How I Built This with Guy Raz - Steve Madden: Steve Madden (2018)

Episode Date: December 23, 2019

Steve Madden fell in love with the shoe business in the 1970's, when he sold platform shoes at a neighborhood store in Long Island, New York; that was in high school. About 15 years later, he struck out on his own, designing and selling shoes with a high-end look at affordable prices. As his business—and his ambitions—began to grow, he got involved in a securities fraud scheme and wound up serving two and-a-half years in prison. In 2005, he returned to Steve Madden, where he helped the company grow into a business valued at $3 billion. PLUS in our post-script "How You Built That," we check back with "kid-preneur" Gabrielle Goodwin and her mom Rozalynn who invented GaBBY Bows—double snap barrettes that don't slip out of your hair. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This podcast is brought to you by Squarespace. I talk to entrepreneurs all the time who are looking for a way to upgrade their digital footprint. Well, whether you're just starting out or you're scaling your business, Squarespace is the easiest way to build a great website that stands out. It's an all-in-one website platform that gives you everything you need to claim your domain, showcase your products, and get paid. Anyone can use Squarespace's cutting-edge design tools to build an online presence that truly reflects what makes your business special. There are templates, intuitive drag-and-drop editing, and even an AI-enhanced website builder. Then, Squarespace's built-in analytics tools help you make smarter business decisions. Review website traffic, learn where to focus engagement, and track revenue all in one place.

Looking to grow your business? Squarespace even offers fast, easy business financing through Squarespace capital. Go to Squarespace.com slash built for a free trial. And when you're ready to launch, use offer code built to save 10% off your first purchase of a website or domain. Loans issued by Celtic Bank and serviced by Stripe. All loans subject to credit approval. This show is in partnership with Airbnb. This past summer I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries,

visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the whole. home we booked on Airbnb. It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. Your place, with all of its personal touches and its amazing location, could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at

Airbnb.ca.ca. slash host. And just a quick heads up about today's show. If you stick around to the very end, you will hear a very special clip from the latest episode of Wow in the World, our kids' podcast. It's our first ever musical extravaganza. So if you want to know what I sound like when I sing, you will soon find out. So if you've seen the film The Wolf of Wall Street, you might remember there's a scene where a young shoe designer is in a boiler room full of these broish stock traders. And while he's pitching his company, the traders are just being ruthless. They're cracking mean jokes or even throwing things at him. And the guy in that scene, he's playing a real person, a shoe designer named Steve Madden.

We're about to hear the story of how Steve wound up in that room about the price he paid for dealing. with those traders, and how in spite of everything, he built his shoe company into a massively successful brand. It's an incredible story at first ran in July of 2018. Here you go. I'm not one of those entrepreneurs that thought he was going to be super successful. You know, I was just trying to survive. And I'm very negative and very pessimistic.

Unlike maybe some of the guys that you've done, you know, the shows. Yeah, totally. I'm sure they think that, you know, they're going to be. Nothing can get me down to me. Nothing can get me down. I think I'm going out of business every other day. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

I'm Guy Raz, and on today's show, how Steve Madden took high-end shoe designs, gave them low-end prices, and turned his name into a $3 billion shoe brand. So when I was a kid, if you wanted to wear brand names and you couldn't afford the prices, you'd go to Mervins or Marshalls or Ross, and you'd look for things called irregular items. Maybe it was a pair of guest jeans missing a zipper or in a spree shirt with one arm slightly longer than the other. And it was no big deal because you still got the brand and you got it at Marshall's prices. But then, starting in the early 1990s, brands like H&M and Zara started to go global and it meant that all of a sudden,

many more people had access to high fashion designs, but at a much lower price. And this is the way that Steve Madden not only tapped into, but in a lot of ways, pioneered, especially when it came to shoes. With Steve Madden's, you could all of a sudden buy a pair of black stilettos for 70 bucks that looked suspiciously like a $900 pair of Manolo Blonix, or a $60 pair of Lego-like heels that were a knockoff of $1,000 balancelagas. This was the genius of Steve Madden.

He managed to carve out a very sweet spot between Nine West and Christiane Lubiton. Now, this approach didn't come without consequences. The world of high fashion is an exclusive club, and Steve Madden is largely unwelcome. And one reason? Pedigree. Steve didn't apprentice at one of the great fashion houses. He didn't start out in Milan or Paris. In fact, Steve didn't even study design.

And he's also kind of brash and a bit of a loud enough. So brash, in fact, that he was willing to break the law to get ahead. Steve spent two and a half years in prison for financial crimes. It's an experience that completely changed his life, and we will get there. But long before that, Steve grew up in Long Island, New York. He was a scrappy, middle class, half Irish, half Jewish kid. I was sort of a leader type, charismatic, sort of always pretty similar to the way I am now. I was, you know, small and had a big mouth and a little ambitious and a little obnoxious probably.

The kind of kid who would get in trouble at school? Yeah, I always got in trouble. I was always in trouble. I had an attention deficit disorder. I didn't know it then. Yeah. Nobody knew that. Yeah.

Yeah, that was the 60s. And so they didn't really talk about it then. but I couldn't sit still. Yeah. And Yiddish would say, I had spilkis. Oh, right. Yeah. Yeah.

So school was not your forte. No. The only difference is that I was a reader. And I loved history. And I used to love to read about the moguls. You know, I was obsessed for summary. I was drawn to this thing about Louis B. Mayor and Samuel Goldwynn and these great entrepreneurs.

I mean, at a very young age, you know, it was like drawn to it. Yeah, why? Why do you think so? I don't know why. I mean, you know, I was, I guess it was the intersection of art and commerce, you know, was very interesting to me and still is. And those guys came from nothing, most of them. Yeah, and they were artists, but they were businessmen. So it was that kind of thing. Yeah. Your dad was in the textile business. Just out of curiosity, was your dad entrepreneurial? Did he have that kind of mind?

Yes, my dad was. You know, he grew up in the depression and, you know, he was very limited, filled with fear because he had seen so much poverty. So he sort of capped his upside. He was not a risk taker. He wasn't a great risk taker, but he was a smart man. He was a businessman. But he never really made the big bucks because he was very safe, which in a way I admire him

because he stayed in, I mean, it's easy to criticize people like that. You know, but he was, you know, always provided we weren't the, we were right in the middle. I mean, we weren't, you know, rich or anything, but we weren't the poorest. But it was like, you know, people got a 10-speed bike and they got Schwinn. I never got a Schwinn. And you wanted to be the kind of person who could buy that stuff one day? I did. I always did.

You know, I always wanted to fly first class, you know. Like I'd be riding in coach. You know, I was like, get me in the front of this. plane, you know, kind of thing. Had you, had you end up working at a shoe store at age 16? So I worked in a shoe store in high school, you know, the neighborhood sort of cool shoe store. They old, the guy that started the store, went to high school with my brother John.

So it was a job. It wasn't like, hey, I want to go work in shoes. It was just a job. It sort of fell into it. Yeah. But I fell in love with it right away. What did you fall in love with? So it's hard to explain.

But at that moment in the shoe business, you know, it was a very exciting time because. This is like the early to mid-70s. Yeah, like 74. Before I even started, platform shoes were very big for men. It was a really wild time in the shoe business, big platforms. And so it was just very interesting. You know, I was into it. I was into the creative sort of vibe of the whole thing.

What do you remember about working in that store? I remember working very hard, very motivated, even in a young age. And was that, I mean, when you were there, were you thinking, shoes, this is me, this is my calling? Or was it more like, I like selling stuff? I love selling stuff. He did, yeah. I do. But I also like creating stuff.

Yeah. And I like creating stuff to sell. It's always been sort of a core sort of philosophy of mine. I've never been like, oh, that's creative, but, you know, nobody wants to buy it. And then on the other hand, you know, just to sell without any kind of crazy. Creativity is boring to me, too. So you are working, so you're in the store. The stores, by the way, is called Toulouse.

Toulouse, yeah. And who was the guy who ran it? So, yeah, there was this great guy. His name was Lance Rubin. And I really, most of what I know, I got from this guy. You were 16 and he was in his 30. 27. Wow, he owned that store, 27.

Yeah, yeah. And the thing about this guy was so interesting because he was a young man who was successful and creative. And I never saw that. Usually the people that had that I thought of as business and were like my father. Yeah. You know, they rode the railroad and they wore those long coats with the hats, like Don Draper. Yeah. But anyway, Lance came along.

He was this artist and he designed these shoes. And also the wholesalers that sold him would be asking him for input on designs. Oh, wow. Yeah, because he was an up-and-comer, you know, like a young gun. So you are a high school student working at the shoe store, but you have plans. But you have plans to go to college, right? You were going to go to college. Yeah.

I went to the University of Miami in Florida. To study what? Just study golf and sun tents. How you did? You did well. I did good. Yeah. I did well.

Yeah. I mean, I loved learning, but it was, I was on my own and it was too much. How long did you last there? You know, it's a bit of a blur, but I think it was about 18 months. And it wasn't for you. It wasn't for me. My dad did me the biggest favor by pulling me out of school. When I say pulled me out of school, he refused to pay another 50 cents for me to fool around in college. So I went to work. You went back to Long Island? I went back to Long Island.

And back to a shoe store? I went to work in another shoe store. And shoes because you had experience doing that. You liked it. I had experience. So it was kind of a famous store in Long Island called Jildor, which most people know in New York. So you are, and there you're also a sales guy, just dealing with customers in the store? Yeah, I was just a sales guy on the floor. So you're out of your sort of a college dropout. You're working at this shoe store selling shoes. And I know, was your dad or your mom were they saying, Steve, what are you, you know, you're not going to work at a shoe store your whole life.

Do they say that at all? Do they kind of just leave you alone? There are people that said that to me. Guys, my own age, you know, making fun of me for working in a shoe store, for sure. You know, my father did not make fun of me. My father recognized that good, hard work was good. So you're working in the shoe store, and I guess at a certain point you go to the city, to New York City to work at another shoe store. Well, the guy that owned Toulouse, Lance, opened up a wholesale company called LJ Simone.

And he calls you out of the blue? Yes, pretty much, yeah. And he says... Come to work, come sell. So that's what I did. It's like a little wholesale company. Yeah. And what happened was I went to work there and we blew it up, man.

How did you blow it up? You know, I went to work for them and it was like, boom, we made a nice company out of it. And he was sourcing his shoes from shoe factories and then what? Yeah, he was designing the shoes and I was selling them. So he would design them, they would be made and then you would go from store to store. Yeah, I would sell them. And he taught me how to design shoes. How?

Yeah. Well, you know, there's certain tricks of the trade and knowing what people like and working with different constructions. And it was just the two of you at the beginning? There was a few guys involved, but, you know, I was one, I was at the beginning, and it got very successful. Who were you selling to? We'd sell to Macy's and department stores, and we sold to the bootleggar.

I don't know if anybody's from Washington. I don't know. Do anybody remember the bootleger? We sold all over the country. And was that that point where you start to think about maybe doing this for yourself, or did you think this is? great. I'm going to keep, I'm going to, this is, I'm going to just ride this train. You know, at some point I thought about doing it for myself. I was very happy there. You know, but at some point

I thought, you know, I could do this. Yeah. How much revenue were they doing? And when you were working for them, how much money were they making? I would say they were doing maybe 40 million a year. Wow. So it's big. Yeah, which is like big. You know, they were, yeah, we maybe something like that. Yeah. Yeah. And, and so what happened? Why did you leave? You know, I had taken it as far as I could take it. And I just didn't want to have a boss anymore. It was just time. It was ready for me to sort of chart my own course. And I was like 30. You were 30. So you were there for a long time. Yeah. I was like 31. And just to just to be clear, at this point, you are single. You're not married, no kids at that time. Right. Yes. Single. And you were probably paid pretty well by Lance. You

probably making a decent living. Yeah. I was. I made a lot of money with him, you know, relative to time. Yeah. And you weren't worried at all about risking, risking all that? I'm still worried about it. Okay, but then you had this really good salary. Yes, yes. I'm a worrier. I'm a worrier. So yes, but I just wanted to do it on my own. Yeah. This was also, I mean, it's kind of a wild time, right? I mean, you were, you were drinking heavily? You were. I was, uh, started using drugs and drinking. I was pretty much pretty inebriated most of me. my 20s. You know, they say when an alcoholic hits bottom, you know, they keep, there's another level of

bottom to go. So, yeah, it was pretty bad. How bad it again? Well, you know, I could tell you a lot of stories about it. But basically I couldn't stop and, you know, I was embarrassing myself and it was starting to affect my work and I had to stop or die. Was that bad? Yeah.

Drugs and drink. Yes. Everything. And I would work. You know, it went, I worked. I'd work, work, work, and then get stoned at night. You know, hammered. Because you were working so hard, it was just like the thing you did.

You just. Yeah. You thought you deserved it or you could justify it. But, oh, I was a mess. I was a mess. When did you, how did you get out of that? I had some friends, you know, that pointed me towards a place where I could get sober. Did you go to AA or did you go to a clinic?

I did. I went to AA. And it helped? It saved my life. Wow. Yeah. So I'm assuming it was after you recover that you started Steve Madden? Yeah. I was sober when I started Steve Madden. I mean, it was just a miracle.

You know, I got sober. I started this company. and my life completely changed. And when you started the company, did you have the cash to do it, to launch it? You know, I scraped together a little money, but basically no. Your own money. Yeah. And what was the idea?

What was the first idea? The idea was to basically do the same thing, design and sell your own shoes? It was exactly the same idea. And what was your first shoe? My first shoe was a clog. It was a backless clog. And who did you think would be your customer? That's a very good question.

At the time, you know, I would say it would be my contemporaries, you know, so I was like 32, you know. So 32-year-old woman. Yeah, I would say, because I didn't really think about it. I just wanted to make shoes, you know. It wasn't something that I thought. But what happened was I ended up making shoes for the Gen X customer. Those would be people around 40 today. Yeah.

Right after, I guess that's right after. the baby boomers. So they were they were teens at the point. And I discovered this market by accident. There was they were very ill served. You know, basically we stepped into that at Steve Madden. And how many did you make? So, you know, the way it was, you know, we made it, we made some shoes and, you know, we just got this fabulous reaction, but not from the people I thought I was going to get reaction from, which were my contemporaries, which was from the younger kids. They were like, the phone was ringing, like, where do you get that shoe and all that stuff? So we knew that something was going on here. So that's the track that we went on.

So when you decided to start Steve Madden, did you have an office or were you working out of your apartment? No, I worked in a shoe factory. So you found a factory in New York? In Brooklyn. And you worked with them. And then you made, I guess, some shoes. And then what did Did you go to your former contacts that you had from? Yeah, you know, Macy's and anybody that carried shoes I sold. And then I would go to the national shows and sell them all over the country. But in that first year, 1990, like, you would go to shoe stores and they would take ten pairs. You go with your sample case and you'd lay your shoes out and people would buy them.

And that was it. Huh. So what was happening was the market that I was selling to. Everybody in the shoe business walked away from it. The teenagers, you know, and stuff like that, the young. And it was a different generation, you know. And so they had their own thing, their own music, and their own style. And we just tapped into that whole thing.

And this was a market, explain this. It's a market at the time that was essentially abandoned by most shooters. You know, it seems like they just abandoned. I mean, Nine West. It was a company called Nine West that was dominating the industry. Of course, there was Nike and Rebuck. But nobody was making like funky little shoes. It was kind of a throwback to the 70s, you know, from that other era.

So I kind of brought that back. And I was just in the right place at the right time. Were they designed to be like cool but also affordable and expensive? I've always been sort of democratic with my shoes. Do you remember how much revenue you did in the first year? I probably did, I don't know, 500,000. So it's pretty good, pretty good first year. Yeah.

And you named it Steve Madden because it seemed like the obvious thing to do. It seemed like an easy name. Yeah. Yeah. Did you ever think about using like a French name or like a European sounding? You know, it's funny because it was originally the first couple of shoes were called Sulee. All right. It's very good.

Like the Yes, it's a French word for slipper. And so, you know, there was some dispute about that brand or maybe I just wanted to call it Steve Madden. I can't remember, but I switched it pretty quickly. There was one guy that called me up. How dare you? I bought Suleer.

I don't want Steve Madden. Who do you think you are? Yeah. I always, and a guy, he's still in the shoe business, that guy. And I always torture him when I see him. All right. So you've got this pretty good business going. And year one, what are you thinking?

Are you thinking, okay, I mean, did you have ambitions at that point already to make this into something huge? So where I'm at is I started the business. And, you know, I'm just not really, don't have much money. I'm just sort of working hand to mouth. And a friend of mine who I grew up with went to work for this brokerage firm. And they were raising money for small companies. This is Donnie Porosh. Danny Porish.

Yeah. And, you know, we're going to raise you. We're going to get you, we'll raise you 600 grand, and then we'll get you six million. He was working for a brokerage house. He worked. He was a senior guy. And he said to you, hey, you need to expand. He said, you're really talented.

I've known you my whole life. You know, what would you do if you got 600,000? Yeah. You know, 600,000 was like 600 million to me. Yeah. And then he said, well, not only will I get you 600 grand, but I'm going to get you $6 million when I take you public. And I laughed at him, you know, because I probably had $30,000 to my name. And so, of course, you're like, what, 33, 32?

Something like that, yeah. And you're thinking, you can raise me $600,000. Let's do it. That's right. So Danny helped you go public. Yeah, and he helped me go public. And his firm was called Strattonokemont. A very famous name for anybody who's seen Wolf of Wall Street.

Yeah. It was pretty good movie, actually. My name is Jordan Belford. The year I turned 26, I made $49 million, which really pissed me off because it was three shy of a million a week. I guess we should explain. Stratton-Okmont was this called a pump-and-dump firm. Yeah, they used to call them boiler rooms. Right, and they would basically sell, they would sell really crappy companies.

They would jack up, get the stock price jacked up. And then they would sell all the shares and make tons of money and people would lose their shares. And so they basically wanted to do this with Steve Madden, right? They wanted to do it with Steve Madden. I was the perfect guy for them. Because? Because, you know, I had a company and it was small and they could do their thing with it. You know, it fit the profile.

For those you who don't know me, my name's Steve Madden. Yeah, we know who you are. The name is on the box. So that scene with me talking in front of the, it was very accurate. We should explain the scene for people who haven't seen it. You go up in front of all these, these, like, traders in the spoiler. Yeah, I started talking about my shoes, thinking that they would actually be interested.

But they really weren't. I was just a piece of, it was just a piece of paper and a piece of meat that they could sell. Believe it or not, though, the Mary Lou is actually the same as the Mary Jane, but it's black leather. I want to just to digress for a moment because the people are listening to this budding entrepreneurs. I'm not one of those entrepreneurs that thought he was going to be super. super successful. You know, I was just trying to survive. And I'm very negative and very pessimistic. Unlike maybe some of the guys that you've done, you know, the shows. Yeah, totally. I'm sure they think that, you know, they're going to be. Nothing can get me down. Nothing can get me down. Me,

I think I'm going out of business every other day. So at that time, this is like 93, I guess, when. Yeah, 92, 93. So we went public. And how did the stock do? Well, they were totally manipulated. The stocks, they went up. And it was a pump, it was a classic pump and dump. Only Steve Madden was a real company. Yeah. So if you kept that stock on that day in 1993 and you own 10,000 shares, I haven't really done the math, but I think you would be worth millions and millions of dollars today. So the Stratton sale, the company goes public.

Stratton takes you public. Yeah. All of a sudden it raises how much money for you? I think the public offering was about $7 million. Wow. And we used it. I took it. And in very short period of time from a half a million bucks, I was doing $40 million a year or $50 million a year.

And what did that money? Within 36 months. Incredible. So, okay, you get all this cash from the initial public offering. Yeah. And at that point, I mean, did you ask any questions? I mean, these guys were, they were. totally breaking the law. I mean, at that point, they were artificially inflating your

stocks. Did you, like, were you suspicious at all about Danny and about Stratton? I mean, did you, did you think, hey, yo, what are these guys doing? I knew it was too good to be true. Yeah. I knew it. So, you know, I lied to myself and I told myself that it was a gray area, you know, the trading in these stocks and the flipping, they would sell me the stocks and I would sell them back to them. Just Steve Madden's stocks? No, all the other deals. So they brought you into other deals. They brought me into other deals.

So I lied to myself. You know, everybody's doing it, you know, like that. But I knew in my heart that it was illegal and it was wrong. Was a part of it thrilling that you were getting away with it? Well, making that much money is certainly thrilling for sure. But I wish that I hadn't done it. But, you know, more than wishing I hadn't done it, because that's sort of an empty thing to say.

I wish that I didn't feel compelled to do it. I wish that I didn't have that feeling that money was everything, because it's not, it's not everything. So I was greedy and foolish. Here's what I'm trying to figure out. You are this creative guy. You create shoes. You design shoes.

And you've got a really successful and growing business. And then on the side, you're doing these weird stock trades that are shady and ultimately illegal. Why would you even do that stuff on the side if you already had the creativity in the business? I know, because you just... you know, you just get caught up. You just get caught up in this thing. But at a certain point, it can't be about money. It has to be about fulfillment.

And weren't you fulfilled by just the creation of your shoes and seeing your shoes out in the world? Well, that's a very heavy question. How one gets fulfilled. I'm still grappling with that today, you know. So there are moments. where I'm very fulfilled, you know, and there are moments when I'm not. I was raised to think that money was everything, you know. Money is the center of the universe.

And if that's what your core belief is, you know, you'll do anything and you'll break the law. You know, money's like a drug, you know, and we got in trouble. In just a minute, has Steve Madden paid. and pays hard for his crimes. And eventually, how he comes back to the company he started to make it even bigger. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR. Hey, welcome back to How I Built This from NPR. So it's 2002, and after being implicated in a stock manipulation scheme, Steve Madden goes on trial.

He's convicted and sentenced to three and a half years in prison. So in the space of just a few years, he goes from being one of the most famous and successful shoe designers in America to sitting in a prison cell. What did you think? I mean, did you think I'm finished? My life is over. Yeah, pretty much. You know, I thought I thought my goose was cooked. But I did have the sense that I could get through it.

Were there people who knew you who didn't like you who were just feeling like he got his come up and so? Oh, sure. Yeah, I had made such a success in the shoe business. And I was a bit of a rebel. So now people are going, ah, see, that's what happens when you do that. In Florida? You were sent to a minimum security person? Yeah, what they call a camp.

And what was your living situation like there? We lived in a barracks. It was like a military barracks. You had your own room? I lived in a cube. I lived in a cube and with another guy or two. How did you pass the time? Well, read a lot, exercised a lot, and I taught some classes when I was there.

Did you, when you got there and you knew that you were going to be there for at least, you were there for 31 months, but 41, I think, was your sentence. 31 months. 31 months. Yeah. Did you ever get to press? Did you ever think, I don't know how I'm going to stay here for 31 months? Yeah, my first night, I looked up at the ceiling and I said, how the heck am I going to do this?

How am I going to get through this? Did it go by faster than you expected? It seemed like 31 years. Wow. But I quickly ascertained early on that whining and moaning would not do me any good and running around saying I was innocent would not do me any good. So I would try to get through this, try to better myself, if it sounds corny, but exercise and read and learn and, you know, that kind of thing. And so I did.

When you went to jail, Steve Madden was doing very well, right? When I went to jail, it was doing well. Were you worried about the brand, that the name, your name was the brand, that your... Well, I had great people working for me. I was really worried about surviving and getting through it. You personally or the company? Yeah, the prison. I was really more focused on getting through that experience.

Did you think that you would ever go back to Steve Madden? You're the company you built? Yeah. Yeah. So you had that horizon to look forward to. Do you think this is a really weird question, but I'm curious to hear your take on it. If you could trade the time you were in prison for just, you know, just, continuing on and not not having that experience. Would you, would you do it or do you think

that strangely enough that that time being incarcerated was important for your development as a person? Yeah, that's exactly right. I'm a very big believer in, you know, destiny and your path and all that corny stuff. I just believe it viscerally. So I'm so grateful for my life after prison I married a great girl. I had great kids. I don't know that I would have had children had I not gone to prison. So I regret some of my choices, you know, shortcuts that I took or, you know, thinking that money was the most important thing. I regret decisions like that.

But I don't regret a day in prison. It was an amazing experience. It was very painful. I mean, the only thing I can, I've tried to describe it to people. Your heart gets broke every day. Yeah. When you're in prison. Your heart breaks every day.

The living in prison part is not as terrible as one might think. But, you know, your heart's breaking because you're not with the people you love. That's the difficult part of prison. It sounds like you became a much more empathetic person when you were there and you saw people who were unlike you, who did. did not grow up like you, who came from different backgrounds, who had, who kind of ended up there because of circumstances. Well, particularly the African American experience really touched me. And young men dealing drugs, getting huge sentences, unfair drug laws that really were biased against black people. So that was, you know, to see problems in those communities, you know, to talk to young black man.

And it's a very complicated, you know, issue. Yeah. You know, I just think, I'll give you an example. This is a little thing. But, you know, when I grew up, I went to grade school in the 60s, right? We learned that Robert E. Lee was a kindly gentleman. He was called a hero. Like he left he defended his homeland of Virginia and that's just that's just

complete racism but we didn't realize it it's the subtle form of racism So that's the kind of thing that you know those kind of feelings or stuff that came up in prison You know that kind of thing I learned and read more about it Okay, so you I think you get out in in 2005 and and do you remember the day that that you were released? You know, that's such an interesting question because I don't really. Wow. It was a bit of a blur. I think of it now.

I thought about that day when I was away for so long what it was going to be like. And I can't remember it now. I really can't. My wife picked me up. And we should mention that while you were in prison, you fell in love. Yes. Yeah. And she picked me up.

She was an employee of a company. I know that we had sushi. And I just, I just can't remember. It was so, it was such a blur. And it was so much coming at me. You know, when you're locked up after 30 months, you know, everything is like amazing. Like a slice of pizza is like, oh my God. Like, this is the greatest thing ever.

So you, you're out. You're back, back in society. You got your freedom back. How long did it take you to adjust to having control over your own schedule, your day-to-day schedule? Well, there's a transition period. You go into a halfway house. But I was fortunate because I had a job that I came right back to work. So it was an amazing time.

And what was your position when you came back to your company? The same position I'm in today, which is the founder, which is the chief cheerleader. We have fabulous people running Steve Madden. I wasn't a great CEO. Why weren't you a great CEO? You know, I'm just, I'm not detail-oriented, and my talents are suited in other things, you know. Yeah.

When did you realize that you were not cut out to be a CEO? Well, when it's, the business is small, you can kind of be the CEO. Yeah, you know everybody. So you know everybody, you live and breathe it, and then you could be a CEO because you touch everything. But then a business, you know, once a business gets past a certain point, you know, it's impossible for someone like me to do that job.

But when you came back to the company in 2005, I think within four years, Steve Madden hit revenue of over half a billion dollars. So what happened in that time? Like, how did the company grow? What was the strategy that allowed you to grow so much? So our goal was to, you know, make great shoes. And, you know, I think that that kind of like won out. At the end of the day, the marketing wasn't super fantastic. It was just great shoes, great prices, great value. And, you know, I think that we just wore everybody out with that. You know, more people were giving us, they're open to buy.

And we opened more stores, you know, and our internet business exploded. But the big thing about Steve Madden, I have to say, and I've said this many times was the people it's the madness that I've hired so many great people. It starts with recognizing

my own limitations. I'm weak at that. So let me get somebody that can do that for me. And, you know, that's really the story. It's people. So you come back to the company

and you, by the way, you had plenty of money at that point. I mean, you could have sold your shares, walked away, very rich man, and just kind of, I don't know, done something else or focused on yourself.

Yeah. Why did you want to go back to the company? Well, actually, that's an eternal. I grapple with that all the time. So I love the idea of making shoes and the people want to buy, and I love seeing my shoes being worn. And I just love all of it. And I love making money. Let me be clear about that. I love it. I love the whole thing. thing. Because you don't need more of it. So what do you love about it?

Well, okay. That's a good, these are great questions. And I want to ask other entrepreneurs or other people. So how do you stay motivated? You know, let's say you've got, you know, a few dollars in the bank and you know that the rent is paid and all of that. And so what keeps you going? I once asked Haim Saban a similar question. You know who Heim Sabon is, right?

The media mogul. Yes. And, you know, he grew up like dirt poor in Alexandria, Egypt. He came from literally nothing, right? And I said, you know, what's the big deal? Because he was waiting to sell his company to Disney for, I don't know, more than a billion dollars. Yeah. And I said, you know, why not just take $500 million when they offered that to you?

He said, because it wasn't worth that. You know, I wanted to be a billionaire. And the point he made was that it wasn't about the actual dollar amount. Because for him it was a mark. It was like a mark. He could say, okay, I've reached this point, and then I can reach this point, and then it's this point. And it's like a demarcation point of success. Yeah, it's a heavy question.

It really is. But of course, it's a luxury that people with money have to be able to talk about this stuff. You know, there's somebody out there that will listen to this and, you know, they've got to pay their rent next Friday. And they'll say, well, listen to this idiot talking about it. You know, and I agree with them. But it does get lost. But it's about human motivation, right? Yeah, the money is the money.

But it's something I think about a great deal. Because I feel so good. If I have had a great day at work where I'm inspiring and inspired at the same time, it's such an amazing feeling. There's no amount of money that can replicate that. So I guess that's what I want, you know. Inspire and be inspired. What was the last shoe that you did? designed just at a curiosity.

The last shoe I designed was last week. Last week. It was a sneaker with studs. You designed a shoe last week? Oh, yeah. Yeah, we have a factory in Long Island City just outside the East River in Manhattan. But I'm always fiddling with shoes and thinking about shoes. Of course, I have a great team that does most of the work and I take most of the credit now.

Steve, you don't seem to be super obsessed over your own personal style. You're like, you've got the baseball cap thing go in. You're not wearing like designer runway outfits every day. No, no. I look like a garage mechanic some of this. I'm that runway. Yeah, I wear T-shirts and jeans. I'm very lucky.

I don't take that for granted. I'm blessed that I'm the ability to wear a nice clean, t-shirt every day. Did you ever feel like, I don't know, like some of these fashion folks kind of were snobby about you that they, I don't know, they didn't let you into their club because you weren't from, you know, Milan or didn't go to art school or because you wore baseball caps and and you were, you know, kind of kicking their butts with with these sort of shoes that were a fraction of price.

Yeah, there's a bit of that. There was a bit of that big time. It's not so much anymore. They used to bug you? Yeah, it bugged me. It bugged me a lot. Or I would go into a high-end department store, like a Barneys, let's say. And they wouldn't carry Steve Madden.

They wouldn't dare carry Steve Madden. But all the people working in the store wore Steve Madden. It would just drive me crazy. Yeah. Yeah. That happened so many times. And still to this day, there's a bit of that going on. It's frustrating.

But if you step away from the balcony, Like me looking at this, I would be like, who cares? You crushed them all like so big deal. Well, I once was upset because they put Puff Daddy in the CFDA. The CFTA is a club for what? CFDA. It's something for designers. FFDA, yeah.

Very, very posh. And? And they put Puffy in there. And I thought to myself, Puffy, he's not, what does he have to do? Are you in there? I'm not. You are, even to this day, they won't let you. And you cannot get into their club.

I'm not allowed in the building. And they would say, well, you copy, you know, Balenciaga or whatever it is. Yeah. Whatever the, you know, and we definitely are aware of expensive shoes that are out there, you know. But I mean, in some ways, a lot of these high-end designers could make the, you could make the case that, you know, the younger crowd will enter the market by buying Steve Madden shoes. And then there's this aspirational to buy Manolo Blonics. I always say it's a gateway drug of shoes, Steve Madden. They're not buying Lou.

and Lou Bittons and Manolo's without starting with Stephen Madden. So Manolo should give me tons of love for that. I reach much, many more people than him. Do you think that there will be a point where you are acknowledged by your peers? Is that important to you? I'm acknowledged by a lot of people, probably too much. You know, young men coming up really know and identify with the struggle and the grind and what I've done. So I think there's a different kind of respect going on.

Not what I had thought, but another kind of respect. And I feel it all the time. You know, I'm walking down the street and people shout out to me. And, you know, it's the real thing. How much of your success do you think is because of your skill and intelligence and hard work? And how much of it is because of luck? I think a lot of it is luck. I do.

I think my own sort of philosophy is that the window of opportunity opens for you. you several times in life, for one. And I think the intelligence comes from knowing when that window is open and, you know, being able to jump through that window. Because you could have all the talent in the world, but sometimes the window is just not open. Besides the, obviously, the stuff that landed you in prison, are there mistakes that you made early in the business that you would have done differently, knowing what you know now? Let me just say that, mistakes can be a very good thing. Yeah.

You know, so there were some mistakes that we made, but we did so many great things. And the thing about that is, if you start getting gun shy and start being afraid to make a mistake, you'll never have the brilliant ideas. You'll never have the big ideas. You know, if you just try to hit the safe ones, you know, then you're doomed, I feel like. Yeah. So you need to make mistakes. You need to make mistakes. You need to goof.

Because if you're not goofing a few times, it means you're not reaching. That's Steve Madden, founder of Steve Madden's shoes. And by the way, if you want to find out more about Steve's story, he's got a memoir coming out in a few months. It's called The Cobbler, How I Disrupted an Industry, fell from Grace, and came back stronger than ever. By the way, how many pairs of shoes do you actually own? I don't own a lot of shoes.

What's the fanciest brand you own? I own Johnson and Murphy. That's the fanciest brand you own? I do. I own Johnson and Murphy's shoes. They're the greatest. Yeah, my dad wore them. Hey, thanks for sticking around because it's time now for how you built that.

And today, we're checking back on a story that began about eight years ago in Columbia, South Carolina. Gabby Goodwin was about five at the time, and every day she went through the same routine. would put pigtails in my hair, and for every pigtail that was in my hair, there was plastic burrets on every single one of them. And usually, she had one of these plastic barrettes in ten of her pigtails. But me, when I was little, I would be running around at school, and my mom would pick me up, and my hair would be a complete mess. I would say, you know, Gabri, what happened to your bows? Like, what were you doing? That voice, of course, is Gabby's mom, Rosalind, who started to get really fed up that her daughter's brets kept coming out of her hair. And so one day, Rosalind actually went on Twitter to complain about it just to blow off some steam.

I didn't think anybody would respond. I got off Twitter, came back on probably in about an hour and had all of these responses from moms who felt the same way. All these moms saying, yes, our daughters, barrettes are falling out too. And we're wasting tons of money replacing them. But Rosalind wasn't necessarily looking to solve this problem. She was working full-time as a health care lobbyist, and she had no interest in starting a business. But a couple of weeks later, as I was styling Gabrielle's hair,

I mumbled under my breath, somebody needs to make a bow. And she jumped out of the seat and said, Mommy, are we going to make a bow? And so every single day after that, Gabby would ask Rosalind, When are my bow's coming? When are my bows coming? When are we going to make my bows? When are my bows coming? So Rosalind figured, okay, since Gabby is so into it, maybe we could just do this as a kind of science project.

We'll work on a design for a barrette and see if we can make just one, just one barrette. So first, they drew out a design with two faces, so you could see a pretty decoration no matter which way the barrette was turned. And each face has teeth and craters to trap and gather the hair. So you're basically creating this sandwiching, mechanism to make sure the hair, it doesn't slip out of the hair. So Rosalind looks at this design and she's thinking, hey, you know, this isn't half bad. Maybe, maybe we could make a prototype. So she gets the number of a couple of engineers and she calls them up.

And you could just kind of hear them sigh, like, oh God. And they said, ma'am, listen, you've got 15 minutes. So she goes to meet with these guys in North Carolina. And at first, things do not go well. The engineers are looking at this design of a hair clip. and they're just not getting it. And I said, well, you know what? I'm going to run to my car.

I promise you there's a standard barrette that has fallen off of Gabrielle's hair. And sure enough, I dug in the back seat of my car, found a standard barrette, brought that back in. And at that point, Rosalind used a mannequin to demonstrate how a standard barrette could just fall out of your hair and how her and Gabby's design worked a lot better. And as soon as I did that, the light bulb went off. and they said, ma'am, we think you're on to something. So these two engineers agreed to help her make the prototype. They found a manufacturer in China.

They made an initial run of 500 bows. And in early 2014, Rosalind and Gabby put them up for sale on their website. We get our first sale and we're like, this is actually happening. Like, oh my God, we're in business. They sold out of the first 500 pretty quickly. So Rosalind and her husband took out a few loans to fulfill more orders. And when we last checked in with Gabby, the company had just become profitable. And now, her Bose are in 74 targets in 22 states.

Anybody can be a kid for no as long as you have the courage to run a business. You can be four years old and have a business. That's Gabrielle Goodwin and her mom, Rosalind, founders of Gabby Bowes. If you want to learn more about the company or hear previous episodes, head to our podcast page, How I Built This.NPR.org. and if you want to tell us your story, go to build.npr.org. And we're going to close out the show a little differently this week because some of you may know I also co-host a kids and family podcast

about science called Wow in the World. And if you happen to know a kid between 5 and 12 years old, please play it for them. It's an adventure show where me and my co-host, Mindy Thomas, go back and forth in time, inside the human body, and into space. And every episode is rooted in real science, like from real peer-reviewed scientific journals. Anyway, our latest episode is out, and this is a special one. It's our first ever wow in the world musical, with four original songs performed by Mindy and me.

So I thought I'd play you an excerpt. This, Skyra's, is my latest, greatest musical invention. Musical invention? What does it do? Well, I could tell you... Uh-oh. Or... Mindy! I could...

Or... I could... Parts, but where's the fun? Well, it may not be fun, but it'll be informative. So let's start a new adventure, and I'm very confident you're gonna think. That sounds fine, but we both know how this goes. Anything for science? Yep. Next thing, I'm wearing crazy clothes.

Just as once. How about... we try a new approach before I wind up as a flamingo or an oversized cockro True that did happen let me show you gotta seat this thing in act Into danger things start out strange and then get stranger then something always goes Rightallet point secrets face to face That's true Ride a wow machine or pigeon you'll get more than just a smidgin of a thursday That's from the world.

You know, I do, Mindy, but we've got so much to go through. Can't you just tell me? That's from the latest episode of our kid science podcast, Wow in the World. You can download the full episode wherever you get your podcasts, and thanks for listening.