The Kenny G Starbucks Investment That Made Him More Money Than 75 Million Albums Ever Could

There used to be a single shop in Seattle’s Pike Place Market that sold coffee beans to people who knew what to do with them, long before Frappuccinos were available in every airport terminal and the green mermaid logo became one of the most recognizable symbols on the planet. In 1987, the majority of investors would have ignored it. Kenny G entered.

Like many good stories, this one begins with a call from a family member. At the time, Kenneth Gorelick, better known by his stage name Kenny G, was a rising smooth jazz star in his mid-20s who had a few successful albums under his belt and, for the first time, actual money in his pocket. A young businessman named Howard Schultz had approached his uncle Harold Gorlick, a Seattle businessman who had amassed a small fortune thru a chain of secondhand shops.

In order to buy and expand Starbucks, a small coffee company with six locations, Schultz was attempting to raise $3.8 million. Harold paid attention. He made an investment. Then he called his nephew. “My uncle says, ‘Hey, they’re trying to raise money for Starbucks coffee,'” Kenny recalled recently on the Benny Blanco and Lil Dicky-hosted Friends Keep Secrets podcast. “I go, ‘I don’t know anything about coffee.'” In essence, his uncle said, “You don’t need to.” Simply get to know the man.

Kenny then got to know Howard Schultz. Since then, he has characterized Schultz as charismatic, astute, and vivacious—the type of person who inspires you to believe in something even when you are unable to fully explain why. Kenny inquired about other investors. He decided to do whatever they were doing after looking at the list of names—people who obviously knew something he didn’t. Before Starbucks left the Pacific Northwest, before most of its locations had an espresso machine, and definitely before anyone outside of Seattle was waiting in line for a morning latte, he became one of the company’s first ten investors.

In 1992, Starbucks went public. The stock has increased by more than 26,500 percent since its initial public offering. To put that in perspective, over the course of his career, Kenny G has sold over 75 million albums. Without much fanfare, he has stated that he made a lot more money from his Starbucks investment than from all of that music put together. It’s a startling and oddly honest admission. The majority of celebrities in his position would allow the story to be told thru their musical legacy. That version of events doesn’t seem to pique his interest.

He was more than just a check writer for the company. Kenny gave performances at the first Starbucks locations, including one in Manhattan in 1999. His 1994 Christmas album, Miracles, was the first record Starbucks ever sold at the counter. It was a small-scale experiment that ultimately led to the establishment of the chain’s in-store music retail business model. Something about that seems almost appropriate. A man who became well-known for his instrumental music helped a coffee shop discover that the appropriate soundtrack encourages customers to stay longer and spend more money.

Additionally, he gives himself some credit for encouraging Schultz to switch to blended drinks. He had seen long lines outside Coffee Bean locations for something sweet and cold, and he kept bringing it up to Schultz. He believes that comments from individuals like him contributed to Starbucks’ eventual development of the Frappuccino. Starbucks has acknowledged his friendship and brand loyalty while pointing out that the Frappuccino concept was actually developed by two internal employes beginning in 1993. The truth might lie somewhere in the middle.

It’s difficult to ignore how sharply this story contradicts the typical narrative of celebrity wealth. Brand deals, product lines, or a well-managed public image were not the foundation of the fortune. An uncle’s phone call, a meeting with an unknown person, and a decision made primarily because other investors on the list appeared to know what they were doing were the beginning of it. The best investment thesis is sometimes just that.

If there is a larger lesson, it has nothing to do with coffee, celebrities, or even stock returns. It has to do with the kinds of relationships that bring you into the room before it becomes worthwhile. That access belonged to Harold Gorlick. He gave it to others. In reality, generational wealth transfers in this manner: discreetly, over the phone, long before there is anything to boast about.