The Container Store: Kip and Sharon Tindell

26:56When we come back in just a moment, how Kip and Sharon recover from that embarrassment, why they eventually decide to take the container store public, and why they wind up regretting it. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

27:19If you've been listening to the show these last couple of episodes, you've probably heard me mention the Airbnb original experience that I'm hosting. and I'm so excited to have a chance to connect with listeners in a completely new way. It's called the Reinvention Lab, and it's designed to help you think about how to unlock your next big move in your career or even in your life. I'll help you discover your own story in ways I do on this show with my guests. And attendees will get a chance to take a deeper dive with me on so many lessons I've learned from this show. Lessons that have transformed how I work and think about the future.

27:57All proceeds from the event will go to support the Ronald McDonald houses that helps families stay near their children who are being treated at nearby hospitals. It's going to be really fun and I can't wait to meet you. So come join me in San Francisco and take your idea to the next level. To grab your spot, visit Airbnb.com slash guy. It's going to be great. Ever had one of those afternoons where your brain just quits on you? You're sluggish, hangry, maybe even a little foggy. What if it's your glucose? See, glucose is an energy currency for your mind and body. When it's stable, you're on point.

28:36When it crashes, so can you. That's why Lingo is so interesting. Lingo is a glucose wearable designed to help you connect the dots between your glucose and what you eat, how you move, and how you feel. It shows your glucose data in real time. Instead of guessing, you see the impact of your choices. Maybe that healthy snack is actually sending your glucose on a roller coaster. Or that afternoon walk is the perfect stabilizer. It's about unlocking your consistent best all day long by truly understanding your body's unique responses. Get to know your glucose and learn about how to build healthy habits that work for you with Lingo, designed for you by Abbott.

29:16Through November 30th, use code GUI10 on HelloLingo.com to get 10 % off a Lingo plan purchase, one use per customer. This offer cannot be combined with other offers, U.S., Puerto Rico, and U.K. only. The Lingo glucose system is for users 18 years and older, not on insulin. It is not intended for diagnosis of diseases, including diabetes. Individual responses may vary. AI companies have unique business models, each with distinct billing needs. Stripe is the go-to choice for AI leaders from early stage startups to scaled enterprises. Whether it's OpenAI offering tiered plans based on user needs or Cursor implementing flexible billing structures for code access, redefining the future requires sophisticated business models.

30:04With Stripe Billing, you can support any business model from credit-based to sales-negotiated contracts and easily align your monetization strategy with customer value. Join the ranks of 78 % of the Forbes AI 50 and millions of businesses worldwide that trust Stripe to help them build more profitable, scalable businesses. Discover more at Stripe.com.

30:39Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1978 and Sharon and Kip have just opened the first container store in North Dallas. And just like they said earlier, it has all the things you wouldn't find in a typical retail store. Popcorn tins, milk crates, wire baskets, all of it repurposed for storage. the store was fully conceptual you know garrett sourced the shelving which was actually the fixtures that all the products were sitting on so and the shopping baskets were also for sale oh wow we could literally sell the entire store all the way down to the fixtures if we wanted to that's genius like it's like the ice cream cone because you're selling the vehicle the container that the ice cream is being served on and you're just eating it.

31:32So I'm looking at a picture right now. It's a picture of Garrett and Kip in that original container store. And it looks not slapped together, but it looks very bare, right? Which is what it should have been. Did it take off right away? Were you making sales right away or was it slow going? Wayne, what do you remember about the summer of 1978? Well, the first day was comprised mostly of friends and family buying stuff out of heartfelt generosity. Garrett's sister bought like a, I think a$500 item, a big trunk of some kind or something. And so we weren't very busy. But sometime during the first week, we had a crude little direct mail mailer go out to parents of the Hockaday School, which is a private school right down the street from where we opened, and the Dallas 500 Club, which 500 leading contributors to the arts.

32:33You know, a couple of very good mailing lists. And it drove curiosity. They left amazed and chuckling and happy, and they bought all kinds of things. And the word of mouth took over. And I would say by the second week or something, it was almost scary how crowded our 1 ,600-square-foot store is. We missed the entrepreneurial terror of wondering if we were going to make it. Well, we worried a lot the first two, three, four days. But by the second week, we were thinking about giving numbers to let people in the door because word of mouth is it. That's what human beings do. So I want to stay in 1978-79 timeframe because I know that you got married in 1979.

33:19You became husband and wife. And Sharon, you had a career. You were trained as an architect. You had a landscape architect and you had a budding career. But I guess you started to do some kind of informal consulting for the container store very early on and within the first several months, which would eventually lead to you becoming an executive there. But how did you go from doing some consulting work to just saying, you know what, I'm going to be part of this full time? Well, I'm not sure I would call that consulting. You were just pitching in. Yes, I was pitching in. I'm using a fancy term like, oh, at a consulting contract.

33:56You were literally, it was like the nights and weekends, you were like, yeah, sure, I'll make a sign. Right. I made signs. I helped count the money. I worked behind the registers. Gosh, the store was just all-consuming for Kip, day and night. And I felt that the more time I spent with him working at the store, the more time we had for each other. And probably the less time we had to talk about business, which was great. Then we had more free time to enjoy each other. So part of it was just enjoying each other. Yeah. But Sharon was working as a landscape architect, and really the business became so overwhelming.

34:36We really needed somebody else whose heart and mind was in the right place. Garrett and I probably thought we were about as good a merchants as there was anywhere, But we've quickly discovered that Sharon could run circles around us when it came to that. Sharon, you, if I'm not mistaken, you were really interested in product, in identifying and sourcing interesting products to stock the shelves. Absolutely. The products, to begin with, were very, very innovative, but they weren't as relatable as I thought that maybe they could have been. There were some really out there products. And I think that's really what created the buzz and energy in the store itself.

35:21You know, the customers were interested, but they were a little bit confused. You know, like we're trying to sell mailboxes for bread boxes. They were trying to sell towel bars for tie racks. A wire leaf barrel that was made to burn leaves in, And we were selling that for toy storage around to keep the soccer balls and basketballs or pool supplies in. I think that works. Yeah. But, you know, I think at the end of the day, there needed to be a little bit more focus and strategy to pull everything together and to make sure the customers really understand that we were selling solutions, not items.

36:06You know, it's just that's where I came in. And I guess because of the interest in the store, it was unusual. You had to expand because 1600 square feet is small, especially given that you were selling storage supplies. How are you financing the growth of the store? Because within a year or two, you would have another store in Dallas and then, you know, growing store by store. Was it all just cash flow from the business? Was financing the next location? Yeah. You know, it's an alien concept, I guess, to the way businesses are developed today. But there's a patience involved to where that's all the money you have.

36:47We didn't really want to borrow money, even from the bank. We certainly didn't want to, you know, raise capital and add new investors. And we didn't do that for many decades. we generated a lot of earnings and then we put that money back in the business we just incrementally grew totally financed by the earnings of the business we were much more interested in growing the business than we were taking money out and buying a new car for ourselves or something and we paid each other we paid each other seven hundred dollars a month for a long long time and then we went to a thousand dollars a month we didn't spend money on anything except growing the business.

37:26And so that went on for many, many years like that. It never even occurred to us to raise capital by having other equity owners come in. And we were afraid to borrow money from the bank. Why were you afraid to borrow money from the bank? We didn't want the bankers involved with the business. It seemed like a lack of control over what we were doing. We figured out that we could grow about 20 % per year safely and securely without the RPM needle getting into the red, without screwing everything up. Wow. Faster than that was a little frightening. And there was enough money for us to grow at 20 % a year.

38:0420 % a year sounds pretty slow now. In those days, it was really considered fast, particularly for retail. That'll get you free cash flow enough to expand your business as rapidly as we wanted to, almost. So the stores are expanding initially in Texas. Let's talk a little bit about the two of you and how you sort of work together. What were your – I know that Kip, you would eventually become CEO, but initially you were COO. And from your perspective, I mean, a lot of people I've interviewed have said I'll never work with my partner or my spouse. Never. Just would never work. We're total opposites.

38:45Obviously, we've had married couples on the show. I shouldn't say obviously. We've had lots. But there are plenty of people who have said, no, no, there's just no way we could work together. So I don't think there's a hard and fast rule about this. But why do you think you guys were able to make this work? Sharon was – she's, in my opinion, she's the greatest person I've ever known. I think she's smarter than I am. I just felt privileged to be able to partner with her. I think a lot of it has to do with having that kind of respect for one another. We're well aware of what the other does better than the other.

39:25And Sharon clearly could do the product selection, product creation, merchandising at a level that even our mentors like Stanley Marcus admired and loved. So I wouldn't dare try to tell her how to do that. We gave each other a lot of leeway. I may have been the CEO, but I certainly didn't feel like her boss. In fact, I joke to friends that when Sharon and I disagree, which is not that often, but when we do, I usually find out two years later that she was right. Well, it certainly wasn't lost on me that our products weren't going to sell themselves. So we were highly, highly dependent on the training of our salespeople and also just the inspiration that they got from Kip and Garrett, inspiring the salespeople that being a salesperson was really a noble profession.

40:19and they really, really empowered our salespeople to feel good about training and selling the product. And we extended this to working with friends, hiring friends. We didn't have an HR department. We asked our employees to bring us their best cousins and best friends. You know who your good cousins are and who your bad cousins are and who you want to work with. And so work with the people you love. You mentioned briefly one of your mentors, Stanley Marcus, and he, of course, people may or may not know him. He was the guy who kind of turned Neiman Marcus into what it was, wrote a bunch of books on retail.

40:59How did he become a mentor to you? Well, you know, we grew up in Dallas. I think we had met him once or twice, but we didn't know him. He walked into the store the first week or two we were open, and he walked in and he said, you know this is the greatest retail store i've ever been in wow and i was like from that guy who was a legend what you know the mighty stanley marcus thinks that what we're doing is worthwhile what are you talking about you said no i i've never seen a retail store that and i said well you know i mean gosh what about your retail you know he he loved it and he was so generous with his time and praise.

41:40And we were so early on, first month, and then he wanted to be involved with it. He wanted to mentor us. Did he want anything in return, like to invest or anything like that? No, no. He offered to be on the board many years later, but he might as well have been a board member all along because he was so helpful. But Stanley Marcus lived until his mid-90s. So we had him as a friend and a mentor for a long, long, long time. Oh, the guy's like a legend in Dallas. I know every time I talk to people in retail in Dallas, his name always comes up because Neiman Marcus was him. And it's interesting because the 1980s is really the beginning of the storage boom.

42:24And it continues to this day, right? With storage facilities, we did a whole episode on pods, that company that basically stores your stuff a few years ago. Fascinating story, Pete Warhurst. And so storage has, you know, over time has become a big business. People just accumulate more stuff. They don't want to get rid of it and they want to store it. And I wonder whether, and you know, who knows, it might just be psycho babble or something that I'm about to ask, but I feel like in a sense, what the store was, it wasn't about just selling people storage stuff. It was also about giving people a sense of control, a sense of like, I can take control over the messiness in my life.

43:09Absolutely. It's really more of a matter of being able to find and locate the things that are meaningful for you. You don't have to have your spices organized alphabetically to be organized. You just have to be able to find what you're looking for. You don't have to necessarily throw your clothes away if you haven't worn them in three years. If you have something sentimental, you want to hold on to it, you can look at it 30 years from now and still love it. And so it's not really a matter of selling items to make people organize, quote unquote. It's really to be therapist in a way. And once people figured out what we were about, we became more of a problem solution store.

43:58until Maria Kondo came around and we did it for everybody. Stop storing stuff. Throw it away. Yes, but she came around. You know what? Yeah. She really did. Yeah. She just now she stores stuff. So, all right, let's go back to the late 80s, because I think a big turning point was when you opened your store in Houston. Doesn't seem like a big deal. OK, you're in Dallas. Now you're in Houston. But I guess that store would kind of catalyze a whole series of principles, which would essentially really create the culture that you eventually would build for the company as it was growing. What was going on with the Houston store?

44:42Why did you feel like you had to come up with a series of principles for that particular location. Well, it was an extraordinary location. It was probably the best retail corner in the South. And that store became so big. It did three or four times the volume that we expected that store to do. And so it was, talk about organized and control and a sense of order. There was none of that. It was mayhem. Because it was so successful, it was actually overrun with customers? So quickly, we couldn't hire enough people fast enough. We couldn't get the products down. We were flying products down on Southwest Airlines.

45:27It was pretty much mayhem. And so in that turmoil, we began to hire people, but we're just hiring just about anybody that came in the door to try to keep up with the overwhelming business. But we still have to agree on a certain set of foundation principles. And so I reached into my old file. I called it my philosophy epistle file. And these were very almost corny, due unto other type principles. Yeah. Well, tell me what these principles were. Communication is leadership. That's one of our foundation principles. So we communicated everything to our employees. I think life's too short to deal with opaque people.

46:07Well, what would you tell them? Would you tell your employees about what was discussed at board meetings? Oh, yeah. We would bring them into the solution of every problem. We would share all sales numbers, everything on the P &L. Another foundation principle is intuition does not come to an unprepared mind. You need to train before it happens. you're not really genius unless you're not just using logic at work you're using intuition at work we want you to use your intuition we authorize you to be brave enough to you you'll make more mistakes but you'll also be much more genius by by using your intuition so seven such principles as this and uh that started with the houston store and this foundation principles thing it was the only way we knew how to deal with the mayhem that we were experiencing every day in that store.

46:59I'm curious about, I mean, obviously it became a really important part of the culture there, but was there any eye-rolling or like, what is this hokey stuff or these corny aphorisms? What are they about? Was there any of that? I was scared to death to present this to these employees, most of whom I barely knew. I was afraid of being laughed at or eggs thrown at me or Rotten Tomatoes or something. And they didn't make fun of me as I feared. They loved it. You know, later on, Fortune magazine's running around saying we're the best company to work for in America. But the way we measured that was by having single digit, less than 10 % employee turnover in an industry that had triple digit turnover.

47:44People joined the business and they never left. I want to go back to just the expansion of the store because it was slow, but as you say, done very methodically. It was, did you have enough money in the bank? Yes, we can build another store. And then I think in the late 90s, you made a pretty significant acquisition. And I know this because I had one, Alpha, a company called Alpha that makes closets, designs, you know, these like build your own closets. I built one in like 2002. I remember going to the container store, getting all this stuff and putting it together. and falling off my stepladder building it, but I built it.

48:24And that acquisition of Alpha was really a game changer, right? Because all of a sudden you get into the business of not only are you selling the storage products, but you're also building or people are building closets. And so, I mean, how are you guys able to acquire that without outside investment? Well, we didn't have much money. We didn't have any experience in acquisitions. It was a David and Goliath struggle. I remember we were like sweating blood trying to win the acquisition because other better finance people were competing with us. But the employees, the people of Alpha, love the container store.

49:03They were really in favor of it being us. And it was the greatest product we'd ever been associated with. It was the ultimate way to design a closet. and it was about 25 % of our sales. We were the importer, distributor, marketing agent, and retailer. There were no middlemen. It was our highest volume and our highest margin product. And that is really a key to business success. If your best-selling product's also your highest gross margin product, you're going to do well. I guess by, I mean, you're growing. The container store is growing into the 2000s. And 2007, for a variety of reasons, you decided that you were looking for somebody to put some money into the business.

49:54I guess your co-founder, Garrett, was looking to liquidate some of his holdings. I'm sure your wealth, his wealth, had been tied up in the business for so long. wrong and apparently he was looking to maybe take some money off the table. Is that why you guys brought in an outside private equity firm? Yeah. Garrett was 10 years older than me and John Mullen was a year or two older than Garrett and they were looking to sell some of their stock. We were a little Spartan about how we didn't take any money. We didn't pay ourselves very much at all and we didn't take any money out of the business. And so at some point, you have to figure out what to do about that.

50:42So we interviewed over 100 private equity firms when we chose our private equity partners. I'm told nobody's ever interviewed half that many, but it was the most important decision we've ever made. And then ultimately even went into the public market. Each of those things, each of those steps dramatically changes the business as you begin to worry about things like equity and partners. You know, until then, you're able to focus on employees, product, and customers. And Wall Street banks and equity owners are not a distraction. You know, they're not taking up the key people's time. Aaron Powell After the majority acquisition by the private equity firm, I believe they're called Leonard Green, you stayed on and both of you stayed on and continued building the company.

51:38And by 2013, I believe, you decide to go public. The company decides to go public. Walk me through that decision a little bit. I mean, And was it the – I mean I'm imagining the private equity investors had an interest in taking it public. They made a significant investment. They wanted to see a return on that. That's a tricky decision, right? Well, the private equity guys were shocked that we wanted to do that. That was our – You wanted to do it. It was your – Yeah, it was our unilateral decision. They never thought that we would ever agree to that thing. You know, I had been exploring that for 10 years because it's very interesting that even if you have the best partners around, and we have wonderful partners, they're really good people, but it's very hard if you're closely held to get your partners to agree to dilute themselves so that you can get stock in the hands of employees.

52:36And Sharon and I were really big advocates of getting more stock in the hands of employees. If you take your best employee, she becomes even better if she's got a piece of the action. If you can look her in the eyes and call her partner, that helps. It's very difficult to do, though, because even a partner that claims they want to do that, they always have an accountant or a lawyer or a spouse that won't let them dilute themselves. And I'm like, that's the only way you can do it. You've got to dilute yourself if you want employees to have more ownership. If you're public, it's standard operating procedure.

53:11There's stock options. Everybody – you're dealing with a more sophisticated level shareholder, ostensibly. And they certainly understand the concept of getting stock in the hands of employees. That's the major reason we did it. Yeah. No, I mean it makes sense. I mean it's interesting because at the time you went public, you had about roughly 70 locations, 6 ,000 employees, hope to expand to about 300 locations. What do you make of this assessment by Forbes that they wrote a couple years ago? They wrote that the container store was the best retailer that should never have gone public. Do you think that's a fair assessment or do you think that's unfair?

53:53I think it's fair because we were very long-term oriented. And I love the idea of getting stock in the hands of our employees. And that was the only way to do it by going public. And that was the only way to do it. It's the only way to do it, sadly. And I take responsibility for that. Like I said, our private equity partners were deliriously happy with that decision, but it wasn't them forcing it upon us. And it fit us like a poor fitting suit. There wasn't anything about it that really worked well for us. I don't think that our company, it was difficult for our culture to be a publicly traded company.

54:32It did take a lot of key people's time away. Once you're public, there's not as much focus going into the employee and the vendor and the community. It's primarily focusing on the equity markets. So I think it's a fair statement. You know, I think there's a reason that there's half as many publicly traded companies as there were, you know, 30 or 40 years ago. It alters your business to go public.

55:01When we come back in just a moment, how the container store deals with yet another challenge, competition. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

55:22Shopping for eggs should be simple. A happy hen makes a happy egg. And that's why eggs from Happy Egg are so delicious. Happy Egg partners with family farms across the Midwest to raise happy hens outdoors. The proof is inside the shell. a tasty orange yolk. It's the difference you can see and taste. I just made an incredible omelet with eggs from Happy Egg. It was delicious and so fresh. Once you crack open a Happy Egg, you can see and taste the difference right away. It's obvious. Visit www.happyegg.com slash built to find happy egg near you. If you've shopped online, chances are you've bought from a business powered by Shopify.

56:13You know that purple shop pay button you see at checkout? The one that makes buying so incredibly easy? That's Shopify. And there's a reason so many businesses sell with it. Because Shopify doesn't just make amazing buying experiences for customers. They're also the experts in helping small businesses grow big. Stop seeing carts going abandoned and turn those sales into... Sign up for your$1 per month trial and start selling today at shopify.com slash built. Go to shopify.com slash built. Shopify.com slash built.

57:01Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2015, nearly two years after its IPO, and the container store is struggling. Income has dropped by nearly 70%. I mean, this was post-recession. Obviously, there's a lot of direct-to-consumer internet businesses that are starting up. So competitors like IKEA are getting into the storage business at this point. What was going on? What would you remember about that time and why growth started – not growth, but even net sales, net income started to decline? Well, you had kind of a change in retail begin about that time. Most people would say Amazon.

57:48Amazon had a lot to do with it. our average customer drove 21 minutes to get to our store, 21 minute drive time on average. So we began to lose our under$25 sales because if you're going to buy three sweater boxes, you might as well just buy it online from Amazon, you know, sweater boxes, sweater box. Now, if you're going to redo your pantry, you know, then you drive, you want to come to us. And so everything was more global. Competition was more fierce. And Amazon-type sales became, of course, bigger and bigger and bigger. So we would hire great people, train them, pay them twice what anybody else would pay them, and then hope that they would interact for an hour with our customers to reorganize their linen closet.

58:40Amazon, there's no human contact. Everything's transactional. It's quick, easy. There's no great locations. It's an opposite form of retail. The American public was surveyed at that time about who provides the greatest service in retail. I expected Stanley Marcus or the Container Store or Crate and Barrel, one of those kind of companies, to win. It was Amazon. I'm like, they don't provide any service at all. But what they do is they make the transaction so easy and so consumer-focused. In a way, they're more consumer-focused than anybody. So people were saying, well, maybe you're out of step because retail began to change.

59:22You had to adapt to it, and it led us to focus more on the high-dollar sale and less on the low-dollar sale because people still wanted to come to us when they were doing something, solving a problem. But if they were just picking up three or four items, they would just take the easiest path. But I wonder whether – was there a world where there could have been a pivot that would have stabilized a container store's finances better? I don't know. I mean maybe the answer is no. I don't know because obviously you're probably a traded company. The stock prices by 2016 is down over 80 percent from its high.

1:00:01And that's a lot of pressure on the business. Well, I want to reiterate that, you know, we had 40 years of being the most successful business around. It was giddy. It was crazy, you know. And then this hit us kind of like a tidal wave, this change in retail. And now I think that the employee orientation and the foundation principles and the selling solutions rather than items still apply. but it's hard to weather that kind of storm, frankly, when you're a public company. You know, Wall Street isn't very patient. They're interested in this quarter's earnings and this year's earnings. And we were trying to be stewards.

1:00:46If you and I had a farm and we only worried about the productivity of that farm this month, this quarter, it may not be a very good farm in five years. So we were accustomed to being private and patient and long-term oriented. and perhaps we didn't react quickly enough to those changes. It's, you know, I'm not sure. It's so interesting because sometimes, I mean, things change. Industries change, right? And so, I mean, whether it's apparel or big department stores or even big stores like REI, I mean, the whole model has changed. You know, as you say, Stanley Marcus focused on customer service, on selection.

1:01:25uh it's very and i'm just gonna say this straight up it's when i go into a big retailer today and i get great customer service i am blown away because it it's very rare it's very unusual to get customer service it was then it's particularly now jim senegal the the the costco guy and i had a running debate for years uh we had 10 000 products he said you should have 1500 products a different price. So most retailers that carry Advil have 15 or 17 different painkillers. They have 15 different Advils. They have different sizes, different strengths. He has one. He only carries one. There's a certain beauty and simplicity to that, but Gordon Siegel and Sharon Tindall and Stanley Marcus and I wanted selection.

1:02:17We wanted to have the world's greatest collection of coat hangers. If you needed a trash can, we had the world's greatest collection of trash cans, you know, and the world kind of went to, no, no, no, we're going to just only have, we're going to have a big one and a small one. That's it. Just two SKUs. And every consultant in the world went around to all the retailers in the world and optimized their SKU count, their stock keeping unit count, which really meant just destroying their, you know, their selection. Yeah. Well, it's, I think about like, for example, you mentioned trash cans, you know, and Simple Human, a brand that easily was scaled because of a store like Container Store, right?

1:02:57Like the Container Store probably made that brand, but then they could sell on Amazon. They could sell on Walmart.com. They could sell at Target.com. And so if you discover that brand at Container Store, you could also just eventually years later, just have it delivered to your house. Well, you know, it's interesting. I spent a long time on the Whole Foods board and both the container store and Whole Foods and Crate and Barrel and companies like that, we would be the first significant customer to so many vendors. And we would help that little bitty company become bigger and successful. And then, unless our relationship was overwhelmingly strong, we would kind of get cut out of the deal as they began to sell, you know, the mass merchants and whatnot, which you can't really blame them for.

1:03:43So you almost need to buy equity in these little vendors because as we make them rich and famous, we get squeezed out in favor of the mass merchants. Yeah. And so you either build a beautiful relationship with those people or in the case of Alpha, we actually bought the company or you phase them out as they become sold at Costco because you can't compete with Costco once that happens. Or in the case of Whole Foods, you just – if you can't beat them, you join them and then you become an Amazon company, right? Which has the scale to grow that business. But I want to stay on this thing for a moment about customer service because you guys spent – I read something like you would offer more than 200 hours of customer service training to your employees.

1:04:26And I guess the industry standard was like 10 hours. And again, it's just a lot of big retailers. It's just teenagers working there and they're just – they don't really care. It's not their fault. I'll walk into stores and I'll think the store is badly managed because it's just the people seem miserable. Is there a world where this – where the emphasis and focus on customers comes back? Because I feel like even 10, certainly 20 years ago, customer service felt really important. It just felt different than it feels now. Well, for us, we hired employees that were actually customers. And I think that's a big difference.

1:05:11A lot of the best employees that we had actually experienced the products that we sold. And that is way different than just hiring somebody off the street. Yeah, the most fanatical customer is going to make your best employee. We're really focused on that. It's a lost art. There's very little of it. You have to compensate people well. You have to train them well. They have to care as much about the business as you do. And that's a, I hope it's not a bygone era. And as it, you know, pendulums happen in the world. As it goes away farther and farther, I think maybe there'll be more, it'll make more sense for it to come back because people will long for it again.

1:05:57I gather that it made sense for you. you felt like it made sense to step down in 2016 and to retire. I think both of you didn't officially retire until 2019, but Kip, you stepped down as CEO in 2016. Let's talk a little bit about sort of the container store post Sharon and Kip. The store, it's no secret, has been struggling. I mean, in large part, just because the retail environment has shifted. there's one here and not too far from where I live in Marin County that I go to now and again and to be honest it's almost always empty when I go in and so I wonder whether when you when you think about the stores today and I know you're divested and you're out of that world but I don't know do you think that there's a future to to what the container store is now or or do you think it has to radically transform and become something else.

1:06:58Frankly, not everybody's interested in what the old founders have to say about how something should be run today. But it's still your kid, you know? If your child goes through a time where it's not doing well, that's painful. And if they're not particularly anxious for you to step in and say, here's how you should correct that. They're not particularly anxious for us to do any of that, and we're not particularly anxious to do it. You know, we did this for 42, 43 years. I'm not, you know, bringing out the violin, but I'm not really bragging. But I mean, we loved it. We worked, you know, 14, 15 hours a day, six or seven days a week for 43 years.

1:07:39Nobody loved their work more than Sharon and me, but also nobody has enjoyed retirement more than me. The freedom, the lack of stress. And so we're loving life, frankly, more than ever. And they're into new people, new era. And it's very interesting to watch. And half the time, we don't even know what's going on with it. Yeah. When you think about the journey you guys have taken, you know, from opening this first store in North Dallas in 78 to, you know, when you left and obviously the retail environment It changed, but both of you did very well. You did extremely well. You built a really big brand and a big business.

1:08:21How much do you think it had to do with the work you put in the elbow grease? And how much do you think had to do with luck, the luck of finding the right people, the luck of people buying, you know, liking the idea, etc.? Well, I think there's always a little bit of luck, but I think that staying focused and disciplined to the concept was really, really critical. to our success we really didn't divert from the idea. We loved it. We found something to do that we were good at. We found other people who we loved, who loved us, who were also good at it and we worked night and day to make it happen.

1:09:04But we certainly had plenty of good luck in spite of all that along the way. I think it takes it all in order to build something of that magnitude, it takes all of the above. That's Kip and Sharon Tindall, co-founders of The Container Store. By the way, Sharon wasn't kidding earlier when she said that Marie Kondo had reversed herself on the value of storage. In fact, a few years back, Marie collaborated with The Container Store to release a whole line of minimalist hangers and baskets and drawer organizers, all designed, of course, to spark joy. Hey, thanks so much for listening to the show this week.

1:09:45Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And please sign up for our newsletter at gyros.com. This episode was produced by J.C. Howard with music composed by Ramtin Ereblui. It was edited by Neva Grant with research help from Sam Paulson. Our audio engineers were Kwasi Lee and James Willits. Our production staff also includes Alex Chung, Carla Estevez, Catherine Seifer, Devin Schwartz, Chris Messini, Kerry Thompson, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

1:10:34music. Before you go, tell us about yourself by filling out a short survey at wondery.com slash survey.