Melissa & Doug: Melissa And Doug Bernstein

Melissa and Doug Bernstein's first success was a wooden 'fuzzy puzzle' of farm animals. Today, Melissa & Doug makes over 2,000 kinds of toys and serves as an antidote to the rise of digital toys. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03Speaker 00

  Basically, what happened is when we called the stores, you know, "Hey, can I send you some more?" "Nope, can't. It's not selling." And we would always say, "But you're not selling it." And they'd say, "No, it's not selling." And this happened time and time again. And then after about two months, it was like, "This stuff is taking up too much space. I want it out of my store."

• 0:32Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 0:44Guy Raz?

  I'm Guy Raz, and on today's show, the story of how Melissa and Doug Bernstein built a multimillion-dollar toy company without ever selling a single screen, video game, or app.

• 0:59Guy Raz?

  Okay, so if you have a small child in your life, maybe a niece, or nephew, or a grandchild, or maybe your own child, at some point in the next few days this time of year, you will find yourself in a toy store, and you will be frantic, looking for a new Transformer, or Shopkins, or Angry Birds video game, something with a battery, probably. And while you're doing that, you might stumble on toys made by Melissa and Doug Bernstein. These are toys that do not have to be plugged in, or charged, or upgraded with the latest software. They're just simple, old-fashioned toys. In fact, things like wooden blocks, and tea sets, and puzzles, and easels. And the company, which is actually called Melissa and Doug,

• 1:42Guy Raz?

  was created when Melissa and Doug Bernstein were still dating back in 1988. And the way they met, they were actually introduced by their parents.

• 1:53Speaker 02

  Was it like love at first sight? Was there an instant connection? I think for Melissa, it was love at first sight would be my guess.

• 2:00Speaker 00

  You know, it was very interesting because we're both very strong people. So I would say it was interesting, yet contentious.

• 2:11Speaker 02

  So what were you guys doing at that time in your lives?

• 2:16Speaker 00

  You know, I've always been a wild creative, but never believed that could turn into a vocation. So of course, instead of pursuing creative things, I ended up as an investment banker

• 2:29Speaker 02

  Of course.

• 2:30Speaker 00

  At Morgan Stanley in New York City.

• 2:31Speaker 02

  The most creative job in the world.

• 2:33Speaker 00

  Exactly. And by the way, did not like numbers either.

• 2:36Speaker 02

  What were you doing, Doug? I was right out of school. I was planning on going into education and I wanted to work at a university. And right when I was getting ready to do that and head off into a career in higher education, I got a call from a person I had worked summers for, Jim McManus, one of the greatest mentors, greatest marketing people in the world. And Mr. McManus said, nope, you're not doing that. You're going to come work for me and be my assistant, be my right hand. And so I went there right after school, worked for Mr. McManus for a couple of years and had an incredible experience. But it wasn't what you wanted to do?

• 3:18Speaker 02

  It wasn't something that I wouldn't want to do, unlike Melissa and her investment banking experience. But no, but there was something inside me that tugged and wanted to, two things. One, wanted to do something for children and frankly, wanted to do something of my own creation also. Right. So what did you do? Well, we booked ourselves into a little bed and breakfast in Lenox, Massachusetts. I think it was called The Cliff Wood. And we locked ourselves in the room and did what everyone would do if locked in a room in Lenox, Massachusetts and brainstormed business ideas. We literally said, let's close this door and we are not leaving this place until we know what our path is and what we're going to do.

• 4:03Speaker 02

  So what was the idea you came up with in that hotel room in Lenox, Massachusetts? I think we walked out of there knowing that we wanted to start by doing some interactive products for children, things that they could really interact with rather than be passive recipients of.

• 4:20Guy Raz?

  So, OK, so you get back to Westport, Connecticut, and like, what did you, did you, within the weeks, quit your jobs?

• 4:27Speaker 00

  We did. We determined that this is what we were doing. We literally took our savings accounts, put them in one joint account.

• 4:36Speaker 02

  Which was nothing, by the way.

• 4:37Speaker 00

  Which was meager, at best, and we decided we were going to use those funds to create our first product.

• 4:45Guy Raz?

  So, at this point, Melissa, are your parents regretting that they introduced you to Doug?

• 4:53Speaker 00

  That's funny that you say that, and I would have to say, my parents were scared to death.

• 4:58Guy Raz?

  I bet.

• 4:59Speaker 02

  And I remember when we were in Melissa's kitchen and we were talking about doing this, I remember them being concerned, let's say, because she had the greatest thing going, and she was leaving it to do, well, we weren't too certain exactly what we were going to do.

• 5:16Guy Raz?

  Sure, something with kids, with Doug.

• 5:17Speaker 02

  Yeah, something with kids.

• 5:18Guy Raz?

  Yeah, they could do something with the kids.

• 5:19Speaker 02

  Exactly.

• 5:20Guy Raz?

  No problem.

• 5:21Speaker 00

  Yeah, you know, they were, as, I guess, Depression-era people, they were just very fearful and worried about security, whereas, we couldn't have been less worried. We felt like if you weren't living out your passion and wanting to go to work every day, running to work every day, then it didn't matter how much money you were making or about the security.

• 5:41Guy Raz?

  Yeah. So, you, so you've got this, like, small amount of money in a savings account, and what's the product you make?

• 5:49Speaker 02

  So, what we decided to do first was, we both had a little bit of experience with television and television programming, and we decided that we wanted to make a program for children that would be groundbreaking in that children wouldn't sit there and watch it, they would actually participate with the program. And so, we literally wrote, scripted, produced, directed, cast, wrote music, Melissa sung in it, wrote lyrics.

• 6:23Guy Raz?

  Wait, this was a, like, a VHS video?

• 6:25Speaker 02

  Correct.

• 6:26Speaker 00

  Ultimately, three of them.

• 6:27Guy Raz?

  So, what, you were, you, like, even participated in it? You were on camera?

• 6:31Speaker 02

  So, we wrote a script for this, and... We literally went around to stores and parks and we cast real children. We didn't want this to be contrived or fake. We didn't go to casting agencies. We literally would sit in grocery stores and look for animated children and approach them, which probably

• 6:52Guy Raz?

  Couldn't do today, I don't think.

• 6:53Speaker 02

  Couldn't do today.

• 6:54Guy Raz?

  No, you could not do that today.

• 6:55Speaker 02

  Not as successfully.

• 6:56Guy Raz?

  Yes, no.

• 6:56Speaker 02

  We literally, in parking lots, would watch for children that are interacting well with their parents.

• 7:01Guy Raz?

  Today, yeah.

• 7:02Speaker 02

  And we had eight children that were in this video. And then we shot it at some friends' houses in Westport, Connecticut, some schools.

• 7:11Guy Raz?

  What were the videos like? I mean, was it kids singing? Was it dancing?

• 7:15Speaker 02

  Yes and yes. It was singing and it was dancing. And it was encouraging children who were watching this to participate along. It was literally

• 7:25Guy Raz?

  Alright.

• 7:25Speaker 02

  Teaching them some of the songs, teaching them what we're dancing to.

• 7:29Speaker 00

  And talking directly, one of the things that was so unique about it is the boy who led the programs talked directly to the kids at home and truly befriended them in a very honest and sincere way.

• 7:41Guy Raz?

  Do you remember, either of you remember any of the songs on it? Like, how they go?

• 7:45Speaker 02

  Go ahead, Melissa, sing it.

• 7:47Speaker 00

  Ready? Special friends, special friends, we will be special friends. That was like the emotional one at the end. But the others were very interactive.

• 7:59Speaker 02

  Shoo-bee-doobie-doobie, oh. All sorts of making sounds with your body, making sounds with your lips.

• 8:05Guy Raz?

  So how much money did you guys sink into producing this thing? Because at that time, it was not cheap to make films like it is now.

• 8:13Speaker 00

  It was a lot.

• 8:14Speaker 02

  Probably, I think, all told, the first one, we probably spent about thirty or forty thousand dollars to produce.

• 8:21Guy Raz?

  That must have wiped you out.

• 8:22Speaker 02

  Well, it did. It took all of our savings and then we finished this. We said, wow, this is awesome. And then we looked at each other and said, well, wait, what do we do with it? We had put no thought at all into what do we do with this product? We now had to figure out, well, how are we going to pay for the next lunch? And what are we going to do to get this product out there?

• 8:44Guy Raz?

  So do you make thousands of copies of it to start to sell it?

• 8:49Speaker 02

  So we did, I mean, we got our first little lessons in business because, right, you want to make some copies and you find out, well, we won't make you four copies. We have to make you 5,000 copies. And, uh, and we said, what in the world are we going to do with 5,000 copies? We made lists of our relatives and that didn't get us fully to 5,000. And so we literally, uh, bought a little combination television VCR player, put it in the back of my father's station wagon and we started driving around knocking on doors of retailers. Uh, and the funny thing was this was right around holiday time when we finished this product. And so all the little, uh, mom and pop toy shops throughout, uh, New England, this was

• 9:34Speaker 02

  their busiest time of year and we would walk in there and apologetically carry in our tape player and our TV and put it on their counter and beg them, please, can we just show this to you, please? And I think after enough begging, they figured out the only way to get us out of their store was to take a few of these and present them to their customers. So we would leave very happy that they decided to take a few of these tapes and try to sell them.

• 10:00Speaker 00

  And by the way, this was another thing that was completely against what was happening in the industry because as a manufacturer, you never went directly into a store. You actually had middle people called manufacturers reps who represented your product into the smaller stores. But we realized that if we used one of those, I mean, they would never do our one tiny little product justice. They had, you know, hundreds and thousands of products and that if we wanted to get our product truly distributed, that we were going to have to do it ourselves. So how were sales?

• 10:33Speaker 02

  At the beginning, uh, people were not buying these from the stores. So they were remaining in the stores and they were remaining on the shelves, which is not good for long-term business proposition. So we learned yet another few business lessons. One was that we learned our packaging was interesting because you looked at it and you had no idea what this product was.

• 10:57Speaker 00

  I call them mysteries in a box. When you have something that is in a box and you have no idea what it is and you're not promoting it on TV or advertising it, it's very hard to get it out.

• 11:07Speaker 02

  And the second thing we learned was that for something new like this, you need to help seed some knowledge and some support about it. So Melissa and I then started spending all of our weekends driving back around to the same stores all throughout Connecticut, New York, New Jersey, Massachusetts. And we would have play dates in their stores. And we would sit down in a carpeted area in the store and we would sing songs with children. We would hope and pray that there would be one child there or two children there and maybe they would tell a couple of friends. But it sounds like, I mean, not to be like cruel or crude, but like it was kind of a failure. I would say it depends on how you define the word failure there. Because it probably

• 11:49Speaker 02

  was a failure in terms of having a product that instantly sold and instantly was successful. Yet it was the biggest success we ever had in that what we learned from that and all of the learnings came from that are precisely every single thing that our business is based on today. To Melissa's point, you know, the idea of having direct relationships with all of these customers, doing anything that they wanted. I mean, they would call us in the middle of the night, I have a problem with one of your tapes. The phone was on our bed. We would answer it in the middle of the night. Everything that we do today, we learned, I would say, in that first, first couple of years. And frankly, maybe most importantly, just the fact that not everything is going to work perfectly.

• 12:34Speaker 02

  So at this point, were you guys called Melissa and Doug? I mean, was that your company? We actually weren't. Our first company name that we called ourselves was Lights, Camera, Interaction. And the reason the company is called Melissa and Doug, it's funny, because we, from day one, every single product we made, we were signing our names and we were writing on the back of it. If you have any comments for us, please call us anytime, Melissa and Doug. And so as we started to get more and more products out there, people would call our company and we would answer the phone or someone would answer the phone and say, hello, Lights, Camera, Interaction. And they would say, I'm sorry, I have the wrong number. I was calling Melissa and Doug. And so one day we said, well, wait, let's just- Answer the phone, say hello, Melissa and Doug.

• 13:19Speaker 02

  And that's how we became Melissa and Doug.

• 13:21Guy Raz?

  And by the way, how long, how far along are we, like one or two years in?

• 13:25Speaker 02

  We are three years into it at this point.

• 13:28Guy Raz?

  So focusing entirely on videos for the first three years?

• 13:30Speaker 02

  Correct. Basically, it was a video a year. We produced a video a year for three years and we had three videos out there in relationships now with, I'd say probably, I'm gonna guess, a couple thousand retailers.

• 13:41Guy Raz?

  Yeah, so how did you like move from videos to toys? Like, how did you like start to think, well, let's just start making other things?

• 13:49Speaker 00

  Well, honestly, like most things, it was another brainstorm. We were talking in the car about some of our favorite childhood toys and we're talking about Pat the Cat and Pat the Bunny.

• 14:00Guy Raz?

  Yeah, right, oh yeah, of course.

• 14:01Speaker 00

  The books that had the tactile pieces on them.

• 14:05Guy Raz?

  Yeah, you could touch them and Pat the Bunny and touch all the things in the book.

• 14:09Speaker 00

  Exactly, and we said, I don't know what made us say it, but we said, wow, wouldn't that be great in a puzzle? If we could do a tactile puzzle?

• 14:20Speaker 00

  And we brainstormed having a puzzle that had animals and that the hide of each animal was a piece of plush that had the texture of that animal and the look. And came up with this idea for what we called a fuzzy puzzle.

• 14:35Guy Raz?

  And like, how did you even know how to design a puzzle and where to get it manufactured and produced? And where did you even begin?

• 14:43Speaker 02

  I would say for most of the things that have happened along the way, we had no idea. And we learned as we went and we would, almost the way you're asking the question now, we would ask ourselves the question then, so, so wait a second, if we need animals drawn, we need artists, how would we do that? So we went to the library, we'd look at a lot of children's books and we'd look for illustrators that we liked and we would contact illustrators and we'd see who might want to help illustrate this. And each step of the way was, you know, a new, new phase of learning, but at no point was there ever a magic answer or an easy answer. It was a lot of making mistakes and falling down and some horrible learning experiences along the way.

• 15:31Guy Raz?

  How did you guys fund your company at this point? How were you able to pay for the manufacture of the puzzles? And did you have to take loans? Did you have to go seek out investors?

• 15:41Speaker 00

  You know, this is why we grew rather slowly. We wanted to be self-funded and we lived incredibly frugally. For at least three years, we ate ramen noodles, which were eight for a dollar, and turkey hot dogs on a hot plate because it was about 50 cents a meal. And we lived with our parents for a few years until we could literally get one room in someone's home above their garage and help them with errands for a decrease in rent. And we fueled every cent that we made back into inventory.

• 16:17Speaker 02

  Right, I would say we literally were not, we did not take money out at that point.

• 16:21Guy Raz?

  But once you guys created that, like the fuzzy puzzle, were you able to sell it?

• 16:26Speaker 02

  Oh, gosh, I wish it were that easy.

• 16:28Speaker 00

  Not quite.

• 16:30Speaker 02

  Not quite like that. So no, so, so, once we had the designs for the puzzle, I mean, everything again was trial and error. I mean, I could tell you, one of the things that happened early on was the very first time, we went to a very large toy show where you would exhibit to retailers and show them your products. And the agent who we had hired to help us make our puzzles had a display set up just down the hall from us with our exact puzzles.

• 16:56Guy Raz?

  Wait, he was selling, he was basically selling your puzzles as his own?

• 16:59Speaker 02

  Yes, he was. And this is someone that we had entrusted. And he told us the reason was because we wanted to grow slowly and grow with our independent neighborhood stores. And he wanted us to immediately take them and put them in the mass market. And because we didn't want to do that, he figured he would just do that on his own with our product. So that was his good reason for doing it.

• 17:22Guy Raz?

  Wow. So I'm just curious, like, your reaction at that moment was, was it to go up to him and say, "What are you doing, man? Like, what's going on?" Did you confront him?

• 17:32Speaker 00

  No.

• 17:33Speaker 02

  No, we weren't confrontational about it. We were at a huge show, thousands of customers. And when they came to us and they started to tell us that this is what this person was doing, and they assumed that we were part of it or that we knew what was going on, when they found out the truth of what was going on... It was amazing how many customers came up to us and literally in front of us ripped up orders that they had placed with this person who was our agent and said, here, you can show this to them. Now that we understand what's going on, we will absolutely never in our lifetime order anything from that person. And I think that gave a little glimmer of hope to Melissa and myself. While on one hand, we had a little bit of an exposure

• 18:16Speaker 02

  to the darker side of the business world, I would say simultaneously, we had a really nice exposure to that there are a lot of people out there who will appreciate the loyalty that you have to them and everything that we've done for them in the first couple of years and are now saying to us, we don't care, even if he wants to sell it to us for less money than you are, anything, it doesn't matter. We are loyal to you for everything that you've done.

• 18:41Guy Raz?

  So I'm guessing you guys were able to recover from that incident and just like move on with puzzles?

• 18:46Speaker 00

  Yes. We started to see our way. You know, it's always about, right, finding the path through the forest. And it was like, this was the category that sort of was our path. We said, oh, my gosh, I think we're on to something.

• 19:01Guy Raz?

  When we come back in a moment, the story of how Melissa and Doug grew beyond puzzles and then made the biggest investment of their lives on a toy that became a million dollar mistake. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 19:26Guy Raz?

  It's How I Built This from NPR. I'm Guy Raz. So at this point, it's the mid 1990s, and the toy company Melissa and Doug is literally just Melissa and Doug. It is a two-person operation. Melissa designs all the puzzles, Doug tries to get them into stores. But then, they decide to start making other toys, even though all they've made up until that point are puzzles.

• 19:51Speaker 00

  And we looked backward at what was wonderful and incredible from the past. And we saw wooden toys, that category. And we said, OK, here's another category, wooden toys. Wow, really expensive, completely inaccessible to average people. The aesthetic is very unapproachable to kids, not very playful. And here's a category that we can go in and we can really reinvent.

• 20:18Guy Raz?

  So at this point, like, kids are playing with plastic toys and battery-operated toys. And were you guys thinking, we are going to be the anti-battery toy company? Like, we are not going to do that.

• 20:28Speaker 00

  So we thought it was so interesting that every toy company was chasing, running forward, right, chasing the hottest fads and trends and hot licenses and hot properties.

• 20:38Guy Raz?

  What were kids playing with in the mid-'90s?

• 20:40Speaker 00

  It was like, you know, probably Cabbage Patch Dolls and TV-advertised toys and a lot of sort of hot toys. And that was kind of the market. And we saw, in this experiment with puzzles that ended up working, we saw, oh, my goodness, people actually still want things that are nostalgic and make them remember their past, but they don't want them dusty and like they found them in some old attic. They want them, you know, injected with pizzazz and brought to today.

• 21:08Guy Raz?

  So what did you start to make?

• 21:10Speaker 00

  Well, our first line was about a dozen basics, but basics reinvented, pounding and sorting and stacking and manipulating.

• 21:18Guy Raz?

  Oh, right, like blocks, yeah.

• 21:20Speaker 00

  Yep, and doing them at incredibly low price points and packaging them in a way that had never been packaged with open packaging.

• 21:27Guy Raz?

  And you were designing all of this, Melissa?

• 21:30Speaker 00

  Yes.

• 21:31Guy Raz?

  And it's all made out of like, plastic or wood?

• 21:34Speaker 00

  I mean, 50% of what we make is still wood. And then other materials, we use a lot of metal, we use canvas, but mostly not plastic.

• 21:45Guy Raz?

  So at this point, are you guys, do you have an office? Do you have like a place where you're working at of? Or is it still just the two of you? Or is now, do you now have some employees?

• 21:55Speaker 02

  I'd say at this point, we probably had a couple of part-time people that were helping us. We have, so we have a person who's coming up on his 20 years this year. His first job with us was a mix between helping us change our baby Brendan's diapers, helping us weed the driveway. And also, when trucks would come and deliver products to our house, he would help us unload the truck and load the products in and help us pack up products and ship them.

• 22:26Guy Raz?

  So when you really like transitioned from puzzles to wooden toys, you're still just selling them mainly in like small sort of independent stores in New England?

• 22:35Speaker 02

  Yes.

• 22:37Speaker 00

  Well, by this time, we had expanded beyond New England, but definitely the small independent stores. We were firmly convinced that that was the only way we could really get our products out there.

• 22:51Guy Raz?

  So, I mean, it sounds like at this point, you guys were on a pretty steady path. I mean, did you make any, any big mistakes?

• 22:58Speaker 02

  We have actually never made a mistake. It's the craziest thing.

• 23:01Guy Raz?

  Never had a failure.

• 23:03Speaker 02

  We have had so many failures, and that's why we love that word. Because failure is a word that you have to get comfortable with, and you can't fear the failure.

• 23:11Guy Raz?

  Yeah. So, so tell me about some of the failures. What were some of them?

• 23:16Speaker 00

  So, behind my desk, I have about, I can't even fit them anymore, maybe 500 toys that were all my very favorite toys that failed in a big way. Some of them entire categories. Because every day, I want to remind myself when I come to work and come to my desk that the line between success and failure is as fine as a spider web, and you really never know.

• 23:42Guy Raz?

  What were some of the toys that didn't work?

• 23:44Speaker 00

  Oh, my gosh, so many. But one of the lines that we were most excited about, and I think was a huge investment, was a line called Puzzle World. And it was an entire world made out of puzzle pieces. Not only horizontally, they connected to form a base, but you could build up vertically and build skyscrapers.

• 24:03Guy Raz?

  Wow.

• 24:04Speaker 00

  It was the most amazing line ever.

• 24:07Speaker 02

  But also our most elaborate undertaking. It involved more tooling, more machining. It was by far our largest endeavor ever.

• 24:15Speaker 00

  A year of development, play tables, and it was very expensive and costly to buy inventory because unlike our other products, the retails were about thirty to a hundred dollars for sets. They were sold in sets.

• 24:27Guy Raz?

  Oh, so this was not cheap.

• 24:29Speaker 00

  It was not. And we had all our prototypes, which took us over a year to create. And we brought it to Toy Fair and had our play table out. And the reaction was actually incredible.

• 24:41Speaker 02

  Amazing.

• 24:41Speaker 00

  Amazing.

• 24:42Speaker 02

  Probably the best ever.

• 24:43Speaker 00

  The best ever. And we had, I believe, we had a thousand assortments. And we literally, by the third day of Toy Fair, we sold out. But we made it clear to our retailers that this was going to be a big undertaking for them because this was not an item that was TV advertised. It was expensive.

• 25:02Speaker 02

  It was hard to understand.

• 25:03Speaker 00

  Really, it was a mystery in a box. And it was going to take a lot of education on their part, educating their customers about the merits of this. But we told them, if they do this, it will be an annuity. They will have, you know, years and years of this selling and generations buy more sets and we'll create more.

• 25:23Guy Raz?

  Because it sets, each set connected to the other set.

• 25:26Speaker 00

  It did. It was all interconnected. And it even connected to the popular railway sets at the time, the Thomas and the Brio. So it connected into any existing set you had as well. And they agreed and we sent it out. And do you want to?

• 25:42Speaker 02

  Oh, sure. She, that's nice. She tells all the exciting, great parts. Yeah, so my part is, yeah, and it failed and it all came back to us. And there I was in the warehouse, receiving it all back. That was my role in this.

• 25:53Guy Raz?

  What happened? People just didn't buy it?

• 25:56Speaker 00

  Basically, what happened is when we called the stores two weeks later, you know, hey, let's, can I send you some more? Nope, can't. It's not selling. And we would always say, But you're not selling it. I mean, they say, no, it's not selling. And this happened time and time again. And then after about two months, it was like, this stuff is taking up too much space. I want it out of my store.

• 26:19Guy Raz?

  But it just didn't, it just didn't, never took off.

• 26:21Speaker 00

  Well, the stores never got behind it to sell it. I mean, I think it, it had the potential to take off, but it's hard. You know, it's, it's hard to run a store and you have thousands of products and you have lots of competing interests. And here we are thinking, well, you'll just focus on our product and sell it.

• 26:36Speaker 02

  It reminded us that there's a higher burden on us because we take our products really personally. And we think that everyone in every day is gonna take all the time to explain everything about it the way that we, the inventors, would. And that's not always the case. It can't be done. So we realized it's our job. It's our job to design it in a way that speaks to their customers. And that's really what we started to do after that.

• 27:02Guy Raz?

  Do you know when a, like, how do you know when a toy is, is gonna work?

• 27:07Speaker 00

  It's amazing. You know really quickly. I mean, and we don't have, you know, we're not a, a hit-driven company. We joke that we have a lot of singles and doubles. We don't really want home runs because we don't want it here today, gone tomorrow. We're an evergreen company. We want our toys to be around forever.

• 27:23Speaker 02

  Melissa, even when she's working on a product, I mean, even with our own test laboratory with our six children at home is always using our, our, our products with our own children.

• 27:34Speaker 00

  I would say the initial ideation, I mean, you're obviously feeling a good gut that you're, you have an idea that's going to work. And then throughout the process, we do a huge amount of, we call it mom testing. And mom is synonymous with caregiver dad, you know, anyone who's playing teacher. And we get a, a good sense as we're going through the process. But the truth is, that's the joy of it. You never know for sure at all. And there are surprises every single day.

• 28:01Guy Raz?

  Yeah. I mean, it's interesting because you start this company in 1988. You know, 10 years really before the internet starts to take off. And, I mean, there was no reason why wooden products and analog toys were gonna succeed. I mean, it's so, so unlikely.

• 28:16Speaker 02

  And, in fact, every reason why they wouldn't succeed. And, and I think that's been a part of, you know, to the extent we have a business model, I think that's been a part of it all along, is to not go with the tide, not go the direction, not look at things and say, that's what everyone is doing? That's what we should do? Because our feeling has always been, if we copy... Every good model out there, at very best, what does that mean? We're going to be mediocre by definition because we are simply following and copying what everyone else is doing.

• 28:47Guy Raz?

  So was there ever a point, Melissa, when, I don't know, like investors or somebody said to you guys, "Look, you've got to do something with batteries," or "You've got to do something that, you know, electronics," or something? And did you ever think, "Maybe they're right"?

• 29:02Speaker 00

  They say it to us every single day.

• 29:04Guy Raz?

  Oh, right, okay.

• 29:04Speaker 00

  I mean, that's, and you know, that is one of the things, I think, that has kept us successful, is we've stayed true to mission, you know, ever since we started with our very first puzzle.

• 29:18Guy Raz?

  You guys basically, you know, did this on your own for, pretty much until a few years ago, right? And you were a successful company. But I guess, just a few years ago, you decided to seek outside investors.

• 29:31Speaker 02

  Correct, yep. We kept significant ownership and we brought in some investors who now will sit on our board and participate very actively with us also and helpfully.

• 29:42Speaker 00

  Because the truth is, for the first 20 years, we really did this without mentorship. You know, it was, it was finding our own way in a very dark room.

• 29:50Guy Raz?

  What did the outside investment allow you to do as a company?

• 29:54Speaker 02

  Well, I think, two things. One is, they have Rolodexes that are much larger than ours and introduce us to folks that can, can help with things. And then financially, also frankly, freedom to grow and expand more exponentially if we want to expand our footprint internationally. And so, opened up those doors, too.

• 30:16Guy Raz?

  I'm curious, how did you guys, I mean, obviously, you've got, I mean, I shouldn't say obviously, but it seems like you have a great relationship and you're great business partners, but also a great couple, great parents, you've got kids as well, I think, like, what, six kids, is that right?

• 30:32Speaker 00

  Yep.

• 30:33Guy Raz?

  You were just trying to figure out how many kids, okay.

• 30:36Speaker 02

  She was going to say with her first husband.

• 30:38Speaker 00

  No, I was going to say, do you consider Doug a child?

• 30:41Guy Raz?

  Oh, okay, because you did this.

• 30:43Speaker 00

  Six children and then Doug.

• 30:44Guy Raz?

  But like, honestly, was it all like blissful and joyful and laughing? Or were there moments of tension between the two of you?

• 30:52Speaker 02

  You mean this morning, or in general?

• 30:55Speaker 02

  It's a combination. The good news is that we absolutely do have things that we disagree on, which is good and which is healthy. But I would have to say that I think we have our respect and our admiration that keeps it working perfectly, both from a business and a personal perspective.

• 31:15Speaker 00

  I mean, in terms of the business, we never would have been able to make it without each other. I mean, this is absolutely a partnership, and a partnership is necessary to go through everything we've gone through. I mean, although it seems blissful and easy, the 28 years has not been easy, and we have faced every challenge imaginable. And it goes on and on every day.

• 31:41Guy Raz?

  Melissa and Doug Bernstein run the toy company Melissa and Doug. The company has grown from just the two of them to almost 1,000 employees, with revenue of more than $350 million a year. And they still make lots and lots of puzzles. I remember the letter puzzle, where you take the letter out and it says that you hear the sound of the letter. And for some reason, one or two of the letters weren't in the right slots. And I remember I'd fallen asleep in my kid's room with them. In the middle of the night, I'd just heard "J." "J." "J." And I was like, "What is that? Where's that coming from?" And it was like a shadow. It was like a shadow moving over the sensor.

• 32:22Speaker 02

  Is that what this is all about? Do you want a replacement for that item?

• 32:25Guy Raz?

  That night, I was like, "Melissa and Doug, I need to sleep tonight."

• 32:30Speaker 00

  I'm sorry.

• 32:36Guy Raz?

  Hey, thanks for listening to the show this week. If you want to find out more or listen to previous episodes, you can go to howibuiltthis.npr.org. You can also subscribe to our show on iTunes. And please do us a favor and write a review. Let us know what you think. You can also write to us at [email protected]. And if you want to send a tweet, it's at howibuiltthis. Our show was produced this week by Rund Abdelfatah, with music composed by Ramtin Arablouei. Thanks also to Neva Grant, Sanaz Meshkhanpour, and Jeff Rogers. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 33:16Guy Raz?

  Hey, thanks for sticking around. We are at the very end of the show, which means it's time for you to tell us about the companies you're building. And this one came to us from Paul Castor. He's from Kansas City, Kansas, and his company is called Crooked Branch Studio.

• 33:31Speaker 03

  We specialize in handcrafted wooden bow ties.

• 33:34Guy Raz?

  Handcrafted wooden bow ties are actually a thing.

• 33:37Speaker 03

  So a wooden bow tie is just like a pre-tied fabric bow tie, except for, well, it's made out of wood.

• 33:43Guy Raz?

  This all started for Paul about a year ago, when a friend gave him a wooden bow tie as a gift.

• 33:48Speaker 03

  It's a common gift if you're a woodworker and you're a preppy guy in high school. But as a woodworker, I kind of saw all the flaws in the design.

• 33:55Guy Raz?

  So Paul decided, hey, you know, I can make a better wooden bow tie, one that actually looks less flat and more like real fabric. So he set up a shop in his basement at home, and then he started selling the ties on Etsy.

• 34:08Speaker 03

  The greatest compliment that I ever get is, I didn't know that was a wooden bow tie. And I get that one a lot. They're like, that's made of wood? I couldn't even tell.

• 34:16Guy Raz?

  Paul has an entire line of bow ties now, and he figured out how to get wood from all over the world.

• 34:21Speaker 03

  I have paduk, maple, cherry.

• 34:23Guy Raz?

  Oh, yeah. And by the way, Paul is just 17 years old. He's a senior in high school.

• 34:29Speaker 03

  There are some days where it's just really crazy. And so what I do is I come home at 3 o'clock from school, and then I work till 8 or 9, and then I study from 9 to midnight, and then just do it again the next day.

• 34:41Guy Raz?

  Paul says his company has made about $18,000 in profit this year. He's even hired two friends and his mom. She works part-time for him, making the neck straps for the ties.

• 34:52Speaker 03

  I pay my mother, yes. About $15 to $20 an hour.

• 34:55Guy Raz?

  This is a real family business now. Paul plans to go to college next year, and he says he's going to run his business from his dorm room. But he says he's already learned a ton.

• 35:04Speaker 03

  It's been the greatest learning experience. I can almost say that I've learned more from this than I have from my school in the past year.

• 35:11Guy Raz?

  That's Paul Castor from Kansas City, Kansas. His company is called Crooked Branch Studio. And if you want to tell us about the company or idea you are building, go to build.npr.org. That's B-U-I-L-D dot NPR dot org. And thanks.

• 35:30Guy Raz?

  As the end of the year approaches, a lot of you have been asking about the best way to support How I Built This. So first of all, thank you for asking, and it is pretty easy to do. You go to stations.npr.org. You find your local station and you make a year-end contribution. Or even better, you become a regular monthly donor. And when you do, please tell them that How I Built This sent you. So find your local station at stations.npr.org. It takes like two minutes. It's totally tax deductible. And please do tell them How I Built This sent you. Again, that's stations.npr.org. And thanks.