Pivot · United States · 1971–1992
Starbucks: from coffee-bean shop to the ‘third place’
Starbucks sold coffee beans until Howard Schultz, inspired by Milan's espresso bars, left to start his own café chain and then bought Starbucks for about $3.8 million.
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
by the numbers
- Original business
- selling coffee beans (1971)
- Price to buy Starbucks (1987)
- about $3.8 million
- Stores at IPO (1992)
- about 165
What happened
Starbucks opened in Seattle in 1971 selling roasted coffee beans and equipment, not drinks. Howard Schultz joined as marketing director in 1982. On a 1983 trip to Milan he saw espresso bars as community meeting places and wanted to bring that experience to America.
The founders weren't interested in becoming a restaurant business. Schultz left in 1985 and opened his own café, Il Giornale, in 1986. In 1987, with investors, he bought Starbucks' Seattle stores and brand for about $3.8 million and merged the companies under the Starbucks name.
Schultz built Starbucks as a ‘third place’ between home and work, with consistent drinks, comfortable stores, and trained baristas. When it went public in 1992 it had about 165 stores; it later grew to tens of thousands worldwide.
Timeline
- 1971
First Starbucks bean store opens in Seattle.
- 1983
Schultz visits Milan espresso bars.
- 1986
Schultz opens Il Giornale.
- 1987
Schultz buys Starbucks.
- 1992
IPO.
what made it work
- Saw that people paid for an experience, not just a product.
- Founder conviction strong enough to leave and prove it.
- Standardised a premium experience for rapid expansion.
the lesson
The same product can be worth far more when you sell the experience around it.
Apply it to your business
- 1What experience could you build around your product?
- 2Travel and other industries are rich sources of ideas.
- 3If your partners won't back a strong idea, test it yourself.
Laws at work in this story
Figures are rounded and drawn from public reports, company filings and widely cited coverage at the time. Check the company's latest filings before relying on any number.