The Merchant Prince: The Man Behind The Gap, Old Navy, and J. Crew | Mickey Drexler

Harley Finkelstein (00:00:00):
I don't know why, but when I say this guy's name, I got to add an F-bomb in the middle of it.

David Segal (00:00:05):
I know, you've been doing it every time.

Harley Finkelstein (00:00:06):
Mickey fucking Drexler. This guy, 18 years, A CEO of the Gap, took it from 400 million in revenue to 14 billion. He creates Old Navy, he creates Madewell. He basically takes J.Crew private. This guy is the godfather of retail. And when you think about iconic CEOs in any industry, Mickey Drexler, Mickey fucking Drexler's name always comes up, and he's full of stories and chutzpah and audacity. And he just goes into these incredible stories and anecdotes about working with Steve Jobs. I mean, he was on the board of Apple for like 10 or 15 years.

David Segal (00:00:49):
Well, they call him the Merchant Prince for a reason.

Harley Finkelstein (00:00:51):
He is.

David Segal (00:00:52):
And what really struck me about Mickey is his sense of urgency, right? He almost thinks it's riskier to not make a decision than to make the wrong decision.

Harley Finkelstein (00:01:01):
Well, he said he has this very simple heuristic for how he gauges when he is interviewing someone, whether or not he's going to hire them or not.

David Segal (00:01:09):
Right. I loved that, that was great.

Harley Finkelstein (00:01:09):
When you hear this heuristic, it's simple and brilliant and I think I'm going to use that from now on. But he goes into details of how he built the gap. He talks about how he created Old Navy. He talks about where the name came from. He talks about why Steve Jobs developed this relationship and what Steve Jobs taught him. It's an unbelievable interview. And I think Mickey Drexler epitomizes everything there is about big shot that we love so very much.

David Segal (00:01:33):
100%. He was really into gut. What's his gut telling him? But there's a method to it, right? As the interview unfolds, you start to see how he thinks about when to use his gut and when to get enough information and how to process it. I thought he gave us some really important tips.

Harley Finkelstein (00:01:49):
He does. And then he tells this story of 18 years into being the CEO of the Gap. He gets this call late at night from Steve Jobs that will totally change his life forever. And he explains exactly what happens on my phone call. Ladies and gentlemen, Mickey fucking Drexler.

David Segal (00:02:07):
Let's go.

Mickey Drexler (00:02:26):
Oh shit.

Harley Finkelstein (00:02:26):
No not that.

Mickey Drexler (00:02:27):
Hey Emily. Oh no, never mind.

Harley Finkelstein (00:02:31):
You're good?

Mickey Drexler (00:02:31):
It was an emergency.

Emily (00:02:34):
What's the emergency?

Mickey Drexler (00:02:35):
It's gone. It was a chip, a potato chip.

Harley Finkelstein (00:02:41):
Thank you. Thank you. And sorry.

Mickey Drexler (00:02:43):
We had a chip emergency, but I'm looking, how did the yellow get on me? All right.

Harley Finkelstein (00:02:48):
I'm going to win an Emmy for this one. When people mention Mickey Drexler, they think of a couple things. They think about you running the gap for 18 years, taking it from 400 million in sales to 14 billion. They think about you founding Old Navy. They think about you taking J.Crew Private, founding Madewell, founding Alex Mill.

Mickey Drexler (00:03:14):
Nope, my son started it.

Harley Finkelstein (00:03:16):
Sorry. Helping to build Alex Mill with your son.

Mickey Drexler (00:03:19):
My son is Alex.

Harley Finkelstein (00:03:20):
I figured as much, but I actually want to go back. I want to go back to the one bedroom apartment in the Bronx, and I want to start there.

Mickey Drexler (00:03:28):
Okay.

Harley Finkelstein (00:03:29):
And I want to talk about what it was like growing up there.

Mickey Drexler (00:03:32):
Okay, well I didn't know how other people lived. That didn't bother me much, even if I slept in the living room. Who knew? Because in the Bronx we were all on equal footing in that regard. And I never knew anyone who was a big shot, which, no pun intended, or a perceived big shot. The worst thing about that was my father growing up, because he didn't meet my job description of what I thought a father should be.

Harley Finkelstein (00:04:04):
What'd you think it would be? What did you think a father should be?

Mickey Drexler (00:04:06):
Nice, affectionate. Not talking to me. I think I told you the tell the other, maybe I didn't. Anyway, what it should be, encouraging, not angry all the time and caring.

Harley Finkelstein (00:04:23):
And he wasn't those things.

Mickey Drexler (00:04:24):
None of them. He couldn't check the box on any of them. My mom had cancer the year I was born and he wasn't nice to her and he just wasn't a nice man. And my validation was my seven cousins, Jewish cousins who lived down the street. I didn't know they all disliked him. My mother's after her sisters, my aunts disliked him. And I think, I don't know, someone asked me the other day, "Did he have any friends?" And he really didn't. And all the big shots in his life were people who he bought piece goods from Sam Pobor and Shapiro. And I grew up thinking, well, I didn't want to face that he was in fact what he was, because you want your dad to be this, that.

Harley Finkelstein (00:05:12):
Yeah, you put him on a pedestal.

Mickey Drexler (00:05:12):
Yep, I did. But I kind of started to know, but I kind of wished I had a rich dad. Why? I'm glad I didn't, because here we are, and it's different.

Harley Finkelstein (00:05:23):
Now you're the rich dad.

Mickey Drexler (00:05:26):
I am. But I never think of that, because Bronx gives you a certain value system.

Harley Finkelstein (00:05:32):
And what is that value?

Mickey Drexler (00:05:33):
Well, for me it's identifying with people, the have-nots. And I don't mean have-nots just financially. They work hard, they do whatever. And I say I get a wave from the woman who cleans the building because, and like this morning, on the way here, the elevator opens. She gives me a big wave and a smile. And that makes my day, because I never liked big shots. My father wanted to be one, and I confirmed that he wasn't, when I took the payroll, because I used to work in the shipping room to the bank when I was 16. I'll never forget, I tucked into the alcove at the freight door. I went through every envelope and I saw his salary.

Harley Finkelstein (00:06:25):
Sorry, just to set the stage here. So you were working at the same company your father was working at as well.

Mickey Drexler (00:06:31):
Well the good thing he did was he made me work, not nicely or with any charm, but get out of bed and you're sleeping late and whatever. And so I went to work in the shipping room.

Harley Finkelstein (00:06:45):
Of this company.

Mickey Drexler (00:06:46):
Well it was his.

Harley Finkelstein (00:06:46):
He didn't own the company, he was an employee there.

Mickey Drexler (00:06:48):
He had the big boss.

Harley Finkelstein (00:06:49):
So wait a second. So you were in the shipping room, he had a boss, you're working there, and you were able to see all the pay stubs at 16.

Mickey Drexler (00:06:56):
No, they asked me to take it to the bank.

Harley Finkelstein (00:06:58):
So you had the pay stubs there.

Mickey Drexler (00:07:00):
I had it in my hand.

Harley Finkelstein (00:07:00):
And obviously your father's pay stub is there.

Mickey Drexler (00:07:03):
Yeah, I looked at all of them.

Harley Finkelstein (00:07:04):
And what do you see when you look at your father's?

Mickey Drexler (00:07:06):
I saw that he was one of the lowest paid people in the shipping room and in general. And he always acted like he was, because he bought expensive clothes and whatever.

Harley Finkelstein (00:07:20):
But it turned out he actually wasn't making very much money.

Mickey Drexler (00:07:22):
He wasn't, but he acted to the family, the aunts, like he was a big shot.

Harley Finkelstein (00:07:29):
A big shot.

Mickey Drexler (00:07:30):
And he was Uncle Charlie. They didn't like him much at all. In fact, they don't like, well, he's not here anymore.

Harley Finkelstein (00:07:36):
Yeah. But they didn't like him. So how did you feel when you saw that your dad, who acted like a bit of a big shot to family and other people, how did you feel when you found out that he was the lowest paid person, one of the lowest people?

Mickey Drexler (00:07:48):
I devastated because it broke, it eliminated the fantasy I kept with about him.

David Segal (00:07:56):
Is that when you realized you didn't want to be a big shot? Because you said, "I didn't want to be like him."

Mickey Drexler (00:08:01):
Oh, well part of it because anyone who had, in those days, it might've been a Cadillac convertible or doctor, was a big shot for him, or a CPA. They were professionals, and he was just not a nice, he had no emotional measurement whatsoever, no matter how bad things might be with other people. Whatever I did well, I gave up trying to tell him because he was never really was nice as I was growing and doing better. There's one great, I always have to tell, there's one great, it's not a great story, it's what I lived with. There was a really good article. And when I was early days started to get some really nice articles.

Harley Finkelstein (00:08:45):
This is when you were at the Gap?

Mickey Drexler (00:08:46):
Yeah. And it was a really good article. It happened to be in Vogue, but it wasn't a fashion-y article. And the writer was great. It always matters who the writer is. And I said, "Hi, by the way. There's a really good article in Vogue." Masterly he says, "You've seen them one, you've seen them all."

Harley Finkelstein (00:09:05):
Wow. Wow. And here you thought, look, you're at the Gap. They're writing a great article about you. It's in Vogue, a big magazine.

David Segal (00:09:11):
I'm proud of you son.

Harley Finkelstein (00:09:12):
You want your dad to be proud of you. And he says, "Well, you've seen one you've seen them all."

Mickey Drexler (00:09:14):
No, he didn't say it like that. He said, "You've seen one." It's not like that.

David Segal (00:09:18):
Were there ever any moments where you remember him fondly, where you got something out of the relationship?

Mickey Drexler (00:09:22):
No, except he's working hard, maybe.

Harley Finkelstein (00:09:26):
Get out of bed, go work.

Mickey Drexler (00:09:27):
And part of what you get in hindsight is it develops an escape drive. You want to get out of your environment. And I think I said the other day, you live in your imagination. You live in a fantasy, you want to escape.

David Segal (00:09:43):
What was your fantasy at that time once you realized...

Mickey Drexler (00:09:45):
Oh, that's a good question. Just not being there. Oh, having siblings. My mother died when I was young. Couldn't have them. And luckily, and having a bedroom, and then beyond that, not living, it was okay where I lived. But once I met a friend who lived in Riverdale, that's the fancy part of the Bronx, he had a three-bedroom apartment, a maid. And I'm thinking, "Oh my God."

Harley Finkelstein (00:10:16):
This is the good life.

Mickey Drexler (00:10:18):
Yeah, it was like another world.

David Segal (00:10:19):
Were you like, I want this?

Mickey Drexler (00:10:21):
Well that was certainly a stepping stone to other people. Or if I went away to, I went to sleepaway camp, and bungalow colonies for a number of years, and if someone had a Cadillac, wow. Because I was playing off my dad's values in a way. And when you've lived with someone like that, bitter, angry and all that stuff and not nice to my mother and she was sick when I was growing up. And so I realized as I got older, that first of all I wanted to be successful. I didn't say I want to be. And I never had the first day of Bloomingdale's on a training program. They went around, "What do you want to do?" I don't know what I said. So one guy says, "I want to be a vice president of this joint." I look at this schmuck, he was a lucky sperm cell by the way,

David Segal (00:11:16):
Just to define lucky lucky sperm cell, meaning that he-

Harley Finkelstein (00:11:18):
His parents were somebody's.

Mickey Drexler (00:11:20):
Yeah. And it was a low bar to be lucky in my definition. But I never thought about being the way I am. I mean whatever success is called, but I never went there, because it was one step at a time. I guess I always had a good sense of decision or instinct and gut. And I always say my best friend, gut instinct. And if I think it, I accept it is, and then if I'm wrong, I'm wrong. I always had that gut about all my bosses. I think I mentioned this one, Katie Murphy. She adopted me. She was a fashion director. Most of this-

Harley Finkelstein (00:12:04):
This is where, this is at Bloomingdale's?

Mickey Drexler (00:12:04):
At Bloomingdale's. I was very lucky. I was on a fast track and-

Harley Finkelstein (00:12:08):
And that was really one of your first jobs.

Mickey Drexler (00:12:09):
That was my first full-time job.

Harley Finkelstein (00:12:11):
But wait, I mean you say here's this guy who wants to be vice president and you say, "Look at this schmuck." Why was he a schmuck?

Mickey Drexler (00:12:18):
Because I'm a human being. It's a schmuck thing to say. If we go off the record, I'll tell you another story.

David Segal (00:12:24):
We're on the record rather. That's okay. Talk off the record.

Mickey Drexler (00:12:28):
No, when you start to meet people, and I try to give it, young people don't have the confidence. Well, I was in my late 20s, early 30s. You have a radar to immediately-

David Segal (00:12:45):
Who's gay?

Mickey Drexler (00:12:45):
Like or don't like. And then I always tell people, sometimes I've repeated this like yesterday, but I always tell people when they, "Oh, he's a terrific guy." And I know a lot of terrific guys because everyone's nice to me now. I remember those that weren't, not that I see them be a fly on the wall, watch how they treat family, help whoever. And that's who's nice.

Harley Finkelstein (00:13:15):
Yeah. You once told me a story that I love. I repeated to David this morning in a preparation, which is that when you were interviewing somebody you want, you would ask your receptionist, how did they treat when the interview came in, how did they treat you as opposed to obviously they're going to be next to you, you're Mickey Drexler, of course they're going to be of course next to you. But how do they treat the receptionist? And the other thing you mentioned to me that I repeated to David, which I love, is how quickly do they walk? And I think how quickly do they walk is a fantastic proxy for someone that just wants to get shit done.

Mickey Drexler (00:13:47):
Yep.

Harley Finkelstein (00:13:47):
I love that. What does that tell you?

Mickey Drexler (00:13:51):
No, it's kind of I learn and then I look and I have these ideas. I say, "This is what I do." I also, another thing I'd like people who are nervous when they interview with me because it's a natural thing. You got to be a little nervous. I always can tell the neck turns a little red. That was my sign. And I liked them. And when they come in, I hate know-it-alls. Today my friend Stephanie Greenfield and I, we used to say, we called them, this is years ago, she started Scoop and she's still a good friend and advisor. We say, "Oh, they're an authority." That was our nickname for the know-it-alls.

Harley Finkelstein (00:14:33):
For the know-it-alls. Authorities in their own mind.

David Segal (00:14:36):
Right, trying to impress you. Where did it come from where this idea that treat everyone with respect regardless of their station.

Mickey Drexler (00:14:44):
It's a really good question. I was never treated. I would say I was treated okay, but I never knew I'd be becoming whatever I'd become. And I always wished I would get a little hello nice from in Bloomingdale's or at my summer jobs. You never wanted the big shots. I always use that word too.

David Segal (00:15:12):
That's true.

Mickey Drexler (00:15:14):
You wanted the big shots to give you a smile or how are you. Be warm. In fact, that was the entry level for me of liking people. And I'll never forget the chairman of Bloomingdale's. Harold Krensky, he was a lovely guy. I have no idea if he did his job well, but he was the chairman, and nice. His successor, Harvard Business School. I hope there's no one listening. Oh, they might be big shots. Anyway, you know the people who carry their, on their shoulder.

Harley Finkelstein (00:15:49):
Their credentials on their shirt.

Mickey Drexler (00:15:51):
Their credentials, like a uniform thing.

Harley Finkelstein (00:15:53):
Harvard, yeah, whatever.

Mickey Drexler (00:15:54):
It's like when I lived in California, Stanford, first or second sentence, and it doesn't mean anything to me at all now. Then I kind of was longing for like, oh my God, but now it's no more.

Harley Finkelstein (00:16:09):
When you were at Bloomingdale's, you weren't a big boss there. You were in the training program.

Mickey Drexler (00:16:14):
Well, I never was, see the reality is, first of all, I say, just pick a good boss. Training programs, you learn nothing. Someone stands up there. Well school I learned nothing too. They stand up there and they talk, and working is training, life is training. So I never actually was in it because I was very lucky. Life is about these incidences that happened. My first day I was in house was, I didn't know what the hell I was doing. A pot, a pan. And Tim Morgan, I think. He was a cool guy, but he was nice.

(00:16:48):
And then the next day they assigned me to be a buyer of a department because Barbara was out on maternity leave. So I became the boss and a lot of bosses pay no attention, just don't. And that was most of the world. They left me alone. Stan Stern was my boss and he was a terrific guy, very supportive, nice. And he was a good person. Just passed away a couple of years ago. Stan was that kind. But I went out to the market, on my own. I went to all the showrooms, and I bought goods. I reordered, my best-seller was an Arthur Bell elephant pant. And it was only one store even though Bloomindale's had six stores then. And I just felt, I didn't think about it.

Harley Finkelstein (00:17:34):
There wasn't data involved. You just saw it and you liked it.

Mickey Drexler (00:17:36):
Well, I knew how many, no data is always important. How many do I own? How many did I sell? And I used to, my nickname was Stubbs.

Harley Finkelstein (00:17:44):
Stubbs. Why?

Mickey Drexler (00:17:45):
I'll tell you why. Because in those days they had a spindle with the price tags on it. So they tore them off, they put them on the spindle and I'd stand at the register every day, and I'd start looking through the stubs. And it gives you, it's a clue, it's a tell.

Harley Finkelstein (00:18:05):
As the buyer, you wanted to know are your products selling?

Mickey Drexler (00:18:07):
That minute.

(00:18:08):
That minute.

Harley Finkelstein (00:18:09):
That minute.

Mickey Drexler (00:18:10):
And no one teaches you this, right?

Harley Finkelstein (00:18:11):
No one teaches you.

Mickey Drexler (00:18:12):
You get this break, you're there, and you intuitively feel a sense of confidence in what to do. Where is it?

Harley Finkelstein (00:18:18):
I have no clue. But I always, I'm a bit obsessive about phone calls and all that. And I say "Kelsey, tell him I'm going to call him in three hours or whatever." And I have a rule in the company, most people don't listen. Three hour returns on every email. I really want an hour. I want it immediately. And people, and then this morning I said, why don't you tell me about this issue? I learned it from a competitor. They said, "Well, we've been talking about it." I don't care what you talk about. I said, "I'm here to teach. That's my mentor and mensch, my two favorite words." And I heard from of a competitor, she was a friend of mine. She owned a really nice company and we have a nice relationship. She goes, well, her two biggest important, I guess it goes through Shopify affiliates and influencers.

(00:19:14):
So I walk out, small office, I walk, I said, "Do we know the percent of our business by affiliates and influencers?" The answer is, we get it weekly. And I'm saying, oh really? What do you do with it? What do you do with a best seller? What do you do if you see anything trending in your world? You go after it. It's a tell if you don't have detective sense. So then I called, well she's the new president. I love Ali. I said, "Ali, I don't care what you, I care what you're looking at down the road, not rear view mirror." So what happened last week? What do you do with the information? And then I called the guy who's in charge, because he's not in the office today. And I said, "Kyle, what do you do with this? I don't want to hear you talked about it.

(00:20:09):
And I said to Ali, I said, Ali, you look down the road to build something, you look at where it's going and it's like a selling report. It's a religion, the selling report, how many do you sell, how many do you own? And then I'm just going to give a story. So this morning I'm standing out, I schmooze a lot. So I ran into a woman who knew me, I don't remember, but she works in the building. I sometimes recruit elevator people. I once recruited her to go to the office. I love the coat she was wearing. So she says, "Hi."

David Segal (00:20:45):
When you say recruit, you met someone in the elevator and just hired them?

Mickey Drexler (00:20:48):
I'm in the elevator. And there's a few fashion companies in our building. If I see a cool friendly person, I don't like for business. Got to get. So in this case she says, I said, "I'm sorry." She goes, "Remember, I work at so-and-so I was wearing a coat. You brought me into the office and you gave me a VIP card." She was with her sister, I'm schmoozing with her. So the designer comes in from the coffee shop next door. She's wearing an amazing-looking sweater. I loved it. I knew it was ours. And I said, "Alice". And the two women said, "Love that," I said, "I love that sweater. Do we still have it? Do we own it?" Here's her answer. And she's terrific. But she says, "No, because it didn't sell well."

(00:21:43):
I said, "How do you know?" "They told me." You could figure out if you hide a sweater or you buy 10, they'll look at three months selling. I learned by myself, Bloomingdale's, how many do we sell in February each day the first week on a T-shirt? Ended up being the biggest unit buy, it's a long story, 30,000 biggest unit buy. And then the chairman, he comes and says, "Is that the right amount?" He's looking down at me. I went to City College or whatever. I could be a little nasty. I don't want to sound that way. I just have a high standard personally. So you guys will feel...

David Segal (00:22:27):
But wait a minute, the sweater didn't sell.

Mickey Drexler (00:22:29):
It didn't, but I don't take anything at face value. What's her definition of didn't sell? And I did say, I said, "That's a great sweater." So she says, "We have something just like it. It's even better." I busted her on that when we got to the office and then it didn't sell. And I, when I got up to the office, I said, "Alice, let's talk." I said, "Show me the better sweater." I guess they get a little nervous maybe because I'm intense, but they know who I am. But a lot of them, whatever. Anyway, went through it and I said, I want that sweater repeated. She showed me what was similar. Not at all.

Harley Finkelstein (00:23:15):
It wasn't similar.

Mickey Drexler (00:23:15):
And then I looked at it and I say to myself first look, that's what I think. Old, new or whatever, I don't care. We're going to do that sweater. And if I'm wrong, I'm wrong. But on this one I'm right.

Harley Finkelstein (00:23:30):
Is that the same type of philosophy you brought to the Gap? That sort of this gut instinct? I mean because it's one thing to get lucky in one particular SKU or one particular product, but to get lucky over an 18-year period is quite abnormal. Do you credit your success running the Gap, making it a cultural icon to your instinct?

Mickey Drexler (00:23:54):
Well, I credit anything. You have to have an instinct. All of you doing what you do, you have to trust it. And I always say, and I didn't do this when I was younger, I didn't have the confidence. If you are thinking it is. I knew when I was in grade school, the bad teachers were when you think about

David Segal (00:24:15):
It, but this is very counterintuitive. I mean the buzzword today is data-driven, right? Or better than that, data-informed. But here you are, you don't even care why it didn't sell. You're like, "No, this is going to work. Let's repeat it."

Mickey Drexler (00:24:26):
No, I don't. But, what I look at is the data is critical. The only subject I excelled in was math. And I also had my most favorite grade school teacher, which goes hand in hand with wanting to learn, because the teacher's, chemistry, Ms. Frank, what am I memorizing the chemistry codes for?

David Segal (00:24:48):
Yeah table of elements.

Mickey Drexler (00:24:49):
Whatever they're called. Or calculus, I got by. But to me it's all logic trying to get a conclusion. And I do, I care, if they said they owned 400 and it was bad colors, then I'd say, "That's why it didn't sell. Do it anyway." Yesterday I saw a sweater, it was an email, and I looked at the sweater and I said, the email, and I said, "Is this sweater in our language kind of going to be a key style? We're going to sell a lot of them." So I get into the office, I have one senior, three people do merchandising. I know the company's hundreds did it. I said, "Let me see the selling on that." Boom, two stripes, one solid. Stripes were by far better looking. The solid was a bad color in my opinion, but the customer validated that.

(00:25:48):
So I said, "What are you doing about this?" She says, "Well, I haven't made a decision yet." This is four weeks it's been around. And I said, "Let me hear the selling." It blew out in four weeks. And then I get emotional. I don't know if it's called upset, but I said, and then I get her boss and I say, what's with the, you haven't made a decision on a best-seller the second day, third day. And by the way, if it was a brand new sweater, it was a role neck sweater in a boring color. Solids and stripes are major now, I'll tell you a funny story with stripes.

David Segal (00:26:31):
But is that a lack of confidence? I mean it's clearly a best-seller.

Mickey Drexler (00:26:35):
It's a lack of urgency. Maybe nothing dripped. I mean today, every day I have something where I want, I said, "I'm here to teach, and have this as a long-term viable business." Because in my stage of life you got to do that. My son started it. I'd like him to be in-

Harley Finkelstein (00:26:59):
This is Alex Mill we're talking about.

Mickey Drexler (00:27:00):
Alex Mill. And I recruited people who used to work, the lady wanted to get out of the old company anyway, it was J. Crew. But that's a responsibility I have. The heir apparent thing and boards, it's all bullshit. They have to, it's check the box of heir apparent. Who's your backup? Who's this.

Harley Finkelstein (00:27:22):
Succession planning they call it?

Mickey Drexler (00:27:24):
Exactly. And then they have the consultant come in and who's-

David Segal (00:27:29):
The guy with the badge.

Mickey Drexler (00:27:30):
In other words, I make a lot of mistakes on people, but you have to act quickly. But that's why I want to help.

(00:27:39):
And they leave out this important subjects like that sweater. So when I get back, this had just happened, I'm going to look at the selling, it doesn't matter. But the two stripes it came in also, I'm sure they blew out. If you have two good colors out of six, I say every color is a P&L, because they lump everything together. But I'm always looking like I'm a detective, DNA, and you have to be, I love detective shows. Colombo when I was, he was a great detective. He always left the room saying, "By the way, one more thing." That was always the-

Harley Finkelstein (00:28:20):
He was always saying.

Mickey Drexler (00:28:23):
And I loved his style.

Harley Finkelstein (00:28:25):
But I mean at a place like the Gap or in the fashion industry or the schmutz of businesses, as you and I like to call it together, you can use that instinct. You were on the board of Apple for how long?

Mickey Drexler (00:28:37):
16 years.

Harley Finkelstein (00:28:38):
Okay. You were on the board of Apple, by far the most valuable company on the planet today.

Mickey Drexler (00:28:43):
And Steve was the best guy in the world.

Harley Finkelstein (00:28:44):
And Steve was probably the greatest product visionary. I know Steve Jobs was a very close friend of yours. We'll talk about Steve in just a bit, but talk a bit. How was, about Steve, but how was it different, you running the Gap versus what you encountered being on the board of Apple for 16 years? Because that to me seems like real precision, real, I mean, there's some gut instinct, of course Steve obviously famously had this incredible gut instinct for design. But how are those different for you?

Mickey Drexler (00:29:11):
Well, it was hugely different. First of all, I am to this day, I don't know, I couldn't get into the building Kelsey gave me-

Harley Finkelstein (00:29:20):
Yeah, you're not a great, technology is not your thing. Yeah.

Mickey Drexler (00:29:21):
Kelsey gave me this email. Just press this and then I know what to do.

Harley Finkelstein (00:29:26):
That's why you and I are friends. I'll help you, I got you.

Mickey Drexler (00:29:26):
Thank God Emily was there.

Harley Finkelstein (00:29:27):
Good.

Mickey Drexler (00:29:28):
I used to have a BlackBerry in the meetings.

Harley Finkelstein (00:29:33):
Sorry, you had a BlackBerry in the Apple meetings?

Mickey Drexler (00:29:34):
Yeah.

Harley Finkelstein (00:29:35):
Oh wow.

Mickey Drexler (00:29:35):
I just was so intimidated by technology as I am about other subjects. And I was born much too early to be proficient like everyone I know who's 30, 40 years younger than me, and I do one like this. And I don't think it's uncommon with older people who grew up. And I was always like math I did with the whatever and hardly used a calculator. So I get there and Steve and I, he recruited me for a year.

Harley Finkelstein (00:30:11):
So Steve Jobs recruited you to be on the Apple Board. And at this particular point, Steve was on the board of the Gap.

Mickey Drexler (00:30:18):
No, no, no.

Harley Finkelstein (00:30:18):
It was before that.

Mickey Drexler (00:30:19):
What happened is Steve never gives up. He's a very seductive guy. I guess you know better than I, the music world. And he never gives up. I'll never forget two stories. A big deal person in the world, who I knew well, I fixed him up with Steve, and he's on the call with Steve, five minutes later he walks out, it was about buying some Chinese computer company, whatever. He said, "Who does he think he is? I'm bigger than him." Those days he was bigger. But...

Harley Finkelstein (00:30:53):
But Steve was still Steve.

Mickey Drexler (00:30:54):
And then another friend I fixed up, and he's rude to them, but if he wants, it was funny, I think about it affectionately. But if he wants, he wanted me on the board. I figured out why, he was going into retail, and he didn't let up for a year. And it was stupid. I mean, I wish, that was 16 years watching that guy and feeling badly. He had seven years of cancer. He refused to have surgery. And I sat at the board next to a great guy. Art Levinson was the CEO of Genentech, a cancer drug company. So anyway, he said to me when I saw him after about a year, he goes, "I'll join the Gap board if you join my board. Deal, that second.

Harley Finkelstein (00:31:44):
Because he wanted you on the Apple Board because Apple was going into retail. You're the king of retail. You wanted him on the Gap board because I assume you wanted someone like him around the table. Instigator.

Mickey Drexler (00:31:54):
I'll tell you why I know, he's a renegade. He's, I don't want to say not respectful, he says what he thinks. He has this thing of say it, he'll be late, he's Steve Jobs. And I was enjoying, maybe it was a year or two until I got the boot. But I loved him on the board, because boards today are not independent directors. You can go through. Is your brother-in-law, that's probably not independent. Roommates, best buddies, people you met on the subway could be.

Harley Finkelstein (00:32:34):
But Steve was really independent on the board of the Gap. I mean he was...

Mickey Drexler (00:32:37):
Well, Steve was there as my friend, and he knew what the board, he hates boards of directors. And because I understand why, I'm not a fan of eight then mostly men, now nicely more balanced. Going around who don't know anything. If it's a chef, if it's a restaurant, they don't know how to cook. Oh, there's too much this.

Harley Finkelstein (00:33:02):
What do they know?

Mickey Drexler (00:33:02):
They just financially, go ahead.

David Segal (00:33:05):
You're on the Apple board, and you're walking into meetings with a Blackberry, Steve's super intentional.

Mickey Drexler (00:33:10):
No, I tried to hide them. He was pissed off.

David Segal (00:33:11):
He was pissed off. Okay.

Mickey Drexler (00:33:11):
I hid them after the iPad. I hid it behind my iPad, then I got an iPhone.

Harley Finkelstein (00:33:16):
Okay.

Mickey Drexler (00:33:17):
But I loved, I so admired him.

Harley Finkelstein (00:33:20):
What'd you learn from him?

Mickey Drexler (00:33:21):
Learn? I learned less fear.

Harley Finkelstein (00:33:25):
What do you mean by that?

Mickey Drexler (00:33:26):
Well, he would say with Intel, "I don't know much about chips." He goes, "I'm betting the company on this." He had no fears about following his vision. He was tough. He was a great marketer, because the marketing then, I knew right. You know when you know if someone's got it, and Steve had it, he showed the products first. We'd walk in, there were gray cover cloths on all the products. And then he'd do was show, the most important thing. That I always knew. Product, product, product for him also. And he loved things he loved, and he failed and he said, "Didn't work."

Harley Finkelstein (00:34:14):
And he was okay with failure.

Mickey Drexler (00:34:15):
On to the next.

David Segal (00:34:15):
But Mickey, you keep bringing up this theme between indecision and the cost of failure. How do you think about that? I mean, in some ways you're presenting it as indecision is costlier and riskier in a lot of cases than actual failure.

Mickey Drexler (00:34:28):
If you have a habit, I always say this, of being indecisive, a quick bad decision is much better than any slow decision because the train's going down the track quickly. Every single day. There's some tell something, make it, don't overthink it. And I say, "Enough, what's your first impression?" And when people start all the companies, I said, "Your first week or two, I'm going to ask you a lot of stuff or something." You have a fresh eye to what's right and what's wrong. And I don't know why I'm like this.

David Segal (00:35:10):
So when do you say, "Let's wait." Do those words ever come out of your mouth?

Mickey Drexler (00:35:13):
Let's...

Harley Finkelstein (00:35:14):
Let's wait.

Mickey Drexler (00:35:15):
Never. Do I ever say let's, I say it if in fact there are cases where I'm not that in love with the idea, like today I said let's wait and talk about it. If someone says, Bob, I heard it this morning with the affiliate discussion. I didn't wait for one second. And I don't wait for a second. And it's urgent to me. You got to get it done quickly, fast. So if I don't know about it, I won't get involved. I know about most things. I don't want to, finance, if you have a good finance person, I don't have to spend time as long as you have a good person. Audit committee, we're not big enough yet to have it. But that's someone you trust. Let them do that. And I don't think everyone could do everything. I love people who do the best they can do in a focused area.

(00:36:11):
So for me, everything that's customer-facing, except technology now, although I'm very involved in that, the websites, most of them are over-assorted. They have too many styles. And I want them redesigned. Oh, we have the Redesignalists in Switzerland or Paris. I said, "Get someone in New York City and I want it done." But great websites are rare, in my opinion, a lot more about this. But I want a message and a point of view on everything we do.

(00:36:47):
And that's what customers want. They don't want a lot of choices. And I mean, think of yourselves. You go into a supermarket, there's like 30 cereals. Hello? Tell me the best five.

Harley Finkelstein (00:37:02):
Yeah, there's a paradox of choice there a little bit, right? Yes. Which you think you're giving them more choice, more options, but rather you paralyze them.

Mickey Drexler (00:37:07):
The cars.

Harley Finkelstein (00:37:08):
I mean, Steve did that beautifully. Apple does it beautifully, right? There's the small iPhone and the large iPhone.

David Segal (00:37:13):
Two colors.

Harley Finkelstein (00:37:13):
There's this color or that color, you pick.

Mickey Drexler (00:37:15):
And if he were alive today, we couldn't imagine what he would've done.

Harley Finkelstein (00:37:20):
Oh, it'd be incredible.

Mickey Drexler (00:37:21):
Last year or two, he wanted to do a car. He idolized the Tesla and I'll never forget, he was like, "Oh." I said it was one of the two-seater. The ugliest of them all.

Harley Finkelstein (00:37:30):
Yeah, the Roadster.

Mickey Drexler (00:37:31):
I said, Steve, it's such an ugly car. I like when he looked at me with huge derision, and says, "It's not about the car. You can always design a beautiful car. It's about what's inside." And I'll never forget that.

David Segal (00:37:44):
What's inside the car?

Mickey Drexler (00:37:46):
The engine, the engineering, whatever. It's the engineering.

Harley Finkelstein (00:37:49):
The batteries and all that. The way that it functions.

Mickey Drexler (00:37:51):
It was an ugly-looking...

Harley Finkelstein (00:37:52):
He feel he could have put a beautiful design on top of it.

Mickey Drexler (00:37:55):
He said he would of done it. He was very, and I think he was right. He would've done it.

Harley Finkelstein (00:37:58):
Yeah.

David Segal (00:37:59):
Yeah. He seemed to be all product. And the marketing comes second. Are you the same way?

Mickey Drexler (00:38:03):
No, he's all marketing tool. I am product-obsessed. Well, you have to be. Someone's got to look at what's coming off the assembly line. And I look at products out there, it's just my own little thing. Restaurants, I'm always like, I heard this great quote the other day. So Cobb Salad, I order it across the street in [inaudible 00:38:27], which is actually right down the block. And I didn't have a Cobb Salad, it's new on the menu. And so I said, Cobb Salad comes, and I could have used a magnifying glass to find the bacon. It's standard.

(00:38:45):
So I say to the waiter, "Can you get some more bacon or whatever." The manager, Marco, I know them all. I'm like their buddy and things. He comes over about two minutes later. So I give the waiter credit, because he told Marco what I said. He comes over with a cup of bacon chips. I said, "Marco, thanks so much." I said, "Why don't they put more in?" He goes, "The kitchen doesn't understand. They treat it as an ingredient." And then he said, "It's the ingredient."

Harley Finkelstein (00:39:25):
Right. And they missed that. But he understood that. Marco understood that. You understand that.

Mickey Drexler (00:39:31):
I wrote the quote down, it's the ingredient, like a striped sweater in some cases. I used that today in an email.

Harley Finkelstein (00:39:40):
So actually, let me ask you this. What is the ingredient from the Gap? What was the ingredient? Because we all know the big Gap logo. We all know the story. Obviously this incredible 18-year story of you running the Gap. But what was the ingredient that made the Gap go from 400 million to 14 billion and made it a household icon?

Mickey Drexler (00:39:58):
Well, you could ask that question of Phil Knight, who I never knew. The ingredient is having a focused, almost narrow vision about what the world, now, to me, it was a big white space. I loved Ralph. I used to buy it wholesale because my roommates, whatever.

Harley Finkelstein (00:40:18):
You mean Ralph Lauren.

Mickey Drexler (00:40:18):
Ralph Lauren.

Harley Finkelstein (00:40:19):
Yeah.

Mickey Drexler (00:40:20):
He inspired me. I really couldn't afford his clothes.

Harley Finkelstein (00:40:27):
Okay, so you liked Ralph Lauren, you just couldn't afford it.

Mickey Drexler (00:40:29):
Oh, I think he has great taste and style. He sometimes accuses me of copying him, but that goes with ego, whatever. But I said, this is in my head. I actually was working for my third department store job. I was like, I made a list of styles, maybe just in case I went to start a company. You couldn't start them that way. So I was saying, "Where's the white space?" I didn't say it that way. It wasn't like I said-

David Segal (00:40:59):
What does white space mean just for everybody listening?

Mickey Drexler (00:41:01):
Opportunity, who is not doing what I felt I needed and the world needed. Now I don't just do it like that, but Ralph made very simple, easy clothes. And no one's ever accused Ralph of doing the newest and the greatest, he'd be mad if he heard me say that. But I loved Ralph and I admire him. I did.

Harley Finkelstein (00:41:24):
And you felt that the Gap would be able to fill that white space of great clothes like Ralph Lauren and the affordable prices.

Mickey Drexler (00:41:31):
It's funny you say that. I had a, yeah, someone needed to fill it. So I wrote on a piece of paper when I was, I was at A&S, not Anne Taylor's. And I said, "This is what the world needs." I said a tee, and I always loved color. I still do. It's the first thing you see when you go into anything. A shop. Color is art.

David Segal (00:41:56):
Right. Long before fit, size, all that stuff. Yeah.

Mickey Drexler (00:41:59):
I love the color palette. Now we, because of minimums at Alex Smith, we're now expanding, but we need minimums for factors. So I wrote down on a piece of paper, I think 10 things. I said, tee shirts in lots of colors. They washed jeans, which when I went to Gap, they had rigid jeans from Levi's. And two for, Gap was a discount.

Harley Finkelstein (00:42:32):
Sorry, the Gap was selling Levi's jeans.

Mickey Drexler (00:42:34):
They started on Levi jeans only.

Harley Finkelstein (00:42:37):
Wow.

Mickey Drexler (00:42:38):
And when that, these businesses always, you got to keep reinventing.

Harley Finkelstein (00:42:44):
Sure, of course.

Mickey Drexler (00:42:45):
I'm sure in your business, and any business, you keep reinventing or else, it's fashion. It's not like out of a book. It's not a commodity. It's whatever. So I wrote the list down, sweat shirts, lots of colors, sweat pants, pocket tee, also on the [inaudible 00:43:03].

David Segal (00:43:03):
But Mickey, all this stuff seems fairly obvious, right? If I'm listening right now, I'm thinking, okay, tee shirts in lots of colors. Was that Levi's jeans? Everybody sold Levi's jeans. Was that novel at that time?

Mickey Drexler (00:43:12):
Well, Levi's jeans there brought the company down because they didn't have an Act 2. So then it became a discounter. And you know how I remember this? On 57th in Madison, on 57th, there was a designer store. I should remember his name. Not around anymore. He had in the window always cashmere sweaters in at least 10 to 12 colors. That was embedded in my mind. And I just loved it. I didn't know why, but wow, what a picture. And that was probably the seed of colors, because no one was really doing it that way. And the color is critical. It's the personality of a business, it's the emotion. And our business is purely emotion and need, whatever. So when I saw that, I always remembered the picture. I couldn't buy the cashmeres, but I remembered the picture.

Harley Finkelstein (00:44:15):
And you brought a lot of that to the Gap. There was this other moment when you were at the Gap where you decide it's time to start a company, which you named after a bar, I believe in Paris.

Mickey Drexler (00:44:27):
A bar on the, Saint Germain in Paris.

Harley Finkelstein (00:44:30):
And this bar is called Old Navy. Why do you start, you're at the Gap. You bring in this sort of more Ralph Lauren-esque aesthetic, but affordable, great colors.

David Segal (00:44:41):
Private label.

Harley Finkelstein (00:44:42):
Private label. No more Levi's, our own stuff. I say this to you all the time. You were the OG of direct-to-consumer. You're the guy who in my view, who really, you've always been direct-to-consumer.

Mickey Drexler (00:44:53):
You had to be.

Harley Finkelstein (00:44:54):
Yeah.

Mickey Drexler (00:44:56):
Because then I was buying for the department stores, and everything I would buy was somewhere on sale.

Harley Finkelstein (00:45:03):
That's right.

Mickey Drexler (00:45:04):
And I had a policy, the store did.

Harley Finkelstein (00:45:06):
Yeah. And your famous quote is No sale bingo. Right? Where these stores are just playing bingo. 20% up and down.

Mickey Drexler (00:45:13):
Today, someone wrote something, they said, what about, I said, "My best advice is when you're ready to buy something in the store or online, just Google it to see what the sale price is." But that's it. And today I call, it's funny. This morning I was just thinking, I want to look up the definition of commodity.

Harley Finkelstein (00:45:36):
Of commodity.

Mickey Drexler (00:45:36):
Of a commodity. Guys, can you just tell me what-

Harley Finkelstein (00:45:40):
Yeah, we're good. Yeah.

Mickey Drexler (00:45:40):
Yeah.

David Segal (00:45:41):
Yeah they'll figure it out.

Mickey Drexler (00:45:41):
Yeah, no, just look it up and just yell it out.

Harley Finkelstein (00:45:43):
Something ubiquitous.

Mickey Drexler (00:45:44):
Yeah. What is it? Definition of...

Harley Finkelstein (00:45:48):
Commodity.

Mickey Drexler (00:45:49):
Commodity. We have time for the-

Harley Finkelstein (00:45:52):
We can do whatever we want.

Speaker 6 (00:45:52):
The dictionary definition... A raw material or primary agricultural product that could be bought and sold such as copper or coffee.

Mickey Drexler (00:46:03):
They don't say anything about power. Yeah, just do commodities.

Harley Finkelstein (00:46:12):
You want to go deeper?

Mickey Drexler (00:46:12):
Well, here's-

David Segal (00:46:12):
Commoditize apparel.

Speaker 6 (00:46:12):
It says goods and materials that are widely used.

Mickey Drexler (00:46:13):
Okay, here's my interpretation now, I just thought about it.

Harley Finkelstein (00:46:17):
This is audience participation. That's a new thing.

David Segal (00:46:20):
Totally. That's great. Would you like Mickey to say A.

Mickey Drexler (00:46:24):
Because I think about, it's daydreaming. Your mind doesn't take time off, ever. You could see something and it's inspirational. You could do this. So I was thinking in apparel today, well, everything's on sale someplace. So the lowest price wins. I'm calling the fashion business a commodity business. If in fact it's distributed, every discounter in every shop. And that's why I always say, that's why TJ Maxx, the best in the world. They have it and they have everything at the best price. No guessing what they've got.

Harley Finkelstein (00:47:05):
Yeah. There's no sales at TJ Maxx because it's already on sale.

David Segal (00:47:09):
It's every day.

Mickey Drexler (00:47:09):
It's the honest price.

Harley Finkelstein (00:47:10):
It's the honest price.

David Segal (00:47:11):
But that didn't work for Ron Johnson at JCPenney.

Mickey Drexler (00:47:14):
Don't get me started.

David Segal (00:47:15):
Well, I do want to get you started.

Harley Finkelstein (00:47:17):
Before we go there, let's finish the story. It's Old Navy. So you're at the Gap. Why do you decide to build Old Navy and how do you do it?

Mickey Drexler (00:47:21):
Well, I'll tell you what happened. Gap was being copied like Walmart. Everyone had a Gap department. And it's not hard to copy the, the nuances and the marketing is one thing. And I didn't say, oh, everyone, but I saw that. So I read an article in the New York Times when I used to read the New York Times, buried, about then Dayton Hudson then became Target Corp opening Everyday Hero. And someone was quoted saying, "It'll be like Gap, but at lower prices." And you're competitive.

Harley Finkelstein (00:47:59):
It'll be like Gap, but lower prices. Wow. That's like most people's instincts, right? They're knocking me off. I can't believe it. Yeah, but you didn't do that.

Mickey Drexler (00:48:06):
No. Well, I couldn't, I flew the day, the week the store opened. I wanted to see who was trying to be us at lower prices. You got to protect your turf, in your world, every world. So I flew to Mall of America. I walked into the store and I said, this is terrible, to myself. I'm not worried. But, this company, Dayton Hudson, they did so much research. I knew that because we belonged to the same buying group, and everything was focus groups, statistics, everything. And I said, I know they must have done a lot of studying to do this.

David Segal (00:48:50):
Why would that impress you though? Because you're a guy who was about the gut.

Mickey Drexler (00:48:53):
That's right. But no, I looked at the tidbit about what they were doing on research. I wanted to know, but I also knew my gut on it. There was a big white, let me finish that and I'll tell you about the white space. So I went to two lower demographic Chicago neighborhoods with a Gap store in each. And I always say, you speak to who's on the floor. Don't speak to the next person on the 12th floor looking down at everything.

David Segal (00:49:26):
In the ivory tower.

Mickey Drexler (00:49:27):
Yeah, the ivory tower. That's what they do. Not most of them, but a lot of them do that. Steve was into every detail, lunch every day with Jony Ives. But remember, Steve could do no wrong to me. And it was a tragic loss.

(00:49:42):
So I went to the two stores. I spoke, what I do now, we only have two shops. I speak to the store team. You have to be, I didn't say this yesterday, I meant to, but if you're nice, not nice and respectful, and not of the ivory tower, people are automatically more connected and less fearful. I visited two shops in Chicago and I said, "Gap clothes are higher than they'd like to spend." So I'm thinking. So that was a very important tell. And then, I don't know how I found this out, but someone might've told me, 80% of the jeans in America were sold for $30 and less. Gaps started at 34.50. I was stunned. You mean, we're a huge jeans company and...

David Segal (00:50:43):
You were scratching the service.

Mickey Drexler (00:50:44):
I thought we were. And then I took 10 people, gave them 200 bucks each at that demographic level. And I gave them 200, assigned them Walmart, Mervyn's was in business then, Kmart. 10 discounters.

Harley Finkelstein (00:51:02):
Go shopping.

Mickey Drexler (00:51:03):
Go shopping and come back, week, 10 days later we get, I was the only one at the company in the room. I mean, I didn't tell anyone that.

David Segal (00:51:13):
Is this the first time you've done market research? This is not sort of your fourth day.

Mickey Drexler (00:51:17):
No, I do market research on everything. I did it on starting the kids business. I'm sorry I did it because it's a tough business to make money, and get me back to where I was. I used to shop for my son, Alex, every year, uniform, Oshkosh plaid shirt. So when I'm in San Francisco, we moved, he was ready to go to first grade or whatever, and we go to Emporium, a department store, whatever. I couldn't find any kids' clothes. I looked for Levi's. They didn't have the right thing. So I went back to the office, I said, "I got a group of parents." I said, "Does anyone have a problem finding good clothes for their kids?" Hello, everyone. Now back to, what was I getting back to?

David Segal (00:52:05):
The Focus Group-

Harley Finkelstein (00:52:06):
Chicago.

David Segal (00:52:06):
Where you gave them money for Kmart.

Mickey Drexler (00:52:07):
So I then after the meeting, in the boardroom, well, it was just next to my office, I said to myself, we're doing this. That was it. They said everything, it's my version of market research. I was forced at Gap to do a focus group. It was worse than I ever imagined.

David Segal (00:52:32):
You were like, I don't care what they say, show me what they do. What are they buying?

Mickey Drexler (00:52:36):
Look, they get paid for it. And I looked, I'm looking in, the whatever you look at, and I'm saying, what the fuck is going on here? Who cares? And you pay a lot of money to the McKinsey's of the world, whoever those focus groups, market research. I don't believe anything I read anymore about 600,000 people. They studied the best restaurants.

David Segal (00:53:01):
I mean. Well, people that are bringing back stuff with the $200 they gave you and the stuff looks a particular aesthetic.

Mickey Drexler (00:53:06):
They confirmed what I was hoping, white space, they care about style, not that the price is ending in 97 cents or 45. They want style, good value, clean stores. And be nice. And be nice is what I always, at the graduation speech last week, I said, "Remember who you are and be nice to people." And after that meeting, I didn't think about it. I said, "This is it." And then just a little, so Jeff Feifel, terrific guy. Used to run Gap design in men's. So I recruited him. I mean, he worked in a corporation. And Jeff had a comment, he goes, I said, "You seem a little unsure." He goes, "Well, what happens if it doesn't work?" I kind of said, "We'll cross that bridge when and if we come." But I did say to him, I said, "Jeff, this might sound weird, someday this could be bigger than Gap."

Harley Finkelstein (00:54:10):
Cool.

Mickey Drexler (00:54:10):
Sure enough...

David Segal (00:54:11):
It was. And the name you got because you were in France?

Mickey Drexler (00:54:15):
No, but I got the name, but the board didn't like it.

Harley Finkelstein (00:54:20):
And where'd you get the name from?

Mickey Drexler (00:54:23):
The Old Navy name? The bar, right? I was on the way to the airport, thank God I was in the back seat on the left. I'm looking out the window daydreaming. You see it was Old Navy with a neon sign. It was in the morning. And I said, "Oh my God." I said to the woman I was with, "Maggie. There it is. That's the name." Loved it.

Harley Finkelstein (00:54:46):
Old Navy.

Mickey Drexler (00:54:47):
Old Navy.

David Segal (00:54:47):
Do you make the name or does it matter?

Mickey Drexler (00:54:50):
No. Did I what?

David Segal (00:54:51):
Do you think that in business, you make the name meaning Starbucks has no meaning?

Mickey Drexler (00:54:55):
I think you do to a degree. But I see some companies say they hire naming companies. My board made me go to two naming companies, and I always had to be a little shrewd about what I wanted, which was in the best interest of our shareholders. So the first thing on the, I was forced after spending in today's money, maybe $5 million, I got a free name, and it wasn't trademarked.

David Segal (00:55:25):
When you say you did you mean the Gap did?

Mickey Drexler (00:55:27):
No, the Gap. Yeah. I mean say I-

David Segal (00:55:29):
You bought it for The Gap.

Mickey Drexler (00:55:29):
For the Gap. Well, I didn't have to buy it.

David Segal (00:55:32):
It was free.

Mickey Drexler (00:55:32):
It was free. Yeah.

(00:55:33):
It was free. The bill from these land-

Harley Finkelstein (00:55:36):
But you spend $5 million on naming consultants when you already had the name that you knew was going to be a good name.

David Segal (00:55:41):
When we saw the name on the bar and you're like, "That'll do."

Mickey Drexler (00:55:42):
So the first store opened called Old Navy. Well, it could be called Coke, Pepsi. It was called Old Navy Gap. And you put Gap out of business. How do you confuse a point of view and Old Navy's-

David Segal (00:56:01):
But wait, you're the CEO?

Mickey Drexler (00:56:02):
No, but Don's majority.

David Segal (00:56:04):
So you got overruled on that.

Mickey Drexler (00:56:05):
Majority rules.

David Segal (00:56:06):
Yeah, majority rules. The golden rule.

Mickey Drexler (00:56:07):
Percents. Majority rules. Yes, I was the CEO.

Harley Finkelstein (00:56:13):
It's still Don's company. He created it.

Mickey Drexler (00:56:16):
Well, he started it and he knew, he was smart to know it was going this way.

David Segal (00:56:20):
Yeah. What was that conversation? Were you like, "Don, it should be its own brand?" And he's like, "No."

Mickey Drexler (00:56:25):
Stop. I understood that. I'll get it done my way, because it's in his best interest. I knew it was the right name. And if you feel it it is. And so the naming companies, the second naming company, I kind of got them to name it. I then had to be a little manipulative to get Blue Indigo. It's in the ballpark, wasn't available, the name.

Harley Finkelstein (00:56:57):
Perfect. Navy. I got you.

Mickey Drexler (00:56:59):
Perfect. So Blue Indigo, it's very connected.

Harley Finkelstein (00:57:02):
Wow. So you got them to pick Blue Indigo, that's unavailable.

Mickey Drexler (00:57:05):
Then we said it's not available.

Harley Finkelstein (00:57:07):
Next best thing.

Mickey Drexler (00:57:09):
Well then we were forced, but he still wanted Gap there. But Don was great. He was willing to bet on a lot of things. And even with Old Navy, I said, "We're going to start it." Good. And then there was some challenges, which got me very emotional, but that's what happens.

David Segal (00:57:29):
What were those?

Mickey Drexler (00:57:30):
Well, four days before we opened, I know, in every big corporation, there's always this political, always someone's after your ass. Someone's this. Someone sucks up to that one. So a guy there, this is a whole other long story that we don't have time for. He says, I know it was him. He goes, "You can't open this up. You're only planning a 38% margin." Which is very low and more than attainable. I actually was so angry inside, I almost cried. I was like, "After a year or doing this, I can't open up four days from now." And I said, and I was very upset and I said, "Beat the expectation." I said, "If we did that, we're not going to be in business at 38%." Anyway, so we opened, but the Old Navy was underneath the Gap. And that was bad for Gap. It would be bad for any company, competing companies to have the same name.

David Segal (00:58:45):
Because you're basically knocking yourself off for less, right?

Mickey Drexler (00:58:48):
Yeah, exactly. And so the worry was it'll eat into Gap. I wasn't worried about that. There's this monstrous discount market out there with no style, no fashion, no whatever. That's what I try to do. In fact, when we opened the store, I had Schwinn bikes we sold because it was part of the vibe.

Harley Finkelstein (00:59:12):
Riding around the community.

Mickey Drexler (00:59:14):
And they sold out in about two days now. The late-

Harley Finkelstein (00:59:16):
The bikes.

Mickey Drexler (00:59:18):
The bikes.

Harley Finkelstein (00:59:19):
In a discount store.

Mickey Drexler (00:59:20):
No, in Old Navy.

David Segal (00:59:21):
Well yeah. So you're selling discount clothing and expensive bikes?

Mickey Drexler (00:59:24):
No, it's not discounted.

David Segal (00:59:25):
Sorry. It's everyday low prices.

Mickey Drexler (00:59:27):
No, it's not that either. That's the language of it's not everyday low prices. It's value and style and quality relative. But everyday low prices is Walmart I think, someone owns that. Price is just a piece of the world. And at a certain level, it's not the price. People are emotional. Look at the designer business today. You talk about pricing and I think it's a logo business. Why? Because what do you wear, the Gs, the Hs, there's one company that has a metal logo on every style. I'm using those. I love those companies.

David Segal (01:00:11):
Harley and I are both students of retail. Harley sold T-shirts and I sold running shoes when I was young. What is value?

Mickey Drexler (01:00:19):
It's in the eyes of the merchandiser, and the customer. And the more emotion, that's a good question. It's relative value to someone who spends $2,000 on a cashmere sweater. Is maybe the satisfaction that they can afford something, even if they take a mortgage out to buy it, that it elevates them. When I was a young guy, I used to go to Italy regularly. I was buying sweaters. I went to the factories. I went with Katie and the Gucci, I was think my mid-20s, the Gucci buckle, which in those days was a badge of wow. For lack of, it was a logo that you are cool enough. Not that I had money, it was whatever the price was, but now everything, in my opinion, this is all my opinion, it's become a bit of a commodity.

(01:01:18):
Really, if you think about it, there's no barrier to entry anymore to buy, I mean, I look at the prices on designer clothes and others, and I'm stunned that people, now that's because we do fair value with equal style, if not better. My opinion, I'm biased, but people, they feel more confident. It's like buying it when I was a kid growing up, if you bought a Cadillac, you stretched, you were rich, you were this.

David Segal (01:01:52):
Right, the price didn't matter in that equation.

Mickey Drexler (01:01:54):
Well, it didn't matter at all, but if you can look, for me, rich people did own Cadillacs. We owned a Dodge was our first car when I was five years old, and we up to Buick special, wrong color. We ordered it wrong. I'll never forget, I was 10 years old, and my dad ordered a red bottom, and a white top. I'll never forget this, it's weird. And we go to pick up the car. I'm excited. Dot, dot, dot. And the top instead of white is cream-colored. I said, "God is that ugly looking." I said, he couldn't care. I mean, he wasn't thinking that way, and I never liked that car.

Harley Finkelstein (01:02:44):
Just a feeling you had.

Mickey Drexler (01:02:45):
I thought the color, I mean, it wasn't like, oh, I'm a style person.

Harley Finkelstein (01:02:49):
Yeah, you're 10.

Mickey Drexler (01:02:49):
I was 10 years old.

Harley Finkelstein (01:02:50):
Yeah, what you know, you were 10 years old. But it resonated with you. There was something about it that just didn't, didn't work for you.

Mickey Drexler (01:02:54):
100%.

David Segal (01:02:56):
I mean, you're really into color. You're a painter, I mean, where does that get expressed? Retail is really your canvas?

Mickey Drexler (01:03:04):
Well, retail is, for me, what I do is sport. It's competitive. It's creative, and it never takes time off.

David Segal (01:03:13):
I love it.

Mickey Drexler (01:03:14):
I mean, it's part of, look, if you're in the TV business, you're watching, I would hate to be watching news all day because those news shows, well, I'd quit my job, but I can't help it. If you see someone walking down the street, like the designer today, she's wearing that.

Harley Finkelstein (01:03:33):
He does it with tea. Someone stirs in a cup of tea, he says, "You know this tea, it's over steep. The temperature's wrong. It doesn't have all that too." And he can't turn it off.

Mickey Drexler (01:03:41):
I had breakfast with my daughter this morning, every Thursday is daddy/daughter, so I went to a new place. She lives in Tribeca, and the waiter is selling me the avocado toast, which I love. In other restaurants. He's saying it's the best. And I said, you know something, I'll have it. Bring me hash browns just in case. The avocado toast comes. It's on a thick piece of rye bread, half toast. That already was a problem, and it was cold, and it wasn't good, and you had to cut it through. I always get thin toast.

David Segal (01:04:20):
Too much toast.

Harley Finkelstein (01:04:20):
I think he can make Jews happy in a restaurant. You've got a way.

David Segal (01:04:24):
There was a famous Jackie Mason skit where the waiter goes over to a group of Jews and says, "Is anything okay?"

Mickey Drexler (01:04:30):
Yeah. Well, I have it with two Jewish women, but it's true.

David Segal (01:04:34):
I was trying to be more-

Harley Finkelstein (01:04:36):
Or Seinfeld's joke. I'll get it right this time. Two Gentiles walked down the street. They bump into each other. How's business? Great.

David Segal (01:04:42):
I want to ask about a story that you told me a while ago that I love, but I love it because of the way you reacted to it, but it was a tough story. Maybe the toughest day of your life. You're the CEO of the Gap for 18 years. You're killing it. I mean, you invent Old Navy, you grow this business incredibly well. The Gap is a household, not just a household name, but it's part of American culture, it's folklore. It's everything. And Steve Jobs on the Board of the Gap calls you at 9:00 P.M. at night and says, "Mickey, call Don, founder of the Gap. He's going to fire you tomorrow." How are you feeling when Steve Jobs calls you and says he's going to fire you?

Mickey Drexler (01:05:29):
Well, as Steve said, he wouldn't tell me before because they were afraid I would tell you, which of course I would have. I felt the vibe at dinner that night and I felt-

Harley Finkelstein (01:05:41):
They didn't look at you, you've told me that they didn't look him in the eye.

Mickey Drexler (01:05:44):
And the dinner was with the merchandise, all three brands, Old Navy, Gap and Banana, we had a bad year, and it was kind of a recession year, and I got off course. I know this, H&M and ZARA, they had lines around cheap goods. And I don't know, I just got a little more fashiony than I should have. I got them every morning, when I drove to the office on 18th Street. I'd see the lines around H&M on Fifth Avenue, and I'm going inside crazy. I still wish we could get lines, but it's mostly food in a way, or shrewd marketing or international. So we had a tough year, and I felt a few months before a little, I interviewed some people who I figured out they're looking to replace me I think. They send someone in there to my home on a weekend. I couldn't believe it. Beyond, couldn't do the job, beyond wrong. And then I get a call from a director who never called me. "What do you think of her?" Yeah, it was a her, not a him. "What'd you think of her?"

(01:07:01):
First of all, her credentials. Forget it if you work in it, there was no sense at all of right. Look, the first thing I look at with people is what I think, feel, energy volleying back and forth. It was very long. I had to spend an hour, I think, to be polite. And I said to him, "No way." That was another tell, this guy, I know he had it in for me because he was an angry, he's the one who got rid of Tom Ford and I forgot.

David Segal (01:07:36):
Tom Ford was at the Gap.

Mickey Drexler (01:07:37):
No, no, I'm saying he was on the board of Gucci.

Harley Finkelstein (01:07:40):
Yeah. I mean, Tom Ford famously built Gucci and then he left. And started Tom Ford.

Mickey Drexler (01:07:44):
And his partner, great guy. They didn't agree to a negotiation.

Harley Finkelstein (01:07:53):
So you felt that this was coming?

Mickey Drexler (01:07:55):
Well, I said to Steve, "Tonight, they didn't look at me. They didn't respond. I felt like I was in another world." And I said, "Now, I've seen it." There was a number of tells, but I knew the turnaround was in, and you know how you know it. And I ended up being very right. So I was supposed to leave the next day. I couldn't believe it. I went into the board, and I got ushered out very quickly. I know there's a lot of lawyering going on. And then the next day we have the press conference, whatever that is, the analysts and this, someone asked if I had a contract. They had no idea. I was just working and doing.

Harley Finkelstein (01:08:39):
You were there for 18 years, no contract.

Mickey Drexler (01:08:41):
Yeah, right. I didn't know. I didn't. But so after, not because I didn't have a contract, Don, and I couldn't have done this without Don, really, and I'm still friendly with his three sons. I really like them a lot. And we hang. So he calls me in and he says, "I made a mistake in firing you."

David Segal (01:09:02):
It was 24 hours later.

Mickey Drexler (01:09:04):
Yeah.

David Segal (01:09:04):
Wow.

Mickey Drexler (01:09:05):
And I knew what happened to him. Someone, Don would listen to an opinion, and that's his opinion. I mean, that was what, because he didn't know our business, and he was nervous when I first started. Very nervous. I understood.

David Segal (01:09:26):
Well, first started, it's 18 years later, though you've already, three, four Xed the business.

Mickey Drexler (01:09:31):
No. Right. Well, three, four X.

David Segal (01:09:33):
More than that. 400 to 14 billion.

Mickey Drexler (01:09:36):
$300 million market value when I started.

David Segal (01:09:40):
And you built the division that had 80% of the profits, in Old Navy, right?

Mickey Drexler (01:09:45):
And I was stunned. They came back. I was treated like I was, whatever. Not a big shot I was treated like.

David Segal (01:09:55):
But in many ways you were a founder.

Mickey Drexler (01:09:57):
Oh, well, yeah, exactly. And my dream now is what I do because my son founded, if I don't have a director who's whatever, I wouldn't mind a good investor.

Harley Finkelstein (01:10:08):
Yeah. It's all you guys now.

Mickey Drexler (01:10:09):
Yeah. I wouldn't mind a good investor because I still live in Bronx money.

Harley Finkelstein (01:10:13):
And Dave might be able to [inaudible 01:10:15] on investments today.

Mickey Drexler (01:10:16):
Who?

Harley Finkelstein (01:10:17):
I thought we [inaudible 01:10:18].

Mickey Drexler (01:10:18):
Who?

Harley Finkelstein (01:10:18):
David. I want to ask.

Mickey Drexler (01:10:20):
So let finish the story, then you'll cut and it doesn't matter what you cut. Anyway, so then they came back. You can stay until we choose your replacement. That was three months. I had millions and millions of options. I didn't want to screw around. And I did my best. Turned it around, long story short, and I didn't have a non-compete.

David Segal (01:10:46):
Wait, you say turn it around. So they fire you. Then they're like, "Come back." You're like, "Okay."

Mickey Drexler (01:10:50):
No, May 4th to September 26th. May, June, July, August.

David Segal (01:10:55):
You had three months.

Harley Finkelstein (01:10:57):
Three months.

Mickey Drexler (01:10:57):
Okay. But it was on the way.

David Segal (01:10:59):
But at first it was 24 hours. Here's your box out of the office. And then the next day was come work for us for three more months.

Mickey Drexler (01:11:04):
Well, it was actually, yeah, until we find your replacement.

David Segal (01:11:07):
Yeah. I mean, one thing we all have in common is we're all married to psychologists, and talk to us about Peggy. I mean, she's been there for all your moments.

Harley Finkelstein (01:11:15):
Yeah, we want to hear about Peggy.

David Segal (01:11:15):
It sounds like Peggy has been a big part of this whole story.

Mickey Drexler (01:11:17):
Well, Peggy, we've been married over 50 years.

Harley Finkelstein (01:11:20):
Wow.

Mickey Drexler (01:11:21):
Peggy, when you're a psychologist, I think it's like maybe our businesses, there's a gut you have about people, and she has a brilliant gut, and she has a PhD in psychology, but she doesn't practice. Never did. And she has an interesting career right now, never practiced except in when she was in graduate school, social work in Columbia. And we moved to California. She got a PhD and she spoke. She wrote two books, but never saw patients, did research. And she's very smart. Very smart. I'm not saying that because she's my Peggy. And so that's what she spent her time doing. And our daughter, Catherine was one-year-old or two years old then. So it was a lot to do at home. And so she's done that. And she's a voracious reader, but she knows a lot. She gives me very good advice about people, which I should have listened to her more.

David Segal (01:12:27):
Is there a moment in particular where you're like, she said something and you went against it and you regret it?

Mickey Drexler (01:12:34):
I regret one thing which cost a lot for the company that I didn't, she said, dot, dot, dot. I'll fill in later or whatever, and I didn't do it. And then another thing, I didn't do that, but we were okay on the other. I'm sometimes a hostage to creativity because it's so hard to find. I don't know in your world. Oh my God, they help that. But now what she does, she's a producer of documentaries. Now, when I say that, she invests and she has a say. There's always a director, and she's on her...

Harley Finkelstein (01:13:14):
When you decided to take J.Crew private...

Mickey Drexler (01:13:17):
I didn't decide.

Harley Finkelstein (01:13:18):
Well, when you took J.Crew private, one of the things that you did was you put in your own money.

Mickey Drexler (01:13:24):
Yes.

Harley Finkelstein (01:13:25):
Quite a bit of money. I think the number was like $10 million. Something like that.

Mickey Drexler (01:13:26):
No more.

Harley Finkelstein (01:13:26):
More than 10 million.

Mickey Drexler (01:13:29):
Way more. I bought it. That's what I put in when I joined J. Crew.

Harley Finkelstein (01:13:34):
When you joined, you put $10 million in. When you go and you do something like you go and buy a company, personally, like J.Crew, when you talk to Peggy about this, what are those conversations like? What's the pillow talk like when you're about to buy J.Crew?

Mickey Drexler (01:13:51):
Well, Peggy is hugely supportive. And we moved to San Francisco on hardly any notice. Neither of us really particularly liked the city, but I took a shot, and she totally supported, in the first two or three years personally, very personally, difficult, adjustments public company. I'm in my late 30s and here I am.

David Segal (01:14:24):
How old are your kids at this point? Do you have young kids?

Mickey Drexler (01:14:25):
My son is, Alex is in his mid-40s.

David Segal (01:14:29):
No, no. At this point in time when you moved to San Francisco.

Mickey Drexler (01:14:31):
Oh, my daughter wasn't born then, and Alex was five years old.

David Segal (01:14:36):
So you have a little kid. Yeah.

Mickey Drexler (01:14:36):
So he was a little enough, I mean, not to have it. And we moved to a different culture, and the stock was going like this, and I was taking big markdowns. I had to.

David Segal (01:14:50):
Right, you were over-stocked.

Mickey Drexler (01:14:52):
And the board was, what are you taking all these markdowns, the earnings. I said, "You got to get rid of the dead fish or whatever." I didn't call it that, but you got to get rid of-

Harley Finkelstein (01:14:59):
And dead fish is the dead inventory.

Mickey Drexler (01:15:01):
And oh, it was the first day on my two turnaround jobs. I don't really want to call them a turn around. I went through every single style on order and in stock, and I quickly mark it down, get rid of it. Everything was a markdown, and they were both discount companies. And then the people, I had to make very quick people decisions, because you can't do anything alone like this.

(01:15:27):
I mean, Gap was hugely difficult personally, because I just said it would just, in the newspapers. The stock was dropping and this and that, and I'm getting, pressure-wise, you got to turn it into cash. And well, I can say, this is off the record, Don calls me in January, start Thanksgiving week, and I'm commuting every week back and forth, trying to get a hotel room. I didn't think, "Oh, you're a big shot now. You could get an apartment to rent." So he calls me in in January. He says, "What are you doing?" Because he's not warm and fuzzy. And he says, "You're taking all these markdowns. We're going to have a horrible quarter." And I didn't say, "It goes with the frickin territory." Convert your-

Harley Finkelstein (01:16:16):
Yeah. Rip the Band-Aid.

Mickey Drexler (01:16:16):
No one taught me this. I knew. We needed cash, we had a bankruptcy plan right before the company, I've got that in a minute. So anyway, he'd give me shit on that.

David Segal (01:16:30):
When you joined the Gap, it was a bankruptcy plan.

Mickey Drexler (01:16:35):
Well, I'll tell you what, I mean I was scared shitless then, but you live through these things. Well, moving there was a nightmare. We rented a house with too many mosquitoes. I'll never forget, and I was so depressed, I couldn't deal with it. And Peggy and Alex moved. They moved in June. I'm there commuting every weekend back and forth without the accoutrements that I would've wanted then. And I'm getting on the plane, I'm doing this, and I'm checking into a hotel. Finally, my friend, Stan, Bromley, I said, "Stan, there's no rooms for me. And what am I going to do?" Anyway, long story, it was miserable. Calls me in, "What are you doing?" And in the summer, the business was tough. In August, we gave everything away and I got rid of, give everything away. He calls me, gets me nervous. He's, "Business is so bad, what's going on?" And I'm scared shitless. It is a public company. Stocks going like this. And so that was what that was like.

Harley Finkelstein (01:17:45):
But did Peggy support each of these moves? Was she...

Mickey Drexler (01:17:49):
100%.

Harley Finkelstein (01:17:50):
100%. She never doubted that you were doing the right thing for the family.

Mickey Drexler (01:17:53):
Well, she didn't say it that way, but we'd been together, well, even then, we weren't together that, well 2010, yeah. She was never, I told you so you shouldn't have done... Well, not in that category.

Harley Finkelstein (01:18:08):
Now you joining Alex Mill, working with Alex, working with your son, how did she feel about that?

Mickey Drexler (01:18:14):
She'd been very supportive of what I do. I'm supportive of what she does.

David Segal (01:18:20):
What's the secret Mickey? I mean, all about urgency. You want quick responses. You work like crazy, and you've been married 50 years and have a wonderful family.

Harley Finkelstein (01:18:30):
How do you do all this?

David Segal (01:18:30):
You work really hard at it. Is this off the record?

Harley Finkelstein (01:18:34):
No, this is on the record. Everybody wants to hear this.

Mickey Drexler (01:18:37):
You work hard at it. No one, there's no road without a detour that you can take to achieve what you want to achieve success. It's not like an easy run up. You work hard. You have to, and being in a big, any position, it's very, a lot of politics out there. And I always resented authority when I was a kid. I couldn't articulate that. I didn't like someone who said, do this, do that or this, I just didn't like it.

David Segal (01:19:13):
It was like your dad a bit.

Mickey Drexler (01:19:15):
Oh, I think you're right. And I respected every single boss I had outwardly, and Don was a great partner, and I couldn't have done it without Gap as a critical mass. But I don't give up.

David Segal (01:19:34):
You just work it.

Mickey Drexler (01:19:35):
I work it. I try to figure it out.

David Segal (01:19:38):
In everything, in marriage too and in being a father too.

Mickey Drexler (01:19:41):
Oh, look, there's no easy ride anywhere. If someone tells you, oh, everything's terrific. For me, the answer when I was young is have a rich dad. Hello. I'm so happy.

Harley Finkelstein (01:19:52):
Yeah. David and I didn't have that opportunity. David and I believe deeply in entrepreneurship. We deeply believe in the Jewish connection to entrepreneurship. What do you think it is about particularly Jewish entrepreneurs and the Schmata business? Why is there this weird connection here?

Mickey Drexler (01:20:07):
It's a good question. I think it was, we were meant to be maybe.

Harley Finkelstein (01:20:12):
Why?

Mickey Drexler (01:20:13):
And I think, look, my grandfather was a tailor. Don't ask me why. I mean, I don't know.

David Segal (01:20:18):
Mine too. Mine too.

Mickey Drexler (01:20:20):
You're kidding.

David Segal (01:20:22):
My family's in the clothing business. Yeah.

Mickey Drexler (01:20:24):
This is very funny.

David Segal (01:20:25):
My family was...

Mickey Drexler (01:20:26):
Wait, wait, no, how many? Four.

David Segal (01:20:29):
My family's Peerless Clothing in Montreal.

Mickey Drexler (01:20:30):
Oh, that's a suit company.

David Segal (01:20:32):
Correct. Yeah.

Mickey Drexler (01:20:32):
Fancy.

David Segal (01:20:33):
Yeah very fancy.

Harley Finkelstein (01:20:34):
He's a pre-word Jew.

David Segal (01:20:35):
No, no. My dad was a psychologist. They all fought. No trust fund for me.

Mickey Drexler (01:20:41):
Isn't that funny.

David Segal (01:20:42):
No trust fund for me.

Mickey Drexler (01:20:43):
I think it's in-

Harley Finkelstein (01:20:43):
It's in our DNA almost.

Mickey Drexler (01:20:44):
It's probably an easy business. That's a very good question.

Harley Finkelstein (01:20:51):
I think if there's a low barrier to entry, it's an easier business to get into. Anyone can do it.

Mickey Drexler (01:20:55):
Yep.

Harley Finkelstein (01:20:55):
Not everyone does it like Mickey Drexler does.

Mickey Drexler (01:20:58):
I'll never forget this. There was a guy, Lou Russick, I was maybe 20-plus or whatever, and I said, "Who's your competition?" I still use this term. Lou, he built the greatest kids business then, I forgot the name. He said, "Anyone with a sewing machine." I love that answer. Who's your competition? And I still use that. People kind of don't get it anymore.

Harley Finkelstein (01:21:26):
I think that when people ask me about my competition, I say, "Two kids in a garage." Same thing.

Mickey Drexler (01:21:31):
That's right. That's right.

Harley Finkelstein (01:21:32):
In many ways software and the Schmata business are very similar in that there's a low barrier to entry, but there's unlimited growth potential.

David Segal (01:21:38):
Well, I mean, Steve Jobs, who's literally a kid in a garage. Mickey Drexler was a kid working at his dad's company on the floor in the Bronx. Yeah.

Mickey Drexler (01:21:45):
It's funny. I think yesterday, wasn't there a 19% statistic?

Harley Finkelstein (01:21:50):
Yeah. 19% of Americans are going to create businesses this year.

Mickey Drexler (01:21:53):
Except, I don't want to say it there, but most of them, bullshit. They think they're going to be an entrepreneur and they go to class. I think I told you, they go to class to learn to be an entrepreneur, go to class, get some injections to change your drive maybe, raise your instinct. And I can't believe that.

Harley Finkelstein (01:22:14):
The entrepreneurship happens from actual doing it.

Mickey Drexler (01:22:17):
And everyone wants to be an entrepreneur and start a company.

Harley Finkelstein (01:22:21):
It's sexy nowadays. Yeah.

Mickey Drexler (01:22:23):
But it's so unrealistic. Just go out and learn. Hire your own boss I always say, not that you can't learn and develop and fundamentals.

David Segal (01:22:36):
What's the value of school to you? What the value of school? Zero.

Mickey Drexler (01:22:39):
Zero.

David Segal (01:22:39):
Really?

Mickey Drexler (01:22:40):
Well, I don't think, and I say this, what the hell did I learn in school? First of all, I hated school. Science was very intimidating, as I said, the value? In one ear and out the other. And what did I use? I'm sorry. I didn't listen to history, because that's storytelling. I just wanted, I was there to pass, because I was also always all day daydreaming. I daydreamed all day. I didn't like teachers. Most of them, except Mr. Barrett. What did you get out of school?

Harley Finkelstein (01:23:15):
I think I learned how to structure my thinking a little bit, which was valuable. I was also a dreamer. I had company since I was as young as I can remember, but I think through school I learned some hard skills. I learned how to read financial statements. I learned how to write and communicate in writing.

David Segal (01:23:31):
That's what I sort of mean. You can learn certain skills and stuff.

Mickey Drexler (01:23:33):
Yeah, no, I understand. You don't learn in the resumes of bullshit.

David Segal (01:23:39):
Right.

Mickey Drexler (01:23:40):
I don't give the-

David Segal (01:23:42):
You don't learn how to make things happen.

Mickey Drexler (01:23:44):
You don't learn ambition. You don't learn that inner drive. You don't learn the competitive spirit. You don't learn...

Harley Finkelstein (01:23:53):
I'll tell you what though. You and I, it's not the first time we're meeting you. And I've become a new friend of mine. And in our short time, I mean that, in our short time together, I've learned ambition from you. I've learned character from you. I've learned drive from you.

Mickey Drexler (01:24:05):
Wow.

Harley Finkelstein (01:24:06):
But the most important thing I've learned from you, Mickey, is I've learned chutzpah from you. And I kid you not. When Dave and I were first conceptualizing Big Shot, we made a list of people that one day we'd love to have on this show, and on that list, it was a short list of three or four people, was the name Mickey Drexler. And we are honored you were able to spend the last couple hours with us.

Mickey Drexler (01:24:29):
I'm honored because I still am who I was, and sometimes I don't enjoy who I am enough.

Harley Finkelstein (01:24:38):
Well, enjoy it because us and the millions of people that are going to watch this...

David Segal (01:24:43):
Are going to get a lot out of it.

Harley Finkelstein (01:24:44):
Get a lot of this. It's crazy.

David Segal (01:24:46):
We're making you a big shot now.

Mickey Drexler (01:24:47):
Why'd you wait so long? How long has this podcast been going on?

Harley Finkelstein (01:24:50):
A year. Come on. We were in Canada for a while.

Mickey Drexler (01:24:52):
I love that.

David Segal (01:24:52):
Not only are you an inspiration and it's a pleasure to meet you, but you got the coolest nickname I've ever heard. The Merchant Prince. I mean, that's pretty good.

Harley Finkelstein (01:25:01):
The Merchant Prince.

Mickey Drexler (01:25:02):
Well when you introduced me yesterday, legend, Merchant, yeah, it's...

Harley Finkelstein (01:25:06):
Merchant Prince is so cool.

David Segal (01:25:08):
Careful, careful.