Kendra Scott on Fashion, Family, and Philanthropy

You know, we talk about what does it mean to hit level 7 as an entrepreneur? This point where you have hit your number, this point where you're able to, you know, generate and create and really give back in a way that we would all call legacy. Right. This legacy creation. You know, what does that mean? And where I'm so excited about this next session is that Kendra Scott is definitely that person. I mean, she is someone who is an icon in this city and really all over the world. You're talking about somebody who in 2002, just a few months after giving birth to her son, which I've never done that myself, but I'm married to a woman who did it a few times and I've seen what's happened. Like that doesn't seem like necessarily the ideal time to go.

You know what?

I'm thinking about starting a business. I'm thinking about just starting a business. You know, love jewelry design. I'm thinking about starting my own brand. Starting seems like a great opportunity. Carved out a little spare bedroom and with a spare bedroom, $500 and a baby. Launched this business from scratch. 2002, we were talking like, yeah, so then we went, did a few $10,000 here one year and then it was a couple hundred thousand and then it was a couple million and then it was more and then it was more. Until most recently, company was valued over a billion dollars. A billion with a B. And what I love is now the focus, yes, on business. And we were talking, said, you know, love talking to entrepreneurs, but passion is really on giving back. So I don't know those of you, if you had a chance to go buy the pop up store over here, but a significant portion of that is also going to charity as well. So make sure that you do that. But this next session, I know you're going to learn a lot. I know you're going to be inspired because this person who's coming up here, yep, she's at a level that most of us could only dream of attaining, starting with $500, a spare bedroom and building a billion dollar company. I know for me is something I look at and go, okay, that sounds pretty cool. But what I know from the brief conversation that we had and what I know you're all going to discover is that she's very much one of us. She's also somebody who has dealt with all the same struggles that we've dealt with. Seriously contemplating firing herself on multiple occasions. All of these themes that we've talked about here, all of these feelings that you have felt you're going to hear echoed here again during this time. So pay attention, take notes, and be inspired. And please welcome back to the Scalable Impact stage, Kendra Scott and Roland Frazier.

Like a song we only like.

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First of all, y' all being here so brave and taking those steps to do something, to say, I want to learn. And when we look at this, like, I see all these faces out here. I'm a college dropout and I am a founder and owner of a billion dollar brand and continuing our education. Being a sponge, learning and wanting to learn from each other is so awesome and badass. So I applaud all of you because that's incredible.

It's really great.

Yeah. And they said I could say bad words because it's past five o'.

Clock.

You can.

So what are you. Is that okay?

Okay.

He's like, I think so.

Badass. That's not that badass is good.

No, that's okay.

What.

What are you most excited about right now? You got all kinds of things going on. You've done so many crazy, cool things.

Oh, my God. Well, first of all, you guys, I don't. I mean, you heard a little bit, but I started this business with my newborn and it was right after 9 11. So he was born on 11 11. Two months exactly after 9 11. So not only Was it like, oh, my gosh, I've been given this human being, my first son. So, you know, I'm a new mother. And as any of you out there are parents know when you have your first child and they're like, take it home with you, it's kind of like, where's the manual? Yeah, well, you're just, whoa. But, you know, here I am having this new baby and I really, in this uncertain time, I mean, I remember all of us thinking, what is this world gonna be like? I mean, we all can remember where we were on 911 and 9 12. I think about going into coffee shops and talking to people, and we all could share this similar moment in our lives. We had such unity. But what was crazy is coming out of that. There was also, like this incredible opportunity for hope, too. And it was really a hopeful time just seeing how people were connecting. And when I started this business and why I'm getting to this lower part, before I tell you what I'm excited about now is I need you to understand the context. And the context is I started this as a new mom. And being given that little baby, I knew that I wanted to be the best mom that I could be to this little brown eyed human being that they handed me. But I also had loved fashion and design since I was a little girl, sketching things my whole life. So if I could do what I loved, which was design, I felt I would be like, that would be the greatest thing in the world. And after losing my stepfather to brain cancer and my first business that I started failed. It was a hat company. I did headwear.

The hat box, right?

Yep. For men and women undergoing chemotherapy. He left me with this, you know, thought of Kendra. We have one life and it is short and it is fast. And while we're here, you need to use the gifts you were given to do something good. And that when you give, you will receive so much more. But when you're broke, it's hard to think about that. Right. But at the same time, I thought, okay, what can I do that allow me to be a mom, to be in fashion and design and to be able to do good? And it didn't have to be here. His theory was every small act of kindness makes a difference. And he died when he was 47 years old. I'm sitting here on this stage and I am 47 years old. Every single morning I wake up and I think, I have another day. I have another day to do something good. And what that means is for me, I'm Able to create a company that has 96% women. I love men, don't get me wrong. They just don't. You know, they're scared of us. I mean, there's a lot of women. That's a lot of girl power, let me tell you. But we have over 3,000 employees, 96% women, so many of them mothers and the guys, fathers, where we've been able to create a company that allows them to be parents, to have a balanced life, to have a career that they're excited about. And we have a mission of doing good as a company. And. And so to take those values that I had personally and to see how we have, over almost 20 years, done that with our Kendra Scott family, but how we've also done that with our customers. So our customers share our core values. They have a heart that beats for their community. They're caring, they're optimistic, they're fun. If you walk into a Kendra Scott store or you see a person wearing Kendra Scott, usually, I can tell you they're probably great.

Okay?

They're probably amazing, great people. And for me, what's been so cool is that idea of something that seems so out of reach. We've been able to create and now share and become a beacon for other brands and other companies that you can put your team first, you can put your community first, and you can still have a fiscally successful company. And that's a pretty, pretty amazing and exciting thing. And teaching that now. So I started the women's entrepreneur and leadership Institute at the University of Texas Hook em. And we are really opening this up to all majors. Because for me, when I started, it was, Kendra, you're an artist. You can't be a CEO. You can't run a business. Oh, really? I love it when somebody tells me I can't do something. But I just needed the tools. And so what you guys are getting here is those tools, right? I needed the tool belt, and I needed the bridge between my left brain and my right brain. But we all have that ability. And if you're creative, you even have, I think, superpower ability because you can think outside of the box. So once you've been given those tools, you can learn about what it looks like to be able to create. Think about where you want to go, and then create the roadmap which you guys have been doing to get. Get there. And so at the women's Institute, we opened it up to all majors because I said you shouldn't have to get into the McCombs Business School to learn about business and entrepreneurship. That's just not right. And if you are in the school of education, why can't you learn about entrepreneurship and leadership skills? Why couldn't you be the superintendent of school someday? Why couldn't you do those things? So we situated an entrepreneurship skill school in the fine arts building. So that's where we're sitting.

That's awesome.

So that's what I'm excited about.

That's great.

That's what I'm excited about. Yeah.

So you've. We were talking.

That's a long winded answer to get there. But we got there.

We.

We talk about seven. Seven levels of scale. And you've kind of gone through all of those and recently had some really cool things. I'd like to. To kind of walk through maybe the entrepreneurial journey that you've had. You started out with the hatbox, and then I think the jewelry business was the next one after that, right?

Kendra Scott job in between. Because kids, it doesn't just go from like, oh, a business fails, and then you just get to start another business that's not, like, real. I had to pay bills and my rent, and I had a car payment, and I didn't want to move back in with my mother, you know, love her, but it was a lot, you know, So I had to get a job in between there. And then started Kendra Scott after that, and very quietly, because I didn't want anyone to know I was starting another business after I failed at the hatbox, because I figured they'd all be like, oh, here she goes again. She already screwed up that one business. Good luck to her. So I didn't come out with like, hey, everyone, I'm starting Kendra Scott Jewelry. No, it was like, don't tell anybody.

You do have that good radio announcer voice, though. You should do that.

But I didn't. I was just very, like, quiet about it. And, like, I was terrified that people would laugh at me because I had this other failure.

How did you work through that fear? And how do you work through fear in any of the new things that you're doing? Because you got a lot of stuff going on.

I think fear, first of all, fear is real. And it is okay to be scared. I'm scared. I mean, y', all, I wake up every morning and I'm running a business bigger than it was the night before. I am walking in unchartered territory every time I step my feet off the bed in the morning. And it's a new world, right? And so the way that I kind of overcome it is one I'm not afraid to ask for help. I think that can be the biggest sign of strength. So many times we say to ourselves, oh, if I try to act vulnerable or if I say I'm not sure about something, people are going to lose their. Like, they're not going to think I'm smart enough or I can figure. No, it's the opposite. So mentors are huge for me. If I'm coming with something that I'm scared about, I talk to the people around me that I really trust and respect. And if it's a business thing, I've got some amazing business mentors. And I'll pick up the phone and I'll say, hey, I'm grappling with this right now. What are your thoughts? What do you think? And I try to again, be that spirit sponge and try to get insight. And then at the end of the day, I still have to figure out how to overcome that obstacle or that scary thing that we're setting in front of me. But then I also know I don't have to do it alone. And so for me, it was building the most amazing team ever. And Kendra Scott is this brand that so happens to also be my name. But the brand is the DNA of all of the people that work at my company. It is all of our DNA together that has created this amazing brand that I get the honor of being able to hold that name. But it's this team, and it's when you go through these scary moments when you're not alone. Because I was alone in it for a long time and I only had a few employees. And I think I was afraid if I told them I was scared that they would get scared. And what I finally started to learn is when I brought them into the discussion of, you guys, we've got this problem. Our biggest account is not ordering from us right now or whatever it might have been. Let's put our heads together, let's roll up our sleeves. Let's think of some creative ways that we could solve this problem together. It was amazing when I was able to have the confidence to do that with my team. One, how engaged, incredible they were and how excited they were to be able to overcome this. And it created this culture within our organization that is a roll up your sleeves, entrepreneurial mindset all the time. We hire people like that. And I think that's where it starts to that fear when you can, and I hate to say it, share it with others, but it really does make a difference. And then, yeah, and asking for help. I mean, this is not easy. You're not picking, like, the easy route. Okay, this is definitely not the easy route. It is so fun when it's fun and it is really scary when it's scary, terrifying, gut wrenching. Wake you up in the middle of the night with sweats, feel like you might throw up at any moment. Scary. But when you can get through and you know this entrepreneurship and running a business is peaks and valleys. Just like life. I mean, just like relationships, just like life. It's peaks and valleys, peaks and valleys. And when you're in those valleys, you sometimes think, oh, God, I mean, I've sat there and thought, this is it. I'm gonna lose my business. I'm gonna lose my business. Six years I've been running this business. I'm gonna lose this business. And trying to figure out, okay, how am I going to get out of this valley? This. Well, really, it was like more like the dark hole of death, you know, Valley just sounds cuter. It wasn't cute. There were no, like, valley flowers or anything hanging out in there. It was really scary. And how we would get ourselves out of that. But what's so cool is when you start to see that you can get yourself out of the hole of death. And you walk up and it starts to see, like a little bit of cloud breaking and there's sun shining. And you're like, okay, wait one step and you're looking behind, you're like, all right, it's a little further away. I'm not gonna. And then you get a little further and a little further and you've got this team with you that's doing it. It's so cool. And when you get back and then you're on a peak and you remember being in the hole of death, it's even more exciting because then you know, okay, we did it. We overcame the hole of death together. And the bond you have is so amazing. And you're like, okay. And you know, though, every good thing starts to have its issue. And it's not gonna be people, peak, peak, peak, peak, peak, peak, peak, peak, peak forever. It's gonna be like this. And hopefully it's not as much of that. It's more like this. I like that.

Not so bullying.

2020 was kind of like that scary. But then, hey, here we are.

So let's use 2020 as an example. So would you say that was a hole of death you were looking at?

No, it wasn't a hole. I mean, it was a global pandemic. It's not ideal. It's not ideal to have that happen in a retail business where you have 120 stores. It's like, oh, my gosh, we have 120 brick and mortar stores. All I'm hearing on every day through, you know, business of fashion, cnn, it's like brick and mortar has seen its last day. You know, like, everything will close every. You know, and I'm like, I gotta not watch the news anymore. Cause this is not okay. But March 15th, 14th, 15th, I don't think I slept at all on the phone with my board. I'm chairwoman of the board. And really trying to understand what we were going to do. And it really came down to our core values. And I think. I don't know how much you guys have talked about core values here, but our core values are family fashion. Because that's the business we're in. And philanthropy is giving back. And it really is how we make every single decision in our company is based on our core values. It's how we hire people. It's how we fire people. It's how we hire vendors. They have to match our core values. So when this pandemic happened, it went back to the whiteboard. I mean, I wish I had a piece of paper, but it was like, 2020 plan was, like, ripped in half. And we were like, okay, let's start over. That's not gonna work. Everything we had thought we were going to do in 2020, we were changing basically overnight, really. And, you know, it was okay. How do we stay true to our core values? Well, right now, we're in a global pandemic, and we have all these Kendra Gives Back events. So we host about 20,000 Kendra gives back events per year for women's and children's charities across the United States. And these very small organizations really depend on these fundraisers that we host to help them throughout their year. And so one I was like, how are we going to continue to help them? So. So we did Kendra Gives Back events virtually. How are we going to keep our store employees employed? How am I gonna take care of my Kendra Scott family? It was family first, and then it was really thinking about giving back to our community. But in that, we created this connection with our customer during this really scary time where we were just sending them letters, calling our best customers, checking on them, seeing how they're doing if they need anything. And we were sending our teams out with. We were making masks, we were sending them out to folks. We were bringing people things to their homes. It Was a really amazing time for a company. And it was again, that ability to go back to that small Being a small business again, that feeling of solving problems quickly, not having to sit here and over strategize. Oh, God. The worst thing about becoming a big company is everybody wants to overthink things. It's like, well, you know, let's figure this out 20 different ways to Sunday. And I'm like, y', all, you gotta paint the train while it's moving. We don't have time.

I like it.

Right?

Yeah.

So during COVID we painted the train while it was moving. We couldn't stop the train, even though the world felt like it had stopped.

What were some of the lessons that now knowing what you did to repaint the train and surviving that. Are there takeaways that you have that going forward you think could insulate you more from challenges like that that are likely to come?

You know, I think you can never anticipate something like 2020. I mean, you say, well, would it be quite like that? I hope it's not quite like that. But I don't know if you ever can completely insulate yourself. But what I think you need to do is realize your customer and really looking at. And I always think about, customer is my boss. I don't run this company. My customer runs my company. And so if I am not surprising and delighting her every single day, I am failing in my job and never being complacent. And so learning, constantly learning. We are going to make mistakes. We are not perfect. Nobody is. And our company doesn't always do the right thing. The worst thing we could do is make a mistake and just be like, oh, that sucked, and not learn from it. Right? But when we can sit there and go, okay, we need to learn from this. So an example for Covid was is I kept saying, we've got lines on our stores at Christmas time. I don't know if any of you have been in some of our Texas stores, But it kind of looks like an apple release at certain times of the year. And we have stanchions. It's like one oak in Vegas. I'm not kidding, you guys. Like, we're passing out water, hot cocoa. It is a thing. And I was like, this is terrible. I don't want to stand in a line. I don't want my customers. Customers have to stand in a line. We need to do curbside pickup. We need to be able to make things easy for the mom who's got three kids in her car so she can Order online and we can have a little bag and run it out to her car. We need to go and think about where she's at and how we can service her better. And that's what Covid really helped us have. Everyone had to realize, like, oh, wait, that's a pretty good idea. Maybe we should be thinking about that. So we right away implemented what we were going to in fourth quarter order. We brought that up within 30 days and had buy online pick up in store curbside pickup. We started doing same day delivery. So we partnered with Tiff's Treats and started doing delivery of our jewelry to customers to their doorstep. So if they weren't comfortable even getting in their cars and doing curbside, we would be able to still be able to bring product to them for birthdays or deliver it to their niece or nephew or their granddaughter. And so we really started to kind of understand, like, what is our customer need virtual try on? She couldn't go into the store. So we had to get our virtual try on expedited so that she could go online and pick an earring and put her little face and see what she looked like and all virtual styling. We started employing our employees to do FaceTime calls with our customers, to walk them through new collections and walk them through the store to be able to see what they wanted and how they wanted to shop. All of those things that we implemented because of COVID is such a enormous part of our business now. So it has set us up to be more successful, which is crazy to think about. But sometimes you have to have these shake up the snow globe moments. That was a shake up the snow globe moment. And it forces you to look at your business different because we can all sometimes get that laser kind of tunnel vision of this is how it's supposed to be. This is what we're doing. This is how we're getting here. This was our 2020 plan. Darn it. I can't let a pandemic ruin that. I'm gonna keep on how we're keeping on. If we would have done that, I may not be sitting here today. So you gotta be agile. You gotta pivot, you gotta be able to go. Sometimes the best laid plans don't always work out, and that's okay. But if you don't, if you're not willing to kind of pivot from it, you can find yourself sitting in that dark hole that we were just talking about. You don't want that.

The dark hole of death.

The dark hole of death, yes. Yeah, that one. Yeah. Dhod Dhod, we put that in the new. Yeah, yeah.

So along the way, you've run the whole gamut from starting very, very small to growing to very, very large. And along the way, are there key points at, like, a lot of the times you've maintained control of your company, but there seems like there's people along the way that to grow, they want part of your company to get that bank loan. They want warrants or stock options, bring in that CEO that's got all the experience. They want something, and they chip away at the company. How did you manage to get the growth and the advice and the capital capital that you needed while maintaining that control?

Well, first of all, nobody would invest in me. I remember I was like, God, I just need somebody to help me. I ended up having two sons, and they were three and one, and I went through a divorce. So my business was three years old. And now I was a single mother trying to figure out how to run this business and have no. I had no investors, so I was doing it on lines of credit. I was able to get a line of credit through my purchase orders through big companies like Nordstrom or some of those guys. But I had a huge boutique business, and they would not give me any lines of credit on my boutique business. And then I had to do it on all of my. What I had as far as inventory went. So they took a percentage of that. And I really lived and died on that line of credit. And then credit card debt. I signed everything I owned up for collateral. Everything. I mean, probably I might have even said, you could have a kid if things didn't work out. I don't know. I mean, I was pretty and depending.

On the kid and the time.

Yeah, it was a kid, right? They, like, it was berries. But so I'm, you know, I'm single mom. I had to have my sister move in with me because I couldn't pay. I mean, there was a point where I was like, I have to pay for my team. And my team was tiny, but I couldn't lose anybody. Like, I couldn't lose them. So I couldn't pay myself. But being a single mother, I mean, I'm not like, you know, I'm not a Rockefeller over here. You know, my dad lives in Kenosha, Wisconsin. My mom were farmers and coal miners. Like, there was no support there. So my sister moved in and she had this really great job at Dell. Thank God for Dell Computer on so many levels. But, you know, she was able to help me pay my rent. And I mean, that Was one of those times where you, like, have to. To sit there too and be like, mom, can you help me watch the kids? I can't hire a babysitter while I have to go sell my product. I took my son Cade with me to New York City, and I had a friend in New York who would watch him while I would sell at the Javits center to my wholesale accounts. I mean, it was. I look back on it now and sometimes I think, I don't know how we actually did it, but it also was like looking at them and looking at their little faces, I was like, failure is not an option. I can not let this business fail, too. I had to, really. I was just like, we are going to figure this out. But there were so many times when I really did think I was going to lose it. And the capital part was a struggle. I didn't get any investment capital until 10 years of running my business. 10. You know, I remember begging, going into these VC firms and all these different places here in Austin. And it was tech, tech, tech, tech, tech, tech, tech. And I'm walking in and they're like, you're doing what? You're selling jewelry? I mean, not that I got laughed out of the room. There was definitely some under, like, yeah, she thinks we're going to invest in her kind of thing. I love it when I see those guys now and they're like, damn it, Kendra, why didn't we invest in your company? I'm like, it's okay. It all worked out. But they would say, I love it. But they would say, you know, people would say, well, Kendra, you just need to find yourself an angel. Well, no shit, Sherlock. Yeah. Where do these angels hang out? I would love an angel. You know, I mean, that sounds great. Do they just show up at your doorstep? You know, this was not a time when we had access either. The World Wide Web was just kind of. It was quiet. It was, you know, 2002, 2004. It was a different way. Different than it is today as far as just knowing about other funds out there.

Probably a blessing, though, because so many of those take so much of your company, right?

I mean, blessing in that I retained a lot of equity. Negative in that. I mean, I might have had a couple ulcers or, you know, things like that. But it was. I mean, there was a time I sold my car and, you know, to pay a vendor for stones and jewelry and literally would just get rides from one of my employees into the office until I could have enough money to get a New car. I mean, there were so many of those moments where that's not necessarily the ideal way to do business, but I think there's a balance. So after 10 years I had all of these advisors because I didn't have a typical board. And I felt like after going through some of the classes like you're going through and reading every business book I could get my hands on, from the Great Game of Business to Tipping Point to you name it, I knew that it would be important to have the cadence of really going to a board on a quarterly basis and having that feedback of them looking at my numbers, looking at what I'm doing and getting some criticism, as much as I wanted to hear what I was doing wrong or what I could be doing better. So I set up an advisory board early on and I gave them an earned in very small equity position over a four, I think it was like four year period. And I only had three of them, three advisors. But they were very different in what they were great at. And these are people that I really admired. One of the advisors wouldn't take the earned an equity position. He just loved me and loved what we were doing. Just great friend and super philanthropic. So I think he thought of me kind of like a charity case. But as we started going through, through this, at one point he said, I want to invest in your company. So he was my first investor. And at the time I got a 20 million valuation from him, which I think was kind of generous. And he got a 5% stake in my company. So I own 95%. He owned 5 the next year. Just having, and I know it sounds great, it's not the money because it wasn't that big of a check necessarily. It was for me, one. I could breathe for a second. I had the first time in my life I had the ability to not look at my checkbook and go, I had a $10,000 float. I knew exactly the float. I knew how money came in, what I could write. I mean, I was literally knowing I would call my guy who I rented my space from and I'd be like, look, Nordstrom check is coming. I put the check for my rent on your desk. Just maybe wait just a couple days. And he'd be like, kendra, just tell me. When he was an entrepreneur, he owned Thundercloud Subs here in town, Mike. And he was so supportive. Like you think about people like that. That's how I was able to do it is to be really honest and open. But also I was hustling all the time.

It seems like luck plays a lot in our ability to survive through these things too. Would you say that's true?

No.

No.

You don't think luck has anything to do with it?

I don't believe in luck, no. I think that there are opportunities that you can get presented to you. You can pay attention to moments of impact, people you meet, things that happen. But if you don't seize those opportunities, that's missed opportunity. But those opportunities, when you see them, sometimes people say, well, that was lucky. No, you had to take the initiative to make that opportunity happen. So if there is an opportunity, I picked up the phone, I started calling people I admired and respected. They did not fall on my doorstep saying, oh, Kendra, we want to invest in you and mentor you. No, I had to call them and beg them for their time. These are important people. But I was like, please, I need your insight and I'm not going to take a lot of your time, but it would mean the world to me if you would consider. And I know my company's not really worth anything today, but I believe it's going to be. And I believe it'll especially be that way if I have some of your insight and knowledge. And it was amazing how that changed things, right? Because when you bring in that, it's a very different. It's a different day. And I finally wasn't feeling so alone because it can be very, very lonely at the top when you're having to make every decision and the balance of open and close is there every day on your shoulders. So I think having a great advisors makes a big difference.

What were the three, you said there were three that you brought in. What were the different skill sets or personalities or why did you pick those three and how did they each help?

So one was she. Well, one, she was a woman and a badass woman. And she was Gap's CEO for North America for many years. And so she really talk about an iconic brand, an amazing, you know, built all of these brick and mortar. She really was there with Gap. She started the Disney Store concept for Gap, went to Disney, sorry. She moved from Gap to Disney, went and did Disney Store after that. So her knowledge base of retail was incredible and she was one of the kindest, nicest humans. So that was my biggest thing is I didn't want to just have advisors that had a gold plated resume. I wanted people that I looked at and I respected and thought they share my heart, not just have all of this brilliant experience because when you're in the weeds or if you you want somebody that shares your heart. That's how I still hire. You can have the most beautiful resume in the world, but if you're B word, you're the B word. You don't work at Kendra Scott. It doesn't matter how much experience you have, you're not going to work for me. So that was my biggest thing, is I wanted people that I really liked and admired and loved being around them. I mean, they're just great people. So she was. She was one of. Cynthia was one of those people and really just became kind of this like, aunt to me and really wanted to see other women succeed in business. So for her, it was something she was really excited to be. Be part of and really helped me think about the retail side of my business before I did retail. Really starting to kind of launch into retail. She was really there by my side when I was considering that. Then I had another investor who was really tech savvy. He had invested and started up a ton of tech companies. And why that was important to me was I created a customization tool online. And I really. This is before Nike ID and before any of those guys. We launched it in 2009.

Is that the color bar?

Color bar? The color bar. And it was where you could pick your earring and then you could put the stones in online and then we would make it here in Austin and ship it to your door the next day. And so I really was interested in innovation of how you can take. And being in Austin, I felt like we have such a handle on innovation from the tech side. And here I am in fashion. I've got access to. To all of these really smart, amazing people. How can we make our experience both in stores and online so much better and cutting edge? And so brought in a person that really thought like that. And then the last one was Steve Hicks, who ended up being my first investor. And he had started up many companies, sold them, went public with two, but really was one of the most unbelievable philanthropists in giving huge beings and talk about legacy. He was my dream level seven. He was everything that I hoped that someday I could be a man of that. A person of that caliber who gave so much and did it with such an open heart and was creating such an amazing world from what he was able to build earlier in his career. So that's why I chose those three.

That's really great. And that was supportive. Advisors.

Board of advisors.

What about board of directors?

Well, that's it. I mean, I didn't have any investors, so I had an Advisory board. And then there was me and you're the director primary and I was the director. So I mean that was it until I brought on Steve Hicks and he became my first real board of directors. Now as I brought in other team members, so I brought in a COO and again cut my salary down team to basically nothing so I could hire this guy. And I remember we had a controller at the time. We didn't have like a cfo. We couldn't afford any of that. There was no C anybody. And my controller was like, kendra, you cannot afford this guy. And I said, we can't not afford him. We have to have this guy if we're going to go anywhere. And I said, take my salary down to X. And at that point point, you know, that's when that investment really helped me because I was like, okay, I can take. And it wasn't, again, it wasn't life changing money here. But for me, going from never not being in debt to being able to feel like I could at least like pay for my family and take care of some of our needs so I could get this guy in our team. And then together, you know, he came from Starbucks. He was opening a store a day for a while. Can you imagine? He would laugh. I'd be like, we're opening 10 stores this year. And I'd be like sweating. And he's like, oh God, please. Boring. 10 stores. I'm freaking out. He was opening a store a day. I still can't even get my head around it. But it was such a great partnership because everything I was and I really had gone through, the strength, weakness, exercise. Do you ever read the book by Marcus Buckingham? Now discover your strengths.

I haven't. Not a long time.

Great book. But basically it went through. Write down everything you love. He's British. Love and loathe. I love it. And he's like a darling, by the way, so you should watch him on YouTube too. And love and loathe. And you write down all the things I love doing. And what you love doing doesn't mean necessarily even what you think you're good at doing. What do you love to do? And I loved our customers. I loved engaging with their customer. I love the design, I love the marketing. I love the creation of like what the experience would be. I hated dealing with vendors. I couldn't stand negotiating manufacturing contracts. I mean, there were things that I would go through loathing, like talking to Fish and Wildlife about our license. Not really one of my favorite things to do on a daily, you know, And I started going through and I said, I have got to hire a team that loves the things I loathe. And they are going to be amazing and fantastic and great at it. And then I can focus on my strengths, I can focus on the things I love. And the minute I brought in a number two that loved the things I loathed and he loathed the things I loved, we were this dynamic team because I trusted in him and he trusted in me. And the more I could focus on what I was great with, the customer experience elevated, the design of the product elevated because I wasn't spending my time doing all this other stuff that was taking and sucking the life out of me every day. And he was doing the things that he was super jazzed about, creating systems and post it note work like you guys did earlier. Loved it. I think his whole office was covered in post it notes at one point. And so that was really. And seeing that work, it really realized very quickly that's how you build a winning team.

How do you find those people? Where do they come from?

So that's a great question. First of all, I told everybody I knew that would listen what my dream COO looked like. I had it down to personality type, how we would work together. And it wasn't as much as I'd like him to have five to eight, eight years of experience in a retail brand, the end of the day, you get a dynamic team. It doesn't matter if you're selling a widget or you're selling jewelry. The fundamentals of business are the same. So you want a winner, you want somebody that wants to win. You want somebody who has passion, who has drive and who gets excited about this age and stage of a business. Here's a man who came from Starbucks, one of the biggest companies in the world. He was so pumped and excited in this final place of his life, in his career. Not life, career. He's living great. I didn't kill him, okay? I could have. He called me the blonde tornado. That's why I turned my hair brunette. The stage is that he wanted that again and he wanted to be part of something. And so for him it was also, look, I know you're getting an offer from Whole Foods right now. And he was big offer. I can't pay you that. I can't, but I can give you an earned an equity position. And I gave him a percentage over a four year period because I wanted him to vest in and be excited to be there. And I knew that if he really believed and really wanted to be part of this team. He wasn't going to care as much about the big, big paycheck as he was about having skin in the game. And if he really believed in what we were doing, the skin in the game was going to pay off. His equity position turned into $40 million.

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So his Right. Can you imagine? But he saw something too, I think, in what we were doing that really allowed him to be able to say, like, I want to do this. And he was in a financial place in his life life that he wasn't like me. And he came in six months in and this is the best. He's looking at the books. He's like, why are we paying Kendra $36,000 a year? And then they had. We had to tell him that I basically had to give him my salary so that he could get paid. He's like, I think we could give you a pay increase. I was like, okay, that'd be great. Yeah, that'd be great. Yeah.

So now you, when we were standing over there talking, you said you have bigger, bigger plans and you've recently stepped away from the CEO position. Right. To be the chairwoman. What are those bigger plans? And how does leaving the CEO position fit in with that?

So I think for me, I've been CEO for almost 20 years and love every minute of it. But I had really thought about succession planning and what that looks like. And it doesn't mean just you get hit by a bus, Kendra. And then what happens? It's more about what that's going to look like for our company. And as I started to build the team, which is crazy because we started with three of us, seven of us. There was seven for a long time, then there was 13 for a while now, thinking we have 3,000 employees. But as we started to build, you start to see these stars shine and you start to see, wow, we've got some really un, unbelievable people on this team. And again, after 20 years, my strengths now for the company have changed from they did when I was starting out of my bedroom and when we've gone through these different growth stages. So the biggest impact that I can have on the company today is to be out there and really focus on our core pillars. I spend so much time in stores, I am still head of customer experience that I live and die for her. I'm on customer service calls. You may get me if you call our customer service at some point. I love to be on the calls. I love to be in the stores. I want to learn so that I can continue to make this brand better every day. The philanthropy pillar is huge for me. Like, this is my opportunity now to impact other people's lives. The fact that only 70% of venture capital is still going to women founded businesses is absolutely insane. And so my mission is that I can get more women entrepreneurs out there, get them funded and help them be successful with their businesses. So that's been exciting.

And is there new expansion that you see for Kendra Scott in terms of.

Oh, I mean, I feel like when we were talking about the brand, I feel like it's kind of a preteen lady right now. Like we are in this awkward teenage phase of our brand. Which sounds crazy, but if you think about Ralph Lauren, Ralph Lauren did men's ties for 25 years, basically before he branched into other categories. And you think about that, you think that sounds crazy. Coco Chanel, she did hats, she was a milliner. She's a global brand now. But it took time. And I think the best brands, this doesn't happen overnight. So jewelry has been my core. Right. But I do feel like we have the opportunity to expand. But I want to do it thoughtfully. I don't want to just slap my name on a bunch of products like a lot of brands do. I want to think about where's the white space? Where is opportunity out there? Where are things that my customers need and desire that they can't find? And if I can give them something that they can't find, I don't want to just give them another handbag line with my, my name on it. It's got to be something disruptive in any category that we're going to go into. And that excites me. I mean, that gets me up in the middle of the night thinking about what we can do. We just launched a men's line called Scott Brothers with my son. So I have three little boy, not little, 20, 17 and 8. And we launched a line with them that's men's line. Really cool bracelets with a give back computer component. It did more in its launch month than I did in my third year of business. It's crazy. I'm like, boys, this doesn't happen, okay? I'm just letting you know. And this is still Mama's business. So, you know, y' all are in college. You know, I got a lot of bills to pay for you kids, you.

Know, how are you bringing them into the business?

Oh, my God. It's been. Well, they've been part of it since day one. I mean, the boys, they've gone. I mean, I had their pack and play in my office with me when they were babies. We would pass around the kids. You know, Nordstrom would call and I'd have like, Beck, you know, as a baby, I'd be like, so what? Take him quick. I'm on the phone with the bar. I'd be like, hey, yeah, no, great. Oh, that's not a baby. It's weird. I don't know. We were, you know, focus groups. Yeah. It was like insanity, but it was how we were able to grow the business. So they've been. I mean, they would come after school, and this sounds like you're like, kendra, I don't know. But this is okay. You're their kids. They can do things for you. It's not considered child labor. So they had. We had these big boards, like, in our design studio, and the beads would get stuck in between the wooden floors. It was an old warehouse. And my game for them was like, let's see how many beads we can pick up. Won't that be so much fun? And so they've been part of it from day one. And I think they've, you know, they've seen. Seen the whole process. They've gone with me and seen even, like, how we're manufacturing, how we cut stones. They're in our design lab. They've been able to really watch all the steps from ideation to then what it takes to actually create the product to sourcing. And I have them working at different teams. They spend time in the warehouse. They're in there picking packing orders, cleaning, using the forklift. And they're not going to be CEOs of this company unless they earn it.

Yeah, that's great.

And, you know, they're going to have to work their way up just like anybody else would. But I don't know if they want to do that. You know, they want to do their own thing, which I think is great.

Yeah, that's great. What one thing would you Say that you'd like to leave this group of wonderful people with, before you had out today, that one thing you think might be helpful and maybe something they haven't heard before or read before, something that you've learned.

Oh, God. No pressure. So something completely unique, mind blowing that's.

Guaranteed to change their lives.

Guaranteed to change their lives. Okay.

Yes.

Just that, you know, look, I think the one thing I can tell you all is you have the opportunity to change the world. You really do. And we need to stop making business is a bad thing. Creating business is a great thing. Commerce is a great thing. Businesses create community. Businesses support community. So what you all are doing is needed. It is important. It is valued. But what I can say to all of you is if you lead with your heart, I promise you, you are going to have. And I know that sounds kind of whatever, but I am a CEO that has completely led with her heart. Now, that doesn't mean I'm not tough, doesn't mean that I can't get tough in a business negotiation, but I lead with my heart. And when you lead that way and you lead your team that way, it is amazing. The people that you bring around you, it's amazing how they lead. And the best thing you can do is let your team fly. Give them the tools to soar. And when they become leaders like you and they start teaching and mentoring and leading their teams, that's when you know that you've become a true success.

That's awesome.

Thank you.

Let's give her a hand. Thank you so much for coming.

Thank you. Thank you. Thank you, guys.

You didn't get to drink or something?

Can I take my shoes?

Absolutely.

Thank you, guys. Thank you.

You've been listening to Business Lunch with Roland Fraser. If you're enjoying the show, let us know by subscribing and leaving a review. And for more information, go to businesslunchpodcast.com thank you for listening.

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