Luke Johnson: It's always party time

The serial entrepreneur on the benefits of throwing a good party and why Starbucks is his least favourite coffee chain.

by Luke Johnson
Last Updated: 21 Oct 2011

One of life's great joys is attending and giving parties. I love everything about them - the excitement of being invited, the anticipation of the event, meeting new people on the night, bumping into old acquaintances, seeing a different venue for the first time, conversation, entertainment, special food and drink. Of course, friends' parties are better than business engagements and best of all is throwing your own party. Parties may be frivolous and extravagant, but they are also an opportunity to be sociable and a little bit generous. Every year for at least three decades I've hosted one or two personal or corporate bashes of every description: birthday celebrations, restaurant launches, charity affairs - you name it. I relish such hospitality and I hope to keep it going for at least another quarter of a century.

Surprisingly, there are many out there who have never given a party - whether because they are too lazy, or selfish, or mean, or perhaps just lacking confidence, I don't know. Possibly they have read Evelyn Waugh's tragicomic short story Bella Fleace Gave a Party, about the elderly hostess who threw a great ball, to which no one came. So she died from disappointment and it was only after her demise that they discovered she had forgotten to send out the invitations.

I think a decent reception can be a highly effective business tool to promote companies of almost any description, while being very enjoyable too. And permissible even under the preposterously over-draconian Bribery Act.

Unfortunately, the era of Twitter and Facebook is killing the printed party invitation. The digital kind is taking over, just as they are destroying the traditional greetings card. I accept that an emailed missive is in many ways more efficient, and very much cheaper, than a delivered one. Yet, somehow, the effort and expense of a proper invitation suggest a far grander event, involving much more planning and thought. Occasionally, I even miss an online invitation among all the spam that clogs my inbox. I can still remember the fascination of designing and placing the print order for the invitations to the opening of my first business when I was 18. So I shall continue to use the Royal Mail and dispatch old-fashioned physical invitations, because I think they are fun and, after all, that is what parties should be about.

I often wonder which prize corrupts the ambitious most: money, power or fame? While tycoons might be despised for their avarice, only by exception are they megalomaniacs, or do they seek celebrity status.

My dealings with TV stars at places such as Channel 4 (or talent, as they are known in showbusiness) lead me to believe that many have hollowed-out personalities. They become so surrounded by sycophants, so addicted to endless adoring attention, that they are driven mad. Their selfishness becomes overwhelming, their sense of self-importance suffocating. When their time in the limelight inevitably ends, frequently they struggle to cope with normal existence.

Similarly, one wonders about the psychotics who rise to the top in politics in many societies. How on earth can characters like Gaddafi, Assad and Mugabe butcher their own citizens? Were they always monsters, or have the years in control perverted their humanity so badly that they no longer understand the meaning of evil?

So, really, pushy entrepreneurs are not so bad. They create jobs and invent the new products we all want, from Dyson vacuum cleaners to iPads. They may well be demanding, stubborn and impatient, but surely their dreams of business empires are preferable to the vanity of the entertainment world and the cruelty of politics.

There was a time when I admired Howard Schultz. I loved the story he told in his first book, Pour Your Heart Into It, of how he approached 247 people to raise money to fund his business in its early days. Ultimately, he built Starbucks into a global brand and almost singlehandedly introduced Americans to espresso coffee. But, somewhere along the way, he lost the plot. His new memoir, Onward: How Starbucks fought for its life without losing its soul, confirms my suspicions. The very title is bogus.

This book is 350 pages of self-indulgent claptrap about the Starbucks turnaround over the past few years. It is divided into sections with headings such as 'Love', 'Courage' and 'Pain'. He talks ad nauseam about 'reigniting the emotional connection we share with our customers' and 'the excitement that comes from assaulting the status quo' - as if Starbucks isn't a blue-chip member of the corporate establishment. He writes interminably about his passion for great coffee and building an enduring brand - but then launches a powdered coffee called VIA, which he claims tastes just as good as a product Starbucks sells for 10 times as much in its stores!

I readily admit I am biased. I have never liked Starbucks coffee and I compete with them at Patisserie Valerie, Baker & Spice and Gail's, where I'm an owner. Moreover, my impression is influenced by observations of Starbucks' UK operations. I believe its business here has always lost money and probably always will. It is being beaten by Costa and Caffe Nero - and indeed by us. It has not adapted to the local market and economics, and the offering is wrong.

But Mr Schultz is a driven and intelligent man, and millions still drink his coffee every week. His empire will certainly continue, even if independents and newcomers do a better job. One day soon, Starbucks will be the coffee equivalent of Pizza Hut or Burger King. I suppose that is the inevitable fate of giant American food and drink chains ...

Luke Johnson is chairman of Risk Capital Partners

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