Monday, February 26, 2007

The Starbucks Experience

Last Friday, Howard Schultz, founder, former CEO, and Starbucks visionary sent a memo to upper management about the “commoditization of our brand” and a dilution of the Starbucks experience. I commend him for offering this so candidly. The truth is that Starbucks has drifted far from its roots in espresso excellence. If you ask a barista, he’ll tell you that he spends more time pressing the hot chocolate button than making any coffee. There’s nothing wrong with that though. In fact, Starbucks isn’t about coffee—it’s about community and being a great place for different people to get together for an informal time. Recently the company has become complacent and stopped innovating, sinking into the category of fast-food or just another caf√©.

Howard wrote: “I have said for 20 years that our success is not an entitlement and now it's proving to be a reality. Let's be smarter about how we are spending our time, money and resources. Let's get back to the core. Push for innovation and do the things necessary to once again differentiate Starbucks from all others.” Full text of Howard’s memo can be found at

Success is not an entitlement. It must be won every day with ever single customer. Starbucks changed the world of coffee—that’s innovation. Selling hot sandwiches might pacify Wall Street, but it’s distracting from the Starbucks brand and hurting the company long-run. Let’s go back to the roots, reinvigorate and take a clear look at the future.

Here’s what Starbucks should do:

1. Go back to the La Marzocco machines in small urban stores with relatively low traffic. This brings back the history and customers appreciate that. For the office jock stores, people pay for speed, so don’t even think about La Marzocco there. Forget the automatic espresso machines while you’re at it—they are the antithesis of the Starbucks experience.

2. Make it a community meeting place. Let’s see a jazz guitar player there, a verse reading session, or something more interactive. This is best for late evening stores.

3. Stop funding movies like Akeelah and the Bee. Artistic film would have been a nice move, or something foreign. Akeelah had absolutely nothing to do with the Starbucks experience.

Comments welcome, but any that are off-topic will be removed.