Gymboree: Joan Barnes. How Building a Beloved Brand Nearly Destroyed Its Founder

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1:29 dot com And tell us how we can help you. I go to New York to sign the deal. Um one of the investors is on the plane, the lawyer, you know, whatever, they're all coming for this big celebration. Well I get a call.

1:52 That afternoon I'm sitting in the hotel room and she says, Hello, my name is Carol Anderson. I'm the senior vice president of something. And I said, oh hi, Carol, I'll probably meet you tomorrow. She says, actually you won't. The deal is off. We're not coming. What? That's what I thought.

2:09 What? Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. they built. I'm Guy Raz and on the show today how a casual children's playgroup grew into a national franchise, a stomping ground for kids and a lifeline for parents. Chimbury.

2:50 Every founder eventually hears a version of the same advice. Work harder, push further, and don't give up. That it's the combination of discipline and drive that can turn a small idea into a big one. And don't get me wrong, this is not bad advice. But there's also a darker side to that story, because when Drive goes unchecked, It can quietly begin to erode everything around you.

3:17 Your relationships, your health, your business, and ultimately Your entire sense of self. Today's story is about that very tension. Now, if you're younger than say thirty five. it might be hard to understand just how ubiquitous Jim Bree once was.

3:34 In the nineteen eighties and nineties. Jimbury wasn't just a place you took your kids, it was the place, a brightly colored, padded world of parachute games, circle songs. And structured chaos. For many parents it was also something else. A lifeline.

3:52 A place to connect with other parents and find community. Jimbury began as a simple idea. Get groups of kids to play and offer classes and activities that would give parents a reason to show up. And it worked. At its height.

4:08 Chimbury operated hundreds of franchises around the world, along with more than 200 retail locations selling children's clothing. And like so many stories on this show, It started with someone trying to solve her own problem. Joan Barnes was a new mom. Living in a new city

4:25 Far from family. and looking for connection. She began hosting playgroups at her local Jewish community center. The response was immediate and the demand was overwhelming. And before long, Joan found herself running a national franchise business.

4:41 From the outside, it looked like a runaway success, but inside there were serious problems. The business wasn't making enough money to pay back investors. The pressure was relentless. And the stress began to take a devastating toll on Joan's personal life and her mental health. Eventually, she was forced to make some incredibly hard decisions about the company.

5:05 And about herself. But before any of that, Joan grew up in a suburb of Chicago. She studied dance and English in college, where she met a journalist named Bill Barnes. They got married and after a few years living on the East Coast, They decided to move.

5:21 I was pregnant. Um you know and we didn't really plan it, but I knew we knew we would want to have a family someday and we've been married four years, so we decided, Okay, we'll go for it and I said I'd like to just pick up and go. I you know, I just the east coast was dreary and I just couldn't get over the weather and

5:38 So we just, you know, packed up everything and just took kind of Sea America tour and went across the country and and thought, Well what about here? And what about here? And was like, Okay, well let's try the next stop until we ran landed in San Francisco and Bill took that job. For the San Francisco examiner. Right, exactly. Okay. Within I think about a year of moving there, you guys um

5:58 left San Francisco, moved outside to a to suburb in Marin County. Correct. Um, and you are a young mom. This is nineteen seventy three, seventy four. And from what I I understand, you

6:12 Y you were kind of lonely. You felt a little isolated at that time. A hundred percent. Lonely and isolated, nineteen seventy three was the lowest birth year. since forever. Um and the media had had dubbed The families.

6:26 or the people who were living in that era is dinks, double income, no kids. Yeah. So having kids was against the grain. And so I was looking for Comrades. I was looking for people who'd made the same choice. My family was a gazillion miles away. His family was in New York, my family was in Chicago, and

6:45 Yeah, lonely and isolated. So I wanted to meet some people who had made a similar choice. So how did you I mean you wanted to meet other moms and And kids so so were there playgroups and things? I'm assuming they were like play parent. None of that stuff existed. None of it existed. And so I was in a dance company Um'cause I was into still into dance and a woman there She had been offered a job at the local Jewish community center um to run the

7:13 children's programming and she was scared'cause she had two kids and I said Please share it. This is long before job shares were even Even Mm.

7:22 Yeah, there weren't job shares that we were really kind of revolutionary. And they so we did. We shared our big ten thousand dollar a year job and each made five thousand dollars. And what did that mean? Like Sing sing along and and you know, coloring and arts. After school programs, you know, the uh the pre school programs, the family programs. My f my colleague took all the Jewish stuff and I took the the the secular programming. Okay, you're running an after school program.

7:49 And uh and this is and b basically this is what you're doing. And I guess At one point you had Just by chance you had gone to A class at a YMCA in Berkeley. So on the other side of the bay.

8:03 to uh to see this like a gym, a gym for kids, for little kids that they were doing at the Y M CA there. Tell me tell me remember about that. visits. So um one of the women on the board had come into our at that time we were operating our offices in a trailer because we were gonna build we were building a real JCC and she came in and she said with her then two two three year old daughter and said she was going to a program called Kinder Gym at the Berkeley MCA and maybe I oughta come see it with her because it was really special. So I said okay. You went to go observe this, and what did you see?

8:39 So it was in a gym at the Berkeley Y and they had basically had f they were borrowing the U C gymnastics equipment. So there was full size trampoline. Wow. You know and stuff and and a pommel horse and all those things. All that stuff. And so so they were sort of improvising a way that kids could kinda play on this stuff. You know, all the moms would c get around the big trampoline and somebody would you know, it was just And I just thought this is not really Kid appropriate, but it could be. Анайкусі

9:10 All this stuff scale down in bright colors to little kids' eyes and some really wonderful upbeat music and a really lively teacher and we would have something. Арай, союз концепсон. potentially really cool. Now you are

9:27 Kids program at the J C C in Marin County and And so tell me what you start to think. You start to think, hey, maybe I could bring this concept and do it there? I did. I thought maybe we could do this at the JCC. But not this, we could have an opportunity for

9:45 Moms and kids to come together, but instead of having it be with full sized adult gymnastic equipment. We would develop our own equipment. That would be scale down. to appropriate size.

9:58 with the appropriate kinds of activities to develop Um Because Play is how kids learn and I knew that much. And and this would be like Kid sized or toddler sized trampolines and toddler sized Tunnels and bouncy things and climbing. And did this stuff exist? Like did you buy it off the shelf?

10:19 I um I found somebody well first I had I had to convinced the board to put up I think it was five thousand dollars to to buy this stuff, whatever the stuff was. But I didn't know I didn't have it priced out'cause it wasn't It wasn't like going through catalogs and saying custom made. Yes. А саме вас авиабофор спешил нес кис. Um, so some of it I could get, some bouncy logs and things like that. And then I found somebody to make our

10:46 Propriety. Products. And We were lucky and I was pretty savvy because of my um

10:54 husband at the time, I knew how to talk to the press. So I went to the local paper in San Rafael. And I got a big feature story in there. It was even before you started you had a story about what you what your plan was. Yes. And we had pictures of the equipment. We hadn't opened yet, but we had sort of a dry run and we had the f anyway, we had a big full page feature, you know, fifty years before social media or thirty All right.

11:19 You open I think you open this up. In nineteen seventy six, it's the first you open at the J C C Yeah. And you originally you're calling it the Kinder Gym. Yes. Right. And

11:30 Uh and and and how did you right away people Who were like, This is amazing. Like they start coming. Right away. F from the p that that press story we we were oversold right away. And and how much was it c did it cost? It was like five bucks for an hour or something like that. Yeah.

11:47 But we would sign up for a session, or you know, for twelve weeks for fifty bucks or sixty bucks. And come once a week. And this would be Moms and their toddlers. Sometimes dads. Dads. And you would lead the lead them through a program or they would just r kinda run around and jump around and do whatever. I hired um

12:06 you know, I wasn't a pre school train pu I was you know an entrepreneur, you know, whatever. And so um w I developed with them what w they would do and how they would set up the equipment and you know, sh I was winging it, man. I didn't know. You know because'cause underneath all that Um Guy was really

12:28 the intent to connect with other moms. And that would happen through doing having f the kids having fun and everybody talking. And in that first year, do you remember starting to develop like a program where the kids would come in and sit in a circle and then they would or was it just free a free for all? No, it wasn't a free flow. And we had the the parachute that I had seen at the Berkeley YMCA was the parachute that the kids would hold in the corner. Okay, yep. So that was an army colored parachute, and I developed a multicolored parachute, which I did have made that was very kid friendly. And so we uh every class ended with about 10 or 15 minutes of group time where the kids would run underneath the parachute. We had songs, some of them became propriety songs. In the beginning they were just songs that everybody sort of knew, you know what I mean?

13:16 Um And so, you know, and then I was aware that parents would feel Um You know weren't

13:24 participating or or anti social or didn't want to be in the group or didn't like or scared of running under the barrel. Or shy, yeah. Or y all that sort of stuff. So I wanted everybody to feel um positive. I wanted this to be a very uplifting experience. How were you able to cultivate it? Because I remember taking my kids to play groups and it was really fun and I was usually the only dad there'cause of the time I w I wor I worked Wednesday to Sunday as a as an anchor of a of a weekend program back in the day. And I l I remember the parachutes, and my kids, you know, sometimes they were just shy. They just didn't want to get in the circle. They didn't want to clap and sing and do that stuff. How would you get

14:00 Parents to feel. I always felt good, it was always fun, but how would you do that? How would you cultivate that feeling? Well, because we would have the we'd have the teachers really be very upbeat and positive about whatever your kid's doing is all cool. Some some you know there's so much freer spirits than we are. Some days we don't feel like doing something and we just don't go sit in the corner and pick your nose. It's fine. It's fine. And then we'd have the teacher say, Hey out there, how you doing guy? You know what I mean? And just you know Uh. Just be tribble running down my m my mouth, that's it, you know.

14:31 I lo I lo those those days are so fun. All right, so Joan, you're running this program at the JCC in Marin, and it's a JCC program. You were paid five grand a year running this program. But it was successful enough that I guess at at a certain point, maybe a year or year or so in, the the president of J C approached you and he had been uh an entrepreneur himself and he said, Hey

14:54 I think this could be bigger than something here. Do you want to go into business? And yeah, uh how did that work? Did you did you start to think to yourself, hey, maybe I should turn this into a business? Or how how did you go from running a gym at the JCC to start thinking, Hey There could be something bigger here. Well, uh before that I opened a second one on behalf of the Jew Center in a neighboring community, the one I lived in, Mill Valley, which was a lot. So I had two of them and they were

15:22 really making money and they were supporting all the you know, sort of do good programs of other things that the center was doing. And um that's when the guy who had had been running these he was the president of the board. He was all of thirty two and I'm twenty six, and I think He seems like an old man to me, but he he had run these Rick Berry basketball camps and he'd sold them and he was in a non compete clause. He was looking for something else to do. And he came to me and said just what you said.

15:50 I think this could be commercial. I'll put up the money. You run them. What do you think? And I was completely naive. I had n no I This was not even I never even thought of it as a commercial venture. It was all him. And just to clarify, Rick Barry was a legendary basketball player. This guy you're talking about, his name is Max Shapiro, he had run a chain of basketball camps

16:11 with the discount Rick Berry had sold them. Had made some money. Yes. And he was looking for something to do, and of course he had seen what you were doing at the J C C Yeah, he was he'd seen what we he'd seen the success of Kander Jim and he was like I think we could do this commercially. Alright, so Mac says

16:28 Hey. There's something here. Do you want to go into business together? So what did that what did you then do? I mean that you have two two of these centers in J Cs At that point it's not your business.

16:40 So so then do you say, All right, I'm gonna start a business. It's gonna be called Kinder Gym or whatever. Like is that Did that happen at that point? Yeah, well, but I was afraid to leave my job, my you know, my important five thousand dollar year job. I just so I skipped down to south of San Francisco to the peninsula, we call it, um San Mateo. Um

17:02 As a business, calling it Kinder Gym, none of this trademark or any of that stuff is even I think about all that stuff. And um And so I open up at the at a temple. Um I convinced a temple that we could use their

17:18 there a social hall a couple of days a week and that we could store the equipment, you know, h a little bit here, a little bit on the that sort of thing. I'm So that was the model. It wasn't like I'm gonna get a a a lease of space. It was I'm gonna go to a a temple or synagogue or a church or whatever. Yeah. Use their space and pay them rent, and that's where I'm gonna start this open this up. Yeah. And I hired somebody who was you know, similar to the teachers I'd hired up in Marin County in the two locations. I hired somebody with um pre school background.

17:49 to run the program. And they ran it um a little bit of a precursor as the franchisees. They put a phone in their home, they run the business part of it. And they would teach the classes. They would pick up the calls get them, you know. And I was able to get a big story in the San Mateo paper, same as I had done in Marin. And the same thing, it completely filled up. Wow.

18:10 Okay, so you so you start to see this thing as Well a lot of there's a lot of potential here, right? Yes. And um Somewhere along the way, I bought my partner out. I realized I'm doing all the work.

18:24 Max. He was a he was a passive investor and yeah. And I'm working I'm working hard. And when the you know, the setup guy doesn't show up to put up the equipment. You know, I'm putting the toddlers in the car and driving down to San Jose and setting up equipment myself and I thought this is no way to run an airline. So I make My um San Mateo Partner or

18:45 She was a employee at the time. Now she's running like three of these up in northern California, up in the northern part of the peninsula. And I have another person down in San Jose, who's r operating another four or five of these things, and I make them both partners in the business. You gave them some equity. I gave them some equity. You know, because they they had investment in this business and so they were running it. So your investor, uh, Max Shapiro who had originally given you three thousand dollars, you decide You know, he's He's a passive investor. I'm doing all the work. I want to try to buy him out. And he agreed to let you buy him out. I think you gave him double what he he put in like I think three or thousand dollars and for from what I understand, you gave him six thousand back. I did.

19:24 All right, so he did pretty well. He doubled his investment. Bought out. Um and And ha and and w these bl places were making money, these these tender gyms? I mean they were little tiny businesses, but they were yeah, they were making a little bit of money. Yeah. I was making some money. And at what point I mean you w w did you leave your job at the J C C to start focusing on this?

19:47 That's a good question. I'm you know, I was trying to remember. I think somewhere around location five or six, I thought, you know what, this is doing well enough and I need to focus on really making this happen. So I left the job. Alright. So by nineteen seventy nine, I read, just three years in. There's like nine of these locations operating all over From, you know, S uh M Marin County all the way to Silicon Valley, where we were

20:15 Uh and um And you guys start bringing in, you know, significant revenue. Uh something like t over two hundred thousand dollars a year in revenue. Yeah. A little bit more than that. Yeah. And your costs were probably

20:30 Relatively low because you're renting out space at churches and synagogues. Correct. And for them, they're happy'cause it's revenue they didn't even have. Yeah. Sure, and you're bringing people in. Yeah. Everybody's happy. Yeah. Okay. I I I imagine that as people start to see

20:47 How cool this is. People start to approach you to say hey Can I can I open one? Can I Like Talking up to you about potentially franchising, which was not again

20:59 was not part of the idea that you had, right? N nothing everything just sort of showed up. No, I none of this was calculated. It was you know, I'll get nine locations and then we'll start franchised and we'll be national and then a plan. Kai didn't even know what the word franchise really meant. Right. And I you know, I you know, I was the the one thing I will say is that

21:21 It's best to start a business when you're young and in and ignorant because I just figured I could figure it out. You know, I mean when I look back at all the things that I sort of figured out Amazing. So I did. And I I went to the um Federal Trade Commission, I got the franchise papers. I was probably the first person, not a corporation, franchising. So I wrote up the whole thing and I got license to be able to franchise in California. Alright, and and so you go to the FTC office in San Francisco, I'm assuming. Correct. And they give you a stack of documents to fill out in order to become a franchiser.

21:55 W uh uh And I'm not saying this for any other reason except for I don't think with all of the knowledge I've now gained over ten years of doing the show that I could fill out those forms. Did you know How to fill out those forms?

22:07 I had no idea what I was doing. I just thought, okay, I can read, I can answer these questions, I'll figure it out. And I did. Okay. So you fill out the forms to become a franchiser to operate a franchise business, but d but I guess when they asked for you the name of the business or or to to the how it you know what would be called. You couldn't trademark Kinder Jim. Well, I I knew enough to know that one of the the m the most valuable things of the franchise is the name.

22:34 So I thought okay, I better register or trademark or whatever it's called this name. Kinder gym. Okay. Kinder gym, yeah. So I tried to do that. I didn't have a trademark attorney. I had nobody to fast you know, f make this work for me. So I'm just I'm just me filling out the damn form for the name. And about a year later, or be you know, quite a while later, year and a half, I get a rejection. It's generic.

22:58 You cannot patent that. You can't trademark the name. Cannot trade that name and by that time I had a few franchises operating. And you had all this press attention uh about Kinder Gym. All of it. And we had about four years of operating as Kinder Gym, both in the company owned locations and maybe we had I don't know four or five franchises at that time. And I thought. You can imagine what I thought. You know, what am I going to do? That's the end of the business. That was sort of the first big

23:26 Trouble. When we come back in just a moment. More big trouble. A business model that just won't work and an acquisition deal. the drops of a cliff.

23:39 Stay with us, I'm Guy Raz, and you're listening to How I Built This. Welcome back to How I Built This. I'm Guy Raz. So it's nineteen eighty one and as Joan's business starts to grow across the Bay Area. She discovers she can no longer use the name Kinder Jim. So I

24:14 Um The then husband and I, Bill Barnes and I sat with a broke down a gazillion Names and things like that. He calls me. From a phone booth where he's running around the embarcadero.

24:25 And said Jim Burry. And I just loved it. I just loved the sound of it. I got immediately what it meant. And I thought, okay, now I'm going to Hire somebody. to find out whether this is a good name, how we get this trademark, how we do this properly. So I found and so therefore did all that.

24:44 So you trademark this name. This new name, Jim Bree. Uh and now you're ready to to start franchising the business in earnest. Uh, and I guess you get introduced to a guy, someone named Bud Jacob. who had experience in franchising and and what, um he he liked your idea?

25:00 Yeah. He did. And he liked me and he was and he was the only he was he was like a a dad figure. He was the next generation. He was, you know considerably older than me, twenty, twenty-five years older. And Bud had worked for uh McDonald's.

25:14 In Chicago? He worked for Arby's. And then he became a franchisee and he owned about 20 Arby's out on the West Coast. Did you need at that point'cause it's nineteen eighty two and you've now there's a Bigger vision here.

25:28 Did you need to raise money to do this? Okay, so how are you gonna do that? So Bud introduces me to the guy who eventually becomes my f primary investor. Stuart Muldau. And Stuart had had super success and he was a V C and he

25:45 Um I met him and I told him what I was doing. He said, I love it. I love you. You go home and write a business plan. If it makes sense, I'll put money in. to expand. Were you at this point opening your own brick and mortar locations, or were you still renting out churches and still renting church halls and community centers. Yeah. By the way, there was a model like that, which is Jazzer Size. I know Jazzer Size, yes. Yeah, still to this day, that's their model. They they

26:10 the you know the instructors work out of community centers. Okay, so you you you write a business plan for this investor. I do. I go to him with a business plan. He says, You got it. And he t he just makes me an offer, he tells me he's gonna put up um three hundred thousand dollars. um for thirty percent of the company. He values the company a million dollars, which is sort of ridiculous, I think, but whatever. Um, and he put up the three hundred thousand and said, You you go for it.

26:36 And so then Bud's now working for me, we're putting up a strategy to to run to run franchises across the country and get a hold a foothold in the media market of New York, so we weren't labeled some crazy California phenomenon. And Three hundred thousand dollars, thirty percent. So the business is being valued at a million dollars, which in nineteen eighty two was a pretty I mean it's a pretty good valuation. Yeah for um you know what was at that point You had no assets. We had nothing. And no leases either. I mean it's like I like jazz size. I mean, any one of these churches or uh synagogues or whatever could say, Okay, see you later, you know?

27:12 Yeah. Yeah. Okay. So let's talk about the the initial plan,'cause from what I understand.

27:18 The model that you you and Bud put together was a was somewhat different. It wasn't like um, hey, you want to own a Taco Bell or a McDonald's. It was you you really wanted women actually to be the franchisees. Correct. Um, particularly women maybe who who were not working, um, at the time. Tell me a little bit about that model that you start to develop. Th that was sort of the the I think one of our brilliant moments. What we what we were trying to do is really replicate people like me. but a little bit younger. Now I'm in my early thirties. So we're looking for women in their mid to late twenties who were Um raising a family, but also had ambition for some kind of professional focus. And this was like the perfect business.

28:00 And so We had a unique strategy, um, because again, this is also pre social media. We knew that um the local newspapers were The next best thing to Anything. I mean paid ads, not none of that was gonna work like having having a press.

28:17 endorse you and write a big story on you. So w we just went about going to the local press in every community that we were thinking about going to and saying We're thinking about going here and then some story about the neighboring community with the local franchisee and blah blah blah, and then People started running. We also ran kind of an interesting strategy. We ran avatorials.

28:39 Like like editorials that were ac looked like editorials but they were actually advertisements. Correct. In the Wall Street Journal, so that daddy could s read them on his commute to his real job that he had to do to pay for the family, and he'd say, Oh my god, this is perfect for my wife And then then they would fly out to California on their own nickel. maybe him too, but definitely her. And we would sit and we would spend the whole day with them. They would go to a center, then we'd all ha the management team and me we'd all have lunch in my office together. And if any one of the management team of of the company thought that this person was not a good fit for us, that was a Veto.

29:18 I was very collaborative. Yeah. And and w was there a certain energy or attitude you were looking for? Oh yeah, we were looking for somebody charismatic, who was bright, who understood that we were you know, that we're this was like a marriage. You know, the s the success of Jim Bree was the t was the interaction between the franchise or and the franchisee. And in addition to that, we would also discuss with them how big of a business they wanted. Some of'em would have six, seven, or eight locations, some would only have one or two.

29:47 And from what I understand, you really focused on the east coast initially. You didn't you didn't even though you were based in California You really want to push the New York market in uh from the beginning. Wha why was that? Well, first of all, we built out already the the Northern California market because I was able to do that on my own even before we were growing. But when we opened in LA it was a different story. And the LA franchisees

30:13 Um were extraordinary and they knew how to get all the press and and they were part in the film industry and so they were on all the fancy you know, T V shows and they got all the movie stars in their classes, and they had about eight locations. And because of their success, we were able to build out the Southern California market because people who were in their classes would say, I wanna do this. So that Uh, grew

30:36 Naturally. Hm. So the east coast is where we needed to put our energy, which is when we did the the um Wall Street Journal adds. I hired a PR firm. They helped us get some big stories and You know, we're happening.

30:50 And I mien this like was hot. I mean start nineteen eighty two. It was like You were getting all kinds of crazy attention. I mean,'cause it kinda coincided with this new trend around like

31:04 child development and better understanding of like play and I mean this was becoming a thing, especially in affluent communities in the US like Right? I'm I I even I'm at some point People magazine wrote, Move over Roper Room, all the best babies come to boogie at Joan Barnes's Jimbery. That was a great. How about that?

31:26 Yeah. We were in um U S World and News Report and Time and Newsweek and I mean it was like It just w we just had to pinch ourselves to realise we were getting all this press. Okay, and so ba and basically tell me what kind of you know, sort of blueprint you gave to the franchisees. Presumably you gave them like here's how you run a class for this age. Like were there different

31:48 classes that they would run for different ages and was there a script. Exactly. So we first of all um had a uh week long training program and the all the p different people on my staff trained different things. I trained them how to find a location. Somebody else would train about how to set up the equipment. And we also had quality assurance people that flew out to their locations. and hung out with them and, you know, made sure they were doing everything well and whether or not we could be more helpful to them. The the all the marketing material everything was that's that's what they bought. Yeah. Alright, so you get you're really g exploding. I think by in nineteen eighty six

32:24 I read you had twenty five employees in your corporate office. You had uh about fifteen milyen dollars in revenue. And about four hundred of these franchisees, about uh these local play centers in in all across the US, even abroad in some countries. And I guess they were paying you like twenty percent or a percentage of what they were bringing in.

32:46 Correct. Well we had we um in addition to the um US franchisees we had sold Mexico, France. And we'd done those as um master franchises. So they were they replicated who we were and then they would subfranchise to uh things. And all under the jimbery Brand Okay and I r I remember seeing this movie in in the theaters. It was even mentioned in Baby Boom, the Diane Keaton film. She mentioned Jimbery in that movie.

33:13 I was at that movie and I heard them say that, and people pay, as you know, millions of dollars to have their airline put in there, and I started screaming, oh my God, you know, because Diane Keaton's sitting there talking to a bunch of women in some Upper West Side Park and they go, you don't even know what Jim Berees? I mean, come on. And and so this really w and you it sounds like you were targeting Um you know, sort of Affluent.

33:42 places initially New York and Los Angeles and San Francisco, but you were also in Kansas City. I mean you had you were all in in mainly in cities, right? Mainly in cities, yes. Or suburban markets. We were all over s um suburban Detroit, suburban Minneapol um Atlanta, Florida. Yeah. All right. You get to nineteen eighty six. This is now four years after you start the franchise and you've got Yeah, franchisees. operating all over the place. Got fifteen million coming in in revenue, which is

34:11 From the outside sounds. Like you guys are doing great, but On the inside. You know. that there's a problem that actually

34:20 What seems to be a wildly out of control success is had some serious underlying structural. Problems. What what did you start to realize?

34:32 I realized that the franchise model was flawed. Mm. that no matter how many franchises we had, it wasn't a about scale. Them the revenues that the franchisees generated are therefore the percent that they would give us of their revenues was never going to be sustainable. How? Is that just because

34:50 A a you know, a franchisee might have three to tr three or f open three or four days a week and only bring in a certain amount and You could see that there was just I mean we already were doing it, so I'd seen. You know.

35:07 Each location would maybe pull in a good one would maybe pull in a quarter of a million, maybe. A year, yeah. Yeah, and we get eight percent of that or whatever the percent was at the time, it was six, who knows?'Cause it kept growing over and that just and in order because of what I said earlier, Guy, that the success of the of the growth of the business was how well we supported the franchisees. So yeah, we could not support them and then we wouldn't sell any And so it c the cost of actually supporting them and sending out a team to be with them and run trainings for their teachers locally and all that stuff. It was all well well thought out and really beautiful, except that it cost too much money.

35:45 So essentially the only way to Even Break even was to sell more franchises in order to sell more franchises, you get to spend money

35:56 To service. Those franchises and to So it was like a Say catch twenty two. Flawed.

36:03 And I I realized it was flawed, but I didn't know what to do about it because I couldn't s I couldn't figure it out because there was no way I could charge more or give less service. I mean I've I thought of all the possibilities. Now my question though is couldn't you do things like just raise the price, like say to all the franchises, okay, it's no longer five dollars a class, you gotta charge eight dollars a class. Well, by that time we spawned competitors. Right. And that's that's good news because if you're you know, if you don't have a real business, you won't Competitors validate the the validity of of the business. So they charged about the same thing. So we really it wasn't really sustainable for us to, you know, get to a fee where the our eight percent was really gonna make a difference to us. Undercutting. It's amazing because on the one hand Public.

36:55 You've getting national media attention. You're in Baby Boom. You're in People Magazine. Everyone's talking about this thing. Every mom's going to it. Everyone loves it. It's so fun for the kids. But the business is barely treading water. Yes. You couldn't could have said it better myself. That must have been really, really stressful. It was s I mean I I

37:16 I I'm usually pretty good at fighting at myself out of a paper bag, but this was this was the only thing I could do was just be honest. with the board and say. The way we're doing things is never gonna be to have a return on investment for you guys. Hm. We could probably s move along as a is a nice family business. I'd get paid, the employees would get paid, the franchise but they would never see they'd never see a return. It could and they w they didn't go into this to fund a little family business. I knew that.

37:45 Okay, so you say this to the board and What do they say? They say, Go figure it out, just no more money. We're not giving you any money, go figure out some some other way. And you know, that was like

37:57 Um, okay, I'll figure out another way. So I guess you have to start thinking about Okay, maybe there's a product, maybe there's retail, maybe there's other things we could do. Well, the first thing I thought about was what can we do that doesn't cost any money'cause they're not giving us any money and I'm not gonna be able to go out and raise money when our

38:15 when our board is all invested in this thing and they're not putting up any more money. So I thought licensing I was sophisticated enough to know licensing, you know, Jim Beree had a really great name, as you said. We've been we And a brand and a logo, right? Everything and we had a great press and we were in We were everybody knew it by this time. Everybody knew it. You would go to some places, what do you do? I I run jimbre. Jimbury, I love Jamboree. If you were a parent and didn't know what Jimbury was, you were like really out of the way. Living on Mars. And so um So we were able Um to

38:47 uh secure some very, very prestigious licenses. We had Random House doing our books, Health Techs, which was kind of a cool brand for clothing. They ran they did a clothing line for us. We also had Connor Toys did Some really like a big climbing gym that you'd put in your that you could buy like a b your own climbing gym. Your own climbing c really colorful and nice looking and it was sold in Toys R Us. I mean it it was like wow, we really struck gold, it appeared. And you didn't need any cash to do this'cause you were just licensing your name. Exactly. But from the consumer's perspective it appeared that Jimbury was even bigger. Like wow, look what Jimboree is making. Yeah.

39:26 Um but Um Probably a year later, maybe a year and a half later. We were dropped by all of them. Because we didn't have the sales. We weren't Snoopy, we weren't Garfield, we weren't Little Princess or whoever the cool

39:39 you know, product w we didn't have a T V show. We didn't have nothing. We just had this live living breathing program and it wasn't big enough. So even though parents were Clamoring to come to the classes, they weren't walking in a toys or us and going, Oh, Jim Beree Toys are buy them. Yeah. Well they they obviously were buying some, but not enough. Because these these licensing companies really want you to be a the next gazillion dollar baby.

40:03 And if you're not, they drop you. They drop you because there's always a million more T V shows that are with a new with a new pro So we were dropped. And so now now licensee doesn't work. the franchising, we're still we're still operating. I'm not you know, but but we're not making any m we're we're we're making m we're doing fine. We're supporting our staff. But we're never gonna pay them back. The same problem exists.

40:26 Alright, so this is nineteen eighty six. You've got this major problem with the business. But then it suddenly looks like you might get a lifeline, right? You get you get I guess you get introduced to someone from Hasbro Which is one of the biggest toy companies in the world, right? And And what, I guess they they want to make like an investment, maybe even a quarry. What w what's the story? What happened? Yeah, so

40:47 First they thought they were gonna do a corporate investment and then they thought they would buy the company. Do you remember how much they were offering? I don't. Um I think They had an option to maybe it was the first they they um put in a c investment and then if we hit certain benchmarks they would buy it. And so with that you started to get some confidence that you could at the very least pay back your investors or give them a return. I just felt um like we have been bailed out of hell. Yeah. And it's crazy by the way. Can we just pause that how crazy that is because

41:17 Everyone who knew you was like, there's Joan Barnes. She runs Jimberry. It's the most amazing company. And you're like freaking out. I'm freaking out. And I'm trying to act like I have it together and I don't want the franchisees to be panicking that we're going under'cause this is their business too now, you know what I mean? And so I get this offer. I'm so sh I'm so stoked. I get the lawyer. They you know, they they and their lawyers they're You're going back and forth on these documents, and I go to New York to sign the deal. Um one of the investors is on the plane, the lawyer, you know, whatever, they're all coming for this big celebration for us to be partnering slash being bought by eventually with luck. Hasbro. Well, I get a call. That afternoon I'm sitting in the hotel room and she says, Hello, my name is Carol Anderson. I'm the senior vice president of something. It has, bro, you don't know me. And I said, Oh hi, Carol, I'll probably meet you tomorrow. She says, Actually you won't.

42:13 The deal is off. We're not coming. What? That's what I thought. What? I said I'm sh I'm sorry, I said we have our lawyer and our other investors coming, everything was set, but your lawyers are aggr I'm I'm confused. She said, Well here I'll straighten you out. She was really kind of a not very lovely person. Um it's all over. We're not coming.

42:34 And and you were like, sorry, can you give me any more information? She was not forthcoming. Just that's all I needed to know was that it was off. Was there anyone else you could call? That was it. She was the kind I said, should I call I for I could whatever the marketing guy's name who I really originally connected with I said, would I be able to speak to she said, nobody's gonna speak to you. I am the uh I am the omudsman telling you the news.

42:58 Wow. I'm sitting h all by myself. These people are on the plane. I'm humiliated. I mean I thought, okay, this is the end. I can't imagine what we can do from here. I mean, to me this was the the s the the bailout and the board was thrilled. They loved Hasbro, you know, they Hasbro was a big deal in those years. Still a pretty big deal. Still is. Yeah. And so um

43:19 I um Left a message. in the room for the woman investor who came from Montgomery Securities who became kind of a friend and I said, Please come to my room This is one of your investors who came out. Yeah. She'd been fantastic. You know, she was with Montgomery Securities and she was a peer my age and so she came to the room and I just burst out crying.

43:41 I said, I'm so embarrassed, Linda, I don't know what to do. You know, the law all these hot shots are coming. Our lawyer, you know, another investor. And she said, We'll deal with it. We'll figure it out and And I don't even really remember. I just I just remember It's a blur probably. It's a blur. And I remember f finally flying home and going to the Jimbre office and telling everybody Yeah. This had happened.

44:05 And I said, You guys, I know there's an answer. But I don't have it and I'm completely spent. I'm gonna go to my little c cabin in the Sierra to restore and I'd like it if you guys would take the weekend to get together without me so I won't inhibit you and come up with the the winning strategy. You basically you come back and you say to your team Figure it out. I'm done.

44:27 I I'm done or I'm taking some time off? I'm take no, I'm not done. I just can't I don't have any I would be a drag on a creative meeting for what's next because I was the one that come up with the All of it. You know, I mean I was the one the big leader and with the insult of Hasbro walking away from the deal, I just felt leveled. I had nothing left. I knew I would, but I needed I needed some time to go be in nature and

44:50 You know, whatever. I read that you guys that Jim Marie was down to fifty thousand dollars in cash. Yeah. I think it was even less than that. My CFO came up to the cabin and we sat there at my gu at my little kitchen table figuring out how long we had to live. You probably had to lay people off. we lay laid people off and the ones th those of us who remained in the I call it the life raft, we all took f fifty percent pay cuts. I took a seventy five percent pay cut.

45:14 And everybody hung in there. But this was all quiet. This was not in the papers. It was not publicly known. Nobody knows nothing the franchise. Nobody knows anything except for me and that in my my people that work for me. The board doesn't the board knows, but I said we're coming up with a we're gonna coming up with the final and winning solution, you guys. I just I kept being putting on the happy face.

45:35 I mean it's it's it's kind of this classic dilemma. You had an amazing brand But you didn't really have a A a pro a retail project. We do not have a money making business in You know, I always say to my franchisees the co the the price of admission into the play yard of building a business is making money. You can do it for a little while.

45:55 you know, social venture and it's fun. But if you can't make money, you can't stay there. Oh. Yeah. So when I got back from the my cabin Um, you know, trying to figure out how long their fifty or twenty five grand was gonna last and who was gonna get laid off and who was gonna take pay cuts and all that stuff. On my desk was a picture of a play center.

46:16 Next to a retail store. A photograph? A a sketch. No, it's it was a a sketch. Somebody had some th this is what they'd come up with. Huh. Our play centers, instead of being in church halls, we'd rent a space, we'd open a retail store, Jimbery branded stuff. And then in the back of the retail store would be the play program. So we'd

46:34 Rent one space and then it All together. And I thought, wow. Retail stores. Well, that's a big deal. You know, what we have to manufacture our own clothes and you know sell them in our own blah blah blah. I thought, okay. Let's put this together. The and the so just to clear cl be clear, the idea was

46:53 Let's have retail stores, we'll sell all of our stuff and we'll have the Jimberry Place that are inside. Yeah, in the back of the walk through the store the back of the store. But the store would be um a new creation. We would we would design and manufacture our own apparel. And we'd also put some play equipment in, we'd have you know some s it would pretty much be all branded, maybe in the beginning we'd have to bring in some other people's toys and things like that. But it would be a a thing. So So the idea would be, hey, they're coming in for the classes anyway, but let's make them walk to the gift shop first. Right? Yeah, you are to the gift shop, then you go to the class and you gotta walk back out the gift shop. So the gift shop was going to be the business.

47:33 Yes, exactly. But the classes are gonna draw people into the stores. Right. And you like this idea right away? I did. I thought it was Yeah, but I realized it was gonna be We'd have to really come up with the whole plan, we'd have to do a model of what the store looked like, some prototypes of the clothing, you know, we'd have to do a whole thing and then sell it to the board. But again, I'm young and dumb and blue you know, just I'm The the business was not dying under my watch. That's what I can say, guy. It just was not going down.

48:03 Okay. The board previously Like W lessen a year earlier had said go figure this out. No money. No money. Now you're going back then and say, Okay, we figured something out.

48:14 I'm gonna present this to you and I need Money? Is that what you did? Yeah, I said, um, I I think we really have come up with a winner to to to take the best of our reputation, the press and all of that, and come up with something that is super sustainable. And it will need an investment and I'm gonna tell you how it works. So I just I was all in sales mode. You know, we'd had a you know, beautiful mock above the store, which is pretty much how it ended up looking. Like a gym and then some clothing. Um the the woman who had done our clothing, her husband was the GM of the gap.

48:46 So he knew all these people in in China that could manufacture for us. You know, and she did a great job designing our first line. We couldn't design a boys and a girl's because we couldn't make enough product, so we did a unisex line. Anyway, so I went to the board that the Phil Schlein who had been the had of the of Macy's had just joined US Venture Partners, my venture capital firm. And he asked the board if he could sit in on the meeting, because he was like the retail guy and he wanted to hear what the deal was. And so I made the presentation. I could tell that it was

49:18 Um, it was going over well. And then he asked if he could speak. And he looks at the board. He says, You'd be crazy to invest in this business. First of all, they don't know how to run the business they have. Yeah. True. They don't know the first thing about retail. And he just gave all the reasons why they should not invest. And by the way, the other question he must have asked was, Haven't they already tried products with licensing that didn't work? Why is this gonna work?

49:42 I think that question came up, but that one I had an answer for. That in our own environment, housed in our own world. That we created You know. And also the products that we were going to create were going to be really kid friendly. These were three inch cuffs and you know, unisex, and unisex was kind of a thing then.

50:02 our customer base is affluent. They've got money. They're educated. Yep, all of that. Anyway. Um So they said well th they would think about it and let me know.

50:12 And the next day the lead investor called me, the guy that put in the first three hundred thousand dollars, and he would s he said, Joan I always believed in you. We'll give you a bridge loan, get over to Hong Kong, produce the line, and when you get back, you'll find a location and we'll open up a test store. Wow. I said, Okay, Stu. Just as an aside, you were based in the Bay Area.

50:32 There happens to be two massive apparel brands based in San Francisco, Gap and Levi's. And I think at the time Gap was starting to work on a kids line as well. Like did you ever approach them or try to You're gonna laugh. Stuart Maldon, my lead investor, was on the board of the gap. He was quite close friends with John Fisher and he said, Joan, I'm gonna get you a m in a meeting with with Don Fisher. I think maybe this was before I made the presentation about the retail to them, and he said, Um, I'm gonna get you a meeting with him and I think if you present it to him, maybe they would take it and they would they would develop your whole retail thing. So we ch we talked retail. So I did. I went to got Don Fisher's office amongst all the

51:12 artwork that's now at MOMA and stuff like that. And he said, It's a great idea, Joan, but uh you need to know we're we're opening Gap Kids in six months. And I'm thinking, great! Even if we ever get this started, we're gonna go up against the most formidable retailer in the world! This is great news. When we come back in just a moment.

51:34 The clothing line goes forward, but Joan has to step back. and leave the company. For good. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Welcome back to how I built this.

52:02 Guy Raz. So it's nineteen eighty six and just as Jimbere is about to launch its own line of kids clothing, The gap says it's gonna do the same thing. But despite the threat Joan doesn't back down.

52:16 And she takes off to Asia to visit a clothing factory. Yeah, me and my me and the the woman who was being my designer, you know, were in the back of the bus of the airplane, you know, one of us sitting lying on the floor, the other on the two seats sleep you know, and Um we go and then they say they can't make that few quantity'cause of what we need for one store. So I called Stuart and I say, Stuart, they won't make They won't make this view of quantity.

52:42 Yeah, they need And he said, I double it, you'll open two stores. So I did. I doubled the order. I come home. I get rolling, I look around, I find a location in San Jose and one in San Mateo. Are these in in shopping malls or are these in Macy? Shopping malls yeah, top level malls between the Nordstroms and the Macy's. And these are What?

53:02 Ten year leases that you had to sign or three year leases or what? Ten year leases and and they were at that time with only a thousand square feet. They were small stores. And Um We're ready to roll.

53:13 And the holiday season of eighty six going into eighty seven. All this had happened within a few months. Wow. Okay. So you get you get the clothes being made, you get the leases in the shopping malls, which is a little scary'cause a ten year lease, man, that's You are locked in and the shopping malls of course, this is the eighties. I mean today shopping malls are in crisis, but this is like Boom times. This was the top of the line. And also the fact that everybody's tried to get in and we don't have any history of any retail stores. How did you get in? I g got in telling them that we have You know, ten franchise locations in the area. These people h know the brand. I

53:51 uh implored them with all the statistics that I was aware of. And that those people, you know, and they're gonna bring other business to the mall. They come anyway to walk their kid, you know, just It's something to do. They'll come to the classes, they'll come to the store and then they'll they'll spend money at the rest of the places. They'll go to lunch. They'll and they bought it. And it turned out to be true. Okay, and w tell me about the openings of these places. They were on fire. People were lined up. We w we did the highest dollars per square foot in both malls of any other store during that holiday season.

54:24 What w what were people buying? Clothing? I mean They were buying clothing, yeah. And actually I'm looking at uh on my wall here, I'm looking at a picture of the first store because we were voted the best new design. in nineteen eighty six or nineteen eighty seven, as well as doing the bit greatest dollars per square foot. It's incredible. It must have been such a validation for you. It was such a validation. And we did it all on our own. They didn't have to go to the board and I hired all the people. We all of our staff went down and merchandised the stores. We opened up the boxes all damn night. And we greeted the customers the next day and

54:56 And it was just a blowout. You and um you must have been on cloud nine. I was so ecstatic. And then, you know, of course the board, you know, just like all businesses, they saw it as a winner and now that we were to go out and raise money. So within the next year We raised six million dollars. People were coming to you to give you cash. Yeah. And and because Stewart knew all these people. So he went to Harvard Endowment Chemical Bank of New York and they all came in.

55:21 Wow. And so Now you're on you're on fire. You've got something really hot. You've got a hot brand, but you're also making money. We're making money, we're doing well, and I also realize that I'm in over my head. Mm And I'm assuming the board is like expand, expand, expand, let's go, let's go, let's go. Let's go, let's put down a p business plan. I want four fifty stores by, you know, year three or something. And now they're telling me I'm aware that I had my my what I call my origin team, the people who've been with me from the beginning, which we wore every hat. Okay, put your marketing on. Okay, put your this hat on, because

55:55 That's what you do when you're building, as you well know w when you're building something. And now Um we needed the specialist. We needed someone who did this, someone who did that, and so I My main investor said Joan and I knew too it's time to let go of that those people. Start hiring people. Start Letting go of firing the the the people that

56:14 The generalists that have been with you forever, took the pay cuts, did everything. And I thought I can't do this. They wanted you to professionalize, basically, quote unquote. Yeah, they wanted me to do like run a real business, and I thought, you know what? I should go too.

56:28 I'm over m not only should the origin team be cut, I should be cut because I I I don't know what I'm doing either. We need somebody that really knows how to Who's done this before? Um, it's one thing, I'm a visionary. I I could conceive what the store would look like, I can get it operating, but I'm not gonna be the right person to replicate this inf in you know Up to hundreds of these things. I'm just not.

56:51 Okay, this is 1988. Yeah. From the outside you are A just a One of the most successful female founders in America.

57:02 You've got this incredible brand, it's expanding like crazy, all this money is coming in. The the board. Once. uh a hundred stores in the in the future. And you

57:14 yourself are like crumbling inside, like you are actually physically unhealthy. Yeah. And also you've and you've talked about this and w written about it. You had a an eating disorder that was serious.

57:27 I did. And I managed it by building a gym in the Jimbury headquarters and making everybody come at lunchtime to go to Robux class so I could settle myself down. It was just not a good time for me. Everything looked great on the outside and on the inside I felt like I I couldn't do this anymore. And you were Exercising like hours a day just to

57:48 Cope with the stress. I was an exercise act, uh huh. Yeah. Were you talking to anybody about this or were you keeping this all in? At that point I think I was still keeping it in.

58:00 I was just embarrassed and I I knew that I had all these franchisees that depending on me and I wanted to keep it together for them. And I said to the board or said to my main investor, I am gonna let these people go as you s as we both know they need to. Do you think it maybe it's it's that you wanna replace me too?'Cause I would I'd be down for that. No, the press loves you. Everybody thinks you can you're gonna run it all the way and I'm thinking

58:24 Okay. You I'll do my best. Um meantime, Joan. You were working like Crazy, right? Yeah.

58:33 And you also had a family. I think you had two kids, right? I had two kids. And your husband was busy. Tell me about your relationship. at home with your husband and and with your family. How I mean

58:45 Well, I had hired all pairs from the time my kids were little because I was working so much and you know, I would come home late. And I'd be like, Well, what's for dinner? You know, I mean I just, you know and Yeah so I was, you know, basically hired someone to kinda raise my kids except for on the weekends and we and the vacations w I was there. And my husband was, you know, he was now, you know Major. He'd move to the big time editor. He was a big time editor, but he morphed from that to to running campaigns, running Brent Bill Bradley's campaign and and Jerry Brown's campaign. He became Presidential campaigns. Yeah.

59:18 Or Mayor Oil like uh Bradley in in LA. He he morphed into another business where he parlayed all his his know how into that. So he was running and so neither one of us were man manning the store. You know, he was more involved than I was. And he had two kids. And we had two kids and and we were both very much committed to our And

59:40 You know, we were drifting apart because, you know, I I didn't have the energy to hear him about his what his day to day shit and he didn't have the interest mine and you know, so Um I don't just I could tell that this Wasn't going well. You you around this time

59:57 were hospitalized. You had a a panic attack. I can understand. I mean, it's so crazy'cause on the one hand, the business is really succeeding. You're under a lot of pressure from your board to Fire people to run new people and also to double down on how much you're working. Your part your marriage is crumbling.

1:00:16 And you are feeling overwhelmed. Yeah. And so if one of my employees who became a a friend took me to the hospital and they said, Yeah, you're having a panic attack, you know, and gave me whatever they give you for that stuff.

1:00:30 And um And it just it just wouldn't go away. Then I decided to talk to somebody and then I hired a therapist and I told them about my eating disorder and they said, Oh, we'll solve it here in the thing and And you know it w it's not solvable that way. When when it's as extreme as what I was doing. You know, I was Yeah.

1:00:48 I was a bulimic and I was an exercise addict and it was just not and I was You know, just I was Not in a good place, let's just put it that way. And I decided I was gonna go to a treatment center. You were gonna need to step away from the from obviously from the business.

1:01:02 Yeah, so I told the the investor that I was going away for thirty days and would he you know would he cover me? I had hired I think by that time they'd already kicked me upstairs. I was Chairman of the board. So you weren't operational yesterday. I was already hired somebody who was operational, but you know, from from the press's point of view, I'm chairman of the board, you know what I mean? Um And I went away and they told me in the treatment center

1:01:26 that I would never recover if I went home after thirty days and I needed to go to a long term. Where was this treatment center? Georgia. I was up in the Blue Hills of Georgia. It was one of the one and only eating disorder There's a millions of alcoholic programs, but this was for eating disorders. So you basically go it's a kind of a place where you go And you live on this campus and they have Mm a structured program for you.

1:01:52 thirty days is not gonna be enough. Not enough. They said you're gonna need to go to long term because it's not like you plug the jug like an alcoholic. You have to create a whole new relationship with food because you need to eat. You just need to do it in a different way. But w the w the thing that I really learned about it was that you recover because you're with like minded people and that it's not the therapist thing, it's quote colleagues that were also suffering from the eating disorder are gonna bust you. You know, and eventually when I did get home, I went to that therapist. I said, If you ever have anybody like me in your office again, get them to treatment'cause that's where that's where it happens.

1:02:27 Joan, did you feel like so I I I I mean, you know, on the one hand you're this role model and you're strong and you've run this business and all these things. On the other hand, you're doing something very vulnerable, right? And people had to know about it'cause they need to know where where's Joan going? I told Stuart I was going and then I called me a lead investor. Stuart my my my investor and I called him because I thought my marriage wasn't gonna make it either. And I told him that I wanted him if he would, because it wasn't public company or anything at that point. I wanted him to to buy some of my stock or all of it because I wanted to have some financial security because I think didn't think my marriage would make it. And he said,

1:03:03 Joan, this is your business. You made this all happen. I don't want you to ever think I took advantage of you when you were vulnerable. You go away. I will definitely buy you some of it or all of it, whatever you want, but I want you to really think about this. He was such a great guy. And I said, Okay, I will. He paid me the whole time I was gone, I got my salary. And I called him halfway through that that time and I said, Stuart I need to sell.

1:03:27 He said, How much do you want? What how much would you be willing to sell? I said, Stuart, I'm like any other entrepreneur, I want a million dollars. And he said, Okay, well there is no public market for it. Um I'm gonna leave you with thirty percent and I'll take seventy percent. So you get a million dollars for your for seventy percent.

1:03:44 Uh and uh and you keep thirty percent. But you're really Focused on your recovery. At this point. I mean this is and and you would stay there for almost a year, ten months I read. Yeah. Mm-hmm. And and I guess after you left that rehab facility

1:04:00 Uh, you didn't come back to California right away. You actually spent quite a bit of time on the east coast. Um And then eventually you move back in nineteen ninety three, but uh but by then you've been away for quite some time, like uh almost three years, right? Yeah, about three years, uh huh. And you move back and you I guess

1:04:18 And now your daughters are they're grown up. I mean, I think they're close to my age, so they're they're in college Uh-huh. And you would come back to try and And you say this, you've written about this to r kind of repair your relationship with them. There were there were some challenges.

1:04:33 Yeah. Well I mean I left them one when they were One was a freshman in college and one was in um high school. And I left. And I never came back. I mean they thought I was gone for thirty days and I was gone for almost three years.

1:04:45 I mean I came back periodically, but I wasn't living with them. You know, fortunately their peer groups and their friends were much more important to them at that time than their mother. But um I definitely knew to needed to do some repair work. And we did. Did that take some time? Yeah.

1:05:01 Yeah. So you come back to California. in nineteen ninety three and That year Chimbury announces it's gonna go public.

1:05:13 Were you even involved? Like were you did they Did they communicate with you? Did you have any connection with them when you came back? I was um I'd gone to a restaurant in Las Gatas where I went to move. This is like around in in again in the Bay Area, yeah.

1:05:28 Yeah, the Bay Air. This is in the South Bay. Um and I go to this restaurant and then I heard a bunch of, you know, sort of entrepreneurial types, young sort of wannabe Silicon Valley go getters talking and I heard them say You know, a consumer company went public yesterday for quite a valuation. I it's Jimberie. And I overhear this and I thought What?

1:05:50 Jimberry went public? And I'm sort of half ass interested, really interested, and I go up to where where they're you know, and I see a bunch of New York Times sitting on the a little bench next to where you cash out. And I took took a paper and I opened it up, and sure enough in the financial section I see one of those tombstone ads, the chimberry was going public. Wait, how how were you not informed of this? I mean as a shareholder. But as a shareholder, I think they have to find out if you're gonna sell your shares before they're gonna go public. Like ha I don't understand how you were not made aware of that. I was not.

1:06:21 Maybe I had signed something originally. I don't even remember that um when I sold my shares to to to the investor, maybe I signed something that if there was ever an event that I would agree to You know, I was sort of still out of it whenever whenever that was happening. So I did not know. They IP I think they I I looked it up there, IPO uh Price was twenty dollars at the end of the day, I think it closed like thirty eight dollars a share. It c it went up fifty eight percent on the first day of trading. And and so you had thirty percent of your shares remained, so you probably still had some considerable number of shares.

1:06:55 I had I had some money, yeah, a little I mean it was nothing like what I would have had and I didn't even care. But did you so when you found out about this What did you did you want to liquidate your shares right away? Well you do you um No, I did not. I just I was so focused, guy, on um maintaining my recovery.

1:07:12 That was the most important thing to me was that I could do that. But the company I kept my stock because it was like this is my baby. I can't sell this stuff. And the company went, split a number of times, so it was kind of smart that I kept on to it. Was not smart knowingly, but it w turned out well. Right. The company IPOs and that's that's really I mean that i you'd already kind of been out of it, but that's really kind of

1:07:35 your end with Uh Jimbaree. Meantime, you are now back. And You are divorced.

1:07:43 Right. Got divorced that same year, big year. The company the year the company went public, I got divorced. And you are Fully recovered. Yeah. Although we some of us like to think that you're you know, that they're always doing push ups in the background, so you need to be d vigilant. So but I was really committed and I've been I've been

1:08:02 Um and full abstinence for thirty five years. So I feel like it's you know, it's behind me now. And and fitness was always part of your life anyway. Yeah. I guess You were never really into yoga.

1:08:17 But this is when you are start to get exposed to yoga in in the mid nineties. That friend of mine that I had that day was in the dance company with that we shared the job at the Jewish Community Center, we stayed friends this whole time and she called me, she said, Come to a yoga class with me and I said, I'm not a yogi, I'm a mountain biker, I'm a this, I'm a that, you know, that seems silly, but okay. Friendship trumps, I'll go. And uh my first class I fell in love. I just it just something cracked in me. I was able to access my emotions. It was just

1:08:46 the way those poses were put together, I just loved it. And I became uh yogi right from the get go. And then people came up to me then said Oh, you're the Jimberee lady. We should you should h open up a chain of yoga studios. Of course they would say that'cause you already did you already proved what you could do.

1:09:03 I've already done this, right? And I said, You know, I don't think I can do this again. I just kind of And they said, Well how about just a Bay Area chain? Who who were these people saying this to you? These were students th in the class that I had known and people I been fellow students with me or people I'd known from the community and stuff like that. And I thought You know what? I guess I'm an I you know, I just I soften to the idea'cause I'm an entrepreneur. I love the idea of growing. I love service businesses. I love, you know, a business where you go in one way and an hour later you come out another way and I thought

1:09:34 Okay, we'll do this. So you basically decide That your next act was going to be Yoga Studios. It it's amazing'cause it's basically Jimbery for grown ups, right? It's exactly that. That's that's what I would say to myself. I'd say, Here you go. Because I start businesses for the phase of life I'm in and I still wanna do like a um a senior living center'cause I'm h that's the phase of life I'm headed towards. But I'm I'm not fully there yet. I you know, I don't wanna go live in one of those places, but if I do, I wanna start it.

1:10:02 And this was going to be a chain of yoga studios only in the San Francisco Bay area. That was the idea. That's what I thought. Yeah, I I can't do this nationally. I can't do the I can't do a big roll out again, but maybe I could do a little a little Bay Area chain. And so where did you open the first location? I open the one. in Mill Valley where I lived and I thought, gee, I wanna be just like a little franchisee. Just wanna have a little location, go home, have this thing, you know, blah, blah, blah. And then I opened one in in another area of Marin County.

1:10:30 Larkspur and then I opened one in the city. And then I realized I can't I'm the same stuff is coming up for me again. I'm what like what? I'm feeling completely obsessed with this business. I can't think about anything else. I don't want to see my kids. I don't wanna talk to people. I just I just wanna make this business work. I don't have that ubiquitous thing called balance. I don't know how to do that. I just don't. And I didn't want to have another breakdown. I just so I said I'm gonna sell the business. Um

1:10:58 Which I did to Yoga Works, which was a a national chain. They had at the time when they bought me they had about twenty five locations. They were in LA, but they buy other studios like me and change the branding. So now it went from the name I called it to Yoga Works. Your business was called the Yoga Studio, right? Yes. And you had how many locations did you have? I had three locations, but they were really they were really significant because they weren't like these old school places that were up upstairs with purple walls. They were in they were in real malls and we had like three studios and we had a retail thing and you know, it was they were they were significant businesses. Was it breaking even? It was not. Yeah, it's a tough business. It's an it was another gimbery franchise business. These service businesses are even though the classes are packed and everybody thinks it's super successful, it's just not.

1:11:47 That's the thing. The g it's like restaurants. You go to a restaurant and it might be packed, but the margins are thin. And and you go to a yoga studio and it might be packed, but It's just it the the capacity is limited. You can only fit a certain number of people in and They're really hard businesses unless it's a super efficient model. They're really hard businesses to make Uh profitable.

1:12:10 Right. And here I had been selling my teachers all these years and were partners. So I would give them fifty percent of the revenue. That was never gonna fly. And the truth is I was not gonna be able to make it work because unless I changed the way they got paid. Which Was too scary for me. Um

1:12:28 I wasn't gonna do it. So I sold it to Yoga Works. Yeah, and yoga works eventually would go on also. During Covid it went on. During Covid, yeah. And so this really begins a The next chapter. In your life.

1:12:42 to start focusing on You know, d just different things. I mean W tell me a little I mean, th here you are, it's two thousand eight time period. You're in your fifties, right, at this this point? Early fifties, yep. And um Oh s I mean, were you done?

1:12:58 With entrepreneurial ventures, what did you think you wanted to do at that point? Well, Jim Marie now had a new chapter and first of all Yoga Works I consulted to them for about a year and a half after they bought me. And then I decided that I well, I had lost my privilege to be an entrepreneur. It didn't mean that I didn't love the whole idea of other women building their businesses. So I became um

1:13:21 a mentor slash consultant or whatever to other women who are running their businesses. And then I then I went on the speaking tour. I became a keynote speaker and f was flown all over the place to speak to women's conferences. But you didn't like that. I well, I liked the fact that I would tell my story pretty unvarnished, as I'm telling you about the whole eating disorder thing, and women would come up to me afterwards and say, I've never told anybody but I have an eating disorder too. It's so feels so good to know that you you know that there's someone like you who I looked up to and thought I wanted to live your life and I always say well wait till you hear the story before you want to be me you know what I mean? Um and um so that felt good, but it was lonely. It was even more lonely to fly across the country and then lead a workshop and then fly home.

1:14:05 I just I didn't love it. Meantime on uh The Jimberee world I mean when public it was public in uh Uh the nineties.

1:14:15 And By twenty ten it was acquired. By Bane. Yeah. for one point eight billion.

1:14:22 Which is um incredible. I mean the the shareholders I'm sure did very well. out of that and you're certainly you were nervous about paying your investors back, but of course they did very well. Yeah. Many millionaires, many multi millionaires. But th this really begins or maybe was in the midst of a decline, a a significant decline for Jim Beree. I mean that was sort of its high probably its high watermark in terms of its value.

1:14:45 Um because then, you know, eventually I think Bain then buy buys it for 1.8 billion. And then sells it uh six years later for Hundred twenty seven million. And then recently the

1:14:58 Brand name. was bought for seventy five million. Clearly people still see value in it'cause I'm paid. Seventy five million bucks for a couple years ago. Just for the name.

1:15:08 Exactly. And they're still fr there's a few some I have friends that live in Oakland and there's still a franchise on Oakland on Lakeshore Drive and kind of the kind of hot area over there. I mean, they're still around. Joan, you are in your seventies. Yep, late seventies. And you're very uh people can't see you, but you're very Vibrant and clearly very fit. Tell me a little bit about

1:15:31 your your sort of regiment. How do you What do you do? I I pretty much go to yoga every day or but uh maybe four times a week now. Um, and I hike every day. And um Well, it's not like I haven't had my fair share of things. I'm a cancer survivor. I mean I've had my stuff too, but I just when did that happen?

1:15:49 I was I got my first cancer um My first and only cancer actually, six years ago. I'm six years in remission. So I'm seventy two. Wow. I had major ovarian cancer and I you know it It comes on very quickly.

1:16:03 I figured it out f quickly and they P put me into surgery and it was heavy duty for a lot of years. Wow. Yeah. But

1:16:13 I think I'm a little bit naive. Guy to be honest with you, I just never occurred to me that I would really die from this thing. So I just Just kept keeping on. And then I I knew that'cause the oncologist kept telling me, you know, it's g there's gonna be

1:16:26 Life before cancer and there'll be life after. And and what did that mean for you? Well I w I I thought she meant like you don't expect to come back to your old self, you know what I mean? And it was like Okay, well I'll I'll deal with that when I deal with that, but I pretty much have. I mean you know, I'm s I'm older, so I've you know, I've got regular aging issues, but I'm

1:16:45 Pretty much myself. I I wonder when you think about You know. Starting at the Jewish community center is just with you know part time job and then turning it into a

1:16:57 really m a big cultural thing, right? It was it was People Magazine, Baby Boom, it was centers all over the country. Eventually bought for one point eight billion dollars from Bain. Do you do when I when I put it in those terms, do you reflect on it and think There's a lot to be proud of. Yeah, I I'm proud of it. I mean it's it's not it's not my defining actually my recovery from cancer. Mm-hmm. Um

1:17:19 I'm more proud of that and how I came through that. I hear you. Yep. Yeah. Um I mean, I guess and I ask this question everybody'cause on the show and and you know it's it's more of a a chance to kinda reflect, but um

1:17:33 Do you think that your success came from all the work you put in the grind, or do you think some of it had to do with With luck and just the timing of of of all this. The both and U absolutely the both hand. Um

1:17:47 I think you have to definitely be on the right street corner at the right time when the bus comes by and know which one to get on. And there were many of those moments. But I also think that um if I had given up where many people would have and And probably I would have too if I was a little smarter at different periods of time, you know, just walked away like, oh God, the franchise isn't work. Oh God, the licensing has crumbled. Oh God, Hasbro's killed us. You know what I mean? Just a million, a million exits should have happened. Um But I was I was as I mentioned earlier, I would refuse to let the damn business die.

1:18:20 I I'd let my marriage go, I'd let my kids falter. I mean Th I and I still don't know. Twenty five years of therapy later, I still do not know. why I put that kind of effort into it. It wasn't like I had a lot of money into it. It's six thousand dollars, you know. I mean that was the total sum of my investment in this thing. I mean I it's part of me and I love building that business until it was just over my head. But I really love the camaraderie of the team and the women I built it with and

1:18:47 Um I d I I feel like what a privilege it was to be able to cr you know, f dream up something and have the right people at the right time and get the right investors to to be able to Make this a reality. That's Joan Barnes, founder of Jimbere. By the way, even though Jimbury is nowhere nearly as big as it once was, it's still doing pretty well overseas, especially in China, where there are hundreds of play centers.

1:19:13 As for the clothing line, the retail stores closed down in 2019, but the brand still exists. It's owned by a company called The Children's Place, which recently reopened its first chimbury brick and mortar store at a mall in New Jersey. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and as always, it's totally free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyroz.com or on Substack. This episode was produced by Chris Massini with music composed by Ramteen Arablui. It was edited by Neva Grant with research by Ramel Wood. Our audio engineers are Patrick Murray and Jimmy Keeley. Our production staff also includes Alex Chung, Casey Herman, JC Howard, Sam Paulson, Catherine Cypher, Carrie Thompson, John Isabella, and Elaine Coates.

1:20:10 I'm Guy Raz, and you've been listening. to how I built this.

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