Why Starbucks is the Model for Every Business

August 6, 2015

9:00 pm

I just used the Starbucks online orders smartphone app for the first time today. It made me think about how the Starbucks mobile payments really are a model of innovation for other companies.

No matter what type of enterprise you own or work at, we all have a considerable number of lessons to learn from the world’s leading purveyor of coffee. There is nothing high-tech or unique about a coffee shop, but that is where any similarity to the ordinary ends.

Years ago, while attending an alumni event at the University of Southern California’s Marshall School of Business, Lloyd Greif Center for Entrepreneurial Studies, I spent the day with Howard Schultz. If you aren’t familiar with him, you’ve more than likely helped enrich this entrepreneurial genius. I will forever remember that day when he collaborated with us and imparted his unique story.

In 1982, the Brooklyn-native told his mom that he was moving to Seattle to join a fledgling coffee shop. Elaine (Bobbie) Schultz, in a traditional Brooklyn-Jewish motherly dialect said: “what, are you crazy? You don’t know anything about coffee.” According to “Pour Your Heart Into It. How Starbucks Built a Company One Cup at a Time,” by Howard Schultz, his mom only drank instant coffee. If like my mom, it was probably Sanka Instant Coffee, which was all the rage back then.

The rest is history and the lesson to dream and try new things is the model.

Mr. Schultz also shared with me his day in 1999 with Magic Johnson in New York City, on the occasion of the first Starbucks to open in Harlem. It was a big deal. After lunch at a swank restaurant, they stepped outside for a limo ride to the new store. As I remember the narrative, the most powerful African American man in business, said, “no.” Instead of being chauffeured they would walk. Along the way, fans – especially young admiring children of the sports icon – blocked the route. Throngs of admirers formed, each asking for his autograph. Magic Johnson stopped, on what became a prolonged stroll to greet every person and sign autographs. But, he wasn’t the only hero that day.

Howard Schultz is an American entrepreneurial hero, too. His lessons on innovation extend to technology that we could only have dreamed of, much like how Walt Disney invented an entirely new experience.

What can you learn from stepping into your local Starbucks?

Beyond my “leasing” a comfy lounge chair for the price of a cup of coffee, I study the experience of how employees operate along with every element of the business. If you are ever at a loss for new ways to be inspired and run your business, buy a coffee and experience what would otherwise come from majoring in entrepreneurship.

The Starbucks App

Ordering is a click away when you use their app, which is now widely copied at other businesses. The Starbucks mobile payment system seems to have been influenced by casinos; rather than cash, chips and paper receipts replaced currency. You spend more and have fun earning rewards for free extras. According to Eater.com, “Starbucks’ app accounts for 90 percent of all mobile transactions.”

Online Ordering

As the pioneer in mass market technology, Starbucks makes it easy to order online and eliminate delays from lines and directly connecting with a spirited Barista. With the press of a button, your order is awaiting pickup. Today, many other companies are employing similar services, such as Panera Bread.

Just as it took the imagination of one person, with no experience in retail or coffee to launch a global phenomenon, anyone can dream and invent the next business revolution. Who knows, the person sitting next to you at Starbucks right now may be typing on their smartphone the dawning of the next “new-new”thing?

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As a graduate from the Marshall School of Business and Entrepreneurship at the University of Southern California, Mitch Goldstone is a longtime leader in the photo imaging industry and co-founder of ScanMyPhotos.com, the Ecommerce photo digitization service which has scanned more than a quarter billion pictures

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