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Mixing Music at Williams => Starbucks Music Guru

You Starbucks aficionados will be happy to know that a big chunk of the Starbucks ambiance — its music — is under the control of Don MacKinnon ’90. After college, MacKinnon started Hear Music, a small chain of music stores based out of San Francisco that sold CD compilations. In the mid-90s, Starbucks began selling CDs, including those from Hear Music. In 1999, Howard Schultz, the head of Starbucks, flew down to San Francisco see what Hear Music was all about, and as he says, the minute he walked in the store

‘My imagination was racing a mile a minute.’ He watched customers thumbing through the banks of carefully organized compilation CDs and decided they were rediscovering music in the same way people had rediscovered coffee at Starbucks. ‘The fact that Hear Music had elevated its status from a record store to an editor was compelling.’

Accordingly, Starbucks bought the company later that year for $8 million. MacKinnon moved to Seattle and became Starbucks’ VP of Music and Entertainment.


Last year, Starbucks began offering the ability to burn a CD while you had a latte. After a high profile announcement in March 2004, the company tempered its rollout schedule as it discovered that inserting a CD burner into a cafe wasn’t as easy as it initially thought. Nevertheless, as Rolling Stone notes, Starbucks’ growing CD business is an anomaly in an era of slumping CD sales.

So for all you recent graduates that have rigid career development plans (work for two years, get my Harvard MBA, be a brand manager at P&G for three years…), note that serendipity can have a much bigger impact on your career than you may think.

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#1 Comment By David On August 2, 2005 @ 2:53 pm

I believe that Don also did cool stuff (founding and running a catalog company) in the 1990’s. Also, while your praise of seredipity is well-taken, the real issue is that way too many Ephs go to business school. For the vast majority of people/careers, the costs outweight the benefits.

If you want to work in business, then work in business. Doing two years of almost anything will do more for your resume (and finances) then two years at HBS.

#2 Comment By Jeff Zeeman On August 2, 2005 @ 4:40 pm

David, I am very surprised at this comment, given what a believer you are in the power of markets. Could the thousands of very smart, accomplished, economically oriented thinkers who strenuously compete to be admitted to HBS and other top schools on an annual basis really be making a decision that doesn’t help their long-run economic prospects? I seriously doubt it. I think the power of elite business schools to attract ten or more applicants per spot speaks for itself. Sacrificing 100k in income and perhaps 80k in tuition over two years pales in comparison to the long-term economic benefits accruing to graduates of the top b-schools. You’re talking about two years versus the next 40 years of having a credential which, rightly or wrongly, carries tremendous weight througout the business community. If going to HBS was really such a waste, people wouldn’t be leaving jobs at McKensie, Bain, Mercer, Goldman, et. al. to go there …

#3 Comment By David On August 2, 2005 @ 4:55 pm

Jeff asks:

Could the thousands of very smart, accomplished, economically oriented thinkers who strenuously compete to be admitted to HBS and other top schools on an annual basis really be making a decision that doesn’t help their long-run economic prospects?

Sure. People make mistakes, even smart people. Lots of people bought dot.com stocks in 2000. The fact that they did so does not make the decision a smart one.

Applications were down at a majority of full time two year programs last year.

How much a MBA matters in the business community goes down each year. Holding all else constant, the marginal worth of an elite MBA (relative to 2 years of work experience in that industry) to a Williams graduate is zero.

The very best consultants/traders are encouraged not to go to business school since they are so valuable to their firms right now. In fact, this was already true at Monitor (the most purple of the major firms) 10 years ago.

#4 Comment By Jeff Zeeman On August 3, 2005 @ 4:52 pm

Sorry David, I’ll still trust the collective wisdom of the thousands of people who leave cushy jobs, annually, to spend 40k to attend business school. I have lots of friends and classmates who have attended b-school, and it seems to have definitely helped their careers. I note that many of their employers actually reimbursed their business school expenses, signalling that those employers felt that b-school did, in fact, add more value than an additional two years of experience (you could argue that those employers were simply shelling out to keep good employees, but I would counter that the b-schools could also keep them by giving them 40k and a promise of a promotion following two years of work).

I can’t speak to the relative value of an MBA now vs. ten years ago, but I’m very confident that, were it a total waste of time, elite college graduates would be smart enough to figure that out and do the economically sensible thing by foregoing huge loans and two years (or at least one year) of hard work and no salary.

#5 Comment By David On August 3, 2005 @ 11:47 pm

What an excellent senior thesis this would make!

Gather data on Williams graduates from, say, 1985, figure out who went to business school and who did not (10% of the class?), control — hard to do, but start here — for various things (not too many elementary school teachers got MBAs), and then see if getting an MBA was worth it, just in terms of added income.

I have done my fair share of hiring and talk to many others who do the same. With each passing year, employers care less about whether or not people from places like Williams have an MBA, all else equal.

Quibbles:

1) “collective wisdom of the thousands of people who leave cushy jobs”? Huh? Most of the people who go to elite business schools leave hard, draining jobs. So what you will about Monitor, but it isn’t “cushy”.

2) “I’m very confident that, were it a total waste of time, elite college graduates would be smart enough to figure that out and do the economically sensible thing by foregoing huge loans and two years (or at least one year) of hard work and no salary.” You Democrats are too trusting of the free market! Not everything that people do, even smart people, actually has the effect that they think it will.