Starbucks (with Howard Schultz)

1. BGBen Gilbert0:00

   All right.

2. DRDavid Rosenthal0:01

   We rolling?

3. BGBen Gilbert0:02

   We're rolling.

4. HSHoward Schultz0:02

   We get to see how you guys do this. It's kinda interesting.

5. BGBen Gilbert0:04

   [laughing]

6. DRDavid Rosenthal0:05

   We usually have pump-up music, but- Mm-hmm.

7. BGBen Gilbert0:08

   I feel pumped up.

8. HSHoward Schultz0:08

   We can do that! [upbeat music] We, we got a turntable here.

9. DRDavid Rosenthal0:11

   Ooh, I, I saw your turntable. That's beautiful.

10. HSHoward Schultz0:13

    What do you wanna hear?

11. BGBen Gilbert0:15

    No, we're starting. [chuckles]

12. DRDavid Rosenthal0:17

    Ben's keeping us on track.

13. SPSpeaker0:18

    Who got the truth? Is it you, is it you, is it you? Who got the truth now? Is it you, is it you, is it you? Sit me down, say it straight. Another story on the way. Who got the truth?

14. BGBen Gilbert0:35

    Welcome to Season 14, Episode 5 of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.

15. DRDavid Rosenthal0:43

    I'm David Rosenthal.

16. BGBen Gilbert0:45

    And we are your hosts. Seven years ago, David and I did an episode on the Starbucks IPO, just the IPO. That episode was a mere one hour and 24 minutes, and Starbucks is a $90 billion institution in our world that deserves the full Acquired treatment.

17. DRDavid Rosenthal1:02

    Whew, what were we thinking?

18. BGBen Gilbert1:03

    [chuckles] Well, it actually was amateur hour back then, David.

19. DRDavid Rosenthal1:07

    Gotta start somewhere.

20. BGBen Gilbert1:08

    Well, today we have a very special third co-host to discuss this third place, Howard Schultz. Howard started working at the small chain of three Starbucks stores in 1982, eventually buying it and becoming CEO. As you probably know, he is effectively the founder of the Starbucks we know today that exists on every corner of the earth. I come to you, David, and listeners, as an unabashed Starbucks fan. In this tumultuous time for the company, I am absolutely pulling for them in every way possible, and that is going to come through in our conversation. You may have seen the news recently that they had a very rough last quarter, with a key metric that you may remember from previous episodes as same-store sales. These dropped, and their stock price plummeted as a result. This is on top of a tumultuous pandemic era and some of their stores unionizing and a change in leadership. We thought that this would be the perfect time to sit down with Howard and unpack: Why did Starbucks work in the first place, and how did it work at such grand scale? What can other founders and business leaders learn from what got them here? And although he is no longer CEO, where do they go now?

21. DRDavid Rosenthal2:19

    It really is incredible, one of the very, very small number of food and beverage establishments that has scaled to the entire world.

22. BGBen Gilbert2:29

    Yeah, most of those types of concepts do not work in different countries and continents, but Starbucks is different. Today, they're in over 80 countries, with 39,000 stores across the world. They're even huge in China, a country that didn't consume very much coffee until Starbucks arrived. They are a bank-scale financial institution as well. At any given time, Starbucks holds $1.7 billion that customers have loaded onto gift cards but not yet spent. So how did they go from one store selling beans, not even drinks in cups, just beans, to the default meeting place in communities everywhere? Today, we tell that story. And listeners, this episode has video. We recorded it in person in Seattle at the Schultz Family Foundation, and you can watch it on YouTube. All right, well, listeners, we have a gigantic announcement for you.

23. DRDavid Rosenthal3:18

    Yes, save the date. If you love Acquired, you are going to want to be physically in the city of San Francisco on Tuesday, September 10th, 2024.

24. BGBen Gilbert3:30

    And we can't say much, you know, about every detail of it just yet, but it will be the biggest thing that Acquired has ever done. It'll be in partnership with our good friends at J.P. Morgan Payments, so mark your calendars now. Save the date. And if you wanna be first to know details, you can sign up at acquired.fm/sf, or click the link in the show notes.

25. DRDavid Rosenthal3:52

    Speaking of J.P. Morgan Payments, just like how we say every company has a story, every company's story is powered by payments, and J.P. Morgan Payments is a part of so many companies' journeys from seed to IPO and beyond.

26. BGBen Gilbert4:05

    And if you want more from David and I, you should check out our second show, ACQ2, where we interview founders, investors, and experts, often as deeper dives into topics that we covered on the main show. Recent episodes have been awesome, with the CEO and the founder of Synopsys, of Starfish Space, further exploring the space industry, and we've got some great stuff in payments coming up next, too.

27. DRDavid Rosenthal4:26

    We do.

28. BGBen Gilbert4:27

    All right, so with that, this show is not investment advice. David and I may have investments in the companies that we discuss, and this show is for informational and entertainment purposes only. On to our episode with Howard Schultz. Well, I do have to tell you, and I think I've told you this off camera, for the last almost ten years, every single day starts with a spinach and feta wrap. I assume there are other people like me in the world, but it's always an iced almond milk latte with whipped cream and a spinach and feta wrap, and so thank you for, uh, powering approximately a third of the cells in my body. [laughing]

29. HSHoward Schultz5:02

    [chuckles] Oh, God. That's a great start.

30. BGBen Gilbert5:03

    I also... Here's another stat that David-

Episode duration: 3:15:40