GigaOM » Howard Schultz

Starbucks teams up with Square, will accept Pay with Square

Om Malik and Ryan Kim — Wed, 08 Aug 2012 04:03:31 +0000

Square, the San Francisco-based mobile payments company co-founded by Twitter founder Jack Dorsey, has signed a wide-ranging agreement with coffee chain Starbucks and as part of this agreement, Starbucks will be able to accept payments from Square’s Pay with Square application. As part of this new deal, Square will also process Starbucks’ U.S. credit card and debit card transactions.

Starbucks is going to invest $25 million in Square as well. Prior to the Starbucks agreement, Square was said to be valued at $3.2 billion valuation and was rumored to have raised $200 million in funding. Here are the partnership terms from the press release jointly issued by two companies.

Customers will be able to use Pay with Square, Square’s payer application, from participating company operated U.S. Starbucks stores later this fall, and find nearby Starbucks locations within Square Directory;

Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs;

Using Square Directory, Starbucks customers will be able to discover local Square businesses — from specialty retailers to crafts businesses — from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application;

Starbucks will invest $25 million in Square as part of the company’s Series D financing round;

Starbucks chairman, president and ceo Howard Schultz will join Square’s Board of Directors.

This is a significant boost for Square which has been in competition with the likes of eBay’s PayPal division. Square, which was started to tap into the growing people-to-people economy, has broadened its ambitions. Signing up Starbucks can be viewed as a big part of the company’s desire to go after bigger retailers in addition to independent retailers.

The deal gives Starbucks another way to accept payments in store at its 7,000 U.S. locations. It currently has a successful mobile payment system based on barcodes. But now, it will have a way for Pay with Square users to pay at the register using their phone. Pay with Square allows users to open a tab at a business and pay by just using their face, which an employee can recognize on their Square Register iPad app.

It’s a big win for Square, showing how it can move up into big retail. Here’s what Square CEO Jack Dorsey said in a letter:

Square began with a really simple idea: everyone should be able to accept credit cards. It should be easy and free to get set up, it should use simple technology people already own, and, most importantly, it should instantly adapt to any size business—from the person chasing a dream to the largest organization on the planet. By embracing Square, Starbucks has validated these ideas as powerful tools—not just for small businesses, but for smart businesses.

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Starbucks CEO extends “Indivisible” campaign from coffee to social media

Laura Hazard Owen — Sat, 30 Jun 2012 17:56:21 +0000

Starbucks CEO Howard Schultz likes his coffee black and his politics nonpartisan. Last year, in a move to break gridlock in Washington, he launched a campaign urging CEOs to boycott political donations. Now he’s leading “Indivisible,” an initiative focused on job creation.

Starbucks launched the “Indivisible” collection — a coffee blend, branded tumblers and mugs — in its stores in mid-June and makes a donation to the Create Jobs for USA fund every time an “Indivisible” item is purchased. Now the campaign is extending to social media in a special Fourth of July initiative. Schultz wrote yesterday on the company’s blog:

I invite you to share your view of America, and how we can all put citizenship over partisanship. On Instagram, post a photo of the America we all need to see. On Twitter, provide a link to an innovative idea. Blog about who’s making a difference in your community; or on YouTube, share how you made your American Dream come true. No matter where you post, if you use the tag #INDIVISIBLE, Starbucks will do its part to collect and amplify your voices.

That’s a little vague. Is it enough to get consumers excited? So far, #indivisible isn’t a trending topic on Twitter, but a search today reveals a few #indivisible tweets an hour. Posting to Instagram is interrupted by the fact that Instagram is down in a mass power outage. Still, we have a few days to go until July 4. On that day, “To spark the conversation in our stores, your local Starbucks will proudly serve everyone a free tall hot brewed coffee on the Fourth of July.” It’s yet to be seen whether the conversation that day will focus on job creation and nonpartisanship — or whether people will just be wondering why they didn’t get an iced coffee instead.

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Groupon’s CEO gets some financial adult supervision

Staci D. Kramer — Mon, 30 Apr 2012 23:53:04 +0000

It was a vote of confidence when Howard Schultz joined the Groupon board of directors — and it’s a sign of the start-up’s significant financial challenges that the Starbucks CEO is leaving before his term is up to make way for American Express CFO Daniel Henry.

A second director, Accel Partners’ Kevin Efrusy, won’t stand for re-election at the company’s Jun 19 board meeting. As the board rep from a key investor, usually someone like Efrusy would be replaced by another member of his firm. Instead, his slotted successor is Robert Bass, a vice chairman of Deloitte LLP, now nominated for election at the annual meeting. (The changes were reported first by AllThingsD, then confirmed by Groupon.)

But Groupon’s lightning-rod-in-chief –CEO Andrew Mason — isn’t going anywhere. Yet. Mason, the co-founder and one of the largest individual Groupon shareholders, has been criticized for his eccentric management style, which could be forgiven or at least overlooked when he was delivering results.

Investors get a lot less forgiving when growth is in question and you have to restate your first public quarter’s results, especially if accounting methods aren’t the norm. Groupon is being sued by shareholders and may face an SEC investigation .

Howard Schultz is no financial slouch but he’s not a finance guy. Replacing him with the CFO of a major company who speaks fluent transactional and e-commerce adds a kind of financial gravitas. Henry and Bass aren’t investors on a board; they’re experts in managing corporate finance — and doing it in the spotlight of a public company.

Both new directors will join the audit committee chaired by early-in Groupon investor Ted Leonsis. Leonsis also serves on a corporate board that oversees one of the new directors: he joined the AmEx board in 2010 following the credit card giant’s acquisition of Revolution Money. At AmEx, he heads the Innovation and Technology Committee.

As for Mason, I don’t know what it would take to remove him as CEO — or for him to step away voluntarily — but that would be a logical next step if this move doesn’t help the company find more secure financial footing.

The stock dropped 10 percent in late trading to $10.71, continuing a sharp downward trend since the restatement.

GRPN data by YCharts

Thumbnail image courtesy of Shutterstock user [Monkey Business Images].

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Howard Schultz Uses Starbucks’ Power To Campaign Against Campaigns

Staci D. Kramer — Fri, 02 Sep 2011 21:10:05 +0000

Usually my e-mail from Starbucks (NSDQ: SBUX) is about the new reserve coffee or some other promo about the company’s products. But the message from Starbucks CEO Howard Schultz addressed to “Starbucks Friend and Fellow Citizen”: that just hit my inbox has a very different subject, one that raises the question of how companies should use access they’ve been given by customers.

Schultz went public three weeks ago with his decision not to donate money to any campaigns and his appeal to fellow business leaders to follow suit. AOL (NYSE: AOL) CEO Tim Armstrong was among the 100 or so CEOs who quickly agreed. Since then, Schultz has gone into full campaign mode in his campaign against political business as usual, making TV appearances and launching a “take the pledge” effort at http://www.upwardspiral2011.org and aimed at getting both CEOs and other donors to take the pledge.

Today’s e-mail blast touts the next step: “a national call-in conversation on Tuesday September 6th hosted by ‘No Labels.’ a nonpartisan organization dedicated to fostering cooperative and more effective government.”

Click on the Upward Spiral link and you can either RSVP or “take the pledge.” That takes you to a Facebook page describing the “platform for action” where you can pledge not to donate and/or to hire. So far it stands at 2,047 promising not to donate — which may sound like a small number but can reflect a lot of money that usually goes to candidates — and 308 pledging to hire.

I wanted to know more but when I clicked on the “tell me more” button I rebelled at all the Facebook permissions it took to get there. I should be able to find out more about an effort like this without giving up privacy.

That brings me back in a way to the beginning. I’m not offended by today’s e-mail from Howard Schultz. He has a powerful consumer pulpit and a message he thinks is important enough to use all of his resources to get across. It’s in keeping with the emphasis Starbucks has had on responsible giving for many years and other efforts.

But I probably wouldn’t feel ok if it were the head of another public company — or any company — using my permission for a consumer relationship to send messages about, say, a proposition to ban gay marriage or to back a specific candidate. How about an opt in for any info that isn’t directly related to the company’s goods and services?

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KidZui: No Pornography Here

Stacey Higginbotham — Wed, 19 Mar 2008 04:01:40 +0000

The launch of KidZui could be viewed as just another social network for kids hitting the market, or it could be seen as a victory of real-live people over the mighty algorithm. Time and the company’s success will eventually tell. Over the last two and a half years, KidZui has paid 200 parents and teachers to manually filter the adult Internet, distilling the world wide web down to 500,000 sites appropriate for kids.

The KidZui Internet is accessed through a browser designed by the company to reflect a child’s point of view and levels of interest. The goal is to get parents of kids ages 3 through 11 to sign up for $99 annual plans or $9.95-a-month plans. Those subscription fees (no ads) will support a staff of editors who will monitor where kids want to go outside of the KidZui sites, reviewing and adding those that are appropriate.

It has social components, but KidZui aims to be broader than Webkinz or Club Penguin, both of which have received loads of media attention and have subsequently prompted the launch of dozens of me-too sites. It also seems to allow for a broader web experience than some of the filtering software products out there such as NetNanny and CyberSitter. KidZui’s founders include Clifford Boro, the former chairman of VideoEgg, and is backed by Maveron, the investment fund founded by Starbucks Chairman Howard Schultz.

As a parent, I like the idea and am impressed with the various features built into the KidZui browser; it’s something I’d consider signing up for once my kid is old enough. It would still enable her to watch her beloved YouTube videos of babies laughing, and it seems like a fun interface. As a journalist, I’m hopeful that KidZui can make it because it would proving that while technology can certainly help filter information, it can never replace that human touch.

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One Way to Differentiate Your Startup: Customer Support

Carleen Hawn — Thu, 28 Feb 2008 08:02:07 +0000

Update: for another lesson on the imperative of customer support, spend a few minutes studying Starbucks CEO Howard Schultz’s decision this week to close hundreds of stores nationwide for 3 hours in order to retrain Baristas in good customer service. The Wall Street Journal: Starbucks Closes Stores To Retrain Baristas (Photo credit, from WSJ: Kurt Wilberding)

Ben Yoskovitz is a very thoughtful founder, and we republish posts from his Instigator Blog here frequently. (See list at bottom). Yesterday, Ben put up an ode to his customers that is (OK) a tad mushy but, as always, material.

Ben points out an all-too-common shortcoming of cash- and time-strapped startups: a lack of attention on customer support. Maybe we’re overly focused on our code or our funding. Whatever the reasons, this is a weakness Ben argues — and therein lies a potential strategic advantage.

Of course it’s just good business to offer quality customer support. The fact that so few startups do so only compounds the value to you if you can:

Luckily for you, very few companies (especially startups!) provide anything remotely resembling quality customer support and so you can immediately use it as a differentiator…

What is more, tying in to our post yesterday on the perils of pursuing product perfection, Ben points out that providing good support can compensate for the inevitable glitches, bugs and necessary tweaks that you — and your users — will be dealing with post-launch.

Invariably your product will be rough around the edges, bugs will emerge and there will be a shortage of features. On top of that, you’re the new kid on the block, so customers may look at you with a bit of concern (especially in a B2B market.) “How long will they last?” “Can they really provide the level of product quality and service we need?” To assuage those concerns, and balance against the shortcomings of an early product, use great customer support.

So this is how, Ben concludes, what must of us think of as a “cost-center” actually becomes a value-creator.

Read all of Ben’s post, I Love Customers , and for more of his writings, see also:
* DEMO Went Great, Then “All Hell” Broke Loose.
* Presenting at DEMO: 12 Do’s. 5 Don’ts.
* Are you a leader?

* This is Your Brain. TiYB when fundraising…
* How-To Create the Perfect Company Blog

Image credit: CartoonChurch.

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