Melissa & Doug: Melissa And Doug Bernstein (2016)

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. PLUS for our postscript "How You Built That," an update on The Cut Buddy, a stencil device that helps you cut your own hair. (Original broadcast date: December 19, 2016) 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.

• 0:01Guy Raz?

  Hey, it's Guy here. So Melissa and Doug Bernstein originally planned to make educational videos for kids. But when that plan didn't quite work out, they decided to shift to toys. And the rest, as they say, is, well, you'll have to hear the episode to find out. The Melissa and Doug story first aired in December 2016.

• 0:26Speaker 01

  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."

• 0:55Guy Raz?

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

• 1:07Guy 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.

• 1:22Guy Raz?

  OK, 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, 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,

• 2:03Guy 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. Was it like love at first sight? Was there an instant connection?

• 2:17Speaker 02

  I think for Melissa, it was love at first sight would be my guess.

• 2:21Speaker 01

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

• 2:32Guy Raz?

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

• 2:36Speaker 01

  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.

• 2:50Guy Raz?

  Of course.

• 2:51Speaker 01

  At Morgan Stanley in New York City.

• 2:52Guy Raz?

  The most creative job in the world.

• 2:54Speaker 01

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

• 2:57Guy Raz?

  What were you doing, Doug?

• 2:59Speaker 02

  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'd 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.

• 3:37Guy Raz?

  But it wasn't what you wanted to do.

• 3:39Speaker 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.

• 3:58Guy Raz?

  Right. So what did you do?

• 3:59Speaker 02

  Well, we booked ourselves into a little bed and breakfast in Lenox, Massachusetts. I think it was called The Cliffwood. 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.

• 4:24Guy Raz?

  So what was the idea you came up with in that hotel room in Lenox, Massachusetts?

• 4:28Speaker 02

  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.

• 4:41Guy Raz?

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

• 4:47Speaker 01

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

• 4:56Speaker 02

  Which was nothing, by the way.

• 4:58Speaker 01

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

• 5:06Guy Raz?

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

• 5:14Speaker 01

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

• 5:19Guy Raz?

  I bet.

• 5:20Speaker 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.

• 5:37Guy Raz?

  Something with kids.

• 5:38Speaker 02

  Yeah, something with kids.

• 5:39Guy Raz?

  Yeah, something with kids. No problem.

• 5:41Speaker 01

  Exactly. 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.

• 6:02Guy Raz?

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

• 6:10Speaker 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.

• 6:43Guy Raz?

  Wait, this was like a VHS video?

• 6:46Speaker 02

  Correct.

• 6:47Speaker 01

  Ultimately, three of them.

• 6:48Guy Raz?

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

• 6:52Speaker 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

• 7:13Guy Raz?

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

• 7:14Speaker 02

  Couldn't do today.

• 7:15Guy Raz?

  No, you could not do that today.

• 7:15Speaker 02

  Not as successfully.

• 7:17Guy Raz?

  Yes, no.

• 7:17Speaker 02

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

• 7:22Guy Raz?

  Yeah.

• 7:22Speaker 02

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

• 7:32Guy Raz?

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

• 7:36Speaker 02

  Uh, yes and yes. It was singing and it was dancing. Um, and it was encouraging children who were watching this to participate along. It was literally

• 7:46Guy Raz?

  Alright.

• 7:46Speaker 02

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

• 7:50Speaker 01

  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.

• 8:02Guy Raz?

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

• 8:05Speaker 02

  Go ahead and let's sing it.

• 8:08Speaker 01

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

• 8:20Speaker 02

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

• 8:26Guy Raz?

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

• 8:33Speaker 01

  It was a lot.

• 8:34Speaker 02

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

• 8:41Guy Raz?

  That must've wiped you out.

• 8:43Speaker 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, how are we going to, you know, pay for the next lunch? And, um, and what are we going to do to get this product out there?

• 9:05Guy Raz?

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

• 9:10Speaker 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, ma and pa toy shops throughout, uh, New England,

• 9:55Speaker 02

  this was 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.

• 10:08Speaker 02

  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.

• 10:21Speaker 01

  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?

• 10:55Speaker 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.

• 11:17Speaker 01

  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.

• 11:28Speaker 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

• 12:10Speaker 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.

• 12:55Speaker 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. 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 The phone say, "Hello, listen, Doug."

• 13:40Speaker 02

  And that's how we became, "Listen, Doug."

• 13:42Guy Raz?

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

• 13:46Speaker 02

  We are three years into it at this point.

• 13:48Guy Raz?

  So focusing entirely on videos for the first three years?

• 13:51Speaker 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 going to guess, a couple thousand retailers.

• 14:01Guy 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?"

• 14:09Speaker 01

  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.

• 14:21Guy Raz?

  Yeah, right. Oh, yeah, of course.

• 14:22Speaker 01

  The books that had the tactile pieces on them.

• 14:26Guy Raz?

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

• 14:30Speaker 01

  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?"

• 14:41Speaker 01

  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.

• 14:55Guy 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?

• 15:04Speaker 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, some horrible learning experiences along the way.

• 15:51Guy Raz?

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

• 16:02Speaker 01

  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, you know, literally get one room in someone's home above their garage and help them with errands for, you know, a decrease in rent. And we, you know, fueled every cent that we made back into inventory.

• 16:38Speaker 02

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

• 16:42Guy Raz?

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

• 16:47Speaker 02

  Oh, gosh, I wish it were that easy.

• 16:49Speaker 01

  Not quite.

• 16:50Speaker 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.

• 17:16Guy Raz?

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

• 17:20Speaker 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, our independent neighborhood stores. And he wanted us to immediately take them and put them in the mass market. And, 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.

• 17:44Guy Raz?

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

• 17:53Speaker 01

  No.

• 17:54Speaker 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 it 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

• 18:37Speaker 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.

• 19:02Guy Raz?

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

• 19:07Speaker 01

  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.

• 19:21Guy 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.

• 19:46Guy Raz?

  Hey, everyone. Just a quick thanks to two of our sponsors who helped make this podcast possible. First, to Goldman Sachs. Get insights from some of the world's leading thinkers on markets, industries, and the global economy on the firm's podcast, Exchanges at Goldman Sachs. You'll hear discussions on topics with far reaching implications like climate change, autonomous driving, the future of China's economic growth, plus much more. That's Exchanges at Goldman Sachs, available on iTunes, Stitcher, SoundCloud, and Google Play, and at gs.com/podcast.

• 20:18Guy Raz?

  Thanks also to TD Ameritrade. People who set defined financial goals are more likely to achieve them. And TD Ameritrade can help you craft a plan that's aligned with your specific objectives. So tell TD Ameritrade about your goals, and then you can start building towards something beautiful together. To schedule a complimentary goal planning session, visit tdameritrade.com/podcast.

• 20:46Speaker 03

  Before you start your day, you might like to know what's happening in the news. And that is what Up First is for. It's the morning news podcast from NPR. The news you need to take on the day in just 10 minutes. Listen to Up First on the NPR ONE app or wherever you get your podcasts.

• 21:08Guy 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.

• 21:33Speaker 01

  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.

• 22:00Guy 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? We are not going to do that.

• 22:10Speaker 01

  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.

• 22:20Guy Raz?

  What were kids playing with in the mid 90s?

• 22:22Speaker 01

  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.

• 22:50Guy Raz?

  So what did you start to make?

• 22:51Speaker 01

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

• 23:00Guy Raz?

  Oh, right, like blocks, yeah.

• 23:01Speaker 01

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

• 23:09Guy Raz?

  And you were designing all of this, Melissa?

• 23:11Speaker 01

  Yes.

• 23:13Guy Raz?

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

• 23:16Speaker 01

  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.

• 23:27Guy Raz?

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

• 23:37Speaker 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.

• 24:07Guy 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?

• 24:17Speaker 02

  Yes.

• 24:18Speaker 01

  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.

• 24:33Guy 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?

• 24:40Speaker 02

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

• 24:43Guy Raz?

  You've never had a failure.

• 24:45Speaker 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.

• 24:53Guy Raz?

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

• 24:57Speaker 01

  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.

• 25:23Guy Raz?

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

• 25:26Speaker 01

  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.

• 25:45Guy Raz?

  Wow.

• 25:46Speaker 01

  It was the most amazing line ever.

• 25:49Speaker 02

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

• 25:57Speaker 01

  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 $30 to $100 for sets. They were sold in sets.

• 26:09Guy Raz?

  Oh, so this was not cheap.

• 26:10Speaker 01

  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.

• 26:23Speaker 02

  Amazing.

• 26:24Speaker 01

  Amazing.

• 26:25Speaker 02

  Probably the best ever.

• 26:26Speaker 01

  The best ever. And we had, I believe we had 1,000 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.

• 26:43Speaker 02

  It was hard to understand.

• 26:45Speaker 01

  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 buying more sets and we'll create more.

• 27:05Guy Raz?

  Because each set connected to the other set?

• 27:08Speaker 01

  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?

• 27:23Speaker 02

  Oh, sure. You see, 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.

• 27:35Guy Raz?

  What happened? People just didn't buy it?

• 27:37Speaker 01

  Basically, what happened is when we called the stores two weeks later, 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."

• 28:00Guy Raz?

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

• 28:02Speaker 01

  Well, the stores never got behind it to sell it. I mean, I think it had the potential to take off, but it's hard. You know, 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."

• 28:18Speaker 02

  It reminded us that there's a higher burden on us because we take our products really personally and we think that everyone and every day is going to 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.

• 28:44Guy Raz?

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

• 28:48Speaker 01

  It's amazing. You know really quickly. I mean, and we don't have, you know, we're not 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.

• 29:05Speaker 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 products with our own children.

• 29:15Speaker 01

  I would say the initial ideation, I mean, you're obviously feeling a good gut, that 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 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.

• 29:43Guy 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 going to succeed. I mean, it's so unlikely.

• 29:58Speaker 02

  In fact, every reason why they wouldn't succeed. 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.

• 30:28Guy 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?

• 30:43Speaker 01

  They say it to us every single day.

• 30:45Guy Raz?

  Oh, right, okay.

• 30:46Speaker 01

  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.

• 31:00Guy Raz?

  You guys basically 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.

• 31:13Speaker 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.

• 31:23Speaker 01

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

• 31:32Guy Raz?

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

• 31:35Speaker 02

  Well, I think two things. One is they have Rolodexes that are much larger than ours and introduce us to folks that 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.

• 31:57Guy 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?

• 32:13Speaker 01

  Yep.

• 32:14Guy Raz?

  You were just trying to figure out how many kids.

• 32:17Speaker 02

  She was going to say with her first husband.

• 32:20Speaker 01

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

• 32:23Guy Raz?

  Oh, okay.

• 32:24Speaker 01

  Six children and then Doug.

• 32:26Guy Raz?

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

• 32:33Speaker 02

  You mean this morning or in general? 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.

• 32:57Speaker 01

  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.

• 33:23Guy 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.

• 33:42Guy Raz?

  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 just heard "J." "J." "J." And I was like, "What is that? Where's that coming from?" We have had those stories. And it was like a shadow. There was like a shadow moving over the sensor.

• 34:03Speaker 02

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

• 34:06Guy Raz?

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

• 34:21Guy Raz?

  And please do stick around, because in just a moment, we're going to hear about the things you're building. But first, a quick thanks to one of our sponsors, QuickBooks. When you work for yourself, every receipt lost is cash lost at the end of the year. Snap and sort your business expenses with QuickBooks for maximum tax deductions. Smarter business tools for the world's hardest workers. QuickBooks, backing you.

• 34:47Guy Raz?

  Hey, thanks so much for sticking around, because it's time now for how you built that. And we're going to update a story we ran about a year ago. This one is from Joshua Eznard, who grew up in Ithaca, New York.

• 34:58Speaker 04

  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.

• 35:08Guy Raz?

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

• 35:15Speaker 04

  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.

• 35:25Guy 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.

• 35:32Speaker 04

  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.

• 35:40Guy Raz?

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

• 35:45Speaker 04

  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.

• 35:58Guy Raz?

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

• 36:06Speaker 04

  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?"

• 36:19Guy 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.

• 36:34Speaker 04

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

• 36:42Guy 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, some people started to troll him.

• 36:51Speaker 04

  "Oh, my goodness, he has a receding hairline. His product sucks." But what they didn't realize was that the main issue was obviously me as the model.

• 37:02Guy Raz?

  So Joshua cast out for guys with the perfect hair to demo his product on YouTube. And those videos, they actually started to work. He started selling like a few dozen Cut Buddies a day. And then, when a popular DIY site posted one of the videos, it went viral.

• 37:19Speaker 04

  I'll never forget it. I'm putting on my clothes and my phone just starts going ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, ding, buzz, buzz, buzz, buzz, buzz, like vibrations and notifications.

• 37:31Guy Raz?

  All of this happened in March of 2016, and Joshua started to get hundreds of orders for the Cut Buddy. And since then, he's sold about 90,000 of them. He also got a chance to go on Shark Tank, and one of the sharks gave him a $300,000 investment. And with that money, he's starting to get the Cut Buddy into some major chain stores like Target. Oh, and another piece of good news, his wife recently had a baby. And the baby's name is Phoenix. We love hearing about the things that you're building. And if you want to tell us your story, go to build.npr.org. And thanks for listening to the show this week. If you want to find out more or hear previous episodes, you can go to howibuiltthis.npr.org.

• 38:14Guy Raz?

  Please also subscribe to our podcast at Apple Podcasts or however you get your podcasts. You can also write us at [email protected]. And you can tweet us, that'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, Thomas Lu, Diana Mustak, and Jeff Rogers. Our intern is Noor Kudsi. I'm Guy Raz, and you've been listening to How I Built This from NPR.

• 39:20Speaker 05

  There are millions of books out there just waiting for you. But how to keep up? Introducing NPR's Book of the Day. Every weekday, we feature some of our favorite conversations with authors and writers about their latest books. You can check it out in about the time it takes to walk the dog. Happy reading.