Introducing the capital one Walmart rewards card earn five percent back at Walmart Online Games for the kids headphones for dad a laptop for mom doesn't matter, you get five percent back at Walmart. Online you'll also earn two percent Walmart in store, restaurants and travel, and one percent everywhere else. When you want all that You need the capital one Walmart rewards card. What's in your wallet terms and exclusions apply capital one. Its October nineteen, eighty three Starbucks headquarters, Seattle Howard shawls rings his hands. Is he paced the office of jury, Baldwin, the company's co, founder and shelters? Pay? sing becomes more frenetic Baldwin size. He knows he can't put shorts off his purse. Distance. His mind, boggling jury, Espresso bars are the future of Starbucks. If-

seeing the ones in MILAN. You believe me I didn't see them. Howard love, most Americans have no idea what espresso is or how great it is he could introduce them following gets up from his desk. He walked to the door and opened it. Signalling. The conversation is over but day after day, shows keeps after him. If you can just ring Baldwin around Jerry please reconsider all right Howard, you can test your precious espresso bar thanks. That's great now I'll need fifteen hundred square feet in one of our stores, I'm giving three hundred square feet MAX there'll, be no room for chairs or tables there is room for a counter. Ok, I'll make the best of it short. Where's out a corner of an existing starbucks adds a gleam Chrome espresso machine in line shelves with tens of espresso. Two balistas or talk to make the special the italian drinks.

And on an unseasonably cool day in April nineteen. Eighty four special bar opens show watches, anxiously as customers drink from their porcelain cups. He said, genuine pleasure in their reactions. By closing time, The first day leaves an amazing four hundred customers he high fives, barristers soon the espresso bar is serving eight hundred customers daily. Every evening Schulz Rush into Baldwin's office waving sheets of paper, detailing the latest sales figures, Jerry Customers are standing in lines out the door you test, and yes, people like it but it's just a distraction from our business, which is selling coffee beans. You closed down, don't you see the bars luring yet more customers? This is The time for a new venture. We haven't opportunity to buy PETE's coffee and were putting our energies there

I have to live with that, but Schulz can't live with it. He thought so hard to join. Starbucks He knows in his got that Baldwin is overlooking a huge opportunity. Now, he's got it aside. What he's most dedicated to accompany it coffee business. It is supported by male chip, so you want to grow your business now. What you know most businesses hit that now, what moment at some point or another they want to grow where they ve launched a new product or here sales plateau well male chimps, all in one marketing platform is the solution. It helps businesses get to the next milestone by helping the market, smarter, That's because it allows you to manage more of your marketing activities from one place, so you can market smarter and grow faster. It eliminates the need for multiple by giving you everything you need to create, publish manner Jen measure, multi, channel campaigns, plus its power

a marketing crm. So you can collect, organise, understand and act on all your audience data. Now, Now you know who to talk to what to say when to say it and the best channel to deliver the message. Male chimps, complete marketing platform has, everything you need to start marketing your business today and they'll, be there to help as your business growth. Now, what Melchior that's? What learn? More male chip, dot com. Wrong wondering I'm David: and this is business wars.

In our last episode, Howard show: Spend his life's mission in Starbucks and the pursuit of great coffee Meanwhile Duncan doughnuts found its mass got in perfect salesman: Infrared the Baker by June nineteen. Eighty four Duncan D. NUTS, has expanded to nearly fifteen hundred stores on the east coast on the West Coast, a d text. Howard Schulz is tired of morning is thwarted. Dream of transport Starbucks into an espresso bar business, he's gonna do think about it. This is episode three shots versus the bean counters. In August Schulz decides on a bold move. He called Baldwin at home high Jerry. I thought it over and I need to explore. Espresso bars the content,

may not work out, but I have to try it. I get it but, as I've said a thousand times now is not the right time for us to pursue this. I know I know and that's why I've decided to set up my own company strike out. Oh my where I think that's a great move for you now. You know what, to show you we believe in you. I leave. Like you, a check for one hundred fifty thousand dollars. Well, thanks Jerry, Faith in me means align its April nineteen. Eighty five. Opening Dave Schulz, his own seven hundred square foot store on the ground or by shiny new office tower up is named yields you're. Not really after me, daily newspaper with this on counter wooden floors and round tables It's a slice of ITALY in downtown Seattle Shore, greets customers as they arise. You might I a catholic latte. I've

It is true to America, Delicious espresso, top of steam mill, the perfect marriage Sure I'll give it a try, shields rolled up his sleeves and works alongside the Balistas. He bore shots. Steams milk plans, beverages He can't stop. Smiling dreaming of espresso bars and every american city, and he knows he won't stop until he gets them. Two years later Schultz's a cappuccino at yield. Your knowledge when jury Baldwin calls Howard. I have big news: we're going to sell STAR Vauxhall six stores Why? But we need to focus on running peaks and that's why I'm calling I like, you too have Starbucks give you a ninety day exclusive to raise the money. The prices three point: eight million that's a lot of money for short, but the prospect of Starbucks setting

brain on fire shooting ventures, investors, the espresso concept, will take off two months later, he's right, Two million dollars he's conflict. He'll get the rest in time with the deadline looming, Baldwin asks for a meeting at a downtown restaurant. I'm sorry, Howard, but one of your yield, your knowledge investors has offered us four million cash. Stares at him, he feels if the world just ended, luckily Schulz has Seattle most powerful and respected lawyer on his side, bill gates, senior father of the Tec, Mobile he's a colleague of a friend and children, Russia's to see him Gates is a towering figure literally he sixty seven inches and no four rattling. The city's bigwigs Gates listens, then gets up and

Short to the investors office, they burst past secretary in March up to his desk before them. I could say anything gates explode, You should be ashamed of yourself or trying to steal this kid's dream. Stand down. Kids buying this company. Remarkably, that's all it takes. The investor withdraws his offer. In August nineteen, eighty seven Howard SH by Starbucks for three point, a million dollars. But almost immediately showed spaces could undermine the coffee market, been stagnant, young people rather drink soda. He asked to figure out how to get them into Starbucks and convince them. They want good coffee, Anna Spress over a frothy price. It's not going to be easy. But shawls has total faith in his own abilities and in his coffee.

We can persuade millions of people to love it and he won't stop stop until they do its nineteen. Eighty eight back EAST Duncan. Don't CEO Bob Rosenberg also has big plans for something he thinks take the company to the next level. Buddy, it's not just up to him Fifty year old Bob may be CEO, but his bill still ways in on company decisions and Bob's Bob calls his father into his office. His father into his office. Dad I want to invest in Shelley's. You know the casual dining chain well Chile's is a good company, but We don't know anything about the business. I won't do it Bob says that we agrees he's not gonna. Into one of their verbal tussels bill. Thanks, that's the end of it.

But Bob goes behind his father's back and convincing. The Duncan Doughnuts Board to vote for the Chile's investment bill. Rosenberg is again raged at home. His wife tries to come down. How could Bob do this? My own sign bills- pacing you'll, give yourself a heart attack its Bob, whose giving me the heart attack within a half a year, we're Bob is made a major mishap, the chilly, Franchises are draining Duncan doughnuts coffers and fast embarrassed and panicked, but bill still licking his wounds. He hasn't gotten his sons, betrayal, look at these those bob. This is a disaster. Like to say I told you so, but I know you tell me well it's too late. Now you went behind my back. You had no respectfully now you ve gotten us in a mess. I died

I promise you'll never see my face in the company's office again. The next day bill is at home, still seething. Someone knocks on this front door. He answers it and sees a man holding a massive box What's all this, I have a pact. For you! They'll takes the package inside as he opens it, his wife into the room. What's that I can't believe it. It's my portrait from the lobby of the corporate office Why was it said here? full bodied, never see my face there again: I guess he doesn't want to see it either. In nineteen. Eighty nine there's more bad news with a company weakened chile's grandchild is sold a corporate writer try to take over Bob Rosenberg.

To maintain control, but the next year he agrees to sell Duncan doughnuts to a british company, allied LEO they own the company, but by remains at the helm. Bob holds up this meeting with the new owner, but it's not the friendly. Chad he'd, anticipated Bob Our priority is to grow the company, so we, make changes within the stores, so we're getting rid of the counters they take up. Eighty percent of the space, but account for twenty percent of business, but count are important. Hostesses know our counter customers by name and no what they want. They don't even have to order having counters means only having stores in suburbia for theirs space. We need smaller urban stores. That reminds me another thing. That's got to go having the kitchen inside the store, you don't get it our customers, love looking through the window and seeing the doughnuts made despite Bob's protest

allied LEO, create separate kitchens and then D, where's donor to the stores without a kitchen, or a counter. The company is a open smaller stores in key asks in bus terminals, train stations in department stores, some measuring only sixty four square feet, but this or stores do great business? What takes in a million dollars in its first year in for years Duncan Donut, moves from eighty new store openings a year to more than three hundred ninety, ninety, the company, a total of two thousand stores: you six and eighteen. Ninety two is the most joyful day: the shortest career the day of stock. Books I at six that morning As the opening bell sounds at the New York Stock Exchange shorts and the stars, bucks leadership, team gather around computer, monetarism, brokerage house in Seattle, censure bought the company five years ago, he's worked tirelessly.

The full his promise to initial investors, to open one hundred twenty five stores and five years now more than one hundred fifty stores starboard since the nations largest specialty coffee roaster, an retailer with huge Opportunities to expand shorts to think of himself as a visionary, but he's got to admit the whole special coffee phenomenon has grown quicker than even He ever imagine today. Starbucks becomes the first car retailers to offer stock to the public shorts leans over the back of a chair watching intently. Target range sporting to sixteen dollars a share. Look the stocks jumped immediately to twenty one dollars this doctrine,

briskly through the day when the second most traded stock or NASDAQ at the closing down they ve raised, opting twenty nine million dollars just five years after showed spot Starbucks for three point: eight mill, its market, the stands at two hundred and seventy three million dollars by the clothes nineteen? Ninety three Starbucks has more than two hundred seventy stores in the Pacific Northwest get in the North EAST Dunkin donors. Has more than ten times as many, but how would show, is focused on competitors in the rapidly expanding gourmet coffee arena places like Barneys and the coffee beanery that are out for the same elite, taste conscious, Java, Draeger he's had time to bask in the company's success since their ip o a year ago, but he know he gets it still is time too,

expand his coffee kingdom to the east coast. It he's hesitated to make because the higher land and labour costs in one. Ninety, ninety four: the company opens the first Starbucks in Boston to Duncan doughnuts. This is the first calf unaided salvo as far as their concern its business and personal additives, their headquarters furious executives, hunker down to devise ways to respond, but soon their nature will troubles Starbucks more than they ever could its June nineteen? Ninety four? How shortages in the Hamptons, with his wife, son and daughter. Is why surging he's just begun? What will be his longest vacation in ten years? The phone rings

his bp or in Smith, is on the line. There are severe frost in Brazil, coffee prices are through the roof, We don't buy coffee from Brazil, but Brazil provides more than a quarter of the world's coffee. That means every being seller hours included will be dragging up their prices. We have three hundred fifty stores to supply Schulz. Heads Baptist and summonses tab aids. They gather around the big table in his office. We have a ten months supply beans locked in still gotta make some decisions here. Do you tight prices, I say raise them, but price hikes is it a disadvantage against Duncan doughnuts, because even if they these prices, their coffee still cells were much less than ours. Let's wait. When gasoline companies jacked up prices after oil prices rose, people were outraged. Remember I don't Starbucks facing that kind of backlash. Two weeks later,

Brazil has another frost, that's more damaging than the first one. The price of coffee beans jumps three hundred thirty percent shorts holds another emergency team meeting there is no easy way around this, we gotta raise prices, not alot. Just five or ten cents, a cup steamers are already complaining about our prices I'm betting they'll pay more for the best coffee and they do Now shorts is ready to turn its attention to his new stores in the North EAST, and this will galvanise Duncan doughnuts and amongst them both in all heated rivalry by one nineteen ninety four star, has more than four hundred stores in an agreed. Give they dispense with potential competitor by acquiring a twenty two store. Boston, Jane, called the coffee connection, one of the

Products is a cold slushy drank maiden soft serve machines, they call it proper Chino. Short loves the name, but he doesn't like to drink, but his VP Howard Bay, wants him to keep an open mind this, drink will be a big seller. Barracks like a milkshake, not something a coffee lover would enjoy I think we need to experiment with it. Well, ok I'm not induce, but let's try it weeks later. Starbucks marketing team present shorts and bay hard with a prototype, Proper Chino shorts tasted, it's awful shock pasty. You may not like this one, but customers are asking for blended drinks and because they can't get them from Starbucks they're going competitors like the coffee being all right all right. Consult our beverage director and with ninety ninety four, the beverage director brings

uh version. He likes it. No longer. A slight milkshake by using low fat milk, What is more, I see than creamy shorts meets with his. Retail operation staff. Rapid Chino is unlike any product. We ve offered its assent. Drink, so we got a launch it by April. First, we got five months to do it nearly impossible. You have to do it It's the only way word of mouth can spread by the summer in aid of nineteen. Ninety five, the first proper Juno's in coffee, mocha flavors, our blended in the first two weeks a whopping one million are sold that summer. Rapid Chino counts for eleven percent of Starbucks sales. Its especially popular in the northeast as the temperature rise Duncan donuts ignore this. They need. Respond and fast, so

The two brands will be locked in a race to unleash the next. I see drink sensation, freeze, out- the competition. Finding the right freelancer can be time consuming, frustrating and expensive. Where do you go too far? the talent, how much will it cost? How can you be were they'll. Deliver. Will thanks to our sponsor I've or finding the right freelancer doesn't have to be a struggle. That's because fibres marketplace helps you get more done with less they connect MRS with freelancers, who offer hundreds of digital services, including graphic design, copy riding web browser having film editing and a whole lot more. You can search by service deadline, price reviews and other factors and you'll know exactly what you're paying for up front known to go. Waiting needed. I need you, Go designed and it was her finding someone who would do it for the right price and do it, though, I wanted it to get done. Well, I

for someone with a great review at five or dotcom. That's if I e r r dot com- and I found the perfect artist, it was a terrific experience got exactly what I wanted. When I wanted it, I posted a review about you, find it fibre dot com. You know, if you check out fibre, come right. Now you get ten percent off your first order, but have to use my code. That code is be W, that's be w like business wars it so Easy to get the service you deserved by going to five or dot combat ef, I e r, r dot com and using code be w fibre. It starts here. I want to talk about our sponsored, Ashley. If you ve ever had to move money across borders chances are, you were

had to move money across borders. Chances are. You were haunted by hidden these, whether you use your bank or another provider, they most likely slipped in an extra fee in the exchange rate, and if you didn't notice. Well, that's the whole point. Transfer wise is different. You always get the real exchange rate when you send money to over seventy countries. You pay one super low fee and hold on to more of your money. Transfer wise also offers an easy alternative. Opening a bank account in a new country, their multi currency account. Lets you hold up to forty five currencies at once and convert between them at any time. Transfer

eyes has over six million customers who saved nearly four million dollars every day and bad rates and hidden bank fees. That's over a billion dollars in savings every year. Try them out today and get your first transfer free by visiting, transfer, wise dot com, slash business wars, one more time: that's transfer wise dot com site. Business wars while Duncan doughnuts Agri eyes is over its answer to Rapid Chino. Starbucks is cruising. By ninety. Ninety six, they ve got more than one thousand stores in the: U S and there first international stores in Singapore and Japan. Finally, in nineteen. Ninety seven Duncan doughnuts prefer.

Its own blended summer, drink the coffee coup, lotta Lotta is a winner Duncan That's regulars love it and just like the proper GINO It also attracts people who don't usually drink coffee, but then the marketing, in gets the call they ve been dreading. After a fifteen year run the actor whose played Fred the Bay you're in the popular time to make the doughnuts adds has decided to retire freds, the cornerstone of all their tv advertising. He is, can doughnuts the marketing department hastily gathers customers, adore Fred they'll be so disappointed. We have to say and the blow for our base, How about advertising campaign? They give spread an appropriate, send off or a big retirement party. Our parade you all three as too

rate moves through the Boston streets. It's free a day and Freds honour his back and gobble up six million doughnuts across thirty three hundred stores. Now question is how to weapon eyes all that love against Starbucks and the war is global. In nineteen. Ninety nine Duncan Let's celebrates the sale of their eight billion cup, of coffee the next year. They opened their five thousand store outside the. U S, this one Bali, Indonesia starving, She is gaining on them, though, with more than thousand stores in the U S and eighteen other countries, including England, New Zealand. And the United Arab Emirates by the end of the decade, an error of caloric access. Taking off and teens are leading the way when starboard

introduces caramel, Proper Chino in the summer of nineteen. Ninety nine it becomes the after school treat of choice, and adults are in line with them, but Duncan don't shoot back with a dunker. Gino a cappuccino with thick swirls of chocolate and whipped cream. And its wily popular thanks to some help from a surprising spokesman, it's not anymore. It's dark, don't get Chino, don't mind if I do name Jean Luc, hey Don T now you're creamy, goodness your friends say hello to my chocolate products at Lahti. Like this whole time is out of sight. They put me back in with Hazel Tom elsewhere. I know what vision into and three Duncan doughnuts takes another strike at Starbucks when they announced in a revolution that once

we brand, is going upscale with its new line of espressos lattes in cappuccino. They don't need stir bugs free wifi, inoffensive, music or arm covered in purple crushed building their job. Try with a less pricey alternative and are for my God tables and chairs Duncan knowledge is doing well, maybe too well as part of Duncan and which includes Baskin Robins in Togo, Sandwich stores Duncan doughnuts accounts Eighty percent of sales it success, makes it ripe for a private equity. Take over in two thousand six: three firms: Bain Capital. The Carlyle group Thomas H, Lee Partners, by in brands for two point: four billion dollars: Everyone knows. This means that Duncan doughnuts will eventually be going public weeks later Duncan doughnuts comes out swinging with a multi million dollar, add campaign taking it

with their upscale competitor. They call it a man. A car runs on ducking in one of the first adds that customer space along Menu of Starbucks Non words like latte. Do Owen spreads delicious lotteries from don't you order them an English, not battalion runs on Duncan Starbucks. Does counter the ad they never advertise. Schulz is convinced, the best advertising his word of mouth from satisfied customers, then the trench warfare begins, as Duncan doughnuts opens new stores litter Lee side, by side with Starbucks and poaching their customers. Coffee now accounts for sixty three percent of Duncan doughnuts sales

The nations largest per barrel, brood copy through fast food outlets selling, one billion cups a year into thousand seven there were signs, an economic downturn. That's good for Duncan, but it means some. Tough choices for Starbucks. In the fall of two thousand seven shorts walks what team meeting quietly he take, seat in the back of the room research He stepped down a ceo and is heading up global strategy and marketing. So at this meeting all these required to just a fly on the wall as that talks among themselves his mood from worried to alarmed after an hour, he leaves seeks out his trusted. Vp Howard by our. I don't like what I heard in their decision As is so indecisive they're not coming with creative ideas, I know

I too would like you're taking success for granted there so carpet they become arrogant. It's been near. The eight years since short step down as the company seo, as head of. Mobile strategy he's overseeing the opening of stores in thirty two countries and secured start, Reputation is the world's premier, coffee Brandon Destination quarter after a quarter. Stock prices soared profits increased now at the end of two thousand seven there flagging Wall Street is taking notice sport has to find a way to stop the bleeding in our next pursued a showdown is brewing, Howard, Lt gears up for an unexpected, come back and Duncan let's goes all out when they, celebrate a taste test.

Wondering this is business wars. We hope you enjoy this episode and we invite you to subscribe apple pie, guests, Spotify, Google Pie, Sticker Iheart Radio, wherever you get your PA guests, you'll, find on the episode notes, just tapir swipe over the cover. Are you also see some offers more sponsors? We hope you will support our show by supporting them if you like, you ve heard we would love it if you give us a five star rating and tell your friends how to subscribe. Another way supporters is to answer it word survey wondering dot com, slash survey until but business war stories. You'd like to hear a quick but the conversations even listening to and this episode, we can't know exactly what was said at the time that this dialogue is based on our best research parts of history. Were based on the book. Pour your heart into it by Howard shows, host David Brown Elizabeth K wrote this story: Kara Low is our senior producer and editor edited and produce by Emily. Frost Sound designed by Kyle Random, our exec

producers are Jenny, Lauer, Batman and martial, doing created by economic as or wondering you heard, the stories of TED Bundy and Charles Manson. But what about Rodney I'll call the Dating game killer, one of the deadliest serial killers ever the dating game killer. The new true crime podcast from wondering premier last week and quickly became the number one show on Apple podcast in the latest episode I'll call appears on the popular tv game. Show is millions of viewers tune in they have no idea there watching a cold blooded serial killer subscribe to the dating games or wherever you're listening right now or binge also, episodes on one reply today