1970s
Schultz says his Xerox sales job required 50 in-person cold calls a day in a New York territory.
“And I had to make 50 cold calls, physical cold calls a day.”
Topic
Howard Schultz
18 facts from 2 episodes, in date order. These are what speakers said on the shows, each linked to the moment it was said. They aren't independently verified.
1971
Schultz says Starbucks sold only whole-bean coffee, with no beverages, from 1971 until about 1985 or 1986.
“But you have to remember, Starbucks Coffee Company from 1971 until around 85, 86 only sold pounds of coffee. There was no beverage.”
1982
Schultz joined Starbucks in 1982 as head of marketing, when the company was preparing to open its fourth store.
“I was offered the job as the head of marketing for Starbucks when they were getting ready to open their fourth store in 1982.”
1985
After his 1983 Milan trip, Schultz pushed Starbucks' founders for two years before they let him open a coffee bar at Fourth and Spring in Seattle.
“I banged on the door for two years and in two years they finally let me open up a coffee bar on the corner of fourth and spring in Seattle”
1986
To raise the initial $1.6 million for Il Giornale, Schultz spoke to 242 investors and 217 of them declined.
“For the initial 1.6 million that you raised for Il Giornale, you talked to 242 investors, 217 of which said no.”
1987
Schultz says Bill Gates Sr. confronted an investor who was trying to buy Starbucks out from under him and told him Schultz would acquire the company.
“And he says, Howard Schultz is going to acquire a Starbucks coffee company, and he's never going to hear from you again.”
1987
Schultz's company bought the six Starbucks stores in August 1987, and the combined business had 11 stores by year-end.
“August of 87, we bought the six Starbucks stores. We had the three old El Dernales, and there were two stores under construction.”
1987
Schultz says sourcing, roasting and serving coffee as a beverage gave Starbucks roughly an 80% gross margin when he bought it.
“The ability to source and roast coffee and put that through the supply chain of a beverage gave us probably at the time an 80% gross margin.”
1991
After resistance from two venture-capital board members, Starbucks granted all employees stock options worth 14% of base pay, the Beanstalk program, a year before its IPO.
“And so the fight became, ultimately, we gave 14% of everyone's base pay in the form of stock options at the end of the year based on the strike price.”
1992
Schultz says each new Starbucks store was modeled on first-year sales of twice the investment and an operating profit above 20%.
“And the model basically was a sales to investment ratio of two to one and a operating profit of 20%.”
2008
By Schultz's 2008 return as CEO, Starbucks' market capitalization had fallen from about $30 billion to under $7 billion.
“the market cap had dropped from $30 billion to less than $7 billion.”
2008
After returning as CEO in 2008, Schultz closed about a thousand underperforming Starbucks stores.
“There were a lot of unperforming stores that should have never been opened that we need to close. I think we closed a thousand stores.”
2008
Schultz says Steve Jobs advised him to replace his entire leadership team, and that all but the general counsel eventually left.
“you go back to Seattle and you fire everyone on your leadership team.”
2022
On returning as interim CEO in 2022, Schultz says he suspended Starbucks' stock buybacks and redirected over $2 billion toward investing in partners.
“I announced that we were suspending the stock buybacks and the stock went down.”
Undated
A host notes that Starbucks under Howard Schultz was one of the biggest CD retailers in the US, and Ek says he first met Schultz when Starbucks became a Spotify partner.
“And we were talking about it before, but Starbucks and Howard Schultz was actually one of the biggest retailers of CDs in the US.”
Undated
Schultz and designer Terry Heckler replaced small, medium and large with the names short, tall and grande for Starbucks cup sizes.
“And we just started talking about changing it from the pedestrian words of small, medium, large to what it became, which was short, tall, and grande.”
Undated
Schultz says Starbucks' international partnerships vary by country, from 80-20 splits favoring Starbucks to 50-50 joint ventures.
“Some countries have been an 80-20. Starbucks owns 80. They own 20. Some are 50-50.”
Undated
Schultz says the vacant former post office in Milan's Cordusio Square, which became the Italian roastery site, was owned by Blackstone.
“Turns out the owner of the space is Blackstone.”
Episodes