Dictation 1: Unit 10_Entrepreneurs and Innovators

Hello.
Good morning, and thank you for inviting me to speak at the fourth annual innovations and
business conference.
It's a pleasure to be here.
My topic this morning is something that is, I can see, very relevant to many of you.
Many of you have paper cups in your hands.
Right now, it's coffee and a little company called Starbucks that all of you have heard of.
And although the company isn't actually little anymore, it did start out that way.
I'd like to talk to you today about the man who started the company, Howard Schultz, and about
some of the things he's done along the way that have led to the company's great success.
Perhaps these same ideas could lead to more success for your companies as well.
In the early days, Schultz was like every entrepreneur.
He had a strong motivation to bring the coffee culture of European countries to the United States.
But of course, he needed money to get started, so he needed to find investors.
But it was quite difficult for Shultz to find those investors for two main reasons.
First, they didnt understand why anyone would pay extra for a fancy cup of coffee.
And this created a lot of uncertainty about the whole idea.
Would they eventually get their money back?
Now, of course, it seems like the world was just waiting for a good cafe latte to come along
Ive certainly bought my share of fancy coffee drinks.
Okay.
The other reason for the uncertainty among possible investors was the fact that Schultz kept
talking about using his company to do good things.
That was unusual, since the main focus of most businesses is making money.
If you ask me, focusing only on making money is a great way to make a business fail.
But I suppose a lot of people would disagree with me on that.
So what is Starbucks model for success?
To begin with, valuing employees is an essential part of the Starbucks business model, and it's an
idea that many businesses could learn from, I think.
In fact, I really shouldn't use the term employees to refer to the people who work at Starbucks,
since they're actually called partners.
As you know, partners in a company are equals.
So I guess Starbucks wants to show its employees how important they are to the company.
A well-known quotation from Schultz is that success is best when it's shared, and Starbucks does
share its profits with its employees.
Sorry, with its partners.
Not only are Starbucks wages a little higher than in other service jobs, partners who work
enough hours can receive stock in the company.
I mean, how great is that?
If Starbucks has a good year, their employee stockholders also have a good year.
Now let’s think back to a younger Howard Schultz trying to convince investors that instead of
keeping employees’ salaries as low as possible, you know, in order to make a bigger profit, he
was planning to pay his employees more in order to make their lives better.
It must have been a difficult idea for the investors to accept.
Well, Schultz was persistent and he had confidence in his ideas.
And in light of how quickly Starbucks grew, that persistence clearly paid off.
Another important aspect of the Starbucks business model has been to treat the customers as
individuals and to value them as people.
It's no accident that your name is hand written on your coffee cup and that the coffee can be
customized in any number of ways to suit your taste.
According to the company website, our mission is to inspire and nurture the human spirit.
One person, one cup and one neighborhood at a time.
Okay, as long as we're trying to learn lessons from Schultz and his company, it's important to
point out that Starbucks has experienced some failures along the way.
Schultz has given up his position as CEO on more than one occasion over the years.
The first time was in 2000 and the company experienced some major problems as a result.
Those problems were caused by the company moving away from Schultzs Original vision.
Instead, after Schulz quit, they moved away from being a company that cared about its
employees and focused on making as much money as possible.
And though every company evolves over time, this was.