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Last Updated: Friday, 13 October 2006, 15:59 GMT 16:59 UK
Seattle, the billionaire's city
A POINT OF VIEW
By Tim Egan

The first Starbucks, Seattle
Seattle gave birth to the widespread Starbucks chain

Seattle is home to two of the world's most successful entrepreneurs, but the city still maintains a firmly populist streak, says Tim Egan.

I live in Seattle - 2,840 miles west of New York. The world knows Seattle - if at all - by our music, our similarity to London weather (almost identical), the oddball television comedy Frasier, and our billionaires.

Among the home-grown tycoons, the two most famous are Bill Gates, the co-founder of Microsoft, and Howard Schultz, the man who made Starbucks Coffee as ubiquitous as McDonalds. Of late, I've been looking at the different paths that Gates and Schultz have taken, and how it has affected their images at home and their empires abroad. It's been fascinating to watch them morph through their middle age.

Gates, of course, is the richest man on the planet - worth $53 billion in the latest estimation of Forbes magazine. He will celebrate his 51st birthday in two weeks.

The first time I saw him was at a wedding about 15 years ago, when Microsoft was churning out fresh millionaires at the rate of 10 or so a day. Gates then was the uber-geek - with oversized glasses, dumpy clothes, and a high-pitched, squeaky voice.

Dork dance

His appearance didn't matter, because he was Master of the Cyber Universe. I remember watching him take to the floor at the wedding, and proceed to do this dorky, floppy, techno-style dance. Picture a scarecrow with glasses. But soon, everyone was on the dance floor trying to imitate him.

His home on Lake Washington - complete with a trampoline room, where he can bounce away his troubles, and his own salmon run with fish returning to the doorstep of the Gates family compound - has became a huge tourist draw.

In time, Microsoft went from a cool local software company that made it very big, to a sort of global menace, in the eyes of some. It was said to be a ruthless predator, a monopolist, a force of evil.

There were numerous web sites devoted to comparisons between Bill Gates and Satan. And after the United States Justice Department went after him, Gates was forced to retreat to make major changes in how the world's largest software company sold its products.

The lingering image of him from that case was an aloof, arrogant man who would not suffer fools, even if they were judges or prosecuting attorneys.

Monopoly headache

Here in Seattle, after everyone had embraced Bill Gates as our local boy made good, there was some discomfort during the years of the monopoly struggles.

Bill and Melinda Gates at an Aids conference
Gates has used his wealth to support a range of causes

Also, people were upset over how the city had changed from a pleasant, middle-class burg, a place where union longshoremen had summer homes, to this gilded enclave - a golden ghetto on Puget Sound.

No longer anonymous, Seattle at the height of the cyber boom was one of those places said to have lost its way in a sea of sudden wealth.

But starting about five years ago, Bill Gates went through an extraordinary transformation, and so did his home town. Married, with three children, he and his wife started the Bill and Melinda Gates Foundation. They promised to give away most of their wealth, and do so at a relatively young age.

The sceptics sneered: Was this just a ploy to get people to buy the next upgrade of Microsoft Windows and to do so without guilt?

But Gates seemed a changed man. Once, while I was following him around on his tour to bring free computers into every impoverished library district in America, he told me over a cheeseburger that it was absurd for any one family to have so much money.

Poverty plan

I think that's a sentiment he picked up from his father, the gentlemanly William Gates, who is perhaps the leading voice in this country in favour of retaining the inheritance tax on the rich. The United States is at its best as a meritocracy, the elder Gates argues, instead of fostering a permanent privileged class.

In short order, the Gates Foundation became the world's largest philanthropy, with more than $25 billion in assets. They 've gone out and hired the best and brightest in select fields, and made it their mission to try to eliminate poverty, disease and illiteracy in some of the world's most forgotten corners.

And this year, the billionaire Warren Buffet announced that he was giving away most of his money to the Gates Foundation, almost doubling their net worth.
Bill Gates collecting his honour from the Queen
His efforts have been recognised across the globe
So nowadays, you are more likely to see a picture of Bill Gates holding a hungry child in Africa or touring India with former President Bill Clinton than you are to see him around a computer.

He's even been made an honorary Knight of the Order of the British Empire - whatever that means. But nobody here calls him Sir Bill.

The Gates Foundation is a global force that can rival the Presidency; they seem to have their own State Department, their own foreign policy. And it's no accident that when the President of China was in the United State for a recent visit, he felt somewhat snubbed at the White House, while here Gates threw an elaborate formal dinner for him.

At the same time, Seattle is moving from a centre of the Information Age to a capital of philanthropy. On any given night, there are meetings among the super-wealthy where experts dispense advice on the fine mechanics of giving away money.

Hippie origins

Last year, Time Magazine named Bill and Melinda Gates, along with Bono, as their Persons of the Year. The comparisons to Satan are long gone. Bill Gates, the brand, is now something else - a sort of Mother Theresa with money. Howard Schultz is two years older than Gates, and in many ways he seems younger. Gates is one of those people who went from boy-executive with a face that looked curiously unlived-in to middle age, with no stop in between.

Schultz is a Brooklyn guy, the product of a housing project. Get him talking about sports or politics, and he's just like any other New Yorker with an attitude.

Somehow Schultz managed to anger people in his home town. It happened rather curiously

Schultz moved to Seattle about 30 years ago. He kicked around, and eventually wandered into this lone store in our Pike Place Market where some hippies were, like, roasting their own coffee beans, dude.

And their first logo was what you might call sailor porn - a bare-breasted mermaid flashing her, uh, lower scales.

It was Schultz's genius to see this aromatic hangout as a global brand. Now I always thought Starbucks would be strictly a Seattle thing, perfect for a bookish, misty city.

But Schultz realized that in the modern age, most cities lack a Third Place - somewhere between home and the office. The closest thing to Starbucks, he always says, is the British pub of years ago.

Outstripping McDonald's

Now you probably think there is a Starbucks on every street corner. In fact, in some cities, there are four to an intersection. Let's think about how this has grown.

In 1982, when Schultz joined the company, they had just four stores. By 2002, there were 5,886.

Now there are more than 12,000 and the new goal - just announced last week -- is to run the total to 40,000. That's triple the number of McDonald's.

Every day, Starbucks opens five new stores. New plans call for stores in Egypt, in Russia, in Brazil. Now this is the kind of global reach the Brits can appreciate: for the sun never sets on the Starbucks empire.

Howard Schultz
City reputations have been rocky, over sport and business

Through it all, Schultz has tried to emphasize that Starbucks has a corporate conscience. The company provides health care for every person behind the counter. They buy only environmentally-correct coffee. They donate money to community foundations.

But somehow Schultz has managed to anger people here in his home town. It happened rather curiously. He was the main owner - and the most visible cheerleader -- of the city's professional basketball team, the Sonics.

But then he started to complain that his team needed subsidies from this rich city, that they couldn't live with their present lease.

One blogger wrote that, "I'm pretty damn sure a majority of Seattleites share my disgust at the thought that billionaire Starbucks chairman Howard Schultz is holding taxpayers hostage at a time when we face so many pressing needs."

In the midst of this turmoil, the team was sold this year to a group from Oklahoma, which will most likely will move them out of town. Fans felt betrayed. How could Howard do this to us? It's our team?

The sale spawned a ballot measure, which people will vote on in Seattle next month. It essentially makes it impossible to give tax breaks to professional sports teams.

There's an old populist streak runs through this city, and Howard Schultz - as the poster child for greedy sports owners - brought it to the surface again.

In his defence Schultz said he did not want to sell the team, and meant no betrayal of the city that has been so good to him. The economics of professional sports, where benchwarmers are paid $5 million or more a year and never break a sweat, forced him into the sale, he said.

But it will take some time to heal the rift between Seattle and its coffee mogul.

As the visionary behind a unique form of cultural imperialism, Schultz was a hero in Seattle. But as another sports mogul looking for a handout, he was vilified.

But perhaps there is a lesson in the transformation of that other billionaire, and it's this: If you give it all away, nobody cares how you got it to begin with.


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