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Why Starbucks doesn’t need a double shot of technology to grind out dominance

Starbucks “has no technology,” its CEO, Howard Schultz, freely admitted last week at a dinner hosted by the Economic Club of Chicago.

“What is our competitive advantage?” he asked. “Humanity.”

This self-awareness and sensibility has served Schultz well. A multimillionaire several times over, Schultz returned to the helm of Starbucks in 2008 after the company he introduced to the world two decades earlier became as flat as a three-day-old Latte. The stock price for Starbucks halved as quality decreased, and Schultz decided quickly into his 2.0 stint running the company that all of its processes needed to be rebooted. He cut back on locations, spent tens of millions of dollars on employee retraining, and charged ahead with the risky launch of the VIA instant coffee brand.

While Schultz is modest about his company’s technological prowess, the newly appointed Groupon board member (who also had an early seat on eBay’s board) understands how to leverage digital media to get more people to talk about his company more of the time.

“(The Internet) is not a channel to sell things, but one to build trust,” he said. “Peer-to-peer marketing is changing the game and so much of what we do is based on the social relationship.”

So instead of obsessing over the number of transactions his company generates per hour, Schultz can invest time thinking about how to deal with “seismic shifts” in our country’s economy.

Whatever he is doing is working.

Over the last three years, Starbucks’ stock price rebounded while the company successfully launched a new consumer product (VIA) that is now available in more than 40,0000 external locations.

Credit the renewed success of the company to a tasteful blend of new age thinking and old school bravado. The Brooklyn native and longtime Seattle resident also has a bit of Chicago in him.

“When I see (people) holding up a cup of coffee that’s not ours,” he said, “I want to tackle them.”

George Garrick appointed CEO of another California startup

Sometime Chicago-area technology executive and venture capital investor George Garrick last week became CEO of San Bruno, Calif.-based startup SocialField. With $10 million in funding, SocialShield develops technology that purportedly lets parents see what their kids are up to online in a way that does not compromise their privacy.

Garrick, formerly CEO of Information Resources Inc. and A.C. Nielsen Marketing Research Co., made a bundle of cash selling Internet startup Flycast for billions during the late-’90s dot-com boom. In 2000, he hosted a $25,000 per couple fundraising dinner for Al Gore that attracted Chicago’s technology heavy-hitters of that time.

In recent years, Garrick has also served as CEO of TapJoy, Mochi Media, Jingle Networks, and Wine.com.

Small Business Expo to be held Oct. 7

The Chicago City Treasurer’s Office Small Business Expo, typically held in the summer, this year takes place at the UIC Pavilion on Oct. 7. The Expo draws expert speakers and scores of vendors with offerings for small businesses. In the meantime, early and prospective business owners can check out the organization’s One Hour Mentoring program on May 13. For more information, visit chicagocitytreasurer.com.



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