Howard Schultz

The Coffee Evangelist Who Built Community One Cup at a Time

Most people know Howard Schultz transformed coffee from a commodity into an experience, but few realize his vision for Starbucks was born from a profound sense of loneliness—watching his father struggle without dignity or benefits in blue-collar jobs, then later feeling isolated as a young salesman in Milan cafés where he witnessed something America was missing: genuine human connection over coffee.

Timeline of Key Moments

• 1961: Born in Brooklyn housing projects; father works series of blue-collar jobs without benefits • 1982: Joins Starbucks as Director of Marketing when it was just a small Seattle coffee bean retailer • 1983: Travels to Milan, experiences Italian espresso bar culture, envisions bringing it to America • 1985: Leaves Starbucks after founders reject his coffeehouse concept; starts Il Giornale • 1987: Acquires Starbucks for $3.8 million with investor backing, begins transformation • 1992: Takes Starbucks public, becomes first company to offer stock options and health benefits to part-time employees • 1996: Begins international expansion, opens first store outside North America in Tokyo • 2000: Steps down as CEO but remains chairman, company struggles with rapid expansion • 2008: Returns as CEO during financial crisis, closes 600 stores, refocuses on coffee quality and customer experience • 2017: Steps down as CEO again, focuses on premium Roastery concept and social initiatives • 2018: Briefly explores presidential run, ultimately decides against it

The Entrepreneurial Journey

Howard Schultz's entrepreneurial story begins not with coffee, but with shame. Growing up in Brooklyn's Canarsie housing projects, he watched his father—a truck driver, factory worker, and cab driver—cycle through jobs that offered no security, no benefits, and little dignity. When his father broke his ankle and couldn't work, seven-year-old Howard saw his family's world collapse. "I never wanted to be in a position where I was at the mercy of other people," he would later say. That childhood trauma became the foundation for everything he built.

The path to coffee was circuitous. Schultz worked his way through college, became a successful salesman for Xerox, then moved to a Swedish housewares company. In 1982, he noticed a small Seattle company was buying an unusual number of their coffee makers. Intrigued, he flew west to meet the founders of Starbucks—then just a coffee bean retailer with four stores. The quality and passion he found there convinced him to join as marketing director, taking a significant pay cut to move his pregnant wife across the country.

The revelation came in 1983 during a business trip to Milan. Wandering the city's espresso bars, Schultz experienced something that would reshape American coffee culture. "I was struck by the sense of community, the camaraderie between the customers and the barista," he recalled. "There was something magical about it." He watched Italians start their days with ritualistic visits to neighborhood bars, engaging in animated conversations over perfectly crafted espresso. The coffee was excellent, but the real product being sold was human connection.

Schultz returned to Seattle evangelical about bringing this experience to America. But Starbucks' founders, Jerry Baldwin and Gordon Bowker, weren't interested. They were coffee purists who believed their mission was selling the world's finest coffee beans, not running restaurants. The tension grew for two years until Schultz made a painful decision: he would leave to start his own company.

Il Giornale, launched in 1985, was Schultz's attempt to recreate Milan in America. But early results were mixed. American customers didn't understand the standing-only format or the opera music. They wanted larger drinks and comfortable seating. Schultz learned his first crucial lesson about entrepreneurship: vision must be adapted to reality. "I had to Americanize the Italian coffee bar experience," he realized.

The breakthrough came in 1987 when Starbucks' founders decided to sell. Schultz, despite having limited capital, convinced investors to help him acquire the company for $3.8 million. At 34, he suddenly owned the brand he'd fallen in love with, along with its six stores and 100 employees. His first decision revealed the values that would define Starbucks: every employee, including part-timers, would receive health insurance and stock options. "We wanted to build a company that our fathers never had a chance to work for," he explained.

This decision was radical in 1987's retail landscape, where part-time workers were typically treated as disposable. Investors questioned the expense, but Schultz understood something they didn't: exceptional customer service requires employees who feel valued. He called them "partners," not employees, and watched as turnover plummeted while customer satisfaction soared.

The early expansion was methodical. Schultz insisted on company-owned stores rather than franchising, maintaining control over the customer experience. Each new market was entered carefully, with extensive research into local preferences. When Starbucks opened in Chicago, Schultz spent weeks there personally, observing customer behavior and adjusting operations.

Going public in 1992 validated Schultz's vision, but also introduced new pressures. Wall Street demanded rapid growth, pushing Starbucks to open stores at an unprecedented pace. By 2000, the company was opening three new locations daily. Schultz, exhausted and concerned about losing the company's soul, stepped back from day-to-day operations.

The decision nearly proved disastrous. Without Schultz's obsessive attention to detail, quality declined. Automated espresso machines replaced the theater of hand-pulled shots. The aroma of fresh-ground coffee was masked by breakfast sandwiches. Customer satisfaction scores dropped, and same-store sales growth stalled. "We had lost our way," Schultz admitted. "We were more focused on the business of coffee than the coffee business."

The 2008 financial crisis forced a reckoning. With the company's stock price collapsing and customers cutting discretionary spending, the board asked Schultz to return as CEO. His response was swift and dramatic: he closed 600 underperforming stores in a single day, laid off 12,000 employees, and shut down every U.S. store for three hours to retrain baristas on espresso preparation.

The most symbolic moment came when Schultz closed all 7,100 U.S. stores simultaneously for "espresso excellence training." Critics called it a publicity stunt that would cost millions in lost revenue. But Schultz understood that Starbucks' fundamental promise—great coffee prepared by knowledgeable partners—had been compromised. "We had to go back to our core," he said.

The turnaround required painful decisions. Schultz eliminated his own salary, taking only $10,000 annually. He sold his personal art collection to fund employee health insurance during the crisis. These gestures weren't just symbolic; they demonstrated the servant leadership philosophy that had always driven him. "The currency of leadership is transparency and vulnerability," he often said.

Innovation became crucial to recovery. Schultz pushed the company beyond coffee into adjacent categories—music, food, even wine bars in some locations. The VIA instant coffee launch in 2009 was particularly risky, as instant coffee seemed antithetical to Starbucks' premium positioning. But Schultz recognized that convenience and quality weren't mutually exclusive if executed properly.

The mobile app, launched in 2011, revolutionized how customers interacted with the brand. By allowing pre-ordering and payment through smartphones, Starbucks solved the urban professional's biggest coffee frustration: waiting in line. The app became one of the most successful mobile payment platforms in America, processing more transactions than many banks.

Schultz's leadership style was intensely personal. He read every customer complaint personally and responded to many himself. He held quarterly "partner forums" where any employee could ask questions directly. His emotional connection to the company was legendary—he would tear up discussing the company's mission and became visibly angry when quality standards slipped.

The social responsibility initiatives reflected Schultz's personal values. The company's commitment to hiring refugees, veterans, and young people from disadvantaged backgrounds wasn't just corporate social responsibility—it was Schultz living out his childhood promise to create the kind of company his father never had. When he announced plans to hire 10,000 refugees in 2017, facing significant backlash, he stood firm: "We are not going to be intimidated by the threats."

His approach to expansion was equally values-driven. When entering new international markets, Schultz insisted on understanding local coffee culture rather than simply imposing the American model. In China, stores were designed as larger social spaces where families could gather. In India, the menu was adapted for local tastes while maintaining coffee quality standards.

The Reserve Roastery concept, launched in Schultz's final years as CEO, represented his ultimate vision: coffee as theater. These massive, cathedral-like spaces featured small-batch roasting, rare coffee varieties, and brewing methods that elevated coffee to an art form. Critics called them expensive experiments, but Schultz saw them as laboratories for innovation and temples to coffee craftsmanship.

Revealing Quotes

On his driving motivation: "I wanted to build the kind of company that my father never had a chance to work for, where people were respected regardless of the color of their skin, their religion, their sexual orientation, or their station in life."

On the essence of Starbucks: "We're not in the coffee business serving people. We're in the people business serving coffee. The equity of the Starbucks brand is the humanity and intimacy of what goes on in the stores."

During the 2008 crisis: "We had to admit that we had lost our way. We were more focused on the business of coffee than the coffee business. We had to go back to our core and remember what we stood for."

On leadership philosophy: "The currency of leadership is transparency and vulnerability. You have to be willing to be completely transparent about your failures and mistakes."

On social responsibility: "We have a responsibility to use our scale for good, to be a force for positive change in the world. Success is not just about profit—it's about the impact you have on people's lives."

Lessons for Today's Entrepreneurs

Schultz's journey offers several enduring insights for modern entrepreneurs. First, the power of values-driven leadership: his commitment to treating employees as partners wasn't just morally right—it created competitive advantage through lower turnover and higher customer satisfaction. Second, the importance of maintaining founder vision during rapid growth: his temporary departure and necessary return demonstrate how easily companies can lose their essence when scaling. Third, the value of admitting mistakes quickly and correcting course dramatically: his willingness to close stores and retrain employees showed that short-term pain often prevents long-term failure.

Perhaps most importantly, Schultz proved that businesses can be both profitable and purposeful. His integration of social responsibility into core business strategy—from employee benefits to refugee hiring—showed that doing good and doing well aren't mutually exclusive. In today's stakeholder capitalism era, his model of building community through commerce remains remarkably relevant for entrepreneurs seeking to create lasting impact beyond financial returns.