Why Howard Schultz Left Starbucks In 1985 For Another Company

Howard Schultz's impact on Starbucks, from when he first joined the company in 1982 to the present day, is undeniable. It was his vision to turn Starbucks into a "third place" (after home and the traditional workplace) where people could spend time, socialize, and do work, notes CNet, all while enjoying their latte, cappuccinos, or frappucino.

During his multiple stint as CEO, Schultz transformed the company from a small Seattle company with just six stores that only sold freshly roasted coffee beans and coffee equipment into a nationwide, and eventually international, powerhouse, notes CNN Business. Today, Starbucks has one of the most recognizable brand names in the coffee business, and with more than 35,000 stores around the world (via Statista), is the largest coffee chain in the world, according to Cuppa Bean. Yet Starbucks' dramatic transformation is one that almost didn't happen at all, when Schultz ended up leaving for another coffee company just three years after he started at Starbucks. 

Schultz's vision for Starbucks

According to the Starbucks website, Schultz first discovered Starbucks in 1981, when he visited the original Pike Place shop and enjoyed his first taste of Sumatra. Schultz moved from his native New York to Seattle and joined the company as director of operations and marketing in 1982. A year later, during a visit to Milan, Schultz discovered Italian coffee bars and knew right away that the Italian coffee experience was something he wanted to replicate back home.

Although Schultz was able to convince the Starbucks founders to experiment with serving espresso drinks in 1984, they weren't convinced that serving beverages was the right direction for the company and considered it a distraction from their primary retail business of selling coffee beans. With an insurmountable difference in vision for the company, Schultz ended up leaving Starbucks in 1985 to form his own company, which he named Il Giornale, after the newspaper in Milan (per Starbucks Melody), where he was first inspired by Italian coffee culture. Starbucks actually invested in Il Giornale (via Starbucks), which used Starbucks coffee beans to make their espresso and coffee drinks.

In 1987, the founders decided to sell Starbucks. Schultz jumped on the chance to buy the business, raised funds, and Il Giornale ended up purchasing Starbucks and retaining its name. Schultz became CEO of Starbucks for the first time, and the rest is coffee history.