Shep and Ian Murray: Vineyard Vines. A Stale Product Transforms into a Lifestyle Brand.

[MUSIC] The reality is you're standing in a parking lot in the side of the road, putting on your tie, putting on, we were like salesmen. Going into a place in the pouring rain, in the fall, each day it got colder and wetter and rainier and each day there were more nose. And what we found was we didn't know the business and we needed to learn the business. And it was tough. [MUSIC] Welcome to How I Built This, a show about innovators, entrepreneurs, idealists and the stories behind the movements they built. I'm Guy Ross and on the show today, how two brothers ditched their day jobs to sell neckties and built an entire brand around beach culture and the good life, vineyard vines. In the late 1990s, neckties weren't exactly a growth industry. Offices were getting more casual, tech culture was on the rise. Steve Jobs was already wearing his iconic black turtlenecks and fewer and fewer people were shooting up every day. But two brothers, chef and Ian Murray, still believe there was an opportunity in ties. Not necessarily the function of a tie, but rather what a tie could say. Because their ties would be different, especially if you got up close to them. You'd see tiny whales or little sailboats, street signs from a small island off Cape Cod. They were trying to capture a very particular version of New England. Chef and Ian had spent their summers on Martha's Vineyard. A place that back in the 1970s was a little more rough around the edges. And for the Murray Brothers, the vineyard wasn't just a summer getaway, it was a feeling and a pace of life and a kind of freedom. And so years later, stuck in jobs they didn't love, wearing ties they didn't even like. They decided to build a business around that New England summer feeling. At first, it was just the two of them with a few thousand dollars in credit cards, taking a chance on something that frankly didn't make a lot of sense, a premium tie in a market that was shrinking. But what Chef and Ian understood was that even as the world was getting more casual, people still wanted ways to express themselves. And over time, that one small idea grew, from ties, to shirts, to dresses, to an entire lifestyle brand. Today, vineyard vines does around half a billion dollars in annual sales with more than a hundred stores and a presence in department stores like Nordstrom and Bloomingdale's. And remarkably, they built it all without outside investment. And the brothers still own the company and they still run it day to day. Chef and Ian Murray grew up in the 1970s and 80s in Greenwich, Connecticut. Their parents were travel writers. So in addition to going to Martha's Vineyard in the summer, the brothers got to see a lot of the world as kids. When they finished college, they moved back in with their parents and both got jobs in Manhattan. Chef eventually landed in advertising and Ian in public relations. I got a job offer to be an assistant account executive for $30,000. And I remember my father saying to me before I took the job, don't be in a rush to put on a suit and get on the train because good, bad, or indifferent, it's totally possible you'll be doing that for the next 40 years. And remember sitting on the train reading the paper about various people who had quit their jobs and sort of chased their dreams and also getting to work and realizing no fault of them, but I did not want to be my boss. I did not want their job. I did not want that life. It wasn't for me. And so I didn't exactly know what was next for me, but I knew that what I was doing was not what I wanted to continue to do. I just want to point out something which is that we, I hear that a lot, you know, and I remember my first job actually was as a reporter and I certainly wanted certainly one of the jobs that I saw other people doing. But it's very normal to be a 22-year-old kid working at a company and and feeling like this sucks. I don't want to do this like, especially if it's a grind, you know, it makes sense. You're just looking around. You're like, this is not really what I'm going to do with my life. Like the the reality, I mean, I started to think maybe doing want to teach or something because the reality of not having a summer vacation was like outrageous to me. Couldn't figure out how I was going to get to make this. It's called adulthood. It's called being an adult. I'm not there yet. No more three months off. Yeah, well, not for me. But I didn't feel authentic to me. And I, you know, one of the things that happens from a young age, I think when for some entrepreneurs is everything you see, you go out to lunch, you go out to dinner, you go anything, you just see opportunities. How could this be done differently? How could we reimagine what's happening right here at this takeout window? You know, how the person greeted me, how they thanked me, anything like that. What does the packaging look like? My mind always went to those places. And so sitting there writing pressure releases, it was, it was not fulfilling for me. You were daydreaming. Yeah. And meanwhile, Chef, while your brother Ian was working this PR job, I guess you were doing something kind of similar, right? And you were working at a big ad firm, young and Rubikam in New York. Yeah, it was really, really exciting being on the new business team and seeing how fast and dynamic those people were. It was amazing. And then after that, I got spun off to just a regular product group. And it wasn't as dynamic. But we got to a point where we went and presented work to the, to the client. And the client didn't like it. And I didn't like it either. So I actually went up to the executive floor and went to the chief creative officer. Here I am making $30,000 a year. Going up, ranting on my team and saying, Hey, we're not going to keep this account. We delivered not great creative to the customer. And what's worse is they didn't like it. And we have somebody great internally who did great work. So I went and I set up a meeting with the, with the creative that wasn't chosen. To be presented to the account. And the CEO and chief creative officer loved it, brought it to the account, which was Toblerone and Kraft and they ended up buying it and they loved it. And so after that, my account team was really, really angry with me. And I was told to think more inside the box. I just remember her saying, you know, what you did is you made this look. I said, no, what I did was make Y and R and the team look great because they liked the work that we didn't present. And so I went back to the guy who did the winning campaign, the two guys. And I said, they're asking me to think more inside the box. They're all mad at me. So it seems like like after that incident, kind of like Ian, I mean, you weren't, I imagine you weren't super happy at your job either. But either way, I mean, both of you guys had these jobs in New York. And by the way, were you guys commuting back and forth together, like at a certain point, were you riding the train together? We were both living at home. Our dad drove us to the train and picked us up. And yeah, we both lived and then he worked on 60th Street. I worked on 40th. We met for lunch every single day at this little place called the prime burger. And we both are meeting was this. Yeah, how's your day? It sucked. How is your day? It sucked. Yeah. When are you going to quit? Yeah. All right. So you guys were, I mean, you were sort of ripe to do something else. And I imagine you would think about what other job could I get? Like what's something else I could do? And that's a normal thing to do to think about, right? Especially when you're not happy or excited about what you're doing. But I guess it was, you guys were on a family trip in the Caribbean. And the two of you were just what like kind of commiserating about work and tell me what what the story is. So here's what I remember. I remember going down to Anguilla with our parents. And shep had mentioned the idea of creating a line of neck ties of all things. And in talking about it, we really liked that print motif tie that you could get from Ramesh and Farragamo. We found that that was a price point over $100. We found that you could get novelty ties that sort of had the same sort of motifs, but they were like $25 to $30. And we saw an opportunity to do something right in the middle. And at the time that we started, it was all about the casual workplace. Steve Jobs is wearing the black mock turtle neck. And a lot of the other companies were making drab colors as a result. And we saw an opportunity in the marketplace to make a tie with color that represented our favorite place, Martha's Vineyard. And be able to bring the good life to work with you was a great idea. Yeah. And of course, Martha's Vineyard was a place where both of you guys had spent time growing up to in the summers. So I guess when you started talking about selling ties, you somehow wanted to incorporate that vineyard feel from your childhood. Exactly. The things that we love to do are very much still rooted in what we did when we were kids. We would drive our truck out on the beach with our father early in the morning. Somebody would make breakfast out on the beach. We'd go fishing. We'd spend the day at the beach all day. And by the time the end of the day came around, we were all exhausted and we went to bed, not long after the sun went down. Yeah. I would also say that the vineyard was our rock in life. We would go for a week or a weekend or two weeks. Whatever our parents could afford at the time. And it was like we lived our whole lives. Even since we were little kids, just being able to go spend time there. And I think that's, we all have kids now and it's their favorite thing to do as well. It's home. Yeah. But it seems like you actually got inspired to pursue the idea of selling ties when you were far away from the vineyard. You actually had a trip to Anguila with your parents. And I mean, they were travel writers. So I guess you had to travel with them, all these cool places that they would write about. But what was it about that particular trip that motivated you to start making ties or thinking about it? Yeah. I mean, it was very interesting. We were traveling with our parents. And one thing that was interesting about being the guests of these properties is how much time we got to spend with the general managers and seeing how they did everything from helping to check people in and bring the luggage to their rooms to getting on their hands and knees and fixing a carpet to making sure the food and beverages running properly. And I think we maybe didn't appreciate it at the time. But we learned how to really understand what customers expectations were or could be, particularly for affluent customers. Yeah. I think the defining moment as to why being in Anguila was so important was we were talking with a general manager about this idea. And what happened was he pulled out a New York City phone book and he looked up time manufacturers. And he just really showed us that this idea could be done. And he encouraged us to go call those people the next day and we did. So you had this idea, but it was still just like a-- it could have just been another idea that would have come and gone. I think we were ready to take that leap. You know, I think we were ready to fail now and have no regrets rather than continue to be unfulfilled every single day. All right, so you have this-- you've got a bunch of numbers and of like close manufacturers in New York City that potentially make ties. And so what do you know about sewing or about cutting fabric or about designing? Like, I'm mad because you guys were still young guys without any-- you know, it's not like you'd been working in a fashion house for the last-- We had no fashion experience. All we knew were that people liked the ties that he and I were wearing prior. You know, these sort of bright colorful ties. What did you do next? I mean, first of all, you guys are still working your day job or were you-- you're like, let's quit and do this. We were still working our day job. OK. And, you know, for lunch, we would go meet these various people. All of the different components of making a neck tie. Whether it was a silk importer, a designer, a label maker, a stitcher, you name it. How did you find them? Would one-- would one like meeting lead to the next-- One lead to the other. We used all of our contacts. Ian, remember, was it a fashion, you know, PR company? He leveraged some of those. But really, it was all about curiosity. All right, Ian. So you guys are-- and what do you remember? Do you remember, like, your brother, it was his idea, and he was sort of taking the lead on it, and were you kind of supporting this idea? Yep. The way I remember it is we have this idea of the street signs in Martha's Vineyard have a very distinct look to them. You've probably seen them. And we went up to the vineyard. I remember going up there and taking a picture of the street signs of all the street signs. Shab was working at Young and Ruby Can. I'm Madison Avenue. When I get out of my job at 5.30, I go down to see him at Y&R. I'd bring a pizza, a 12-pack of beer. I'd go into the creative studio. People would think I basically worked there. And we befriended a couple of graphics people. I said, hey, can you guys do me a favor? Will you scan in these photos? Will you create an illustration similar to them? Lay it out on a piece of paper? And who did you ask? Who'd you ask to do this? These are the employees at Y&R. Again, OK. And the creative studio. You just asked him to do a favor for you. Exactly. Well, these are people that I had worked with. And the street signs, I know there's like the sign of entering a town. Like you're entering oak bluffs. I know what those look like. It's got like this. It's like a pages of a book. Is that what you're focused on? That's what you're using as a model? Yep. We're using that. And then also the vineyard has a very distinct shape of the actual island. It's sort of like a triangle a little bit. Yeah. We would make a tie, another print pattern. It had that with whales swimming between the little islands. And those are the first very early patterns that we had. And then we would, like Shep said, I remember going to the New York Public Library and looking up clothing manufacturers and label manufacturers in various things. And would make those cold calls. And we got to a point where we had assembled enough information that we had met people that knew how to screen silk overseas. We had met people who knew how to cut the silk into the various patterns to sew them into ties. Yeah. What we needed to do is we needed to find a silk importer. And this is what we were talking about, how complicated making a simple product can be. Yeah. And so we found a silk importer and all the silk comes from China. Then it gets printed in Korea. And then it gets cut and hand finished in New York. So I think I look at a necktie. I haven't worn a necktie. I can't remember the lesson on a necktie. But it doesn't seem from the outside like a particularly complex piece of a peril. Like it's just a, you know, it's the shape. And am I wrong about that? Is it a lot more complex than people realize? It's not. I mean, it's a pretty basic item. But the components really matter. One thing that most guys will tell you is they like the way a tie ties or they don't. And a lot of that has to do with what's inside it, the interfacing, which we cut apart all the ties that we had, what we liked, what we didn't like and why. The other thing that you people notice is how the silk feels. You know, what the finish is on there is it gummy is it not gummy. And as you pull the tie tighter, a lot of people would like a little bit of a contour, like a little curve to the surface of it. And we discovered that that had to do with the way in which you cut it in which way the weave was going. And we found that a lot of the ties that didn't tie well were all done one way and the more expensive ones were done the other. So we emulated what we liked and walked away from what we didn't. Yeah. But I think it's important, you know, we talk about what was going on in the world at the time and what was motivating us. And back then in the late 90s, she had the idea of a tie and I was sort of like, well, like your response guy, like these guys are crazy. It's a casual workplace. Nobody is wearing ties. This idea makes no sense. But what really fueled us was not the endgame, but the journey. And at that time, and Tucket Nectars was a very popular brand. And you know, all I could think about was these two guys Tom and Tom who got to ride around their boat, meet cool people and enjoy their summer and make a business out of it. And then on larger scale, you had people like Howard Schultz revolutionizing getting a cup of coffee at Starbucks, David Neelman at JetBlue, Pike's Place Fish Market where they made, you know, throwing fish fun. And we saw all this energy and excitement being put into products that were sort of overlooked. Yeah. And that was the fuel to propel us. I mean, the Nectars thing totally makes sense because that was a big brand. I think they eventually sold it and it made a lot of money off of it. And it was two guys from Nantucket who had like a fruit juice stand and turned into a really big brand. Right. And so I can see how that would be inspiring. Yeah. All right. So you guys have, you're starting to get a ducks in a row. And you are going to produce your first order of ties. And what was the plan? Like you were going to, they were going to be made in New York, I think, right? You found them, manufactured in New York, is that right? Yes. You would order how many and where would you sell them? We, so we ordered enough silk to make 800 ties. So we had four styles each and two colors. So that was 800. And the styles were to just briefly tell me what each style was. Sure. So we had four styles or four prints. One was the street signs. Of Martha's Vineyard, yep. Yep. Number two was the shape of the island with the whales between them. Yep. Number three was just a fish, a blue fish on it. And. And number four was a bluefish with like a four by four Jeep, you know, like an over sand vehicle between them. - And you couldn't, and if you looked at it from a distance, it would just look like paisley or some, you wouldn't know what it was, right? It just looked like a cool abstract design. - Yeah, I mean, our prints have since gotten smaller, but they were small enough that they looked appropriate with a suit, particularly at the time. - And by the way, were you still doing your day jobs while you put the order in for your first run? - Yeah. - You were, I think the other thing that was, you know, we haven't talked about is how we were going to pay for this. - So we financed the business with credit card cash advance checks that we wrote to ourselves. So while we still had our incomes, we signed up for like four or five different credit cards while we had credit. - And we took credit card cash advances to pay for the silk and to get them made. And hey, how much, I mean, 800 ties, you said, roughly, you're gonna make that first run? - Right, so we screened the silk overseas, we bring it into New York, I can remember driving out to the JFK commercial terminal and my flip flops along all these semis, and I'm in the back of my Jeep or whatever or is driving at the time and grabbing the silk and driving it to the manufacturer. So we got enough to make 800, and I can tell you this, that we didn't know this going into it, but ties have very good profit margins. - Got it. - And they have no sizing, and they take up very little space in retailers. - Yeah, it's a great product 'cause you don't have to make large medium small, you just make one size, and that's it, yeah. - So we probably, I don't know, Chef, what do you think that first run cost us? - Probably eight or 10,000 bucks. - And once we got those, it was like a big secret. We were really scared somebody was gonna steal our idea. We knew that other people had, other companies had better resources than we did. And so we thought that there wasn't any need to tell anybody much anything until we were ready to go to market. - So, all right, so you guys have these designs, you get to get some cash from credit cards, and you've got a place in, was it in Manhattan? Was it on Long Island? Where did you find the original manufacturer? - In Long Island City, yeah. - And how did they require you to pay it all in advance? Or what? - So I think at the time we would pay by the dozen, I think that's still how it works. And so a lot of it was, they were the cut and sew factory. They had people who could hand sew the ties, which is a real skill. It's not something that just anybody could do. So we would deliver all the paid components to them. The only thing that they were getting paid for was actually assembling and sewing the tie together. - Got it. And so how long roughly would it have taken at that time to make 800 ties? - The process from start to finish is probably about four months. And what we learned over time is that we figured out ways to abbreviate that, to cut it down. - Okay, so you get the first order put in, and when they were ready, were you guys still working your jobs, or were you, had you quit at that point? - We quit in May of '98, leading up to, we had very much decided by, I would say, April that we were definitely going to quit our jobs. But again, it's very, even a job that you don't like, it's very hard to quit. - But scary. - Totally scary, even as a young guy. And we started to ramp up to get ourselves excited for it. And we ramped up in sort of unusual ways. We were very concerned about health insurance and not having health insurance. So we actually got our wisdom teeth pulled on the same day, even though they didn't need to come out, 'cause we were covered. And so we got all these things together, and we quit. I think we both gave notice on the same day towards the end of May. I remember a chef called me, he said, "I quit." I said, "Bullshit." Did you, he's like, "No, no, I did." I'm like, "Really?" He's like, "No, I quit." He said, "Okay, give me five minutes." And I went and I talked to my boss, and I quit too. And we joke about this, so we literally met on the bar car, had a couple of drinks, and went home kind of buzzed and had dinner with our parents. And we're like, "Oh, and by the way, we both quit our jobs today." Yeah. And to be honest with you, I don't think we've ever been as happy as we were on that ride, because we finally did it. And we went home, and our parents were pretty upset with us. They were upset because you had stable jobs. Yeah, my girlfriend at the time, who's now my wife, you know, all she wanted to do is get married. And I just quit my good job. When we come back in just a moment, Shepanyan starts to sell their ties on the vineyard and grab a moment of gorilla marketing in the middle of a presidential scandal. Stay with us. I'm Guy Roz, and you're listening to How I Built This. (bell ringing) Hey, welcome back to How I Built This. I'm Guy Roz. So it's the summer of 1998, and Shepanyan have received their first order of ties. 800 of them printed with little whales, and jeeps, and street signs of Martha's Vineyard. So once we had the ties, I remember I was up on Martha's Vineyard, and went to a couple of local stores. And I showed them our product. Shepanyan was still in New York, because I had a few samples, and he was waiting for the last batch of ties to be completed. And we didn't have any idea that stores bought things in advance. I thought I could sell them to him on Friday and deliver them on Saturday. Like you'd walk into a store, so the plan was to go to boutiques on Martha's Vineyard and sell them that way initially? I rode my bike. I put on a pair of khaki shorts and a white shirt in one of our vineyard vines ties, a red tie with street signs on it. And I went to a local mom and pop shop called The Fliggers. And I walked in there and I said, "This is what we're doing. What do you think?" It was a store that we had been customers at our whole life. So you knew them? You knew the manager. I knew her a little bit. And I was a kid and she said, you know, why not? And we had made like a little stand that could go on the counter, so we had thought of that in advance. I said, "You leave you a stand. I could sell you some fully anticipating that we would leave them on consignment. We wanted them to go out to retail at $65. And we're going to wholesale them to stores at $30. And we had a little one page sort of order form. And she looked at me and she said, I'll take 180. Wow. Right, Chip, am I getting this right? She's at least 100 and something. Well, it was $1800. I just remember it was $1800. So everybody, that was 60 ties. That's amazing. Yeah, it was a crazy amount of money to us at the time. And still, and so I remember going across the street in San Ishep. Mrs. Flieger just bought, you know, a couple of thousand dollars worth of ties. We're not gonna have to work anymore. Like literally like that. It was like, I made more money and five minutes walking in that store. Yeah. And did you have success with the rest of the inventory or or or not? Yeah, so we also went to another couple stores. And I'm going to ask us, there's a store called Murray's on the Vineyard, which is no relationship even though our last name is Murray. Yeah. And they bought some ties, but they did something that we didn't anticipate. They also had a store in Ann Tucket. And going to the Vineyard your whole life, you don't necessarily refer really to go to Ann Tucket or vice versa. And within the first couple of weeks, they had taken half their inventory, particularly just the ones with the fish on them and put them on their store in Ann Tucket. And what we found like almost immediately is that Ann Tucket was selling like two X what we were selling on Martha's Vineyard. I think the unlock for us after selling ties to Murray's of the Vineyard and then having them take that one bluefish time putting it over to Ann Tucket was he was, he said, well, why don't you make ties with the Ann Tucket Street signs and with the shape of the Ann Tucket Island. And so we did that and it did very, very well as well. And so then we said, oh boy, we've got an idea that's bigger than just Martha's Vineyard. - Tell me about the aesthetic, 'cause it's just a tie business at this point. You're not thinking beyond ties, right? Is that fair, say? - Yeah. What we found early on and the whole height of the casual workplace worked towards our advantage 'cause people were no longer buying ties because they had to, 'cause they had to wear them every day. They were buying a tie because they were going to a wedding or a graduation or some sort of occasion. And so they were more thoughtful in their purchase. And what we found very early on is that our ties sort of said something about the person before they even opened their mouth. So whatever the motif was, and our first ones were Martha's Vineyard. It said right away, I go to Martha's Vineyard. Before you even said anything. And we found early on that with our products, people who wore our ties were part of a, like in the no group. We almost created a tribe. - Yeah. So I read a story and while I was researching about you guys, You were also in the vineyard during a very, kind of a wild time because there was all that Bill Clinton scandal, right, that, you know, the Monarch Lewinsky story and he was on Martha's vineyard that summer. He would go there, a lot of Democrats presidents would go there. And you guys kind of pulled a stunt that summer. Tell me what you did. So that summer, in addition to selling ties at the local stores, we always would keep our backpack with us in case we met somebody and we could just sort of tell them our story about what we were doing and we were selling ties pretty much everywhere. And I can remember, Shep called me. He was actually in New York. He called me, so look, I don't know what's going on, but Clinton is all over the news right now. There's something going on with him testifying today. And apparently the paper broke the story that he's wearing a neck tie that Monarch Lewinsky gave him while he's testifying. And there was a picture of that tie in the New York Times. It wasn't a vineyard's tie and nothing to do with us. But we did know that the press headquarters was the Agretown Elementary School, which is just, you know, a mile from where we were, and that every major network was there and they were covering the Clinton's on vacation in the middle of the scandal. But there was a very little news. So Shep's like, I don't exactly know what's going on, but just go over to the Agretown School. So here I am, I'm 23 years old, I'm at bike over there. I throw a whole bunch of ties around my neck. And I just start walking around the parking lot, saying, I've got Martha's Vineyard ties. I'm starting a business called Vineyard Vines. Who's interested in buying a tie? Who wants to see our ties? And the people started to interview me because they had nothing else to do. There was no one there. And they said to me, and I was a total wiseass, they said, you know, what are you doing? I said, well, my name's Ian and I started a company just recently with my brother. It's called Vineyard Vines. And I heard that the president is wearing ties that young people give him. I wonder if he'd like one of ours. And that night, that little clip was on every major news network on the 630 news nationwide. I bet. I bet. Yeah. That's right. Then in there, we saw, wow, there's a way to amplify what we're doing and to do that for free if you're clever. And do you guys remember that summer, right? I don't know. I mean, did the ties, just like the cash from the ties, enable you guys to eat and live and do what you need to do on Martha's Vineyard? I think what we did is we've always since day one reinvested it. So what we did do is we did have this shitty old boat and we put our logo on that. We put the logo on our jeeps and then we played guitar and sang at night in the bars there wearing our ties. So every single thing that we could do to be walking vehicles of the brand, we did. And when someone, we're out on our boat one day and someone said, I just bought two ties. We're like, thank you for the gas for our boat. Yeah. There's a photograph of the two of you guys in a Jeep Wrangler, very young, in short. So it's got to be the summer wearing a button down shirt and ties. And so that was your look like you guys would be wearing shorts. Everywhere we went. Shorts, a button down white shirt and your ties. Yep, boys. And did people think you were like, I mean, did it look at a place or was it just like a preppy look? I mean, the answer is yes to all the above. Yeah. But it was great because it would immediately start with, why are you wearing that? Why are you wearing a tie? It's a summer. Yeah. I'm so glad you asked. Let me tell you about what we're doing. And then next thing you know, they're rooting for us and they're a customer. All right. So you guys get through that first summer and you've tested, I mean, it proves out, right? You're seeing some traction. And so you clearly are deciding, you've realized now or you know that you can go outside of Martha's Vineyard and Nantucket and go outside the islands. And so what was the plan? The plan was to go to other boutiques and to go to New York City. What would you think was the next lily pad you were going to jump on? So after the summer, we had already seen with the success of the Nantucket test, if you will, that we would go make more ties and see if we could bring them off of the island. And so we made about a dozen new designs and we got in our Jeep and we hit, we drove all up and down these from seaboard. We were going to drive to different boutiques throughout the northeast and see if we could get some of these stores, boutiques and mentors to buy our ties. Would you call ahead or would you just pop in? We would do both. We would do anyone who wouldn't take our call. We would stop by and say, hey, and you know, we always liked the know. Even though the yes was always great, we liked the know because we knew that at some point we could get them to say yes. And how did you identify which stores you wanted to go to? This is the 1998 internet search not quite there yet. Do you remember how you, you was okay and boss, you might have gone here and Philadelphia, we want to go here and you know, in Washington, DC, we want to go here. That was a hard thing to do to be totally honest. There are two ways we found out about good accounts. One was most of the customers we had on Martha's Vineyard didn't live there. They're visiting. So they would go back to wherever they lived and any customer that we had met or knew somebody in different places we'd ask them, do you know of a good outlet for us in your town? The other thing we would do is we would find sort of similar brands and we'd get their catalogs or whatever collateral we could find and we would check, you know, where are their products available? Because people would often list their wholesale accounts in the back of their catalog. So we would sort of retrace the steps of somewhat similar brands. And you know, in terms of reaching out to them in advance, we did a lot of gifting of our product. It was a very easy thing to do. So we would just pop a couple ties and a little, you know, color zerox catalog that we put together in an order form and just send it to people. It's just cold call. And that was very uncomfortable calling people trying to be a salesperson when you're really not. Did you get people saying on that road trip, you know, ties are just not selling right now. It's just not, it's just, we're seeing this as a declining market. There were two great moments on one trip. One we walked into a store and he had all brown ties and he said, ties are not selling. I said, okay, well, we have all these great colorful ties. And it didn't, it didn't take. The next one was a great store in Boston called Zara and it was run by one guy and he carried beautiful clothes and he sort of laughed at us when we came in with our ties and our little plastic sleeves. And he had a backgammon board in his, in his store. It says, "Tell you what, we play a game. If I win, you take some ties on consignment. If I lose, you'll never have to hear from me again." And so we played and I beat him. And that was the beginning of a very, very nice relationship. So I'm curious. I mean, 1998 on that trip, where do you remember aside from that boutique? You must have had some success of some people saying, "Yeah, we'll carry these." Or was it just, I don't know, was it discouraging? You know, I think it was both. It was a total look of the draw of what we were going to find. But it's hard to, I think we look back on it like is the most fun we never want to have again type of thing where the reality is, you know, you're standing in a parking lot on the side of the road, putting on your tie, putting on, we were like salesmen going into a place in the pouring rain, you know, in the fall each day, it got colder and wetter and rainier and each day there were more notes. And like, I think we look back on it and say, you know, the nose motivated us and they did for sure. But they were hard, you know, because it was a very uncertain time. We, I think we always knew we could get another job if we needed to, but we didn't want to, you know. And so what we found was we didn't know the business and we needed to learn the business. And so those people who would say no, who were like, maybe is on it, we just started to hang around their stores a lot. Yeah. Because I mean, a parallel, especially specialty apparel, there's this very knowledgeable group of people who are in that business. Sometimes it's multi-generational. And I imagine like two young guys in their 20s going into some of these stores and you come across an older guy who's been in the business for 50 years and he's like, he's maybe not impolite, but he's probably looking at you guys and thinking, what do they know about this business? And he might even have an opinion about the designs. And he might even say, you know, This is really not, these are things that just aren't going to sell. Like, did you remember coming across anyone like that? We did for sure. We had one guy who said, you know, we were very pedestrian. We had one, a lot of people say, you know, we're just not selling ties. And you're totally right. We had no experience in this industry. And, you know, a lot of brands were started by people who were in the industry. You know, and had an idea and they acted on it. So for us, what we had to do was to show them that we were eager to learn. And by spending time in their stores, like stalking their shelves, helping sell on the floor, just by hanging out and learning through osmosis, we earned their respect. And with that respect came their willingness to give us a chance. But it's interesting because that fall, after we were done having a lot of doors slammed in our face, we started signing up for like all of the holiday fairs. You know, the church boutiques, the school boutiques, the women's lunches, whatever it was. In Connecticut, around where you guys went. In Connecticut, in New York, in Washington, D.C. everywhere. Anywhere they would take us. And these were not trade shows. These were like-- No, these were like-- These were like, yes, these were in high school gymnasiums and churches. And like all of us, that's what we did. We used to joke, we were on the show circuit. And so we would hire our friends. It was, you know, our parents, whoever could do it. We would sometimes have three or four at a time. And that was a great way because all of the stores said no around us. All of the people would come in who bought the ties from us at those shows or say, you got to buy them in your advance. And so it really was like small time word of mouth in those first few years. Did you guys try to get any media coverage? Did you try to pitch magazine? Because at the time, magazines mattered. Men's magazines. And did you make any attempts to get into some of those places? So what Ian and I did is we used to send our ties to a lot of the people on the news. Oh, like the anchor people. And we would get handwritten notes backed by people. And then those anchor people would call their producers and say, "Hey, listen, this is an American Dream Story." And so we ended up getting segments about our story at all the major networks. Such a smart move. Yeah. I mean, and at that time, I mean, 2001, right? Because I read, well, I get to this question in a second, but I read that within three years, you guys are doing a million dollars in sales, which is kind of crazy. Before I ask you about how you got there, just can you just give me the breakdown, like roughly, of what the margins were? I mean, what did it cost you guys to make a tie? So the ties, I mean, just the cost of the tie itself, the physical tie and the components was probably somewhere around $12, $13, something like that. And we didn't realize it at the time, but it was a very high profit margin product. It also had quite a long runway in terms of a peril. It was less seasonal. Like, we could make the same print. In fact, we still make the same print, some of the same prints we did 20 years ago. So the inventory lasted longer than typically for a peril. And it also took up a very small amount of retail space. You could hang a bunch of ties on a wall, and it didn't take up much space. And there's also no sizing. Yeah. So all those things were great. And I wish we could say we went into it, taking this as a great industry to be in, but we just got lucky. Yeah. But one of the things we learned very early on when we had this success was to stay focused, which is not easy for an entrepreneur to do. No. And what did that mean? Stay focused. It just meant making more ties. So for us, at the time, it meant it's working with the ties, keep making ties, keep selling ties. Don't take on more than you can do. But I think one of our mentors, his name was Ira Neemark, who was the guy who really put Bergedorf Goodman on the map. Oh, wow. You guys knew him from, like, just a family connection? We knew from a customer, introduced us. And we got some great advice early on. He said, you know, guys, I really think you need to set a goal that you want to achieve in terms of how many annual sales and neck ties you're going to do before you add another product category. And it was sort of hard to hear as an entrepreneur because we started to see lots of opportunity for our prints for other things. He said, I think it was $5 million. I think he said, you know, get your tie sales to $5 million if you can do that. If you can do that, layer on one more product. And so, we're like $5 million, but you know, that's going to, is that ever going to happen? But it did. And that's how we went because losing focus is easy to do when you are an abstract thinker and you are an entrepreneur. Yeah. But you guys had this goal to hit $5 million in sales before you would even think about expanding. Were you already, do you remember already in 2001 thinking, okay, we got to move beyond ties or did you think of it as a tie business? You know, I think we were listening to our customers. And one thing that we're hearing a lot of was what, and a lot of our customers were women who were buying gifts for their husbands. And they really wanted something for themselves. They had fallen in love with our aesthetic and our look and our prints specifically. And they really wanted something. And so we came up with the idea of doing a tote bag and lining the edge of the bag with our print. And that was another great product. Like you said earlier, accessories are great because there's not much sizing and that type of thing. And somebody suggested to us, somebody who was making some of the silk or something for us said, you know, really think that you guys would do well with your prints on men's boxers. And we said, nope, we don't want to do that. Doesn't really not something that interests us. He said, okay, that's fine. And then he showed back up at our place like a month later. And he had just took it upon himself to make some samples for us. And he put them in front of us of boxers. And we're like, oh, those look great. I bet we could sell a ton of those. So next thing you knew, we were we were making men's boxers in our prints with like prints of little fish and whales or what? Yeah, they look just like the times, but they're pretty exact. And that being pitched an opportunity of what that other people with experience saw potential in our brand has propelled a lot of different opportunities for us over the years. Things that we didn't think of or we didn't know where possible or we simply just didn't know how to do a lot of what we've done is being open to opportunities that is they come our way. So do you remember, so you have the boxers, right? You've got this, you know, this idea and you guys love them. And how do you remember getting into other apparel because you would soon get into shirts and sweaters and jackets and other things. How did that happen? That happens because Ian and I were looking at the hang tag one day. And we said, and it said we invite you to take the good life to work with you whenever it's necessary. And we said, well, why the hell shouldn't we help people dress for this lifestyle that we're conveying in a tie? And said, let's try and make some clothes. Part of it too was we were pretty confident that we could figure things out. We were good at that. You know, things we didn't know how to do. We knew we could figure out a way to do them. And so what we found was we were wearing, you know, polo shirts, khaki shorts, flip flops, belts. Why are we buying these products from other people? Why don't we figure out a way to make them ourselves? When we come back in just a moment, Shepani and expand their inventory, but when the financial crisis hits, they have to learn how to get rid of it. Stay with us. I'm Guy Raaz and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raaz. So it's 2005 and Vineyard Vines has started to add clothing to its lineup. And it's also opened its very first store on Martha's Vineyard. But in those early days, things are a little rough. What we learned very quickly was what we did not know about operating retail. So we thought, you know, to open a store, what we need, we need a store. We need a location. So we actually bought the building. I don't even know why we did it or why we thought we shouldn't rent a space, but we actually bought a building. A very small building, it's sort of an undesirable location. We also thought it would be smart to put a bunch of, you know, our very junior. I mean, we were pretty junior at the time, obviously, people with no retail experience to operate the store. They were great. People loved them. It was super fun. And then like the next year, we decided we were going to open a kid's store right behind that. So we bought the building next door. And so we were doing like, I don't know, a couple of million bucks and we were losing a million bucks in the process. I mean, it makes sense why you would open a store in Martha's Vineyard, you're called Vineyard Vines. The problem though with Martha's Vineyard, it's very seasonal. Like who is shopping in the winter time? I mean, there's a small population that's there year round. So I'm wondering just that, like wouldn't it have made more sense to open it in Boston, you know, rather than on Martha's Vineyard? And though it's called Vineyard Vines. The answer is 100% yes. Yes. Okay. We felt like, you know, it was the namesake and where we wanted to be. So that's why we did it. And yes, so incredibly busy for a very short period of time. And like any seasonal business, it's very challenging to go from zero to 100, back down to zero, all within like a hundred days, which is basically what the season is up there. And were you, I mean, how was your overall cash situation? I mean, you know, we just started with a two of you. Now you've got to store on Martha's Vineyard, you've got a whole line of clothing. So how are you financing all of these hires? Was it just cash flow from the business? Exactly. We had no like line of credit or anything like that. It was all just cash flow. Well, and roughly, do you remember how many people you guys had working for you by that time? That was 2005. We probably had, what do you think, 60? And that includes retail sales reps like on the floor. Yeah. Yeah. All right. So you've got this store on Martha's Vineyard and the strategy is to presumably to open more stores, right? And I guess you guys met a family called the Mitchell family. They had their own boutiques and you formed a partnership with them. Tell me about who they were and why you formed a partnership with them. So there's a local store here in our town in Connecticut called Richards, which sold still in business sells fantastic brands, men's and women's clothing store. And we had done a nice business with them. They sold a ton of our ties and they were selling our other products as well. And remember calling them one day saying, look, we think that we should have our own store here in Connecticut. And they said, okay. And we said, you know, we realized we do quite a bit of business with you. We don't want to take the business from you. That was always an issue, you know, in all these places where we open stores and said, look, what do you think we should do? And they said, you know, we agree. You guys have a great brand and you've got a lot of opportunity and we think you should open stores and we appreciate you reaching out to us. We know quite a bit about how to run stores and how to run them very well. What do you say we work together and we open the store together and if it works out, we'll open some more stores together. And so they were very helpful. They helped us identify real estate. They also knew that we had a vision as to what we wanted the store experience to be like, what we wanted the product to be like. And it was very different from their aesthetic and their store, which is more of a luxury, like the high end luxury specialty store. And so we opened a store and Greenwich, which we're still in that same location today. And there was a lot of excitement around it. People lined up overnight to sort of get in and be the first one in there. And then we opened I think four or five additional doors with them. And then a few years into working together, we started to see the beginning of the recession. And they were spending a disproportionate amount of time helping us versus what they needed to focus on, which was their core. And so we came to agreement where we sort of bought back part of the business from them so that we owned the stores outright. But we have a lot of gratitude towards the Mitchell family because they helped us set up a foundation to grow from. And we're still close to this day. And all of these stores were basically just financed to cash flow. Yes, all of them. I mean, it's, yeah, it's amazing. And you really struck, you struck on something, right? You hit on something that was appealing to a certain audience. I think at this point, probably where you're doing, you were doing women's clothing as well. But how would you describe your, like, the typical customer? Was it, was it young people? Was it students? Was it sort of, you know, how would you describe who was, who was buying and wearing your clothing? So 70% of the people that were walking through our door was a woman 35 to 55 years old. And 70% of the product was for men. And then we decided to make women's stuff so that she could find something for herself. What we've tried to do is figure out how to make her happy when she's in the store. How do we make the shopping experience better for her? Okay, so you guys, you hit 2008 in the financial crisis. And this is actually going to be not a good period for many businesses, but particularly for you guys. Tell me what was going on, what happened to the business during that time? 2008 was interesting, A, because the recession was starting to hit and things were getting tough. To internally in our business, there was a lot of like shifting going on. Our parents passed away just a few years earlier. We had some, you know, some people on our team, the chef and I didn't always agree with or agree on. So that was, you know, presented some issues. And the world was very uncertain. And we sort of were faced with, okay, what do we do here type of the situation? I think our business are probably about around that time. I'm going to guess around 50, 60 million dollars in sales. Oh, oh, we were 100 million. So we're 100 million. And at that point in time, we really could sort of hunker down or we could really, you know, go for it. Because we saw a lot of opportunity. We saw a lot, we saw real estate was sort of depressed. We saw that the workforce, there was, you know, getting a job was not as easy. So from our standpoint, then there was a lot of great talent available. And so we sort of revamped our management team at the time, you know, say management loosely, but we sort of really put together our first sort of seasoned management team to compliment the people who have been with us, you know, it wasn't to replace them, but really to go alongside it in mentor. When we signed a whole bunch of leases, we just like went for it with the stores and we started to scale. The other thing that we did in '08 when the crisis was coming was we really were aggressive with our inventory. Someone once told us inventory is like fruit. It doesn't get better with age. And so we liquidated a lot of our inventory to like the TJ Maxx's and Phylene's. And that actually was, I think, the thing that saved us during that time. What do you say saved you? And meaning was. Because everybody, you know, was losing their job. I mean, you remember that time. It was a very, very tough time and people weren't buying cashmere sweaters. They were shopping in their closets instead of in a store. And so we got ahead of that. At the time we had a, we did have a line of credit with a bank and we drew that down and we just held on tight. And I mean, just, I mean, it doesn't seem to have affected your brand value at all. But was there any concern internally like, oh, you know, people see vinyr vines at logo at these discount retailers that could change how people think about us? There was definitely that concern. But we also learned that is, is that better than, you know, getting stuck with this stuff and potentially having a slippery slope? So you use that tool. You don't lean on that tool, but it's there when needed. All right. So you guys get through that period and you continue to grow because you've got, you know, I think by 2011, you're 13 stores. Also mainly are all, I think entirely on the East Coast of the US. What do you remember about, I don't know, wanting to be a national brand? One of the things we were reminded of by our customers is that people liked that we're from New England that were authentic and that going to our store felt like you were going to a yacht club or going to something that you might not have in your local community. So when we opened in Memphis or we opened in Dallas or we opened in New Orleans, we didn't try to put like in Memphis, you know, guitars and catalogs like Elvis, you know, we built a store that felt like you were in New England at a yacht club. And I think what we found is that there were like-minded people all over the place, you know, Denver, Colorado and St. Louis and Chicago and, you know, everywhere. Tell me about financing. I mean, you guys had not brought in any, I guess maybe you had some friends and family who put a little bit of money in, but from what I gather, you didn't know. It was all self-funded. It's all self-funded and we have a line of credit with syndicate of banks. And you never thought, hey, let's go find, you know, venture capital and really- Like Blitz scale this thing. Did you ever start to have those conversations at two of you? - We did and we ran a process and we ultimately decided not to do anything. And I think the reason was is because it was gonna change the dynamic of what's worked very, very well. We've just kept it a family owned and operated brands since 1998. - You know, one of the things about taking on investors, there's two things. One, if you give an entrepreneur money and they're gonna spend it, there's no doubt if somebody gives a bunch of money, we'd find a way to spend it. But when you don't give them any and they're hungry, you figure out a way to make it. And that has been really at the root of how we operate and our best years have always been the years where we are chasing our tails to keep up with demand. I mean, that makes sense, right? To always, the one thing you can't really buy is customers wanting your product, right? The rest of the stuff you can always catch up. And the years that have been the harder years are when we have too much inventory, we've sort of overshot the mark. So, you know, in a lot of ways, the disciplines that are required to operate a business self-funded really set you up for success. So we just really don't take anything for granted. And I think that some of that may fall by the wayside once you get fat, you know, but taking on some capital. - I think one thing that you were asking, which was I think interesting, is you were talking about private equity. And one of the things that we face as a brand, what we've seen time and time again is these private equity backed companies that spend too much at the beginning, that leave the owners with a lot of very, very big expenses after they've exited. Does that make sense? - Yeah, I mean, basically, we, I'm sure many people know a brand like this. And then all of a sudden, you just see them everywhere, all across the country, just opening up like gangbusters. And it's really, it's not a reflection of the success of the brand. It's a reflection of the money that's going into doing that with the hope that people will see them everywhere and assume that, oh, this is a great brand and let's go shop there, but that doesn't always happen. And in fact, it sometimes, it reverse happens. It destroys the brand. - Totally. And you know, that's exactly what I was saying. - Yep. Right now, we definitely believe we've got opportunity for more stores in the States and beyond. But we also think, in the short term, we've got a lot of opportunity within what we already have. And when you have more things, it's hard to make sure that all of them, everyone is singing the same song at the same time on the same day. And so getting everybody to make the most what they have is something that we focus on a lot. - You know, I know that in 2022, the two of you stepped back and brought on a CEO and you guys became sort of, just ended up more creative roles, which maybe makes sense. You've been working on this thing for 25 years. But that didn't last long. You did return as co-CEOs. What did you learn from that? - You know, in any organization, it's very hard to have somebody come from the outside to lead and be successful. The success rate is not high. But I think there was a disconnect. We're not a fashion brand. We're a brand brand. And so there's a big difference between fashion culture and brand culture. The other thing that I think was a disconnect was how important customers are and how lucky we are to have customers. That it's a total privilege. There's lots of choices. And the minute, and I think we did this, I think we lost sight of just how important customers were. We spent a lot of time with tons and tons of internal meetings and planning and stuff for each other. And a lot of theater that really didn't end up being customer facing. And I think the customer let us know. - Yeah. - And we didn't touch on it too much, but our logo is a smiling pink whale. Our brand is fun. It makes people's lives better. They come to us for the best moments in their life. And to be a part of that is something that, I don't think we can put a value on that. - It's a question I ask. Our guess at the end, which is, if you think about the journey you took and starting these ties and this little tie business and selling them off is vineyard and where you are today, 140 stores and well known brand. How much of what you got to do, tribute to the hard work you put in and how much do you think had to do with getting lucky? Shep first to you. - There is no doubt that we've worked our asses off. And there's no doubt that that hard work has presented opportunities and along with that, some luck. - Ian. You know, I would say being a part of a team, which is sort of what I would put the brand at, gave me the courage and a lot of instances to do things I wouldn't do on my own. To go up to somebody and make a sales pitch to go introduce myself to somebody to put myself out there. The brand has given me the courage to do that. And as a result of that, it's created a lot of opportunity. And one of the things that we talk about the future and we started this talking about traveling with our mom and dad and the experiences that they afforded us. It's hard not to think about what it might be like to be one of my kids or one of Shep's kids. And to know that basically any time you get in the car to go somewhere, any time you go on vacation, well dad's gonna be taking pictures of just about every store he sees. He's gonna make us go to his store. He's gonna talk to his team. He's gonna do all this stuff. And it's funny, my kids are younger, but like, you know, my wife is the same thing. They're learning. They don't even realize it, but like they know so much. And they've been patient and supportive, you know, I think just like, you know, hopefully we were to our parents through the process. And I think that's another one of the things that we don't necessarily realize how impactful that is on us personally and the brand and truly being a family brand. So, you know, we value our team, we value our family and our friends and we wouldn't be here without them. That's Ian and Shep Murray, co-founders and co-CEOs of Vineyard Vines. By the way, Vineyard Vines is still very much a family business with the next generation of Murray starting to get into the act. Four of Shep and Ian's adult children now work at the company. And some of the younger kids even came up with a new design for the brand. Neon colored ties, which apparently sold pretty well. 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 if you're interested in insights, ideas and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at gyros.com or on Substack. This episode was produced by Carrie Thompson with music composed by Rootina Robloey. It was edited by Niva Grant with research help from Casey Herman. Our engineers, Patrick Murray and Robert Rodriguez, our production staff also includes Catherine Cipher, Chris Messini, John Isabella, Sam Paulson, Alex Chung, Ramell Wood, Norgill and Elaine Coates. I'm Gyros and you've been listening to How I Built This. [Music]