The Knot: Carley Roney & David Liu (2018)

Hey, so back when Carly Roni and David Lou decided to launch a wedding magazine online, The internet was so basic that it barely had ads. But as the internet got bigger and bigger, so did the knot. And today it's grown into an international brand that helps people celebrate all kinds of milestones, weddings, babies, new homes, bar mitzvahs. This episode first ran in March of last year and I think you're gonna love this one because it's also

Extremely funny with a really great wedding scene. So Here it is. We put together this deck, we practice this presentation, we go through this whole dog and pony, talk about the what we're planning on doing and what we were gonna build. And he looks up and he says This has gotta be the worst business plan I've ever seen.

And and The air just got sucked out of the room. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. they built.

Guy Roz and on today's show, how one couple's disastrous wedding inspired their business, the not. The number one wedding planning site in US Right now, I've got three wedding invitations hanging on my fridge. And I sometimes wonder about the people behind those cards. The six people who are probably freaking out right now. The caterers, the flowers, the bridesmaids, the groomsmen, the venue, the hotel discount for guests, the hair, the makeup, the photographer, the

I'm gonna stop here because I'm starting to get stressed out and I'm already married. By the way, fun fact, the average wedding, the average wedding in the US now costs$35,000. And the planning for it takes between nine months and a year. So my advice? Help. And if that's not an option, you will probably at some point make your way to TheNot.com. It's a multimedia platform that helps you plan your wedding. And it's a big business, the knot is the center of a media group now valued at more than half a billion dollars.

Which is all the more remarkable because at one point during the dot com bust, The knot stock price fell to 26 cents, but we'll get to that a little later. When founders Carly Roni and David Lou started the knot in the late nineteen nineties, It was more like a chat room. It was a place people could pop into and type in all caps, is anyone else freaking out about their wedding planning?

Well today The knot says it's used by 80% of all couples planning a wedding. Which is also remarkable because David and Carly's wedding was kind of a disaster. They actually met briefly when they were both undergrads at NYU in the nineteen eighties.

They were both in the same film program, but it wasn't exactly love at first sight. Well, David was a senior and I was a freshman and we didn't really talk during it because I'm going to be aware of Wow, in the entire year. Yeah. 'Cause he looked like kind of a super senior snob to me. Um David, did you notice Carly at that time? Oh yeah. I had a I I had a crush on it. You did already at that point. Oh yeah.

But nothing ever came of it. So after college, Carly and David went their separate ways. David got a job working at a startup in Philadelphia where he made video yearbooks for high schools, and Carly was a script reader for a movie director in New York. But a few years later, in the early nineties, they both happened to be invited to a Christmas party by a former NYU professor. And I remember like looking across at this group of people and thinking, like, who's that guy with the ponytail? Why does he look so familiar?

You have a ponytail? So so you're like uh I don't know, your late twenties, David at this point. Kinda just you're like yeah I'll show up at this party and well actually I remember the doorbell ringing and hearing Carly's voice and I immediately r remembered her. Wow. And she walked in and made a bee line for the the vodka. And went up to you and said Hey handsome.

Well what's funny is we ended up. We pretended that there was a project to work on together. We were like, we should talk about this more. Um maybe we could do s work on something together. And so we both left the party with the premise of being back in touch. But but clearly there was you y there was interest beyond I mean, right? Or or or was it just super earnest? Like you thought, yeah, let's let's have collaborate. No, it was totally a ruse. Okay. We moved in together in June and we were married in July. Oh my gosh, you jumped through this story so fast. You you've gone from from ponytail at the party To being married like

Seven months later? Yeah, yeah. Yeah. Well was w the irony that one of the starting ironies of the story is that you know, I have divorced parents. I never thought I was getting married. I didn't believe in marriage. I thought people just sort of like Jean Paul Sartre and Simon de Beauvoir, it would be better to just be in love with someone maybe but have your own home, just in case. And then I met this guy and I'm like

This is kind of Amazing. He's so amazing. He lived in um Philadelphia at the time and I actually then moved right to DC at that time to work on a project at the Smithsonian. And so we started this like long distance romance between Philadelphia and D C and I don't know if it was like something in the air, or it was just like mad true love. But one time we were sitting there and we were talking about taking a trip to Um Hong Kong?

And I said, Oh, um, you wanna get married in Hong Kong? Uhhuh. Just like out of the blue. I don't even know what I was thinking. He said sure and I was like Okay then, let's get married. So you go to your parents, Carly, and you say, You know that David I've been telling you about? Yeah, we're getting married. Well what's funnier is like I haven't told you about this guy David. Oh by the way we're getting married. You might want to meet him prior to the wedding. And and uh and did they say, Carly, this is crazy, this is not gonna work. This is not how marriages last.

That's exactly what they said. That is exactly what they said. Um and in fact, turns out, and I never knew this, they had sort of had a whirlwind romance and gotten married very quickly and ended up divorced. So this was just like their biggest fears playing out in front of them and you know, because you're Yeah, like young and spit, and you're like you just don't understand Mom and Dad. So you You guys get married and uh and how how how's the wedding? What's the wedding like? So

We were trying to look back at why it was that we Picked a date. of July. Um D C in Washington D. But which which where where I am and it is a horrendously On a rooftop outside.

On a rooftop outside in July in Washington, DC. This is gonna be your wedding day. And really, how hard can it be? You're literally throwing a party. For eighty people, like like what do we need? We need like a location. We really didn't have a place in mind, but we figured we could find one so we sent without the invitations. Which one the invitations were postcards from the national zoo that had pictures of pandas on Really making us sound crazy. And it said what, just show up in Washington, D C on this date? We'll give you details when you arrive. Exactly. It's a July tenth. Location D V D. Okay, gotcha.

But it was all, you know, kind of in the spirit of like we're just gonna throw this fun party and you know, like our actually community around us pulled together and that was the fun part about it. My aunts who live nearby were like, We're gonna go get flowers at the farmer's market. Another aunt of mine was like, I have a friend who live who has a There's a rooftop on the top of her building, which is a block away from your home. And then there was this Peruvian restaurant near us that we knew kind of served fun tapa sempaella, so we went and asked them and we really just figured it out in over the course of three weeks. And it sounded at this point, I'm kind of loving it, like that's like the first original DIY rooftop, you know, edgy wedding, alternate wedding. And the only problem was that, you know, you still watch the news those days to find the weather. And we sort of turned on the news on the Wednesday before and saw the weather chart, which included hundred and eight.

It was twelve. It was climbing. It was gonna be a hundred and eleven degrees on our wedding day. What? A hundred and eleven degrees? It's boiling hot. Our guests look like they're dying. Uh we had, you know, booked this venue, the venue's air conditioning had broken from trying to get the place cool. And as we said, it was like a beautiful Peruvian place and because, you know, we have of a flair for the dramatic, I thought that the most incredible thing would be If instead of serving the paella that we were serving behind the scenes, if they would bring out the paella and kind of walk it through the room. The giant plate of paella, right? Yes. So My my only horrifying part of my wedding day was turning looking up

And seeing my grandmother's face as they walked this steaming plate of paella by her. I mean, she was just. Horrified sweet. And this steaming fishy I mean It was like, oh my god, this is such a colossal disaster. Everyone is so completely uncomfortable. There's no air conditioning. And really everybody just wants snow cones. Everyone wants the hell out of there is what they want. And we walked away from that evening being like, oh my god. I never want to do anything related to weddings ever again. What a crazy industry. Why isn't it easier? Why isn't there a place to find this information? I just like, what yeah, it was exactly all the things we we thought would be horrible about planning a wedding were, and so we slam the door. and um never wanted to think about it again.

So nineteen ninety three, you are married, you uh move it, you're living together in Washington D C What are you what are you guys doing at that point in your life? You're still a Smithsan, Carly. Yes. We finish the project, we all move back to New York. Start grad school. Start grad school, right. So you start working on your

Ideas or projects and So in the very first semester, uh I'm taking this class on interactive media and this new technology that was going to transform the world was C D Roms. Yes. Yes, they were going to transform the world. Exactly. They were, yeah. And we Started Noodling on this idea that this project that Carly had been working on all summer was going to be the largest single largest collection of Smithmonian objects collected.

from all the different museums and was being brought to Japan and is gonna talk about American history. And we said, That's such a shame that the American audience will never get to see this. Why don't we see if the Smithsonian will hire us to produce the sort of epic American history disc? You know, it has the Dizzle Gillespie's trumpet and the Ruby slippers and the Apollo space capsule and you know, all the work is already done. We can just, you know, scan it and put it in and some animations, music, and we have a C D ROM. And Uh, we pitched the Smithsonian and they thought it was an awesome idea. We thought they had a budget and they said and they said, Great, you guys if you can find someone who will pay for it, you can do it. Oh, which is already far fetched that the Smithsonian would agree to have two people who know nothing about anything.

Right. And we walked into the egghead software store and started pulling CD ROMs off the shelf and writing down the names of the publishers and started faxing proposals to people. And uh we had this one. Group out in Portland, Oregon. called us up immediately said we're doing edutainment discs.

This is right in the center of her bullseye, an American history disc with the Smithsonian brand. Uh they flew out. Uh took us to Smith and Lensky for big steak dinner. And at the dinner the guy writes on a cocktail napkin One gold master American history CD ROM Smithsonian content. Uh

Hundred thousand dollar budget. Six month delivery date. Sign here. What? Wait, look, you guys have no experience. You just pitch this half baked idea to the Smithsonian. You then fax this half baked idea. Blindly to a bunch of publishers.

This one company bites. Yeah, and we we s we we actually said, Can we can we go to the bar area to discuss this for a second? And we go in there. We're like, Is this is this binding? Is this a real contract? What what happens? And we just said, You know what, whatever, let's just go let's just sign it. And we went in, we signed it and the guy turns us and You know what? You know this is not a binding contract. We said, We assume so and he said But this was a test. This was just test to see if you guys had the Hutzpa to actually sign this this napkin. And he said, Let's do it. Wow. So you get this money and and you start working on this project right away?

Yes. I mean that was it. We like basically founded a business. We used all of our film school experience actually. We were suddenly like Um we literally hired all my classmates. Everybody said we're on board. I mean you know we're we're all in school for this and then suddenly to be able to create a commercial product with the Smithsonian brand was exciting. So you you deliver this to the Smithsonian and then they make this CD ROM available in their in their shops and and stuff? Well so the publisher uh was actually very aggressive about getting the disc out. And you know, no one was really making any money on CD ROMs and and w pretty quickly we realized that this was not going to be the medium that was going to change everything. But this publisher managed to get the C D ROEM bundled

With every one of the early IMAX. So if you bought the one of those IMAX, you got our disc and as a result, you know, we got maybe a I think it was like a dollar per disc that was actually distributed. So It became a windfall for us. Yeah, no. So millions of these discs. It's sort of one of the top grossing discs of all time because it got bundled. It was such a easy win. And that was the yeah, that turned out to be the sort of launch of our company. So you walked You walked out of that project with like

Some cash to to play with. Enough cash to keep the people. That we had hired around, at least I think that like school because suddenly I realized well we have this company now and we're gonna work on the next project. Digital media studio, but in the middle of this working on this project together. One of the four of like one of the four of us, two our two friends, Michael and Rob.

They sort of said, Hey guys, don't you think we should be thinking about you know, we work well together. Do you think we should be thinking about something doing something that isn't work for hire for somebody else. Like something that was was yours, that you guys would own. Right. We started brainstorming. What can we build? You know, because our vision was now to create this multi-branded, multi-platform content studio And we started looking at the different categories and we said, you know, sports, news, entertainment, that's what I'm doing. You were you were like brainstorming. Right, and that's what's funny, like the the The later story makes it sound like it was all like and then on her after her horrible experience planning her wedding. The idea was birthed and in reality what happened is That

Michael. actually was like, Hey, this guy friend of mine, he wants to do s like this online shopping thing and something late related to like registry and maybe we should do something in weddings. And I think David and I look like we'd like seen a ghost. Like oh my God. No way. Jesus do you know anything about the wedding? Well they suck. Yeah. Like completely disaggregated. Like the industry is old fashioned uh And then of course you have that moment you're like Right.

It's a disaster. And it would completely and fundamentally change if you introduced Technology to it. Yeah. You know, there was not an MBA between the four of us. So our research was going to the magazine store and pulling different categories like, you know, bridal, travel, epicurean. And we looked at these wedding magazines like wow, they're huge. Look, they're four hundred pages. Just to just to sort of understand, like you you you decide that you want to do something in content. And weddings was probably the the way to go, but what

What would it be I mean a website, a message board. Yeah, this is ninety five. Ninety five no website. So what was it gonna be? Like a way for people to just list their services? So We were content people, so we thought the best place to start would be putting incredible like

fresh content on the internet. And the only cool idea for your wedding. Yes. Yep. And so the only way I would agree to do this, the one who was suddenly I was looked at immediately like, You're the woman. You're gonna be interested in weddings. I was like, the only way I am touching this is if we do something really different Like the reason we didn't access any of the information that was out there when we were planning our wedding is because it was written for people who were completely had a different worldview than me. I did not dream about my wedding every day from I'm when I was born. I did not I wasn't marrying in a traditional way. I mean I have like an intercultural marriage with divorce, parents, I mean every problem there could be in a wedding was in my wedding. And those magazines made you feel like crap. Yeah.

They wanted you to quit your job, sit with your mommy having bonbons, and dream up your big day. Yeah. And calling it your big day. That just wasn't my thing. And none of my friends either were that way. Like all the women I know were like, it was you know, it was the at this point it's like the nineties. You're hip, you're forward looking. You care about fashion and there's like a whole like a m it's just it's such a different movement among young people and that wasn't reflected at all. It was like the industry that had been left behind. Our whole overall attitude and the reason why we called it the knot was that we wanted our brand to be very, like alternative and differentiated and not be You know, the kind of traditional cookie cutter These are the rules way to plan a wedding. We wanted it to be like dare to do it differently. And you know, if you looked at the landscape, you know, Brides Magazine had been around for fifty years, Modern Bride for thirty five years, Martha Stewart, like a hot thing been around for ten years. And we didn't know which way to

could attack that and we suddenly realize based on, you know, uh also Carly's you know belief in the just the differentiation of our brand. That we would be could become weddings for the real world. And we define that as uh interracial couples.

uh interdenominational couples, same sex couples. Right. You're pregnant, you already have babies, you're divorced, you know, second marriages, all the stuff that we knew that the traditional media companies couldn't touch. You know these are the marginal areas and we're gonna own declare ownership of those. We also had a really big sense of humor. We wanted to be to be irreverent because we thought that that was sort of attitudinally. If you wanted to talk to Brides and grooms, not their mothers, you needed a new voice. Yeah. So I'm trying to understand, if you were to describe this to your grandmother who was appalled at the paella at your wedding, would you have said so grandma, we're we're we're making basically a magazine, but it's going to be in the computer, in the internet. Was is that a fair description of of how you were thinking about it?

There were Yeah, two components. One, it was like the world's coolest wedding magazine mixed with a community. Right. Remember this was on AOL. So we launched on AOL. AOL had like these message boards and these chat rooms. And like sites. So it was a it was g you You partnered with AOL to to start this up? Well, they provided the C financing. How did you even get to AOL?

So Michael. Exactly. So Michael, our Rainmaker co founder, uh had an inn and managed to get us an audience with Ted Leonces, who was running the greenhouse and was making investments. And I remember we put together this deck, we practiced this presentation. Carly, Michael and Rob were like the the the marketing and presentation geniuses and we rent our little car, drive down to Vienna, Virginia, and we had This audience with Ted. And we go through this whole dog and pony, talk about the what we're planning on doing and what we're gonna build.

And he looks up And he says, This has gotta be the worst business plan I've ever seen. Wow. And and And we would you just the air just got sucked out of the room. But by the way, how did you propose to make money off of this in that in that plan? Well w we we hadn't gotten to that point yet. And so but he basically said he was like look, wait a minute.

What's a lifetime about I mean h how long is an average engagement? We said, You know, nine to thirteen months and he said So your your average lifetime value of your customer is nine to thirteen months. How do you ever plan on recouping? Any of your marketing costs in nine months. This is impossible. Right, if your audience churns a hundred percent every year, you never if you do your job right and they find the right person, you will never have them as a customer again. To this day I credit our our co-founder Rob who stood up and said, you know

We're going to sell advertising. And Ted looks at us and says, There's no advertising on AOL. There's no advertising on the internet. And how would but if there was no advertising no advertising was allowed on AOL partnerships? No one had done it. No one had done it. There's no IAB, there are no banners. It was, you know, all basically a subscription business. And Ted looks at us kind of funny and then he picks up the m you know, the Bride's magazine we brought as sort of like the the show and tell.

And I still remember he picks it up, brings it to his nose and flips through the pages and goes I don't know anything about this industry, but I smell money, he goes. Let's fund them. Wow. And so in ninety seconds we went from the worst business idea they had ever heard to You know what, let's give these guys a chance. When we come back.

how David and Carly launched the knock. Watched its value skyrocket with a dot com boom? and then fall to rock bottom. Trash. Stay with us, I'm Guy Raz, and you're listening to How I Built This.

From NPR. Oh. Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So in nineteen ninety six, when Carly Roni and David Lou pitched their idea for the knot. The bigwigs at AOL wound up giving them a pretty hefty amount of cash.

We got our seed financing by one point six million. I think it was their largest investment at that time, too, in any content compartners. Ironically though, like It isn't really that much money if you have to buy computers for seven thousand dollars each desktop or right, and you know, there was no such thing as open source software, so we were paying software licenses, you know, there's no we work, so we had to find an office to rent. In New York. In New York. What were you doing to build the site? We wanted to make sure that the audience came to our site would see something fresh in new every day. So we treated this like a daily publication, like a newspaper. Planning and fashion and bridesmaids.

So a lot of it was just producing and publishing content constantly. And who did you get to write that content? Um, I had this connection to a a group of fun, really fun young writers. They were um the people who wrote for Sassy magazine, so really strong attitude. Um, we had men and women All had Great sense of humor. Really good sense of humor. And we had that they You know, my um

My litmus test is if they would never, ever, ever write for a wedding magazine, then they could write for me. Yeah. The other key piece of it though was really understanding and this we didn't We didn't know going into it, but really realizing how important the community was and managing the community and building out the kind of platform of the different message boards and how to create connections between people and And that is where the sort of explosive what you know sort of the early concept of like a social network, right? How you can crowdsource amazing information. And that's where AOL was the perfect training ground for that, because the key sort of the gravitational center of all this stuff were in their chat rooms.

Right. And you know, these chatrooms you had to try to turn into these thriving, continuous conversations. And we all had to man the chat rooms. We we had aliases. Like uh mine was Anya. And I would sit in this chat room waiting for people to show up and most people tend to just lurk. They wanted to hear and want meet other people's conversations and you had to try to figure out a way to get people engaged and get them to participate. And so I always had this one thing and I would write and uh to get people started I would say, uh, my fiance H forced me to buy a dress two sizes. S too small.

And said if I can't fit in the dress on the day of the wedding to not show up. But you would just make this up? I would make this up. I wanna say that this was unsanctioned. But you would spur a conversation. And boy d was that the fire start. The room would explode, everyone who was lurking would jump in. You were a troll, you were a curly character. Well and I can then and I could slowly then back away and that room would just keep going for hours and hours and hours. Do you drop mother in law, mother the word mother in law always gets a chat room going and or you know, misbehaving bridesmaids. It's just all about like putting the theme in play and but what it did was it taught us to listen. To our audience. Yeah. It did was it were you was the site m making money pretty fast through, you know, those AOL subscription dollars?

Uh no. Okay. Well if you think about the internet at the time, which was I mean, mostly men Yeah. Even an AOL was probably the most women of any place on the internet, and still that was mostly men. Yeah. And then People getting married, since there are only two million of them in in America at any given point in time, you're starting to like get down to a very small set of people who could even potentially be our customers. But I think in those first week I remember our our like monthly visitor account. Oh, I think it was seven thousand and we were like seven thousand out of two million Americans. Like we've got a long way to go. Yeah.

What we really had to do was go out our first hire was a salesperson. Yeah. You needed advertising. We needed advertising. In fact, one of our first advertisers, uh in fact I think she may have been our first advertiser was Nicole Miller. And she had this bridesmaid's dress line that was cute and she wanted to market it as something that you could wear again and uh Nicole came to our office and I remember we were showing her the little pieces of art that we had created that were essentially the first banners. You know, they were little buttons that would sit on the side. And you know, Rob would explain to her, hey, you know, we we people can click on this. And she said, Well, What w what will my buttons do?

Mm-hmm. And we realize That she didn't have a website. to link to. And he said very quickly, Well, they'll link to a catalogue of dresses that we'll build for you. And she was like, Oh my god, that's amazing. And you know, we were basically selling Links and buttons and clicks were leading to other places that we had designed to create for the advertisers. Which which the advert I mean for the advertisers was this new shiny thing that they didn't understand and they were like, Well these guys understand it, but but I I have to assume that the ad rates at that time weren't that high.

Right? They weren't they weren't paying that much money at that time, or were they? They weren't. I think our first year total revenues were maybe seventy thousand. Yeah, seventy thousand dollars, remember, like seventy one thousand dollars. So you could not li I mean the one point six million was that Money was burning quickly. It was

It was almost gone. We were we were rapidly running out of money and uh what saved us was uh uh we had found a amazing book agent, Chris Damasino, and our you know, remember our aspirations was to always to create these multi bl branded platform And she actually managed to get a

bidding war from multiple publishers on a three book. Deal for the knot. And that money actually that infusion of cash saved What was the advance? Three hundred fifty thousand dollars. For three books.

Yeah. And so you put that back into the company. But then you have to write books. Well Carly we we had just had our first baby and so Carly literally came back from maternity leave of All of maybe three weeks. And I still my the image I still have of her is like breastfeeding her daughter while

F furiously typing away at the computer because we had to deliver the first manuscript. Did you go to investors? Did you think we need to go to like private equity people are, you know, vent venture capitalists and try to get some money. We we we hadn't thought about it. yet. We were trying to think of other ways that we could make money and build the business. Yeah. And we had this idea and we said, you know, the thing that brides seemed to be really vexed about Is this whole registry process. Isn't there a way to like

completely reinvent that and create an online gift registry where they can register for everything they want. You're not picking the gift anyway, so why couldn't you just like buy it on the internet? And we said. This has gotta be the thing we do. And that actually prompted us to go try to raise money to build the first online So remember, this is nineteen ninety seven. And so when We just launched the website in July. Right. When we act like it's super mind blowing

to think of an online gift registry, you have to remember that like Nobody even really bought anything on the internet yet. And and so how did you what did you do? How how were you gonna make that a reaction? We needed to raise money. Yeah, that's when it became extremely clear because no one had online gift registries yet, or really there's no way to do it. We actually realized that to do this we would have to Get the inventory ourselves. At that time we are

Uh bride count, or whatever we call it, our member count, was really growing in a very significant way. And word of mouth was our only way we were marketing. We didn't spend any money. No, but like Brides Who Discovered Us and this I think was a lot about our brand and our attitude. Like once you found us, you wanted to tell anyone you knew who was getting married about us. And so we were growing in that way like wildfire. Like people really were very like loyal and excited about the brand, but it still wasn't a way to make money. So when you took the concept of the registry to uh potential investors, what did they say? Uh

It w it was a really long slog. I mean, it was hard to raise money for anything that was female centric in the digital space. And the fact that a large component of our business would now be predicated on e commerce on top of advertising. You know, the peop the first question people said was like they're not gonna give you a credit card number. It's like the you know, people are too paranoid about that. Uh they're not gonna register, they're not going you know, and and I think We probably were marketing for almost a year. before we came across uh venture capitalists out on the West Coast that said, you know what, this is really interesting and I think you know, we're gonna take a flyer on this. W how much money did you guys raise?

Uh three million. We launched the registry and Was it on the knot? Was it like the knot dot com slash registry? Yep, exactly. And we tab. And we suddenly saw within I think three or four months We had close to one hundred and fifty thousand couples registered.

in our registry. To put that into context, that's more than what Bloomingdales was registering back then. Wow. So uh a hundred and fifty thousand people registered within the first few months, how did they even know about about the registry. This is actually the the critical thing where Carly was the the secret weapon.

Carly became the person who when we published our first book Suddenly appeared on the Today Show. Suddenly appeared and and became sort of the wedding lifestyle kinda guru. Exactly. Meanwhile, not telling the world word one about my actual wedding day. I remember the first time I was on TV a friend of mine was like, um I was at your wedding. And all of a sudden you're a wedding guru?

So were you profitable at that point or were you still kind of No, we were bleeding. How were you funding this? Um but we were We essentially were looking to raise another round and uh within a year we raised another fifteen million. Also no one in our office had air on chairs. Like everything was IKEA or hand me down or I mean we didn't we sort of that That whole culture of the internet companies now where you have to be no foosball tables, no catered lunches, you know, you were lucky if you got a pizza. W were you guys nervous at all? I mean you had a kid. And uh and eventually you'd have two more. But but at that point you had a kid

Um, you were not making any money because you were you were just funding this company. So you guys are probably earning nothing. No, I know. I think we made thirty five thousand dollars a year, if I remember correctly, which seemed kind of unfair and exorbitant, like we shouldn't be taking this money. I mean did you guys ever have conversations you know at night and where you were like I don't know if this is gonna work. Maybe we should just like I don't know maybe I should go to law school or something. Like did you ever or were you totally confident this was going to work out? I don't think we felt we had an option. You know, w when y we had BFAs. We're n we were unemployable, so we we had to make this thing work.

So So by this point you guys um You've got the the gift registry going, um and and things seem to be humming along, I guess. And and then Uh in in two thousand you decide to to take the company public on the Nasdaq. So uh I'm assuming this was to raise more cash? Yes. So in ninety nine we actually uh had just raised money to uh build out and and flesh out the registry. We raised fifteen million dollars and Uh literally a week later we're approached by bankers who said

Yeah, the window's gonna close, you need to go public. And and we were you know, we we we had f fresh money in the bank and I I couldn't understand why there was such urgency, but uh we took their advice, fortunately, and uh within I think seven months of that meeting we were going public. So that was December uh second, nineteen ninety nine. We go public. The entire internet world collapses four months later. And we were really lucky to have that additional thirty five million dollars. So you uh when you went public It raised thirty five million more dollars. Yes. And then four months later the dot com crash.

Does that do anything to your stock price? We never had the super spiky jump and we didn't have a super c cataclysmid crash. It just over the course of a year and a half went from twenty dollars and settled down to twenty six. Twenty six cents. So people lost their shirts on this. Yeah. Oh yeah, we were not allowed to sell. I mean, you we we were locked up and by the time the six month lock up had released, you know, we and honestly, we we we were also we were way too loyal and dedicated. We did not want there to be any indication that the founders had lost faith, and so we were gonna hold on to the bloody. But the I mean the optics of going from twenty dollars to twenty six cents over year. and a half must have been

Rough. I mean there must have been market analysts and people even in the industry who were saying this this company's not gonna last. Oh, he was horrific. We we had our competitors faxing our stock charts to our advertisers saying, Look what's happening, they're going out of business. Do you really want to give them more money? And did did the did that. In any way affecting

you know, how much money you s had to sp you you had to to use, like did you have to did did you have to fire people, did you have to lay people off at that time, or or w could you still kind of plug along? We we never had layoffs. We always we were able to downsize through attrition, but we never formally had to lay people off. In part because we were always running relatively lean. Um and there were people who panicked and and basically s sort of got out. Um Yeah, I think the biggest challenge was controlling the like psychology of your team. I bet. Who they didn't understand. And how that had nothing to do with your s a stock price. I mean it is kind of a logical. No, exactly. So between your young staff who also is looking like, remember those options that I got? They're underwater by about nine dollars or and our and and advertisers. So there was so much Emotion control. I think that was the hardest part. To keep people focused. And it was exhausting. And also you do go home at night and you were like, Remember when we were actually gonna walk away from this business with

You know, thirty million dollars uh together and now we have like three hundred thousand dollars, it doesn't seem worth it. It doesn't seem where there were definitely moments where we feel like exhausted. was the summer of two thousand one where the stock dropped below a dollar for over ninety days, you get delisted. Nasdaq delisted you. No longer in the newspaper. No exactly. And you know you had to go down to D C and beg Nasdaq to to reconsider and they and I still remember there was a little tribunal, you make your case, and then uh this old gentleman looks over and says I'm sorry, we you know, we're still gonna have to delist you, but you have a great little business, don't let it fail. You're still a stock. Uh you're trading in the bulletin boards, but the key difference is now the major funds are no longer allowed to hold your stock. If you are you're delisted, you cannot the big funds are not gonna invest in you. Yeah, the fidelities and the the and and unfortunately.

you know, that's where a lot of the volume and the support comes um from with public stocks and so the moment we got delisted, two million shares just automatically gets ejected into the system and that's when the stock just really cratered. Uh We went down from like ninety cents to that twenty six cents, uh in matter of minutes. And and to be listed in an Aztec you have to be above a dollar for a certain number of months. Uh to get re-listed you have to be uh above five dollars for hundred and eighty days. Without institutional suffering. Once you're delisted, it's almost impossible to presumably to get back on there'cause you would have to convince people, individuals to buy shares, right? Exactly. So in in fact I spent the next three years

going to Dentist investor club meetings at the back of the red line in going to small cap uh, you know, conferences, drumming up retail support to try to get the stock uh retail. Because that was the only way you could increase the share price. Yeah. So you had to get individual investors to just buy shares. Yeah, we need it. Exactly. Thank you, dentists of America. That just sounds so grueling. It was, and I think you know, it it I think that's when you put on like twenty five pounds too.

Well, I had this one meeting with a competitor and I think uh he he said these fatal words that I that sort of propelled this thing forward. Uh, they saw this as an opportunity to acquire us and they said, Listen, you you have a broken IPO, we should just put these companies together, you know, seventy, thirty their way, we can, you know, repackage it and go but probably. You were offered this is an uh another company offered to buy you out. Yeah. And he said,'Cause you're delisted. Yeah. And getting relisted is like carrying a gorilla up thirty flights of stairs. It's impossible. It's too hard. And I remember the day we got re listed in two thousand five, I

So It is four years you're off a NASDAQ. It's a long time. I I'm trying to figure out why you didn't Just

Cut your losses and say We're still young, you know, we can still kind of Try something else out. Um This is not gonna It's not gonna be the way that we're gonna make a sustainable life.

I think it was because we were never doing this for the money. Well, but you had kids you needed a At certain point you y there's m you need to have some money. We yeah, but I think it was I think it was the work. I I I we were launching a T V show, we were launching, you know, a national magazine. There were so many really exciting things that we were building. You know, the Nest came the the bump came. The Nest and the Bump were like

the next iterations, and that's obviously about Uh as if anyone knows about your home. And the bump about babies, children. Yeah, our audience had been begging us for years to take them beyond the wedding day. And we you know, people on our staff who had like grown beyond the wedding phase and we're all had babies, they all wanted to launch it. So it's just seemed incredibly fun. There was so much more to do. We always said to each other, like if this ever becomes like super boring We should get out.

I mean, we're not particularly like planner people anyway. We didn't think about our future. We were just thinking six months in advance. Exit wasn't part of our vocabulary. I mean you you get re list in in O five, you then launch the nest and the bump. Um as part of the the whole sort of media empire. You're working on a bunch of different projects. At what point

Were you did you guys feel like, Okay, we've turned a corner, like we are We're gonna be okay, not we're gonna be more than okay. I'm not sure we're there yet. No, I think once we were like profitable or Sisyphus. Like you keep thinking you're ahead and then all of a sudden the boulder seems really heavy and you're going backwards and you have to keep pushing again. I mean in two thousand six and seven we wound up uh we we

But wedding channel. There was unbelievable sort of uh frothy expectations on what that acquisition was going to net us and the stock hits thirty two dollars. We have a billion dollar market cap and You know, then precipitates. The next you know, minor nuclear winter where the stock starts decline again because you just can't live up to those expectations. And then

Two thousand eight happened and it's the great recession. And does where does the stock price go at that point? Our stock actually held up relatively well. I think you know, most media companies were down twenty percent. We grew five percent. You know, we actually grew that year because a lot of the marketers realized that the only people who are gonna continue to spend money during this great recession are are brides and grooms. You know, weddings were truly recession proof. What do you think it is about about your personalities that work so well together because i you you guys went through such intense emotional highs highs and lows building this business. So

Wh what do you think it was about the other person in the in the relationship that made it work? This is where you declare your love of me and how amazing I am. This is uh this is the romance moment. Exactly. You know, I I think we were ultimately so different as people I wouldn't say that we necessarily worked well together. But we were incredibly complimentary. Where there's no overlap, there's less conflict, and when there was overlap, oh my God, it was like World War Three. Like the two of us are both incredibly bullheaded. There are really distinct differences. Like David can kind of

Look up. look ahead and think of something like really bold and strategic way down the road and then I can grab that ball really quickly, believe in it. Like I'm not a naysayer, so I'm like, Okay, you want to do that? And then I figure out how to get that thing done. Yeah. When you think about the fact that you both have

bachelor's degrees in fine arts and you met um you met, you know, a long time ago and you you you probably were never gonna had you pursued a traditional path never really gonna m make a whole lot of money, the fact that you built a company that's now, I guess, worth close to half a billion dollars, does it seem like a dream? Does it seem like weird, or d now that you look back on it, do you think, Yeah, okay, that makes sense. We we're gonna do this. Th it's surreal. I mean at one point someone said Do you realize seven hundred families are gainfully employed because of what you've built? And that you know they can send their kids to college and buy homes and actually uh thrive. And th there's a great sense of satisfaction to that. I think I think the you know, the the company has always been this just this extension of our family and we

There's a great deal of Pride in having been able to build something that is sustainable and and can continue to grow that way. But I can tell you, not being worried about money. Yeah, but that's like a personality kinda you know. Disorder. I've interviewed. You I think more than anybody else.

your business really reflects the progression of your adult lives. And what I love about it is you you clearly did all these um very imperfectly. Like your wedding was kind of a a a disaster and then you you know, you kind of struggled with kids because you were busy and you w didn't probably do everything that all the perfect parents were doing and all these companies that you started reflect all the things that you've done in your lives. And I think Almost even, you know, more to that point.

Our whole set of brands kind of celebrated the imperfect. I think what appeal to people is that We were like there is no perfect. Although there are some parents who do seem perfect. I'm not friends with any of them.

Car seat in the back. And as we're driving back from Mount Sinai, our friend asks. We were like, Right, diapers. David. We were about to bring home a newborn. We didn't have anything. There were three diapers in the kit. Oh my god. Um I think it also made us good business people. Yeah. Because I think we never walked around with a hubris. No a notion that we knew better. А просвезен гад вас конст.

And a team effort. Yeah, and I think you know, we would never be in a position to say, Oh my God, we know exactly how things in weddings should be done or how things in pregnancy should be done. We learned it, you know, by the seat of our pants and we embrace the people who are courageous enough to do that as well. And you didn't I mean, a lot of entrepreneurs will have like a spouse who will, you know, teach music lessons on the side, or you know, will be a school teacher or a lawyer or have some kind of income coming in. Like you guys did not have a plan B,'cause you're both in this. No, this was the Highwire Act. Yeah, although I think back like I would have hated to be married to an entrepreneur and not be one one. You like never see them. And they're just totally stressed out all the time. And I think that it was like super, super stressful and like really Dangerous and painful and complicated in so many ways. And it was the most romantic, amazing, exciting, exhilarating thing on the other side. I mean it was literally both. Like you're building something from scratch, and it was like the early days of so exciting and you're

In the thick of it and you're hiring these people, I mean it was something so exciting to be doing it together. That's Carly Roni and David Lou, founders of The Knot. Last year in a one billion dollar deal. Their parent company merged into a new company called The Knot Worldwide, which includes The Knot, The Bump, The Nest, and a website called How He Asked. which is a marriage proposal planner, who knew?

Both David and Carly have moved on from the brand and are working on other projects, which hopefully means more time for the kids, for hanging out with friends, and never, according to Carly, ever serving paella. And please do stick around because in just a moment we're gonna hear from you about the things you're building. Hey, it's Mariaino Rosa, host of NPR's Latino USA. Every week we bring you a mix of reporting, diverse voices, and coverage of current and emerging issues that impact our lives. and maybe even inspire you to action. Listen and subscribe now. Hey, thanks for sticking around because it's time now for how you built that. And today we're updating a story that first ran over a year ago.

It begins with Tyson Walters, who lives in Los Angeles with his dog Harley. Um she was the true inspiration behind The product. Now Harley, like a lot of dogs, is lovable. But also like a lot of dogs, she sheds all over the place. So there was a lot of conversations to people before I brought her over as in you're gonna vacuum when she leaves. Or even riding in cars. No one wanted to ride with me because they knew they're gonna be full of Of hair, and Tyson started to take this problem very seriously. Research and research, like what could I do? And there was no solution.

So I kinda started To create it. Now this was around 2011 when Tyson just got out of college and moved back in with his parents. And they didn't want Harley shedding all over the house either. So they thought, maybe we can design some kind of body suit for her. You know, something to really get all that hair and keep it in. And something that was punchable for the dog, too. So

You know, the first idea started from just a blanket and kind of messing around with that and trying to make some leg holes. Everything from like more of a network. And you can probably imagine how this all went down. Tyson and his mom worked with an old sewing machine in the living room. They tried a bunch of different designs. And we finally kinda came up with it look just looked like a baggy shirt that the dog wore. But the shirt was too baggy and the fabric wasn't breathable enough, and so Tyson and his mom had basically hit a wall. So he went on Craigslist and he found a professional seamstress. She could see it in her head better. And then she would recommend different materials too. So that's when she started bringing in the stretchy material, kind of like the underarmor and Nike athletic shirts you see.

That's when it finally came together. And what they eventually came up with? was this form fitting suit, kind of like body spanks for dogs, different colors. and nine different sizes. Chihuahua? to Great Dane. Most dogs are actually okay with it.

The fabric's so stretchy, it really doesn't hinder their movement at all. And I would double check with vets and stuff like that and they would all give it the okay as well. But remember, the whole point? is to keep your dog's hair from winding up all over your house or your car. All the hair is just contained pretty much in a suit. So you just take it off outside, you can shake it out. And while you're at it, you can shake off all the weird looks you're gonna get from your neighbors. They laugh and say, what is this? And you have to see this to believe me, because when I looked at all the pictures of these dogs in their spanks, I almost wondered whether they were kind of embarrassed.

Anyway, Tyson called his dog suit the Shed Defender, and just a few months after we first ran this story, Tyson made it unto Shark Tank. where one of the sharks invested$250,000 for 25% of the business. And this year, Tyson is expecting to hit over a million dollars in sales. Oh, and by the way, the Shed Defender is not just an indoor suit. A lot of people use it at the beach or in the woods or wherever to keep their dogs clean. And if the dog needs to go, well

There's the zipper. The space is wide enough. For the dog to use the restroom and then once they come back in you can just Zip it on out. If you want to find out more about Shed Defender or hear previous episodes, head to our podcast page, how IbuiltThis.npr.org, and of course, if you want to tell us your story, go to build.

dot npr. org. And thanks so much for listening to the show this week. You can subscribe at Apple Podcasts or wherever you get your podcasts and while you're there, please do give us a review. You can also write to us at hibtnpr.org, and if you want to send a tweet, It's at How I Built This or at GuyRod. Our show is produced this week by Rachel Faulkner with original music composed by Ramteen Arablui. Thanks also to Candace Lim, Julia Carney, Sanas Meshkinpur, Niva Grant, and Jeff Rogers. Our intern is Sequoia Carillo.

Guy Raz, you've been listening. Yeah how I built this.

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