Thomas G. Stemberg and the fortune in the supply cupboard

Thomas G. Stemberg needed a printer ribbon. It was the Fourth of July weekend in 1985, and the office-supply shops were closed or unable to help. He had been working on a business proposal after losing his job in the supermarket industry. Before he could get on with his next enterprise, he had to solve a much smaller problem: finding the thing that would let him print it.

The errand has become the tidy opening scene of the Staples story. It deserves its place. There is something pleasing about a company devoted to keeping offices running beginning with an office that could not run. Yet a broken ribbon explains the irritation better than it explains the retailer. Plenty of people have endured a wasted shopping trip. Stemberg arrived at his with years of practice in prices, shelves, suppliers and customers.

He was looking at an inconvenience with a supermarket executive’s eyes. Office supplies were essential, repeatedly purchased and often sold through a system that gave small businesses little bargaining power. A company with a modest payroll still needed pens and paper. Its size could make those necessities disproportionately expensive. Stemberg saw room for a store that would treat the small office as a customer worth organizing an entire business around.

The first Staples opened in Brighton, Boston, on May 1, 1986. Leo Kahn, a former grocery rival, became his co-founder and backer. Bain Capital joined the investors. The ribbon had provided an opening; the people, money and retail knowledge made it possible to walk through.

A Harvard education, with lettuce

Stemberg was born in Newark, New Jersey, on January 18, 1949, and grew up in nearby Orange. His parents came from Vienna. His father ran a restaurant, giving the future retailer an early example of a business with a human being responsible for making it work. After his father died, Stemberg moved with his mother to Austria and attended the American International School in Vienna.

Basketball offered him a distinction he later treated with a joke. He was junior All-Austria, an achievement he recalled with the observation, “It was probably the only place in the world I could have been all-anything.” The line makes a useful introduction to someone whose commercial ambitions rarely sounded modest. He could take his work seriously without making every accomplishment a solemn occasion.

An academic scholarship brought him to Harvard in 1967. He graduated in 1971 and earned his MBA in 1973 as a Baker Scholar. During college, he also took management roles at Harvard Student Agencies and the newly established Harvard Independent. A newspaper needs readers, but it also needs someone to keep its business alive. He had found a practical occupation alongside the academic one.

His next classroom was the grocery business. At Jewel, the management training reached into the everyday work of a store: produce, meat, checkout operations and managing employees. He subsequently became a sales and merchandising executive at Star Market and president of the Edwards-Finast division of First National Supermarkets. This was preparation in the unglamorous details on which glamorous growth eventually depends.

His eventual advice to entrepreneurs reflected that apprenticeship. Learn how a well-run company operates before starting your own. Hiring, motivating and managing people become more consequential as a business grows. The person with a good idea will eventually need people who can make it happen on a Tuesday afternoon, after the excitement of the announcement has worn off.

“You have to live the reality, but dream the dream.”Thomas G. Stemberg

The aisle was a mess. Business was good.

There was another scene behind Staples, less polished than the holiday errand. While interviewing for a job at the Makro warehouse club in Langhorne, Pennsylvania, Stemberg noticed an office-supply aisle in disarray. Open boxes and scattered merchandise suggested that customers were buying heavily. To a shopper, it might have looked like housekeeping overdue. To an experienced merchant, the disorder was evidence of demand.

The contrast is instructive. A neat display tells you that someone has arranged the stock. A depleted one can tell you that someone wants it. Stemberg followed his observation with research. He was interested in what people bought and what they paid, especially when the conventional view of an industry made those customers seem too small or too inconvenient to serve differently.

Office-supply manufacturers commonly sold through wholesalers, who supplied dealers. Large purchasers could negotiate advantages unavailable to smaller offices. Staples proposed buying directly from manufacturers and selling through a warehouse-style store. The change was visible in a shopping cart, but its economic work happened further back, in the route between factory and buyer.

One contemporary comparison put a dozen yellow pads at $11.55 through an office-supply dealer and $3.99 at Staples. The saving was $7.56, roughly 65 percent. Those figures describe a historical example, rather than a promise about today’s prices. They also explain why the apparently dull contents of a supply cupboard could support a substantial business. Small purchases become consequential when an office keeps making them.

Customers still had to accept the new arrangement. The store asked them to shop for themselves rather than rely entirely on a nearby dealer. Research into buyers suggested that worthwhile savings could overcome that inconvenience. It was an exchange Stemberg understood from groceries: the customer did some of the work, and the receipt provided a reason to do it.

A rival, an investor, and a pile of invoices

Kahn’s place in the story is particularly revealing. Competition had given him a close view of Stemberg’s abilities. When Stemberg lost his grocery job, the former rival wanted to back him in a business. A relationship formed across a competitive divide became part of the foundation of a new company. Retail supplied both the training and the person willing to support its next application.

Bain’s examination of the idea produced a useful disagreement. In Stemberg’s later account, its researchers asked small companies about their office-supply spending and came back with estimates far below his. He urged them to inspect invoices. The businesses, he argued, did not know what they actually spent. Adding the bills changed the assessment and helped move the investment forward.

That episode gives the founder story a welcome piece of arithmetic. Customers can describe their habits honestly and still underestimate them. A forgotten pack of paper here, replacement supplies there, and the annual bill becomes something different from the number remembered in an interview. The invoices offered a way to test a claim that enthusiasm alone could never settle.

The company grew beyond the original store into an international retail and distribution business. In 1995 it recorded $3.1 billion in sales; by 1996 it had entered the Fortune 500. Stores, catalogs, contract sales and online ordering broadened the ways it reached customers. Stemberg remained chief executive until 2002 and chairman until 2005. The errand had become a sixteen-year operating assignment.

Send in the mother-in-law

As the chain expanded, Stemberg kept visiting stores. His method began before he walked through the door: how easy was the location to find? Inside, he looked at stock, signs, prices and the help offered to customers. A staff member pointing toward an aisle and one walking a customer to the product were delivering different experiences. A chief executive could learn the difference by asking an ordinary shopping question.

He also enlisted his mother-in-law to shop at Office Depot in South Florida. Purchases and returns let him examine delivery, billing and collection. Family involvement in a business usually brings to mind succession plans or awkward dinners. Here it included testing a competitor’s return procedures. One hopes the shopping list was at least legible.

His rule for visiting rivals was to find what they did better. He admired Sam Walton’s habit of noticing a good piece of merchandising even in an otherwise disappointing store. It required a certain discipline: a competitor’s flaws are comforting, whereas its advantages leave you with work to do. Stemberg took notes and circulated observations to management.

There was a broader generosity in his business relationships, too. When Beth Williams took over Roxbury Technology, the toner-cartridge business founded by her father, Staples funded executive training and Stemberg’s team helped open doors. He praised her preparation and abilities. The supply business that had been built to serve smaller enterprises could also help a particular entrepreneur learn to run one.

“I’ve never visited a store where I didn’t learn something.”Thomas G. Stemberg, 1998

The investor who still thought about shops

In 2005 Stemberg joined Highland Capital Partners and founded its consumer fund. His investment interests included Lululemon and City Sports, businesses close enough to retail that the old questions still applied. He and Katherine Chapman also co-founded the children’s footwear retailer Olly Shoes. Shoes and office paper have different customers; both require someone to understand why people choose a store.

By 2014 he was discussing how physical retail and e-commerce needed to work together. Stores let people handle merchandise; distribution centers and websites offered different efficiencies. He also worried about competing with Amazon’s pricing. Experience had made him attentive to the economics beneath a tempting market. A customer’s willingness to buy matters less if the seller cannot build a viable business around the transaction.

His interests extended to technology infrastructure: businesses needed systems and people capable of supporting the size they hoped to reach. This was the operator’s concern carried into investing. Opening a first location is one problem. Making an organization work when it is much larger is another, and early decisions can leave expensive work for later.

A name on the basketball floor

Basketball remained a thread through his life. At Harvard, he supported the team as a member of the band. He helped establish the Friends of Harvard Basketball in 1974 and served as its longtime chairman. His association with the program lasted more than forty years, including support for players beyond their time on the court.

In 2015 his family endowed the men’s head coaching position. Stemberg died on October 23 that year, aged 66. In 2018 Harvard dedicated its basketball court in his name. The name attached to an institution where he had once been a scholarship student and a fan became part of its daily sporting life. A store founder’s legacy can be measured in more than store openings.

A later recollection offers another glimpse of his judgment. In Harvard Business School’s 2026 alumni awards coverage, Mitt Romney recalled Stemberg advising him to focus on a colleague’s strengths rather than expend his effort correcting weaknesses. It is a fitting companion to the retail visits. Look carefully enough and you may find the useful thing everyone else has overlooked.

The ribbon remains the memorable prop. Around it sit a grocery apprenticeship, a former rival’s confidence, invoices that challenged a survey, and a mother-in-law carrying out reconnaissance. Stemberg made a career from paying attention to purchases other people treated as incidental. Every office had a cupboard. He took the trouble to ask what keeping it stocked really cost.