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The Speech of the CEO of Starbucks1. I did not know very much about coffee, and it was an experience that I had. Walking into Starbucks store for the first time in Seattle Washington, when I tasted for the first time, I was really intrigued with a taste that I had never experienced before. I wanted to learn more about it. And that brought me to being able to meet the people behind Starbucks initially and ultimately gonging to work for Starbucks in 1982, but they turned me down. They turned me down because they didnt think they needed someone to come in and help them build Starbucks to another level. And I was very fortunate and very lucky that they and a change of mind and they did offer me a position and I moved form New York city to Seattle Washington. In September, 1982, and joined Starbucks. / 2. One year after I joined Starbucks, I went on a trip to Italy, a business trip, for Starbucks and while visiting Italy, I became enamored, and curious, and intrigued with the phenomenon of the Italian coffee bar. For example, there were 1500 coffee bars alone in the city of Milan and what I saw in the coffee bar was not just great coffee but the sense of community and human connection. Starbucks only sold pounds of coffee for home consumption. They never sold one cup of coffee. It was a different business. It was a business created for home use. So I rushed back from Italy with tremendous enthusiasm and excitement and sat down with the founders of the company and said, “Ive seen the future. The future is the Italian coffee bar and what we can create-the sense of community”./ 3. And as enthusiastic and excited as I was-thats how disappointed and non-interested they were. With the idea and theyonce again, they turned me down. It was a disagreement about strategy. He was the owner; I was the employee. He was the boss, and he was in charge and I had to follow that, but the way that I thought about this over a period of almost two years is that I couldnt allow this incredible opportunity that I saw in Italy and what I thought was an opportunity to create a different kind of business in America to go by. And so I guess you can say for almost two years, I just continued to be so frustrated and disappointed, and disappointed in myself that I wasnt taking action and that I found myself really unhappy and I had to kind of look myself in the mirror and say, “Ok, its up to you. You are responsible for what you want to do.” And thats why I decided to leave.4. First of all, I had zero money, but I knew that the way to start the business was to raise what in America called “venture capital”. And so, I wanted to go to private individual investors who could perhaps see the future with me and invest with me and I was a terrible salesman. In the first year, when we were trying to raise the money, I literally talked to 242 individual investors and about 98% of them turned me down. I meet many of those people today. I remind them. At the same time when I was trying to raise money for this new company, coffee consumption in America was down. Were gonna charge 2,3,4 dollars for a cup of coffee. We were gonna serve in a paper cup and also we were gonna call each drink by an Italian name that no American could pronounce. Would you have it invested? /5. While thinking you are trying to raise money from a sophisticated investor, you have to create for them a very very bright picture, a vision of what the company is going to look like and ultimately what it is you are trying to accomplish. But you also obviously have to create an economic return. I should tell you this: the first business plan was-over a five-year period, I believe that we could open 100 stores. And things were going so badly that I actually rewrote the business plan and crossed out 100 and wrote 75 stores and even then, people said that there was no way that you were gonna open 75 stores in five years. Its impossible. And well, therere 11,000 today. /6. I think I mentioned to you earlier that when I walked into the Starbucks store for the first time, I had an emotional experience and that emotional experience was that I could feel and see that this rough diamond was not yet polished, but it had so many assets and so many unique characteristics that if positioned properly, could be something of extraordinary quality and so that gave me the idea and perhaps gave me the confidence. But also I recognized that the Starbucks name, the name itself I believed, was a magic and the people who were working for the company were so passionate about the coffee and the customer. And I believe that, if given the opportunity to grow the business and expand it reliterally and I wasnt just kidding-I really believe that we could make history. /7. Any time you are growing a company, I think, at this pace, theres risk attached to it. As we examine what has taken place over the years, in terms of number of new stores, number of new markets, the foundation of our success has been the cultural values of the company, so that the risk that we constantly address isand sounds kind of trivial way is how do you get big and stay small, how do you maintain the local relevancy of the stores, how do you maintain the intimacy with the customer, how do you maintain trust with your people, and so what weve tried to do in every place that weve gone is to make sure that the fundamental foundation of what has built the company around the cultural values is in place first./8. I believe strongly, that people, irregardless of the differences, want to be part of something larger than themselves. They want to be part of something that they can go home at night and share with their family and friends that they are proud of be part of. So weve created an environment both for our customers and our people. That is aspirational. And I think also, when you are managing a company and managing people, its really important, no matter where you are, if you are the CEO, or if you are the lowest person in the company, that everyone is treated respectfully, and there is no arrogance. And I think in the end of the day, as managers, and I would say this to future entrepreneurs and business people as well, you wanna demonstrate to your people not how much you know, but how much you care, and if you can do that in a genuinely authentic way, that is gonna cross over all of the culture differences, because you want to build an emotional connection with people. / 9. And Ive learnt that even though there are differences, that emotional connection-there is a common language. Even though I am the chairman of the company, my main job is to ensure the fact that they are heard, that they are valued, and that the

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