(Ignore the Bush image, the Howard Schultz segment is after Bush.)
Howard Schultz, Starbucks CEO, was on Charlie Rose recently. I've never really heard him talk before so it was interesting to hear about how the company started and what his personal background (Brooklyn, projects) and priorities are (universal health care).
To be honest, I really don't like Starbucks. I am put off by its ubiquity and I don't connect with the iconic white cardboard cup the way a lot of people do. I just don't find it stands for much except a sort of blind masstige conformity.
As a marketer though, I respect what they've done; namely, to cultivate a fiercely loyal brand following in the absence of advertising. So I was interested to hear Schultz talk about his approach to the company and its role in culture. Here are some highlights:
- Starbucks spends more on health care insurance than they do on coffee. Each employee who works more than 20 hrs/week gets access to the company health care plan and stock options.
- "We're not in the coffee business serving people, but in the people business serving coffee."
- "There is no single patent that we have. There is no secret sauce. We buy the world's best coffee, roast it to perfection . . . but the only competitive advantage we have is the relationship we have with our people, our employees. You can't exceed the expectations of your customer unless you first exceed the expectations of your people. That's the only advantage we have, every single day."
- "We live at a time right now where we long for human connection. The world is very fragile; we work hundreds of hours [a year] more than our parent's generation, technology has become a burden not just a tool, it's very secular - our existence - and the human connection, conversation, the sense of humanity, sense of community that exists in Starbucks has proven to be a real asset to the company and probably not since the English pub has something been created . . . Starbcucks has become this third place between home and work. We have become, clearly, this third place. It is as relevant - or more relevant - as a third place outside the US."
- In America 80% of the business is takeout. In China, where they have about 500 stores, it's nearly the opposite. People linger for hours, go on dates there. Their challenge in China is to become enduring, not faddish.
- The wi-fi in their stores makes up the largest wi-fi footprint in the world
- He is seeing his stores as an entertainment network. More than 40 million people went into starbucks this week, which is twice as many as the largest network TV show audience
- Sees the brand as a distribution mechanism for entertainment content. "Starbucks can play a major role in the distribution of unique documentaries."
- "Great companies push for innovation. They compete with themselves and that's what we have to keep doing."