How Steve Madden Went From College Dropout to Billion Dollar Fashion Mogul With Only $1,100

0:00Steve Madden went from working in a Queens shoe store to launching his namesake brand with just$1 ,000. In this episode, he talks Duke culture, rebuilding after prison. It's a house of horrors. And the instincts that actually built his legacy brand. I'm Steve Madden. Welcome to The Burnouts. Steve Madden, welcome to The Burnouts. You started the brand with only$1 ,100. Can you walk me through the first couple months of founding Steve Madden, what that looked like? I suppose every time I do one of these, which I don't do many anymore, people always ask me that. I remember waking up and having butterflies after I left a job.

0:41I basically had a job for a company in New York and I was doing the shoes and I was selling the shoes. I do both. You know, I was like, I remember waking up and saying, what did I do? What am I going to do? Like little butterflies. You ever get butterflies? I call it a vague sense of impending doom. And that was what it was like. I was like, well, how dare I do this? What am I doing? I was making a good living, you know, making money. But I knew that I wanted to be in charge of my vision. That sounds so lofty. I don't mean it to be. But I mean, I wanted to be the director. It really wasn't about money.

1:16I mean, I thought I could make some money. And I like making money. Don't get it wrong here. But it was really about that. I just wanted to be the sort of master of my fate. And if we are to even back up a little bit more. So you had gone to college and then you dropped out and you entered in essentially the fashion world. I want to better understand what drew you to fashion, making shoes. What was the personal motivation for you? Well, number one, I had to pay the rent. I dropped out of college, University of Miami in Florida. My father called up and said, I'm not paying for you anymore. So you better figure out what you're going to do next.

1:56I think I was 19 or 20 when that happened. And can you imagine somebody doing that today? Like, you know how parents are, you know, they would never do anything like that, right? You know, not pay if they had the money. You know, my dad said, you're out, pal. You better figure it out. I went to work at a shoe store and that's how it all started, really, basically. I learned everything that you could learn, you know, waiting on hysterical women selling them shoes. But did you enjoy it? Did you want to work at the shoe store? I liked and have feel for shoes. You know, there's sort of a little feel for it.

2:31I had the sense that something was coming, but it wasn't like, oh, I'm going to have this shoe company one day and it's going to be a household name kind of a thing. It wasn't like that. But I did have the sense that I was doing something for the future. It was almost like being in the minor leagues and working on, if you were a pitcher, working on your curveball or something. It was a little bit like that. I mean, looking back, it sounds very planned. Of course, it wasn't. And I was doing other things, too. But I knew I had this sense that something maybe my friends would make fun of me, all my good friends.

3:06So in those days, I lived in this town called Lawrence, right by Kennedy Airport. And they would be like 21 or something. And they would get their first job in New York City. And they would take the railroad in, you know. And there was sort of like pretend grownups. And they'd call me shoe salesman, you know, because I would stay behind in the town, you know, with a shoehorn sticking out of my pocket, putting on shoes, you know, for women. And so I was the butt of jokes. Let's talk about the first shoe that you made that went, I mean, viral, before viral was actually a thing. Before viral. Like the Mary Jane shoe with the little heel.

3:43Can you talk about what that experience was like? Did you know that you would hit something magical at that point? In those days, people did not pay attention to the young market. They sort of, you know, there was Doc's maybe, Doc Martens. I don't even know if there was. I'm trying to remember. But nobody really cared about it. They just sort of made shoes. And, you know, so I came up with this Mary Jane. And all of a sudden, these 15-year-olds had a shoe that was like for them. So the phone started ringing. And so that was the first sort of hit. It was portrayed in the movie, I want to say. They did try to talk about it in The Wolf of Wall Street.

4:20Steve Madden. In 1993, I went before these group of brokers when they were taking me, I went public early, and they talked about the Mary Jane. It was called the Mary Lou, actually. And I gave this convoluted speech in front of all these brokers where they were throwing shoes at me and calling me all these names. And he captured that, Martin Scorsese captured that moment on film, a fellow that played me in the movie, his name is Jake Hoffman. And I see him, we're friends today and we get a kick out of that. In fact, I saw him last night at the Knick game. And what do you think made you so good at designing women's shoes?

5:00Is there a certain piece of inspiration that you had or why do you think that you have such good intuition for it? I just have a feel for it. We've sort of got this terrible moniker as the leader of dupe culture, which of course we do, you know, but we've designed so many shoes, more shoes than anybody. We have a factory, we have a design factory in Queens. Nobody has that. So, you know, like there's a Chanel shoe. So we may, you know, we'll make the Chanel or a Gucci shoe in there. $150 or a jelly that's$900, you know, so we make it for$50 or$60 and little changes here and there but that's today but in the beginning we were designing and creating all the time as we still do no i'm glad you're just attacking what is your hot take on duke culture i'm a fucking pirate you know what i mean in fact i want to get a tattoo of a pirate right on my arm and uh i was going to get a tattoo on my back but i think i'm going to get it right here i think it would be all right like a pirate with a patch over his eye do you guys look on the internet of like okay this shoe's going viral like let's recreate it besides that i mean we make a lot of our own shoes and we We make those shoes and we do.

6:07It's like a big Steve Madden. I swear it's like a big pot of stew. You know, you stir it around. You have dreams. Your dream is something. You design something. You see something on the street. You see the latest Gucci shoe and you stir it around in the pot. Boom, it comes out. And that's really the way it is. You know, it's a big pot. How much of design is driven also by like data of understanding what's hot right now or what trends are in? My data comes from seeing it around New York City. You know, boom. Like if I walk three blocks and I see three of the same shoes, bingo. You know what I mean?

6:49That's it. Of course, as I have gotten older, I am less mobile. But we have a lot of people that I train that are very good. And plus, you know, we have a lot of our own stores in every city in America. and, you know, we see what's happening in the stores. And so it's very much test and react. It's harder today because of as we make less shoes in China, it gets harder because they're so good over there, you know. I mean, we make shoes all over the world. We make tons of shoes in Mexico, which is great because the food in Mexico is so great. No, it really is. I love going there. It's the greatest food.

7:29It's like it's better than Italy. Speed to market is everything for us. I love this ownership of you just wanting to make what people want. I guess I've always wanted to do that. You know, I mean, I remember. Yeah, I like doing that. And my phone is ringing. It's probably a lawyer from Chanel. That's my daughter. Wait. Hi, honey. Can I call you right back? Okay. Okay. Bye. Um, so, um, the cover is a little ugly. People comment. Um, no, yeah, you can hold it. Um, where were we on that? Um, I did have a point I wanted to make. Oh, I was saying like you, you want to make things that people actually want.

8:22You know, I do. And I'm inspired by what's happening. I got sober when I first started the business. I used to take a lot of drugs and drink and I was pretty crazy. And then for some reason it actually happened all around the same time. There's a place to sort of go that's very good. And so it was in the West Village, you know, and I lived sort of in the middle of the village. And I would walk there, you know, and I would see what everybody was wearing on my way from Mercer Street to Perry Street, which is like sort of the East Village to the West Village, not quite. and for a while my line was only those kinds of things.

8:59That's all I saw. You know, it was like a lot of black shoes with platforms and stuff like that. I'm very influenced by what I see, you know, and in those days it was Pat Fields was a big deal. A lot of that kind of, like ballet shoes with big bottoms. It was very sort of Japanese inspired, you know, that kind of. But anyway, so I'm just influenced, but in those days I had no employees. It was just me making the shoes. Anyway, yes, yes, we are influenced very much by the marketplace. And it's frustrating sometimes, too. I want to tell you, and this is the other side. We design shoes all the time, and I'll make a shoe.

9:42And it's just frustrating because they don't want it. I love it. Well, I love that shoe. You know, we do a moccasin on a big heel. Not only are we in dupe culture, but they want what they see on TikTok and all of that kind of thing. I mean, you understand. So it's a little frustrating creatively, frankly. But anyway, there we are. We're always trying to make our girls happy, trying to make great shoes. And that is, you know, the North Star of our company, which is it's always about product. Over a year into the business, it's like being a founder is just lessons in rejection. getting rejected all the time and then like stacking those on top of each other to actually learn how to move the business forward rejection when the customer doesn't like something new feature that you've pushed and okay adapting that it's rejection if someone doesn't want to finance you and you're putting out your entire pitch out there because it feels like you're putting out your heart but it's about like actually instead of being like wow that was a negative experience actually taking that and be like well where did we mess up in our pitch what did we miss what are we not thinking about i want to switch tones a little bit and talk about in 1993 you guys ipo with Jordan Belford's firm.

10:47What did you learn from that experience? Before you finish, it is, someone asked me yesterday, someone that worked, I want to be like you. I want to be, you know, I want to be, and he said, what did you do? And I said, I suffered a lot. Fring, you know. But anyway, yes, my childhood friends started, you know, they had this thing, this bucket shop, what they call a kind of a bucket shop. And, you know, you saw the movie Wall Street and all that. And they take companies and take them public and really, really, it was a little bit of a scheme. And I was involved in it, you know. I was the product for them.

11:26You know, Steve Madden. At the time, we didn't realize it quite like that. But, you know. Anyway, I raised the money that I would otherwise not have raised. And we put it to Caduce, as you could see. Although, I got in trouble.

11:43and it was a good lesson. It was not a great moment. But you can ask all about that. I don't care. Yeah, you're such an open book. I love it. It is what it is. I mean, I needed to raise money. They were my childhood friends. We'll take you public, blah, blah, blah. And that's really what it was. But they were taking some shitty companies out there and selling stock and I was part of it. You know, I was part of it and I got in trouble. What did the moment feel like when you were stepping down as CEO? You should say, what was prison like? Yeah, I actually do want to know. I'm curious because - What was it like?

12:17It was terrible. No, what I'm curious about is less about like what was prison like, but how were you the creative and design chief while in prison? That was a while ago, but there is no way to do that. I mean, I had a contract and the contract didn't say that if, you know, I got paid when I was in prison, which raised eyebrows. But I mean, it was, there's no way there was, you are surviving in prison. You're trying to eat, you're trying to work out, and you're trying to get through the day. You ain't designing shoes, and you're not doing anything with the business. I mean, maybe you can, if they come and visit, you might say, why don't you make that shoe that we made, you know, that's about it.

12:57I mean, there's not much you can do. You're really, you know, sort of busy surviving. It's very, very painful were you worried about your reputation at all or how did that personally impact you my reputation's been bad since i'm 15 but do you like do you know it's such a horror it's a house of horrors there's a panoply of horrible things that you could think about during the day and um you know the people that love you are there for you and that's and and uh that's it i mean there's not much you know you can do except to try to stay active in prison in the sense that you know physically mentally and spiritually sort of active if you could so you don't die so you don't uh you know just crawl up into a ball you have three children now yeah two 18 year olds one 12 how do you talk to them about like, hey, I made these mistakes.

13:53Like, this is what I learned from it. Well, I don't have that problem because it's in the movies. No, we have no secrets in my house. We really, we talk about all of it because it's so silly not to because of, you know, you can find anything out anyway. I mean, it sort of would be silly, you know. And I went to prison. I made a mistake. I try to tell them not to take shortcuts and that money is not everything. and there's other things out there. I mean, I suppose we can, you know, some of, I have three. Some of them listen and some of them don't. What can I say?

14:44How do you think that you were able to return back to Steve Madden after prison? That's a great question. And you know what? It's just because I have such a group. Because I was forced to let go, I had a bunch of great people. Great people, loyal to me, loyal to the company, loyal to the vision. And so when I came back, it was just like, you know, they were rolling. I just let me in, guys. You know, they were rolling already. But why do you think they let you in? Because I love shoes and I love product. And I think ultimately at the end of the day, you know, I'm not a deal guy. You know, it's not me.

15:20You know, really, I don't barely can read a balance sheet. I can't read a balance sheet. I don't know why I said I barely can. And so, but I never had to because I knew that if I made a great shoe and people wanted it, I could get a lot of people to figure out the rest, you know. That was always my business philosophy and it worked out well. I mean, that kind of loyalty is crazy for you to go to prison for years, come back, and they're like, get back in here, let's build this thing. You have 2006, your guys' revenue goes sharply, sharply up. how did you build that kind of culture within the company?

15:51I think you got to have a really strong North Star. I know that sounds a little cliched, but it really, and if you have a singularness of purpose, at the very least you must make great product all the time. How do you address your team when you feel like you've made a mistake? And not necessarily around like the whole prison thing, but just like generally, how do you talk to your team about things like that? Well, I mean, I think people that were with me, you know, understood everything and understand that I made a mistake. also was trying to raise money for the company and they bought into the dream.

16:21You know, you got to have people that are buying into the dream. Some people don't, other people do. They believe in you, which is, you know, as I say, I realized that's the hardest or the best that I did for the company as I think about it was to have so many people believe in what we were doing and what I was doing, you know. I always feel like being a founder is so interesting because it's a constant battle of the ego, right? Like when the company's doing well, it's like, and I can't imagine even for you because your name is tied to the company. The company is you. How do you deal with the battle with your own ego and manage that in different situations as a company naturally has different ups and downs?

17:00The struggle continues every day, every single day. My ego, that is, I mean, I don't know how you even know this. I'm serious. You gotta, you wanna do something, you're impulsive. Obviously, I'm impulsive. We've got a multi-billion dollar company. But you got to eat a lot of shit and you got to take yourself out of it. Was this about me or is this about furthering the firm? I mean, man, that is such a struggle. And a lot of people lose that struggle. I've seen so many guys that just fall prey to that ego. And it hurts, you know, also when you don't really get your way, you know. And then, you know, you're up at night talking to yourself.

17:53It's just brutal. But if you want to win, you kind of have to have a good group around you. And you have to kind of think about all those things, you know. My dad always talks to me about, well, now he's 70. So he's like, he wrote his book about his life. He's reflecting a lot. I get a lot of calls of reflection, which is great. I love it. When Microsoft was booming, he was on the cover of Fortune magazine. He would spend those nights like driving around by himself, scratching his head and doing the math of how many people do we have on payroll? And if the money stopped coming in today, how long do we have to feed their families and pay their salaries?

18:29and would literally drive for hours at night up and down like the 520 Bridge in Seattle just thinking and thinking and being so stressed, the outward perception of success isn't always the internal, what the person's thinking or feeling in that moment. Yes, I feel good to hear that because I feel the same way. And then there's the pimples you get. You have to be careful about that. But I'm just, it was a joke. No, no, that's a real thing. That's not a joke. But yeah, and it's, people do not understand what that's like, you know. And I have it all the time. I still have it all the time. As you were telling me that story, I was thinking like, what's the end game at the end of the day?

19:08Like, what are we trying to do here, you know? And the best thing is, for me, is if I'm in an elevator and I see a girl wearing my shoes, it's just, that's it. That's the moment. I mean, obviously there's money, which is the language of America, you know, which is great, you know. But it's that moment on the street when you're getting a Starbucks and you see them wearing your shoes. That's the greatest. That's the payoff. I want to go back to something that you said that was obviously very funny about not knowing how to read a balance sheet. But why I'm really interested in that is this idea of like leaning into your strengths and knowing what you're good at and then understanding where you need to resource and hire other people.

19:53So I'm curious, when did you realize, obviously you're a creative wizard, but when did you realize - I love that, but - You definitely are. Creative pirate. I like that. Pirate. Pirate. But when did you realize you wanted to really lean into your skill set of design? And then how did you figure out who you needed to hire around you to kind of support that? Basically, I had this wisdom that was given to me. I don't even know where it came from. It was like knowing what you don't know is a tremendous gift in business. And the other is I met a guy and he said, my business philosophy is, you know, he was spouting off.

20:27He had just sold his business, was do it for me. You know, at first I rejected that thought, but then I understood what he meant. You know, it was really the same thing. That's been a central theme in my life. I knew I didn't know numbers. I didn't know computers. I don't really understand the Internet. I really don't on a visceral level I don't get it I love TikTok I love going on my phone and pulling the covers over my head and staying there for hours but on a visceral level I don't get it but I have great people I have young people in their 20s that live and breathe this stuff and the same with numbers and the same with technology so for me it was like make good shoes and make sure they sell and buy low and sell high you know what I mean?

21:14Some kind of basic shit Yeah. And you guys are going to do the rest. Follow behind me and pick up after me. You know, that kind of thing. How did you find your first few really, really good hires? Because that's honestly so critical to the success of a business. That's definitely something we've learned is like the team you hire is really the company you end up building. How did you go about finding those first few people? Well, it's providential, you know, and you just get lucky. I've just been enormously lucky. A lot of people have been with the company a long time and they started, you know, in the at the bottom.

21:48How do you headhunt? Well, we do. We have, you know. But early, early on when you're like, I suck at balance sheets. How did you find the person? You know, I don't know. I mean, I suppose you meet smart people and you ask them and they tell you, well, I've got this guy, you know, or I know this guy and who does this over at this company. and I'll go, hmm, let me go get that guy. You know, it's sort of like that. Of course, I've been in the shoe business my whole life. So I do know some folks and I do know some people. So you ask for referrals if you're looking for a specific type of role? Are you asking my voir dire?

22:25That's the French word for search. Yes. Voir dire, I love that word. Yeah, I guess you got to find out. There's all sorts of things you miss sometimes too. The story of my success is that I've hired great people. and been very lucky. That's facts. That's just the way it is. I've had a couple of misfires. You know, there's a couple of things in the culture of my company that you could be very smart and not make it at Steve Madden. There's a couple of things at Steve Madden. One of the things at Steve Madden is you have to be busy. You have to be busy at Steve Madden. If you're not busy, you're fucked.

23:02You could be a brilliant person who like gets it done and then like checks out. It doesn't work. That's something I wish that we could do better at. But that seems to be like, you need to be like, you know, like three things going on at once. It just seems to work. How did you set that culture? I don't know what I did, but it just seems to. You know, I had this girl work for me once. She was a very good designer. She was very linear. You know, she was very talented, very linear. And she would finish her work and then she would put her head down on her desk and go to sleep. I swear. And she was very good.

23:41And she knew how to work with China. And she was really good. But I couldn't take it anymore. I'd walk by and she'd be sleeping on a desk. Get out. You know, she was good. But, you know, it's that kind of thing. But in her mind, she was like, I did everything I said I was going to do. It's all done. Here's the work. Why do you think you've become such a phenomenon with Gen Z after that really viral video that you have? That was so crazy. You think it was crazy? Why do you think that young people are so drawn to you? I think people are tired of bullshit. And we all did it. You know, we'll couch our answers.

24:14You know, I'm going to say this. I'm not trying to be inflammatory. I would say Trump's success is because of that. Mondami's success is because of that. Obama's success is because of that. You know, and they're all three on all different stripes. So I covered myself. But I really believe it in my heart that those three guys have really spoke directly. And Bernie, in a way, too. And you ask them a question, and then they answer it. Whichever one of those three I don't like, we will save that for another time. But I will say those three guys that I mentioned, they really were straight. Particularly Trump and Mondami are really kind of direct guys.

24:55And so it's interesting because they're on different sides of the spectrum. But people are tired of, you ask a politician a question and they don't answer it. Like, just say. It's like a word salad. Like, what are you doing? Like, do you like this or not? Do you think this should be legal or not? Like, blah, blah, blah, blah, blah, blah. And people just want to hear, they don't even care if they agree with you. They want to hear someone speak frankly. I believe that. You know, I'm not getting into the whole genuine. Everybody's genuine in their own way. I just think that you just sort of answer questions and be truthful as you see it.

25:31Have you always been no bullshit or is this like a recent evolution? I think it's more recent. It's in the last as I've gotten older and sort of don't give a shit as much. Why? I don't know. I'm not sure, but I tried it. Look, I've had so much bad shit out there. You know, I went to prison. I was a drug addict. Hello? You know, those are kind of things like those are like death sentences, It's like almost, you know, but like there's Google and everything's out there. Like everybody knows everything. So it's like, yeah, I messed up. I went to prison. And I'm back doing the best I can. And, you know, it's like that.

26:09And yes, I took drugs and I drank like a lunatic and I stopped. A lot of the creative geniuses of our times, yourself included, who like build brands, have struggled with addiction. What is that? Yeah, what is that? What is that? You know, I even saw Martin Scorsese's documentary. And, you know, because he's such a great filmmaker. He just is phenomenal. And he did, too. I went, wait. He, you know, like, OD'd. He, like, was dead. He was in the hospital. Like, I can't believe it. It's a generalization, perhaps, to say that. But, you know, you're creative. And you're thinking on a lot of different levels.