FROM RAGS TO RICHES- HOW HOWARD SCHULTZ BUILT A $100 BILLION DOLLAR COMPANY FROM DRINKING COFFEE.

Howard Schultz’s journey from humble beginnings to building Starbucks into a global coffee empire is packed with lessons in resilience and innovation. Here are three takeaways from his inspiring story:

1. Think Differently: Raised in poverty, Schultz refused to let his circumstances define his future. Inspired by his father's struggles, he aimed to create a workplace that valued employees, proving that challenges can drive innovation and purpose.

2. Don’t Give Up on Dreams: Schultz’s vision of bringing Italy’s café culture to America faced numerous rejections. Undeterred, he founded his own coffee shop and later overcame immense obstacles to acquire Starbucks, showing that perseverance is key to success.

3. Take Responsibility: When Starbucks faltered during the 2008 financial crisis, Schultz stepped back as CEO, made hard decisions like closing underperforming stores, and reignited the brand’s core values, demonstrating the power of leadership through accountability.

Schultz’s story reminds us that with grit, determination, and responsibility, we can transform setbacks into opportunities for success.

Transcript

FROM RAGS TO RICHES- HOW HOWARD SCHULTZ BUILT A 100 BILLION DOLLAR COMPANY FROM DRINKING COFFEE.

 How did Starbucks turn drinking coffee into a $100 billion company? Let's find out by examining three lessons from Howard Schultz's life.

 Hey, welcome back to 3 Point Inspiration, where we discuss courage, resilience, and grit. My name is Bessy Ebule. Now to Howard’s secrets.

 NUMBER 1- THINK DIFFERENTLY

Howard was born in 1953 in Brooklyn, New York, and raised in poverty in a public housing project. His parents had to work long hours to support the family and could barely make ends meet.  But he had determined he would not be as poor as his parents were.

 Young Howard turned to sports and played football, basketball, and baseball. His dedication to sports paid off, as he was granted an athletic scholarship to Northern Michigan University. As he was leaving New York to go to university, he carried one memory. His father had never gotten ahead in any of his low-paying jobs and was rarely shown any respect by his employers. Schultz said, "I watched my dad's self-esteem fracture." 

 When Howard was just seven years old, his father fell and broke his legs while delivering diapers and he lost his job. There was no medical insurance or savings, which led to his father lying on the couch hopeless, crushed, and defeated. That left a permanent mark in his memory as he used to sit on the staircase of their building, dreaming of a better life.

  Schultz went to college armed with the inspiration to make the most of his college days, both athletically and academically. His hard work paid off as he received a bachelor's degree in business and marketing in 1975, and he is proud to be the first member of his family to attend college.

 Here's the lesson: If you were raised in poverty, living in the most despised suburb in your area, with no access to food, good education, and healthcare. You should not exclude yourself as a candidate of success.

 This is in no way meant to deny the existence of poverty and its impact on people's lives. What it's meant to do is to make you think differently. The beauty of humanity and God's creation is the ability to use our thoughts to change the course of our lives. If you don't like what you see in your life, you have the option of changing it.

 Instead of discouraging you, your background should inspire you to overcome. The meals you could not have as a child should inspire you to raise a family where food is not lacking. The education you lack should motivate you to educate your children, and the lack of quality family time you did not experience should empower you to raise a loving family.

 If Schultz had allowed his family background to determine his future, then he would not have succeeded. 

 NUMBER 2- DON'T GIVE UP ON YOUR DREAMS

Schultz was on a business trip to Washington in 1981 to sell coffeemakers and then walked into a Starbucks café. Immediately, he fell in love with the flavorful coffee and when he met with one of the owners, Jerry Baldwin, he expressed an interest in working there. By the following year, Schultz was hired as marketing director for the Seattle business.

 When he started at Starbucks, the company did not sell coffee by the cup but sold coffee beans and related products. But his orientation changed after a trip to Milan, Italy, in 1983.

 While in Italy, Schultz was captivated by his experience at a café while drinking coffee. He was shocked to discover that the owners of the coffee shop knew their customers by name and had conversations with them while serving coffee. 

 He became convinced that he could replicate the Italian experience in America. Customers could sit in chairs and chat with the baristas while they drank their coffee. "I believed the relationship I saw between people in Italy was transferable to America in a big way," Schultz explained later. 

But that was not to be as he tried unsuccessfully to convince the owners of Starbucks to buy this novel idea. He then quit Starbucks in 1985 and went on to start his own coffee company called Il Giornale. However, there was no money to fund the company. Schultz said he spoke to 242 people to raise the funds and 217 of them said no.

The rejections did not stop him, and he finally got enough people to invest in the business. He then worked hard to open the first coffee shop where he could replicate the Italian experience. The cafe was growing, and he was planning on opening more stores when an opportunity came along in 1987.

 The owners of Starbucks, facing financial problems decided to sell the company. So they approached Schultz. They told him, If he could raise the money, he was the right guy to acquire Starbucks. It was great news to Schultz, but the problem was that he did not have the $3.8 million. They gave him a timeframe for raising the money- 60-90 days and if he could not raise the money, they would have to sell it to someone else.

 In desperation, he then went back to some of his investors to raise the money and after about 30 days, he had raised 1/3 of the money. After about a week or two, while chatting with the Starbucks owners, they revealed that they had an all-cash offer to buy the company. When Schultz asked who it was, it turned out it was one of his investors, and this guy had all the money in the world to buy the company.

 Heartbroken and confused, Schulz spoke to his friend, who introduced him to Bill Gates Senior (father of Bill Gates), who was a titan in Seattle. The next day, Schultz met Bill Gates senior and after narrating the story to him, Bill Gates senior then takes Schultz into the other guy's office and tells him to back off from the deal. Surprisingly, the other guy agreed. Bill Gates Senior and his then not-so-famous son Bill Gates helped Schultz, and he bought the company.

 Here's the lesson: Don't give up on your dreams. No matter how much adversity you face. You are never going to achieve it on a platter of gold- no one does. 

 Imagine if Schultz had not given purchasing Starbucks a shot because he had no money? Imagine if he had given up when he was rejected 217 times? Imagine if he had stopped chasing the dream when he learnt that someone far richer than him was going to buy the company.  

 That should teach a lesson. Don't stop chasing that business idea or charity, or degree that you want so badly. Give it one more shot and you never know if your next shot is going to be the winning one.   

 Hey before we go on to the next secret of Schultz success, please follow  the channel if you have not to help us grow. On this channel, we focus on the secrets of successful people and how you can apply them to your life so you too can succeed.

 NUMBER THREE

TAKE RESPONSIBILITY

By the time Schultz stepped down as chief executive of Starbucks in 2000, the coffee chain was one of the world's most recognisable brands—and on a steady trajectory of growth. But then, eight years later, trouble came. Schultz's previous tenure had seen promising growth, but now he faced a challenging mission: to lead a turnaround of the company he had built.

 In 2008, Schultz came back to Starbucks as CEO in the middle of the financial crisis amid less spending by customers. Things got so bad that the sales per hour could not justify the labour. He was confused and started reaching out to other people who he felt were smarter. Guys who were leading big retail brands. To his surprise, they wanted to know more from him because they were also in the same boat. It looked like the company was going to collapse.

 As the world seemed to turn on Starbucks, from newspapers to social media posts, Schultz knew he had to act fast. Schultz made the difficult decision to close hundreds of stores globally, even though it involved layoffs and financial setbacks. This allowed the company to focus on locations that could better serve customers and align with the brand's values.

 He also started re-emphasising Core Values by pausing operations for a day to retrain baristas, ensuring they delivered the high-quality coffee experience Starbucks was known for. He aimed to restore Starbucks' reputation as a brand that valued human connection, and it worked, and Starbucks became profitable once more. between 2008 to 2017, Schultz oversaw nearly $100 billion added to the company's market capitalisation.

 Here's the lesson: It was Margaret Thatcher that said, "You may have to fight a battle more than once to win it". Success is a continuous endeavour. Sometimes, you feel you arrived at your destination, and you can then rest on your laurels and then trouble shows up. 

Maybe in the form of new competition or technology, or some human errors. You will have to take responsibility, step into the ring again and fight to overcome. Schultz did that and succeeded.

 So, what can we learn from Schultz life? He thought differently, he did not give up on his dreams, and he took responsibility. You too can succeed if you do these.

 Hey thanks for listening and please let me know in the comments below. What lesson from Schultz life are you going to apply to yours? Don't forget to like share and follow the channel.

  If you want more inspiration to fuel your success drive, then listen to my other episodes. Always remember with God, all things are possible. I'll see you in the next episode. God bless you.