Howard Schultz – Brooklyn Projects to $4 Billion.
The amazing story of a poor boy who created the world’s most famous coffee empire
Some dreams are born in the poor house.
Howard Schultz’s dream was born in a housing project in Brooklyn, New York – in a small apartment where money was always tight, where his father labored at physical jobs that did nothing for him, and where a young boy saw the American system fail the people who needed it most and decided, quietly and with unwavering resolve, that his life would be different.
He didn’t know, at that point, that his life would eventually revolve around coffee.
He knew he was going to get out.
And then he was going to build something.
The Projects
Howard Schultz was born in Brooklyn, New York on July 19, 1953.
He grew up in the Canarsie Bayview Houses, a public housing project in the Canarsie neighborhood of Brooklyn. It was not a glamorous start. The apartments were small, the hallways were loud, and the families that lived there were all, in their own various ways, trying to hold things together with very little to work with.
Howard’s father, Fred Schultz, did a string of physical jobs in Howard’s childhood – truck driver, factory worker, cab driver. None of them provided health insurance. None of them had paid sick leave. None of these offered any kind of safety net for a working man and his family.
When Howard Schultz was seven, his father broke his ankle at work.
No insurance. No reparation. No earnings.
The family had no backup. His mother was pregnant then. The bills just kept coming. The fridge was bare. And a seven-year-old boy in a Brooklyn housing project saw his father, a good man, a hardworking man, utterly failed by a system that took everything he had to give and gave nothing back when he needed help most.
Howard Schultz never forgot the picture.
It was the arbiter of what happened after.
The path ahead
Gifted athlete Howard Schultz, sports became his escape.
He was good enough at football to earn an athletic scholarship to Northern Michigan University, the first person in his family to attend college. The year was 1971. He was eighteen years old and had never been away from Brooklyn beyond his imagination.
College was a real eye-opener. He studied communications, worked several jobs to make up for what his scholarship didn’t cover, and graduated in 1975 with a degree and the certainty that he wasn’t returning to the projects.
Back in New York he then spent several years in sales, first at Xerox, where he learned the fundamentals of selling, then at a Swedish housewares company called Hammarplast, where he eventually became vice president of sales.
He flourished. He was earning money. He was everything the kid from the housing project in Brooklyn was supposed to want to be.
Then he noticed something strange.
The Coffee Shop That Changed It All
In 1981, while Howard Schultz was working at Hammarplast, he noticed a small retail store in Seattle ordering an unusually high volume of one type of coffee drip machine. He was curious. So he flew to Seattle to see what was happening.
The company was named Starbucks“>Starbucks.
The Starbucks of 1981 was not the global giant it would become. It was a small chain of stores, only four locations in Seattle, selling high quality coffee beans and apparatus. It didn’t sell brewed coffee. It sold the ingredients for making great coffee at home.
Yet when Schultz walked into that first Starbucks store, something struck him that he could not quite put his finger on. The aroma of coffee. The people behind the counter, the passion. A sense that this was a place that really cared about what it was doing.
He was totally absorbed.
He was in there.
The Door That Wouldn’t Stay Open
Schultz spent more than a year trying to persuade Starbucks’ founders to hire him. They were hesitant – they had built something small and carefully curated and were not sure they wanted to bring in an aggressive sales executive from New York who kept talking about expansion.
They said yes finally.
Howard Schultz joined Starbucks in 1982 as Director of Retail Operations and Marketing.
A year later, he went to Italy on a buying trip and had an experience that would change his life and the American coffee industry forever.
He entered an espresso bar in Milan and was immediately struck by what he found. The whole experience. Not just the coffee, and the coffee was out of this world. The warmth of the spot. The ritual of it. The barista knowing all the regulars by name. The way people remained, conversed, linked.
The espresso bar wasn’t just about getting coffee — it was a place to meet up, a third space between home and work where the rhythms of everyday life slowed down for a moment.
A single burning thought filled Schultz’s mind as he flew back to America.
This is what Starbucks ought to be.
Building the Dream
But Starbucks’ founders did not.
They had created a coffee bean retailer, not a coffee shop. That was their vision, and they did not want to alter it.
That is why Howard Schultz left.
In 1985 he opened his own coffee company, Il Giornale (named after an Italian newspaper), which was entirely built around the espresso bar concept he had discovered in Milan. The stores were tiny, the coffee was superb and the experience was exactly what Schultz had envisioned.
It did the trick.
When the original founders of Starbucks decided to sell the company in 1987, Schultz raised $3.8 million from investors and bought it. He merged Il Giornale into Starbucks, using the Starbucks name.
Thirty-four years old he was. He owned Starbucks.
And then he set to building in good earnest.
Empire
What followed was one of the most remarkable corporate expansion in American business history.
When Schultz took over, Starbucks had just 17 stores. Today, there are more than 32,000 locations in more than 80 countries. The company went public in 1992, making Schultz a very rich man. By the time he stepped back from day-to-day operations, he was worth more than $4 billion.
But what Schultz created wasn’t just a coffee shop.
He created a culture.
From the very beginning, he insisted on providing health insurance to every Starbucks employee, even those who worked part time. In 1988 it was almost unheard of in the retail and food service industries. He thought of his father. He knew what a working man looked like when he was hurt and had nothing to fall back on. He wasn’t going to build a company that did that to its people.”
He referred to Starbucks employees as “partners,” not workers. He gave stock options to employees at all levels of the company. He established a culture of dignity and respect that was, by American service industry standards, genuinely revolutionary.
The Return
2008 was a hard year for Starbucks.
The company had grown too fast, lost its focus, and was in the midst of the worst economic crisis since the Great Depression. The price of the stock had gone down. Stores were closing down. The culture Schultz had built was fraying at the edges.
He returned.
Schultz came back as CEO, closed hundreds of under-performing stores, retrained every barista in America, and made the company focus on the quality and experience that made it great to begin with.
Starbucks bounced back. Absolutely.
2018 saw him step down again, leaving a company that was once again the most successful coffee chain in the world.
The Teaching
Howard Schultz’s story is more than a story about coffee or money or business strategy.
It’s about a seven year old boy watching his father lie on the couch with a broken ankle, unable to work, unable to provide, completely abandoned by the system he’d given his working life to.
and it is about what that boy decided, in the silence of that moment, about the kind of person he was going to be and the kind of company he was going to build.
He built a company that treated its people like he was never treated by his father.
That is his real legacy – beyond the $4 billion, beyond the 32,000 stores, beyond the pumpkin spice latte.
A kid from the Brooklyn projects who never forgot where he was from.
And built an empire that showed you did not have to.
Howard Schultz · Born July 19, 1953 · Brooklyn, N.Y.
Founder & CEO: Starbucks · Net Worth: $4+ Billion
First-generation college student · Sports scholarship
Grew Starbucks from 17 stores to 32,000+ stores worldwide.
If you want to read more like this, click here: Steve Jobs: The Dropout Who Changed the World 3 Times
