Stop Trying To Become Great At Everything & Build A Billion Dollar Business | Kendra Scott

0:00Hi, my name is Lewis Howes and welcome to the Daily Motivation Show.

0:11All of this was happening and I realized I had to change my business model. Otherwise, we were going to fail. I was going to have another failure under my belt. And so I remember walking into my office and saying to my team, if you guys are with me, it's kind of like the Alamo where you draw the line in the sand. I'm a Texan, so we all know that story well. But it's like if you cross the line, if you're with me, if you're not, I totally understand. And it was like, we're going to change our business model. We're going to still have our wholesale customers. We love them. But we are going to focus on direct-to-consumer.

0:41We are going to build a website that is actually not just information, but e-commerce. Not just publicity, but it's actually how to buy with that. It's actually an e-commerce website. We're going to create, which we had Color Bar, which was this customization tool where you could pick the stones you wanted and put it in any setting. We're going to create that tool online, and we are going to open a retail store. When stores all over Austin were shuttering, I sign a lease for a store with an office above it. So you'd walk through our retail store to get to our offices. I was like, this is going to be our laboratory.

1:14This is how we're going to learn about our customer. We're all going to work in that store. We're going to ask her what she loves, what she hates, what she wants more of. She's the boss. We have got to know what she needs and wants so that we can build the best company we can build. not knowing that what we were actually doing was going to have this huge retail company. Because I said, if we're going to do it, I hate jewelry stores. I hate the way they are. I hate everything's under glass. I hate how judgy everyone is when you walk in. I'm in Tim Snobby. Snobby. I said, I want to take all that away.

1:47We're going to have jewelry freely displayed on the tables where our customers can touch and feel them and try them on. We're going to create a real color bar where they can sit at the bar and drink champagne and eat a cupcake and watch their jewelry be made in front of them. Wow. We're going to be totally disruptive in a space that I did not personally like as a consumer. And I remember people saying, Kendra, that's not going to work. You know how much you're going to lose? How many shoplifters are going to just take that jewelry? And I looked at them and I said, I believe that 98 % of people are good.

2:19So I'm not going to build a business for the 2 % of people that are bad. Right. And it worked. Wow. We had lines around the block to come into this little store. No, it was like Red Oak or whatever in Las Vegas. We had to get stanchions. It would be like five in, five out. It was unbelievable. It was this energy and community in the store. We were hosting community events with Kendra Gives Back events for local charities and color bar parties for birthdays. And it was unbelievable. Wow. And we realized that this is the missing link. But it all came from a shake the snow globe moment of the recession for us to think differently.

3:03Because we were doing okay. We weren't, you know, making any big headlines, but we were paying the rent and I was being able to put my kids through school and things were good, right? But that recession was the greatest gift Kendra Scott ever got. And you would think, that sounds crazy, but I say it's a ribbon wrapped in yellow. was our future was because it forced me to think differently. What is this, what looks like recession, forcing you to think differently about the next evolution? Well, we don't know for sure if we're in a recession yet. Right, wow. You know, look. It looks like. But I also think.

3:40Let's just call it this economic challenge. I get excited now, which seems really weird. What is the thing that, what's your blind spot that you haven't yet looked at within your business that if you really start to peel back or lean into in a different way could explode into a nice level? When you think about when I started my company, it was Cade was born two months after 9-11. I started at one of the most unstable times in our history. I started a business. Crazy. Here we are. 2008. One of the biggest economic crisis that we faced in our lifetime happens. My business becomes lightning in a bottle growth afterwards because of that shakeup.

4:21The pandemic, scary, closing stores. It made me think about how we relate to our customer differently. Where is she and how do I meet her there? Does she need curbside? Does we need to make mobile access better? Does she need virtual styling? Things that we weren't doing, we're doing now as every day as part of our business because the pandemic had us thinking about where our customer was. So when you think about these things that are happening, it is fear is good. Fear is normal, but usually on the other side of fear, something great. Yeah, of course. And if you can get through that scary, that scary phase, that uncomfortable phase and go, how am I going to make my business better today?

5:00How am I going to make my customer happier today? How am I going to understand where they are so that I can be there for them in this moment of whatever it is we're going through, those are the businesses that are not only going to make it through this period, but they're going to absolutely thrive. So how many stores, you started with one in Austin, how many stores did it get to before 2020? We were at just about 100. 100 stores around the country or outside of the U.S. or just U.S.? Nope, all in the United States. That's a lot of stores. Yeah. 100 of your own stores, not like other brands? No, no.

5:32Kendra Scott stores. 100 stores. Now we are over 120. 120. Did you have to close any you said though? Well, we just, we closed them temporarily during the pandemic, but we were really creative. 120. 120. It's incredible. March 16th, I closed those stores. It's my birthday. Is it? Yeah. That was like the week of the pandemic. Yeah. It hit and I was like, happy birthday to me. Well, I was up at midnight for your birthday because I didn't sleep the night before, you know? I mean, it was. I got all these stores. If people can't come in, what am I going to do? Well, and I had all these employees that I love.

6:03They're my family. Yeah. You know, at Kendra Scott, family is one of our core values. And thinking about how are we going to keep our family in a good place? How are we going to be there for our customer family? You know, we have the sister rule at Kendra Scott. We treat her like our sister. So it was, I'm like, girls, get on the phone. Start calling our customers. We had elderly customers that instead of us asking them what they wanted to buy in jewelry, we were delivering food to their doorsteps. we really started to reach out and just say, we've built a connection with our customer. And I think for anybody that sells anything, it's doing anything with a retail service mind, make a connection first and the transaction will follow.

6:44When you're so focused on transaction, you lose the connection and you don't have that, especially when bad things happen. Our connection with our customer was so strong over the last 20 years. We were there in hospitals, 31 hospitals with our Kendra Cares program for pediatric cancer. We were there in oncology centers the month of October for our Buy One Give One program, giving a woman battling breast cancer a gift and letting her try to have a little piece of joy. We show up when we aren't expecting to all the time, every single day. So when something bad happened to the world, our customers showed up for us.

7:20And they had this loyalty to our brand that wasn't fake. It was authentic and real. And, you know, I say this to companies all the time. Being an authentic brand, you have to be authentic. It's not something that you can just create. It has to come from doing it consistently. Day in and day out and leading by example. Right. Man, this is inspiring. I didn't know this whole story. It's really inspiring. I'm curious. There's a lot of entrepreneurs that watch and listen that have small businesses. You started as a small business. What's the difference between a few hundred thousand dollar a year or a million dollar business and a billion dollar business?

8:00What does it take emotionally, mentally and psychologically to really excel to get there? And then what are some a few of the things that take in terms of strategy and execution to get there? Well, no small business is small. because first of all, to have the courage to start a business is real big and really amazing. So I always say that, you know, the smallest ideas can turn into things that you can't even imagine. But I think the biggest thing for me as an entrepreneur is knowing my weaknesses. And I think you think, whoa, wait, why would you want to know that? We try as entrepreneurs to be like, we can do it all.

8:37We are, we're like magical unicorns, right? We just have all, And that is the biggest failure we can make as an entrepreneur. We've got to know what we're good at. Very important. Because if you can focus on the things you're great at, awesome. But more importantly, know what you're not good at. And hire and create a team of people that are awesome at the things that you suck at. Because when you create this magical team, that is how you go from$200 ,000 a year to a billion-dollar brand. is identifying the places, the gaps where you need to bring in others that have that expertise, that knowledge that maybe have gone down that road before and can help avoid some of those pitfalls.

9:19And that is how you get there. No single human founder on the planet has done it themselves. And if they have, they're lying to you again. They're arrogant and they're lying because it's not true. So I'm hearing you say the awareness to know what your weaknesses are and then the execution and strategy to find the right people. Team and expand the team. And expand the team. And then having trust and faith in that team and being collaborative. Knowing that you may not always have the greatest idea in the room. You know, you can be a leader and a visionary, but you also have to be able to absorb these awesome people around you.

9:53And more importantly, listen to your customers. Listen to them every single day. I read every comment on my Instagram to my marketing teams. They're like, Kendra, please don't read all these comments. I want to know. I'm like, has somebody gotten back to her? I literally said that on the way here. There was somebody who had a question about something. I go, I didn't see a reply on Instagram. I mean, I'm doing a lot of things, but every day I want to hear from our customer. And I think from entrepreneurs, you've got to get out of your office, whether it's in a store, whether it's on your customer service calls, listening in, taking those calls yourself, being engaged with the person that matters the most.

10:32And that is the person that is signing your check. It is not you signing your checks. Even though your name might be on the building, it is not you. It is your customer signing your checks. She's the boss. She's the boss. He's the boss. Now we've got a men's line. So he and she are the boss. So I'm wearing a, you know, it's funny because Matt was just saying that I never wore jewelry until a couple months ago. My girlfriend got me a chain and some rings and then you put on a bunch of cool stuff. Why did you start a men's line for 18 years? It was a women's line only line. And we had so many men, first of all, like Kendra, you know, when are you going to, and I never quite like got it.

11:09My boys became men. They never wore jewelry as a 12 year old. Yes. So Cade, the three month old is now 20. Okay. So every year my business has become a year older. So has my oldest son. And when we were in the pandemic together, I would be having all my design meetings around my dining table because we weren't really in the office. so you know a few of my designers six feet apart masks on we would be designing collections and my boys were home with me and they'd be walking in the dining room they're like mom that is so cool you need to make that for me or can you make that in a bigger size and I started talking about and I was watching kind of what they were wearing they were kind of layering cool bracelets and you know and and really kind of seeing their style come out and I said wait maybe we should do like a little line together you know and it kind of just became kind of a fun project for us.

11:58We launched Scott Brothers and it was, I think we exceeded by 70 % or something crazy of our expectations for launch. But it was a line that came from a genuine place and the boys love being engaged and involved in it. And it's been something fun for us to do, but we had 36 % customer base that were male prior to Scott Brothers. Because they were buying for their girlfriend, wives. So now they can come in and buy for their girlfriend and wives and leave with something for themselves. And the women are probably the main buyers. They're going to buy for their guys. If they're going to be there, they might as well get a gift for them too.

12:31Yeah. So it's been really fun and it's growing. I mean, it keeps expanding. So yeah.

12:41I have a brand new book called Make Money Easy. And if you're looking to create more financial freedom in your life, you want abundance in your life and you want to stop making money hard in your life, but you want to make it easier, you want to make it flow, you want to feel abundant, then make sure to go to makemoneyeasybook.com right now and get yourself a copy. I really think this is going to help you transform your relationship with money this moment moving forward. We have some big guests and content coming up. Make sure you're following and thank you for listening to this episode of the Daily Motivation Show.

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