Gymboree: Joan Barnes. How Building a Beloved Brand Nearly Destroyed Its Founder

Before Gymboree became a cultural icon in the 80s and 90s, it was just one lonely new mom trying to find connection. Joan Barnes started hosting weekly playgroups for parents… and demand exploded. What began as a diversion became a business. Then a franchise. Then a brand everyone seemed to know, with its padded playrooms and parachute games. From the outside, it looked like a runaway success: hundreds of locations, glowing press coverage, celebrity buzz. But inside, the franchise model was failing. A potential Hasbro rescue vanished overnight. And Joan—while smiling for the world—was breaking under the pressure. Then came a major pivot that helped turn Gymboree around. The company was going to survive, but Joan realized she might not. She stepped away for good, to fight for her health. In this episode, Joan talks frankly about building Gymboree, losing control of it, and learning some vital lessons about ambition, balance, and humility. What You’ll Learn The hidden math of franchising: when scale makes you weaker, not strongerHow—years before social media—Joan used the media as her marketing engine The moment Gymboree nearly died—and the brilliant pivot that saved itWhat it feels like to be celebrated publicly while privately falling apartWhy “more hustle” can be a trap Timestamps: (Timecodes are approximate and may shift depending on platform.) [08:20] “Lonely and isolated”—The new-mom need that sparked Joan’s first playgroup[13:43] The early days: parachute games, circle songs, and connecting with other parents[16:59] The first, $3,000 investment, and expanding to new venues.[23:08] Learning the hard way: “I didn’t even know what franchise meant.” [38:40] Joan discovers her business model has a terrifying Catch-22[45:05] A humiliating gut punch: Hasbro calls off a life-saving deal [50:15] The pivot to profitability: play centers + clothing stores[1:03:00] Success on the outside, collapse on the inside: panic, addiction, treatment [1:14:17] After Gymboree: yoga studios, recovery, and redefining success Hey—want to be a guest on HIBT? If you’re building a business, why not get advice from some of the greatest entrepreneurs on Earth? Every Thursday on the HIBT Advice Line, a previous HIBT guest helps new entrepreneurs work through the challenges they’re facing right now. Advice that’s smart, actionable, and absolutely free. Just call 1-800-433-1298, leave a message, and you may soon get guidance from someone who started where you did, and went on to build something massive. So—give us a call. We can’t wait to hear what you’re working on. This episode was produced by Chris Maccini with music composed by Ramtin Arablouei. It was edited by Neva Grant with research by Rommel Wood. Our engineers were Jimmy Keeley and Patrick Murray. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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• 6:52Speaker 01

  I go to New York to sign the deal. One of the investors is on the plane, the lawyer, you know, whatever. They're all coming for this big celebration.

• 7:00Speaker 00

  Wow.

• 7:01Speaker 01

  I get a call that afternoon. I'm sitting in the hotel room, and she says, hello, my name is Carol Anderson. I'm the senior vice president of something. And I said, oh, hi, Carol. I'll probably meet you tomorrow. She says, actually, you won't. The deal is off. We're not coming.

• 7:17Speaker 00

  What?

• 7:18Speaker 01

  That's what I thought.

• 7:20Speaker 00

  What?

• 7:30Speaker 00

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 7:41Speaker 00

  I'm Guy Raz, and on the show today, how a casual children's playgroup grew into a national franchise, a stomping ground for kids, and a lifeline for parents: Gymboree.

• 8:01Speaker 00

  Every founder eventually hears a version of the same advice. Work harder, push further, and don't give up. That it's the combination of discipline and drive that can turn a small idea into a big one. And don't get me wrong, this is not bad advice. But there's also a darker side to that story. Because when drive goes unchecked, it can quietly begin to erode everything around you. Your relationships, your health, your business, and ultimately, your entire sense of self. Today's story is about that very tension. Now, if you're younger than, say, 35, it might be hard to understand just how ubiquitous Gymboree once was.

• 8:45Speaker 00

  In the 1980s and 90s, Gymboree wasn't just a place you took your kids. It was the place. A brightly colored, padded world of parachute games, circle songs, and structured chaos. For many parents, it was also something else. A lifeline. A place to connect with other parents and find community. Gymboree began as a simple idea. Get groups of kids to play and offer classes and activities that would give parents a reason to show up. And it worked. At its height, Gymboree operated hundreds of franchises around the world, along with more than 200 retail locations selling children's clothing.

• 9:27Speaker 00

  And like so many stories on this show, it started with someone trying to solve her own problem. Joan Barnes was a new mom, living in a new city, far from family, and looking for connection. She began hosting playgroups at her local Jewish community center. The response was immediate, and the demand was overwhelming. And before long, Joan found herself running a national franchise business. From the outside, it looked like a runaway success. But inside, there were serious problems. The business wasn't making enough money to pay back investors. The pressure was relentless, and the stress began to take a devastating toll on Joan's personal life and her mental health.

• 10:10Speaker 00

  Eventually, she was forced to make some incredibly hard decisions about the company and about herself. But before any of that, Joan grew up in a suburb of Chicago. She studied dance and English in college where she met a journalist named Bill Barnes. They got married and after a few years living on the East Coast, they decided to move.

• 10:31Speaker 01

  I was pregnant, you know, and we didn't really plan it, but I knew we knew we would want to have a family someday and we'd been married four years. So we decided, okay, we'll go for it. And I said, I'd like to just pick up and go. And, you know, I just, the East Coast was dreary and I just couldn't get over the weather. And so we just, you know, packed up everything and just to kind of see our America tour and went across the country and, and thought, well, what about here? And what about here? And it was like, okay, well, let's try the next stop until we ran, landed in San Francisco and Bill took that job.

• 11:01Speaker 00

  For the San Francisco Examiner?

• 11:03Speaker 01

  Right, exactly.

• 11:05Speaker 00

  Okay. Within, I think about a year of moving there, you guys left San Francisco, moved outside to, to suburb in Marin County.

• 11:13Speaker 01

  Correct.

• 11:15Speaker 00

  And you are a young mom. This is 1973, 74. And from what I understand, you, you were kind of lonely. You felt a little isolated at that time.

• 11:26Speaker 01

  A hundred percent lonely and isolated. 1973 was the lowest birth year since forever. And the media had, had dubbed the families or the people who were living in that era as DINKs, double income, no kids. And so having kids was against the grain. And so I was looking for comrades. I was looking for people who'd made the same choice. My family was a gazillion miles away. His family was in New York. My family was in Chicago. And yeah, lonely and isolated. So I wanted to meet some people who had made a similar choice.

• 12:00Speaker 00

  So how did you, I mean, you wanted to meet other moms and, and kids. So, so were there play groups and things? I'm assuming they were like play, parent play groups?

• 12:10Speaker 01

  None of that stuff existed. None of it existed. And so I was in a dance company because I was into, still into dance and a woman there, she had been offered a job at the local Jewish community center to run the children's programming. And she was scared because she had two kids. And I said, why don't we share it? And this was long before job shares were even, even, there weren't job shares that we were really kind of revolutionary. And they, so we did, we shared our big $10,000 a year job and each made $5,000.

• 12:41Speaker 00

  And what did that mean? Like, Sing along and coloring and arts.

• 12:47Speaker 01

  After school programs, the preschool programs, the family programs. My colleague took all the Jewish stuff and I took the secular programming.

• 12:58Speaker 00

  Okay, you're running an after school program. And this is, basically this is what you're doing. And I guess at one point, you had, just by chance, you had gone to a class at a YMCA in Berkeley, so on the other side of the bay, to see this, like, a gym, a gym for kids, for little kids, that they were doing at the YMCA there. Tell me, tell me, remember about that visit?

• 13:22Speaker 01

  So, one of the women on the board had come into our, at that time, we were operating our offices in a trailer, because we were going to, we were building a real JCC. And she came in and she said with her then two, two, three-year-old daughter, and said she was going to a program called Kinder Gym at the Berkeley YMCA. And maybe I ought to come see it with her, because it was really special. So I said, okay.

• 13:48Speaker 00

  You went to go observe this, so what did you see?

• 13:50Speaker 01

  So it was in a gym at the Berkeley Y, and they had basically had, they were borrowing the UC gymnastics equipment. So there was full-size trampoline.

• 14:00Speaker 00

  Wow.

• 14:01Speaker 01

  You know, and stuff.

• 14:01Speaker 00

  And the pommel horse and all those things?

• 14:04Speaker 01

  All that stuff. And so, so they were sort of improvising a way that kids could kind of play on this stuff. All the moms would get around the big trampoline and somebody would, you know, it's just, and I just thought, this is not really kid-appropriate, but it could be. And I could just see all this stuff scaled down in bright colors to little kids' eyes, and some really wonderful upbeat music, and a really lively teacher, and we would have something.

• 14:31Speaker 00

  All right, so you see in this concept something potentially really cool. Now, you are directing the kids' program at the JCC in Marin County. And so, tell me what you start to think. You start to think, hey, maybe I could bring this concept and do it there?

• 14:48Speaker 01

  I did. I thought, maybe we could do this at the J C C, but not this. We could have an opportunity for moms and kids to come together. But instead of having it be with full-sized adult gymnastic equipment, we would develop our own equipment that would be scaled down to appropriate size with the appropriate kinds of activities to develop. Because play is how kids learn, and I knew that much.

• 15:16Speaker 00

  And this would be like kid-sized or toddler-sized trampolines and toddler-sized?

• 15:22Speaker 01

  Tunnels and bouncy things and climbing.

• 15:25Speaker 00

  And did this stuff exist? Like, did you buy it off the shelf?

• 15:29Speaker 01

  I found somebody. Well, first, I had to convince the board to put up, I think it was $5,000, to buy this stuff, whatever this stuff was. But I didn't know, I didn't have it priced out because it wasn't, it wasn't like going through catalogs and saying-

• 15:44Speaker 00

  You had to get it custom-made?

• 15:45Speaker 01

  Yes. Some of it was available for special needs kids. So some of it I could get, some bouncy logs and things like that. And then I found somebody to make our, quote, "propriety" products. And we were lucky, and I was pretty savvy because of my husband at the time. I knew how to talk to the press. So I went to the local paper in San Rafael, and I got a big feature story in there.

• 16:13Speaker 00

  It was even before you started, you had a story about what your plan was?

• 16:18Speaker 01

  Yes. And we had pictures of the equipment. We hadn't opened yet, but we had sort of a dry run. And we had the, anyway, we had a big full-page feature, you know, 50 years before social media, or 30.

• 16:28Speaker 00

  All right. You open, I think you opened this up in 1976. It's the first, you opened at the J C C?

• 16:35Speaker 01

  Yep.

• 16:36Speaker 00

  And you, originally, you're calling it the Kinder Gym?

• 16:39Speaker 01

  Yes.

• 16:40Speaker 00

  Right? And how did you, right away, people, people were like, this is amazing? Like, they started coming?

• 16:47Speaker 01

  Right away. From that press story, we were oversold right away.

• 16:52Speaker 00

  And how much was it to cost? It was like five bucks for an hour or something like?

• 16:56Speaker 01

  Yeah, yeah. But we would sign up for a session or, you know, for 12 weeks for 50 bucks or 60 bucks and come once a week.

• 17:05Speaker 00

  And this would be moms and their toddlers?

• 17:08Speaker 01

  Sometimes dads.

• 17:09Speaker 00

  Dads. And you would lead them through a program or they would just kind of run around and jump around and do whatever?

• 17:15Speaker 01

  I hired preschool teachers because I wasn't, you know, I wasn't a preschool trained person. I was an entrepreneur, you know, whatever. And so I developed with them what they would do and how they would set up the equipment. And, you know, I was winging it, man. I didn't know. Because underneath all that, guy was really the intent to connect with other moms. And that would happen through doing, having the kids having fun and everybody talking.

• 17:46Speaker 00

  And in that first year, do you remember starting to develop like a program where the kids would come in and sit in a circle and then they would, or was it just a free for all?

• 17:56Speaker 01

  No, it wasn't a free for all. And we had the parachute that I had seen at the Berkeley YMCA was a green.

• 18:03Speaker 00

  The big parachutes that the kids would hold in the core. Okay, yep.

• 18:05Speaker 01

  So that was an army colored parachute. And I developed a multicolored parachute, which I did have made, that was very kid friendly. And so every class ended with about 10 to 15 minutes of group time where the kids would run underneath the parachute. We had songs. Some of them became propriety songs. In the beginning, they were just songs that everybody sort of knew, you know what I mean? And so, you know, and then I was aware that parents would feel bad if their kids, you know, weren't participating or antisocial or didn't want to be in the group or didn't like, or scared of running under the parachute.

• 18:40Speaker 00

  Or shy, yeah.

• 18:41Speaker 01

  All that sort of stuff. So I wanted everybody to feel positive. I wanted this to be a very uplifting experience.

• 18:48Speaker 00

  How were you able to cultivate it? Because I remember taking my kids to play groups and it was really fun. And I was usually the only dad there because at the time I worked Wednesday to Sunday as an anchor of a weekend program back in the day. And I remember the parachutes and my kids, you know, sometimes they were just shy. They just didn't want to get in the circle. They didn't want to clap and sing and do that stuff. How would you get parents to feel, I always felt good. It was always fun. But how would you do that? How would you cultivate that feeling?

• 19:15Speaker 01

  Well, because we would have the, we'd have the teachers really be very upbeat and positive about whatever your kid's doing is all cool. Some, some, you know, there's so much freer spirits than we are. Some days we don't feel like doing something and we just do it.

• 19:29Speaker 00

  Go sit in the corner and pick your nose. That's fine.

• 19:31Speaker 01

  It's fine. And then we'd have the teachers say, hey, out there. How you doing, guys? You know what I mean? And just, you know, be, uh, just be-

• 19:38Speaker 00

  Just dribble running down my, my mouth. That's it, you know?

• 19:41Speaker 01

  (laughing)

• 19:42Speaker 00

  I love, I love those, those days are so fun. All right. So Joan, you're running this program at the JCC in Marin, and it's a JCC program. You were paid five grand a year running this program.

• 19:53Speaker 01

  Correct.

• 19:53Speaker 00

  But it was successful enough that I guess at a certain point, maybe a year, a year or so in, the, the president of JCC approached you and he had been a, an entrepreneur himself. And he said, hey, I think this could be bigger than something here. Do you want to go into business? And he, how did that work? Did you, did you start to think to yourself, hey, maybe I should turn this into a business? Or how did you go from running a gym at the JCC to start thinking, hey, there could be something bigger here?

• 20:22Speaker 01

  Well, before that, I opened a second one on behalf of the Jewish Community Center in a neighboring community, the one I lived in Mill Valley, which was a lot-

• 20:30Speaker 00

  Okay.

• 20:30Speaker 01

  So I had two of them and they were really making money and they were supporting all the, you know, sort of do-good programs of other things that the center was doing. And that's when the guy who had, had been running these, he was the president of the board. He was all of 32 and I'm 26. And I think, he seems like an old man to me, but he, he had run these Rick Barry basketball camps and he'd sold them and he was in a non-compete clause. He was looking for something else to do. And he came to me and said just what you said. I think this could be commercial. I'll put up the money. You run them. What do you think? And I was completely naive. I had, no, this was not even, I never even thought of it as a commercial venture. It was all him.

• 21:12Speaker 00

  And just to clarify, Rick Barry was a legendary basketball player. This guy you're talking about, his name was Max Shapiro. He had run a chain of basketball camps with this guy, Rick Barry. Had sold them, had made some money.

• 21:25Speaker 01

  Yes.

• 21:25Speaker 00

  And he was looking for something to do. And of course, he had seen what you were doing at the JCC.

• 21:31Speaker 01

  Yeah. He was, he's seen what we, he'd seen the success of Kinder Gym and he was like, I think we could do this commercially.

• 21:37Speaker 00

  All right, so Mac says, "Hey, there's something here. Do you want to go into business together?" So what did you then do? I mean, you have two of these centers in JCCs. At that point, it's not your business. So then do you say, "All right, I'm going to start a business." It's going to be called Kinder Gym or whatever. Like, is that, did that happen at that point?

• 21:58Speaker 01

  Yeah, well, but I was afraid to leave my job, my, you know, my important $5,000 a year job. I just, so I skipped down to south of San Francisco, to the peninsula, we call it, San Mateo, to open up the first one.

• 22:13Speaker 01

  As a business, calling it Kinder Gym, none of this trademark or any of that stuff is even, I think about all that stuff. And, um, and so I opened up at a temple. I convinced a temple that we could use their, their social hall a couple of days a week and that we could store the equipment, you know, a little bit here, a little bit on here, that sort of thing.

• 22:35Speaker 00

  So that was the model. It wasn't like, "I'm going to get a lease a space." It was, "I'm going to go to a temple or synagogue or a church, whatever."

• 22:42Speaker 01

  Yeah.

• 22:43Speaker 00

  Use their space and pay them rent, and that's where I'm going to start this, open this up.

• 22:47Speaker 01

  Yeah. And I hired somebody who was, you know, similar to the teachers I'd hired up in Marin County in the two locations. I hired somebody with preschool background to run the program. And they ran it, a little bit of a precursor as the franchisees. They put a phone in their home, they run the business part of it, and they would teach the classes. They would pick up the calls, get them, you know. And I was able to get a big story in the San Mateo paper, same as I had done in Marin. And the same thing, it completely filled up.

• 23:20Speaker 00

  Wow. Okay, so you, so you start to see this thing as, well, a lot of, there's a lot of potential here, right?

• 23:27Speaker 01

  Yes. And, um, somewhere along the way, I bought my partner out. I realized, "I'm doing all the work."

• 23:34Speaker 00

  Max, he was a passive investor.

• 23:37Speaker 01

  And I'm working, I'm working hard. And when the, you know, the setup guy doesn't show up to put up the equipment, you know, I'm putting the toddlers in the car and driving down to San Jose and setting up the equipment myself. And I thought, this is no way to run an airline. So I make my San Mateo partner, or she was a employee at the time. Now she's running like three of these up in Northern California, up in the northern part of the peninsula. And I have another person down in San Jose who's operating another four or five of these things. And I make them both partners in the business.

• 24:11Speaker 00

  You gave them some equity?

• 24:12Speaker 01

  I gave them some equity, you know, because they had investment in this business. And so they were running it.

• 24:17Speaker 00

  So you're an investor, Max Shapiro, who had originally given you $3,000. You decide, you know, he's, he's a passive investor. I'm doing all the work. I want to try to buy him out. And he agreed to let you buy him out. I think you gave him double what he put in, like, I think $3,000. And from what I understand, you gave him $6,000 back.

• 24:34Speaker 01

  I did.

• 24:34Speaker 00

  All right. So he did pretty well. He doubled his investment, bought out. And, and these places were making money? These, these kindergims?

• 24:45Speaker 01

  I mean, they were little tiny businesses, but they were, yeah, they were making a little bit of money. Yeah. I was making some money.

• 24:50Speaker 00

  And at what point, I mean, did you leave your job at the JCC to start focusing on this?

• 24:57Speaker 01

  That's a good question. I, you know, I was trying to remember. I think somewhere around location five or six, I thought, you know what, this is doing well enough. And I need to focus on really making this happen. So I left the job.

• 25:09Speaker 00

  All right. So by 1979, I read, just three years in, there's like nine of these locations operating all over from, you know, Marin County all the way to Silicon Valley.

• 25:24Speaker 01

  Correct.

• 25:25Speaker 00

  And

• 25:28Speaker 00

  And you guys start bringing in, you know, significant revenue, something like over $200,000 a year in revenue.

• 25:36Speaker 01

  Yeah, a little bit more than that, yeah.

• 25:38Speaker 00

  And your costs were probably relatively low because you're renting out space at churches and synagogues.

• 25:43Speaker 01

  Correct. And for them, they're happy because it's revenue they didn't even have.

• 25:47Speaker 00

  Sure. And you're bringing people in.

• 25:50Speaker 01

  Yeah, everybody's happy.

• 25:51Speaker 00

  Yeah. Okay. I imagine that as people start to see how cool this is, people start to approach you to say, hey, can I, can I open one? Can I, like, talking to you about potentially franchising, which was not, again, was not part of the idea that you had, right?

• 26:11Speaker 01

  Nothing. Everything just sort of showed up. No, none of this was calculated. It was, you know, I'll get nine locations and then we'll start franchising and we'll be national.

• 26:21Speaker 00

  That was not, that was not the plan.

• 26:24Speaker 01

  I didn't even know what the word franchise really meant.

• 26:26Speaker 00

  Right.

• 26:27Speaker 01

  And I, you know, I, you know, I was, one thing I will say is that it's best to start a business when you're young and ignorant because I just figured I could figure it out. You know, I mean, when I look back at all the things that I sort of figured out, amazing. So I did. And I went to the Federal Trade Commission. I got the franchise papers. I was probably the first person, not a corporation, franchising. So I wrote up the whole thing and I got licensed to be able to franchise in California.

• 26:55Speaker 00

  All right. And so you go to the FTC office in San Francisco, I'm assuming.

• 27:00Speaker 01

  Correct.

• 27:00Speaker 00

  And they give you a stack of documents to fill out in order to become a franchiser. And I'm not saying this for any other reason except for I don't think with all of the knowledge I've now gained over 10 years of doing the show that I could fill out those forms. Did you know how to fill out those forms?

• 27:17Speaker 01

  I had no idea what I was doing. I just thought, okay, I can read. I can answer these questions. I'll figure it out. And I did.

• 27:25Speaker 00

  Okay. So you fill out the forms to become a franchiser, to operate a franchise business. But, but I guess when they asked for the name of the business or it were to, how it, you know, would be called, you couldn't trademark Kinder Gym.

• 27:39Speaker 01

  Well, I knew enough to know that one of the most valuable things of the franchise is the name. So I thought, okay, I better. Register or trademark or whatever it's called, this name.

• 27:50Speaker 00

  Kinder Jim. Okay.

• 27:51Speaker 01

  Kinder Jim, yeah. So I tried to do that. I didn't have a trademark attorney. I had nobody to fast, you know, make this work for me. So I'm just, I'm just me filling out the damn form for the name. And about a year later, or you know, quite a while later, a year and a half, I get a rejection. It's generic.

• 28:08Speaker 00

  You cannot patent that. You can't trademark the name.

• 28:11Speaker 01

  Cannot trade that name. And by that time, I had a few franchises operating.

• 28:15Speaker 00

  And you had all this press attention about Kinder Jim.

• 28:19Speaker 01

  All of it. And we had about four years of operating as Kinder Jim, both in the company-owned locations and maybe we had, I don't know, four or five franchises at that time. And I thought, you can imagine what I thought. You know, what am I going to do? That's the end of the business. That was sort of the first big trouble.

• 28:39Speaker 00

  When we come back in just a moment, more big trouble, a business model that just won't work, and an acquisition deal that drops off a cliff. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

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• 32:39Speaker 00

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1981, and as Joan's business starts to grow across the Bay Area, she discovers she can no longer use the name Kinder Gym.

• 32:52Speaker 01

  So the then-husband and I, Bill Barnes, and I sat with a wrote down a gazillion names and things like that. And then he calls me from a phone booth where he's running around the Embarcadero and said, "Gimbarry." And I just loved it. I just loved the sound of it. I got immediately what it meant. And I thought, okay, now I'm going to hire somebody to find out whether this is a good name, how we get this trademarked, how we do this properly. So I found, and so therefore, did all that.

• 33:23Speaker 00

  All right, so you trademark this name, this new name, Gimbarry, and now you're ready to start franchising the business in earnest. And I guess you get introduced to a guy, someone named Bud Jacob, who had experience in franchising. And what, he liked your idea?

• 33:40Speaker 01

  Yeah, he did. And he liked me, and he was like a dad figure. He was the next generation. He was considerably older than me, 20, 25 years older. And Bud had worked for McDonald's in Chicago. He worked for Arby's, and then he became a franchisee, and he owned about 20 Arby's out on the West Coast.

• 34:01Speaker 00

  Did you need, at that point, because it's 1982, and now there's a bigger vision here, did you need to raise money?

• 34:09Speaker 01

  Yes.

• 34:09Speaker 00

  To do this? Okay, so how are you going to do that?

• 34:11Speaker 01

  So Bud introduces me to the guy who eventually becomes my primary investor, Stuart Muldoon. And Stuart had had super success, and he was a VC. And I met him, and I told him what I was doing. He said, "I love it. I love you. You go home and write a business plan. If it makes sense, I'll put money in to expand."

• 34:34Speaker 00

  Were you at this point opening your own brick and mortar locations? Or were you still renting out churches?

• 34:39Speaker 01

  Still renting church halls and community centers.

• 34:42Speaker 00

  Yeah. By the way, there was a model like that, which is Jazzercise.

• 34:45Speaker 01

  I know Jazzercise, yes.

• 34:47Speaker 00

  Yeah, still to this day, that's their model. They, they, the, you know, the instructors work out of community centers. Okay, so you, you, you write a business plan for this investor?

• 34:56Speaker 01

  I do. I go to him with a business plan. He says, you got it. And he, he just makes me an offer. He tells me he's going to put up $300,000 for 30% of the company. He values the company at $1 million, which is sort of ridiculous, I think, but whatever. And he put up the 300,000 and said, you go for it. And so then Bud's now working for me. We're putting up a strategy to, to, to run franchises across the country and get a hold, a foothold in the media market of New York. So we weren't labeled some crazy California phenomenon.

• 35:29Speaker 00

  And $300,000, 30%, so the business is being valued at $1 million, which in 1982 was a pretty, I mean, it's a pretty good valuation.

• 35:37Speaker 01

  Yeah.

• 35:37Speaker 00

  For, you know, what was at that point, you had no assets.

• 35:41Speaker 01

  We had nothing and no leases either. I mean, it's like, I like Jazzercise. I mean, any one of these churches or synagogues or whatever can say, okay, see you later. You know?

• 35:51Speaker 00

  Yeah. Okay. So let's talk about the, the initial plan. Cause from what I understand, the model that you, you and Bud put together was, was somewhat different. It wasn't like, hey, you want to own a Taco Bell or a McDonald's. It was, you, you really wanted women actually to be the franchisees.

• 36:09Speaker 01

  Correct.

• 36:10Speaker 00

  Particularly women maybe who, who were not working at the time. Tell me a little bit about that model that you start to develop.

• 36:18Speaker 01

  That, that was sort of the, I think, one of our brilliant moments. What we, what we were trying to do is really replicate people like me, but a little bit younger. Now I'm in my early 30s. So we're looking for women in their mid to late 20s who were raising a family, but also had ambition for some kind of professional focus. And this was like the perfect business. And so we had a unique strategy because again, this is also pre-social media. We knew that the local newspapers were.

• 36:49Speaker 01

  The next best thing to anything, I mean, paid ads, none of that was going to work like having a press endorse you and write a big story on you. So we just went about going to the local press in every community that we were thinking about going to and saying, we're thinking about going here. And then some story about the neighboring community with the local franchisee and blah, blah, blah. And then people started running. We also ran kind of an interesting strategy. We ran avatorials.

• 37:18Speaker 00

  Like editorials that were, looked like editorials, but they were actually advertisements?

• 37:23Speaker 01

  Correct. In the Wall Street Journal, so that Daddy could read them on his commute to his real job that he had to do to pay for the family. And he'd say, oh, my God, this is perfect for my wife. And then they would fly out to California on their own nickel, maybe him too, but definitely her. And we would sit and we would spend the whole day with them. They would go to a center, then we'd all, the management team and me, we'd all have lunch in my office together. And if any one of the management team of the company thought that this person was not a good fit for us, that was a veto. That was very collaborative.

• 37:58Speaker 00

  Yeah. And was there a certain energy or attitude you were looking for?

• 38:03Speaker 01

  Oh, yeah. We were looking for somebody charismatic, who was bright, who understood that we were, you know, that this was like a marriage. You know, the success of Gymboree was the interaction between the franchisor and the franchisee. And in addition to that, we would also discuss with them how big of a business they wanted. Some of them would have six, seven, or eight locations, some would only have one or two.

• 38:26Speaker 00

  And from what I understand, you really focused on the East Coast initially. You didn't, even though you were based in California, you really wanted to push the New York market from the beginning.

• 38:38Speaker 01

  Correct.

• 38:39Speaker 00

  Why was that?

• 38:40Speaker 01

  Well, first of all, we'd built out already the Northern California market because I was able to do that on my own even before we were growing. But when we opened in LA, it was a different story. And the LA franchisees were extraordinary, and they knew how to get all the press, and they were part in the film industry. And so they were on all the fancy, you know, TV shows, and they got all the movie stars in their classes, and they had about eight locations. And because of their success, we were able to build out the Southern California market because people who were in their classes would say, I want to do this. So that grew.

• 39:16Speaker 01

  Naturally.

• 39:17Speaker 00

  Hmm.

• 39:17Speaker 01

  So, the east coast is where we needed to put our energy, which is when we did the the Wall Street Journal ads, I hired a PR firm, they helped us get some big stories and, you know, we're happening.

• 39:29Speaker 00

  And, I mean, this like was hot. I mean, starting 1982, it was like, you were getting all kinds of crazy attention. I mean,

• 39:38Speaker 01

  We were.

• 39:39Speaker 00

  And because it kind of coincided with this new trend around like, child development and better understanding of like, play and, I mean, this was becoming a thing, especially in affluent communities in the US, like, right? I mean, I even, at some point, People Magazine wrote, "Move over romper room, all the best babies come to boogie at Joan Barnes's Gymboree."

• 40:03Speaker 01

  That was a great, yeah, wasn't it? How about that?

• 40:05Speaker 00

  Yeah.

• 40:06Speaker 01

  We were in US World and News Report and Time and Newsweek and, I mean, it was like, I just, we just had to pinch ourselves to realize we were getting all this press.

• 40:15Speaker 00

  Okay, and so, and basically, tell me what kind of, you know, sort of blueprint you gave to the franchisees. Presumably, you gave them like, here's how you run a class for this age, like, were there different classes that they would run for different ages and was there a script?

• 40:31Speaker 01

  Exactly. So, we first of all, had a week-long training program and all the different people on my staff trained different things. I trained them how to find a location. Somebody else would train about how to set up the equipment. And we also had quality assurance people that flew out to their locations and hung out with them and, you know, made sure they were doing everything well and whether or not we could be more helpful to them. The, all the marketing material, everything was, that's, that's what they bought.

• 40:57Speaker 00

  Yeah. All right. So, you get, you're really exploding. I think by, in 1986, I read you had 25 employees in your corporate office, you had about $15 million in revenue, and about 400 of these franchisees, about these local play centers in, in all across the US, even abroad in some countries. And I guess, they were paying you like 20% or a percentage of what they were bringing in?

• 41:25Speaker 01

  Correct. Well, we had, in addition to the US franchisees, we had sold Mexico, France, and we'd done those as master franchises. So they replicated who we were and then they would sub-franchise to things.

• 41:40Speaker 00

  And all under the Gymboree brand. And I remember seeing this movie in theaters. It was even mentioned in Baby Boom, the Diane Keaton film. She mentions Gymboree in that movie.

• 41:52Speaker 01

  I was at that movie and I heard them say that. And people pay, as you know, millions of dollars to have their airline put in there. And I started screaming, "Oh, my God!" Because Diane Keaton's sitting there talking to a bunch of women in some Upper West Side Park, and they go, "You don't even know what Gymboree is?" I mean, come on.

• 42:13Speaker 00

  And so this really was, and it sounds like you were targeting affluent places, initially New York and Los Angeles and San Francisco, but you were also in Kansas City. I mean, you were mainly in cities, right?

• 42:30Speaker 01

  Mainly in cities, yes. Or suburban markets. We were all over suburban Detroit, suburban Minneapolis, Atlanta, Florida.

• 42:39Speaker 00

  All right. You get to 1986. This is now four years after you start the franchising. You've got franchisees operating all over the place. You've got 15 million coming in in revenue, which is, from the outside, sounds like you guys are doing great, but on the inside, you know that there's a problem, that actually what seems to be a wildly out-of-control success had some serious, underlying, structural problems. What did you start to realize?

• 43:10Speaker 01

  I realized that the franchise model was flawed. That no matter how many franchises we had, it wasn't about scale. The revenues that the franchisees generated, and therefore the percent that they would give us of their revenues, was never going to be sustainable.

• 43:28Speaker 00

  How is that just because a franchisee might have three or four days a week and only bring in a certain amount and you could see that there was just, you couldn't squeeze them for more?

• 43:41Speaker 01

  I mean, we already were doing it. So I'd seen, we'd had several hundred of these things and, you know, each location would maybe pull in, a good one would maybe pull in a quarter of a million, maybe.

• 43:51Speaker 00

  A year, yeah.

• 43:52Speaker 01

  Yeah. And we'd get 8% of that, or whatever the percent was at the time. It was six, who knows, because it kept growing. And that just, and in order, because of what I said earlier, Guy, that the success of the growth of the business was how well we supported the franchisees. So, yeah, we could not support them and then we wouldn't sell anymore. And so, the cost of actually supporting them and sending out a team to be with them and run trainings for their teachers locally and all that stuff, it was all well thought out and really beautiful, except that it costs too much money.

• 44:24Speaker 00

  So essentially, the only way to even break even was to sell more franchises. In order to sell more franchises, you had to spend money to service those franchises and to, so it was like a catch 22?

• 44:40Speaker 01

  Flawed. And I realized it was flawed, but I didn't know what to do about it because I couldn't, I couldn't figure it out because there was no way I could charge more or give less service. I mean, I thought of all the possibilities.

• 44:53Speaker 00

  Now, my question, though, is couldn't you do things like just raise the price? Like say to all the franchisees, okay, it's no longer $5 a class, you gotta charge $8 a class?

• 45:02Speaker 01

  Well, by that time, we spawned competitors. And that's, that's good news because if you're, you know, if you don't have a real business, you won't, competitors validate the validity of the business. So they charged about the same thing. So we really, it wasn't really sustainable for us to, you know, get to a fee where our 8% was really going to make a difference to us, you know?

• 45:27Speaker 00

  Because it would have been a race to the bottom, just undercutting. It's amazing because on the one hand... Publicly, you're getting national media attention. You're in Baby Boom, you're in People Magazine. Everyone's talking about this thing. Every mom's going to it. Everyone loves it. It's so fun for the kids. But the business is barely treading water.

• 45:47Speaker 01

  Yes. You could have said it better myself.

• 45:51Speaker 00

  That must have been really, really stressful.

• 45:53Speaker 01

  It was, I mean, I, I, I'm usually pretty good at fighting it myself out of a paper bag, but this was, this was, the only thing I could do was just be honest with the board and say, "The way we're doing things is never going to have a return on investment for you guys."

• 46:11Speaker 01

  We could probably move along as a, as a nice family business. I'd get paid, the employees would get paid, the franchise, but they would never see, they'd never see a return. It could, and they, they didn't go into this to fund a little family business. I knew that.

• 46:24Speaker 00

  Of course. Okay. So you say this to the board and what do they say?

• 46:29Speaker 01

  They say, "Go figure it out. Just no more money. We're not giving you any money. Go figure it out some, some other way." And, you know, that was like, um, "Okay, I'll figure out another way."

• 46:39Speaker 00

  So I guess you have to start thinking about, okay, maybe there's a product, maybe there's retail, maybe there's other things we could do.

• 46:47Speaker 01

  Well, the first thing I thought about was what can we do that doesn't cost any money because they're not giving us any money? And I'm not going to be able to go out and raise money when our, when our board is all invested in this thing and they're not putting up any more money. So I thought licensing. I was sophisticated enough to know licensing, you know, Gymboree had a really great name, as you said, we'd been, we'd-

• 47:06Speaker 00

  And a brand and a logo, right?

• 47:08Speaker 01

  Everything. And we had a great press and we were, we were-

• 47:11Speaker 00

  And everybody knew it by this point.

• 47:12Speaker 01

  Everybody knew it.

• 47:13Speaker 00

  You would go some places, "What do you do? I run Gymboree. Gymboree! I love Gymboree!"

• 47:17Speaker 01

  If you were a parent and didn't know what Gymboree was, you were like really out of it.

• 47:20Speaker 00

  Living on Mars.

• 47:21Speaker 01

  Yeah, exactly. And so, um, so we were able to, um, to secure some very, very prestigious licenses. We had Random House doing our books, Health Tex, which was kind of a cool brand for clothing. They ran, they did a clothing line for us. We also had Connor Toys did some really like a big climbing gym that you'd put in your-

• 47:42Speaker 00

  Oh, that you could buy like a bit, your own climbing gym for your house.

• 47:46Speaker 01

  Your own climbing equipment.

• 47:47Speaker 00

  Oh, cool.

• 47:48Speaker 01

  Really colorful and nice looking and it was sold in Toys R Us. I mean, it, it was like, wow, we really struck gold. It appeared.

• 47:55Speaker 00

  And you didn't need any cash to do this because you were just licensing your name.

• 47:58Speaker 01

  Exactly.

• 47:58Speaker 00

  But from the consumer's perspective, it appeared that Gymboree was even bigger. Like, wow, look what Gymboree is making.

• 48:05Speaker 01

  Yeah, but probably a year later, maybe a year and a half later, we were dropped by all of them.

• 48:12Speaker 00

  Because?

• 48:13Speaker 01

  Because we didn't have the sales. We weren't Snoopy. We weren't Garfield. We weren't Little Princess or whoever the cool, you know, product was. We didn't have a TV show. We didn't have nothing. We just had this live, living, breathing program, and it wasn't big enough.

• 48:26Speaker 00

  So even though parents were clamoring to come to the classes, they weren't walking into Toys R Us and going, oh, Gymboree toys, I'm gonna buy them.

• 48:33Speaker 01

  Yeah, well, they obviously were buying some, but not enough because these licensing companies really want you to be the next gazillion-dollar baby.

• 48:43Speaker 00

  And if you're not, they drop you.

• 48:44Speaker 01

  They drop you because there's always a million more TV shows that are with a new product. So we were dropped. And so now licensing doesn't work, the franchising. We're still operating. I'm not, you know, but we're not making any money. We're making, we're doing fine. We're supporting our staff, but we're never going to pay them back. The same problem exists.

• 49:05Speaker 00

  All right, so this is 1986. You've got this major problem with the business. But then it suddenly looks like you might get a lifeline, right? You get, I guess you get introduced to someone from Hasbro, which is one of the biggest toy companies in the world, right? And then what? I guess they want to make like an investment, maybe even a quarry. What's the story? What happened?

• 49:25Speaker 01

  Yeah, so first they just thought they were going to do a corporate investment, and then they thought they would buy the company.

• 49:30Speaker 00

  Do you remember how much they were offering?

• 49:32Speaker 01

  I don't. I think they had an option. Maybe it was the first they put in an investment, and then if we hit certain benchmarks, they would buy it.

• 49:42Speaker 00

  And so with that, you started to get some confidence that you could, at the very least, pay back your investors or give them a return.

• 49:48Speaker 01

  I just felt like we had been bailed out of hell.

• 49:52Speaker 00

  Yeah. It's crazy, by the way. Can we just pause it? How crazy that is? Because everyone who knew you was like, there's Joan Barnes. She runs Gymboree. It's the most amazing company. And you're like freaking out.

• 50:06Speaker 01

  I'm freaking out. And I'm trying to act like I have it together, and I don't want the franchisees to be panicking that we're going under because this is their business too now, you know what I mean? And so I get this offer. I'm so stoked. I get the lawyer. They, you know, and their lawyers, they're... Going back and forth on these documents and I go to New York to sign the deal. One of the investors is on the plane, the lawyer, you know, whatever. They're all coming for this big celebration for us to be partnering slash being bought by eventually with luck Hasbro. Wow. I get a call that afternoon. I'm sitting in the hotel room and she says, hello, my name is Carol Anderson. I'm the senior vice president of something at Hasbro. You don't know me. And I said, oh, hi Carol, I'll probably meet you tomorrow.

• 50:51Speaker 01

  She says, actually, you won't. The deal is off. We're not coming. What? That's what I thought. What? I said, I'm sorry. I said, we have our lawyer and our other investors coming. Everything was set, but your lawyers are, I'm confused. She said, well, I'll straighten you out. She was really kind of not very lovely person. It's over. We're not coming. And you were like, sorry, can you give me any more information? She was not forthcoming. Just that's all I needed to know was that it was off. Was there anyone else you could call? That was it. She was the kind, I said, should I call, whatever the marketing guy's name who I really originally connected with. I said, would I be able to speak to? She said, nobody's going to speak to you.

• 51:33Speaker 01

  I am the, I am the ombudsman telling you the news. Wow. I'm sitting all by myself. These people are on the plane. I'm humiliated. I mean, I thought, okay, this is the end. I can't imagine what we can do from here. I mean, to me, this was the bailout and the board was thrilled. They loved Hasbro. You know, they, Hasbro was a big deal in those years. Still a pretty big deal. Still is. Yeah. And so I left a message in the room for the woman investor who came from Montgomery Securities, who became kind of a friend. And I said, please come to my room. This was one of your investors who came out? One of my investors who was coming out for the closing. And. She'd been fantastic. You know, she was with Montgomery Securities and she was a peer

• 52:17Speaker 01

  of my age. And so she came to the room and I just burst out crying. I said, I'm so embarrassed, Linda, I don't know what to do. You know, the law, all these hot shots are coming, our lawyer, you know, another investor. And she said, we'll deal with it. We'll figure it out. And, and I don't even really remember. I just, I just remember.

• 52:34Speaker 00

  It's a blur, probably.

• 52:35Speaker 01

  It's a blur. And I remember finally flying home and going to the Gymboree office and telling everybody that this had happened. And I said, you guys, I know there's an answer, but I don't have it. And I'm completely spent. I'm going to go to my little cabin in the Sierra to restore. And I'd like it if you guys would take the weekend to get together without me. So I won't inhibit you and come up with the winning strategy.

• 53:01Speaker 00

  You basically, you come back and you say to your team.

• 53:04Speaker 01

  Figure it out. I'm done.

• 53:06Speaker 00

  I'm, I'm done, or I'm taking some time off?

• 53:08Speaker 01

  I'm taking, no, I'm not done. I just can't, I don't have any, I would be a drag on a creative meeting for what's next. Because I was the one that's come up with the, all of it. You know, I mean, I was the one, the big leader. And with the insult of Hasbro walking away from the deal, I just felt leveled. I had nothing left. I knew I would, but I needed, I needed some time to go be in nature and, you know, whatever.

• 53:31Speaker 00

  I read that you guys, that Gymboree was down to $50,000 in cash.

• 53:34Speaker 01

  Yeah. I think it was even less than that. My CFO came up to the cabin and we sat there at my, at my little kitchen table, figuring out how long we had to live.

• 53:43Speaker 00

  You probably had to lay people off.

• 53:44Speaker 01

  We laid, laid people off and the one, but those of us who remained in the, I called it the life raft. We all took 50% pay cuts. I took a 75% pay cut. And everybody hung in there.

• 53:55Speaker 00

  But this was all quiet. This was not in the papers. It was not publicly known.

• 53:59Speaker 01

  Nobody knows nothing. The franchise, nobody knows anything except for me and that, and my, my people that work for me. The board doesn't, the board knows, but I said, we're coming up with a, we're coming up with the final and winning solution, you guys. I just, I kept being, putting on the happy face.

• 54:14Speaker 00

  I mean, it's kind of this classic dilemma. You had an amazing brand, but you didn't really have a retail product.

• 54:22Speaker 01

  We did not have a money-making business. And, you know, I always say to my franchisees, the price of admission into the play yard of building a business is making money. You can do it for a little while. It's, you know, a social venture and it's fun, but if you can't make money, you can't stay there.

• 54:39Speaker 00

  Yeah.

• 54:40Speaker 01

  So, when I got back from my cabin, you know, trying to figure out how long our 50 or 25 grand was going to last and who was going to get laid off and who was going to take pay cuts and all that stuff, on my desk was a picture of a play center next to a retail store.

• 54:57Speaker 00

  A photograph, a sketch?

• 54:58Speaker 01

  No, it was a sketch. Somebody had some, this is what they'd come up with.

• 55:02Speaker 00

  Huh.

• 55:03Speaker 01

  Our play centers, instead of being in church halls, we'd rent a space, we'd open a retail store, gymboree branded stuff. And then in the back of the retail store would be the play program. So, we'd rent one space and then all together. And I thought, wow, retail stores, wow, that's a big deal. You know, we'd have to manufacture our own clothes and, you know, sell them in our own blah, blah, blah. And I thought, okay, let's put this together.

• 55:28Speaker 00

  So, just to be clear, the idea was, let's have retail stores, we'll sell all of our stuff and we'll have the gymboree play center inside.

• 55:37Speaker 01

  Yeah, in the back of the, we'd walk through the store, in the back of the store. But the store would be a new creation. We would, we would design and manufacture our own apparel and we'd also put some play equipment in, we'd have, you know, some, it would pretty much be all branded. Maybe in the beginning, we'd have to bring in some other people's toys and things like that. But it would be a thing, so.

• 55:59Speaker 00

  So, the idea would be, hey, they're coming in for the classes anyway, but let's make them walk through the gift shop first, right?

• 56:04Speaker 01

  Yeah, exactly.

• 56:05Speaker 00

  You walk through the gift shop, then you go to the class and you gotta walk back out the gift shop.

• 56:09Speaker 01

  Right.

• 56:10Speaker 00

  So, the gift shop was going to be the business.

• 56:11Speaker 01

  Yes, exactly.

• 56:13Speaker 00

  But the classes are going to draw people into the stores.

• 56:16Speaker 01

  Right.

• 56:17Speaker 00

  And you liked this idea right away?

• 56:18Speaker 01

  I did. I thought it was, yeah. But I realized it was going to be, we'd have to really come up with the whole plan. We'd have to do a model of what the store looked like, some prototypes of the clothing. You know, we'd have to do a whole thing and then sell it to the board. But again, I'm young and dumb and, you know, just, the business was not dying under my watch. That's what I can say, Guy. It just was not going down.

• 56:42Speaker 00

  Okay, the board previously, like, less than a year earlier, had said, "Go figure this out."

• 56:49Speaker 01

  No money.

• 56:50Speaker 00

  And, "No money." Now, you're going back and you say, "Okay, we figured something out. I'm gonna present this to you, and I need money." Is that what you did?

• 56:57Speaker 01

  Yeah, I said, "I think we really have come up with a winner to take the best of our reputation, the press, and all of that, and come up with something that is super sustainable. And it will need an investment, and I'm gonna tell you how it works." So, I just, I was all in sales mode. We'd had a beautiful mock-up of the store, which is pretty much how it ended up looking, like a gym, and then some clothing. The woman who had done our clothing, her husband was the GM of The Gap. So, he knew all these people in China that could manufacture for us. And she did a great job designing our first line. We couldn't design a boys' and a girls' because we couldn't make enough products, so we did a unisex line. Anyway, so I went to the board.

• 57:41Speaker 01

  Phil Schlein, who had been the head of Macy's, had just joined US Venture Partners, my venture capital firm. And he asked the board if he could sit in on the meeting, because he was like the retail guy, and he wanted to hear what the deal was. And so, I made the presentation. I could tell that it was going over well. And then, he asked if he could speak. And he looks at the board, he says, "You'd be crazy to invest in this business." First of all, they don't know how to run the business they have.

• 58:07Speaker 00

  Yeah.

• 58:08Speaker 01

  True. They don't know the first thing about retail. And he just gave all the reasons why they should not invest.

• 58:14Speaker 00

  And by the way, the other question he must have asked was, "Haven't they already tried products with licensing? That didn't work. Why is this gonna work?"

• 58:21Speaker 01

  I think that question came up, but that one I had an answer for. That in our own environment, housed in our own world, that we created, and also, the products that we were gonna create were gonna be really kid-friendly. These were three-inch cuffs, and unisex, and unisex was kind of a thing then.

• 58:39Speaker 00

  I guess the argument you could also make was, "Our customer base is affluent. They've got money. They're educated."

• 58:45Speaker 01

  Yep, all of that. Anyway, so they said, "Well, they would think about it and let me know." And the next day, the lead investor called me, the guy that put in the first $300,000. And he said, "Joan, I always believed in you. We'll give you a bridge loan, get over to Hong Kong, produce the line, and when you get back, you'll find a location, and we'll open up a test store."

• 59:06Speaker 00

  Wow.

• 59:07Speaker 01

  I said, "Okay, Stu."

• 59:09Speaker 00

  Just as an aside, you were based in the Bay Area. There happens to be two massive apparel brands based in San Francisco, Gap and Levi's. And I think at the time, Gap was starting to work on a kids line as well. Like, did you ever approach them or try to?

• 59:26Speaker 01

  You're gonna laugh. Stuart Muldoon, my lead investor, was on the board of the Gap. He was quite close friends with Don Fisher. And he said, Joan, I'm gonna get you in a meeting with, with Don Fisher. I think maybe, this was before I made the presentation about the retail to them. And he said, I'm gonna get you a meeting with him. And I think if you presented to him, maybe they would take it and they would, they would develop your whole retail thing. So we, we talked retail. So I did, I went to, got Don Fisher's office amongst all the artwork that's now at MoMA and stuff like that. And he said, it's a great idea, Joan, but you need to know we're, we're opening Gap Kids in six months.

• 1:00:00Speaker 00

  Oh.

• 1:00:01Speaker 01

  And I'm thinking, great. Even if we ever get this started, we're gonna go up against the most formidable retailer in the world. This is great news.

• 1:00:11Speaker 00

  When we come back in just a moment, the clothing line goes forward, but Joan has to step back and leave the company for good. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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• 1:01:40Speaker 00

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1986, and just as Gymboree is about to launch its own line of kids' clothing, the Gap says it's going to do the same thing. But despite the threat, Joan doesn't back down, and she takes off to Asia to visit a clothing factory.

• 1:01:58Speaker 01

  Yeah, me and the woman who was being my designer were in the back of the bus of the airplane, one of us sitting lying on the floor, the other on the two-seats. And we go, and then they say they can't make that few quantity because of what we need for one store. So I call Stuart, and I say, Stuart, they won't make this few of quantity.

• 1:02:20Speaker 00

  The factory needed a bigger order.

• 1:02:21Speaker 01

  Yeah. And he said, I'd double it, you'll open two stores. So I did. I doubled the order. I come home, I get rolling, I look around, I find a location in San Jose and one in San Mateo.

• 1:02:34Speaker 00

  Are these in shopping malls or are these in...

• 1:02:36Speaker 01

  Shopping malls, yeah, top-level malls, between the Nordstroms and the Macy's.

• 1:02:40Speaker 00

  And these are, what, 10-year leases that you had to sign, or three-year leases, or what?

• 1:02:45Speaker 01

  10-year leases, and they were, at that time, with only 1,000 square feet. They were small stores. And we were ready to roll in the holiday season of '86 going into '87. All this had happened within a few months.

• 1:02:58Speaker 00

  Wow, OK, so you get, the clothes are being made, you get the leases in shopping malls, which is a little scary because a 10-year lease, man, that's, you are locked in. And the shopping malls, of course, this is the '80s. I mean, today, shopping malls are in crisis, but this is like boom times.

• 1:03:15Speaker 01

  This was the top of the line. And also, the fact that everybody's tried to get in, and we don't have any history of any retail stores.

• 1:03:21Speaker 00

  How did you get in?

• 1:03:22Speaker 01

  I got in telling them that we have 10 franchise locations in the area. These people know the brand. I implored them with all the statistics that I was aware of, and that those people, and they're going to bring other business to the mall. They come anyway to walk their kid, just something to do. They'll come to the classes, they'll come to the store, and then they'll spend money at the rest of the places. They'll go to lunch, and they bought it. And it turned out to be true.

• 1:03:50Speaker 00

  Okay, and tell me about the openings of these places.

• 1:03:54Speaker 01

  They were on fire. People were lined up. We did the highest dollars per square foot in both malls of any other store during that holiday season.

• 1:04:03Speaker 00

  What were people buying? Clothing? I mean...

• 1:04:05Speaker 01

  They were buying clothing, yeah. And actually, I'm looking at, on my wall here, I'm looking at a picture of the first store because we were voted the best new design in 1986 or 1987, as well as doing the greatest dollars per square foot.

• 1:04:18Speaker 00

  It's incredible. It must have been such a validation for you.

• 1:04:22Speaker 01

  It was such a validation. And we did it all on our own. I didn't have to go to the board. And I hired all the people. All of our staff went down and merchandised the stores. We opened up the boxes all damn night. And we greeted the customers the next day, and it was just a blowout.

• 1:04:37Speaker 00

  And you must have been on cloud nine.

• 1:04:40Speaker 01

  I was so ecstatic. And then, you know, of course, the board, you know, just like all businesses, they saw it as a winner. And now that we were to go out and raise money. So within the next year, we raised $6 million.

• 1:04:50Speaker 00

  People were coming to you to give you cash?

• 1:04:54Speaker 01

  Yeah. And because Stuart knew all these people. So he went to Harvard Endowment, Chemical Bank of New York, and they all came in.

• 1:05:01Speaker 00

  Wow. And so now you're on, you're on fire. You've got something really hot. You've got a hot brand, but you're also making money.

• 1:05:09Speaker 01

  We're making money. We're doing well. And I also realize that I'm in over my head.

• 1:05:15Speaker 00

  And I'm assuming the board is like, expand, expand, expand. Let's go, let's go, let's go.

• 1:05:19Speaker 01

  Let's go. Let's put down a business plan. I want 50 stores by, you know, year three or something. And now they're telling me, I'm aware that I had my, what I call my origin team, the people who've been with me from the beginning, which we wore every hat. Okay, put your marketing on. Okay, put your this hat on. Because that's what you do when you're building, as you well know, when you're building something. And now, we needed the specialists. We needed someone who did this, and someone who did that. And so my main investor said, Joan, and I knew too, it's time to let go of those people.

• 1:05:48Speaker 00

  Start hiring people.

• 1:05:49Speaker 01

  Start letting go of firing the people, the generalists that have been with you forever, took the pay cuts, did everything. And I thought, I can't do this.

• 1:06:01Speaker 00

  They wanted you to professionalize, basically, quote unquote.

• 1:06:04Speaker 01

  Yeah, they wanted me to do like, like run a real business. And I thought, you know what? I should go too. I'm over. Not only should the Origin team be cut, I should be cut because I, I don't know what I'm doing either. We need somebody that really knows how to, who's done this before. It's one thing. I'm a visionary. I could conceive what the store would look like. I can get it operating. But I'm not going to be the right person to replicate this in, you know, up to hundreds of these things. I'm just not.

• 1:06:30Speaker 00

  Okay, this is 1988.

• 1:06:33Speaker 01

  Yeah.

• 1:06:33Speaker 00

  And again, from the outside, you are just a, one of the most successful female founders in America. You've got this incredible brand. It's expanding like crazy. All this money is coming in. The board wants 100 stores in the, in the future. And you yourself are like crumbling inside, like you are actually physically unhealthy.

• 1:06:59Speaker 01

  Yeah.

• 1:07:00Speaker 00

  And also you've, and you've talked about this and written about it. You had a, an eating disorder that was serious.

• 1:07:06Speaker 01

  I did. And I managed it by building a gym in the Gymboree headquarters and making everybody come at lunchtime to a de Rober's class. So I could settle myself down. It was just not a good time for me. Everything looked great on the outside and on the inside, I felt like I couldn't do this anymore.

• 1:07:23Speaker 00

  And you were exercising like hours a day just to cope with the stress.

• 1:07:29Speaker 01

  I was an exercise addict. Uh huh. Yeah.

• 1:07:33Speaker 00

  Were you talking to anybody about this or were you keeping this all in?

• 1:07:37Speaker 01

  At that point, I think I was still keeping it in. I was just embarrassed and I, I knew that I had all these franchisees that depending on me. And I wanted to keep it together for them. And I said to the board or said to my main investor, I am going to let these people go as you, as we both know, they need to. Do you think it maybe it's that you want to replace me too? Cause I would, I'd be down for that. I said, no, the press loves you. Everybody thinks you can, you're going to run it all the way. And I'm thinking, okay, you, I'll do my best.

• 1:08:06Speaker 00

  Um, meantime, Joan, you were working like crazy, right?

• 1:08:11Speaker 01

  Yeah.

• 1:08:12Speaker 00

  And you also had a family. I think you had two kids, right?

• 1:08:16Speaker 01

  I had two kids.

• 1:08:17Speaker 00

  And your husband was busy. Tell me about your relationships at home with your husband and with your family. How, I mean?

• 1:08:25Speaker 01

  Well, I had hired au pairs from the time my kids were little because I was working so much. And, you know, I would come home late and I'd be like, well, what's for dinner? You know, I mean, I just, you know, and

• 1:08:35Speaker 00

  Yeah.

• 1:08:36Speaker 01

  So I was, you know, basically hired someone to kind of raise my kids, except on the weekends and the vacations. I was there and my husband was, you know, he was now, you know, major.

• 1:08:46Speaker 00

  He was a big time editor?

• 1:08:48Speaker 01

  He was a big time editor, but he morphed from that to running campaigns, running Bill Bradley's campaign and Jerry Brown's campaign.

• 1:08:55Speaker 00

  Oh, presidential campaigns.

• 1:08:57Speaker 01

  Yeah, or Mayor Orell, like Bradley in LA. He, he morphed into another business where he parlayed all his, his know-how into that. So he was running, and so neither one of us were manning the store. You know, he was more involved than I was.

• 1:09:12Speaker 00

  And you had two kids.

• 1:09:13Speaker 01

  And we had two kids and, and we were both very much committed to our professional lives. And, you know, we were drifting apart because, you know, I didn't have the energy to hear him about his, what his day to day shit. And he didn't have the interest of mine. And, you know, so, um, I don't just, I could tell that this wasn't going well.

• 1:09:34Speaker 00

  You, you around this time were hospitalized. You had a panic attack. I can understand. I mean, it's so crazy because on the one hand, the business is really succeeding. You're under a lot of pressure from your board to fire people, to run new people, and also to double down on how much you're working. Your, your marriage is crumbling and you are feeling overwhelmed.

• 1:09:59Speaker 01

  Yeah. And so if one of my employees who became a friend took me to the hospital and they said, yeah, you're having a panic attack. You know, gave me whatever they give you for that stuff. And, um, and it just, it just wouldn't go away. Then I decided to talk to somebody. Then I hired a therapist and I told them about my eating disorder. And they said, oh, well, solve it here in the thing. And, and, you know, it's not solvable that way. When it's this extreme is what I was doing, you know, I was, you know, I was a bulimic and I was an exercise addict. And it was just not, and I was. You know, just, I was not in a good place, let's just put it that way. And I decided I was going to go to a treatment center.

• 1:10:39Speaker 00

  You were gonna need to step away from, obviously, from the business.

• 1:10:42Speaker 01

  Yeah, so I told the investor that I was going away for 30 days and would he, you know, would he cover me? I had hired, I think by that time, they'd already kicked me upstairs. I was chairman of the board.

• 1:10:53Speaker 00

  So you weren't operationally...

• 1:10:55Speaker 01

  I was already hired somebody who was operational, but you know, from, from the press's point of view, I'm chairman of the board, you know what I mean?

• 1:11:01Speaker 00

  Sure.

• 1:11:02Speaker 01

  And I went away and they told me at the treatment center that I would never recover if I went home after 30 days and I needed to go to a long-term.

• 1:11:09Speaker 00

  Where was this treatment center?

• 1:11:11Speaker 01

  Georgia. I was up in the Blue Hills of Georgia. It was one of the one and only eating disorder 30-day programs. There was millions of alcoholic programs, but this was for eating disorders.

• 1:11:21Speaker 00

  So you basically go, it's kind of a place where you go and you live on this campus and they have a structured program for you?

• 1:11:30Speaker 01

  Yes.

• 1:11:30Speaker 00

  But really, 30 days is not gonna be enough?

• 1:11:33Speaker 01

  Not enough. They said you're gonna need to go to long-term because it's not like you plug the jug like an alcoholic. You have to create a whole new relationship with food because you need to eat. You just need to do it in a different way. But what, the thing that I really learned about it was that you cover because you're with like-minded people and that it's not the therapist thing, it's your other, quote, colleagues that are also suffering from eating disorder are gonna bust you. You know, and eventually, when I did get home, I went to that therapist. I said, "If you ever have anybody like me in your office again, get them to treatment because that's where, that's where it happens."

• 1:12:06Speaker 00

  Joan, did you feel like, so I, I, I mean, you know, on the one hand, you're this role model and you're strong and you've run this business and all these things. On the other hand, you're doing something very vulnerable, right? And people had to know about it because they need to know, where's Joan going?

• 1:12:22Speaker 01

  I told Stuart I was going and then I called him.

• 1:12:24Speaker 00

  He's your main lead investor.

• 1:12:25Speaker 01

  Stuart, my, my investor. And I called him because I thought my marriage wasn't gonna make it either. And I told him that I wanted him, if he would, because it wasn't public company or anything at that point. I wanted him to, to buy some of my stock or all of it because I wanted to have some financial security because I think, didn't think my marriage would make it. And he said, "Joan, this is your business. You made this all happen. I don't want you to ever think I took advantage of you and you were vulnerable. You go away. I will definitely buy you some of it or all of it, whatever you want, but I want you to really think about this." He was such a great guy and I said, okay, I will. He paid me the whole time I was gone. I got my salary. And I called him halfway through that time and I said, Stuart, I need to sell. He said, how much do you want? How much would you be willing to sell?

• 1:13:10Speaker 01

  I said, Stuart, I'm like any other entrepreneur. I want a million dollars. And he said, okay, well, there is no public market for it. I'm going to leave you with 30% and I'll take 70%.

• 1:13:20Speaker 00

  So you get a million dollars for your, for 70%. And, and you keep 30%. But you're really focused on your recovery at this point. I mean, this is, and, and you would stay there for almost a year, 10 months, I read.

• 1:13:35Speaker 01

  Yeah.

• 1:13:36Speaker 00

  And, and I guess after you left that rehab facility, you didn't come back to California right away. You actually spent quite a bit of time on the East Coast. And then eventually you moved back in 1993, but, but by then you'd been away for quite some time, like almost three years, right?

• 1:13:53Speaker 01

  Yeah, about, about three years, uh huh.

• 1:13:55Speaker 00

  And you moved back and you, I guess, and now your daughters are, they're grown up. I mean, I think they're close to my age. So they're, they're in college. And you would come back to try and, and you say this, you've written about this to kind of repair your relationship with them. There were, there were some challenges.

• 1:14:12Speaker 01

  Yeah. Well, I mean, I left them when they were, one was a freshman in college and one was in high school. And I left and I never came back. I mean, they thought I was gone for 30 days and I was gone for almost three years. I mean, I came back periodically, but I wasn't living with them. You know, fortunately their peer groups and their friends were much more important to them at that time than their mother. But I definitely needed, needed to do some repair work and we did.

• 1:14:37Speaker 00

  Did that take some time?

• 1:14:39Speaker 01

  Yeah.

• 1:14:40Speaker 00

  Yeah. So you come back to California in 1993 and

• 1:14:48Speaker 00

  That year, Gymboree announces it's going to go public. Were you even involved? Like, were you, did they, did they communicate with you? Did you have any connection with them when you came back?

• 1:15:00Speaker 01

  I was, I'd gone to a restaurant in Los Gatos where I went to move.

• 1:15:05Speaker 00

  This is like around, and again, in the Bay Area, yeah?

• 1:15:08Speaker 01

  Yeah, the Bay Area. This is in the South Bay. And I go to this restaurant and I heard a bunch of, you know, sort of entrepreneurial types, young, sort of wannabe Silicon Valley go-getters talking. And I heard them say, you know, a consumer company went public yesterday for quite a valuation. It's Gymboree. And I overhear this and I thought, what? Gymboree went public? And I'm sort of half-ass interested, really interested. And I go up to where they're, you know, and I see a bunch of New York Times sitting on the little bench next to where you cash out. And I took a paper and I opened it up and sure enough, in the financial section, I see one of those tombstone ads that Gymboree was going public.

• 1:15:49Speaker 00

  Wait, how, how were you not informed of this? I mean, as a shareholder-

• 1:15:52Speaker 01

  Nobody told me.

• 1:15:52Speaker 00

  But as a shareholder, I think they have to find out if you're going to sell your shares before they're going to go public. Like, I don't understand how you were not made aware of that.

• 1:16:00Speaker 01

  I was not. Maybe I had signed something originally. I don't even remember that when I sold my shares to the investor, maybe I signed something that if there was ever an event that I would agree to, you know, I was sort of still out of it whenever, whenever that was happening. So I did not know.

• 1:16:17Speaker 00

  They, I think, I looked it up, their IPO price was $20 at the end of the day. I think it closed like $38 a share.

• 1:16:24Speaker 01

  It went up 58% on the first day of trading.

• 1:16:27Speaker 00

  And, and so you had 30% of your shares remained. So you probably still had some considerable number of shares.

• 1:16:34Speaker 01

  I had, I had some money. Yeah, I mean, it was nothing like what I would have had and I didn't even care.

• 1:16:39Speaker 00

  But did you, so when you found out about this, what did you, did you want to liquidate your shares right away?

• 1:16:43Speaker 01

  Well, you, no, I did not. I just, I was so focused, guy, on maintaining my recovery. That was the most important thing to me was that I could do that. But the company, I kept my stock because it was like, this is my baby. I can't sell this stuff. And the company went split a number of times. So it was kind of smart that I kept on to it. It was not smart knowingly, but it turned out well for me.

• 1:17:07Speaker 00

  Right. Okay. So the company IPOs, and that's, that's really, I mean, you'd already kind of been out of it, but that's really kind of your end with? Uh, Gymboree. Meantime, you are now back and you are divorced.

• 1:17:23Speaker 01

  Right. Got divorced that same year, a big year. The company, the year the company went public, I got divorced.

• 1:17:28Speaker 00

  And you are fully recovered?

• 1:17:32Speaker 01

  Yeah, although we, some of us like to think that you're, you know,

• 1:17:35Speaker 00

  Never.

• 1:17:35Speaker 01

  They're always doing pushups in the background, so you need to be vigilant. So,

• 1:17:39Speaker 00

  Yeah.

• 1:17:39Speaker 01

  But I was really committed and I've been, I've been in full abstinence for 35 years. So I feel like it's, you know, it's behind me now.

• 1:17:47Speaker 00

  And, and fitness was always part of your life anyway.

• 1:17:51Speaker 01

  Yeah.

• 1:17:51Speaker 00

  You were a big fitness person and still are. And I guess you were never really into yoga, but this is when you start to get exposed to yoga in, in the mid 90s.

• 1:18:00Speaker 01

  That friend of mine that I had that was in the dance company with that we shared the job at the Jewish Community Center, we stayed friends this whole time. And she called me, she said, come do a yoga class with me. And I said, I'm not a yogi. I'm a mountain biker. I'm a this, I'm a that, you know, that seems silly, but okay. Friendship trumps. I'll go. And my first class, I fell in love. I just, it just, something cracked in me. I was able to access my emotions. It was just the way those poses were put together. I just loved it and I became a yogi right from the get go. And then people came up to me and said, oh, you're the Gymboree lady. We should, you should open up a chain of yoga studios.

• 1:18:39Speaker 00

  Of course they would say that because you already, you already proved what you could do.

• 1:18:42Speaker 01

  I've already done this, right? And I said, you know, I don't think I could do this again. I just kind of, and they said, well, how about just a Bay Area chain?

• 1:18:50Speaker 00

  Who, who were these people saying this to you?

• 1:18:52Speaker 01

  These were students in the class that I had known and people I had been fellow students with me or people I'd known from the community and stuff like that. And I thought, you know what? I guess I'm, you know, I just, I softened to the idea because I'm an entrepreneur. I love the idea of growing. I love service businesses. I love, you know, a business where you go in one way and an hour later you come out another way. And I thought, okay, we'll do this.

• 1:19:15Speaker 00

  So you basically decide that your next act was going to be?

• 1:19:19Speaker 01

  Yoga studios.

• 1:19:20Speaker 00

  It, it's amazing because it's basically Gymboree for grownups, right?

• 1:19:23Speaker 01

  Exactly that. That's what I would say to myself. I'd say, here you go. Because I start businesses for the phase of life I'm in and I still want to do like a senior living center because I'm, that's the stage of life I'm headed towards. But I'm, I'm not fully there yet. You know, I don't want to go live in one of those places, but if I do, I want to start it.

• 1:19:42Speaker 00

  And this was going to be a chain of yoga studios only in the San Francisco Bay area. That was the idea.

• 1:19:48Speaker 01

  That's what I thought. I can't do this nationally. I can't do that. I can't do a big rollout again, but maybe I could do a little, a little Bay Area chain.

• 1:19:55Speaker 00

  And so where did you open the first location?

• 1:19:57Speaker 01

  I opened the one in Mill Valley where I lived and I thought, gee, I want to be just like a little franchisee. I just want to have a little location, go home, have this thing, you know, blah, blah, blah. And then I opened one in another area of Marin County, Larkspur, and then I opened one in the city. And then I realized, I can't, the same stuff is coming up for me again.

• 1:20:16Speaker 00

  What? Like what?

• 1:20:17Speaker 01

  I'm feeling completely obsessed with this business. I can't think about anything else. I don't want to see my kids. I don't want to talk to people. I just, I just want to make this business work. I don't have that ubiquitous thing called balance. I don't know how to do that. I just don't. And I didn't want to have another breakdown. I just, so I said, I'm going to sell the business, which I did, to Yoga Works, which was a national chain. They had, at the time, when they bought me, they had about 25 locations. They were in LA, but they'd buy other studios like me and change the branding. So now it went from the name I called it to Yoga Works.

• 1:20:52Speaker 00

  Your business was called The Yoga Studio, right?

• 1:20:54Speaker 01

  Yes.

• 1:20:55Speaker 00

  And you had, how many locations did you have?

• 1:20:57Speaker 01

  I had three locations, but they were really, they were really significant because they weren't like these old school places. They were up upstairs with purple walls. They were, they were in real malls and we had like three studios and we had a retail thing and, you know, it was, they were, they were significant businesses.

• 1:21:13Speaker 00

  Was it breaking even?

• 1:21:15Speaker 01

  It was not.

• 1:21:16Speaker 00

  Yeah, it's a tough business.

• 1:21:18Speaker 01

  It was another gymboree franchise business. The service business, even though the classes are packed and everybody thinks it's super successful, it's just not.

• 1:21:26Speaker 00

  That's the thing. It's like restaurants. You go to a restaurant, it might be packed, but the margins are thin. And you go to a yoga studio and it might be packed, but it's just, the capacity is limited. You can only fit a certain number of people in and they're really hard businesses unless it's a super efficient model. They're really hard businesses to make profitable.

• 1:21:49Speaker 01

  Right. And here, I had been selling my teachers all these years and we're partners. So I would give them 50% of the revenue. That was never going to fly. And the truth is, I was not going to be able to make it work because unless I changed the way they got paid, which was too scary for me.

• 1:22:07Speaker 01

  I wasn't going to do it. So I sold it to Yoga Works.

• 1:22:10Speaker 00

  Yeah, and Yoga Works eventually would go on.

• 1:22:13Speaker 01

  During COVID, it went under.

• 1:22:14Speaker 00

  During COVID, yeah. And so this really begins a, the next chapter in your life to start focusing on,

• 1:22:25Speaker 00

  you know, just different things. I mean, tell me a little, I mean, here you are, it's 2008 time period, you're in your 50s, right? At this point?

• 1:22:33Speaker 01

  Early 50s, yep.

• 1:22:34Speaker 00

  And, um, I mean, were you done with entrepreneurial ventures? What did you think you wanted to do at that point?

• 1:22:42Speaker 01

  Well, Gymboree now had a new chapter. And first of all, Yoga Works, I consulted to them for about a year and a half after they bought me. And then I decided that I, while I had lost my privilege to be an entrepreneur, it didn't mean that I didn't love the whole idea of other women building their businesses. So I became a mentor slash consultant or whatever to other women who were running their businesses. And then I went on the speaking tour. I became a keynote speaker and was flown all over the place to speak to women's conferences.

• 1:23:13Speaker 00

  But you didn't like that?

• 1:23:15Speaker 01

  I, well, I liked the fact that I would tell my story pretty unvarnished, as I'm telling you about the whole eating disorder thing. And women would come up to me afterwards and say, I've never told anybody, but I have an eating disorder too. It's so, feels so good to know that, you know, that there's someone like you who I looked up to and thought I wanted to live your life. And I always say, well, wait till you hear the story before you want to be me, you know what I mean? And so that felt good, but it was lonely. It was even more lonely to fly across the country and then lead a workshop and then fly home. I just, I didn't love it.

• 1:23:46Speaker 00

  Meantime, the Gymboree world, I mean, it went public, it was public in the 90s. And by 2010, it was acquired by Bain.

• 1:23:59Speaker 01

  Yep, for 1.8 billion.

• 1:24:02Speaker 00

  Which is incredible. I mean, the shareholders, I'm sure did very well out of that. And you're certainly, you were nervous about paying your investors back, but of course, they did very well.

• 1:24:12Speaker 01

  Yep, many millionaires, many multimillionaires.

• 1:24:15Speaker 00

  But this really begins, or maybe it was in the midst of a decline, a significant decline for Gymboree. I mean, that was sort of its high, probably its high watermark in terms of its value. Because then, you know, eventually, I think Bain then buys it for 1.8 billion and then sells it six years later for 127 million.

• 1:24:35Speaker 00

  And then recently, the brand name was bought for 75 million. Clearly, people still see value in it because someone paid 75 million bucks for it a couple of years ago, just for the name.

• 1:24:47Speaker 01

  Exactly. And there's still, I have friends that live in Oakland and there's still a franchise on Oakland, on Lakeshore Drive, and kind of the kind of hot area over there. I mean, they're still around.

• 1:24:58Speaker 00

  Joan, you are in your 70s.

• 1:25:02Speaker 01

  Yep, late 70s.

• 1:25:04Speaker 00

  And you're very, people can't see you, but you're very vibrant and clearly very fit. Tell me a little bit about your, your sort of regimen. How do you, what do you do?

• 1:25:14Speaker 01

  I pretty much go to yoga every day, or maybe four times a week now. And I hike every day. And, well, it's not like I haven't had my fair share of things. I'm a cancer survivor. I mean, I've had my stuff too, but I just keep.

• 1:25:28Speaker 00

  When did that happen?

• 1:25:29Speaker 01

  I was, I got my first cancer, my first and only cancer, actually, six years ago. I'm six years in remission. So I was 72.

• 1:25:35Speaker 00

  Wow.

• 1:25:36Speaker 01

  I had a major ovarian cancer and, you know, it comes on very quickly. I figured it out quickly and they put me into surgery and it was heavy duty for a lot of years.

• 1:25:49Speaker 00

  Wow.

• 1:25:50Speaker 01

  Yeah. But I think I'm a little bit naive guy, to be honest with you. I just never occurred to me that I would really die from this thing. So I just, just kept keeping on. And then I, I knew that because the oncologist kept telling me, you know, it's, there's going to be life before cancer and there'll be life after.

• 1:26:07Speaker 00

  And, and what did that mean for you?

• 1:26:10Speaker 01

  Well, I, I thought she meant like, you don't expect to come back to your old self. You know what I mean? And I was like, okay, well, I'll, I'll deal with that when I deal with that. But I pretty much have. I mean, you know, I'm, I'm older, so I've, you know, I've got regular aging issues, but I'm pretty much myself.

• 1:26:26Speaker 00

  I, I wonder when you think about, you know, starting at the Jewish community centers, just with, you know, part-time job and then turning it into a, really, a big cultural thing, right? It was People Magazine, Baby Booms, centers all over the country. Eventually bought for 1.8 billion dollars from Bain. Do you, do you, when I, when I put it in those terms, do you reflect on it and think, that's a lot to be proud of?

• 1:26:52Speaker 01

  Yeah, I'm proud of it. I mean, it's, it's not, it's not my defining, actually, my recovery from cancer. I'm more proud of that and how I came through that.

• 1:27:01Speaker 00

  I hear you. Yep.

• 1:27:03Speaker 01

  Yeah.

• 1:27:06Speaker 00

  I mean, I guess, and I ask this question to everybody because of the show and, you know, it's more of a chance to kind of reflect, but do you think that your success came from all the work you put in the grind or do you think some of it had to do with luck and just the timing of all this?

• 1:27:22Speaker 01

  The both and, absolutely the both and. I think you'd have to definitely be on the right street corner at the right time when the bus comes by and know which one to get on and there were many of those moments. But I also think that if I had given up, where many people would have and probably I would have too if I was a little smarter, different periods of time, you know, just walked away like, oh, God, the franchise isn't working. Oh, God, the licensing has crumbled. Oh, God, Hasbro's killed us. You know what I mean? Just a million, a million exits should have happened. But I was, as I mentioned earlier, I refused to let the damn business die. I let my marriage go. I let my kids fall.

• 1:28:02Speaker 01

  I mean, and I still don't know, 25 years of therapy later, I still do not know why I put that kind of effort into it. It wasn't like I had a lot of money into it. It's $6,000, you know? I mean, that was the total sum of my investment in this thing. I mean, it's part of me and I loved building that business until it was just over my head. But I really loved the camaraderie of the team and the women I built it with. And I feel like what a privilege it was to be able to, you know, dream up something and have the right people at the right time and get the right investors to be able to make this a reality.

• 1:28:40Speaker 00

  That's Joan Barnes, founder of Gymboree. By the way, even though Gymboree is nowhere nearly as big as it once was, it's still doing pretty well overseas, especially in China where there are hundreds of play centers. As for the clothing line, the retail stores closed down in 2019, but the brand still exists. It's owned by a company called The Children's Place, which recently reopened its first Gymboree brick and mortar store at a mall in New Jersey.

• 1:29:11Speaker 00

  Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's totally free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyraz.com or on Substack. This episode was produced by Chris Messini with music composed by Ramtin Arablouei. It was edited by Neva Grant with research by Rommel Wood. Our audio engineers are Patrick Murray and Jimmy Keighley. Our production staff also includes Alex Chung, Casey Herman, J.C. Howard, Sam Paulson, Catherine Seifer, Carrie Thompson, John Isabella, and Elaine Coats. I'm Guy Raz, and you've been listening to How I Built This.