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Nov 18, 2019 · 30m · how-i-built-this

Crate & Barrel: Gordon Segal (2017)

Gordon Segal · 16m spoken Guy Raz · 8m spoken Ashlyn Cook · 1m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Gordon Segal reflects on the founding and evolution of Crate and Barrel, detailing how direct European sourcing, distinctive visual merchandising, and disciplined financial management built a multi-billion-dollar retail empire.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 33.6% of the talking time here. How this is scored →

Guy as informed peer 4.3 Guest teaching 3.0 Guest disagreement 0.0 Guy pushing back 0.8
05100:0010:0020:0030:001:28–4:44 · Guy as informed peer 4/10 Honeymoon Inspiration and the Direct Sourcing Concept Guy Raz establishes the 1960s retail landscape and probes Segal's honeymoon inspiration in the Virgin Islands. Segal warmly explains discovering direct European sourcing and pitching the store idea to his wife while doing dishes.4:44–9:25 · Guy as informed peer 4/10 Securing Capital and Building the First Store Raz engages with disbelief at the early startup costs and lack of venture capital. Segal recounts securing trade commissioner catalogs, borrowing $7,000 from his father, and turning shipping crates into store fixtures.9:27–11:46 · Guy as informed peer 3/10 Opening Weekend, Winter Slump, and Accidental Pricing Raz tracks the opening days and winter slump. Segal educates Raz on how their initial customer appeal was partly fueled by sheer operational ignorance—guessing prices and selling half their inventory at cost.11:57–15:53 · Guy as informed peer 5/10 Cultural Shifts and European Sourcing Expeditions Raz introduces the European scouting trips and references food critics of the era. Segal describes broader cultural trends like Julia Child and jet travel that catalyzed interest in European culinary design.15:57–21:33 · Guy as informed peer 6/10 Expansion, Scale, and the Otto Group Acquisition Raz brings specific store-count milestones and questions why the company grew rapidly and eventually took outside money. Segal explains the necessity of scale for exclusive factory deals and transitioning to the Otto Group for catalog and internet capabilities.21:35–24:50 · Guy as informed peer 4/10 Retirement Reflections, Entrepreneurial Advice, and Legacy Raz asks the signature luck versus skill question and shares a personal anecdote about owning Crate & Barrel plates for decades. Segal shares advice for young entrepreneurs and jokes about durable dinnerware hurting repeat sales.1:28–4:44 · Guest teaching 3/10 Honeymoon Inspiration and the Direct Sourcing Concept Guy Raz establishes the 1960s retail landscape and probes Segal's honeymoon inspiration in the Virgin Islands. Segal warmly explains discovering direct European sourcing and pitching the store idea to his wife while doing dishes.4:44–9:25 · Guest teaching 3/10 Securing Capital and Building the First Store Raz engages with disbelief at the early startup costs and lack of venture capital. Segal recounts securing trade commissioner catalogs, borrowing $7,000 from his father, and turning shipping crates into store fixtures.9:27–11:46 · Guest teaching 4/10 Opening Weekend, Winter Slump, and Accidental Pricing Raz tracks the opening days and winter slump. Segal educates Raz on how their initial customer appeal was partly fueled by sheer operational ignorance—guessing prices and selling half their inventory at cost.11:57–15:53 · Guest teaching 3/10 Cultural Shifts and European Sourcing Expeditions Raz introduces the European scouting trips and references food critics of the era. Segal describes broader cultural trends like Julia Child and jet travel that catalyzed interest in European culinary design.15:57–21:33 · Guest teaching 3/10 Expansion, Scale, and the Otto Group Acquisition Raz brings specific store-count milestones and questions why the company grew rapidly and eventually took outside money. Segal explains the necessity of scale for exclusive factory deals and transitioning to the Otto Group for catalog and internet capabilities.21:35–24:50 · Guest teaching 2/10 Retirement Reflections, Entrepreneurial Advice, and Legacy Raz asks the signature luck versus skill question and shares a personal anecdote about owning Crate & Barrel plates for decades. Segal shares advice for young entrepreneurs and jokes about durable dinnerware hurting repeat sales.1:28–4:44 · Guest disagreement 0/10 Honeymoon Inspiration and the Direct Sourcing Concept Guy Raz establishes the 1960s retail landscape and probes Segal's honeymoon inspiration in the Virgin Islands. Segal warmly explains discovering direct European sourcing and pitching the store idea to his wife while doing dishes.4:44–9:25 · Guest disagreement 0/10 Securing Capital and Building the First Store Raz engages with disbelief at the early startup costs and lack of venture capital. Segal recounts securing trade commissioner catalogs, borrowing $7,000 from his father, and turning shipping crates into store fixtures.9:27–11:46 · Guest disagreement 0/10 Opening Weekend, Winter Slump, and Accidental Pricing Raz tracks the opening days and winter slump. Segal educates Raz on how their initial customer appeal was partly fueled by sheer operational ignorance—guessing prices and selling half their inventory at cost.11:57–15:53 · Guest disagreement 0/10 Cultural Shifts and European Sourcing Expeditions Raz introduces the European scouting trips and references food critics of the era. Segal describes broader cultural trends like Julia Child and jet travel that catalyzed interest in European culinary design.15:57–21:33 · Guest disagreement 0/10 Expansion, Scale, and the Otto Group Acquisition Raz brings specific store-count milestones and questions why the company grew rapidly and eventually took outside money. Segal explains the necessity of scale for exclusive factory deals and transitioning to the Otto Group for catalog and internet capabilities.21:35–24:50 · Guest disagreement 0/10 Retirement Reflections, Entrepreneurial Advice, and Legacy Raz asks the signature luck versus skill question and shares a personal anecdote about owning Crate & Barrel plates for decades. Segal shares advice for young entrepreneurs and jokes about durable dinnerware hurting repeat sales.1:28–4:44 · Guy pushing back 1/10 Honeymoon Inspiration and the Direct Sourcing Concept Guy Raz establishes the 1960s retail landscape and probes Segal's honeymoon inspiration in the Virgin Islands. Segal warmly explains discovering direct European sourcing and pitching the store idea to his wife while doing dishes.4:44–9:25 · Guy pushing back 1/10 Securing Capital and Building the First Store Raz engages with disbelief at the early startup costs and lack of venture capital. Segal recounts securing trade commissioner catalogs, borrowing $7,000 from his father, and turning shipping crates into store fixtures.9:27–11:46 · Guy pushing back 1/10 Opening Weekend, Winter Slump, and Accidental Pricing Raz tracks the opening days and winter slump. Segal educates Raz on how their initial customer appeal was partly fueled by sheer operational ignorance—guessing prices and selling half their inventory at cost.11:57–15:53 · Guy pushing back 0/10 Cultural Shifts and European Sourcing Expeditions Raz introduces the European scouting trips and references food critics of the era. Segal describes broader cultural trends like Julia Child and jet travel that catalyzed interest in European culinary design.15:57–21:33 · Guy pushing back 2/10 Expansion, Scale, and the Otto Group Acquisition Raz brings specific store-count milestones and questions why the company grew rapidly and eventually took outside money. Segal explains the necessity of scale for exclusive factory deals and transitioning to the Otto Group for catalog and internet capabilities.21:35–24:50 · Guy pushing back 0/10 Retirement Reflections, Entrepreneurial Advice, and Legacy Raz asks the signature luck versus skill question and shares a personal anecdote about owning Crate & Barrel plates for decades. Segal shares advice for young entrepreneurs and jokes about durable dinnerware hurting repeat sales.

speaking balance: gold is Guy, purple is the guest (3 minute bins)

0:00 · Guy 55.7% · guest 44.3%0:00 · Guy 55.7% · guest 44.3%3:00 · Guy 20.7% · guest 79.3%3:00 · Guy 20.7% · guest 79.3%6:00 · Guy 17.8% · guest 82.2%6:00 · Guy 17.8% · guest 82.2%9:00 · Guy 24.2% · guest 75.8%9:00 · Guy 24.2% · guest 75.8%12:00 · Guy 21.3% · guest 78.7%12:00 · Guy 21.3% · guest 78.7%15:00 · Guy 23% · guest 77%15:00 · Guy 23% · guest 77%18:00 · Guy 21.1% · guest 78.9%18:00 · Guy 21.1% · guest 78.9%21:00 · Guy 21.2% · guest 78.8%21:00 · Guy 21.2% · guest 78.8%24:00 · Guy 66.9% · guest 33.1%24:00 · Guy 66.9% · guest 33.1%27:00 · Guy 66.4% · guest 33.6%27:00 · Guy 66.4% · guest 33.6%30:00 · Guy 0% · guest 0%30:00 · Guy 0% · guest 0%
Sharpest disagreement ▶ 17:39 Firm rejection of conventional corporate chain-building

Segal forcefully asserts that they refused outside investors for decades because external partners would corrupt their merchant mindset and customer-centric focus.

 Hardest push from Guy ▶ 19:18 Guy Raz challenges the pivot to selling to outside investors

Raz presses Segal on why he ultimately decided to sell to the Otto Group when the business had functioned profitably and independently for decades.

 Biggest teaching moment ▶ 11:08 The accidental pricing revelation

Segal surprises Raz by explaining that their initial competitive pricing wasn't a deliberate discount strategy but resulted from lacking proper vendor invoices.

 Guy holds their own ▶ 18:01 Raz cites specific expansion timelines and store counts

Raz demonstrates deep research by contrasting the 25 years it took to open 17 stores with the sudden jump to 60 stores by 1995.
the scores for every segment, with the reasoning behind each
ChapterTopicGuy as informed peerGuest teachingGuest disagreementGuy pushing backWhy
Honeymoon Inspiration and the Direct Sourcing Concept 4301 Guy Raz establishes the 1960s retail landscape and probes Segal's honeymoon inspiration in the Virgin Islands. Segal warmly explains discovering direct European sourcing and pitching the store idea to his wife while doing dishes.
Securing Capital and Building the First Store 4301 Raz engages with disbelief at the early startup costs and lack of venture capital. Segal recounts securing trade commissioner catalogs, borrowing $7,000 from his father, and turning shipping crates into store fixtures.
Opening Weekend, Winter Slump, and Accidental Pricing 3401 Raz tracks the opening days and winter slump. Segal educates Raz on how their initial customer appeal was partly fueled by sheer operational ignorance—guessing prices and selling half their inventory at cost.
Cultural Shifts and European Sourcing Expeditions 5300 Raz introduces the European scouting trips and references food critics of the era. Segal describes broader cultural trends like Julia Child and jet travel that catalyzed interest in European culinary design.
Expansion, Scale, and the Otto Group Acquisition 6302 Raz brings specific store-count milestones and questions why the company grew rapidly and eventually took outside money. Segal explains the necessity of scale for exclusive factory deals and transitioning to the Otto Group for catalog and internet capabilities.
Retirement Reflections, Entrepreneurial Advice, and Legacy 4200 Raz asks the signature luck versus skill question and shares a personal anecdote about owning Crate & Barrel plates for decades. Segal shares advice for young entrepreneurs and jokes about durable dinnerware hurting repeat sales.

Statements from this episode (9)

Insight
Crate & Barrel's core thesis: direct European sourcing with standard domestic markups
“Obviously, the motivation of going into business was to find beautiful things for other young people, but if we could buy things from Europe directly, and just mark them up normally as if you bought them domestically, not take a big margin, but take a short ma…”
Gordon Segal Nov 18, 2019 ▶ 4:22
Assertion Not checkable as stated
Segal offered half of Crate & Barrel for $10,000 before opening
“I spent six months running around to everyone I knew who had any wealth and offering them half the business for 10,000 dollars.”
Gordon Segal Nov 18, 2019 ▶ 6:16
Assertion Not checkable as stated
Segal's father provided a $7,000 loan to launch Crate & Barrel
“The only person who gave us the money was my father, who lent us 7000 dollars.”
Gordon Segal Nov 18, 2019 ▶ 6:39
Insight
Segal: Youth and lack of wisdom are advantages in entrepreneurship
“The value of being very young is you have a lot of energy and passion and no wisdom. And so being that young was a great advantage”
Gordon Segal Nov 18, 2019 ▶ 8:29
Assertion Not checkable as stated
Segal: Crate & Barrel generated only $2,000 in sales in February 1963
“And then February of 63, I remember, was probably one of the snowiest months in Chicago's history, and we had one day where we did eight dollars, and the whole month was only 2000 dollars.”
Gordon Segal Nov 18, 2019 ▶ 10:26
Assertion Not checkable as stated
Segal: Crate & Barrel accidentally sold half its early inventory at cost
“And we had ended up, because we didn't know how to price merchandise, about half the product we sold at cost.”
Gordon Segal Nov 18, 2019 ▶ 10:58
Disclosure
Segal: Landlords funded store build-outs during Crate & Barrel's expansion
“And what happened starting in that big expansion was landlords started paying for a lot of the build out of the store. Building of the building and whatever. So we didn't have to take as much of our financial risk ourselves, because the landlords built these s…”
Gordon Segal Nov 18, 2019 ▶ 18:59
Disclosure
Segal: Crate & Barrel sold two-thirds to Otto Group in 1998
“And in 98, we sold them about two thirds of the company. And 10 years later, and the contract was for 10 years, we sold them the rest of the third company.”
Gordon Segal Nov 18, 2019 ▶ 20:32
Assertion Supported
Crate & Barrel generates about $1.2 billion annually with 7,000 employees
“It's about 1.2 billion a year. And we went from one employee and out of 7000.”
Gordon Segal Nov 18, 2019 ▶ 23:37
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