Kendra Scott: Kendra Scott

Ever since she was a little girl playing dress-up in her aunt's closet, Kendra Scott loved fashion. Her first business was a hat shop, which she started at 19 – it failed. A few years later, she started a jewelry business out of her spare bedroom. Today the company is reportedly valued at more than a billion dollars. 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.

• 0:02Speaker 00

  All these things were happening and I was like, you know, literally on my kitchen floor sobbing, like, I'm going to lose all of this. And it made me have to make a decision, like, in that moment. I was either going to give up and just say, I can't do this, party's over, or I was going to have to throw all my chips on the table and we were going to have to do something, like, radical.

• 0:33Guy 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, how a young mom named Kendra Scott turned her spare bedroom into a launching pad for a multimillion-dollar jewelry company.

• 0:59Guy Raz?

  When Kendra Scott was a little kid in Kenosha, Wisconsin, she'd often get driven up to Milwaukee to visit her glamorous aunt, who worked as a fashion coordinator at the Gimbel's Department Store in downtown.

• 1:12Speaker 00

  Going into her closet was, you know, magical and I could become anything I wanted to be, you know? I would play in her clothes and her jewelry and I would sketch ideas of clothes and handbags and shoes. I would break antique pieces of jewelry apart and try to put them back together again. I would style my mom. I mean, I don't, can't say it was great looking, but it was creative. I can say that. I loved it.

• 1:38Guy Raz?

  But Kendra really thought of fashion as a hobby. She'd never imagined it as the thing she would eventually do with her life. By the time she turned 16, her parents' marriage was falling apart. Kendra and her mom moved to Houston, and so for college, she decided on Texas A&M. But shortly after the start of her freshman year, her stepdad was diagnosed with cancer, so Kendra dropped out.

• 2:05Speaker 00

  It just was like, you know what? Right now, this is the most important thing that I need to do. And so, dropped out of school, moved to Austin, and was spending, you know, an unbelievable amount of time at MD Anderson in Houston. And... That's where my first business actually started was I went home and started designing headwear for women undergoing chemotherapy.

• 2:28Guy Raz?

  Wow, how did you, how did you get the idea?

• 2:31Speaker 00

  So, you know, there were times when, you know, we'd be in the hospital, you know, and he's in for a treatment, there could be seven hours in a procedure. So, sitting in a waiting room is really, really hard to do for seven hours. So, we would go out, we would meet people, we'd be in the cafeteria, we'd meet women and families, and I could just see, one, you know, it's so devastating for anyone who's going through cancer treatment, but for a woman, you know, to lose your hair as well, it's a part of your identity, and, you know, there weren't great options for these women. And I just started hearing this struggle. And I loved hats and I loved fashion, and I thought, you know, I could take some hats and if I could, you know, put in some cotton linings, comfortable headbands, things that

• 3:12Speaker 00

  would make them more comfortable to wear, because a wool, you know, hat is not comfortable when you've lost your hair, right? So, this could be great.

• 3:20Guy Raz?

  Well, you, you started to, to make the hats?

• 3:22Speaker 00

  Yeah, so initially, I wasn't making the actual hats. So, I was buying hats, and then I kind of started thinking about it, and I'm like, you know, there are no, I was trying to buy hats and I couldn't find them anywhere. I'm like, no one is selling hats. Where are all the hats? And so, my first business was creating a hat store with the intention that I could also have a space and a place for people undergoing chemotherapy to come that was private, so they could have a private area to try hats on. And I had this big fantasy that it was going to be like 1930 again, and everyone was going to wear hats, and there was going to be this big movement of people wearing hats again.

• 3:57Guy Raz?

  What did you, at that point, I mean, your stepfather was, he was battling cancer himself, and at the same time, you launched this, this company, this business?

• 4:08Speaker 00

  Yeah, so, you know, it was a really crazy thing. I remember talking to my father and my mother. And my stepfather and saying, you guys, I want to, I want to do this. And, you know, my unbelievably, and I look back now, like that my parents were like, okay, do that. I mean, I think my mom was going through a lot, so maybe she wasn't in the right state of mind, but she's like, you know, do it, honey. And my dad was the same way. And he said, look, you're not spending the money I'd saved for college, you know, and it wasn't much. I remember it being like $20,000 that I bought my first inventory and signed a lease and all that kind of stuff.

• 4:42Guy Raz?

  What would you call the store?

• 4:44Speaker 00

  The Hat Box.

• 4:45Guy Raz?

  Wait, can I just stop you for a sec? You were like 19 or 20. That's amazing. So how did you even have the confidence to try this?

• 4:54Speaker 00

  You know, I think you kind of go in things without necessarily understanding, like, all the risks. I kind of was like, oh, let's just do this. And, you know, it was amazing. And I had to sell every hat. So like, I clearly, to make money, I mean, if you needed a top hat, I had it. A Joker hat, I had it. You know, whatever, a fedora, a church hat, derby hat, I was your person.

• 5:19Guy Raz?

  And so you open up, and what happens? Do people start to come in from day one?

• 5:23Speaker 00

  Not really. It was, you know, it was a slow, let's just call it a slow build.

• 5:27Guy Raz?

  Okay.

• 5:28Speaker 00

  There wasn't the demand for hats that I really had dreamt that there would be. We tried a lot of really creative, out of the box, marketing tactics, but at the end of the day, we'd sell some hats, but it was, it was tough. I mean, I remember a lot of days, call my dad, just crying and being like, Dad, I sold one hat today, you know? And I had been there like 12 hours and I sold a hat. I was so determined to make this hat business work, which I didn't. I mean, five years after eating top ramen and like, struggling and working seven days a week and open to close, and I couldn't really afford to have anybody, I had to shut it down. And I mean, I failed.

• 6:10Guy Raz?

  You just were losing money all the time, hemorrhaging money.

• 6:14Speaker 00

  Yes. You know, I remember when I closed the Hat Box, you know, saying I would never go into retail again. It was just too hard. You know, here, my store closed, my stepfather now passed away from cancer. You know, it was just a very dark and sad time. And, you know, I failed. I completely failed at something that he was once so proud of. So I really felt like I had let down him in so many ways. But I think at that time, I was like, okay, you know, go get a job. And so, you know, I went and I was able to get a job at a local travel company that had a magazine associated with it. And I was able to, you know, do

• 6:55Speaker 00

  some really creative things with building this magazine for them. And it was fun, but I wanted to do my own thing again.

• 7:02Guy Raz?

  Yeah. And what about your own life? Like, I mean, were you, were you married at that point?

• 7:08Speaker 00

  Yes. Got married in 2000, so about the time that was all going bad. I did have that one, you know, bright light of getting married. And then in 2001, having our first son. So that was really a catalyst for me because the job that I was doing, you know, at the magazine required me to travel a lot. So I really knew at that point that I needed to figure out something else. And I realized that, you know, what I loved was, I love fashion, I love design. And with the Hat Box, I saw what a difference what I loved could do to help other people with, you know, the hats for women undergoing chemotherapy. And I thought, God, if I create a company that could also do something really good, that

• 7:53Speaker 00

  that would be success for me. And that literally was the foundation of Kendra Scott.

• 7:59Guy Raz?

  How did you land on jewelry design?

• 8:03Speaker 00

  You know, I could make it with my own two hands. I can't sew to save my life.

• 8:07Guy Raz?

  Yeah.

• 8:08Speaker 00

  So, you know, I loved all that facets of fashion and design. But jewelry was always like the icing. It was the extra sparkle. It always fit, too. So when you're pregnant, believe me, jewelry is very important because you're wearing potato sacks. So if you can put on a great statement necklace, you all of a sudden feel glamorous. So I think being pregnant, I was looking for beautiful gemstone jewelry that I could afford. And it wasn't out there. It was either inexpensive, plastic, glass that would fall apart after one time wearing it, or semi-precious jewelry that was so far out of my reach. It was unattainable for me. And I just felt like there was this white space in the jewelry industry that for women like me

• 8:52Speaker 00

  who wanted beautiful, quality product, but needed it in a more attainable price point. And that's really, you know, kind of what I set out to do when I created my first line.

• 9:04Guy Raz?

  How did you even know how to make it?

• 9:07Speaker 00

  So I took some very simple jewelry making classes here in Austin. There was a local bead shop that had some classes that I took on wire wrapping.

• 9:17Guy Raz?

  Yeah.

• 9:18Speaker 00

  And then I would look at things and I literally would break them apart to try to figure out how they were made. And I set up shop in the extra bedroom of our house. I had some fold-out tables that my mom gave me, a bead board, pliers and some wire. And that's what the first collection was made out of.

• 9:36Guy Raz?

  You just literally started making jewelry?

• 9:40Speaker 00

  I literally started just making jewelry. And when I was finished, I remember looking at it and going, you know what? This isn't half bad. You know, I think people would like this.

• 9:49Guy Raz?

  What did it look like?

• 9:50Speaker 00

  It was colorful, you know, I love color. So I was trying to mix color in a unique way. So putting stones together that might not typically be put together and create really pretty colorways. It was hand-beating, hand-knotted, wire-wrapped silhouettes with some chain.

• 10:07Guy Raz?

  And they were like bracelets and pendants? And what were they, necklaces?

• 10:11Speaker 00

  We did bracelets. We did necklaces. But I was known for my earrings, like chandelier earrings and really pretty drippy stone, you know, earrings and long shoulder dusters. And so, yeah, I put those little pieces that I made and I literally... Took $500 to get all the supplies I needed to create this collection, which was a big deal for us. You know, our mortgage, I remembered at the time being around $1,500. So $500 is a lot. And we, you know, we have a newborn baby. And, you know, it was like, here's Kendra, one of her crazy ideas. You know, the hat box had failed. My husband's probably like, what is she doing?

• 10:55Speaker 00

  But I was like, I promise I'm going to bring home $1,000.

• 10:58Guy Raz?

  So how did you think you were going to do that?

• 11:02Speaker 00

  I went out and I put this jewelry in a tea box, a wooden tea box, actually that we had gotten as a wedding gift, and took my little son, Cade, in a Baby Bjorn, and we went store to store in Austin, Texas.

• 11:14Guy Raz?

  Asking people if they'd be interested in carrying it?

• 11:17Speaker 00

  Exactly.

• 11:18Guy Raz?

  Was any part of you nervous about doing that?

• 11:20Speaker 00

  Oh, my gosh, yes. I remember sitting in my car outside of the first store for probably 20 minutes, just figuring out like what I was going to say and if they were going to kick me out, like if, you know, they'd call security or something on me. But I thought I did have the baby, so I felt like I was in better, better shape. But I was so passionate about it. And I think when I walked through, that passion shined through.

• 11:45Guy Raz?

  So what was your pitch?

• 11:46Speaker 00

  So I had a very basic line sheet and an order form that I printed off of Word.

• 11:55Speaker 00

  And went in and I said, hey, I'm Kendra Scott, and I've got a jewelry collection. And I always joke that, you know, I don't know if they loved the jewelry or they just felt really sorry for me.

• 12:05Guy Raz?

  Right, with a Baby Bjorn, right?

• 12:06Speaker 00

  Yeah, I had the baby. I take, hey, look, you got to pull out all the stops sometimes.

• 12:10Guy Raz?

  Absolutely, right.

• 12:11Speaker 00

  You know, guy, like whatever it takes. And, you know, they bought it. And so they wrote orders. And I, you know, literally the last store I went to that day, I had to sell my entire sample set.

• 12:23Guy Raz?

  Wow.

• 12:23Speaker 00

  So that I would have enough money to buy the materials I needed to produce the orders I wrote that day. And I came home with a check for $1,200. And I remember walking in and, you know, telling my husband, I'm like, we got a business.

• 12:39Guy Raz?

  So that, after that day of just like hocking it door to door, store to store, you had to basically, I guess, go back and just get to work. You had to start making this stuff.

• 12:48Speaker 00

  Completely. And I remember like I put a bulletin board up on the wall and I had like my four orders pinned, like it was so big time, like what was in production. And, you know, I ended up getting one of my friends to come over and taught her how to wire wrap. And she like helped me make a new sample set and then also produce these orders and delivered them. And I remember the day after I delivered to one of the stores, she called and she's like, "I'm out."

• 13:14Guy Raz?

  Wow.

• 13:15Speaker 00

  "Kendra, I need more." And I was like, "What?" You know, and she's like, "Can you, when, how quick can I get more?" And I'm like, "Um," you know, and it was just kind of like, "Oh, my gosh." And it was exciting. It was really exciting because people loved it. And it was fun because, you know, here I am in Austin, just selling to these stores. And then another store in like Dallas would hear about it and I'd, you know, do it for them. And, you know, all of a sudden, I got a call one day from this showroom in Dallas. And she's like, "Is this Kendra Scott?" And I said, "Yeah." And she said, "Well, who are you?" And I said, "Um, Kendra Scott?" And she said, "Well, I, you know, some of my stores in Austin, they're not buying my line. They're talking about this local girl from Austin. I want to see what you've got." And so I went up to Dallas and she said,

• 13:59Speaker 00

  "Well, you know what? I might as well be selling it." And so she really helped me kind of start to build the brand and get further exposure, you know, in the South through wholesale accounts. And that was a great, that was a great break.

• 14:10Guy Raz?

  Were you profitable right away?

• 14:12Speaker 00

  Well, yeah. We were running a pretty tight ship out of my extra bedroom, you know, and I got this great, you know, rep. I don't know if you remember Harold's Stores, but they were a company that had a great catalog business and stores, a good retail chain. But they were my first big order. And they came to market. And I remember the rep being like, "Oh, don't sample for them. Like, they never really buy anything and they sample all the time." And I'm like, "Hey, I don't have anything to lose." So I made samples up per their request and I like wrapped them in tissue with like ribbon. I don't know, I might even put perfume in the box. I was like butterfly release, you know? And I'm like, "If I'm gonna do it, I'm gonna try to do it." And sure enough, I got a call and it was a $75,000 order.

• 14:56Guy Raz?

  Wow. How many pieces was that for?

• 15:00Speaker 00

  It was, I think, want to say it was like 2,200 or, I mean, it was like in the thousands, guy.

• 15:05Guy Raz?

  How did you even manage to start making those?

• 15:08Speaker 00

  You fake it till you make it, right? Because they had no idea I was in my extra bedroom.

• 15:12Guy Raz?

  Yeah.

• 15:13Speaker 00

  And that was when I was like, oh, my God, I have to outsource production. I clearly can't make all these. And they wanted it delivered in like eight weeks. And I said yes to everything because I didn't know. You know, I was like, OK, yeah, we'll do that. And I remember on The Buyer, you know, when she gave me the order, I started crying on the phone to her. And I just said, you just made somebody's business like happen. And, you know, we're still friends. And she says like she still remembers that moment because I was so emotional. I couldn't believe it. But we did it. So we actually called a friend who had worked as a CEO of a very large retail chain. He had some production resources overseas. They have the stone capability there, too, which was great. So it was all natural stones. I remember it.

• 15:56Speaker 00

  He, as a friend, called and said, can you help my friend out? And literally, thanks to him, that first order was produced on time. And we shipped it out, you know, ticketed and carted it on my dining room table. And UPS picked it up on my front doorstep. You know, it's the biggest lesson I could ever give any entrepreneur is, don't be afraid to ask for help. It is not a sign of weakness. It is the greatest sign of strength.

• 16:24Guy Raz?

  Kendra Scott, when we come back in a moment, how the 2008 recession almost killed Kendra's business and then kind of saved it. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 17:00Guy Raz?

  Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's the early 2000s, and Kendra Scott has just landed her first big order. But if she wanted to make it nationally, she'd have to get her jewelry into the famous fashion showrooms of New York.

• 17:17Speaker 00

  And I started calling them and sending them samples. And, you know, nobody would call me back. I would send cupcakes. I don't know, it's a southern thing here. We eat a lot of cupcakes. Anything I could get to try to get a response out of these showrooms.

• 17:29Guy Raz?

  And they just weren't interested?

• 17:31Speaker 00

  No. And, you know, I'd be told, I get 20 calls a day like this. What's going to make you special?

• 17:38Speaker 00

  Do you know how many jewelry designers there are out there or wannabe jewelry designers? I can't tell you like how many times I got told no and basically kind of laughed at and told, oh, you're from Austin, Texas. What are you selling? Southwest jewelry? I'm like, no, hello, I'm selling very fashion forward, trend based, blah, blah, blah. You know, I mean, they want to put you in a box, right? And it was really deflating, but you just have to like have it like, I'm not going to let this fail. And I remember one showroom out of like the 20 or 15 that I was courting finally called me back. And he's like, well, you just like stop calling me. Like, you know, he's like, I will talk to you, but you have 20 minutes and you need to come to New York.

• 18:22Speaker 00

  And I'm like, OK, I'm in, I'm coming.

• 18:25Guy Raz?

  And like this showroom in New York like sells jewelry from like a bunch of different designers?

• 18:29Speaker 00

  Yes. So this is a wholesale showroom. So they'll carry multi-lines. Some carry multiple lines of jewelry. Some would carry handbags, jewelry, other accessories, footwear, whatever. And this is where buyers, so the buyers of department stores, buyers of boutiques, would go in. So this isn't direct to consumer. This is not a store. This is a actual showroom for wholesale, right? And so this was a really great one. And again, not too big, so I felt like I wouldn't get lost. And he was a tough New York guy. And, you know, he wasn't kidding about the 20 minutes. And I went in and showed him my collection and tried to explain to him what my goal and vision was for the brand. And he said, you know, like, I'll look it over. I'll talk to the rest of the folks that work with me and we'll get back to you kind of thing.

• 19:14Speaker 00

  And, you know, 22 minutes later, I walked down kind of deflated, thinking, ah, you know, I don't think he's going to, like, I don't think that went as great as I wanted it to. And it was about three days later and I was driving on Loop 1 in Austin, Texas. And, you know, my cellphone rang and he said, Kendra, we want to carry your line. And I had to pull over, like, on the highway, which was not safe. But yeah, it was, so then that, you know, we got a New York showroom and we really, we sold into Nordstrom, the next market.

• 19:45Guy Raz?

  What, what do you think it was? I mean, I mean, was the design, like, markedly different from anything else out there? Or was it just that this guy happened to like your stuff?

• 19:56Speaker 00

  I think that, that, you know, look, he wouldn't have carried it if the design wasn't good. You know, he sees a lot of things. So I think, you know, the design was good. I think he was excited about the price point. I think he saw that there was value and there was, that would be exciting for customers to be able to have that. And it was something that he didn't have to show. And again, like, we were filling a void and that was the reason that we got his attention.

• 20:21Guy Raz?

  How did you even know, for example, like, how to price things and how to do all that stuff?

• 20:28Speaker 00

  I didn't, Guy. I mean, come on. I kind of learned as I went along. Then when we went overseas, we were able to buy better, you know, through volume. We were going direct to stone manufacturers versus going through importers and exporters and, you know, all these other middlemen. So it worked out that we were able to actually really price smartly. And for me, the more direct I could go, I could pass that value on to our customer and she could get the most beautiful stone quality, handcrafted jewelry, but, you know, under $100 for a pair of earrings. And it really was about, like, getting out there and trying to source, you know, the manufacturers and the stone cutters to do it.

• 21:06Guy Raz?

  Okay, so, so back to the, the New York showroom and then the Nordstrom's order. What did you, like, how were you able to fulfill that?

• 21:13Speaker 00

  Yeah, so we were able to start working with a sourcing company who started helping us diversify our manufacturing and give us more resources. And so when we were, you know, got the first Nordstrom order, at this point, I was still in the extra bedroom. So we actually did ship Nordstrom out of the dining room again.

• 21:34Speaker 00

  And then we shortly moved to our first corporate headquarters, which was an attic.

• 21:39Guy Raz?

  It was an attic. Where was that?

• 21:41Speaker 00

  It was in Austin. It was a little Victorian house that had a Subway office below, like Subway shop office below it. And it was an attic space. I remember going in. He's like, well, we have the attic available. I'm like, how much is it? And he told me, I'm like, OK, I think we can swing the attic. And then we moved into an attic. So it was a big upgrade from my extra bedroom, let me tell you.

• 22:03Guy Raz?

  And at this point, it was you and who else?

• 22:06Speaker 00

  I think we had about like six employees.

• 22:08Guy Raz?

  Wow.

• 22:09Speaker 00

  Yeah, we were, we were, we were on fire, Guy. So I had a lot of production assistance at that point, literally helping make all the samples, create all the samples in-house. I had a graphics designer. I really believed early on, like I wanted to control the brand. And I think, you know, working in the magazine for a while, I just saw the power of, of having an authentic brand that, you know, we really controlled.

• 22:34Guy Raz?

  So your team was, was basically designing the jewelry and you were overseeing that? Like the design of each piece?

• 22:40Speaker 00

  No, I was designing.

• 22:41Guy Raz?

  Every piece?

• 22:42Speaker 00

  They were, they were producing. Yeah, in the early days, I was designing every single piece. Now I still lead the design for the entire collection.

• 22:50Guy Raz?

  So you have six employees at that time. I mean, by this point, were you already, were you making a lot of money yourself or were you still?

• 23:01Speaker 00

  No, not at all. Not at all. There, I mean, there were lots of times when I didn't, I didn't pay myself.

• 23:07Guy Raz?

  Yeah.

• 23:07Speaker 00

  I had to pay everybody else. I mean, I remember telling my landlord on several occasions, I'd go down and be the first of the month and I'd be like, Mike, so Nordstrom's check is running a little late. Could I have like two more days? And he'd just smile at me and be like, no problem. He was an entrepreneur. He was just so wonderful. And so thankfully, I had a cool landlord and, you know, we were floating constantly. I had a, I think I had about a $10,000 float that I was always in my mind of like when things were coming in and when I could pay things and how I was going to pay rent and pay payroll and, you know, pushing people off to figure out who I could. And I bootstrapped it. I mean, at this point, I didn't bring any investment capital in.

• 23:50Speaker 00

  So I had a line of credit with the bank against my inventory and my purchase orders.

• 23:56Guy Raz?

  How big was your line of credit at that time?

• 23:58Speaker 00

  Well, and then the very first line of credit I got, I think it was about 25,000. And then I got it moved up to 50. And I had a $50,000 line of credit for a while. And then I remember it went to 75, and that was like a big milestone that we got it up to $75,000. Like then, I didn't know how you go out and raise money or bring in equity. Or I didn't know how you do that. I was just worried about fulfilling the orders that I had to fulfill.

• 24:26Guy Raz?

  Yeah. When did you decide to open a brick and mortar shop?

• 24:32Speaker 00

  So do you remember I said I would never go into retail again after the hat box? Those are like famous last words, but I didn't for a long time. I was honestly really scared, really, really scared. And I thought, this is much better. I can design. You know, we're manufacturing and I'm selling to these wholesale partners. They have the product and they have to sell it, right? Like, it was safe. And we were growing, but we weren't growing dramatically. It was like we were at about a million, million five a year. You know, at this point now, I was a single mom, so, you know, I was able to pay our rent and do the things I need to do.

• 25:10Guy Raz?

  Your first marriage ended.

• 25:12Speaker 00

  It ended. Yep.

• 25:13Guy Raz?

  And how many kids did you have at that point?

• 25:15Speaker 00

  Two little boys.

• 25:16Guy Raz?

  And so you were doing this more or less on your own and running the business?

• 25:20Speaker 00

  Yes. Yeah, back, my little one, he was one and the older one was three. So they were little, little, little. So they would, you know, they'd come to the attic with me. And I had a pack and play and toys. And to me, those are just magical days, quite honestly. It was a very special time for me and the boys. It was hard. But it was like there was that determination. Like, I couldn't fail them. I had to make this work.

• 25:48Guy Raz?

  Did you have help from your mom with child rearing?

• 25:52Speaker 00

  She's unbelievable. She is just, yes. And my sister actually moved in with me for part of that time.

• 25:58Guy Raz?

  Because you had to travel and try to sell your line.

• 26:01Speaker 00

  Yeah. I mean, I brought Kate, my oldest, I would bring. He had 75,000 frequent flyer miles when he was three and a half.

• 26:09Speaker 00

  I mean, that poor kid.

• 26:10Guy Raz?

  Wow.

• 26:11Speaker 00

  I mean, I think back now, I don't even know who this person is and how I did it because I don't think I could do it now. But again, the asking for help. I mean, I had some friends in New York who would help with my son when I was there doing the shows. I mean, I surrounded myself with these amazing, wonderful people who had big hearts, who believed in me. And, you know, I'm so thankful because I couldn't have done this without the people around me to support me during this time.

• 26:43Guy Raz?

  So you decide to, to open a brick and mortar store in Austin, presumably, your first one?

• 26:50Speaker 00

  Yeah. So here we are, we're going along, I'm just selling my little orders to all these wholesale accounts, and this amazing, wonderful thing happens called the recession, which turns out to be the greatest gift Kendra Scott, the company, ever received, which sounds really crazy, but it really was the greatest gift because I was playing it safe. I was so scared to go outside of my comfort zone, you know, seeing what happened with my first business. But then the recession hit, and every day I'd walk in and stores I'd been working with for years were shuttering. One after another, buyers that I had been working with and built these great relationships with were getting laid off from their jobs. I mean, the whole world changed.

• 27:34Speaker 00

  And my line of credit gets called by the bank because I'm a high risk being fashion and jewelry. And so all these things were happening, and I was like, you know, literally on my kitchen floor sobbing, like, I'm gonna lose all of this, you know? And I've got these boys I have to raise. That was like a very scary time, and it made me have to make a decision, like, in that moment. I was either going to give up and just say, I can't do this, and it's over, party's over, or I was gonna have to throw all my chips on the table, and we were gonna have to do something like radical. And that's what we decided to do.

• 28:15Guy Raz?

  So what'd you do?

• 28:17Speaker 00

  Radical, meaning retail.

• 28:20Guy Raz?

  So your answer was, we've got to go out there and open up a shop?

• 28:25Speaker 00

  Well, what my answer was is that for all these years, I've been worrying about what buyers, the buyers, wanted. I wasn't thinking as much about the customer. And I realized I had to refocus, that all of my attention had to go on the customer. I had to know what she wanted more of. I had to engage with her personally. And so our complete focus went from business to business to business to consumer. And that meant an amazing web experience. It meant being innovative and creative with creating a customization opportunity for our customers. And the store really was meant to be our laboratory. And so we moved our office to above a store in South Congress in Austin, Texas. So all of us would have

• 29:10Speaker 00

  to walk through the retail store every day before we could get to our offices. So that we were forced to really have to see what was going on and look at the product in a fresh, new perspective.

• 29:20Guy Raz?

  Yeah. How did you finance that? I mean, the recession hits, you are, you know, kind of profitable, but you're not really making crazy amounts of money. So how were you able to put the money into getting a retail space and going that route?

• 29:35Speaker 00

  So a great thing happened. I was with, when I was with this bigger bank, and we're not going to name any names, but when they were about to call our line, we had a local Texas bank who loved me, loved our brand, and took our line of credit on, gave us some extension in addition to the line of credit that they took on, which was phenomenal, and really helped us. Fortunately, because of the recession, all these stores were shuttering. So I was, you know, South Congress, which was now the hottest, hippest place in Austin, in 2008, 2009, it was almost a ghost town. And so negotiating a great lease and getting space was actually pretty easy, right? But I thought, you know, if we're going to do

• 30:17Speaker 00

  it, I want to do it totally different than everybody else. I don't want to just open a jewelry store. I don't know if you've been into a jewelry store, but it's kind of a scary place sometimes. There's like cases and you have to ask people to see things.

• 30:31Guy Raz?

  Right.

• 30:31Speaker 00

  Right?

• 30:31Guy Raz?

  Yeah.

• 30:32Speaker 00

  It's scary.

• 30:32Guy Raz?

  Yeah.

• 30:33Speaker 00

  It's intimidating. And sometimes there's big burly guards at the gate, you know, the door. It's not exactly your warm and fuzzy feeling when you walk in. And so we wanted to take all the scary out of it. And so the cases were open. Jewelry was freely displays on, you know, tables and you could touch and feel it. And we had signs that said, "Have fun, try on." You know, we had the color bar where you could sit at the bar and customize your own piece of jewelry and pick the stones that would go in the setting. And then our girls, right in front of you, would set the stones while you're drinking a glass of champagne. It was fun. It was fun and it was fresh and it was, the jewelry was attainable. And I think in the recession, it was refreshing for people because it was something that they could afford to do

• 31:17Speaker 00

  and it made them feel good. And we had lines around the block. I couldn't believe it.

• 31:23Guy Raz?

  How did you, how were you able to scale up from that one store? Did you have to eventually get outside investment?

• 31:31Speaker 00

  So not with the second store or the third store. So we didn't bring in investment capital until 2012, very small amount. I mean, I was running a business every day that was bigger than it was the night before. I didn't know what I was doing. And I knew I needed to bring in a more qualified team. So, you know, in 2010, we still only had seven people.

• 31:54Guy Raz?

  Wow.

• 31:54Speaker 00

  You know, we were all green, right? We were young, we were hardworking. We definitely were, you know, passionate and excited, but I needed to get some gray hair in the building, so to speak. And in order to do that, you know, we needed to also have money to do that. And so we brought in a COO who is fantastic and with me to this day. And, you know, I stopped paying myself, actually, when I hired him because I knew we had to have him. I knew I needed that, you know, expertise. And I remember going to our controller, who's now my VP of HR. And saying, Christine, we've got to hire this guy. And she's like, Kendra, we can't afford him. And I was like, we can't not afford him. I said, stop paying me.

• 32:39Speaker 00

  We're hiring him. And they did. And then finally, my COO Lon, who is with me still, he laughed. One day, he realized that I wasn't getting paid. Because I was like, it wasn't that long. But he's like, I think you should maybe get paid. I'm like, OK, that'd be great.

• 32:59Guy Raz?

  So with the outside investment, you were able to sort of scale up and to the point where you now have more than 50 stores?

• 33:07Speaker 00

  54 right now, and we'll have 74 at the end of the year.

• 33:12Guy Raz?

  And you still sell in big retail chains like Nordstrom's and other places?

• 33:17Speaker 00

  Yeah, Nordstrom, Neiman Marcus, Bloomingdale's. You know, I think if you would have asked me in the extra bedroom if I would have ever thought this business would be as big as it is today, I would have, no way could I have dreamt that big. But now, I see it.

• 33:30Guy Raz?

  In those early days, when you had your first kid and you're just trying to get this off the ground, and do you remember having sleepless nights or having knots in your stomach and anxiety?

• 33:43Speaker 00

  I still have sleepless nights. Yeah, of course. I mean, running a business isn't easy. If it was, everybody would do it, right? You're always worrying about things. I mean, now I have 2,000 people that work for us. So I'm responsible for their families. So those things keep you up at night. There's always something that keeps you up at night. But in the early days, it's exciting, too, because you've got this idea and you have this thing. And I would wake up more anxious because I just wanted to get up and I wanted the sun to rise so I could just go do it. And I still am that way. I mean, I wake up at 3, 4 in the morning and I have ideas and I have a sketchpad next to me and I'm writing things down and tearing things out of magazines.

• 34:25Speaker 00

  I still have that giddy excitement every day. And that's what keeps you going. You have to like, love it, love it, love it. Like your children love it.

• 34:36Guy Raz?

  Yeah. You know, it's just amazing to me that you didn't finish college. I mean, you barely did a year of college.

• 34:45Speaker 00

  I wouldn't even say I really started, let's be honest.

• 34:48Guy Raz?

  You never studied business. You didn't study fashion and design. You just built this incredible... Business and you failed a lot along the way. Like you had a lot of.

• 35:00Speaker 00

  I just love how you're bringing out all my positive attributes.

• 35:04Guy Raz?

  How much, how much of this do you think was just your talent? How much of it was luck? How much of it was, I don't know.

• 35:13Speaker 00

  There's no luck. I mean, I don't, I don't really believe in luck. This has been very hard, you know? There were a lot of days I didn't think that I would keep this business. I think part of it is drive, right? And I saw where we needed to go. Giving up was not an option. I was going to figure this out. And I think I learned so much from the hat box. It was, that was my education. I mean, I learned business from A to Z, from open to close, literally closed. You can't teach that in a book. You can't learn that in a classroom.

• 35:44Guy Raz?

  Yeah. What do you think when you're like walking through an airport or in some city and you see somebody wearing your jewelry?

• 35:52Speaker 00

  Oh, my God, I get so excited. I still get excited. I mean, I see people all the time and, you know, I used to carry my business cards around and I used to get like, I'd see somebody and I'd write 15% off and I'd sign my name. I'd be like, go into the store, show them like, I love you. You know, you're wearing my, you're wearing your Kendra. You look so beautiful. And so now we have caught you in your Kendra cards. They're like a gold ticket.

• 36:13Guy Raz?

  Oh, wow.

• 36:13Speaker 00

  And we give them to all of our employees. And so if you are wearing Kendra Scott and one of our Kendra Scott employees see you, they like literally will run up to you and be like, we caught you in your Kendra. You look so great. And we give you this golden ticket. And that came from my business card, but I love it. I always go up to people. I'm like, you look so great. Thank you so much for wearing our jewelry. It never, ever, ever gets old, ever.

• 36:39Guy Raz?

  Kendra Scott, founder of Kendra Scott Design. By the way, that original $500 investment paid off pretty big. Last December, Berkshire Partners made a large investment in her company. The size of the deal wasn't disclosed, but according to a report in Reuters, Berkshire's investment raised the value of the company to more than $1 billion.

• 37:11Guy Raz?

  Please don't turn us off just yet. In a moment, we're going to hear from you about the things you guys are building.

• 37:20Guy Raz?

  Hey, thanks for sticking around because it's time now for how you built that. And we got this story from Joshua Eznard, who grew up in Ithaca, New York.

• 37:30Speaker 02

  We were immigrants from St. Lucia in the Caribbean. And my dad, being an old school Caribbean guy, everyone knows about the old school parents. They cut their children's hair.

• 37:39Guy Raz?

  Yes, they did. But his dad's version of a haircut was not exactly Joshua's idea of a haircut.

• 37:46Speaker 02

  And I wanted to edge up my hair and have a cooler hairstyle. So I realized that I need to find a way to give myself the styles that all the cool kids had.

• 37:56Guy Raz?

  Joshua didn't have the money to pay a barber. And when he tried giving himself a cut with his dad's clippers, well.

• 38:04Speaker 02

  I ended up with bald spots. And let's just say that I spent a lot of time in middle school with hats on my head.

• 38:11Guy Raz?

  Joshua was 13 at the time and the kind of kid who loved to draw and design.

• 38:16Speaker 02

  And I realized that if I can cut some pieces of plastic and cardboard and mesh them together for certain designs and stencils, I may be able to use that as a guide to help me cut my hair.

• 38:30Guy Raz?

  And so Joshua invented, basically, a head stencil. He'd press it against his head and then he'd shave around it.

• 38:37Speaker 02

  And the first haircut was perfect. Like, the crisp curves on my sideburns were just amazing, to the point that people were like, "Man, you went to the barber? Who's your barber?"

• 38:50Guy Raz?

  "Me, I'm the barber," he would say. And Joshua kept using his stencil through middle school and then high school. And in his mid-20s, he decided to patent his invention. And within a few months, The Cut Buddy was born.

• 39:05Speaker 02

  So I actually took the product and I shot a video of me cutting my own hair with The Cut Buddy.

• 39:13Guy Raz?

  He put it on YouTube and he got some sales. But also, and maybe this is because Joshua doesn't have the best hair for this sort of thing.

• 41:16Guy 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. Please also consider subscribing to our show on iTunes. And do us a favor, write us a review while you're there. You can also write directly to us at [email protected]. And if you want to send a tweet, it's at how I built this. Our show was produced this week by Randa Abdel Fattah with music composed by Ramtin Arablouei. Thanks also to Neva Grant, Sanaz Meshkhanpour, and Jeff Rogers. Our intern is Claire Breen.

• 41:51Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This from NPR. One more quick thing just before we go. We are trying something this month. We're asking all of our listeners to tell a friend or a loved one or a parent or an uncle or anybody, really, about a podcast that they love or one that they think that that person might love. And tell them about it in real life. Go explain the podcast, how it works, maybe even show them how to download a podcast.

• 42:36Guy Raz?

  And do us a favor, tell us what you are recommending to other people by using the hashtag tripod. So that's T R Y P O D. And thanks.