#389 The Founder of Jimmy Choo: Tamara Mellon Transcript from https://podmenti.com/t/5e147c5d5a195314 One of the reasons that Tamara wrote this book, and this story will shock and surprise you, but one of the reasons that she shares her story. is because she wants future generations of entrepreneurs to learn from her experience. And there is a warning in this story. And the warning is always retain control of your company. This is also something that John Mackie, the founder of Whole Foods, told me. I got to spend seven hours with John over two days and I read his autobiography twice. And it was one of during one of our conversations That John told me one of the craziest things that anyone has ever said about the podcast. He had listened to over a hundred episodes. before we met and he told me that if founders existed When he was younger. That Whole Foods would still be an independent company today. That since the podcast and all of history's great such readers constantly emphasize the importance of patrolling costs. He would have put much more of a priority on it. Especially during good times, during boom times. It is very natural for a company, for a person, for human nature To just not watch your cost as closely because everything is going so well. This is something that Andrew Carnegie actually warned against. In fact Carnegie would repeat this mantra. He would say, profits and prices are cyclical, subject to any number of transient forces of the marketplace. Costs, however, could be strictly controlled. And any savings achieved in costs were permanent. This is something I was talking about with my friend Eric, who's the co-founder and CEO of Ramp. Ramp is the presenting sponsor of this podcast. I've gotten to know all the co founders of Ramp and spent a ton of time with them over the last two years. They all listened to the podcast and they all picked up that the main theme of the podcast is on the importance of watching your costs and controlling your spend. And how doing so gives you a massive competitive advantage. That is a main theme for Ramp. The reason that Ramp exists is to give you everything you need to control your spend. Ramp gives you everything you need to control your cost. Rank gives you easy to use corporate cards for your entire team, automated expense reporting and cost control. There's a line in Andrew Carnegie's biography that says cost control became nearly an obsession. Keep in mind. When Carnegie sells to JP Morgan, Carnegie has the largest liquid fortune One of the largest fortunes in the world today is the Walton family. Sam Walton was obsessed with controlling costs and the competitive advantage that it gave you. just like Andrew Carnegie was. In fact, Sam wrote in his autobiography, he said Our money was made by controlling expenses. You can make a lot of different mistakes and still recover. If you run an efficient operation or you can be brilliant. And still go to business if you're too inefficient. Ramp helps you run an efficient organization. Ramp is everything you need. to control spend and optimize all of your financial operations. On a single platform. I run my business on Ramp. As do most of the top CEOs and founders that I know. If you are not already running your business on Ramp. Make history's greatest entrepreneurs proud. by going to ramp dot com to get started today. That is ramp. Dot. A journalist once wrote that I often seem less an actual person. than the heroine of some dicey Danielle Steele novel. The basic Danielle Steele story is to take a plucky heroine Set her on a quest. And then subject her to every villain and viper and obstacle imaginable. Which I suppose. Is not an entirely bad summary. Of my life so far. When Tamara Mellon's father Lent her the seed money to start a high end shoe company. He cautioned her. Don't let the accountants Run your business. Little did he know that over the next fifteen years the struggle between the financial and And the creative. Would become one of the central themes of Mellon's business. Melon grew Jimmy Choo into a billion dollar brand. Yet it's her personal glamour. That keeps her an object of global media fascination. Vogue photographed her wedding. Vanity Fair covered her divorce and the criminal trial that followed. And the Wall Street Journal covered the three private equity deals. the relentless battle between the suits and the creatives, and Mellon's triumph against a brutal, hostile takeover attempt. But despite her eventual fame and fortune, Melon didn't have an easy road to success. Her seemingly glamorous beginnings in the mansions of London and Beverly Hills were marked By tumultuo and broken family life. Battles with anxiety and depression. And a stint in rehab. Determined not to end up unemployed. Penniless and living in her parents basement. Under the control of her alcoholic mother. Melan honed her natural business sense and invested in what she knew best. Fashion. In creating the shoes that became a fixture on sex in the city and red carpets around the world. Melon relied on her own impeccable sense of what the customer wanted Because she was That customer. What she didn't know at the time was that success would come at a high price. After struggles with an obstinate business partner a conniving for a CEO, a turbulent marriage, and a mother who tried to steal her hard earned wealth. Now Melon shares the whole larger than life story. With shocking details that have never been presented before from her troubled childhood. To her time as a young editor of Vogue. To her partnership. with the cobbler Jimmy Chu. to her very public relationships. Mellon offers an honest and gripping account of the episodes that have made her who she is today. This is a definitive book for fashionados, aspiring entrepreneurs, and anyone who loves a juicy true story about sex. Drugs. Money. Power High heels and overcoming adversity. That is an excerpt from the inside cover of the book that I'm gonna talk to you about today. Which is in my shoes, a memoir. And it was written By Tamara. Melon. Okay, so I organized all of my notes and highlights from the book. around a few recurring themes that I think are the most interesting and important ideas from the book. I actually discovered this book because Tamera is the long term partner. Of my friend Michael Ovitz. Ogstands me very well and he's listened to a bunch of the podcasts and he told me he's like, Hey, I think if you check out Tamara's book, That you're actually enjoying it and he was right. And it starts off with a bang. She starts the book by getting fired. From Vogue. And this winds up being Probably the best thing That could have possibly happened to her. And she's very on open and honest about the struggle she was going through at the time. And the way I think about this like oh She had to hit rock bottom. Before she actually got her life. together and then as a result of hitting rock bottom, there's only one way to go and that's up. But this is also leads her Two. the founding of Jimmy Chew. And so this is the way that the book starts, does I just drag myself to my desk at Vogue. Yet again. Two hours late. I'd been up all night. consuming prodigious quantities of cocaine And vodka. I'd been at Vogue for five years at this point, and despite my after hours indiscretions. I'd always worked very hard. And so this is what I meant earlier. And this is actually a idea from Jim Simons, just an episode on him. He's the founder of Ren S Technologies. Way before he founds Renaissance Technologies, which goes on to make over a hundred billion dollars in profit and continues to make what I hear, billions of dollars in profit. Uh every year. To this day. He got fired and he said something looking back on his life. Uh he has this great quote about this, and he says, Getting fired can be good for you. You just don't want to make it a habit. So her boss pulls her into the office. And she and this is the way Tamaro describes what is happening to her at this point in life. I did not fully appreciate The huge favor. Anna was doing me. She was setting me up to mend my waist. She was setting forces in motion that in time. Would lead to success far beyond anything. I could have ever Imagined. She continues, in the days after getting fired, I realized more and more that I had slipped into the realm of personal crisis. What exactly was I going to do with my life? I needed a plan. And so she had talked about what do when you read self help books, like what's their advice? And some of the vice actually pretty good. And it's like well you should ask yourself What do you love and what are you good at? And Her answer leads her directly to this idea that she'd been i i in the back of her mind. Oh, while she was a folk. She's like, Well, fashion certainly I'm good at. With a particular fixation on shoes. And so her previous work at Vogue was actually instrumental. to the founding of Jimmy Choo. She says for the past year or so I've been germinating An entrepreneurial idea. There was a cobbler in London. Who had made a name for himself creating bespoke shoes. That cobbler was Jimmy Choo. He worked out of a tiny showroom. With an old dirty carpet. It was hideous. But the Bentley's Would pull up. Whenever we were planning a shoot at Vogue, we'd go down to this hideous workshop and we describe what we were doing. Jimmy. Was able to custom make shoes. on short notice. That is the totality of his business at the time. He is not a a shoe manufacturer. That's what Jimmy Choo's gonna turn into when Tamara and Jimmy partner. So in addition to discovering Jimmy Choo through her past job, she also understood The power of media. To drive Sales. So Jimmy's making these shoes for Vogue. What does Vogue do? They list w who made the shoes. And you could predict what's gonna happen next. We'd give him a fashion credit on the page. And then even more wealthy ladies would find their way to his shop. So the idea was what if I could convince Jimmy Choo to manufacture shoes? So there's a lot more detail in the book. But I think it's important to understand. the prehistory of Jimmy Choo. And what I mean by that is there are several experiences that Tamara had that are going to be beneficial for when she builds Jimmy Choo. And so before Jimmy Chew She worked in a prestigious retail store. She worked in public relations. And she worked in fashion media. And I think those three things are going to contribute to some of the success. That she has much later on. Another important thing that was also hinted at at the inside cover of the book. was the fact that she was going to be the first customer. She says I was the customer that I wanted to reach. This actually plays a role because she has a fundamental understanding. People like me that are gonna like the shoes that I like. I know where they shop. I know. Who they admire, I know what magazines they're reading, I know what TV shows they're watching. All of this is gonna play A huge role in the success. that Jimmy Shu has and it it's successful. Pretty rapidly. It's it's actually mind blowing. And so the first thing that she has to do is she has to go down and she has to actually convince Jimmy Chu And so her pitch was this. Jimmy would design a line of exquisite shoes and I would find a factory to make them and manage the sales and marketing. We would open stores to start a wholesale line to be carried in high end stores all over the world. And we would both become incredibly Rich. This low point of her life is when she's determined to turn her life around. So at the same time That she's trying to sell Jimmy Choo on a partnership, which is gonna take several several months. Of salesmanship and persuasion. She actually goes to rehab so she can get clean and off drugs. She's not gonna be able to run Jimmy Choo. If she's out all night doing what she call what prodigious quantities of of alcohol and cocaine. And this is the way she describes this period of her life. Desperate as I was to find a new direction for my life, I was not going to be easily deterred. Now So actually something that's really interesting that happens well in rehab rehab. So in rehab you have to obviously go through therapy. And the therapists are trying to get her to think small. Just be a normal person. Don't have these. These grandiose visions for your future. If you paid attention to the the episode I did last week on on Jeff B's is sharehood letters. I think one of the most important uh lessons that Jeff was trying to teach and he says it was one of the most important lessons. actually came in the last page of the very last She Huddle letter. And he says that differentiation is survival and the universe wants you to be typical. And it takes a lot of energy and drive. to not have everybody else, society, all your friends, everybody else kind of smooth out your rough edges. Jeff's saying No, you should whatever makes you special and different. you should actually embrace it and and understand how much energy that's gonna take to do it. So excellent advice, obviously for somebody that's ferociously intelligent. As Bezos says. When Tamara's talking to all these therapists. They're trying to like just narrow your scope. Like, no, no, you're just like, you know, you're a an alcoholic or a drug addict. You can't do anything special. And and I love Tamara's response here. Like, this is complete bullsh. Their horizons were always remarkably limited. When I'd say I'm gonna start a luxury shoe brand, they'd say, Perhaps you might just wanna take a job in a shoe store. In other words, don't be grandiose. Think small. My response to them was No Fucking way. When I got out of rehab, I threw myself trying to win over Jimmy Chu. I had nothing to lose and everything. So We knew Pause were on the story. If you really think about where she is right now, okay. She was just fired. She's broke. She just got out of rehab. And she's living in her parents. Basement. If Tamara can build a wildly successful Company from this point, you and I have certainly have no excuses. So now I need to introduce another main theme of the book. Maybe the main theme of the book. 'Ca you you just see clearly what is driving her. She has this torturous relationship with her mother. And it it's talked about in the first few pages, talked all the way to the very end. And I actually think it influences Sim very similar to the Michael Dell episode where you know Michael Dell had a remarkable life. But I feel the most important lesson. of Michael Dell's incredible autobiography is at the very end. But this will give you a a hint. About how w what what's driving Tamar and what's going on with her relationship with her mother. Of my mom throwing me across the bed in my head hitting The radiator. One of the driving forces was my mother and the enigma of why she always despised me. The other force at play was a demonic drive. For the financial security, I hope. Would keep me out of her clutches. My worst fear. was remaining under my mother's Some. her mother's an alcoholic, it sounds like to me,'cause I I've dealt with this in my family as well. That she had undiagnosed mental illness. Says uh she had severe emotional problems exacerbated by alcoholism. She had always been the most painful warp in the loom of my life. My mother's raging lunacy flared up routinely. These are all These are different descriptions spread throughout the book that I just put together. This just goes on and on and on. I could never understand what I'd done to deserve her wrath. It was a steady Drip. Drip. And Pleasure. in hurting me. She said I was stupid. I was lazy. I was Ugly. I I get induced into states of rage. You've heard it on past episodes when people mess with kids. 'Cause essentially what's happening here, this is a psychological assault. From unhappy people. But directed At their own Children. Children who view you as their entire world. Th th this part was really hard for me to read too because i this reminded me of my grandmother. So My grandmother Absolutely she was just like this. She destroyed The self confidence. of her two children. And what I realized from this is like when this happens You know, this happens unfortunately. I I find a lot of examples in these books. A lot of examples of my own family and a and friends' family as well. You can either fight back or you let them win. And so my grandmother my grandmother keep in mind my grandmother. I was probably twelve years old when she died. Eleven, twelve, thirteen, something like that. And My response to her,'cause she tried to do this to me. She told me the I'll tell you the story real quick. You'll see this reactors too, where people are raised by people that, you know, attack them, make them feel bad about themselves. Exactly what what Tamara's mom is doing here. You're stupid, you're ugly, you're lazy. And so for my grandmother, her two kids response was they didn't fight back. And they both turn to drugs. And so my aunt Actu was addicted to cocaine. Did cocaine when she was pregnant. So my older cousin is actually developmentally disabled. She's a coup you know, maybe half a decade older than me or something like that. My grandmother tried to tell me for some odd reason, you know, I was quite ten. When did this happen? Maybe eleven. That I was stupid. And I was stupid because I could only speak one language, I only speak English and not Spanish. And my developmentally disabled Cousin. Was smarter than me because she could speak Spanish and English. And now being an adult with my own kids like Who the hell? What kind of monster? says these kind of things to their children or their grandchildren. And then now with the benefit of, you know, being a few decades removed from that, you just realize like these are just unhappy people. They're either unable or unwilling to fix their own lives. And so what do un unhappy people Try to make everybody else around them unhappy. That doesn't excuse their behavior, but it helps me understand their behavior. And then what is Tamara's response to this psychological torture that her mom puts her through. And this also affects her when she's fighting with partners later on. She's at a very early age and simply learn to shut down and never show any emotion. Either happy Or sad. She learned avoidance. Another inspiring part about Tamara's memoir is she says, like, listen, when I was in school There's just no way that my classmates would have voted me most likely to succeed. And she said, I didn't even have any interests or passions. There was nothing that spoke to me. No class or no moment where I said, Oh, this is what I want my life to be about. Now one of the most confusing parts about this book Is that her dad for some reason did not stop her mom from tormenting her when she was young. And her dad's a very successful entrepreneur. He's gonna wind up being her co founder. And so maybe he was just traveling a lot, maybe he was just working, but when they were adults And they could have a much closer relationship. He did tell her that your mother is the most selfish and self obsessed woman I've ever come across. And then there's this idea where she was also likely nar narcissistic or just obsessed with how good looking she was. She was a model. When her parents met. And in fact, Tamara says that her entire life was about how she looked. And the reason I say it's really confusing is because of The you could tell how important her father was. to to her life to her business in fact She dedicates when you when you open up the book, it's dedicated, one of the people she dedicates her the book to. It says to my memory of my father who inspired me through my darkest days. Her dad's gonna be her co founder, her advisor, her main supporter. Before he helps his daughter, he had been a very successful entrepreneur. He did a bunch of businesses But probably the business bus biggest success was the fact that her dad had helped scale and build Vidal Sassoon. So they just sold right before they found Jimmy Chew, a few years before they sold uh found Jimmy Chew. He had just sold the business for seventy two million dollars and then he had a bunch of free time. And lucky for Tamara that he was able to act as her advisor and co founder. And they became closer as they age and and she I love the way she would describe this because now her her conversations could be about like building the business and says that her father gave a sort of kitchen MBA. Like, you know, steady drips of the how to think about business over Uh the dinner table. So I felt a bond growing between my father and me that had never been allowed to flourish during my childhood. Lucky for me, dad's semi retirement left him available to become the elder statesman. And the spirit guide. uh in my new venture. And you could tell she just really admires him. She talks about how charismatic, how refined he was. He always maintained. on understated elegance. He w he always flew first class. He wore bespoke suits. You'd feel his presence the moment he came into a room. He was very, very charismatic. So now she's out of rehab. She's talking to her dad about this idea. She wants to get the hell out of her parents' basement. And so she goes and she's now hounding Jimmy Chew. who's again not initially receptive to the idea of partnership by any means. So this is where she has to be excessively persistent. And persuasive. And so she says he needed to get a better sense of me as a person and to see a demonstration of my commitment in action. He wanted me to quote smell the leather. So the only way to demonstrate what I was about was to hang around down on his shop with him and get my hands dirty. So every day For three straight months. She shows up. And she's trying to persuade Eventually she is successful. Now remember, this is a company that's gonna sell for one point two billion dollars in about fifteen years from where we're on the story. They start the company with just a hundred her dad puts up a hundred and fifty thousand dollars. That's all they start with the company. Company's gonna be profitable from day one and wildly efficient. Wait till I get to that. It'll blow your mind. And the basic deal Okay, at the time is we're gonna be fifty fifty, meaning Jimmy Choo's gonna own fifty percent. Me and my father will own the other fifty percent. And There's a line in the book that it's probably in every single autobiography looking back. I just simply did not know how difficult it was gonna be to actually do this. I simply never imagined when I started this journey Had just how many backstabbings, cliffhangers, and oncoming trays trains. Lay Ahead. So There is a series of unbelievably smart decisions. That take place right at the founding. So I already introduced one of them, the fact that she knows her customer because she is The customer. There is this idea that I've talked about over and over again on you know, you need to work with the absolute best people Uh that you can. Talent really matters. And it's not just for the big decisions, which are really important, but it's for like the thousand of little thousands of little decisions they're gonna make over the lifetime that you guys work together. And I think those decisions compound. And the reason that I introduced that idea, I want to introduce that idea at the same one I keep repeating that hey, she knows a customer because she is one. The decision she's gonna make right at the beginning. Which is that where are we gonna put our first store is so important. Because this is the store. That The creator of sex in the city. happens to stumble upon to walk in and we're like, wow, the I love these shoes. I love these shoes so much. I'm gonna put them As the preferred shoe of the main character and maybe probably the most influential show. Sure. Tamara's Ideal customers. And listen to what she says. And just the again, just understanding very clear thinking and an understanding of hey, I'm designing for myself. What would I want? And then if I compare like what I want with what other businesses or other competitors are doing. Like why aren't they doing this? Very, very clear thinking here. I set out to find a space for a shop in my preferred habitat. This is in London, okay? A location convenient and near where the ladies like me Do their shopping. Their main competitor was Manolo Blannock. Right? She's like, this kind of weird, Manoel Bonic. It's very popular with the same people I'm going after, but w where'd they put their store? I noticed the Manolo Blonic was twenty minutes from the nearest tube station. God forbid that a customer has an actual job in an office and wants to pop over at lunchtime. I want us to be more accessible. And I found the perfect spot on Mockcomb Street. Remember the name of the street for later. I found the perfect spot on Motcombe Street. For a certain kind of woman me We were in the hot Burning center. So You may think okay. You're reading this, David. Okay. Why does Steve Jobs come to mind? You go back and Steve Jobs has this Excellent idea. That I should talk about more frequently'cause repetition is persuasive. You need to ambush your Your customers. So I w I got to this part and I'm reading this part. I'm like, wait, this this this kind of thinking reminded me of Steve Jobs. So I just asked Sage, which is my personal AI that's trained on all my notes and highlights and transcripts. About hey, what did Steve Jobs say about the importance of putting Apple stores close to where there was a lot of foot traffic? And what happens is it turns out in three different books that I've read in the past, he talks about this over and over again over and over again. He says Jobs had a clear insight about retail location that went against conventional wisdom. This is how Jobs was explaining the Apple store strategy one time. He says it in different ways, but the the idea is always the same. And so he says the real estate was a lot more expensive. But people didn't have to gamble with twenty minutes of their time. They only had to gamble with twenty footsteps of their time. So what Jobs is talking about there. Is the conventional wisdom when he had the idea to do the Apple store. With Gateway and all these other PC manufacturers. They Gateway stores had just failed. And what Gateway did is they they put these put these huge warehouses out like twenty minutes from town. So You have to that the the rent was cheap. But you'd have to drive twenty minutes. And everybody's like, Well, first of all you you can't Steve, what are you doing? You can't open Everybody knows Gateway just failed, so why the hell would uh computer manufacturer Have their own stores. And Jobs is like, Well, one, they're not Steve Jobs. But two, it's like I'm not gonna have them drive twenty minutes in the middle of nowhere. I'm gonna put I'm gonna pay An insane amount of money because what does Jobs want? He wants an aspirational brand. Talked about that over and over again. That Аполз воно в без бранд, мозга бранц, і не волн. I'm gonna go and identify Where Excessively expensive retail. But guess what? They're not gonna drive twenty m minutes or twenty miles'cause people won't do that. But they'll walk 20 footsteps. Later on, he talks about this. We may not be able to get them to drive 10 miles to check out our products, but we can get them to walk 10 feet. If they're passing by, they will drop in out of curiosity. It's exactly the same kind of thinking that Tamara has. It's like hey. I I'm in the red hot center. of where women like me are working, they're shopping, they're going out to lunch. This is where I'm going to put my store. The summary of this idea is I love, again, jobs is a genius at this. And he calls it uh ambushing customers. We had to ambush them. What that meant is that we had to go to high traffic locations and And put stores there. Even If it was more Expensive. Ambush. Your customers is exactly What they're doing at the very beginning. Jimmy Chu and again. It's not like she has to pay. She's paying fifteen thousand dollars a year in rent because these are tiny, tiny locations. This is also in the the m the mid nineties. So how efficient and profitable this company uh with these tiny spaces will just absolutely blow your mind. They set up a very tiny showroom. And then in the back there's an office and they're very frugal. She says we were very frugal. That's a line in the book. We set up an office with two desks in the basement. There was no windows and no For real. So then she's like, Okay, I don't have any experience as an entrepreneur. I've never made shoes. I like wearing them. I like looking at pictures of them. I liked writing about them. in vogue, but I don't know how where do I make them. So what do I do? Let's go find a list of people that make shoes and go ask, Will you make shoes for us? So she goes, I found a book that just had all the uh factories in Italy and who they worked for. So we went. To Italy. Cold calling and knocking on doors to see if we can get an appointment. We were two young girls she's working with Jimmy's Niece Sandra. At the time. We were two young girls representing a brand that they never heard of, with not so much as a single order to give them. Now eventually they find. You find some manufacturers shoes. And the first trial run was an unmitigated disaster. They had like a they had to do it in in a uh A fast turnaround time. Because they were gonna sell them at a trade show in New York. And so at the very beginning, they had no way To manufacture a high quality product. They had to learn how to do so. Our selling samples barely made it to New York on time. And what we saw, and when we saw them, we were horrified. They were covered with black scuff marks and the stitching was awful. They were so bad we absolutely could not use them. I tried to carry on selling off of sketches. But nobody was interested. Again, then the next breakthrough is gonna be really important. She goes back to the fact that I am the customer. Jimmy, it turns out, had no interest In Becoming a designer. He was just a cobbler. And so she goes, Oh my God, I set up a business. with a creative head, who in fact had no creativity. So then She realize I have to play this role. I'm the one that has to come up with the ideas. And so she looks for inspiration in a very basic place. She just goes down to the flea market. And tries to pick out pieces that could inspire designs. And then she's realized, hey, I'll just take a little idea from here, a little idea from over here, and I'll combine them and I come up with something new. Then she would go to manufacturing trade shows in Italy. And then she found all these different pavilions that had all these materials that people weren't putting on shoes at the time. So she's talking about like feathers and flowers and studs and glass beads. And then a glitter fabric that winds up becoming a Jimmy Choo staple later on. And this is what she said about this. I had never known there were so many possibilities. But that's how the Jimmy Choo DNA began to emerge. The first collections were based on things that had caught my eye. The lovely part of that was that the things that struck me And that I related to emotionally, other women related to as well. One of my favorite filmmakers is is Quentin Tarantino. I did an episode on him. He was completely obsessed with movies for two decades before he made his own. And so when he starts making movies they're like, Oh, do you have an audience in mind when you're making a movie like Me, I'm the audience. I've been obsessed with movies just like she was obsessed with shoes for a very long time. Well before I made my own movie, just like she was obsessed with shoes, well before she made her own shoes. So I'll just make what I wanna see in the world. And it winds up paying off. This is incredible. So then she finds These trade shows. that other buyers go to. Okay. And she says they were on the edgier realms of fashion. This is again understanding the importance of she was like an insider into the industry that now now she's creating for right. It's like okay, we'll go to this exhibition. It's on the edge of the realm of fashion. This wind up being one of the most important things that ever happen to her. Because there's a buyer from Sax Fifth Avenue there. Her name is Julie Townsend. She got suspired. Their exhibition? Looks at the samples, says wow, these are great. And then she was so enthusiastic, she does An order for three Thousand pair of shoes. And Tamara says, just like that, we were in, we cracked it. The reason I I wanted to put this part in because They had they had model this out and her and her father realized hey, if we just sell twenty pairs shoes a week out of our little location. We actually have a business. That was their expectation going in. Twenty shoes a week and then they get an order. We're three thousand pairs in one shot and Sachs' gonna be huge. Uh partner. uh with Jimmy Choo. They're gonna put him in, you know, thirty or forty stores. Pretty quickly. So it says suddenly we had the rarest of good fortunes for a startup company, positive cash flow. Our sales for the first year were two hundred and fifty thousand dollars. And the shop cost us fifteen thousand. And the only there's only one employee other than Sandra and myself. And then this is a great description of the very beginning of a business that'll eventually sell for one point two billion dollars. I was still living at home. I had no car and I had absolutely no social life other than entertaining related to the business. Now, right at the beginning, this is what I mentioned earlier, the the prehistory of Jimmy Choo is really uh I think important to the story. Then when I got to this page of the book I was like, Oh, this is just a page full of good ideas. This is her understanding of the power of media. and celebrity and the importance of ambushing potential. customers and what she realized that magazines had already put had always put beautiful models on their cover. But over time they realize that featuring an actress Instead Would send their newsstand sales to the roof. A magazine feature could reach hundreds of thousands of potential customers for a fashion brand. magazine she announ she understands intuitively'cause she saw this at Vogue. Magazines and media can push Product. And then she goes, Okay. So We don't want to just target models, we wanna tar target celebrities. Celebrities are becoming more and more important, especially in the uh in the mid nineties. So how can we get that how how can we get to them? And so they they would gift shoes to celebrities forever. Okay, but then they realized well, uh there's actually a w more effective way to do this too. Because if you gift them to their Agents. They're stylists. Even their lawyers. Like the same stylist, if you can if build a relationship with a stylist, that stylist might have a relationship with five or ten Of the celebrities that you want to reach. Even more aware of the cutting edge or the stylists of the stars. And because these people work for multiple clients, contact with a single stylist. gave us many more shots at scoring a wind. So they would gift shoes to celebrities. with the hopes that they're either gonna be photographed or they'll talk about them, right? And they have a huge win right from the very beginning doing this. In the spring of nineteen ninety eight, we made our first foray into the Oscars. I was up all night on the phone. trying to orchestrate the gifting of shoes to all the right women that same Yeah. Kate Winslett, who was nominated for Best Actress for Titanic that year. She mentions that she's wearing Jimmy sho Jimmy Choo shoes. That has such a positive effect on sales. that going forward, Oscar night was a huge focus. And so they would try to dominate the Oscars every year. And so the idea here is a very simple but effective one. Just identify The media whether it's magazines, T V, podcasts, radio. Award shows, dinners, like where are your customers congregating and then make sure your product is put in front of them. And this combines with the idea of ambushing your customers. Go back to Tamara's decision to place her first door where people like her are likely to go and visit, okay? On July Fifth Nineteen ninety eight, we made our first appearance on Sex in the City and our visibility skyrocketed. The script had Carrie Bradshaw running for the Staten Island Ferry when she stumbles and screaming out Oh my God, I lost my chew. That one mention Help turn us into a household name. Suddenly, women who had never heard of us, women who lived in small towns. thought about us in the same company as other luxury brands being mentioned like Prada, Gucci, and Manolo Blanc. Manufacturers of everything pay fortunes for product placement in movies and TV. We got this huge call out entirely for free. Why? The show's creator said she put the reference in the script because she'd been in London And stopped by the store on Motcombe Street. And fell in love with the product. Ultimately. Jimmy Chu. would be mentioned on the show. Thirty four. Times. So that is the good. Now we need to get to the bad and the ugly. So this is all about her husband, her first marriage. And the dangers of drug addiction. There is I mean I dealt with this my whole life, so I've seen, you know, cocaine abuse. And it's like, Well, I've never done it. I never would. You never get around a co cat and be like, Oh, that seems like a good idea, like a good path I should I should go in life. So you read this book Her experience, you know, when she hit rock bottom, the fact that she she was doing a bunch of drugs, going into clubs and and drinking, but she turned her life around. Some people never turn her life around, and including her husband. It's actually devastating because I get really angry. reading about her husband in the book for what he was doing to his wife and his daughter. And then you re I looked up after the book was published, he actually dies a few years later from a drug over at real relatively young age. And the reason I got angry is'cause you left behind Your daughter, man. Your inability to get your shit together. I remember a friend of mine. A few years ago. And I we don't talk anymore. And maybe this is like related to it, but I remember him Making excuses. About Why he was drinking. And a lot of this just had to do with the fact that he was his inability to eliminate the root cause of his stress that that, you know, led to him drinking. And I just couldn't break through to him and finally told me we had we had kids around the same age at the time. And I was like you need a little son. I was like one day Your son Right now you're his hero, no matter he doesn't understand like w what's going on, he does he can't comprehend anything. And he looks at you and he admires you and he loves you and spend time with you. One day when he's old enough, he's gonna take the measure of the man. And when he's able to do that. What do you want him to see? Some fat fucking drunk that can't get his life together? If you won't change for him. There's no possible way I can help you. And so This is this is the devastating part. Matthew is actually the great great great grandson of Judge Thomas Mellon. This is a you know family dynasty. Uh Thomas Mellon and then his son Andrew. I actually have biographies of both of them. It's one of the few robber barons that I haven't actually Um, done episodes on even though I have books on them. Well you would put Judge Mellon up there with you know Rockefellers and the Vanderbilts. And then now the generations have gone down and you see how far they've deviated from the kind of person that Judge Mellon was. And here's a description of Matthew. Matthew used to hire Limos With drivers rotating shifts. Coat out of his mind, he kept the party going around the clock. This is their wedding night. I went up to my room alone. And Matthew partied until Dawn. This is Again, if you're not gonna clean up yourself. You should want to clean it for yourself, but at least do it for your children. This guy turns into a Cokehead. He's doing crack. Із алкоголік. Meanwhile his wife Is the one that has to support the entire family. I was in the office every day working hard and Matthew had nothing but free time in his hands, and had come home to find him free basing in the kitchen. At times I had to track him down relying on his limo company. Once I found him in a crackhouse. This is why I think this story is important to tell on the podcast. Because it's all the stuff she had to do. She's gonna have a series of ongoing problems. She's gotta deal with the promise of building a successful company, which by itself is unbelievably difficult. Then she's got her husband's drug habit. She's got her mother tormenting her and then she winds up just having all these partners with these short term outlooks. They have these ridiculous ideas that are At complete odds with a founder that loves what they do. That loves the product, that wants to build the best product. That she possibly can. So from the very beginning, remember, she goes to so many partners. She's gonna last from let's say they they start to come to around ninety six, ninety seven. I think by two thousand eleven she's out and from there she's got like four different partners, which we'll go over. But From the very beginning, Jimmy Choo and uh the her and Jimmy Choo never had a good relationship. He was not interested in turns out he wasn't interested in manufacturing shoes at all. He wanted to keep doing his best shoes. And so you start having this huge fight. And Her dad has a great idea. It's like we should just buy out her his shares. Tell us what you want for the shares. If that would have happened would have been the best possible thing for them. With what's about to happen in the story. Jimmy's response was to sue them. For twenty two counts of breach of contract. And then he decides, hey, I'm not gonna sell. My shares to you guys. I'm gonna sell it to a private equity company. Okay. So it says until this time we'd been entirely self funding. They were profitable from day one. After that, they didn't need any other investment. After the first hundred and fifty grand they put up, okay. Tamara's gonna tell us, you know, a fatal mistake. The main lesson From The book? And it's the main lesson From a lot of them is like if you have a founder and you love what you do, never Ever. Ever give up control. Retention of total control. Retention of total control. Retention to total control. This is why Every hundred episodes, it's episode twenty five. It's episode two hundred. It's episode three hundred. It'll be episode four hundred. Is James Dyson's autobiography. That is his main lesson, retention of total control, because that's his his story is a life story of Being the main source of Value creation, the creative force, the inventor behind everything, the one running the company and ha having stolen from him. Until you finally realize I'm not gonna let anybody happen. And then What happens? You fast forward thirty years from thirty few years later. From what I hear, James is pulling out James on our James Dyson owns a hundred percent of his company. And from what I hear, he's pulling out a couple billion dollars a year. So Jimmy sells his fifty percent share. for around eight to ten million dollars to Phoenix equity. Partners. And he leaves the business. This is where Tamara makes a fatal mistake that she warns future entrepreneurs to not do. They come in, they're like, We don't want just fifty percent, we want fifty one percent. And her dad's like no, we're not doing this. And he says he was never one to surrender control of anything. But she says I was so desperate to get rid of Jimmy because they had such a bad relationship that I talked my dad into taking the deal. Later, I could only blame myself. And so at the very end of the book, she's gonna talk about one of the reasons she wanted to write the book. was for the benefit of future entrepreneurs. And retain control. Is one of the warnings that she had for future entrepreneurs. This is two thousand one. For the next ten years, she's gonna go through hell. With this series of private equity partners. She hates private equity. And right away she realizes oh, that one percent is a huge deal. The fact that someone else would now have the final say in how we ran the company was gonna take some getting used to. This is my first painful lesson in private equity. The founder's no longer in control. And they just do a bunch of dumb shit. So their idea is like, Hey, we're gonna buy this company. We're going to in the short term, we're gonna maximize Eba. Because We're gonna sell to another private equity person in a few years. It's essentially the opposite of what a missionary founder would do. Says she she says these people were all about the exit. Are EBITDA going in uh when the deal was completed was two point nine million. So they're making about three million a year. Okay. Uh, which is a lot for a company with only nine employees. Jimmy Choo was not a distressed asset. We were a household name with a product that was flying out of the stores. And so now with her new partner, she wants to continue on with that same exact strategy. We should ambush our con our our our Customers, we should be using influ I guess it would be called influencer marketing today, but one influencer market influencer marketing, one is not new, and two can be excessively valuable. So they talked about A single picture of Madonna coming out of a store. was worth millions of dollars to them. And so Tamara has this idea, hey We wanna sponsor this very prominent dinner. It's at the British Academy of Film and Television. Her idea was like, Well, look at other luxury brands. Cartier has they own this event called the Cartier International Polo Tournament. We should have a prestigious event. around like this annual like an annual gathering. There's a lot of potential uh cust customers in the audience. a lot of chance for us to photograph the event and and use that for promotional material. And so it's like this is incredible. The turnout's gonna be incredible. But the but the CO his name is Robert. Who she hates, by the way, looked at the numbers and canceled our participation. Robert's decision was incredibly foolish and a wasted opportunity comparable To the loss of exposure we would have suffered. If we had been too timid. to take the risk and make our commitment to outfitting stars on Oscar night. So again, when it's a founder led company. You don't have to think about this. I know. gifting these shoes to actresses and to stylists and to being a a mainstay On Oscar Knight is worth the investment. We have a very similar idea playing out now, but in England. We should sponsor this very prominent dinner dinner. At the Academy of Film and Television Awards. And Robert doesn't want to because he sees us, hey, it's gonna cost us, you know, two hundred thousand dollars. That's going to temporarily Decreaser Ibada. Akiel Marita, the founder of Sony. Do you not remember And his autobiography it's hilarious because he his whole thing was like the he really believed in the marketing and promotion, the educating of the entire uh of educating your customers, especially when you're designing a new product and how important it was. And he was getting a lot of pushback. He wanted to spend I think like two million dollars. On this campaign. for one of their new products and the guy running the campaign's like, Oh, what if we spend like less, I think it was like a couple hundred grand or whatever it was. And they go back and forth for several weeks. At one point, Akeo can't sleep. So he calls the guy in the middle of the night. He's like if you don't spend two million dollars on this campaign You're fired. Akiel understood that as a long term investment because Sony was going to la outlive him. But if you're this robber guy And you don't give a shit what happens to Jimmy Chew after you sell it, you'll make decisions like this. And this is a heartbreaking sentence. I was being treated like an employee at the company. I had Found it. Now she's fighting with her supposed partners. And she still has her husband in his crackhead like behavior. He was doing coke and alcohol to the point of psychosis. We had a board meeting at my house a week after I gave birth. And all the while I was worried my husband might be freebasing in The kitchen. It's very difficult times in her life. She's got she's a new mom. She's a founder with terrible partners and she's got a drug addict for her husband. I realize now the full irony of my huge mistake. I had rid myself of the man who had vexed me most, which is Jimmy Chu. Only to saddle myself. with an insecure CEO who dam whose damaged ego knew no bounds. In addition to which I now had a bipolar drug addicted husband who was spiling out of control. I actually met Tamara at a mutual friend's birthday party uh last month. I should have asked her. If she had retained control and if she owned A majority of Jimmy Choo I I wonder if she'd be I bet she should still be working on it to this day. So Here's it it's funny in th in my mind I had a series of people I was thinking about Edwin Land, I was thinking about Steve Jobs, thinking about James Dyson, a Key Omarita, I was thinking about all these other people like what is the opposite of this behavior that I'm reading about. In this book right now. And maybe the best example of this'cause they're in the same industry. Is Bernard or not? He's the opposite. of his partners. He's all long term. And there was a hilario he actually pops up in this book, which was which was really hilarious to me. And I didn't know this this Robert the CO that the of the first private equity company. used to work for Bernard. So it says we were visiting a Chinese shopping mall When we bumped into Bernard and all the head of LVMH. Robert stepped forward to shake Arnold's hand, and Arnold recoiled. It was a reaction of disgust. Well we're not all there. He we wouldn't make any of these short term decisions. Wait till they get to like hey we gotta cut pri We use cheaper level uh leather. Don't refurbish the stores. Don't invest in any marketing. It's just like what are you guys doing? And what I also thought was fascinating was The fact that Tamara, even back then, his book is, you know, twelve years old. understood the genius of her knowledge. She said the luxury brand offered the owner the opportunity to profit from ideas and image with almost limitless prospects for scaling up. A brand image. Could travel all over the world. And migrate to other Products. One of the very first to see the opportunities here was Bernard Arnaud. One of my favorite tweets I've ever read was by this guy named Cedric Chin. And he says one type of remarkable career, and certainly the most interesting type. Comes from finding an earned secret. And then exploiting the hell out of it. For the good part of two to three. Decades. That is a great way to think about Bernard Arnault. And what he's done with L VM H. Now there's another devastating tragedy. It's gonna happen and Tamara's life. Her father dies unexpectedly. On april nineteenth, two thousand four, my dad suffered an aneurysm. I was in shock. I couldn't believe this was happening and I was utterly torn apart. He was my dad, and I loved him. But he was also my mentor and my business partner. He was the one. Solid rock. I'd ever known in my life. And now he was leaving me. I held him. And try to say goodbye. And he was so strong that it took him eighteen hours to die. I don't think I stopped crying once. The whole Time. She's around thirty six years old. When this happens. And from here on in, she's dealing with just one private equity company after another. I'm just gonna give you the outline so you understand. How many times Jimmy Choo was sold? Two thousand one, Jimmy Choose sells fifty percent share. to Phoeni Partners and leaves the business. Three years later, Lion Capital. Buys. Jimmy Choo for a hundred and one million dollars. Three years after that. Lion Capital sells Jimmy Choo for a hundred and eighty five million. To Tower Brook. Capital partners. Four years after that, Tower Brook Capital Partners sells Jimmy Choo to La Low. For five hundred and twenty five milyen dollars. Three years after that, Jimmy Chew IPOs. companies valued of five hundred and forty six million. Three years after that, Michael Kores Holdings acquires Jimmy Chu For one point two Billion dollars. So now she is left without her father and her business partner? She's dealing with all these different owners of And partners of Jimmy Chew. And in the middle of this Her mom Sue her. This is so sad and nuts at the same time. So the lawsuit is complicated. But it boils down to Her mom wanting more money from her, even though she had nothing to do. with building Jimmy Chu. The note I left myself on this page was instead of being proud of the woman that your daughter has become You fucking sue her. For more money. From a company you didn't even build. This is insane. Tamara says, I think my mother was simply born a narcissist whose extraordinary beauty only made her selfishness that much worse. This is how she describes her mother madness combined with stunning beauty. So in the middle of this lawsuit, her mother is losing a lawsuit. And her mother's attorneys. asked to meet to discuss settling. This is the first time that she sees Her mom. She's gonna see First time she sat across and saw her mom. In four Years. And the description here I need to read to you. I hadn't seen her up close in four years and she looked amazing. Everyone ages, so God knows what she's been doing to retard this process. Then again. That's how she spends all of her time. She couldn't even look at me. I studied her face. I was facing down. My most profound Demon. And her mom loses and withdraws. The lawsuit. Finally he came to the point. They were folding. We're gonna withdraw. You take the money that's owed to you and each side will cover our own legal fees. Half the four million dollars I recovered went to my le m to my lawyer's fees. After forty years. We were at last severed. This might be the last time. that she ever sees her mom. There was no sense of exuberance or celebration. I could see nothing but wreckage all around, and I felt empty and alone. And so all the stress of all these factors just compounds and makes her absolutely miserable. She might she's still building a company. She's still fighting with her partners. She had a deal for for this lawsuit with her mom. She went through a divorce. She says, I've been having massive anxiety attacks and nights with. I couldn't sleep. I was so distracted. They would take me hours to dress. I couldn't make decisions and I couldn't stand to be With other People. Then they're also fighting over some stuff that is ridiculous. Our owners became greedy and they began pushing us to improve our margins. They told us we could no longer use leather. That cost more than thirty euro a square miter. Why? Why such an arbitrary decision? I I was thinking about what Warren Buffett says about this. Because when you're reading about the the the direction that some of the her partners want to take the company in. Some of the ideas they had for product, which essentially just like let's charge more for a shittier project or a product. Yeah, that that's gonna work long term. It it reminds me of uh something that Warren Buffett would repeat over and over again. Munger also made the observation And Buffett's like hey keep in mind, Buffett had, you know, in in his mind essentially like a an outline of almost every single business in America. And he says the real issue is mediocrity. There are way too many two forty hitters In business. Businesses all s often settle. For a notch or two above mediocrity, Buffett said. Buffett continues, we've seen so much of the ordinary in business that we can fully appreciate a virtuoso. Performance. So the way I think about this is mediocrity is invisible until passion shows up and exposes it. her partners are trying to pull her into mediocrity. They push our factories to lower their prices so they're forced to use cheaper materials and otherwise cut corners in the manufacturing process. The product we were beginning to produce wasn't my idea of who we were. From Italy, where they were manufacturing the shoes. Anna saw the decline in manufacturing specs being approved. She sent me this message. It's the beginning of the end. So that is The direction that d th that her partners want to take Jimmy Joe and they own most of the company at this time. I I can't remember the her exact ownership, but it's not large and she doesn't really have as much control or influence as she obviously wants to. So that's one direct a description of the direction of like somebody just doesn't really give a shit about the long term health of the business. At the same time I was reading this book, I re read This excellent uh interview that Steve Jobs gave when he was twenty nine years old. And he gave it to Playboy Magazine. And there was a paragraph That I read in that Interview. the same time I was reading this section of the book, I'm like, wow. This is a contrast. Steve had soul in the game. These are the the the the entrepreneurs I admire. The most. They have soul in the game. This is what having soul in the game. Sounds like and looks like and compare that to what you and I have been talking about with Tim with the these private equity partners. We didn't build Mac for anybody else. We built it for ourselves. We were the group of people who were going to judge whether it was great or not. We weren't gonna go out and do market research. We just wanted to build the best thing we could build. When you're a carpenter making a beautiful chest of draw, you're not gonna use a piece of plywood on the back. Even though it faces the wall and nobody will ever see it. You'll know it's there. So you're going to use a beautiful piece of wood on the back. For you to sleep well at night. The aesthetic. The quality has to be carried. Uh The way. Through it. And so she goes and says, Hey We've now had these stores for over a decade. We need to reverse them. They they They're not good enough. We need to constantly nurture and protect the most en daring franchise and valuable thing that we have, which is our brand. And their response is That's not going to pay off during our time horizon. They still cared nothing about the long term health of the business. Or the actual quality of The product. I actually cared about the business we were in. The product. The people. I wasn't merely passing through. And then she makes an excellent point. Every few years we're selling the company again. So what happens before you start the company? You have to prepare the company for set for sale. So their competitors don't have this very costly distraction. The Jimmy Chew. is going to she says facilitating due diligence had become a tiresome second job. Meanwhile, our competition wasn't necessarily going through the same kinds of distraction. And could focus on the real work of creating and maintaining quality and innovation. And so a situation like this can only continue so long for a founder. Till it finally has to reach its end. She finally reaches her limit. She steps down from the company she founded. She steps down from the company that she gave a large part of her life energy to. This is why I always tell you it's bullshit when people say Oh, it's not personal, it's business. For founders, it's always personal. On August first, twenty eleven, fifteen years almost to the day since I'd gone to that first trade show in New York with samples too awful to show. I gave them my notice. What I was feeling was a combination of anger. Relief. Morning. And a profound sense Of loss. After leaving. Jimmy Chu. This is in the last chapter she has all this uh this advice. For entrepreneurs, she goes, I've learned. to always retain majority ownership and control. And then she tells us why she wrote the book. I'd love it if I entrepreneurs find it useful. My most fundamental piece of advice is to follow your instincts. If you have the wrong instincts for what you're trying to do. That will become evident soon enough, and you may require you to change course. But being blown back and forth by the winds of conflicting opinions. Will get you nowhere. And then this is what I meant about I think this is actually the most important lesson other than the retention of total control. that she wants to pass on. And it's breaking the cycle. That she was born. Into. I enjoy the pleasure of watching my daughter's transformation into a smart Beautiful. and resourceful young woman. In the mornings when she comes in to kiss me before she's off to school. It's the greatest gift. Sometimes she'll climb under the covers of me, give me a hug. And we'll have a little chat before we start out the day. I feel truly sorry for my mother. That she denied herself. The pleasure. Of this kind of relationship. But just because I missed out on this kind of closeness as a daughter. Doesn't mean I can't treasure it now. That I'm the mother. And this is the perfect ending. This is the very last sentence in the book. It may have seemed that now and then I needed a rescuer. But over time. I learned Myself. And that is where I'll leave it. For the full story, highly recommend reading the book. If you buy the book using the link that's in the show notes on your podcast player or available at founders podcast dot com. We'll be supporting the podcast at the same time. Make sure you're on my personal email list. For every book that I read, I email you My top ten highlights. From every book. It's available down below. And also available at David Senera dot com. That is three hundred and eighty nine books down, one thousand to go. And I'll talk to you again soon.