The Exchanges

Every argument clarity score on this site is built from rows on this page. Each question and answer was assessed with names hidden, the host's own answers included, on four things from 1 to 5: directness (does it answer the question asked), coherence (do the ideas follow), precision (concrete details and clear references), compression (says a lot per word). The weighted mix (30/30/25/15) is the exchange score. A person's published score averages their exchange scores on raw tape only, at least 8 of them, shrunk toward the cohort mean. Full method →

Howard Schultz no published score: only 6 usable exchanges on raw tape, and a fair score needs 8+ · coarse estimate ≈4.5/5 from 6 raw tape exchanges record → ← everyone

Every exchange below was scored with names hidden, four dimensions each from 1 to 5. An exchange's score is 0.30·directness + 0.30·coherence + 0.25·precision + 0.15·compression. The published score averages the raw tape exchange scores and shrinks small samples toward the cohort mean, so five great answers can't beat twenty good ones. Produced feed rows count only toward coarse estimates, never toward a full score.

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Answered raw tape D 5 · C 5 · P 5 · Cm 5 5.00

Q So take us back, you know, in the Starbucks prehistory before you arrived, how did the company start?

A Well, since I wasn't there, this is what I know. There were three founders, Jerry Baldwin, Zev Siegel, and Gordon Belker. And the story that was told to me is that one or both of them were going to school in California, in the Bay Area, and they became enamored with Pete's Coffee Company, uh, which- Alfred Pete? Yeah, and Alfred Pete was, you know, more than anyone else In the history of coffee in America was the true pioneer. He brought specialty coffee, Arabica coffee, to Northern California. And Jerry Baldwin and Zev became so interested and intrigued with what Pete's was doing, and given the fact that they were from Seattle, decided they would try and bring Starbucks coffee in the form of Starbucks to Seattle, Washington. Now what is not known is that when Starbucks opened in the Pike Place Market in 1971, they were using Pete's Coffee.

AI assessment note: “There were three founders, Jerry Baldwin, Zev Siegel, and Gordon Belker.”

Answered raw tape D 5 · C 5 · P 5 · Cm 4 4.85

Q Yeah. Can you tell us about the people? This is such a huge pillar to our minds of building Starbucks.

A Again, we started this conversation talking about childhood. I really want to build a different kind of company, and, and how do I do that in a way that provides respect and dignity, because I was so imprinted with how my, my father felt disrespected, devalued, and kind of vilified as a uneducated Blue collar veteran working in a series of jobs that he just never made it and living through the dysfunction of, of a poor family, always under pressure with money. And so I wanted to kind of crack the code on how do we create Benefits that would, in a way, uh, take the company in direction no one's ever been in before. And so early on we started talking about exceeding the expectations of our people so they can exceed the expectations of the customer. And the first time we actually were able to manifest that was a year before the IPO. And, and that was an incredible struggle because I had on my board Two venture capitalists, and I was proposing something that had never been done before, and that was, I wanted to give equity in the form of stock options to every single employee in the company, and they just said, what? What are you talking about? We're not doing that. And so the fight became, ultimately we gave 14% of everyone's base pay in the form of stock options at the end of the year based on the strike price. And I had to do it the year before the IPO. Had to. So everyone would…

AI assessment note: “I wanted to give equity in the form of stock options to every single employee”

Answered raw tape D 5 · C 5 · P 4 · Cm 4 4.60

Q And your conviction of, we have to go to L.A., was that for?

A The equity of the brand, I could see, I could envision the warm weather, and everyone walking around with our cups, and the media, and the celebrities, and just the iconic way. And there was nothing in the market, nothing at all, that even appeared to be in the business that we were in. And anyone who was doing it was not doing it well. We had to go. And even though we maybe were not ready, we just had to do it. And we did. And I think Howard would agree today that that ended up being a, the right decision. And LA The halo on Starbucks from Seattle to Vancouver and Chicago was nothing. When we went to LA, it just exploded because celebrities embraced Starbucks.

AI assessment note: “The equity of the brand, I could see, I could envision the warm weather”

Answered raw tape D 5 · C 5 · P 4 · Cm 4 4.60

Q Did you go in with Essentially the Starbucks concept?

A Yeah, it was exactly what you see right now. There's no, no different. But they didn't know, the Chinese people hardly knew what coffee was. There was no morning traffic. And in the early days of our partner, we didn't see eye to eye, so we got them out. When Belinda came along, we had a world-class operator who had succeeded in Singapore and Hong Kong. She's a strong person who believed that Seattle, the way we were organized, was not a formula for success. You can't have people in Starbucks in Seattle designing the breakfast menu who have never been to China. Who think we're gonna make any blueberry muffins. And so when she said to me, I will do it. If I'm in control of everything. So I wanted to centralize China. I report to you. It's you and me and John Culver who runs international. Take Seattle out of the equation. We were failing. What choice did I have?

AI assessment note: “Yeah, it was exactly what you see right now. There's no, no different.”

Answered raw tape D 5 · C 4 · P 5 · Cm 4 4.55

Q You've transitioned from being the CEO to someone else three different times. If you could go back, let's even just say the first time, if you could go back years, 1999 or 1997, so you can start working on some talent development. Um, what would you do differently to make sure that succession?

A I would have believed Oren when he said, I only want to do this for a couple of years. And I convinced myself I could just get Oren to do this for Five years, maybe 10 years. And so when he kept saying, you know, I, I want, I don't want to do this anymore. I just, so I was stuck because I was not prepared. To look around the room and say, God, I think he could do it. And if I would have spent maybe a year or two in, but I didn't, I was very, I believe that I could convince Norton to stay longer. And so I think, and also Jim Donald's a great guy, but I, I think the immersion of an outsider at that time, given we were moving into a crisis, not a Starbucks crisis, but the financial financial crisis, very difficult. So it's on me. I think when I look back and I just did not do a very good job of recognizing the internal talent and cultivating it. But I want to, I want to say one more thing about Starbucks and it's the complexity of it. We're in multiple businesses. So we're in the agricultural business. We are buying coffee from 30 producing countries around the world. We are subject to weather and the agricultural issues, some of which are, many of which are not in our control. Political, all kinds of stuff. Second, we are manufacturing a commodity that is very, very challenging because it's coming from 30 producing countries, and each coffee, each coffee from every country has it…

AI assessment note: “I would have believed Oren when he said, I only want to do this”

Partly raw tape D 3 · C 4 · P 3 · Cm 4 3.45

Q Do you think having that background at Xerox, did that give you a piece of perspective that helped build Starbucks to what it is today?

A When I hear the question, I have to go back to my childhood and think everything that I've experienced growing up in the projects in more or less a dysfunctional family because of the, the pressure of money. Getting the Xerox opportunity and having some level of success, but realizing I wanted more. The humility, which came with rejection, the shame I had as a poor kid living in the projects, all of that, I think, crystallized in me. And I give Sherry so much credit in realizing that together we wanted to build a different kind of life and gave me the courage, the conviction and, um, the drive to try and do something That I felt I was destined to do. I didn't know what it was. I certainly didn't know moving to Seattle was gonna create the opportunity of a lifetime, but I always felt I had to get out of that station in life where I was positioned not to get to the level that I thought I, I deserved to be.

AI assessment note: “all of that, I think, crystallized in me”

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