Get The Equity Of The Brand Bigger Than The Size Of The Company
Schultz says it twice in the conversation, almost in passing: "the equity of the brand was much bigger than the size of the business." When he arrived in 1982 Starbucks had four stores selling beans only, no beverages, no real revenue. But tourists in the Pike Place store would fill out mail-order cards asking for coffee to be shipped to their home cities. People in cities Starbucks had never entered already talked about it like it was an iconic big company. That gap — between how big the brand felt and how small the business actually was — became the entire growth thesis. The principle: build a brand that exceeds the footprint of the operation, then let the operation chase the brand. Every store opening, every Costco shelf placement, every United Airlines deal, every cup someone carried down the street was a billboard that made the brand larger than the revenue justified. By the time the revenue caught up, the next layer of brand equity was already being built ahead of it. Schultz spent zero dollars on marketing for decades. The brand was the product, the product was the experience, and every customer carrying a cup with the logo on it was doing his customer acquisition for him.