KENDRA SCOTT: All these things were happening. And I was like, you know, literally on my kitchen floor sobbing, like, I'm going to lose all of this. And it made me have to make a decision, like, in that moment. I was either going to give up and just say, I can't do this, party's over. Or I was going to have to throw all my chips on the table. And we were going to have to do something, like, radical.
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GUY RAZ, HOST:
From NPR, it's HOW I BUILT THIS, a show about innovators, entrepreneurs, idealists and the stories behind the movements they built.
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RAZ: And on today's show, how a young mom named Kendra Scott turned her spare bedroom into a launching pad for a multimillion dollar jewelry company.
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RAZ: When Kendra Scott was a little kid in Kenosha, Wis., she'd often get driven up to Milwaukee to visit her glamorous aunt who worked as a fashion coordinator at the Gimbels department store in downtown.
SCOTT: Going into her closet was, you know, magical. And I could become anything I wanted to be. You know, I would play in her clothes and her jewelry. And I would sketch ideas of clothes and handbags and shoes. I would break antique pieces of jewelry apart and try to put them back together again. I would style my mom. I mean, I don't - can't say it was great looking but it was creative. I could say that. I loved it.
RAZ: But Kendra really thought of fashion as a hobby. She never imagined it as the thing she would eventually do with her life. By the time she turned 16, her parents' marriage was falling apart. Kendra and her mom moved to Houston. And so for college, she decided on Texas A&M. But shortly after the start of her freshman year, her stepdad was diagnosed with cancer. So Kendra dropped out.
SCOTT: It just was like - you know what? - right now, this is the most important thing that I need to do. And so dropped out of school, moved to Austin and was spending, you know, an unbelievable amount of time at MD Anderson in Houston. And that's where my first business actually started was I went home and started designing headwear for women undergoing chemotherapy.
RAZ: Wow. How did you get the idea?
SCOTT: So, you know, there were times when, you know, we'd be in the hospital, you know, and he's in for a treatment. There could be seven hours in a procedure. So sitting in a waiting room is really, really hard to do for seven hours. So we would go out. We would meet people. We'd be in the cafeteria. We'd meet women and families. And I could just see one, you know, it's so devastating for anyone who's going through cancer treatment. But for a woman, you know, to lose your hair as well, it's a part of your identity.
And, you know, there weren't great options for these women. And I just started hearing this struggle. And I loved hats. And I loved fashion. And I thought, you know, I could take some hats. And if I could, you know, put in some cotton linings, comfortable headbands, things that would make them more comfortable to wear because a wool, you know, hat is not comfortable when you've lost your hair - right? - so this could be great.
RAZ: Wait. You started to make the hats?
SCOTT: Yeah. So initially I wasn't making the actual hats. So I was buying hats. And then I kind of started thinking about it. And I'm like, you know, there are no - I was trying to buy hats. And I couldn't find them anywhere. I'm like, no one is selling hats. Where are all the hats?
And so my first business was creating a hat store with the intention that I could also have a space and a place for people undergoing chemotherapy to come that was private, so they could have a private area to try hats on. And I had this big fantasy that it was going to be like 1930 again and everyone was going to wear hats and there was going to be this big movement of people wearing hats again (laughter).
RAZ: What did you - at that point, I mean, your stepfather was - he was battling cancer himself. And at the same time you launched this company, this business?
SCOTT: Yeah. So, you know, it was a really crazy thing. I remember talking to my father and my mother and my stepfather and saying, you guys, I want to do this. And, you know, my unbelievably - and I look back now like that my parents were like OK, do that.
I mean, I think my mom was going through a lot. So maybe she wasn't in the right state of mind. But she's like, you know, do it honey. And my dad was the same way. And he said look, you're not spending the money I'd save for college. You know, and it wasn't much. I remember it being like $20,000 that I bought my first inventory and signed a lease and all that kind of stuff.
RAZ: What'd you call the store?
SCOTT: The Hat Box.
RAZ: Wait. Can I just stop you for a sec?
RAZ: You were like 19 or...
RAZ: That's amazing. So how did you even have the confidence to try this?
SCOTT: You know, I think you kind of go in things without necessarily understanding, like, all the risks.
SCOTT: I kind of was like, oh, let's just do this. And, you know, it was amazing. And I had to sell every hat. So like I clearly - to make money, I mean, if you needed a top hat, I had it, a joker hat, I had it, you know, whenever, a fedora, a church hat, derby hat, I was your person.
RAZ: And so you open up. And what happens? Do people start to come in from day one?
SCOTT: Not really. It was, you know, it was a slow - let's just call it a slow build.
RAZ: OK, yeah.
SCOTT: There wasn't the demand for hats that I really had dreamt that there would be. We tried a lot of really creative out of the box marketing tactics. But at the end of the day, we'd sell some hats but it was tough.
SCOTT: I mean, I remember a lot of days, call my dad just crying and being like, Dad, I sold one hat today. You know, and I had been there like 12 hours and I sold a hat. I was so determined to make this hat business work, which I didn't. I mean, five years after eating Top Ramen and, like, struggling and working seven days a week and open to close and I couldn't really afford to have anybody, I had to shut it down. And, I mean, I failed.
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RAZ: You just were losing money all the time, hemorrhaging money?
SCOTT: Yes. You know, I remember when I closed The Hat Box, you know, saying I would never go into retail again. It was just too hard. You know, here my store closed. My stepfather now passed away from cancer. You know, it was just a very dark and sad time. And, you know, I failed. I completely failed at something that he was once so proud of. So I really felt like I had let down him in so many ways.
But I think at that time I was like OK, you know, go get a job. And so, you know, I went and I was able to get a job at a local travel company that had a magazine associated with it. And I was able to, you know, do some really creative things with building this magazine for them. And it was fun. But I wanted to do my own thing again.
RAZ: Yeah. And what about your own life? Like, I mean, were you married at that point?
SCOTT: Yes, got married in 2000. So about the time that was all going bad, I did have that one, you know, bright light of getting married and then in 2001 having our first son. So that was really a catalyst for me because the job that I was doing, you know, at the magazine required me to travel a lot. So I really knew at that point that I needed to figure out something else.
And I realized that, you know, what I loved was I love fashion. I love design. And with The Hat Box, I saw what a difference what I loved could do to help other people with, you know, the hats for women undergoing chemotherapy. And I thought, God, if I create a company that could also do something really good, that that would be success for me. And that literally was the foundation of Kendra Scott.
RAZ: How did you land on jewelry design?
SCOTT: You know, I could make it with my own two hands. I can't sew to save my life.
SCOTT: So, you know, I loved all the facets of fashion and design. But jewelry was always like the icing. It was that extra sparkle. It always fit, too. So when you're pregnant, believe me, jewelry is very important because you're wearing potato sacks. So if you can put on a great statement necklace, you all of a sudden feel glamorous. So I think being pregnant, I was looking for beautiful gemstone jewelry that I could afford. And it wasn't out there. It was either inexpensive plastic glass that would fall apart after one time wearing it or semi-precious jewelry that was so far out of my reach, it was unattainable for me. And I just felt like there was this white space in the jewelry industry that - for women like me who wanted beautiful quality product but needed it in a more attainable price point. And that's really, you know, kind of what I set out to do when I created my first line.
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RAZ: How did you even know how to make it?
SCOTT: So I took some very simple jewelry making classes here in Austin. There was a local bead shop that had some classes that I took on wire wrapping.
SCOTT: And then I would look at things. And I literally would break them apart to try to figure out how they were made. And I set up shop in the extra bedroom of our house. I had some fold-out tables that my mom gave me, a bead board, pliers and some wire. And that's what the first collection was made out of.
RAZ: You just literally started making jewelry?
SCOTT: I literally started just making jewelry. And when I was finished, I remember looking at it and going - you know what? - this isn't half bad. You know, I think people would like this.
RAZ: What'd it look like?
SCOTT: It was colorful - you know, I love color. So I was trying to mix color in a unique way, so putting stones together that might not typically be put together and create really pretty colorways. It was hand beading, hand knotted, wire-wrapped silhouettes with some chain.
RAZ: And they were like bracelets and pendants? And what were they, necklaces?
SCOTT: We did bracelets. We did necklaces. But I was known for my earrings, like chandelier earrings and really pretty drippy stone, you know, earrings and long shoulder dusters. And so yeah, I put those little pieces that I made, and I literally took $500 to get all the supplies I needed to create this collection which was a big deal for us. You know, our mortgage I remembered at the time being around $1,500. So $500 is a lot. And we, you know, we have a newborn baby. And, you know, it was like here's Kendra, one of her crazy ideas. You know, The Hat Box had failed. My husband's probably like, what is she doing? But I was like, I promise I'm going to bring home a thousand dollars.
RAZ: So how did you think you were going to do that?
SCOTT: I went out and I put this jewelry in a tea box, a wooden tea box actually that we had gotten as a wedding gift and took my little son Cade (ph) in a BabyBjorn. And we went store to store in Austin, Texas.
SCOTT: Asking people if they'd be interested in carrying it?
RAZ: Was any part of you nervous about doing that?
SCOTT: Oh, my gosh, yes. I remember sitting in my car outside of the first store for probably 20 minutes just figuring out, like, what I was going to say and if they were going to kick me out, like, if, you know, they'd call security or something on me (laughter). But I thought I did have the baby, so I felt like I was in better shape. But I was so passionate about it. And I think when I walked through, that passion shined through.
RAZ: So what was your pitch?
SCOTT: So I had a very basic line sheet and an order form that I printed off of Word (laughter) and went in. And I said, hey, I'm Kendra Scott. And I've got a jewelry collection. And I always joke that, you know, I don't know if they loved the jewelry or they just felt really sorry for me, you know.
RAZ: Right, with a BabyBjorn. Right, yeah.
SCOTT: Yeah, I had the baby. I'd take - hey, look, you've got to pull out all the stops sometimes.
SCOTT: You know, Guy? Like, whatever it takes.
RAZ: Whatever it takes.
SCOTT: And, you know, they bought it. And so they wrote orders. And I, you know - literally, the last store I went to that day, I had to sell my entire sample set.
SCOTT: So that I would have enough money to buy the materials I needed to produce the orders I wrote that day. And I came home with a check for $1,200. And I remember walking in and, you know, telling my husband - I'm like, we got a business.
RAZ: So that - after that day of just, like, hawking it door to door, store to store, you had to basically, I guess, go back and just get to work. You had to start making this stuff.
SCOTT: Completely. And I remember, like, I put a bulletin board up on the wall. And I had, like, my four orders pinned like it was so big-time, like, what was in production. And, you know, I ended up getting one of my friends to come over and taught her how to wire wrap. And she, like, helped me make a new sample set and then also produce these orders and delivered them. And I remember the day after I delivered to one of the stores, she called. And she's like, I'm out.
SCOTT: Kendra, I need more. And I was like, what? You know, and she was like, how - when - how quick can I get more? And I'm like, you know, and it was just kind of like, oh, my gosh. And it was exciting. It was really exciting because people loved it. And it was fun because, you know, here I'm in Austin. I'm just selling to these stores. And then another store in, like, Dallas would hear about it. And I'd, you know, do it for them. And, you know, all of a sudden, I got a call one day from this showroom in Dallas.
And she's like, is this Kendra Scott? And I said, yeah. She said, well, who are you? And I said, Kendra Scott. And she said, well, you know, some of my stores in Austin, they're not buying my line. They're talking about this local girl from Austin. I want to see what you've got. And so I went up to Dallas. And she said, well, you know, what? I might as well be selling it. And so she really helped me kind of start to build the brand and get further exposure, you know, in the South through wholesale accounts. And that was a great - that was a great break.
RAZ: Were you profitable right away?
SCOTT: Well, yeah, we were running a pretty tight ship out of my extra bedroom. You know, and I got this great, you know, rep. I don't know if you remember Harold's Stores. But they were a company that had a great catalog business and stores, a good retail chain. But they were my first big order. And they came to market. And I remember the rep being like, oh, don't sample for them. Like, they never really buy anything. And they sample all the time.
And I'm like, hey, I don't have anything to lose. So I made samples up per their request. And I, like, wrapped them in tissue with, like, ribbon. I don't know. I might have even put perfume in the box. I was, like, butterfly release, you know. And I'm like, if I'm going to do it, I'm going to try to do it. And sure enough, I got a call. And it was a $75,000 order.
RAZ: Wow. How many pieces was that for?
SCOTT: It was - I want to say it was like 2,200 or - I mean, it was, like, in the thousands, Guy.
RAZ: How did you even manage to start making those?
SCOTT: You fake it till you make it, right?
SCOTT: Cause they had no idea I was in my extra bedroom.
SCOTT: And that was when I was like, oh, my god, I have to outsource production. I clearly can't make all these. And they wanted it delivered in, like, eight weeks. And I said yes to everything because I didn't know. You know, I was like, OK, yeah, we'll do that. And I remember on the buyer, you know, when she gave me the order, I started crying on the phone to her. And I just said, you just made somebody's business, like, happen. And, you know, we're still friends. And she says, like, she still remembers that moment because I was so emotional. I couldn't believe it. But we did it. So we actually called a friend who had worked as a CEO of a very large retail chain. He had some production resources overseas. They had the stone capability there, too, which was great. So it was all natural stones. I remember it. He, as a friend, called and said, can you help my friend out? And literally, thanks to him, that first order was produced on time. And we shipped it out, you know, ticketed and carded it on my dining room table. And UPS picked it up on my front doorstep. You know, it's the biggest lesson I could ever give any entrepreneur - is, don't be afraid to ask for help. It is not a sign of weakness. It is the greatest sign of strength.
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RAZ: Kendra Scott. When we come back in a moment, how the 2008 recession almost killed Kendra's business and then kind of saved it. I'm Guy Raz. And you're listening to HOW I BUILT THIS from NPR.
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RAZ: Hey, welcome back to HOW I BUILT THIS from NPR. I'm Guy Raz. So it's the early 2000s, and Kendra Scott has just landed her first big order. But if she wanted to make it nationally, she'd have to get her jewelry into the famous fashion showrooms of New York.
SCOTT: And I started calling them and sending them samples. And, you know, nobody would call me back. I would send cupcakes. I don't know. It's a Southern thing here, we eat a lot of cupcakes - anything I could get to try to get a response out of these showrooms.
RAZ: And they just weren't interested?
SCOTT: No. And, you know, I'd be told, I get 20 calls a day like this.
SCOTT: What's going to make you special? Do you know how many jewelry designers there are out there - or wannabe jewelry designers? I can't tell you, like, how many times I got told no and basically kind of laughed at and told, oh, you're from Austin, Texas? What are you selling, Southwest jewelry? I'm like, no, hello, I'm selling, you know, very fashion-forward, trend-based, blah blah blah. You know, I mean, they want to put you in a box, right?
SCOTT: And it was really deflating. But you just have to, like, have it, like, I'm not going to let this fail. And I remember one showroom out of like the 20 or 15 that I was courting finally called me back. And he's like, will you just, like, stop calling me? Like, you know, he's like, I will talk to you. But you have 20 minutes. And you need to come to New York. And I'm like, OK, I'm in. I'm coming.
RAZ: And, like, this showroom in New York, like, sells jewelry from - from, like, a bunch of different designers?
SCOTT: Yes. So this is a wholesale showroom. So they'll carry multi lines. Some carry multiple lines of jewelry. Some would carry handbags, jewelry, other accessories, footwear, whatever. And this is where buyers - so the buyers of department stores, buyers...
RAZ: Oh, right.
SCOTT: ...Of boutiques would go in. So this isn't direct to consumer. This is not a store. This is an actual showroom for wholesale, right? And so this was a really great one and, again, not too big. So I felt like I wouldn't get lost. And he was a tough New York guy. And, you know, he wasn't kidding about the 20 minutes. And I went in and showed him my collection and tried to explain to him what my goal and vision was for the brand. And he said, you know, I'll look it over. I'll talk to the rest of the folks that work with me and we'll get back to you kind of thing. And, you know, 22 minutes later, I walked down kind of deflated thinking, you know, I don't think he's going to - like, I don't think that went as great as I wanted it to.
And it was about three days later. And I was driving on Loop 1 in Austin, Texas. And, you know, my cell phone rang. And he said, Kendra, we want to carry your line. And I had to pull over, like, on the highway, which was not safe. But yeah, it was - so then that - we - you know, we got a New York showroom. And we really - we sold into Nordstrom the next market.
RAZ: What do you think it was? I mean - I mean, was the design, like, markedly different from anything else out there? Or...
RAZ: Was it just that this guy happened to like your stuff?
SCOTT: I think that - that, you know, look, he wouldn't have carried it if the design wasn't good. You know, he sees a lot of things. So I think, you know, the design was good. I think he was excited about the price point. I think he saw that there was value and there was a - that would be exciting for customers to be able to have that. And it was something that he didn't have to show. And again, like, we were filling a void. And that was the reason that we got his attention.
RAZ: How did you even know, for example, like, how to price things and how to do all that stuff?
SCOTT: (Laughter) I didn't, Guy. I mean, come on. I kind of learned as I went along. Then, when we went overseas, we were able to buy better, you know, through volume. We were going direct to stone manufacturers versus going through importers and exporters and, you know, all these other middlemen. So it worked out that we were able to actually really price smartly. And for me, the more direct I could go, I could pass that value on to our customer. And she could get the most beautiful stone quality, handcrafted jewelry - but, you know, under $100 for a pair of earrings. And it really was about, like, getting out there and trying to source, you know, the manufacturers and the stonecutters to do it.
RAZ: OK, so back to the New York showroom and then the Nordstrom's order. What did you - like, how were you able to fulfill that?
SCOTT: Yeah. So we were able to start working with a sourcing company who started helping us diversify our manufacturing and give us more resources. And so when we were - you know, got the first Nordstrom order, at this point, I was still in the extra bedroom. So we actually did ship Nordstrom out of the dining room again. (Laughter). And then we shortly moved to our first corporate headquarters, which was an attic.
RAZ: It was an attic. Where was that?
SCOTT: It was in Austin. It was a little Victorian house that had a Subway office below - like Subway shop office below it. And it was an attic space. I remember going in. He was like, well, we have the attic available. I'm like, how much is it? And he told me. I'm, like, OK, I think we can swing in the attic. And then we moved into an attic. So it was a big upgrade from my extra bedroom, let me tell you.
RAZ: And at this point, it was you and who else?
SCOTT: I think we had about, like, six employees.
SCOTT: Yeah, we were - we were - (laughter) - we were on fire, Guy. So I had a lot of production assistants at that point literally helping make all the samples, create all the samples in-house. I had a graphics designer. I really believed early on, like, I wanted to control the brand. And I think, you know, working in the magazine for a while, I just saw the power of having an authentic brand that, you know, we really controlled.
RAZ: So your team was - was basically designing the jewelry. And you were overseeing that - like, the design of each piece.
SCOTT: No, I was designing. They were...
RAZ: Every piece.
SCOTT: They were producing. Yeah, in the early days, I was designing every single piece. Now I still lead the design for the entire collection.
RAZ: So you have six employees at that time. I mean, by this point, were you already - were you making a lot of money yourself? Or were you still...
SCOTT: (Laughter). No. No, not at all, not at all.
SCOTT: I mean, there were lots of times when I didn't - I didn't pay myself.
SCOTT: I had to pay everybody else. I mean, I remember telling my landlord on several occasions - I'd go down. It'd be the first of the month. And I'd be like, Mike, so Nordstrom's check is running a little late. Could I have, like, two more days? And he'd just smile at me and be like, no problem. He was an entrepreneur. He was just so wonderful. And so thankfully, I had a cool landlord. And, you know, we were floating constantly. I had a - I think I had about a $10,000 float that I was always in my mind of, like, when things were coming in and when I could pay things and how I was going to pay rent and pay payroll and, you know, pushing people off to figure out who I could - (laughter) - I mean, it was awful (laughter).
SCOTT: And I bootstrapped it. I mean, at this point, I didn't bring any investment capital in. So I had a line of credit with the bank against my inventory and my purchase orders.
RAZ: How big was your line of credit at that time?
SCOTT: Well, in - the very first line of credit I got, I think it was about 25,000. And then I got it moved up to 50. And I had a $50,000 line of credit for a while. And then I remember it went to 75. And that was, like, a big milestone that we got it up to $75,000. Like, then I didn't know how you go out and raise money or bring in equity. Or - I didn't know how you do that. I was just worried about fulfilling the orders that I had to fulfill.
RAZ: Yeah. When did you - when did you decide to open a brick and mortar shop?
SCOTT: So do you remember I said I would never go into retail again after the Hat Box?
SCOTT: Those are, like, famous last words. But I didn't for a long time. I was honestly really scared - really, really scared. And I thought, this is much better. I can design. You know, we're manufacturing. And I'm selling to these wholesale partners. They have the product, and they have to sell it, right? Like, it was safe. And we were growing. But we weren't growing dramatically. It was like we were at about a million, million-five a year. You know, at this point now I was a single mom. So, you know, I was able to pay our rent and do the things I needed to do.
RAZ: Your first marriage ended.
SCOTT: It ended, yep.
RAZ: And how many kids did you have at that point?
SCOTT: Two little boys.
RAZ: And so you were doing this more or less on your own and running the business?
SCOTT: Yes. (Laughter). Yeah, back - my little one, he was 1. And the older one was 3. So they were little - little, little. So they would - you know, they'd come to the attic with me. And I had a Pack 'n Play and toys. And to me, those are just magical days, quite honestly. It was a very special time for me and the boys. It was hard. But it was like there were - there was that determination. Like, I couldn't fail them.
SCOTT: I had to make this work.
RAZ: Did you have help from your mom with childrearing?
SCOTT: Oh, my god. She's unbelievable. She is just - yes. And my sister actually moved in with me for part of that time.
RAZ: Because you had to travel and try to sell your line.
SCOTT: Yeah, I mean, I brought - my oldest, I would bring - he had 75,000 frequent flyer miles when he was 3 and a half. So...
SCOTT: I mean, that poor kid.
SCOTT: I mean, I think back now, and I don't even know who this person is and how I did it because I don't think I could do it now. But again, asking for help - I mean, I had some friends in New York who would help with my son when I was there doing the shows. I mean, I surrounded myself with these amazing, wonderful people who had big hearts, who believed in me. And, you know, I'm so thankful because I couldn't have done this without the people around me to support me during this time.
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RAZ: So you decide to to open a brick-and-mortar store in Austin, presumably, your first one.
SCOTT: Yeah. So here we are. We're going along. I'm just selling my little orders to all these wholesale accounts. And this amazing, wonderful thing happens called the recession, which turns out to be the greatest gift Kendra Scott, the company, ever received, which sounds really crazy. But it really was the greatest gift because I was playing it safe. I was so scared to go outside of my comfort zone. You know, seeing what happened with my first business - but then the recession hit. And every day, I'd walk in. And stores I'd been working with for years were shuttering. One after another, buyers that I had been working with and built these great relationships with were getting laid off from their jobs.
I mean, the whole world changed. And my line of credit gets called by the bank because I'm a high risk, being fashion and jewelry. And so all these things were happening. And I was like, you know, literally on my kitchen floor sobbing, like, I'm going to lose all of this. You know, and I've got these boys I have to raise. That was, like, a very scary time. And it made me have to make a decision, like, in that moment. I was either going to give up and just say, I can't do this, and it's over - party's over. Or I was going to have to throw all my chips on the table, and we were going to have to do something, like, radical. And that's what we decided to do.
RAZ: So what'd you do?
SCOTT: Radical meaning retail (laughter).
RAZ: So your answer was, we've got to go out there and open up a shop.
SCOTT: Well, what my answer was is that for all these years, I've been worrying about what buyers - the buyers wanted. I wasn't thinking as much about the customer. And I realized I had to refocus, that all of my attention had to go on the customer. I had to know what she wanted more of. I had to engage with her personally. And so our complete focus went from business-to-business to business-to-consumer. And that meant an amazing web experience.
It meant being innovative and creative with creating a customization opportunity for our customers. And the store really was meant to be our laboratory. And so we moved our office to above a store in South Congress in Austin, Texas. So all of us would have to walk through the retail store every day before we could get to our offices so that we were forced to really have to see what was going on and look at the product in a fresh, new perspective.
RAZ: Yeah. How did you finance that? I mean, the recession hits. You are, you know, kind of profitable. But you're not really making crazy amounts of money. So how were you able to put the money into getting a retail space and going that route?
SCOTT: So a great thing happened. I was with - when I was with this bigger bank - and we're not going to name any names. But when they were about to call our line, we had a local Texas bank who loved me, loved our brand and took our line of credit on, gave us some extension in addition to the line of credit that they took on, which was phenomenal and really helped us. Fortunately, because of the recession, all these stores were shuttering. So I was - you know, South Congress, which was now the hottest, hippest place in Austin, in 2008, 2009, it was almost a ghost town. And so negotiating a great lease and getting space was actually pretty easy, right? But I thought, you know, if we're going to do it, I want to do it totally different than everybody else. I don't want to just open a jewelry store. I don't know if you've been into a jewelry store. But it's kind of a scary place sometimes. There's, like, cases. And you have to ask people to see things.
RAZ: Yeah, right.
SCOTT: It's scary. It's intimidating. And sometimes, there's big, burly guards at the gate - you know, the door. It's not exactly your warm and fuzzy feeling when you walk in. And so we wanted to take all the scary out of - out of it. And so the cases were open. Jewelry was freely displayed on, you know, tables. And you could touch and feel it. And we had signs that said, have fun; try on. You know, we had the color bar, where you could sit at the bar and customize your own piece of jewelry and pick the stones that would go in the setting. And then our girls, right in front of you, would set the stones while you're drinking a glass of champagne.
SCOTT: It was fun. It was fun, and it was fresh. And it was - the jewelry was attainable. And I think in the recession, it was refreshing for people because it was something that they could afford to do. And it made them feel good. And we had lines around the block. I couldn't believe it.
RAZ: How did you - how were you able to scale up from that one store? Did you have to eventually get outside investment?
SCOTT: So not with the second store or the third store. So we didn't bring in investment capital until 2012, very small amount. I mean, I was running a business every day that was bigger than it was the night before. I didn't know what I was doing. And I knew I needed to bring in a more qualified team. So, you know, in 2010, we still only had seven people.
SCOTT: You know, we were all green, right? We were young. We were hardworking. We definitely were, you know, passionate and excited. But I needed to get some gray hair in the building, so to speak. And in order to do that, you know, we needed to also have money to do that. And so we brought in a COO who is fantastic and with me to this day. And, you know, I stopped paying myself, actually, when I hired him because I knew we had to have him. I knew I needed that, you know, expertise.
And I remember going to our controller, who's now my VP of HR (laughter) and saying, you know, Christine, like, we've got to hire this guy. And she's like, Kendra, we can't afford him. And I was like, we can't not afford him. I said, stop paying me. We're hiring him. And they did. And then finally, you know, our - my COO, Lon, who is with me still, he laughed. One day he realized that I wasn't getting paid (laughter) because I was like, it wasn't that long. But he's like, I think we need - I think you should maybe get paid. I'm like, OK, that'd be great (laughter).
RAZ: So with the outside investment, you were able to sort of scale up and to the point where you now have more than 50 stores.
SCOTT: Fifty-four right now, and we'll have 74 at the end of the year.
RAZ: And you still sell in big retail chains, like Nordstrom's and other places.
SCOTT: Yeah, Nordstrom, Neiman Marcus, Bloomingdale's.
SCOTT: You know, I think if you would have asked me in the extra bedroom if I would have ever thought this business would be as big as it is today, I would have - no way could I have dreamt that big. But now I see it.
RAZ: In those - in those early days, when you were - you know, you had your first kid. And you're just trying to get this off the ground and - do you remember having, like, sleepless nights or having, like, knots in your stomach and anxiety?
SCOTT: I still have sleepless nights. Is that...
SCOTT: Yeah, of course. I mean, you know, running a business isn't easy. If it was, everybody would do it, right? You're always worrying about things. I mean, now I have 2,000 people that work for us. So it's their - I'm responsible for their families. So, you know, those things keep you up at night. There's always something - right? - that keeps you up at night. But in the early days, it was also - it's exciting, too, because you've got this idea.
And you have this thing. And you just - I would wake up more just, like, anxious because I just wanted to get up. And I wanted the sun to rise so I could just go do it. And I still am that way. I mean, I wake up at 3, 4 in the morning. And I have ideas. And I have a sketch pad next to me. And I'm writing things down and tearing things out of magazines. I still have that giddy excitement every day. And that's what keeps you going. You have to, like, love it - love it, love it - like, your children, love it.
RAZ: Yeah. You know, it's just amazing to me that you didn't finish college. I mean, you barely did a year of college.
SCOTT: I wouldn't even say I really started. Let's be honest.
RAZ: Yeah, right. You never - you never studied business. You didn't study fashion and design. You just built this incredible business. And you failed a lot along the way. Like, you had a lot of...
SCOTT: (Laughter) I just love how you're bringing out all my positive attributes. (Laughter).
RAZ: How much of this do you think was just your talent? How much of it was luck? How much of it was - I don't know.
SCOTT: There's no luck. I mean, I don't - I don't really believe in luck. This has been very hard. You know, there were a lot of days I didn't think that I would keep this business. I think part of it is drive, right? And I saw where we needed to go. Giving up was not an option. I was going to figure this out. And I think I learned so much from the Hat Box. It was - that was my education. I mean, I learned business from A to Z, from open to close - literally closed. You can't teach that in a book. You can't learn that in a classroom.
RAZ: Yeah. What do you think when you're, like, walking through an airport or in some city and you see somebody wearing your jewelry?
SCOTT: Oh, my god, I get so excited. I still get - I mean, I see people all the time. And, you know, I used to carry my business cards around. And I used to get, like - I'd see somebody, and I'd write 15 percent off. And I'd sign my name. And I'd be like, go into the store. Show them - like, I love your - you know, you're wearing - like, you're wearing your Kendra. You look so beautiful. And so now we have caught-you-in-your-Kendra cards. They're like a gold ticket.
RAZ: Oh, wow.
SCOTT: And we give them to all of our employees. And so if you are wearing Kendra Scott and one of our Kendra Scott employees see you, they, like literally will run up to you and be like, we caught you in your Kendra. You look so great. And we give you this golden ticket. And that came from my business card. But I love it. I always go up to people. I'm like, you look so great. Thank you so much for wearing our jewelry. It never, ever, ever gets old - ever.
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RAZ: Kendra Scott, founder of Kendra Scott Design. By the way, that original $500 investment paid off pretty big. Last December, Berkshire Partners made a large investment in her company. The size of the deal wasn't disclosed. But according to a report in Reuters, Berkshire's investment raised the value of the company to more than a billion dollars.
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RAZ: Please don't turn us off just yet. In a moment, we're going to hear from you about the things you guys are building.
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RAZ: Hey, thanks for sticking around because it's time now for How You Built That. And we got this story from Joshua Esnard, who grew up in Ithaca, N.Y.
JOSHUA ESNARD: We were immigrants from St. Lucia in the Caribbean. And my dad, being an old-school Caribbean guy, everyone knows about the old-school parents. They cut their children's hair.
RAZ: Yes, they did. But his dad's version of a haircut was not exactly Joshua's idea of a haircut.
ESNARD: And I wanted to edge up my hair and have a cooler hairstyle. So I realized that I need to find a way to give myself the styles that all the cool kids had.
RAZ: Joshua didn't have the money to pay a barber. And when he tried giving himself a cut with his dad's clippers, well...
ESNARD: I ended up with bald spots. And let's just say that I spent a lot of time in middle school with hats on my head.
RAZ: Joshua was 13 at the time and the kind of kid who loved to draw and design.
ESNARD: And I realized that if I can cut some pieces of plastic and cardboard and mesh them together for certain designs and stencils, I may be able to use that as a guide to help me cut my hair.
RAZ: And so Joshua invented basically a head stencil. He pressed it against his head, and then he'd shave around it.
ESNARD: And the first haircut was perfect. Like, the crisp curves on my sideburns were just amazing to the point that people were like, man, you went to the barber? Who's your barber?
RAZ: Me - I'm the barber, he would say. And Joshua kept using his stencil through middle school and then high school. And in his mid-20s, he decided to patent his invention. And within a few months, The Cut Buddy was born.
ESNARD: So I actually took the product. And I shot a video of me cutting my own hair with The Cut Buddy.
RAZ: He put it on YouTube, and he got some sales, but also - and maybe this is because Joshua doesn't have the best hair for this sort of thing - some people started to troll him.
ESNARD: Oh, my goodness, he has a receding hairline. His product sucks. But what they didn't realize was that the main issue was obviously me as the model.
RAZ: So Joshua cast out for guys with the perfect hair to demo his product on YouTube. And those videos, they actually started to work. He started selling, like, a few dozen Cut Buddies a day. And then, when a popular DIY site posted one of the videos, it went viral.
ESNARD: I'll never forget it. I'm putting on my clothes, and my phone just starts going, ding, ding, ding, ding, ding, ding, ding, ding, buzz, buzz, buzz, buzz, buzz, like, vibrations, and notifications.
RAZ: Hundreds of orders started coming through the website. And it turns out, The Cut Buddy works on all different types of hair and appeals to a lot of different kinds of people.
ESNARD: It would be the college student who was cutting their own hair under a dorm. It would be the single mother or father who has to cut two children's hair and is trying to save some money. It would be the barber that's in training, that's - who's...
RAZ: Anyway, soon after that one video went viral, Joshua quit his day job. And he started selling The Cut Buddy full time. He's now hired two people. And since early last year, he says he's sold 60,000 Cut Buddies.
ESNARD: I'm mind-boggled big time. Every day I wake up, I'm like, damn, I can make my own hours. And I love what I do. Yes, I'm - I'm totally mind-boggled.
RAZ: Joshua Esnard is the founder of Cut Buddy. He lives in Fort Lauderdale, Fla. To find out more about Joshuah and The Cut Buddy, head to our Facebook page. Just search HOW I BUILT THIS on Facebook. And as always, we love to hear and share your stories. So please keep sending them to build.npr.org That's build - with a D - .npr.org.
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