In 1987, Starbucks went up for sale.
Howard Schultz had 2 months to get the money to buy it.
With a month left, one of Schultz's own business partners tried to snipe the deal.
One of my favorite business stories ever 👇
Howard Schultz had 2 months to get the money to buy it.
With a month left, one of Schultz's own business partners tried to snipe the deal.
One of my favorite business stories ever 👇
1/
So, first things first:
Howard Schultz did not found Starbucks.
It was started by three college friends who set out to make a great coffee *roaster.* No drinks, no places to sit. Just great beans.
They opened their first location in 1971.
So, first things first:
Howard Schultz did not found Starbucks.
It was started by three college friends who set out to make a great coffee *roaster.* No drinks, no places to sit. Just great beans.
They opened their first location in 1971.
2/
In 1981, Schultz was a young salesman.
He worked for Hammarplast, a co that sold coffee machines & filters. On a business trip to Seattle he discovered Starbucks and became so obsessed, he told the founders he wanted to work there.
He got a gig as “director of retail ops"
In 1981, Schultz was a young salesman.
He worked for Hammarplast, a co that sold coffee machines & filters. On a business trip to Seattle he discovered Starbucks and became so obsessed, he told the founders he wanted to work there.
He got a gig as “director of retail ops"
3/
Schultz’s “Eureka!” moment came 2y later.
In 1983 he visited Milan and fell in love with the espresso bar culture, esp the theatre of coffee preparation and communal atmosphere.
When he got back to Seattle, he told Starbucks’s founders he’d seen the future of coffee.
Schultz’s “Eureka!” moment came 2y later.
In 1983 he visited Milan and fell in love with the espresso bar culture, esp the theatre of coffee preparation and communal atmosphere.
When he got back to Seattle, he told Starbucks’s founders he’d seen the future of coffee.
4/
They didn’t buy it.
So Schultz did what so many frustrated employees have done: he started a company.
Il Giornale was a coffee bar cribbed explicitly from Schultz’s trip to Bella Italia.
Cappuccinos. Gelato. Opera piped through the speakers.
They didn’t buy it.
So Schultz did what so many frustrated employees have done: he started a company.
Il Giornale was a coffee bar cribbed explicitly from Schultz’s trip to Bella Italia.
Cappuccinos. Gelato. Opera piped through the speakers.
5/
Just as Schultz had suspected, people liked it. Success!
Il Giornale expanded to 5 locations. Things were going great.
Then he got a call from one of Starbucks’s founders. They were selling business.
Just as Schultz had suspected, people liked it. Success!
Il Giornale expanded to 5 locations. Things were going great.
Then he got a call from one of Starbucks’s founders. They were selling business.
6/
Starbucks’s founders knew how much Schultz loved the company. So they gave him an exclusive.
If he could come up with $3.8 million in 60 days, the company was his.
There was only one problem.
Starbucks’s founders knew how much Schultz loved the company. So they gave him an exclusive.
If he could come up with $3.8 million in 60 days, the company was his.
There was only one problem.
7/
Schultz didn’t have close to that much cash. He’d invested his money into Il Giornale. And he’d just raised a round from angel investors a couple years earlier.
Who was he going to tap this time around?
Schultz didn’t have close to that much cash. He’d invested his money into Il Giornale. And he’d just raised a round from angel investors a couple years earlier.
Who was he going to tap this time around?
8/
Bit by bit, he made progress. After 30 days, he’d come up with half the money.
It looked like things were going to work out.
Then he got another call.
Bit by bit, he made progress. After 30 days, he’d come up with half the money.
It looked like things were going to work out.
Then he got another call.
9/
Starbucks had gotten an offer.
An investor had offered the founders $4 million, no need to wait.
Worst of all, the investor had put money into Il Giornale! There was no mistaking that he was trying to steal it out from under Schultz.
The dream was slipping away.
Starbucks had gotten an offer.
An investor had offered the founders $4 million, no need to wait.
Worst of all, the investor had put money into Il Giornale! There was no mistaking that he was trying to steal it out from under Schultz.
The dream was slipping away.
10/
Schultz asked for a few more days to come up with the money, but had no idea what to do.
Depressed, he told a lawyer friend about his situation.
After listening, the friend told him to come by his law office. He thought one of the firm’s partners might be able to help.
Schultz asked for a few more days to come up with the money, but had no idea what to do.
Depressed, he told a lawyer friend about his situation.
After listening, the friend told him to come by his law office. He thought one of the firm’s partners might be able to help.
11/
Bright and early, Schultz walked into the offices of Shidler McBroom & Gates, one of Seattle’s most prestigious law firms.
He sat down across from one of the firm’s partners, a 6”7 giant of a man:
Bill Gates, Sr.
Bright and early, Schultz walked into the offices of Shidler McBroom & Gates, one of Seattle’s most prestigious law firms.
He sat down across from one of the firm’s partners, a 6”7 giant of a man:
Bill Gates, Sr.
12/
Yup.
The father of *that* Bill Gates. He was a hugely respected presence in Seattle.
Schultz told Bill Gates Sr his story. After he’d finished, Gates asked him two questions:
“Is everything you told me true? Have you left anything out?”
Yup.
The father of *that* Bill Gates. He was a hugely respected presence in Seattle.
Schultz told Bill Gates Sr his story. After he’d finished, Gates asked him two questions:
“Is everything you told me true? Have you left anything out?”
13/
Schultz confirmed it was all true and he hadn’t left anything out.
Gates told him to come back in 2 hours. Schultz waited at a nearby coffee shop, heart racing.
When he came back, Gates said, simply: “We’re going to see the man.”
Schultz confirmed it was all true and he hadn’t left anything out.
Gates told him to come back in 2 hours. Schultz waited at a nearby coffee shop, heart racing.
When he came back, Gates said, simply: “We’re going to see the man.”
14/
Schultz didn’t know what he meant but soon, they were out the door. Gates walked directly to the office of the investor that had tried to steal the deal.
Schultz didn’t know what he meant but soon, they were out the door. Gates walked directly to the office of the investor that had tried to steal the deal.
15/
Within minutes, he was standing over the investor’s desk, booming:
“You should be ashamed of yourself. You are going to stand down, and this kid is going to realize his dream. Do you understand me?”
He did. The investor dropped his interest.
Within minutes, he was standing over the investor’s desk, booming:
“You should be ashamed of yourself. You are going to stand down, and this kid is going to realize his dream. Do you understand me?”
He did. The investor dropped his interest.
16/
Outside, Gates brought Schultz’s dream to life:
“You’re going to buy the company, and my son and I are going to help you.”
Schultz had the money he needed. He was going to be the CEO of Starbucks.
And the rest is history.
Outside, Gates brought Schultz’s dream to life:
“You’re going to buy the company, and my son and I are going to help you.”
Schultz had the money he needed. He was going to be the CEO of Starbucks.
And the rest is history.
17/
This is one of my favorite business stories, but the truth is, the whole Starbucks history is a fascinating tale of twists and turns and revelations.
If you’re interested in learning more, check out this briefing and join!
readthegeneralist.com/briefing/starb…
This is one of my favorite business stories, but the truth is, the whole Starbucks history is a fascinating tale of twists and turns and revelations.
If you’re interested in learning more, check out this briefing and join!
readthegeneralist.com/briefing/starb…
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