Steven and Sheron's Blog

What We Can Learn From Starbucks

Recently finished a reading of Howard Schultz’s book Onward which detailed a time period of struggle and triumph in Starbucks history. For anyone interested in Starbucks history, it was founded by three former students of the University of San Francisco in 1971. The company was eventually sold to Howard Schultz in 1987 who combined it with his other company at the time, Il Giornale  Coffee. Vancouver was actually one of the first few locations opened by Starbucks (a nice little connection to our lovely city).

The book itself detailed the period from roughly 2007 to 2010 when Howard Schultz, not comfortable with the direction the company was heading in, decided to return as CEO and reinstill the spirit and dedication to coffee that made Starbucks a powerhouse. The results have been astounding. Starbucks stock, which traded slightly below 5 USD during the beginning of 2009, is trading at around 90 USD as we write this post.

So what can we learn from Howard? Throughout the book, you can feel Howard’s passion toward the business. His love of coffee was bred from his travels in Italy which was where he got the original Il Giornale name for his first coffee business from. Silicon valley always had a motto, “Missionaries over Mercenaries”. Successful businesses have a purpose greater than making money. This purpose gives the business its soul, it gels the people together in search of a common goal. The mission is pervasive throughout the business so that its customers become part of that mission. The customer became one with the brand. No amount of marketing can beat the word of mouth of a dedicated and motivated customer. That’s how great businesses are born.

Starbucks had always prided itself on how it treats its employees. For example, at a time when it was unheard of to give bartenders health benefits, Starbucks decided to give its employees not only health benefits, but stock options. That’s right, a barista in Starbucks received stock. I verified this personally with my sister in law who was a barista at Starbucks during this time. It speaks of the belief in practicing win win in all situations. In business, we need to constantly strive for deals that are a win for everyone involved, be it a client, a contractor, a principle, an agent, or a supplier. Only by practicing win win can businesses build long lasting relationships with their customers.

Starbucks was constantly on the offensive. They tried innovative ideas such as the Pike Place Roast, new brewing methods, insta coffee that was up to the par of the real product. Great businesses do not sit back and wait for others to attack, they constantly evolve and find new ways to create value for their clients. At a time when the industry fears of upstarts who may take market share, great businesses turn inward and innovate how it can better serve its customers in new ways. This constantly evolving philosophy is what keeps them on top.

Btw, if you notice, I didn’t mention much about how these tidbits relate to our business. But if you have read this far, you probably have understood how we intend to do business with our partner, our clients, and our suppliers. We read these books to learn how great businesses were made so that together, we can all achieve our mission which is to empower individuals, one property at a time.


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