In 1983, Howard Schultz walked into an Italian espresso bar in Milan for the first time and saw something he had never imagined a coffee business could be. An experienced barista greeted regular customers by name, already knowing their orders. People lingered to talk with neighbors, meet friends, or simply sit for a few minutes in a welcoming atmosphere during a stressful working day. Milan alone had roughly 1,500 such bars, about one for every thousand residents.
Schultz, then a marketing director for a small Seattle chain of coffee bean stores, returned home obsessed with one idea: recreate that experience in America. He brought the proposal to his employers, the three men who had founded Starbucks in 1971. Jerry Baldwin, a former English teacher, Zev Siegl, a history teacher, and Gordon Bowker, a writer, had opened their first shop at Seattle’s Pike Place Market with a single genuine passion. They were fanatics for high-quality, freshly roasted coffee and believed that in early 1970s America, decent beans were practically impossible to buy.
Supermarket shelves were filled with cheap instant coffee in cans and pre-ground blends of questionable origin, made for mass consumers rather than true enthusiasts. The store’s name came from Herman Melville’s Moby Dick. Starbuck was the first mate aboard the whaling ship Pequod, a calm, rational, and somewhat poetic character within the madness of the hunt for the white whale. But that name was not the only option considered.
The founders seriously debated naming the store Pequod’s after the ship itself. They abandoned the idea at the last moment when one partner said the name aloud and noticed an awkward problem: it sounded almost indistinguishable from the English slang verb meaning to urinate. Imagining a respectable coffee shop with such a sign in the center of the city was impossible, no matter how many literary references it carried. An important detail is now widely forgotten.
The original Starbucks did not sell ready-to-drink coffee over the counter. It was strictly a retail store selling whole roasted beans and specialized brewing equipment, filters, hand grinders, Turkish pots, and French presses. The entire business idea was to teach ordinary Americans how to make genuinely good coffee at home with their own hands. That format proved successful among a small circle of enthusiasts in Seattle, and the store gradually opened several additional locations around the city.
Throughout the 1970s, it remained a local niche business with no ambition of reaching a nationwide scale. The three founders considered Alfred Peet their first serious mentor. Peet owned a small but legendary shop, Peet’s Coffee in Berkeley, California. From him they purchased their first batches of roasted beans, and they adopted much of his philosophy of dark roasting and careful attention to raw bean quality.
That detail of friendly mentorship would play an unexpected role a decade and a half later. In 1982, a new director of marketing and retail sales joined the company, then more than ten years old but still a modest local chain. Howard Schultz had previously worked in sales for a kitchen equipment company. Today, much of the world mistakenly considers him the sole founder of Starbucks, even though the company was already 11 years old when he arrived and was founded by three entirely different men whose names modern customers have never heard.
The turning point in his career came in 1983 during that routine business trip to Milan. After his first encounter with an Italian espresso bar, he returned to Seattle convinced that Starbucks should be transformed into full-fledged urban coffee houses. His bosses firmly rejected the idea. Baldwin and his partners did not see themselves in the business of selling ready-made drinks across a counter.
They still viewed Starbucks exclusively as a retailer of quality beans for home use. The very idea of turning their stores into something resembling Italian espresso bars struck them as a dangerous dilution of the brand’s original philosophy. After receiving that rejection, Schultz made a decision that looked almost recklessly risky for a salaried employee without substantial personal capital. He left Starbucks and in 1985 started his own small chain of coffee shops from scratch, called Il Giornale, Italian for the daily newspaper.
The new format closely reproduced what he had seen in Italy. Experienced baristas prepared real espresso in front of customers. Italian music played quietly in the background. Customers were encouraged to stay rather than grab a drink and leave.
Il Giornale quickly gained popularity, and two years after its launch, the chain opened its third location in Seattle. Then the story took an unexpected turn. In 1987, the three original owners of Starbucks decided to sell the entire company in order to focus all their energy and capital on Peet’s Coffee, the business they had acquired in California, which they believed offered greater growth potential. Schultz, the former employee whose main idea had been rejected outright by his own bosses, brought together a group of outside investors and bought Starbucks outright, including its recognizable name, all six physical stores, and full brand rights, for approximately 3.
8 million dollars, an enormous sum for him personally at the time. He merged the newly acquired company with his own Il Giornale chain and made the strategic decision to keep the more recognizable name Starbucks for the combined business. The logo that would become one of the most famous in the world began, like the company itself, in a modest way. Gordon Bowker and a designer they brought in searched for an image that would reflect the maritime theme of the name from Moby Dick, as well as Seattle’s own history as a center of fishing and maritime trade.
In an old 16th century Norwegian book on maritime symbolism, they found an engraving of a two-tailed siren, a mythical creature that for centuries had symbolized the attraction of the sea, its generosity, and its deadly danger to sailors. The very first version of the logo, designed in 1971, depicted the siren in remarkable detail, almost unchanged from the original medieval engraving, including a fully exposed bare chest and a highly detailed depiction of the body. For a small local store in Seattle’s bohemian neighborhood during the 1970s, that logo generated little criticism. But as the company began planning expansion into other states with more conservative cultural norms, the logo became a growing source of internal discomfort for marketing and legal departments.
In 1987, the same year Schultz bought the company, the logo underwent its first major redesign. The siren’s long hair now completely covered her chest, and the overall image became noticeably more simplified and stylized. In 1992, as the company prepared for stock market expansion, the image was simplified again, bringing it much closer to the version most people recognize today. In 2011, exactly in time for the company’s 40th anniversary, the current version was finalized.
The outer text ring containing the word Starbucks was removed completely, leaving only the siren against the familiar green background. Her figure became more abstract, generalized, and almost geometric, a silhouette recognizable at a glance, with very little remaining of that direct visual connection to the provocative medieval engraving. After gaining full control in 1987, Schultz immediately began aggressive expansion, something completely uncharacteristic of the modest regional chain that had operated within the boundaries of a single city for years. Over the next five years, the number of locations grew from six to more than 150.
In 1992, the company went public with an initial stock offering, giving Starbucks access to significantly larger amounts of capital. During the 1990s, Starbucks developed the concept that would become central to its marketing philosophy for decades: the idea of the third place. According to this concept, first articulated publicly by Schultz himself, an ordinary person’s daily life revolves around two main spaces, home as the first place and work as the second. Starbucks would deliberately become the third place, a comfortable neutral space where people come not only to buy coffee but also to hold business meetings, work quietly on a laptop, read a book, or simply spend time without feeling social pressure to rush anywhere.
To bring this concept to life, the company invested heavily in carefully designed interiors, comfortable armchairs, power outlets at tables, and free wireless internet long before any of these features became standard expectations. By the 2000s, the company had expanded far beyond the United States, opening locations first in Japan, then in the United Kingdom, and soon across the rest of the world, including Italy itself, where Schultz had originally borrowed the basic idea of the urban espresso bar. Today there are more than 40,000 active Starbucks locations worldwide, and the company consistently ranks among the most recognizable consumer brands on the planet, even though it all began with one modest coffee bean shop at a fish market in Seattle, which when it opened in 1971 did not even sell ready-to-drink beverages. Starbucks’ rapid expansion also brought an unexpected conflict with the very company whose founder had once been their first mentor.
By the 1990s, Peet’s Coffee, once a small independent shop in Berkeley, also began expanding and gradually became a direct competitor in the growing American premium coffee house market, the very market Starbucks itself had helped create through years of educating consumers. The three founders of Starbucks had sold the company to Schultz precisely so they could focus entirely on developing Peet’s. In doing so, they unintentionally created a direct market rival out of the same consumers of quality coffee that Starbucks had spent the previous decade cultivating. For years, the two chains competed for the best retail locations, the loyalty of the same customers, and even the same coffee bean suppliers from Latin America and East Africa.
Three teachers and a writer from Seattle in 1971 wanted nothing more than to sell good roasted beans for people to brew at home. They were not even thinking about creating a ready-made coffee culture inside their own stores. It was their firm rejection of an idea proposed by an employee named Howard Schultz that ultimately pushed him to create his own independent company from scratch, which just a few years later bought Starbucks itself from those very same people and completely redefined what it meant to go out for coffee.
First for one city, then for an entire country, and eventually for much of the world.