Joan Barnes Founder & Former CEO of Gymboree

Episode 554

On this episode of The Kara Goldin Show, we speak with Joan Barnes, the visionary Founder and Former CEO of Gymboree, a groundbreaking brand dedicated to fostering early childhood development through play-based learning. Joan's entrepreneurial journey began in 1976 with just one play center in California, which eventually expanded into a global phenomenon with 600 franchised play centers in 40 countries and 1000 company-owned retail stores worldwide. Through Joan's leadership, Gymboree became synonymous with innovation and excellence in early childhood education and retail, earning widespread acclaim and a loyal following. We hear about the challenges in the later years, including increased competition and shifting consumer preferences. We hear how although Gymboree closed its doors in 2019, many of the franchises live on. We also hear about yoga and the role that that played in her life after Gymboree. Plus we dive into her book which shares so much of her rollercoaster ride. So many lessons and so much inspiration. Tune in to this enlightening episode now on The Kara Goldin Show.

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Transcript

Kara Goldin 0:00
I am unwilling to give up that I will start over from scratch as many times as it takes to get where I want to be I want to be you just want to make sure you will get knocked down but just make sure you don’t get knocked down knocked out. So your only choice should be go focus on what you can control control control. Hi, everyone and welcome to the Kara Goldin show. Join me each week for inspiring conversations with some of the world’s greatest leaders. We’ll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can’t wait to get started. Let’s go. Let’s go. Hi, everyone. And welcome back to the Kara Goldin show. I’m so excited to have my next guest here we have Joan Barnes, who is the founder and former CEO of a an incredible company called Gymboree. And so it was a pioneering brand dedicated to nurturing early childhood development through the power of play based learning and Joan started the company. Way back when in the 1970s 1976, to be exact with a single play center in California soon blossomed with 600 franchised play centers operating in 40 countries. 1000s of company owned retail stores worldwide. Gymboree became synonymous with innovation and excellence. They also were in the children’s apparel business, just an incredible, incredible story. But Joan will, of course, get into that story. Joan went on, to do really what she was most passionate about, which was yoga, and ended up selling that company so much to talk about here. Oh, and by the way, she has an incredible book, if you’re watching on the TV, play it forward that you must must must buy. It is one incredible story. And my I just could not put it down. So really, really great, Joan, so nice to have you here.

Joan Barnes 2:06
Thank you, Kara. And it’s it’s an honor just knowing who I’m talking to and what you’ve done in the entrepreneurial space. Oh, thank

Kara Goldin 2:15
you. Thank you so much. So so let’s go back to those early days of of before Gymboree, where did this idea come from? And how did you decide to launch Gymboree?

Joan Barnes 2:26
It’s just a classic entrepreneurial story. I was the lonely, isolated mom who’d come across the country with my then husband, barefoot pregnant, probably brockless In a Volkswagen camper, because I wanted to be part of the movement. And, and it was the lowest birth year ever in 1973. And so that was was sort of dub dinks double income, no kids in the media just could not understand why anybody was having kids. So I was essentially looking for Comrades, I was looking for people who had made the same choice I’d made to do this with my family was either in the east coast or the Midwest. And here we’d landed in, in San Francisco with which I was thrilled to be but I thought for sure I’m going to find people like me. And it was very difficult. So I was in a dance company and one of the other women at dance company had been offered a job at the Jewish Community Center doing the children’s programming. And I said, Let’s and she was scared because she had two little kids. I said, let’s share it. I mean, this is long before job sharing was even a glint in anybody’s eyes. Fast forward. We did. She took the Jewish programming, and I took the kids programming, and for my own, quote, selfish needs, I wanted to start something that would fulfill what I was looking for a playgroup for kids and parents. I didn’t know the first thing about child development. But I had come from the consciousness raising groups in the East Coast. And I, you know, this was way before kids and I thought, I don’t want to be in one of those things where everybody’s bitching about how much they don’t like the husband, and they don’t like this. So I thought, well, we’re going to do it under the guise that this is really fun for the kids. And then the natural difficulties and challenges of being a parent and what that means to your relationship and just your life will come up naturally, but it will be an essence for the kids. And that’s what we did. I started for the Jewish Community Center up in San Rafael, in Marin County. It was an instant hit. I opened a second one for them. They were profitable. They were they were, you know, spinning off money for all the other programs that weren’t. And then the president of the board had started these ridgebury basketball camps, Rick Perry being one of the famous warriors, and he, for all the men that wish they could have been a basketball player, and he sold that camp and he was was a big grown up, I must have been off 26 Or seven and he was like 32, but he seemed like an old man. So he came to me approached me and said, How about I put up the money and we open these commercially and I said, Sure, not knowing what I was getting into. And certainly not wanting to risk my halftime $5,000 a year job. So I skipped down below the Golden Gate Bridge and opened the first one in the peninsula, and just started rolling those out and eventually had enough of those, I thought comfortable enough that I could leave my job. And I thought he’s not doing anything. I just need to buy him out in the hallway. Why? So I took a second mortgage on my home without telling the husband, because I didn’t want any backlash and bought him out. And I just kept going. And then people started coming to me, Kara, and saying, This is so cool. I’d like to run this business. Can I buy a franchise? What is a franchise? You know, I just I kind of knew it was those things I’d read about where they were selling earthworm farms at the airports and stuff like that. But I figured it out. And I started selling franchises. And that was the

Kara Goldin 5:53
early days. That’s amazing. So when was the first franchise than outside of your main company? The

Joan Barnes 6:00
first franchise was 1981. Wow. And I started the company. Yeah, it was fresh. I had about eight company owned locations from South San Francisco down to the Nansen Silicon Valley. And then, you know, it just grew organically, somebody was here and they say, Can I open it, they’re kind of open here. They were all in somewhere in Northern California. And it was young enough that I could go with them to help them love, find their location, interview their teachers, you know, just sort of grassroots that. And then some very capable people who I’d known from years ago, wanted to open in LA. And I thought, okay, here we go. And they really knew what to do. And it was more successful in LA than anyplace else. They had the movie stars coming, so forth, and so on. And they got a very savvy about press, they were on, you know, what was considered these shows at the time, Sally, Jessy, Raphael, and our magazine, these are all probably close, you know, the ancient history now. But that gave me the confidence to jump across the country and opening in East Coast in New York or the newer retro media area, so we wouldn’t be labeled some crazy California phenomenon. And from there, it just, it just, it just went, it just went. And we got lots of press. And this is, you know, years before social media was even a glitch. And so, you know, you get a story in one of those local papers, and everybody comes running.

Kara Goldin 7:29
So over 600 franchises, yeah, at the height, amazing. And so

Joan Barnes 7:35
and in 40 countries, and we were doing it in countries Kara, where women aren’t even allowed to sit on the floor. I mean, these are coming in with your babies and playing on the floor. And we’re women could not we were in Saudi Arabia, you name it. We were in China, we were in Vietnam, communist countries. It was kind of a thrill. That’s amazing.

Kara Goldin 7:54
And you were, you know, really the first to do this. Obviously, there were competitors that came along and local companies people talk about, often on the show about when competitors come in. How did you think about it? Like, oh, no, somebody’s coming in to copy what you were doing? No,

Joan Barnes 8:12
actually, I was savvy enough to realize if your industry doesn’t spawn competitors, you don’t have a business. Yeah. You know, you need competitors.

Kara Goldin 8:23
Yeah, in order to grow the category. Yep.

Joan Barnes 8:25
Competitors validate you. And now actually, within the last couple of years, I have been mentoring a guy that runs a company that helps parents decide what Mommy needs to be. It’s so it’s so ubiquitous. Now. We were the first we were to preschool where preschool was to kindergarten, you know, kindergarten was it in the 50s. And then, in the 60s, and so forth, came came preschools. And then by the time the 70s, and 80s rolled around, you couldn’t find a kid in a relatively affluent, or even middle class area that hadn’t been to preschool before kindergarten. And the same was true to some of the kids, I would say hadn’t been to Gymboree or a jamboree spin off. I mean, now it’s music with Mozart and cooking. I mean, there’s, you know, 100 choices for parents, but we were the choice. We were the Coca Cola. So you had

Kara Goldin 9:19
a vision for this concept and grew it and they did credible brand, then you franchised it? So how hard was it to actually manage those franchise play centers versus the company owned ones?

Joan Barnes 9:37
Well, the company on one, there’s only eight and so I had so many that kind of ran those. The franchisees were really like little clones of me. They were a little bit younger, but they were women who just wanted to combine their family focus with something professional. We were all doggedly sort of the first pioneers of the not school teachers, not nurse kind of people. You know, we wanted, we wanted to actualize ourselves in the world the idea of being a stay at home mom. No, thank you. You know what I mean? It was just not even in the, in the radar early, this was early. And so finding franchisees, they were all women. We had very few men, probably no men freshers we had a couple of couples. And then sometimes we rent. We were very creative care. We would run advertorials, in New York, in the Wall Street Journal that told the story of some franchisee that looked like, like a, like editorial, but we paid for it. And then some dad would be reading this thing, I think this perfect for my wife. And he was wanting, and he’d wanted to be a friend. He wanted a business, but he was the main breadwinner and had to work at the at the regular job. So he would take it home to his wife, and she’d say, you think I could do that? Blah, blah, blah. And so then they would fly out to California, we take them on a tour we’d have I was very collaborative, like most women are, I’m sure this was not, this is probably true to you, too. We’d have a lunch with all the executives, and anybody had a veto, if anybody thought that that person wasn’t a good wasn’t good marriage material, because I like in franchisees to marriage, you’re in this for the long haul. It’s not just like, Oh, my God, or cash flows light, just sign them up. You know what I mean? It didn’t work that way. This was, we needed these people to be partners for a long time. And so that’s what happened. So we just kept growing and and I would do what they called my see America tour. They are our marketing people put me on the road that say there’d be 10 people interested in Cincinnati, and another 10 in Cleveland. So I would go around and meet these people on their own ground and tell them what we’re up to and get their questions. And if they were interested, and I thought they had possibility, then they fly to California to meet everybody. So selling the franchises was, was pretty simple. And training them was pretty simple. The real rub came Kara when it wasn’t going to be profitable. And I’d raised a bunch of money for VCs. And I realized that the the revenues of the gem replace centers were so small. And the amount of money we needed to make sure they were successful in terms of support, you know, the quality assurance people that need to go there, and the blah, blah, blah, and the in the little incremental percentage that they would pay us of their thing. The customers were thrilled the mommies and the kids and the daddies, they loved the classes. The franchisees, most of them were pretty profitable, too. But we as the parent company, we could roll along forever, you know, paying our salaries in this net, but the investors would never see

Kara Goldin 12:40
their money. So it’s crazy.

Joan Barnes 12:44
Yeah, so I was onto that. So I’ve finally came clean. And, you know, I tried a little bit of this than that thinking, you know, but I could, if we cut services, the franchisees, they wouldn’t, they wouldn’t do well. And the way we sold more franchises is not what we told the company what we told the potential franchisee they wanted to talk to our franchisees tell me about the, you know, talking about the support, tell me about management. And so they were a salespeople, so we were kind of caught between a rock and a hard place. So I told the investors, I told the board, just what I told you, you know, we’ve created a little bit of an anomaly here, we’ve got a wonderful brand, but I’m not going to be able to figure out a way to get your money back doing this. So they were supportive, and they weren’t ready to fly us off to some private equity and watch us go down, at least at that point. And they said figure out something else, just no more capital. So we went into licensing. And because Gymboree had a very formidable name in the marketplace, we got Random House into our books and health ducts, which is a pretty big brand at the time to do our clothes. We had some really hotshot licenses, big toy company. And you know, so we were using the strength of our brandmark to go into something else. But again, we were not, you know, Little Mermaid or Snoopy, or Garfield or whoever the hot brand was. And so next year, no more, so was the

Kara Goldin 14:10
year then when you finally shut it down.

Joan Barnes 14:14
We didn’t shut it down. Oh, we shut down. The licenses were not renewed. We kept doing the franchises but they, you know, they were the franchises was the base of the company, but we had to figure out another way to make money with the brand. So Stuart Moldau, who was my lead investor was on the board of the gap. And he sent me to to meet to meet Don Fisher about doing a Gymboree clothing line for the gap. And he said it’s a great idea Don Fisher did he said, but we’re going to be opening Gap Kids next year. I thought oh, great. Not only do you not need us, but if should we ever get into the clothing business? We’re going to be competing with the IVIG app. So I so I thought this is just not going to happen. So then on Um, during the toilet during the French during the licensing, I’d met Hasbro toy company because they had come to look at the thing at Toy Fair. So I’ve called that guy you know when you’re young, I’m sure you remember this. Kyra, you’re, you got no pride, you’re forceful. You just think nothing can go wrong. I know way too much now. So I call the number two due to Hasbro fast forward, they decided they were going to make an investment and then they were going to buy the company. I thought fantastic. So I’m gonna have to report to some corporate VP and he’s gonna know I don’t know what the hell I’m doing. I’m an imposter. I just make it up as I go along. But at least Jim Murray will live. So you know, a couple months later, you know, the lawyers and put together some booklet that looked like a Bible. And we’re in New York to sign the deal. You know, somebody from the board this in the that the lawyer, you know, I get a call from some corporate person at Hasbro I’d never met she says the deal’s off.

Kara Goldin 16:02
Crazy. I

Joan Barnes 16:03
couldn’t I couldn’t grok that. Yeah. So I called the company and I and I said, talking to the marketing person. How are we doing on this? How are we doing on that? I was in denial. I just couldn’t take it on. And one of the board people who was from Montgomery stickers was a woman and she was coming in and I told her to come up to my room and I just broke down crying. I was humiliated. I was embarrassed. I was so fused with Gymboree, I thought, Who am I without this? I never considered. I never considered what else I might do. You know?

Kara Goldin 16:34
Yeah, no, no, it’s incredible. And you talk a lot about this and play it forward. I mean, it’s probably one of the more honest accounts for

Joan Barnes 16:43
business memoirs. Yeah. Most Yeah. Most people are like, I did this. And I did that and was like, no,

Kara Goldin 16:50
yeah. And watching it and trying to figure out all these years of work for you

Joan Barnes 16:55
years of work, and I would refuse to let it die. Why it’s not like I had a bunch of money in it. I had like, $6,000 in the business. That was it. It was it was all about not letting the investors down. I just had a, you know, 25 years of therapy. I’m not really sure why it was so goddamn important to me, I put it before my marriage, I put it before my kids. You know, just making that goddamn business successful was all that meant anything to me. So I finally got it together, came back from New York from the Hasbro debacle. And I went to my staff, and I said, I’m Smit. I said, but what I’m not is or what I am, is have complete confidence in you guys, you will think ups the next our next iteration. I’m going up to my cabin, I have a little cabin in the mountains. And I’m going to restore. And I would like to have everybody work this weekend. And I won’t be there. And you’re going to come up with the next situation for us. And I got back on Monday morning on my desk was a picture of a retail store next to a franchise center. And that’s what we did. So I called up the main board member and I said, we’d like to make a presentation to you in a week. We put together we’re like we’re like an advertising agency going for the job. We we had, you know, mock ups of clothing with microphones with the store would look like we just went for broke. The president of Macy’s, Phil Schlein had just joined us venture capital, our viewers, our firm, and he asked if he could sit down in the meeting, I thought, Oh, great. So I do I do a pretty bang up job. You know, we worked on this really hard. And then he says, Can I speak the president of Macy’s and he says, You’d be crazy to invest in this company. A they can’t run the company they had which was true. You know, we weren’t making any money. Be they don’t know the first thing about retail, there’s not a merchant on the staff. And then all the vessels go like this. They turn their head to me to like, what do you say girl?

Kara Goldin 18:52
Oh my god.

Joan Barnes 18:54
And I don’t even know what a how I winged it. But the next day, my investor called me son, Jonah, I’ve always believed in you go to Hong Kong, build a lie, get a line of clothes together and come home and find a store and we’ll do a bridge loan for one store. We get to Hong Kong Kara. And nobody and we had some we had some ins to gaps. Leon Fong who makes the stuff and he wouldn’t do it doesn’t pink and it doesn’t blow. So I thought okay, now this is definitely an AI car investor. And I said, we can’t just do this to thing he says double it will open two stores. And that’s what we did. I came back in May I found two stores. We opened by Christmas time. We were the highest dollars per square foot. We won the best new design. And we were running. And then within a year within six months Harvard endowment Chemical Bank of New York, you name it. We had we’d raised a whole bunch of money and we were ready and we’re going so you know from near death to that. And then you know I started getting in over my head Uh, you know, we were, you know, opening stores hiring, you know, then we started hiring the Stanford MBAs and the serious merchants from here and there. And you know, and I had to start letting go of what I call my origin team, the people who had been with me from the beginning, you know, today I’m wearing this cap today, I’m wearing this cap the way it is in the beginning of a company. But now we needed real people that did real things, including myself, I felt I should go, you know, I mean, I didn’t know how to run a big company. I’m a starter. I’m an entrepreneur. I’m a visionary. Once it’s rolling. It’s kind of not my thing. But I but they thought because similar to you, Kara, the press love me, blah, blah, blah. So I went along for a few more years until I had a nervous breakdown and left. Oh, my

Kara Goldin 20:45
God, what, what a journey.

Joan Barnes 20:47
So I wasn’t fired.

Kara Goldin 20:49
But what a journey, what a journey. I mean, just the highlights of the journey. And you talk about this, this journey in the book, you took a break, then. And I mean, so proud of you for building what you built. I mean, it’s just it’s absolutely crazy, fearless, and in so many ways, but you didn’t stop at that point. And you kind of went back to what you love doing? Do you want to talk a little bit about that?

Joan Barnes 21:16
Sure. So um, so I went to a treatment center where I live for two years, in a treatment I live for a year in the treatment center, I, you know, some might call it an eating disorder. Some might call it nervous breakdown. But whatever it was, I left my family and went to a treatment center. And they told me, I would never recover in 30 days. So I went to a long term. And then when I got out of the long term, they gave us a moment to get back into the world and then process at night. Oh, good job, I get to go work. Yeah, they told me no, you’re gonna go work at the Jewish home for the agent in the Alzheimer’s unit. So that I could learn serious humility where I wasn’t needed, you know, they were going to be fine. Without me. No one was going to remember me the next day, no one was going to appreciate what I did. I was just there to, you know, wipe, wipe somebody’s mouth or change the diaper. And in I had to punch in so this was quite a, this was quite a year for me to find another part of, of life, you know, we anyway, and then when I finally got excused from that, I came back to California. And a friend of mine, who had worked with the Jewish community said, would you come to yoga with me? And I said, No, no, no yoga, yoga is for sissies. I’m a competitive mountain biker, I’m this, I’m of that. And then I thought, okay, friendship, Trumps. And I went to a yoga class with her. And it changed my life. I burst out crying in the middle of the class, something about the integrity of the way those poses fit together and what it does to my nervous system. It was in because of a concept and entrepreneur. I thought, now I got an I gotta turn the world on to yoga. And so I started to think about opening yoga studios. And then some people said, Oh, you’re the Gymboree lady. You don’t have to go through venture capital, we’ll we’ll find some investors. And I thought, I don’t know if I want to do this again. So I thought, Well, okay, we’ll try a Bay Area chain. But after about three of them, I started to feel that same craziness that I used to feel it Gymboree and I didn’t want that life again. So I sold it to Yoga works, which was a chain that had maybe 50, stores 50 things and consulted with them for a year and just, I just had lost my privilege to be an entrepreneur, I don’t know how to do things in balance.

Kara Goldin 23:35
So yoga became your lifeline in many, many ways. And so tell us sort of what happened, as you decided that you were going to actually start this next venture. A

Joan Barnes 23:47
little bit of side story to that is that I had been going to the studio in Noe Valley. And I was also running, I had started a nonprofit, for the Jewish community that the Jewish family has shown services called begin from within, which was basically for women with food, weight and body image issues, and was getting a lot of press. It was a nonprofit that I’d started to do that. And the woman who owned the yoga studio, didn’t know that I was a student of hers. And she called me and said, If you ever need a space to do you know, to run your program, I’m really taken with what you’re doing. And I said, You don’t know me, but I’m a student of yours. And so we decided to meet. And as it turns out, she was having a really hard time making the business work. And so we decided to become partners. So I partnered with her. She’d had a huge tragedy in life and about a year later, she decided she wanted to go back to LA. And so I became the sole owner and then opened up a few more, but the idea of having a business that was so very, you know, here it was many years later in my life, but was was was resonating at the same place. It was something for me, I could not have gotten through that period of being a new mom, without comrades, it just, it was just too lonely and too isolating. And I, you know, and I lost all my friends that didn’t have kids because they didn’t want to be around, you know, a night, what you’re gonna do. And so yoga was also a way for me to reground myself, we find myself, we know who I was. And I thought this is a miracle. So I wanted to open up these other studios. So that’s what I did. But as I said, as it started to grow, and even though getting money to grow was not going to be a problem, it was realizing that this was that I didn’t know how to do this, I never did. And I probably wouldn’t be able to do things in balance. And at this stage of my life, I had lots more things that I wanted to do with my life, I wanted to be a better friend, I wanted to be a better mother, I was going to be a grandmother soon. And I couldn’t, I couldn’t, I didn’t have I hadn’t developed whatever it is that allows me to be able to balance. And so I decided I’m gonna give it up. So

Kara Goldin 26:06
beautifully said, so at that point, you sold the business. I talked, you talked a little bit about that. So knowing what you know, now about building businesses, you know, what a wild roller coaster ride you’ve had, and you’re fearless taken on, you know, all kinds of things from the woman who came to San Francisco to, you know, kind of by accident, start a company. And and I mean, it’s just such an incredible story. And I’m so happy that you wrote this book, because I think you’re gonna help a lot of people who are either going through something similar or, or, you know, are thinking about embarking. What lessons, would you?

Joan Barnes 26:52
It’s not so different than your story care?

Kara Goldin 26:54
I know. I know. So it’s awesome sidesaddle in each other’s stories. Exactly. Now, it’s so true. So what lesson key lesson, would you say that you’ve learned about businesses, starting businesses growing businesses that you would share?

Joan Barnes 27:14
Well, let me start by saying I’m not a good advice giver, because I don’t I think everybody’s got to find the answer. That’s right for them, which is why I call myself a mentor, not a consultant. I’m a really good listener. And I can really help people ask the right questions to them for them to find what’s right for them. Because I don’t I barely know the answers for myself, let alone for somebody else. But what I did learn, when you know, I used to get the question it all these women’s conferences, I would speak out and I’m sure you’ve you’re not this is not unfamiliar to you either. If you had to do all over again, what would you do differently? I do nothing differently. Because I’m because we are who we are. This is what was happening at that time of life. I had, you know, chutzpah in great resiliency and no sense that I would really fail. I just that was just not, I just didn’t get that you know what I mean? Not because I thought I was grit not of grandiosity, just because I had what it took. To keep going. Yeah, you know, and I had a very, I had a second marriage, and that husband got very sick. And I felt the same thing about him. Until I realized that, that this was bigger than me, you know, and maybe the case is true in business, too. So I can’t my life lessons from running a business to my life lessons of living life are parallel. And so to your question, what did I learn? I learned that we learned who we are. And we we find out a carrot is Obama used to say your character is revealed by your choices? So we know we start to we’re not developing character, which is revealing our character. We’re developing some skill sets, blah, blah, blah, but but who we innately are, and as we say, in Jewish show at seven, as at 70. You know, we don’t really change that much. So I lesson is to be accepting and be the best, the best person I can be of Me, and to be the best friend.

Kara Goldin 29:16
And that is exactly who you are. So thank you so much, John Barnes for joining us founder and former CEO of Gymboree, but so much more. The book is called play it forward. We’ll have all the info in the show notes. But thank you so much, Joan. Thank you, Kara.

Joan Barnes 29:32
What a pleasure.

Kara Goldin 29:34
Thanks again for listening to the Kara Goldin show. If you would, please give us a review. And feel free to share this podcast with others who would benefit and of course, feel free to subscribe so you don’t miss a single episode of our podcast. Just a reminder that I can be found on all platforms at Kara Goldin. I would love to hear from you too. So feel free to DM me. And if you want to hear more about my journey Ernie I hope you will have a listen or pick up a copy of my Wall Street Journal, best selling book undaunted where I share more about my journey including founding and building hint. We are here every Monday, Wednesday and Friday. Thanks for listening and good bye for now.

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