How Howard Schultz Turned Coffee Into Gold

When Howard Schultz’s mother visited the sprawling Seattle headquarters of Starbucks—far beyond anything she could have imagined for her son—she whispered, 'Who pays these people?' Little did she know, her son had built one of the fastest-growing companies in U.S. history.

Howard Schultz took a small six-store Seattle coffee bean retailer and built it into a global coffee empire with over 1,300 stores and 25,000 employees. That transformation turned Starbucks into one of America’s fastest-growing companies over two decades.

The Boy Who Wanted More

Howard Schultz wasn’t born dreaming of entrepreneurship. Growing up, his family drank instant coffee, reserving canned coffee and an old kettle only for guests. But everything changed when, at age 7, Schultz saw his father suffer a workplace injury that left him jobless and the family destitute. That memory stuck with him—and fueled his drive to rise above his working-class roots.

He imagined becoming a sports star but settled for a more grounded path: after college, he worked as a salesman in New York and started a family. By 1982, at age 28, he had climbed out of poverty, owned an apartment in Manhattan, and enjoyed theatre and dinner parties. Yet he still felt something was missing. 'Enough is not enough,' he told himself.

The Italian Coffee Revelation

Schultz’s big break came when he noticed a tiny Seattle retailer—the then-obscure Starbucks—ordering more coffee grinders than New York’s biggest department stores. Curious, he flew to Seattle and stepped into a world that felt like a 'temple of coffee.' The store, opened in 1971 by Jerry Baldwin and Gordon Bowker, sold high-quality coffee beans but didn’t serve brewed coffee. Schultz was captivated—not just by the beans, but by the passion behind them.

His true inspiration struck a year later in Milan. Walking past café after café, he watched baristas greet regulars by name, locals chat over espresso, and communities form around coffee. In public squares, music played, strangers became friends, and coffee wasn’t just a drink—it was an experience. 'Starbucks was missing this,' Schultz thought. They sold premium beans, but not the Italian coffeehouse culture.

Turning Beans Into a Community

Convincing Starbucks’ founders to serve drinks took a year. Finally, in April 1984, the sixth Starbucks location opened—with both beans and brewed coffee. At 7 a.m., curious commuters walked in. They ordered espressos, lattes, and cappuccinos—terms introduced to Americans that very morning. The reaction was electric. Customers were surprised by the bold flavors but quickly came back for more. Schultz noticed something else: the coffee beans were being ignored.

Despite the success, Starbucks’ founders resisted going all-in on beverages. Frustrated, Schultz left to start his own shop, 'Il Giornale' (later renamed Starbucks after acquiring the original company). Raising funds proved brutal—he borrowed from 242 people and heard 'no' 217 times. At one point, he said, he felt like 'a dog with its tail between its legs.'

The $4 Million Gamble

In 1987, opportunity knocked: Starbucks’ founders decided to sell. The business was larger than Schultz’s chain—but he went all in. With $400,000 raised from investors (who later earned 100x returns), Schultz bought Starbucks. On a sunny afternoon, he signed the papers and walked into a shop. As he sipped coffee and chatted with baristas, tears filled his eyes. He wasn’t just a businessman—he was now the leader of a coffee revolution.

Frequently Asked Questions

How did Howard Schultz get involved with Starbucks?

Howard Schultz joined Starbucks in 1982 as director of retail operations and marketing after noticing the company’s unusual volume of coffee grinder orders. He was inspired by the founders Jerry Baldwin and Gordon Bowker, who sold high-quality coffee beans but not brewed coffee.

What inspired Schultz to change Starbucks’ model?

During a trip to Milan in 1983, Schultz observed Italian coffee culture—friendly baristas, regular customers, and community-focused cafés serving espresso drinks. He realized Starbucks was missing the social and experiential side of coffee.

Why did Schultz leave Starbucks to start Il Giornale?

After failing to convince Starbucks’ founders to focus on selling espresso drinks, Schultz left in 1985 to start his own coffee shop, Il Giornale, aiming to bring the Italian coffeehouse experience to the U.S.

How did Schultz acquire Starbucks?

In 1987, Schultz raised $400,000 from investors—including a last-minute $75,000 from three Seattle business leaders—and purchased Starbucks from its original owners, merging it with Il Giornale and taking over as CEO.

How many stores did Starbucks have when Schultz took over?

When Schultz acquired Starbucks in 1987, the company had 6 stores and fewer than 100 employees. Under his leadership, it grew into a global brand with over 1,300 locations and 25,000 staff.

What coffee drinks were introduced to America through Starbucks under Schultz?

Under Schultz, Starbucks introduced Americans to espresso-based drinks like lattes and cappuccinos on the morning the sixth store opened in 1984, transforming how Americans consumed coffee.