I am going to write about a couple of my CEO heroes, Howard Schultz of Starbucks and Elon Musk of SpaceX and Tesla Motors. Previously I wrote about my media heroes, which included two CEOs, Rupert Murdoch and Mark Zuckerberg, but when I classify ‘CEO’ heroes I value the entrepreneurial spirit and management style of Schultz and Musk in the same way I value the media empires of Murdoch and Zuckerberg.
Howard Schultz
Starbucks CEO and former owner of the Seattle SuperSonics, Schultz joined Starbucks in 1982 as director of Marketing after a sales trip to Seattle as a general manager for Hammarplast drip coffee makers, which Starbucks was buying at the time. While working at Starbucks, Schultz travelled to Italy to buy coffee and noticed not only were they selling coffee, but espresso too. He also noticed a new dynamic, one he would later embrace, “The third place,” after noticing Italians ‘hanging out’ at coffee shops all over the country.
The Third Place
The ‘third place’ is a phrase coined by contemporary sociologist Ray Oldenburg. Oldenburg in 1990 that postulates that the third place is a term referring to a public place where people gather for the social satisfaction that they can’t get from the first two domains of the home and the workplace. Oldenburg argued that the availability of such gathering places in America was lacking and so, inspired by Oldenburg’s observations, Schultz turned America’s ‘lack of place’ into a business opportunity encouraging loitering and turning Starbucks into a cozy home-away-from-home.
The Great Experiment
When Schultz got back from Italy he convinced the management team to add espresso to the menu. They agreed to try it out in one store and although it went over well, the management refused to roll it out explaining that they didn’t want to get into the ‘restaurant business’. Frustratated, Schultz started his own company to serve coffee, Il Giornale, in 1985. Two years later the original Starbucks management team decided to focus on their Peet’s Coffee & Tea brand and sold the Starbucks name to Schultz and Il Giornale for 3.8 million. Schultz renamed Il Giornale to Starbucks and aggressively expanded the brand across the United States. In 2000 Schultz left the company, but rejoined as CEO in 2008, taking the company to new records in profitability.
Elon Musk
Co-founder of Paypal, SpaceX, and Tesla Motors, Musk is currently CEO of SpaceX and Tesla Motors in addition to being chairman of SolarCity. Musk was inspired by Thomas Edison to solve three “important problems”: the Internet, space, and clean energy.
His first company was Zip2, which Musk cofounded with his brother, Kimbal Musk. Zip2 was acquired by Alta Vista in 1999. That same year Elon Musk cofounded X.com, which later merged with Confinity, which owned the domain, paypal.com. This helped him solve his first problem, the Internet.
Paypal.com was originally used by Confinity for email payments by Palm users, but after 2001 became known for what it is today and X.com changed its name to PayPal. Just one year later, in 2002, Ebay acquired PayPal and that same year Musk founded his third company, SpaceX. This helped him solve his second problem, space.
Musk was still building SpaceX when he cofounded Tesla Motors in 2004. He later became CEO in 2008. Tesla Motors make all-electric cars, which use much less energy than traditional gasoline-powered vehicles. Lyndon Rive, Musk’s cousin, founded SolarCity in 2006 of which Musk is chairman of the board. Together with Tesla Motors, Solar City helped him solve his third problem, clean energy.
In 2007 Musk won Inc.’s Entrepreneur of the Year award and his fortune is estimated at over 300 million dollars. This serial entrepreneur and father of five works 100-hour weeks and is passionate about what he does. His passion is an encouragement to me and that is why is one of my CEO heroes.