What Any Startup Can Learn From Starbucks

Update:  This post was republished on GeekWire.com

As I drove past the Starbucks headquarters today I glanced up at their big green logo.  Instantly I thought “man, what a iconic brand.”  I mean, when most people see a white coffee cup with green letters, they know it’s Starbucks Coffee.  Then I thought “how did they get there?”  Here’s what most forget: Starbucks was a startup at one time.   They had to start somewhere and work hard to establish this incredible brand.  Although I do not know Howard Schultz personally (someday I hope to), it’s obvious he understood a thing or two about creating an iconic brand.  Even if you do not wish to build a business to the size or likes of Starbucks, here are a few things to keep in mind as you grow your company.

Headstrong Founder

Howard Schultz is one of those entrepreneurs you read about in history (or Amazon) books.  He grew up in Brooklyn.  He was the first person in his family to go to college.  He started as a salesman selling Xerox equipment.  Interestingly, before he founded “his Starbucks’ he joined the a small coffee company named Starbucks.  Then after differences in vision he left to start his own coffee company, and as fate would have it he ended up buying the original company’s assets and ultimately named his company Starbucks.  The vision in question?  Changing the way coffee was enjoyed here in The States.  That is no small task and probably why the original Starbucks owners wanted no part in it.  You better believe he encountered and fought through more than a few obstacles along the way.  I will not list them here, but I would recommend reading his book Pour your Heart into it – it’s good.

Founders of startups need to, like Schultz, be headstrong.  It isn’t always going to be fun and roses.  In fact, based on your odds it’s down right impossible for you to take your nascent idea and build a fledgling company around it.   My opinion is most founders quit before they even get started.  Maybe you need to seek out more initial customer feedback?  Maybe you need keep trimming the fat to find your MVP (minimum viable product).  I don’t know.  But if Howard Schultz was sitting across the table from you right now, here’s what I think he would say:

You must be headstrong in your passion, desire, focus, product, marketing, communications, leadership, and recruiting.  In all those things, be headstrong and dead set on doing what-ever-it-takes to make your vision come true.  Anything less will be your company’s demise.

larger Purpose

Early on Starbucks set out on a journey with a larger purpose in mind.  Schultz realized very quickly the coffee industry, although a relatively large market in the US at that time, had become stale.  People were mostly consuming coffee in their home from a tin can.  Schultz knew they could take something familiar and transform it into something altogether new.  They wanted to create a third place.  Not the home.  Not the office.  But a third place.  Somewhere you could go to hang out, drink coffee, talk with a friend, have a business meeting or read a good book.

It was there, at this third place, they figured people would come to be a part of the community.  And drink coffee.  They made this purpose (the place) bigger than their product (coffee).  And it worked to the tune of a $27b market cap.  Go ahead, think about our world without coffee shops.  I am writing from one right now, and it’s all do to Starbucks.  Thank you Howard.

A startup – no matter their industry – needs to find their greater purpose.  “Why on earth are people going to use your application over the millions of other things to play with at this moment?” You must be able to make it clear and concise why their life will be better when they use your product.  I believe this comes together when the overall purpose of your product or service is greater than just making money (for you).   I can’t tell you what your purpose should be; it’s your job to find it.  I feel so strongly about this that if you can’t state your purpose in one sentence, I would recommend finding something else to do.  Because, if you can’t clearly state the purpose of your business how do you expect others to figure it out?

Always Get better

We all know the story, there’s a Starbucks on every corner.  With more than 15,000 stores in approximately 55 countries, it’s fair to say Starbucks won the game.  For a while there I think the executives were also saying the same words behind closed doors.  As the economy collapsed and things got tight, Howard has some decisions to make.  He closed some stores as well as doubled down on their core competencies.  He understood the notion that regardless of what you have done up to this point you need to always get better.  Yes, Starbucks was a successful corporation.  But if not careful, successful corporations are susceptible to failure due to their own hubris.  Howard nipped this in the bud and brought back the idea of continual improvement.

This doesn’t just happen to large corporations.  It’s all relative you know.  To be successful, startups need to continually learn new things and aim to get better as time goes on.  Launching a product and seeing a few million downloads is only the starting line.  What happens after people use your product once?  Ten times?  Two years? You need to get better.  Better analytics to study usage patterns.  Better customer service.  Better executives.  Better management processes.  I am sure there a lot more things to get better at, but whatever it is… just get better.

This is what I thought as I drove by the Starbucks headquarters today.  Hope it helps.

13 thoughts on “What Any Startup Can Learn From Starbucks

  1. Pingback: What Any Startup Can Learn From Starbucks « So Entrepreneurial | Buy Coffee Online

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  3. When I originally commented I clicked the -Notify me when new comments are added- checkbox and now each time a comment is added I get 4 emails with the identical comment. Is there any method you can remove me from that service? Thanks!

    • I feel your pain. Although I am also a disgruntled Sonics fan, I yield short of calling Howard an idiot. I rather look at the situation and say “owning a sports franchise is a bad business decision” – because it is. In that regard, Howard was a smart man to get the Sonics off his balance sheet. Where he went wrong, I feel, was selling to OKC. By gones….

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