In this episode of Founders Podcast, the host discusses the book "Wild Company: The Untold Story of Banana Republic" by Mel and Patricia Ziegler. The Zieglers, founders of Banana Republic, share their journey from journalists to entrepreneurs, revealing how they transformed military surplus into a fashion empire. The episode explores the Zieglers' creative and resourceful approach to business, their focus on product over profit, and the eventual sale of their company to Gap Inc. Despite initial promises of autonomy, the Zieglers' departure from the company underscores the tension between creative freedom and corporate control. The host also touches on the importance of supporting independent, ad-free podcasts like Founders, which offer unique and valuable content to listeners.
"For every business, there's an appropriate scale. That one we got wrong twice, but I'm not complaining. We actually got what we wanted today. We are happy and grateful. Our kids are in their early twenty? S and although they've heard from a lot of other people that their parents started banana Republic, they haven't heard much."
The quote reflects on the concept of finding the appropriate scale for a business and the speaker's satisfaction with their personal and professional life.
"It's never a straight or smooth road, but in our experience, it was the bumps and the breakdowns, the mishaps and the wrong turns that stimulated the breakthroughs we needed to get where we wanted to go."
The quote underlines the significance of overcoming obstacles and how they can lead to important breakthroughs in life and business.
"I actually saw this really useful thread on Twitter where somebody was asking for recommendations of biographies of founders, and I went through the list and I saw a bunch of the ones that I've read already and made into previous Founders podcasts."
The quote explains how Patricia Ziegler came across the book "Wild Company," which played a significant role in the podcast discussion.
"If you leave a review on Apple Podcasts or anywhere else, you listen and you take a screenshot and email it to foundersreviews@gmail.com. I reply back to every email with a private RSS feed."
This quote details the process for listeners to engage with the podcast and receive exclusive content, emphasizing the value of listener support.
"We had both scribbled to answer the first question. A million dollars. The second question. How long? Five years."
The quote captures the ambitious financial goals set by the Zieglers when contemplating starting their own business.
"The only asset we had was our own oblivion. That would keep us blissfully ignorant of the bewildering and arbitrary impediments that would entangle us until we became so embroiled that quitting was no longer a possibility."
This quote reflects the Zieglers' perspective that their ignorance was an asset, allowing them to pursue their business without being deterred by potential challenges.
"We need to double the price, she said. The shirts are too cheap. People can't appreciate the value."
The quote demonstrates the strategic decision to raise prices in order to increase perceived value, which was a turning point in their early sales efforts.
"In your business, if something's not selling, you market down. In mine, we market up." "As long as you're not a commodity and you have a unique product, which is what Banana Republic was at the beginning, that works."
The quotes explain the contrast between traditional markdown strategies for unsold items and the Zieglers' approach of marketing up, which relies on the uniqueness of their product to create value.
"The next Sunday, we went back to the same flea market. This time, Patricia wore herself wore a Spanish paratrooper shirt, belted at the waist with tighter jeans and heels." "A sign which now read, Short Arm Spanish Paratrooper Shirts, $12.95. It was a new day. By the end of it, we sold more than 100 shirts. 102 to be exact."
The quotes detail the change in strategy with Patricia's attire and the new sign, which resulted in a significant increase in sales, demonstrating the importance of product presentation.
"We decided to fast track with a $1,000 in the bank." "Banana Republic needed a store. It's just like hopefully I'm not the only one that finds this humorous."
The quotes reflect the Zieglers' determination to grow their business despite financial constraints, and their humor in acknowledging the risks involved.
"There's a lot of conventional wisdom that just didn't apply to them." "Like, location, location, location. Well, we have $1,000 total."
The quotes highlight the Zieglers' need to diverge from traditional business advice because of their financial situation, leading them to unconventional but successful solutions.
"We made a list of the things we needed to do. Number one, find merchandise." "The more we thought about it, the catalog struck us as a key to the whole endeavor."
These quotes outline the strategic planning involved in preparing for the store opening, emphasizing the importance of the catalog in their business model.
"But if you're in retail, why don't you just get terms?" "30 days credit would do just the trick, we decided it would give us a chance to get to the store, stocked and open, put a catalog in the mail, and start selling before we had to pay."
The quotes describe their introduction to the concept of trade credit and how it became a crucial part of their strategy to open and stock their store without upfront capital.
"Instead, I found a lot of unwearable items... I could take them apart and make other wearable things from the materials." "The fabric themselves were treasures at below bargain prices."
These quotes illustrate the Zieglers' ability to see potential in overlooked surplus materials, transforming them into valuable products for their store.
"Our eclectic cache of surplus... could not tell its own story." "As every journalist knows, you are only as interesting as your subject."
The quotes convey the strategic role of the catalog in communicating the value and stories behind their products, making them interesting and desirable to customers.
"This won't work." "We're no safer if we swim back than if we keep going to the other shore. Failure was not a possibility. Not ever."
The quotes reflect the challenges of starting a business and the Zieglers' mindset of pushing forward despite criticism, emphasizing their resolve to succeed.
"I wasn't reporting the story anymore. I was the story." "As an entrepreneur, it was my job to be interesting."
These quotes highlight the strategic use of media coverage as a distribution strategy and the importance of entrepreneurs being proactive in capturing media interest.
"We buckled a belt around each end of the dowel and nailed it to the ceiling, perfect hanging racks." "We had shelving."
The quotes illustrate the creative problem-solving skills the Zieglers employed to set up their store displays, showcasing their ability to adapt and utilize available resources effectively.
"Rate was something like, let's say 2%. Their response rate was 10%." "The average return would be like, let's say $2, theirs was $10, so on and so forth."
This quote outlines the disparity between the typical industry figures and their own, emphasizing their success in sales and marketing.
"The more press we got, the more press we got. We happily played our part and accommodated each new media query with a press packet stamped propaganda handle with respect, still buying into this whole country theme."
This quote describes the cycle of media coverage leading to even more media interest, which they capitalized on for business growth.
"The need for evangelists over critics has never been more important."
The relevance of this quote is to highlight the strategy of promoting what one is passionate about rather than focusing on negativity, which can inadvertently give more attention to the subject being criticized.
"The serendipitous law of unintended consequences elevated that throwaway sentence into a small international incident."
This quote explains how an unexpected event, in this case, a joke in their catalog, can have a surprisingly positive outcome for a business, in this case, leading to increased sales.
"We need to bust out, make a go for it. What? Bust out how? Open another store, he said."
This quote captures the pivotal moment when they decide that opening another store is the necessary step to take their business to the next level and alleviate operational strains.
"Maybe everybody was happy because we didn't fixate on profits. Instead, we were focused on being a company as good as we wanted to believe we were and claim to be."
This quote reflects their management philosophy, which prioritizes the intrinsic quality of their work over the pursuit of profit, leading to a more motivated workforce and, ironically, higher profits.
"I'll buy it, but only if you two stay with it."
This quote signifies the condition set by Don Fisher of Gap Inc. for the acquisition, which was contingent on the Zieglers' continued leadership, a point that later led to conflict as their autonomy was compromised.
"There's going to be some changes I have to make for the good of the company."
This quote marks the beginning of the end of the Zieglers' autonomy within their own company, as changes imposed by Gap Inc. start to take effect, ultimately leading to their exit.
"My heart was pounding and rage was bubbling up from every cell in my body. I looked at Don, who said nothing. Then I took a breath and looked Mickey in the eye. It's not going to happen, Mickey, I said. Fuck you, Mel. Mickey screamed and stormed out."
The quote illustrates the tension and resolution of a conflict, showcasing Mel's firm stance and Mickey's aggressive reaction.
"The money, as much as we enjoyed having it, was an unexpected byproduct anyway. All along we had been in it for the freedom."
This quote emphasizes that for Mel and Patricia, the primary motivation was freedom, not financial success.
"The members program is now misfits."
The renaming of the member program to "misfits" aligns with the podcast's celebration of individuality and the unconventional.
"My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary."
Steve Jobs' quote reflects the philosophy that product quality should be the primary focus, a principle that the podcast embraces.
"Podcast industry in China, four to 7 billion, almost all subscription based."
The comparison of the Chinese and U.S. podcast industries highlights the potential benefits of a subscription-based model.
"I'm an independent, ad-free podcaster."
The podcast's independence is a key aspect of its identity, distinguishing it from ad-driven podcasts.
"Founders notes is that nerdy kid, except you're copying notes off of entrepreneurship."
This analogy explains the purpose of Founders Notes, which is to provide listeners with a distilled, educational experience on entrepreneurial topics.
"I've never worked on anything in my life that has been this emotionally motivating as I have on founders."
The quote conveys the host's deep emotional investment in the podcast and the importance of listener support.