Starbucks Brews Up Hometown Innovation

Starbucks Brews Up Hometown Innovation

By Caitlin Moriarty

Starbucks’ most obvious contribution to startups in Seattle might be providing places for entrepreneurs to meet and top off their caffeine tanks.

Of course, aspiring entrepreneurs who take the time to consider the coffeehouses in which they’re sitting and sipping will find a fair degree of inspiration as well.

Since launching in 1971 with a single store at Pike Place Market, Starbucks has grown to 18,000 stores in 62 countries. It’s one of the best-known brands in the country, earns praise for treating even part-time employees well and its success is the subject of business school courses nationwide.

Starbucks has inspired other entrepreneurs to get into the coffee business, but its influence is not limited to dark roasts and lattes. For example, Jane Park, a former Starbucks executive and the subject of this issue’s cover story, credits former Starbucks President Howard Behar in helping her succeed.

Behar has advised a number of Seattle entrepreneurs. "I came early to Starbucks when they were 28 stores, and I worked for the classic entrepreneur Howard Schultz. I think people always want to reach out to success," he said. "And Starbucks is a great example of success. I think we all hope that by talking to people who have been around we can find models we can copy, at the same time making it our own. I think all of us ask that question, can I do that too?

"I have worked around a lot of entrepreneurs, and I have such a love affair with entrepreneurs. They make things happen," said Behar. "I believe what matters most for entrepreneurs is figuring out why you are doing what you're doing. What is its greater purpose? How is it bigger than you? If you take the time, spend the time being thoughtful, figuring out how your idea is bigger than you and how it improves the world we all live in, you have a much better chance to succeed."   

Behar who is author of the book, “It's Not About the Coffee: Lessons on Putting People First from a Life at Starbucks,” said Seattle, home to Costco, Nordstrom and REI, has a strong retail tradition.

"Seattle has a particular drumbeat about serving others, particularly in retail segments, like Starbucks and what they do,” he said. “I think Starbucks, not just in the Seattle scene, but globally, shows that you can be of service to human beings, internally and externally, in a way that builds them up and still be an economically viable company."

In 2011, during the Great Recession, Starbucks co-launched the Create Jobs for USA program with the Opportunity Finance Network, in order to support small businesses and help them expand and hire more employees. The Starbucks Foundation seeded the initial Create Jobs for USA fund with $5 million. The program provides capital grants to community development financial institutions which, in turn, make loans to small community businesses and microenterprises, as well as nonprofits and programs for affordable housing.

One of the beneficiaries of the Create Jobs for USA program is Pippa’s Real Tea, a teahouse in Port Townsend, Washington.

"In the year before I opened I received tremendous support and guidance from my local Small Business Development Center," said owner Pippa Mills. "I had no experience at running a business, let alone starting one. All I had was a vision and a commitment to realizing it.”

The loan she secured to equip the commercial kitchen in her store was funded through the Create Jobs for USA program. She now employs 14 people.

“At the time I had no idea that Starbucks was involved in the program," said Mills. “I've always admired Starbucks as a company. They are passionate about their product, take care of their employees and maintain a strong ethical presence in the marketplace. When I heard that they had funded the loan for my tea room I thought it was kind of ironic, especially as they are now entering the tea business in a very big way. It's great -- they will do for tea what they did for coffee in this country, and every tea shop will benefit."

Starbucks also affects the Seattle startup community directly through Maveron, the venture capital firm launched by CEO Howard Schultz. Maveron has invested in several up-and-coming Seattle startups, including Julep, Zulily, Decide and Tred. The firm helps fill a crucial gap in the local entrepreneurial ecosystem.  

"There really aren't that many investors here in Seattle. You have to get out of Seattle to do your fundraising. But Maveron is really growing, and we really like them a lot," said Grant Feek, co-founder of Tred, which brings new cars straight to consumers’ homes or offices for test drives.

With more than 400 locations, Starbucks is ubiquitous in Seattle. Local entrepreneurs might always view them primarily as places to brainstorm over coffee, but the chain offers a lot more for those who willing to look up from their caramel macchiatos.

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