Dennis Scully: From our headquarters in New York City, this is Business of Home. I'm your host, Dennis Scully. Every week, I'll be talking to leaders and innovators from all corners of the home industry. I hope you'll join me.
Dennis Scully: This podcast has been sponsored by Fuigo. Discover the workspaces and business tools powering exceptional excellence in interior design. Fuigo's 18,000 square foot Park Avenue studio includes beautiful workspaces, and material and product samples from thousands of top A&D vendors in the world's largest lending material library. Now available to interior designers everywhere, Fuigo's modern project management software was tailored to solve the business needs of groundbreaking designers at Fuigo studio. Visit fuigostudio.com to book a tour. That's F-U-I-G-O-studio.com. And now, on with the show.
Dennis Scully: Making good design democratic has been at the core of modern furniture company, Blue Dot, since it's founding in 1997. Co-founders John Christakos, Maurice Blanks, and Charlie Lazor set out to create an American furniture company in an era when venture capital, attainable modern design, and an assertive brand voice didn't exist in the home industry. Twenty years later, Blue Dot's forging efforts haven't gone unnoticed. This year the company celebrated its' recognition as the Cooper Hewitt national design award winner for product design. As well as the debut of a memoir chronicling the Minneapolis companies pioneering journey. I sat down with John and Maurice to learn about the growth of Blue Dot, its' early forat into selling furniture online, and how the company continues to expand its' global footprint.
Dennis Scully: So tell us the Blue Dot origin story of the name cause I just thought that was so great.
John Christakos: Yeah so we started talking about this by fax, I mean this is pre-email so we living in different cities and I think I tossed out a fax to Maurice and Charlie saying that I want to kick that design idea around again. I'm getting ready to move on from my current job and I think I've saved up enough money to try this out, what do you think? And they're like, "Yeah sure, let's spitball this idea a little bit". So I invited them all to Minneapolis and I think we had a couple of long weekends of having a few beers and meals together and kind of just talking about what we would focus on, what we would be about. Long walks around the lakes at Minneapolis talking about that. So I remember one particular weekend, walks around the lakes where it really started to kind of come together a little bit for us. That's where the name I think started to happen, is that where we came up with Blue Dot?
Maurice Blanks: While we were doing to faxes we were faxing back different names. We went through a lot of names.
Dennis Scully: We should point out for some of our younger listeners that a fax machine was actually a device that over telephone lines we would insert pieces of paper, thermal rolled up paper would sort of come out on the other end and you would read that much like the Declaration of Independence that you might have seen in a museum, it looked very similar and yes, and you all which I love, saved many of these thermal faxes from the early days. So you were faxing back and forth about different ideas, right?
Maurice Blanks: (laughs) Because it was pre-email so it was the easiest, fastest way to get a long document to each other to express the idea and put ideas down and read them and kind of comment edit. But we did go through a lot of names and a lot of names we are really glad we didn't choose. They were pretty bad and we eventually came to the idea that it should be something that is, it shouldn't be someones name because the idea of the company was it would be a collaborative design effort, it wouldn't be about one individual. It would be modern, it would be simple, it would be humble so it shouldn't be high highfalutin.
Dennis Scully: Hmmm okay.
Maurice Blanks: So we kind of came up with the idea that it should be something that's abstract, it's simple. The idea of it being graphic was important or felt right to us because then it can be used on packaging and we could integrate the design and the marketing, and the packaging and the name. So we might have thrown around different colors and different shapes and somehow it kind of got to blue, and Blue Dot.
John Christakos: It was also around the time that Prince, who's from Minneapolis changed his name to a symbol.
Dennis Scully: In a small way he played a role.
John Christakos: Yeah I think it was around the same time, so we were like "What if our name was just a symbol?". We even considered without words, like literally just a shape, a blue dot. But realized the impracticality of that I should say.
Maurice Blanks: Being listed in the phone book is challenging.
Dennis Scully: Right, when you're just a symbol.
John Christakos: [crosstalk 00:04:56] Or how you answer the phone?
Maurice Blanks: So we eventually became more practical and chose Blue Dot.
Dennis Scully: And chose Blue Dot.
Maurice Blanks: With an "E".
Dennis Scully: Originally had an "E".
Maurice Blanks: Originally yeah.
Dennis Scully: Okay.
Maurice Blanks: And then we found through a friend of John's wife ...
John Christakos: A friend of mine actually at that stage.
Maurice Blanks: A friend of John's, we found a graphic designer who was also young in his career. And we basically said we don't have any money but would you design a logo for us? And we struck a deal which was essentially, he had a small child and he wanted a tree house for his kid. So he said if you guys design and build a tree house, I'll design the logo. So that was the barter.
Dennis Scully: Fantastic. I love it. And you did.
Maurice Blanks: Yeah we did, we did.
John Christakos: The tree house is about half done. We gave him a thousand bucks after that because we never got around to finishing it, he finished it.
Maurice Blanks: But he designed the logo, he came in with essentially the logo that we have today.
Dennis Scully: And he said, "How do you feel about losing the "E"?".
Maurice Blanks: Yeah well he didn't really ask.
John Christakos: One option, he was channeling Paul Rand who is famous for giving his clients one option. Steve Jobs was one of his clients so ...
Maurice Blanks: After he'd been in business for thirty years and was an icon. [crosstalk 00:06:15] He wasn't a 24 year old.
John Christakos: (laughs) True. But he was like no this is the logo and he had a little booklet like Rand used to put together where he'd walk through his logic of how he got to the logo and why he dropped the "E", and how it's a square with a circle and how the letters line up and what not. He's like, "This is it." If you guys don't want this logo I'm out.
Dennis Scully: Right, yeah. Like you're fools if you don't take this.
John Christakos: Yeah, yeah we were like sure we love it. He actually still works with us, he's a principal graphic designer with us now.
Dennis Scully: Is that right?
John Christakos: Yeah.
Dennis Scully: Oh that's fantastic. Okay. So at the time, so now you've got your new logo and you're thinking what's the product you're making as Blue Dot gets started. I mean we know what it is today but what was it at first in your minds?
John Christakos: Well early on we were thinking it might be smaller things and we were looking at a company called Umbra that was sort of earlier pioneer and sort of modern housewares and things like that. Finally I think determined that we had a more solid interest in larger objects like furniture. So we coalesced around that idea and we wanted to create a brand. There weren't many great brands in that space, there are a lot of other great consumer brands in other categories but not in furniture. So we thought there was an opportunity to do that. We wanted to start with a collection that was broad enough, ten to fifteen pieces that spanned everywhere from a small accessory to a large room divider/bookcase. That was the kind of initial brief. And then making design democratic, I mean the sort of price point we were aiming for was really the crux of what we were all about. At the time there was Ikea on the low end and European imports on the high end that you could only buy with a designer in a designer showroom. And you know there's this vast middle and we were frustrated consumers as well so we thought there's got to be a spot in there where there's enough people like us to make enough of a living doing this thing.
Dennis Scully: So and that was part of it, that you liked modern design and I never how much much when people in the beginning say, "Oh we couldn't find furniture for ourselves" you know, I never know where the truth in that story really is, but you can tell me. You were sort of looking for things that you liked yourselves, right? And as you say you saw higher priced European product that wasn't so readily available, and certainly not to consumers at the time. Even today it's not so readily available. And on the lower end Ikea or some of the other brands that perhaps quality wise weren't what you were looking to get.
John Christakos: And Ikea was only on the east coast and the west coast then. There was nothing shippable, like you had to be in New Jersey or be in L.A. So there really was not much, I'm not sure but Pottery Barn wasn't around and ...
Maurice Blanks: CB2, West Elm ...
John Christakos: The landscape then was so much different than it is today. So if you're talking to somebody's who is twenty it's hard for them to understand what it was like in the early 90's when it was modern design. It was either Ikea or it was really really expensive. And everything in the middle price point was much more traditional. So I think the retail apparel analogy was that you had Old Navy and you had Armani or Prada. So imagine if that were your choices as a consumer? You could either be here, or you could be way up here. And it seemed illogical to us that there was not J. Crew or there was nothing in that middle realm. And there really wasn't, we searched and tried to find it. We were furnishing our apartments and trying to find these things. And so we looked at the high end European product and thought this is really nice but it's really expensive. It takes twenty weeks to get it, you have to have an architect or designer to take it to the design center to go up in the elevator. This is completely inaccessible and it's pretentious. It's sort of like, "Well are you good enough to buy this furniture?".
John Christakos: So that became a part of our branding was not only was the product and the price point of that product reacting to that marketplace but it was also the branding was reacting to it. And how do we have a brand that is more approachable and friendly? How do we say to people, yeah it's modern but you're welcome to join us. Come participate in this with us. It's not stand at the door and we'll tell you when you can come in.
Dennis Scully: So where did that whole sensibility come from with for of you? I mean was that something that you sort of picked up while you were in Asia traveling around together because there was this whole democratization of design notion that you had very early on. And wanting to be much more approachable and also playful and fun too, which was definitely part of your brand, right? I mean it is part of your brand.
Maurice Blanks: I think it comes from our personalities. It's basically how we are as people. We take our work seriously, we don't take ourselves too seriously, we like to have fun, we like to make fun ourselves. It's just how we are. So it wasn't like we mapped out the market and said this brand personality is missing and we should do this brand personality. It kind of grew out of a little bit more of who we are as people. It also was reaction to what is in the market, that the market took itself unbelievably seriously. You know here we are designing coffee tables and bookcases, I mean it's not like we're designing medical devices. I mean those designers are true heroes. You know we're designing a table. So as a designer you don't really need to wear a cape if you're designing a table. So we were just poking fun at that notion of the celebrity designer, and it's partly the reason that none of our work we put our individual names on. Partly because we designed as a group from the beginning so it was very hard to decide. " Was this really your design, Maurice? Or was this John's design, or is this Charlie's design?".
Dennis Scully: And in the beginning it was the three of you?
Maurice Blanks: Right.
Dennis Scully: Right and so you were all sort of collaborating on designs and where all of this was going. And where are we geographically at the time? So we're all in Minneapolis?
Maurice Blanks: In Minneapolis.
Dennis Scully: How'd we end up there?
John Christakos: Well we were still in Chicago.
Maurice Blanks: So right just before we started Blue Dot, Charlie was in Arizona working for an architect. I was in Chicago with my firm, or just starting my firm. And John had gone from Boston to Chicago for grad school, and then to Minneapolis.
John Christakos: And I'd quit my job maybe nine months earlier to devote myself to Blue Dot, and these guys wisely said that's great let's keep working together but we'll keep our day jobs for now.
Dennis Scully: Right, so we'll hang on to our steady paychecks.
John Christakos: We worked for nine or ten months to design and prototype our first collection which we debuted at ICFF, a once year trade show in New York for contemporary furniture in May of 97'. That was the first time we'd ever showed the world what we were up to. The reception at that show was incredibly strong, stronger than we thought. So it was clear leaving there that we had struck a chord, that this unmet need in the market existed and that we had something that was probably worth pursuing.
Dennis Scully: So what did you, and I love that you had a little focus group at the time right before to get some feedback, and you had the room and board people. So what did you produce to show at the first ICFF in 1997?
Charlie Lazor: So we had about a dozen pieces, coffee tables, we had quite a few coffee tables, bookcase ... a couple bookcases maybe.
John Christakos: A cd rack. You might want to tell your listeners what a cd is.
Dennis Scully: Another explainer that we'll have to do. Compact discs. They took up a lot of room so you had a rack for them. So you had that.
Charlie Lazor: So we had a dozen pieces that we'd essentially, I don't know if we'd made all those prototypes ourselves or you had kind of subbed our some of the party maybe?
John Christakos: A couple we made ourselves and some we subbed out. We had the beginnings of what our manufacturing partners might look like, they were local mill shops in Minneapolis and some steel suppliers, powder-coaters and what not. But we had one of each and as we say now, from the outside looking in we looked like a real company. We had slightly bigger booth than a rookie booth. We had business cards, an identity, a logo, a mini-catalog. But if you pulled back the curtain there was like nothing behind the curtain, no inventory, nothing. We didn't have order forms, we didn't expect orders because we were told the show was more about press. And we were really just anxious to get feedback, we'd been toiling away we just wanted to know what people thought about what we were up to. And right away there was interest and people wanting to write orders so we hustled out and made order forms at Kinko's and came back and were writing orders and promising delivery in 4-6 weeks. We had no inventory, but it was exhilarating.
Dennis Scully: Oh I'm sure that must have been so exciting.
Charlie Lazor: And it's worth pointing out at that time, so we knew what we were making which was furniture. And we wanted to, we were designing everything ourselves but it was a wholesale business. So it was a trade show for retailers. So that's kind of a different place where we started than we are today. Right, where we have our own retail stores, our own eCommerce, and we're selling and marketing directly to the consumer.
Dennis Scully: Right.
Charlie Lazor: But at that time it was all, so these were all retailers from all over the country that were buying ...
Dennis Scully: Exactly, that had come to ICFF and they were buying. Luckily you ran out to Kinko's and got some order forms so you could take those orders, and then what? You had to rush home to Minneapolis and tell all these furniture makers that needed to get to work on making your orders?
Charlie Lazor: Yeah exactly.
John Christakos: Pretty much. I mean I turned to Charlie, I knew Maurice was probably not a candidate because he had just started his architecture firm and had employees and all the rest. But I thought Charlie was a better target. I said how quickly can you move from Arizona and move to Minneapolis because it's still me. I had set up a smaller little warehouse and a bigger space to be ready, had it teed up. Charlie said yeah I'll do it. And so he moved up with his wife and his young daughter and their dog and we opened up this slightly larger space and started to make our first round of production. We had to figure out how to do health insurance and how to do accounting.
Dennis Scully: Sure, so had you gotten incorporated? Were you actually ...
John Christakos: We were incorporated.
Dennis Scully: Okay.
John Christakos: We were incorporated but that was about it.
Dennis Scully: And had you put up capital? Did you all kind of put in money or how was the financial side working?
Charlie Lazor: Fifty grand.
Dennis Scully: Fifty grand, okay so where did that come from? That was just from everybody pitching in?
Maurice Blanks: From the three of us.
Dennis Scully: Okay so the three of you come up with fifty grand and we get Charlie to move to Minneapolis.
Charlie Lazor: And we bought thirty five thousand also worth of cardboard cartons.
Dennis Scully: (laughs) Right, we had fifteen grand left.
Dennis Scully: Well that was the other thing, you not only had to make it you had to ship all these orders.
Maurice Blanks: Well we were or I should say they at the time, Charlie and John were finding all these vendors and they vendors would make the product. And then they would shuffle it between, so let's say they would buy the plywood and then they would send it to somebody to cut the plywood, and then they would send it to somebody who would finish the plywood, and then the parts would come back to the headquarters, and all the other parts would come in.
John Christakos: Headquarters is not the right word. (laughs)
Dennis Scully: Right, and so what was happening at the headquarters? I mean, so that's where you guys were.
John Christakos: [inaudible 00:18:02] There was a dead raccoon in the elevator shaft [crosstalk 00:18:06]
Dennis Scully: Excellent, I love it. So some atmosphere.
John Christakos: Yes some atmosphere.
Maurice Blanks: But just the two of them.
Dennis Scully: All the production was being formed out.
John Christakos: It was.
Dennis Scully: To it sounds like multiple vendors would work on different stages of the product. And would finished product come back to you at the headquarters?
John Christakos: It would.
Dennis Scully: And then you'd be packing it up and shipping it out.
John Christakos: Exactly and early on, in earliest days a lot of our products were ready to assemble. They were sort of a higher quality than Ikea but nevertheless required some assembly and that clever assembly was part of our DNA as designers from early on. Figuring out clever ways to do that. But so yeah we were collating all these parts into boxes as finished products. Charlie and I would spend the day, the daytime responding to inquiries or customers or doing more administrative stuff. And then we'd spend from four o'clock until ten or eleven at night every night in this sweaty warehouse packing boxes. Yeah. Getting ready to ship our first orders. We had promised them in 4-6 weeks and we weren't anywhere close. When six weeks rolled around people started to call and ask.
Charlie Lazor: And no parts had come in to the warehouse to collate and package yet.
John Christakos: Yeah and luckily UPS went on strike at this time and ...
Dennis Scully: So you were able to blame them.
John Christakos: We would blame them. They went on strike for about two weeks.
Charlie Lazor: Yeah it's sitting on the dock.
Dennis Scully: Ah man, wish we could get it to you. It's all there.
Charlie Lazor: We just want to bill you for them.
John Christakos: And so it was fun, it was just a really intense time and we made tons of mistake. The first batch of production they very very first batch of parts that came back, super simple product. It had to wood parts, two steel parts and two holes where the screws had to line up and they were off by a quarter of an inch. Like a thousand parts or something like that. And so we were panicking and we figured out how to solve that. We just made for the first few years was just a collection of a lot of mistakes.
Dennis Scully: A lot of mistakes.
John Christakos: Which was fun, it was really exhausting but super exciting too cause you're kind of figuring it out as you go.
Maurice Blanks: But it was great to be, for the two of them especially then and then as I joined later when it was still small that we did all these things ourselves because now with the companies scales a lot of those problems, or those mistakes, you can still make the same mistakes but the numbers are bigger.
Dennis Scully: Sure.
Maurice Blanks: And so it gives us a lot of insight into all of the things that happen in our business, that we still know that if you are making this part in one facility and you're making this part in another one that those holes need to line up. Now we're just making more pieces.
Dennis Scully: Well so is production still done in roughly the same way? Or you still have multiple vendors that are making all the components for you?
Maurice Blanks: Well we do for the most part now we have vendors that they consolidate the parts and then we receive finished, packaged product. So rather than people in our facility packaging the thing they are packaged by a supplier.
John Christakos: So we receive completed product now.
Maurice Blanks: Just because we have two thousand sellable items right now so for us to try to manage all those in house, and the cartons for all those things, and all the little bitty pieces of foam and packaging.
Dennis Scully: Of course. So your packaging was part of your brand. You had fun instructions, right? And you had fun packaging and so who was behind all of that. Who was the creative force that was doing all of that because ...
Charlie Lazor: I think we'd all say that we were all a part of that. Again building a brand and creating a personality was important to us in this notion of it being fun and everyone's invited to our party, and we're not too cool for school and that whole thing was important. We wanted people after they bought a Blue Dot piece, opened it up and put it together to be able to come away from it and describe Blue Dot like they describe a friend. To really have a personality behind the brand.
Dennis Scully: Right.
Charlie Lazor: So we had no marketing budget so we couldn't do ads or print ads, or anything else. So really our opportunity was packaging and assembly instructions, and how our hardware was packaged. Our hardware came in a cool little cloth branded bags instead of the standard plastic bags. So we just viewed every one of those little decisions as a design opportunity, and an opportunity to tell our story. So yeah, it's been part of our approach.
Dennis Scully: And you saw Ikea had handled instructions and thought, " Oh we could do a much better job than that". Right?
Maurice Blanks: I'm not sure if we did. [crosstalk 00:22:41]
Charlie Lazor: Ours were more funny.
Dennis Scully: Right, and you're pieces were much easier to put together. There weren't nearly as many parts.
Maurice Blanks: Most of them were. (laughs)
Dennis Scully: Okay so at what point Maurice are you able to say okay I'm going to leave my architecture firm and also come up to Minneapolis?
Maurice Blanks: Yeah that's kind of a funny story. So we were doing this, I was putting in whatever time I could. I would come out to Minneapolis every month or so, or every three months. Whatever it was. And the practice is going along, and then at one point I was down at High Point and I don't know if you were busy with a customer, but a cameral crew came in and they were from Style Network. And they interviewed me about how we had a booth or a showroom at High Point at the furniture market and they interviewed me about the products. Anyway that went on, nothing came of it then about a year later I got a call and it was somebody from the Style Network and they said they were doing a hosted design show on the Style Network and they were looking for a host and they wanted somebody that was in the business. They didn't want to hire and actor, they wanted to hire someone that was in design and they were going through old tape and they found me and they were calling me along with lots of other people. And would I come to L.A. for a couple of days for an audition. You know I was in Chicago, and L.A. was glamorous and warm, and I thought " What's the downside? I'll go out there a couple days, all expenses paid, why not?" Thinking I'd never get this thing.
John Christakos: Meanwhile we were sweating our asses off.
Dennis Scully: I was gonna say [crosstalk 00:24:12] with the raccoon in the elevator.
Maurice Blanks: They benefited ultimately though.
Dennis Scully: So you're off in L.A.
Maurice Blanks: So I go to L.A. and I get the gig. So the deal was when I signed the contract was that I had to transition out of my firm and my wife and family and I had to move to Los Angeles, that was part of my contract. But what happened was after we did one season the executive producer, who was above my producer who was really ... we were in lined with what they show was and it was really a television magazine. Sort like a magazine has an aspirational part and they may have a market watch, and they may have a ... what's the best stacking chair? It had all these different pieces but it was meant to be, we were really trying to be smart about it. We were trying to be serious about this, it was a fun show but it was still serious. And then this new executive producer said I want this to be more like Trading Spaces. I want it to be emotional, I want people to cry. And I don't want you to ever use the word design again. You have to use the word decorate from now on.
Dennis Scully: Oh because that sounded too high minded.
Maurice Blanks: So I picked up the phone and called this friend of mine who was an entertainment attorney who negotiated my contract and said, " How can I get out of this contract?".
Dennis Scully: (laughs) Get me out of this deal.
Maurice Blanks: I did, because I thought this isn't what I want to do. This isn't how I think about design and I don't want to be in the TV business, I did this because I wanted to talk about design and get design into the world, and have people learn and talk about design. So I was essentially, I'd started to close down my practice. I'd taken no new clients, so after this weird place where I would have to restart my firm completely almost. And it gave me a chance to think about what I wanted to do. I got a nice severance so I took some time off and just thought about it. So I called John and sai ...
Maurice Blanks: Off, and just thought about it. I called John and said, "Is Blu Dot big enough, can Blu Dot afford another founder?"
Dennis Scully: A former TV star.
Maurice Blanks: That's right.
Dennis Scully: I mean ...
Maurice Blanks: With a voice coach.
Dennis Scully: I mean, that's what [crosstalk 00:26:13] I mean at this point.
Maurice Blanks: Hundreds of thousands of dollars ...
John Christakos: Did you still have your voice coach then?
Maurice Blanks: No, I had to fire the voice coach.
Dennis Scully: Yeah, but he's got big attorneys.
Maurice Blanks: Right, right.
Dennis Scully: A big ask, right?
John Christakos: You should have seen his contract.
Dennis Scully: Oh, I can imagine.
Maurice Blanks: My agent was, I think Endeavor was the name of the company? I forget.
John Christakos: Yeah, right.
Dennis Scully: You called up the vast Blu Dot offices and say, "Is there room for me?"
Maurice Blanks: But it was, I mean even before that, if you know, in the early days, there weren't funds available to pay three of us to be there, and we couldn't do it. It was sort of a question of whether it was a good time in sort of the life of Blu Dot, did it make sense, and then maybe you should tell the rest, because it was really you.
John Christakos: There really wasn't enough money to afford all three of us.
Dennis Scully: There wasn't?
John Christakos: It wasn't like we were paying ourselves a lot. I mean, Charlie and I, I think were probably paying ourselves $40,000 a year at that point or something.
Dennis Scully: Right, okay.
John Christakos: I mean, we had some employees, we had maybe seven or eight employees, at that point. But at the time I knew Charlie, who was a real designer at heart, but in those early years, we're spending 90% of our time on things that were not designed ...
Maurice Blanks: Right, just keeping the plates spinning and keeping the business running.
Dennis Scully: Sure, running a business.
John Christakos: Yeah.
Maurice Blanks: Packing boxes.
John Christakos: Yeah, right. I knew he was unhappy, and he and I were teaching a design class at the University of Minnesota together, and after one of the classes, I just sat down with him and said, "Hey, there's this opportunity, it doesn't seem like you're happy, that you want to spend more time designing. Maurice is interested in coming to join us. We can't afford all three of us, but if you wanted, only if you wanted to get back into architecture, spend more time designing and lead with that, then there would be an opportunity for you and he to basically trade places."
John Christakos: But you know, if not, we're cool going the way we're going. I mean, Charlie had really paid his dues, and there was no way that I was ever going to ask him to move on, but it was just an opportunity for him to move on if he wanted to. He literally, I think started crying. He was sort of relieved.
Dennis Scully: Oh, wow.
John Christakos: 'Cause I think he felt that, but he felt obliged to stick in with us. [crosstalk 00:28:22].
Dennis Scully: But he couldn't say anything. Sure, yeah.
John Christakos: It was a real relief for him. Basically, he and Maurice traded careers. Charlie started his own architecture practice, and started with a flat pack house, which was a prefab house product, basically, that was sort of modeled after Blu Dot, it was kind of like a large version of Blu Dot.
Dennis Scully: A large scale version of it, wow, okay.
John Christakos: And then Maurice came and took Charlie's role.
Dennis Scully: And what year was that?
Maurice Blanks: 2002.
Dennis Scully: 2002. Okay.
John Christakos: We've been around, five years?
Maurice Blanks: Five, six years.
Dennis Scully: Right, okay. Charlie phases out, former TV star and architect Maurice phases in.
Maurice Blanks: Right.
John Christakos: Yup.
Dennis Scully: And you begin to really sort of grow the company from there?
John Christakos: Yeah, the next three, four, five years were still tough.
Dennis Scully: Now you're still making things for other retailers at this point? [crosstalk 00:29:19]. Right you're a wholesaler?
Maurice Blanks: Up until ten years ago.
Dennis Scully: Who were your big customers of early on? Who were the people that ...
Maurice Blanks: Mostly mom-and-pop stores.
Dennis Scully: So small furniture stores.
John Christakos: Independent stores around the country. Typically, the kinda cool design shop in a given city, and some bigger cities might have more than one. New York would probably, we had the Conrad Shop, we had Moss, we had ...
Dennis Scully: Oh God.
John Christakos: We had amalgamated home, which was down in the West Village, in San Francisco Zinc Details. So those types of stores, we were also doing some private label work. We had some large retailers approach us early on who asked us if we would do custom collections for them, kind of their brand. And of course as a scrappy startup we're like sure. You want Louis the Fifteenth's, yeah we can do that. We didn't do that.
Dennis Scully: That's not what they wanted.
John Christakos: No, no, no.
Dennis Scully: So they liked your look?
Maurice Blanks: And Gordon Segal, the founder of Crate & Barrel was probably, I think that was probably the first real serious conversation we had, right at High Point?
John Christakos: Yeah.
Maurice Blanks: He came into the booth and essentially said would you do something for Crate & Barrel? And the first collection we did we literally designed a Blu Dot collection, so it looked like a Blu Dot line for Crate & Barrel, which of course didn't do well.
Dennis Scully: Co-branded or so was it? It was for Crate & Barrel or was it [crosstalk 00:30:37].
John Christakos: No, it was not branded Blu Dot, but it had a lot of our DNA. So it was too modern for Crate & Barrel's audience and it didn't do as well as we had hoped. As well as they had hoped.
Dennis Scully: Okay, okay, but I mean how exciting? That Gordon Segal, a legend, an icon.
Maurice Blanks: So we asked for a second try.
Dennis Scully: Okay.
Maurice Blanks: And then we said let's put on the Crate & Barrel hat, and let's think about who your customer really is and let's design for that customer. So still something we feel good about, and we're interested in but let's make it work for the customer.
Dennis Scully: Okay good for you.
Maurice Blanks: And it was their best bedroom collection for I don't know five or seven years.
John Christakos: Yeah it was great it was very successful and they're a terrific company, unbelievably nice people and great customers of ours for a long time. So we're thankful for that, and then Target was the other retailer, they're in our hometown. And the first collections we did for them are sort of back to college they were branded Blu Dot, like little mini collabs kind of and those did well.
Maurice Blanks: And John should tell you the secret to selling to Target, how you get in the door.
Dennis Scully: I think everyone would like to know the secret to getting in the door at Target.
John Christakos: I don't think the secret would work anymore.
Dennis Scully: Oh back in the day.
John Christakos: Right?
Dennis Scully: Yeah, what did you have to do?
John Christakos: [inaudible 00:31:55] this is back in the day when Charlie and I were sweating our tails off in the warehouse. We're literally working across from each other [crosstalk 00:32:02].
Dennis Scully: He seems to wanna bring that up a lot Maurice that they were [crosstalk 00:32:06]. To needle you, still to this day, I just feel like so many years later you would have worked through this but obviously not.
Maurice Blanks: No, no. [crosstalk 00:32:15].
Dennis Scully: So you guys are sweating your tails off and?
John Christakos: And I said you know what, I'm gonna call Target. And Charlie's like what do you mean? I'm like I don't know I'm just gonna, which is in Minneapolis right. [crosstalk 00:32:25] hometown, Target's across the road.
Dennis Scully: So you figure what do you have to lose we'll call Target.
John Christakos: Dialed 411 give me the number for Target's headquarters. I get the number for Target's headquarters. A real human being actually answers the phone.
Dennis Scully: Again those were the days.
John Christakos: Right? And I say can I speak with your furniture buyer and they patched me through to the furniture buyer and sure enough the furniture buyer picks up the phone and I introduce myself and tell him about Blu Dot and she says that is so strange that you called because my boss's boss just put an article about you guys on my desk. And her boss's boss was Ron Johnson who's the one that started ...
Dennis Scully: Oh my God sure of course.
John Christakos: The Apple Stores.
Dennis Scully: Yeah, absolutely.
John Christakos: And so she invited us in for a meeting and we came in and were kind of told them what we were all about and that's how that started. Obviously you couldn't do that now probably but we were lucky.
Dennis Scully: That was incredible. And so there had been a local paper article written about you?
Maurice Blanks: Right, right.
Dennis Scully: Okay, and so they had seen that and they said sure come on in?
John Christakos: Yeah.
Dennis Scully: And then you started making a collection for them.
John Christakos: We did.
Dennis Scully: Which you did for a while?
John Christakos: We did and Target then had I don't know how many stores, probably like eight or nine hundred stores, they have almost two thousand now. But we weren't really ready frankly to be a supplier to Target. We were producing these collections too, we weren't just designing them.
Maurice Blanks: We would design them, then we would find a manufacturing partner who would make it.
Dennis Scully: Right. Oh locally still?
John Christakos: No, this was, for Target we had to do it in Asia [crosstalk 00:33:58] that was kind of our first [inaudible 00:34:00] into working over there and but it was exciting and hairy.
Dennis Scully: I'm sure.
John Christakos: It was kind of amazing that they actually put that much confidence in us frankly back then. We musta faked it quite well, but we were able to do it all on time and ship on time, and those collections did pretty well. They've been an amazing customer.
Dennis Scully: Well so and what was that first big order from Target like? How much did they want, what did they, was it some big number that you had never made that many pieces before?
John Christakos: Oh yeah, they need thousands of something.
Dennis Scully: Thousands.
John Christakos: Whereas before for Blu Dot brand we were making ...
Maurice Blanks: We'd never sold a thousand.
John Christakos: Fifty of something or a hundred of something. Albeit at a much lower price point but, nevertheless that was kind of new territory for us.
Dennis Scully: Yeah absolutely, so you went back to Asia funny enough, all these years later, right? And found suppliers and vendors. At a time where that wasn't so commonplace.
John Christakos: Yeah.
Dennis Scully: Were they able to point you in some directions or who helped you figure out?
Maurice Blanks: We basically networked.
John Christakos: Well I think from having our showroom in High Point you would have folks that were sort of agents for factories in those parts of the world come through your showrooms and pitch say, you know I can help you, connect you with the right factory in Asia if you wanted to produce something. We didn't have a need to make anything in Asia then, we were making Blu Dot brand and our own stuff in the United States for the most part. We connected with a British guy who has lived in Hong Kong and I flew over and went and visited a couple of factories and kind of camped out there for a little while.
Dennis Scully: Right? As you have to, right? To sort of just see how it's gonna work, and make sure they're gonna make it to your specifications and they're really gonna make it, right? [crosstalk 00:35:50]. Once you leave are they really gonna keep working?
Dennis Scully: We're gonna take a quick break for a word from our sponsor but we'll be right back.
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Dennis Scully: So Target, that's huge. And then you really knew you had something at this point right?
John Christakos: Right I mean an original idea was our own brand and our own collection but of course when you're bootstrapping a company like we were and starting with $50,0000 of your own money, when two of the best retailers in the nation want you to work with them you obviously say yes. That was really key, those relationships were really key to help finance the growth of the business. And there were periods where we were really much more focused on that business than we were on our own collection. Just 'cause we didn't have the bandwidth to do both. But it kept the company growing and kept the company moving forward til we got to a point where we can kind of turn our attention back to our own collection as well as continue doing work for them.
Dennis Scully: And was there ever a time where you thought about seeking outside capital or I mean did you really believe that you can organically grow it with just working with Target, working with Crate & Barrel and scaling? Did you wish that you had some outside money helping you or were you so happy you didn't? [crosstalk 00:37:44].
Maurice Blanks: We did.
John Christakos: Go ahead.
Maurice Blanks: We did take some, we did a couple friends and family rounds, so we sold some equity very small piece of equity to friends and family basically in two different tranches, right? It was about three years apart.
John Christakos: Yeah. I think it probably raised a total of a million bucks or a million two, at two different time periods but we didn't do that first friends and family raise until about five years in. I had been lucky in the sense that I had some assets that I could use to pledge against a bank loan. So we used a bank loans for a while to finance the growth and then a couple of injections of small [crosstalk 00:38:23].
Dennis Scully: Which, again is what companies used to do back in the day. They used to have to go to the bank and borrow the money, show them your business plan and how we were gonna grow it. Okay so you had some collateral you were able to put up that made you look like a safe risk and that helped?
John Christakos: It did.
Dennis Scully: And then some generous friends and family it sounds like?
Maurice Blanks: Yeah.
Dennis Scully: So people really believed in what you were doing and they got caught up in what I'm sure must've been a lot of fun and excitement right?
John Christakos: Yeah.
Maurice Blanks: Yeah.
Dennis Scully: Watching it grow.
John Christakos: And that was key because I think once we took that first batch from friends and family then it really gets serious. I mean from our perspective, it was like we, this is real money, and these are from people that we love and are friends of ours so like we can't screw this up. I wanna hold my head up high at Thanksgiving dinner you know? It was good 'cause it forced sort of another notch of discipline in terms of becoming kind of a real company and really focusing in. It was a good thing.
Dennis Scully: So then you started to swing back and focus on building your own brand again.
Maurice Blanks: Yeah that was sort of a mid 2000's probably we started 2005, 2006. And then we started to realize that, in the Blu Dot brand we were selling to these independent retailers all over the country and there weren't new independent retailers popping up at a very fast rate, and the existing retailers we had weren't growing, they weren't doubling their business every year. So we started to realize that our business is now, the growth of our business is now tied to the growth of those businesses. And that felt limited, but we did really, we believe that there was more demand and more people out there that wanted to buy our furniture. We decided we should think about how we can sell directly to those customers and really that store in New York was the first time that we did that.
John Christakos: Well we always had an e-commerce side, from earlier days.
Maurice Blanks: That's true.
John Christakos: So we were selling online direct. From the late 90s or early 2000s when we started.
Dennis Scully: So pretty early on.
John Christakos: Yeah.
Dennis Scully: You're selling directly and was that a challenge with your retail store, with your people you were selling to? How did they feel about you having?
John Christakos: It was always a little bit of a sore point but it because it was always there when they signed on with us they knew it was part of the deal. And we always felt there was enough to go around for everybody and that we weren't really, our marketing was equally driving people into their stores as much as our website was maybe taking a sale or two away here or there and that it would kinda all work its way out. People would complain about it but it was fine.
Dennis Scully: And in those days were people buying that much online?
Maurice Blanks: No, [crosstalk 00:41:13]. It was a tiny piece of our business. And we actually tried to make it structurally advantageous for our retail customers so we would make buying on the website actually more expensive than through buying through your store. So our argument was if they're still buying from us at a higher price point then maybe you should look at what you might be doing wrong. But we gave them every opportunity to get the business because we wanted to support them but we had to explain to them that we only have stores in so many markets and there's this whole other part of the country that we would like to sell our product in. And that website enabled that but I think the fact that the web was there when they signed on as customers kind of gave us a pass.
Dennis Scully: Yeah that was part of the deal.
Maurice Blanks: We didn't bring it in later.
John Christakos: But we did open the first store about ten years ago in 2008, I think.
Maurice Blanks: When Bernie Madoff was arrested, yeah was spectacular timing [crosstalk 00:42:10].
Dennis Scully: Really good timing [crosstalk 00:42:12]. What else was going on at that time? Let me think, oh Lehman Brothers was collapsing and the stock market was [crosstalk 00:42:22].
John Christakos: We shoulda done a little more macroeconomic research, but we figured if we can make it work in that crappy of a time then it would work for sure.
Maurice Blanks: And it did, I mean 2009 the SoHo store actually was profitable and ...
Dennis Scully: That was the first store?
Maurice Blanks: That was the first store, 2500 square feet.
Dennis Scully: 2500 square feet and that was 2008.
Maurice Blanks: Ten year lease.
Dennis Scully: Ten year lease.
John Christakos: Monstrous amount of money, what seemed like for sure. That first rent check was $35,000 and I remember writing the check and thinking, "Oh man I gotta write another one of these in 30 days." Like get at it, start selling stuff.
Dennis Scully: Gotta sell a lot of coffee tables to make that rent.
Maurice Blanks: And the security deposit because we were not an established national brand, so the security deposit was one year of rent.
Dennis Scully: You're kidding.
Maurice Blanks: One year of rent.
John Christakos: Yeah 400 grand.
Maurice Blanks: $400,000.
Dennis Scully: $400,000 you had to come up with for the security deposit.
John Christakos: And they sat on that for ten years.
Maurice Blanks: Did they pay us interest on that? I forget.
John Christakos: No. I don't think so.
Dennis Scully: No, of course the interest rates went to 0. [crosstalk 00:43:21]. Financial crisis right and they've only just started to rise this year. So the whole time you've been getting no interest. Wow. Wow. Okay, so you open up a store, I mean you must've been laughing with everything that was going on, like yeah what a great time to open a store here in SoHo. But the store did well.
John Christakos: The store did well, and I think part of it mighta been that people who would normally shop at the high end were coming down, they're sort of trading down a little bit. Not really sure of what was going on. And we presented a great deal, 2009 was a fine year in that store.
Maurice Blanks: And it just kept growing yeah. So it was the first time we were able to present all of our work together in one space the way we wanted to present it as opposed to as when we sold wholesale you knew they'd pick four or five of our pieces then mix it in with other people's pieces and pile sometimes picture frames and candlesticks and other things on top of it, or sometimes it's hard to even see the designs. So it was nice but our product line was incredibly small, I mean we had two sofas to offer. We didn't make rugs, we didn't make lighting.
Dennis Scully: So you didn't have all those accessories to [inaudible 00:44:34].
John Christakos: Very hard to make a store look good when you don't have that sort of complete lineup so that experience of opening that store helped sort of kicked that sort of product development into gear, to flesh out our product line and our assortment.
Maurice Blanks: And really change the way we thought about developing products. As a wholesaler you can develop individual products that don't all have to go together. So you develop this collection and it has a sort of certain look and maybe you pick this color scheme for that, put that aside. You design another collection you do a different color scheme here and you just keep doing that and that's fine because the retailer is the curator.
Maurice Blanks: The retailer takes the pieces and they're responsible and they're usually multi brand retailers. So they're using our product as well as others. Putting them all together and making them look nice in a setting. So when we took all those different pieces and put them in a room, the first store we're sort of like ugh the color scheme was a little bit like bad skittles. Just like those colors made sense independently but when you mix them all together. So we really had to start thinking about our collection now in a very different way as opposed to thinking about individual items and collections we had to think abour the entire assortment. And how all the colors and fabrics and finishes would work across all these things.
Dennis Scully: How it would all work together yeah.
Maurice Blanks: So thinking about of the things that we already made, we had to think about how do we do this differently and that took time because we had all this inventory and legacy product and we had to slowly design our way out of all those things. And then as John pointed out we also had things that we were missing, we didn't have anything over 30 inches. Everything was, the top of a chair, the top of a sofa, the top of a table, so you'd look across the store and it was like you could shoot a gun [crosstalk 00:46:15] through the store at 32 inches and you wouldn't hit anything. So we needed to get taller things, lighting. And I think we quickly went up and made a coatrack and floor coverings, and there's nothing on the tables so we had to start making accessories and that took, that probably took four years before we really turned that into a place where it was starting to look good.
Dennis Scully: So four to five years of product development and you start to add to the assortment and then at that point did you have a great big expansion plan? Of oh, we're gonna be in Australia and we're gonna be, I mean at that point were you thinking yeah we're gonna take this on the road and open a bunch of stores or?
Maurice Blanks: I don't think it was that aggressive. I think it was more incremental right?
John Christakos: Yeah I mean we knew we wanted, the first store was an experiment to see how we'd do and we didn't know anything about retail so we're learning it as we went. I don't think we opened our second store maybe until four years in, or something like that and that was in Los Angeles was the second one.
John Christakos: And we got more serious about e-commerce we actually went out and hired someone who knew something about e-commerce to run it. [crosstalk 00:47:20] and this was also [crosstalk 00:47:24] a turning point whereas, a company we got to a size and a profitability, where we could actually afford really talented people. And people that made $150,000 or more let's say. And once we were able to bring folks like that into our team and see the power of what great people can bring it was like an epiphany for us. Like oh my God this is such added horsepower we can do so much more, and that was a real turning point. Sort of upgrading, not even upgrading there was just a big, we had a lot of folks at entry level positions and then there was this big swath in the middle of sort of seasoned leaders that we didn't have just below us.
Dennis Scully: Oh this was the missing swath.
John Christakos: The missing swath and filling that in was a really critical turning point.
Dennis Scully: Right so you were able to hire good people and then you hired them and wow you found out what a difference it makes to have really good people. 'Cause you have really good copy writing and creative people. I feel like so much of your brand is how you communicate about yourselves and everything that you do, it's such a part of the whole package. And you've had people that have been with you for some time doing that right?
John Christakos: Yeah, that team, I'm speaking of it still, I think all of them are still with us, for the most part. Our CFO recently retired and he was maybe ten years older than us, more than that and was with us for several years. But that continuity, that loyalty and continuity and keeping the same team is really key too. And for us it's about culture and what kind of places we'd like to work at. We're thankful that they're all hanging around.
Dennis Scully: I feel like one of the marketing things that I remember was, it was like you had put chairs all around New York. I can't remember what it was called, but it was sort of this dumpster diving kind of concept, like let's see if people will pick up this chair and what happens next. Can you tell me about that, 'cause I loved that?
Maurice Blanks: So it's a real good chair. It's actually a ready to assemble chair that comes in kind of a big pizza box and I think this was the first anniversary of the store in New York was what kind of inspired this.
John Christakos: 2010 about.
Dennis Scully: 2010 okay.
Maurice Blanks: 2010. So the idea was that we would put 25 of these on the streets of New York assembled, but just on the curb kind of a little bit inspired by curb mining and the idea of walking down the street and seeing somebody had just put this dresser on the street and I'm just gonna take it home. So putting these on the sidewalk, about 25 of them all over New York but we GPS enabled all the chairs. So on the bottom of the chairs there was a little battery pack and basically a cell phone.
Dennis Scully: Okay, so you had a little tracker on each one.
Maurice Blanks: We knew exactly where each one was all the time and we also had camera crews that were surveilling some of the chairs. So they would basically watch people come over and walking down the street somebody would stop, take a look at it and tip it back and inspect it and maybe sit down, maybe even have a cigarette and then just walk home with it. So that happened, I don't know how many, all these things just disappeared off the streets and then the next day with a camera crew the team went back and basically rang the doorbell and said ...
Dennis Scully: So you went to people's homes who had taken the chairs?
Maurice Blanks: We tracked them and we said, "Did you take a chair off the street yesterday?" And they uh, maybe why? And they said we work for the chair company, we're curious what do you like about the chair? So then they interviewed I don't know four, five different people who had taken the chairs off the street and then that became really interesting to hear what their story was and who they were and why they were interested and they let the camera crew come into their home. And one was I saw on the street and the color that my boyfriend had made this whatever, this stool for me and it was the same color of blue and I thought he would really love it. And there was a father and he got it for his son because he needed a place to play his guitar and like there's really touching stories.
Dennis Scully: This whole backstory of why they took the chair. I love it.
Maurice Blanks: But it was kind of a demeaned it a little bit, it was a viral stunt in a way. Like how do we get, trying to get people to learn about Blu Dot and how do we create content that was interesting and people would wanna share it with other people. Which that time is sort of passed ...
Maurice Blanks: ... want to share it with other people, which is, that time has sort of passed, those are a dime a dozen now, that's happened every day, all the time.
Dennis Scully: Yeah.
Maurice Blanks: So there's a lot of noise now, but at the time we did it, it was still, it was a pretty fresh idea and it got a lot of play and a lot of press.
Dennis Scully: Oh yeah, I remember, it got a lot of press and a lot of, as you say, it wasn't so crowded with social media and it was such a fun concept and the footage was great and it seemed like such a classic New York thing too. So often on a New York street, you'll walk by this thing on the street and you're thinking, "Oh, is someone really throwing that out, or should I take that?" I've done it myself, where I go back later. When I used to live down on St. Mark's Place, people would throw away the most amazing things, and I would constantly be lugging them up to my apartment, and I'd keep it for a little while, I'd think, do I hold onto this, should I not? So I loved that people had all these different reasons why they had taken the chair and yeah, it was great.
Maurice Blanks: No, it was fun. So it talked about New York, and a thing about New York, which is curb-mining culture, you just talked about, so that was very much a thing about New York, and it was about getting our product into the world, literally getting it into the world, making it accessible, putting it on the street. And then there was also kind of a fun, humorous piece to it. The video's funny, so this idea of humor that we kind of weave through the instructions and through our marketing-
Dennis Scully: Exactly, such a part of your culture, the humor, and as you said, John, earlier, not taking yourself seriously, in fact, just the opposite, trying not to be serious about all of this, while making substantial furniture. Because that was the other thing, you were at an affordable price point, but it's really substantial furniture, from a quality standpoint. These are pieces that people are going to have for a long time.
Dennis Scully: Okay, so let's fast-forward to where we are today. So here we are, it's 2018 and how many stores do we have?
John Christakos: We have seven stores in the U.S. and three stores internationally, two in Mexico, one in Mexico City and one in Monterey and one in Sydney, Australia.
Dennis Scully: Why Sydney, Australia, how did that come about?
John Christakos: We met a guy from Sydney.
Dennis Scully: Did you tell him, "I'd love to have your product?"
Maurice Blanks: Wouldn't take no for an answer. He basically, I think he must have gone to the San Francisco store-
John Christakos: No, he went to the SoHo Store.
Maurice Blanks: SoHo Store and I don't know if he was in for ICFF or why he was here, but he went and he thought, this is perfect for Australia, this is what Australia needs now. And he, if I remember correctly, jump in John, but I feel like he came to us and said, "I want to do the store in Sydney." And we basically like, "We don't know who this guy is and why would we turn the keys to our brand over to this guy in Australia and thanks a lot, we appreciate your enthusiasm." But he was persistent and just kept after us and every time he'd come from Australia we'd hear from him and I think it turned the corner when he came to the ICFF, the trade show here in New York, and he offered to work in the booth for the day. Basically he said, "I'll just pretend I'm a Blu Dot employee-
Dennis Scully: "I'll represent you-
Maurice Blanks: Yeah, represent you and he was unbelievable the way he talked about the brand, the way he talked to customers. I mean if I remember right, that was the deal, that was the difference.
John Christakos: We basically dated for about a year and a half or two years, until we felt comfortable, probably until he felt comfortable with us too. Because we are putting our brand in somebody else's hands. We would never presume we can operate our own store in somewhere as far away as Sydney, Australia so we really need a local partner and Brad has been really an amazing partner. That's how we ended up in Mexico as well, same thing.
Dennis Scully: Same thing? Some people found you-[crosstalk 00:55:42].
John Christakos: [crosstalk 00:55:42] the same thing. Yeah.
Dennis Scully: Okay.
John Christakos: So if there's anybody out there listening in London or Paris or Rome-
Dennis Scully: Yes if there's anyone in the audience who wants to come forward-
Maurice Blanks: 1-800-
Dennis Scully: [crosstalk 00:55:53] or Amsterdam, Paris and, but you're open to that is the point and some people come along and if they make sense for the brand and they want to take it internationally and what are some of the challenges of having a shop in Sydney? I mean are there a lot of shipping challenges? Are there a lot of other challenges?
Maurice Blanks: I think the lead time is probably the biggest challenge because we inventory all of our product in Minneapolis. No matter where it's made in the world it comes to Minneapolis and so it has to get from Minneapolis to Australia, which is a long way.
John Christakos: Shipping cost plays a role but currency can sometimes play a role overtime because their currency is fluctuating against the dollar then our product gets more or less expensive to them. That's minor generally but they've been great experiences and it's one of the fun things about having your own business is you can kind of roll with it. Like let's try this out, I don't know, maybe it's a terrible idea but maybe it's a great idea. What's the worst that can happen when we try one store in Sydney? So it turned out to work pretty well.
Maurice Blanks: I think we've been lucky. I think the brand voice could have been a challenge with the wrong partner but I think they've been such good partners that they know exactly what our brand voice is and they get it.
John Christakos: And their websites in their countries are versions of our website, basically, but in their language and with their pricing so that's all consistent, the web presence in the different countries.
Dennis Scully: And Australia, it's sort of english. It's sort of the same language. Just with a lot more energy and enthusiasm.
Maurice Blanks: And some extra letters and colors and aluminum and things like that. Mostly the same.
Dennis Scully: Right. So you didn't have to change too much?
Maurice Blanks: No.
Dennis Scully: So now all these years later, you're being recognized as these gentlemen of design, Cooper Hewitt, who's given you a design award, and how do you feel about that?
John Christakos: That's awesome. It's the most incredible honor and a really important award. I think probably one that we've wanted to win for several years, we've been nominated several times, we were starting to feel like Martin Scorsese there for awhile, nominated seven times in a row and never won but it was really nice to win the National Design award for product design, which we received last night.
Dennis Scully: Yeah, it's big recognition.
John Christakos: Yeah it's terrific.
Dennis Scully: And you must be very proud?
John Christakos: Yeah.
Dennis Scully: And so you've got a book coming out. I got to see a little bit of it and it's fantastic. It's so fun, as I say, I was going through the old faxes and all your communications back and forth, tell us a little bit about the book that's coming out.
Maurice Blanks: Basically it's celebrating the 20 years of Blu Dot so it's a story of Blu Dot as told through an oral history. There's an article from Andrew Blauvelt who is the director of the Cranbrook Museum, Cranbrook School, so that puts us in, his is more academic, that's a more academic part of the book. It puts us in a historical context and-
Dennis Scully: And I loved reading that so explain why that's the first part of the book.
John Christakos: There's several things that make us slightly unique verses other designers. One is that we decided to take on the whole business part of design. Most designers work independently and design for other manufacturers and we were naïve enough or ambitious enough to try and do it all ourselves. It talks about that and it talks about setting us in the context of great designers that have come before us-
Dennis Scully: [crosstalk 00:59:40] and Saarinen.
John Christakos: Right.
Dennis Scully: That was some big names that he was putting you in the company.
John Christakos: And we're never gonna talk about ourselves that way-
Dennis Scully: I don't think it would be appropriate to [crosstalk 00:59:49].
John Christakos: But he does it in a very interesting way. He's a really smart curator and been a great friend and supporter of ours over the years. He lived in Minneapolis before he was at Cranbrook. But yes, just to set the stage and the oral history part, telling the story we're telling now, we thought was important to include because I think whenever we do public speaking, talking about our work, generally we're showing pretty pictures or talking about the design process, talking about design, but inevitably when it comes to the question and answer period at the end, the questions and answers are about like, "well how did you do it?" Or "Did you fund it yourself?" And all this sort of sausage making part of it, is where a lot of people are interested in so that's why we though that section was important to include.
Dennis Scully: And what is informing your design sensibility these days? What's inspiring you today and what's making you move in a certain direction with where you're going?
Maurice Blanks: Lots of things. It's hard, it's a question we think about and it's hard to answer because there's so many pieces and part of it, we are constantly looking at our existing assortment and saying, "What are we missing? What don't we have?" And that informs product type so maybe we need a smaller desk or maybe we need a larger this. So that-
John Christakos: Yeah, that helps us decide what to work on but we were, the three of us were the principle designers for the first several years and now we have a larger design team and so they inspire us. They are, Maurice and I act more like creative directors and our designers in our studio will pin up work responding to a brief that we might set up and that's often fun. It's still a collaborative process and everybody is kicking around ideas, but they've got a different, they all come to the conversation with a slightly different point of reference than we have and that's refreshing. They're still designing under the umbrella of Blu Dot so everything we create we still want to feel like Blu Dot and sometimes we'll say in critiques, "I don't know if that's Blu Dot." It's either too decorative or it's too arbitrary or it doesn't have that clarity and economy and straightforwardness of what makes our design DNA.
Dennis Scully: And have you stayed retail? Have designers played a big role in your business? Have companies that want to put your product in their offices and all of that, has that become part of your business?
Maurice Blanks: Yeah, a bit part of our business.
Dennis Scully: A big part of your business.
Maurice Blanks: Yeah, I think we like to, partly we're flattered by it because these are design professionals so if they like our product that says something, but I think it also indicates that there's a need in the marketplace for things, furniture in workplaces that are more residential. They're friendlier or more comfortable than traditional, historical office furniture. So they're doing a little bit of, maybe they do some office cubes over here but then they want to have a really comfortable, nice-looking Blu Dot conversation pit over here.
John Christakos: Yeah, offices are now looking more like boutique hotels when they used to look like cubicle farms so we played a big, there's been a big part of our growth in that part of the business.
Dennis Scully: And you have people servicing that side of the business?
Maurice Blanks: Sure.
Dennis Scully: And have people call in other designers or[crosstalk 01:03:33].
Maurice Blanks: We do, yup.
Dennis Scully: And so do you have people on the ground in New York that are going around and seeing designers? Because you've got multiple-
Maurice Blanks: We have someone in the store who does that who is really specifically dedicated to that, for that channel.
John Christakos: But we don't have a network of reps that are calling on architects and designers that a lot of companies do. We're thinking about doing that. It's about time probably for us, but our business has grown nevertheless. It's grown, crazy growth rates and those channels without doing much pitching. We're doing mostly catching. But we're going to start to change that this year and start to actually put a few more people out and about, calling on those firms.
Dennis Scully: Because the opportunity is there.
John Christakos: And it's tough when we ask our store folks to do that but you end up getting anchored to the store. It's hard to leave the store to actually get out and do that.
Maurice Blanks: But we have created a little bit of an infrastructure so on our website there is a link that says basically trade sales and you can click through it if you're a designer, and online you upload your tax I.D. and you can immediately set up an account, a trade account. It allows you some functionality that you don't have as just a regular consumer and we have, as I said before, there's a team in Minneapolis that services that. And they understand what the needs are of an interior designer or an architect that is different than just a customer off the street. I think what we hear, the architects and the designers can get frustrated with basically a consumer companies, that the customer service teams are one stop shopping for all their channels. If you're a normal person buying a couch or you're a designer buying 20, you get the same customer service people and they don't necessarily, they're not trained for this specificity of the architects and the designers and their needs, which are different.
Dennis Scully: Is that one of the areas that you're most focused on going forward? Where do you want to take Blu Dot from here? What's next? Where's it going?
John Christakos: World domination.
Maurice Blanks: Space. We're gonna go to space.
Dennis Scully: Excellent. From what I understand that's happening much sooner than any of us thought.
John Christakos: We're gonna 3D print everything. I think we want to do more of the same. Our stores serve consumers and users and they also serve the trade. So we look at it as a big stew. We've got a catalog, we've got a website and we have stores and you really need to meet customers where they wanna be met. You need to be in all those different places and we'll continue to add stores in the U.S. and internationally at a reasonable pace. I could see us having 20 or 30 in the U.S. and maybe the same internationally at some point. But we built the business slowly and organically, as we've said, without buckets and buckets of venture capital, kind of brick by brick, and that's just the way we do it. We're ramping that up a little bit but you won't see us opening 15 stores in one year. There's so many examples of retailers that did that that had to backtrack.
Dennis Scully: Had to scale their way back and some retailers that still need to close an awful lot of stores to get back to, yeah, terribly sad with what's happening to retail, in many ways, and so we're taking it slowly and having it grow organically and you mentioned the catalog. The catalog is still a big part of your business, right?
John Christakos: It is. That's been a big change for us. We started mailing catalogs like a traditional cataloger would, only about three or four years ago. Once our product assortment got to the size that it made sense to invest in sending out lots of catalogs, but it's a really important tool for us to get Blu Dot introduced to people that don't know us. Up until then, I think up until pretty recently, we were well-known among design groupies and design junkies but the next ring out or two rings out from that, people didn't know who we are. We're now changing by introducing ourselves to folks who probably had a sensibility for what we do but haven't heard of us.
Dennis Scully: As you look back, we talked about the Cooper Hewitt Design Award, do you think that is what you would point to as one of the things you're most proud of over the years? What really stands out for you as things you couldn't have even imagine have happened over the years from when you first got started?
Maurice Blanks: I think that award is definitely one.
John Christakos: You know one of the things that really I never thought would be, when we started Blu Dot I thought it would be great to do what you love to do everyday and make great design, great to have a business maybe earn a good living or create some wealth in the process, but what's really most rewarding,, and I don't know if it sounds sappy or not, we have got this amazing team of people that work with us. Over 150 people around the world and we've created this family and great community of people that wouldn't have existed if we didn't have this crazy idea 20 years ago. To see that and really being fulfilled in what they do and happy and many of them have been with us ten, fifteen years and we've seen their kids grow up, and we've shared our lives together with this group. And that community is super cool. That's probably for me one of the most rewarding things.
Maurice Blanks: I would say that's exactly the thing that you don't think about when you start a company, that 20 years later you're gonna look back and say, developing this team and leading these people and meeting these people and working with them and enabling them to have these careers, is the most satisfying part. You just don't, you think about product, what to make and what's it gonna be-
John Christakos: You think about yourself.
Maurice Blanks: Exactly.
Dennis Scully: Well and you've created all these jobs and you've come to know all of these families and you have a very close-knit culture, it seems like, and people tend to stay and it seems like a fun place to work, lots of people on glass doors say, "Oh yeah, I love working there. It's really great." And dividing your roles these days, who is doing what? John, what's your role these days? I know you're listed as the CEO? Yes?
John Christakos: Right.
Dennis Scully: Right? And Maurice-
Maurice Blanks: So I don't do anything.
Dennis Scully: So that means what? And you're the Chief Operating Officer, right?
Maurice Blanks: Right.
Dennis Scully: And so how do you divide your roles?
Maurice Blanks: So maybe the quick way to say it is front facing and back facing. John is looking at the customer marketing, all those teams are important to him, in addition of finance. And then how do we get it made, where do we get it made, how do we get it to the warehouse, how do we get it to the customer, all the things that happen behind the scenes are really on my plate but design we basically co-create/direct, or co-direct. So the design team we're equally over them but we're both really involved in the strategy of the other person's world. So if John is working on something in marketing in a high level, I'll be in his office, or then if we're looking at how are we gonna reach our fulfillment system across the country, he'll come in. So it's pretty, a lot of back and forth.
John Christakos: Maurice has the harder of the two jobs. I'm like the car battery.
Dennis Scully: You're the car battery?
John Christakos: Every day it starts, every day it starts. And the day it doesn't start, the day the product doesn't get delivered,
Dennis Scully: That's totally true.
John Christakos: Then "Where the hell's the product?" What about the other 364 days-
Dennis Scully: Don't you remember how good I was yesterday?
Maurice Blanks: I started every day.
Dennis Scully: Along those lines, and this is my last question for you, it's such a challenging environment, is all you hear from people, retail is so challenging, you guys have made it all sound very easy, no we just made some great stuff and we just keep growing, what are the challenges that are facing you today that really have made this environment especially, I mean you opened a store in SoHo during the financial crisis, so maybe it's all easy for you now, I don't know.
John Christakos: There's nothing really daunting. I mean there's nuisances, I'd say, tariffs are a nuisance, or just the uncertainty of this trade war-
Dennis Scully: All that back and forth and wondering what is gonna happen.
John Christakos: Is completely unproductive for business and stalls decision making and stalls investment making and so I can't wait for that to clear up but it's manageable.
Maurice Blanks: It's not fatal.
John Christakos: Knock-offs are a constant nuisance because our products are relatively affordable. We're not the target of knock-offs too often because people can't make it for much cheaper, sell it much less than we sell them for, but there are a lot of bad copies and we have to constantly deal with that. And we deal with that aggressively. But really the environment is great. Honestly no and people say retail is dead, it's like retail doesn't seem dead to us.
Dennis Scully: That news hasn't reached you.
John Christakos: Not at all.
Dennis Scully: About retail being dead. Apparently really it's not doing well.
Maurice Blanks: But I think if you have a cohesive story with an authentic brand that people value that. As much as all of this noise about choice and cost and price and next day delivery, and all these things that go on, I think ultimately, especially when you're furnishing your home, you want a really nice piece that you care about and you like the story behind it. And you're not, convenience doesn't overcome that need. You have to live with this table for a long, long time so if it comes today at four o'clock or tomorrow at two or in a week and a half, I'm probably okay with that because this is really the table I want. So-
John Christakos: Bad retail is dead. And-
Maurice Blanks: The bar is high.
John Christakos: And also bar is high and retail will persist, especially for categories that are like ours or higher fashion or others that people want that experience. I think people are human. How sad would our world be if literally we only shopped online? I'd put a gun in my mouth. That'd be awful to not be able to go out and walk into a store and touch things and talk to people and have an experience like that. That's fun so-
Dennis Scully: And part of what keeps us human. The whole exchange as you say. What do you think about this evolution of modern design? America seems to be slower than a lot of other parts of the world, with adopting modern design. Is that an on-going source of frustration for you or do you feel like your customer base gets what you do and there are plenty of people that are buying modern [crosstalk 01:14:51]
Maurice Blanks: I think they get what we do and I think it's an ever growing group. I think people who like modern design, there are more people today then there were when we started, in America, that like modern design.
John Christakos: Probably because of the internet and when we started, just to even see modern design, you had to subscribe to Metropolis or some design magazine. You couldn't see it online. Now it's all over and people are way more aware of it and way more into it, in a broad sense. There's not many people doing it necessarily, creating it, but there's consumers-
Dennis Scully: There's not a lot of it-[crosstalk 01:15:33]. So it's interesting from that perspective and most of the shelter books, even to this day, are still much more highly decorative than they are contemporary. One of the Dwell editors was involved in helping you with the book as I recall.
John Christakos: Amber Bravo, yeah.
Dennis Scully: I mean Dwell was sort of a publication that I always thought that had your look and feel and sensibility.
Maurice Blanks: Absolutely.
John Christakos: Dead on, yeah.
Dennis Scully: Well, I've loved having you guys in and I really appreciate you popping in on your visit to New York and spending time with us so thank you very much.
Maurice Blanks: Thank you.
Dennis Scully: Yeah, absolutely. My guests have been John Christakos and Maurice Blanks co-founders of Blu Dot.
Dennis Scully: Thank you again for joining us. The show is Business of Home and I'm Dennis Scully. If you like what you hear, please feel free to subscribe, tell a friend about the show, and most of all, leave us a review on iTunes. Thank you again to our sponsor and our producers. You can find us at Businessofhome.com, or on Facebook, or Instagram. We'll see you next week.