emergency. We're also going to have priority seating in every room at the front of the room and at the back of the room, it will be labeled. So please, those are meant for people who have disabilities and be cool. Give it to those who need it on your tables now, you see, there's closed captioning for the keynotes, whereas there's a QR code so you can follow along, and also those who need assistive listening devices this is the first time we've done that you can check them in an out at the Welcome Desk. So they are there and please take advantage of them if you need them. Help us help you. We really want to get feedback on the sessions. So if you can download the sessions you plan to attend before you attend them. Because then you can do the feedback, right and take the survey right in the app. If you haven't done that before. There will be a way online and in the app, a link to a Google form where you can fill out the information. So you can do it one of two ways. There are gender neutral restrooms in the DCC that's this building the Duke Energy Convention Center on each level. And if you look in the DEI guide that we have, you can find where the gender neutral restrooms are at the hotels. There is ABA has a code of conduct. You all read it when you registered and signed it I'm sure if there is a breach of Code of Conduct you feel you can report it to. I'm trying to remember where we report it to report at book web.org. And we're monitoring that the whole time. So if you feel that you've witnessed a code of conduct, please report it. This is a big event of competitors by law. So we must abide by the antitrust guidelines, which means whenever we're gathering at this event in this building in the hotels, etc. Which means that under the law, you are prohibited from discussing certain things. You can't discuss pricing or pricing policies. You can't discuss boycotts, and you can't discuss dividing up markets, just to be sure and that will be announced and that will be posted at the beginning of every session. Photos are being taken. We use them all the time only for good. But if you're really uncomfortable and you don't want your photo taken because when you signed on you realized and accepted that you could be in photos, please send an email to info at book web.org and masks are not required. They're encouraged and you notice their lanyards are green, red and yellow. Check out what people are wearing. It indicates you know whether they want to be hugged or elbowed or stand back. So please do that. Those of you who are going to rip pics on your badge your rep pick room assignments are there and also your bookseller to bookseller discussion group assignments are there. If they are blurry on your badge and you really can't read it. You should go to the welcome desk. And they can tell you they have they can pull it up on the screen and they have printouts and can tell you where you should be if you can't read it. And if you have any questions please visit the welcome desk. Look for ABA staff. We're all wearing, see the red at the bottom of our badges and remember to hydrate drink water I forgot yesterday I only drank coffee. Everybody drink water. Wear comfortable shoes. Hope you have your band aids and be kind kindness first you'll see we have buttons that say kindness first. Be kind to others. Be kind to yourself and have a great week. And now I'd like to introduce my colleague, Anna Gonzalez, who is ABA senior account coordinator and accounting coordinator and she is going to do the land acknowledgement. Thank you very much.
Thank you joy Good morning, everyone.
Thank you for being here. American bookseller Association acknowledges that this institute takes place and the land that it is the traditional land of the Edina. Hope well Miami, SHA one dasa to La y&z and Delaware, Hyundai or Shawnee was as Amazon peoples and many other tribes due to a central location. We recognize them as past present, future caretaker. Of this land, and acknowledge that the rights to use the lands were appropriated through broken treaties. We've recognized them. We recognize the physical and cultural genocide of the indigenous people in the Ohio region. They're forced migration to and from this territory, and the harm caused them when their histories have been whitewash or erase. We ask that you take the time while in Cincinnati to pause. Reflect on the history of this land and its people and consider the actions you can take to support them. We ask that you work together to learn about this history. Remember the importance of language and to call each other in when our words include on through indigenous troops or outdated terminology. One way to offer support is by donating to land back Neko the Native American Indian Center of Central Ohio's land back movement. Leon back Neko is raising funds to purchase Ohio's man for community use and Cultural Restoration as part of our practice of land acknowledgement in local action. Aba is making a donation to land back Neko. through initiatives like free trial membership, and advanced access for underrepresented voices, ABA remains committed to growing and supporting our indigenous membership. Through our land acknowledgement, inaction practice, we continue to honor those whose lands we host events on before welcoming our very own CEO Alison Hill. Please join me in watching a video to learn more about land back Nico's mission.
Land acknowledgments have become important
statements used to recognize the fact that there were and still are numerous indigenous stewards across this land our Iroquois relatives called Turtle Island here in the Ohio Valley area. We know that the great Shawnee nation the Delaware the wind, the Miami hood nashoni and many other tribes once called this part of the country home prior to being forcibly removed, but rather than have these words serve as a blanket statement during a time when cultural sensitivity has come to the forefront moreso than it ever has before about we put some real action behind these words to do something that really helps make up for the past for us here at the Native American Indian Center of Central Ohio or Neko. We are doing just that. We have chosen to take a bold step forward, one that intentionally puts action behind such words. I believe that it's very important to return our Native American Indian
people to the land or Indian people. I have always found that Mother Nature is a very powerful being next to our Creator. Nature is the foundation from which all life derives. Neko has this one opportunity to teach and protect our natural resources, tribal protocols, sovereignty ceremonies, and healing ways that have always been in place all over Indian country but not successfully preserved. Or practiced in urban settings rather than just speaking to it. We are pursuing a
tangible goal, a vision, a dream, one that entails us attaining our own piece of land here in Ohio that we as Native people can connect with and call home this campaign is formerly known as land back Neko. Our goal as Nico is to acquire a minimum of 20 acres thus to not only have a space in Ohio to call ours but more so to have a place where we can preserve and restore our cultural ways and build and strengthen our native community. We as Native American people were raised to respect and honor
the sacredness of nature from the time of birth and goes back for many generations. It has everything we need to survive medicines, food, air and water. It provides all the essential elements to hunt fish, gather our foods, these things we are losing as a people but trying to bring back and preserve our most precious commodity where it is lacking and at a time when it matters most. So please join us and make those efforts to return the Native American people to a land that is not relegated by others. But cared for by its rightful stewards of Ohio. To join and follow our land back Neko campaign and journey,
visit our social media sites and agency website. You can also support us by visiting Neko cuisine, our
newly launched Native American street food trailer here in central Ohio.
Thank you.
Good morning. Good morning. Welcome to Winter Institute 2020 For
last week as I was preparing to come here, someone
asked me how long does it take to get to Cincinnati? It takes three years. Three years to get to Cincinnati. Some of you may recall we originally booked Cincinnati for 2021 and 2022. And now 2024. We're finally here. And we are so thankful to all of you that you've joined us in the Queen City. For what promises to be the best Winter Institute ever. This week, we have in attendance, the oldest bookseller ever to attend Winter Institute at the age of 85.
This week, we have in attendance the youngest
bookstore owner ever to attend Winter Institute at the age of 14.
And we have with us here 951
booksellers, the largest number we've ever convened for Winter Institute.
The days ahead represent 1000s
of hours. Well let that sink in 1000s of hours of planning and preparation. But it has just been a giant spreadsheet until now. It is your spirit and your energy that brings this thing to life. And it is all of you being together. That makes it absolutely magic. Last year at Winter Institute in Seattle, you'll recall we were coming out of the early days of COVID and I felt like we were little groundhogs emerging from the dark earth blinking at the light trying to determine whether spring would ever come. And now here we are a year later. And there are signs of spring everywhere. The RE energizing of the Buy local movement. Consumers desire to know who they're buying from people wanting to shop in alignment with their values and have authentic experiences an FTC lawsuit against Amazon. independent bookstores are ready for
this moment
and the value proposition that you offer combined with the hard earned insights and resilience that you built during the pandemic indicate a very bright forecast for the future. But we still have work to do. We want to ensure that the foundation that we're building this future on is strong. And this week is the opportunity for you to fortify that foundation for your store and for us all to fortify that foundation for our community. To that end, I hope that this week, you share ideas, find inspiration and have a chance, which you don't often have to just think about your business. Think about it on a micro level, how to optimize operations, how to manage projects, how to track KPIs. And on a macro level, what business are you really in? What do you want your store to be in your community? And what do you want the future of independent bookstores to be at this early morning hour? When perhaps you're still half asleep? I'm going to ask you all to commit to three actions that I believe are critical to the foundation of our collective future. I'm going to ask you to think of them as alphabet blocks a, b, c A ABACUS many of you have heard this before. ABACUS is the free annual financial benchmarking survey that ABA provides members we send this to you in May or June. You share your financials confidentially with a third party vendor and in the fall we send you a report that compares your financials to the financials of other stores like yours. This is an incredible tool for this industry. It helps you assess your numbers and discover ways that you can improve your profitability and that data is incredibly valuable to HBase work advocating with publishers and with government officials on your behalf. The more data we have the more effective we can be acting for you. Be sign up for batch. This is the week sign up for batch. So batch is a payment system that streamlines your payments to the publishers. In the UK. Every single bookstore has batch, every single publisher has batch. This system is an incredibly efficient tool. That saves bookstores time and money that they can then reinvest into their stores. If you are waiting for more publishers to sign up, please do not wait. See batch this week. This is your chance the more booksellers that sign up the more publishers who will sign up. There are two publishers significantly large publishers who you do a lot of business with, who are in conversations with batch now. And you signing up this week could make the difference. See, consider the indie channel and report your sales. If every independent bookstore reported their sales to bookscan we could demonstrate the real power of the independent channel. reporting your sales is like voting. Make your sales count. Aba can easily help you with that. An election year seems like a good time to remember that the future doesn't just happen. We build it. And I hope that this week is all about building a future for independent bookstores that is bright and building it together. Speaking of doing things together, I have a lot of people to thank for the amazing week that you are experiencing. First I want to thank our lead sponsor Ingram.
We are deeply grateful for Ingram in support
of Winter Institute 2024 and Children's Institute 2020 for registration opens in a few weeks. I had a great meeting with Ingram yesterday and I have to say I was I was so impressed and grateful for the obvious investment that they are making in this channel. So we're very appreciative of their support. Thank you to all of the publishers who sponsored Winter Institute and who have shared their authors and their galleys with us. And thank you to the authors. We are so honored and grateful that you're here joining us. We're also thankful to the many business vendors who are here investing in this community. I want to thank the booksellers who you will see throughout participating on panels moderating conversations yesterday they were hosting buses, and they're generally sharing their expertise and their experience with us as a nonprofit trade association members. Helping members makes this whole event possible. I also want to take a moment to thank the ABA staff. Thank you
This conference is absolutely a
labor of love for our team. And it is a hell of a lot of labor. So I am grateful to the team for the hard work the creativity, the resilience, the perseverance that they have demonstrated for months and months leading up to today. Please be patient and kind with them as they crossed the finish line this week. I know I speak for all of us when I say seeing you this morning. It is worth it. And finally I want to thank our opening keynote speaker, who I'd like to introduce to you now. James Re is a business guy. He has degrees from Harvard and Harvard Law. He's the CEO and founder of fire pine group, a family office impact investment platform. He serves as the Johnson Chair of entrepreneurship at Howard University and as Executive in Residence as strategic advisor at the MIT Leadership Center. The National Retail Federation awarded James the prestigious power player designation which sounds a lot like Power Ranger. And it is kind of a superhero kind of designation. The NRF gives us honor to individuals most impacting the future of retail. But as you can probably tell from the name of James's book, he's not your typical business person. James is a former high school teacher. His career in the private equity world has focused on brand capital and human intersectionality. He teaches kindness as a business principle. He serves on the executive committee of conscious capitalism and is a 2022 recipient of the New York Urban League's Frederick Douglass award. And now he's an author. His book is called Red helicopter, a parable for our times lead to change with kindness, plus a little math and it comes out in April with Harper one helping live up to the mission that they are known for, to transform, inspire, change lives and influence cultural discussions. James is here to do all of that and more today. So we thank him and please join me in welcoming James reed to the stage.
Have to do Hi, everyone.
Good morning. And I really want to do a good job, especially for the San Francisco guests here you're having I'm sorry. And you had to wake up early too. So I'm really gonna focus you know before before coming in. I also want to say thank you the ABA. I spent a fair bit of time on the phone with Alison Joy Kim and the Advisory Council, the booksellers Advisory Council. I'm not ensconced in the book industry. I'm trying to study as fast as I can so I wanted to see what was most on their minds, both goods and Bad's and so this presentation sort of reflects that input. The theme of the conference is stories. So I'm going to tell a series of stories. None of them are prescriptive. I hope some of them are giving you assurance permission. Maybe some of them will be modestly insightful, particularly in the life of business, the business of life, and especially where they intersect like a spiral. Many of you I'm not so sure there's a much of a difference between the life of your business and the business of your life is sort of kind of messy and beautiful in that way. Okay. So one of the things I did before leaving Boston is that I just wanted to show you this my dad he used to take us to our independent bookseller, it was called a Corner Bookstore. It was at the intersection of Nicholls Road and 25 A and Stony Brook, and it was a labyrinth. archy go in there and there'll be piles of books and we would go there and you would always buy me a book. My dad grew up in Korea. So he would buy the books that he would read about the US when he was growing up in Korea, but what it meant to be American before he immigrated here, so he would these are original copies from like 1978 79 of like A Farewell to Arms. This Aesop's Fables book sits on my desk to this day. I read it every day at ground pole and then he also bought me this and I'm sorry, Harper one this isn't Macmillan book. This is a children's dictionary that he used to inscribe things to me and he this one he said to my darling son, James 1021 79 Dad. So I've been in the process these days of inscribing the book and giving them each to my children to my three children. So my dad's books, I write a note underneath my dad's notes and I give it to them. So reading was a big deal. In our family. And it was more than that, though. My dad was a small business owner, just like many of you. He hung a shingle out in 1974 and opened up a pediatric practice in middle Island, New York and the building that he worked in looked like that he had one of those doors. It was in the middle of sort of nowhere. It was hard to find. It was all that he could afford. And he built a practice for 35 years taking care of 10s of 1000s of children on Long Island and it was enough money to put three kids through college and we went to a very good public school. That was our life growing up. He hid a lot of things from us as kids. It wasn't easy. And now that I look back, I remember there being a fair bit of ambient discussion in the kitchen table about things like OSHA and medical malpractice insurance and how am I gonna implement this software? He English was not his native language, it was not easy for him. And as a kid, you're sort of oblivious to some of these things, but maybe not as oblivious as you think. Around the same time I came home from kindergarten with a toy red helicopter. That's the name of the book. It was another series of misunderstandings and not sort of quite fitting in my parents didn't know where I had gotten the toy from. So there was a barrage of Oh, something wrong happened. James You stole it from school? No, I didn't steal from school. Every kid in America gets a red helicopter Christmas. We're so sorry. You're never gonna fit in in this country. We didn't know the customs no mom and dad, not this time you didn't screw up this time. I'm the only one who got one. Why did you not? Why don't you know why you got it? I don't know why I got it. And then I was sort of in trouble. I just remember very distinctly getting Socrative really interrogated. Why did you get the toy and me standing there with a bowl cut. That's what I look like. And my cheeks fairy read in saying I really don't know and I just I say this it's it's funny and sad like a lot of life is and I'm sure a lot of your day to day is both sometimes funny and sad. It turns out I got it because I had been sharing half my lunch with his boy in kindergarten who came to school often without any lunch. And my Korean mother who expressed her love through food. And even though we didn't have a lot, my lunch was always perfect. It really was perfect like the perfect mayonnaise. It was just perfect and I thought I was in trouble again when they found out why I had shared my lunch they sort of called me and my dad said Why did you do that? And I thought right away oh no, we you know I'm ungrateful to mom. We don't have a lot of money. So like this is an it's a moment that I think back and it reminds me of my dad's office. My dad was he got very emotional he just said listen, you did a really good thing. We may not have a lot. But I want you to live like this. Like be generous, like live abundantly.
Austin big buildings managing billions of dollars in money and
and yes, I used to teach high school and I went to law school to be a public defender. I was a hot mess and I kept for me. Why is it so not reconcilable? Between civics and like the economy? I just didn't understand that. That's not how I understood it studying in school. Like, why is money so divorced from other things? And it was troubling for me and I suppressed these memories of like the red helicopter, of my dad's little practice. And I sort of listened to my parents. They said, You know, we really want you to assimilate like go do it. So part of this was also suppressing some of my Korean myths. That being Korean was not a particular competitive advantage in some of the boardrooms that I was in in Boston in New York, it just wasn't. And that's where I was at around middle age 42 Or that pictures around 42 I was a father of three, three kids under the age of five. And this is one of the story there's another story that gets intersected This is when I met Ashley Stewart. So Ashley Stewart is a business that services plus sized black women in the United States. It's not a very well known business in certain quarters because some of the media stories don't tell a lot of stories about these women. In fact, though, it's a was a very important business, National Business, hundreds of millions of dollars of revenue. Arguably one of the largest businesses that was servicing employing black women in this country. And a lot of my network in Wall Street knew nothing of it. Not surprising to people in this room, right? Like story means a lot. That narrative was lost. And I was now an entrepreneur, I started my own stuff. This investment was a investment in a former employers private equity fund. And I was gone. And I was still on the board though helping advise the company. The company was about to was going through a very difficult time it was about to liquidate. And so there I was at 42. There's a business that is liquidating the language that's being used to describe the business in those boardrooms. In private equity. You can imagine some of the language that was used and at the same time, my father was dying. He was in his 13th year of Parkinson's. And so I was sitting there in my life at 42, father of three kids thinking about this red helicopter thinking about my parents. Looking at this business, hearing the words used to describe this business. And it was a small business, a collection of small businesses, right. It was a national business, but it's really a collection of small businesses, very tied into church. And my dad's guy, and all
of these things are
sitting there and I was I didn't feel very good about myself, actually. I was asking myself a lot. Where was the kid that taught high school for $12,600 a year? Where did he go? And why is this so hard? And so there was a lot of self flagellating too. And so I said, I spoke up, I said, I don't think we really should be speaking about this business this way. It's inappropriate. I've been used to that language all growing up. My mom was treated like that for most of her life in this country. And I was always the little sidekick that would say that don't speak to my mom. Like that was how I was like, the defining trait of my childhood was like don't please don't speak to my mom like that. Like, that's not why would you do that? And so I spoke up and they sort of said, What are you going to do tough guy? What are you going to do? I said, Okay, so I talked to my wife and so I'm not so I resigned from the board. And frankly my life for six months, I said I would come back in six months. So I left this life, this resume that my parents really wanted me to have. I left I said, I'll be back in six months in Boston beg you please take care of the kids. I'm gonna be gone five days a week, and I'll come back. I just have to do it. And this business was headquartered in New Jersey, and my parents were both in New Jersey too. And that's where I was there were two things dying in New Jersey. And I went so the present I did this triangle about present, past and future and I think it's sort of this way that I'm doing this it might be helpful for you all, as you think about your journey as a human or your as a CEO or owner of a business is for me the argument I guess I will posit it's sort of the same journeys. So I'm gonna use the same language. So this was the present. This is how people described it. Remember about controlling the story. Ashley Stewart found in 1991 fashion plus size clothes, black women failure, bankrupt already about to liquidate again, twice bankrupt, gone. That's a pretty Wall Street Journal headline. That's one story. The other story was that it was an abject failure. No Wi Fi. This was 2013. It never made money. It didn't pay its bills. They were sort of weird landlord deals. All of these things. That said, if you look at the pictures, that's not what I saw, I saw a different story. I saw a story of like friendship. It's 3500 square feet stores. I saw a story of a place where a woman who has a lot on her plate could sort of kind of be selfish just once for herself. Ask her kids to sit in the chair and for her to just sort of be at peace. It reminded me of my mom like the one time a year we would go to a Korean grocery store where my mom didn't feel uncomfortable and my mom would turn into a diva for one day a year. My and I said, Oh, that's my mom. Because this country made my mom feel very small. So she played small, but once a year when she was in a place where she could really sort of just be herself like, you could just see it. And I saw the same thing. I saw these women cross the threshold and it was a change. And I couldn't put that in the spreadsheet. You can't write that. I just saw it. And so that's what I saw. But people were scared. 22 years the lawyers were coming restructuring but it was it was about to be ugly. Ironically, the world that my mom and dad wanted me to be so much a part of was the world that was coming to come after this company. Does that make sense? It was sort of this. Oh my gosh. And that was the present and the question is what was reality like was this really reality is Ashley Stewart to the sell clothes is that the story is that the capital P product? Is that why it persevered for 22 years without Wi Fi? Like how could something live for that long despite the government pumping money feeding these huge tech businesses? This company still was here sound familiar? Why? Like it can't be that just the clothes It can't be. And so I really had to get honest about the past. What was the real problem? This company was being asked to sort of fit into a box. But it wasn't a typical company. It was a special company that was nurtured over 22 years of social relationships. It was formed and molded by the actual customers and the relationships they had with not just the books but with the people who worked in the stores. It was a community developed business. Of course it couldn't fit in the box, but it was being asked to and against those metrics. It wasn't going to be successful. And so it reminded me of my parents, or they wanted me as a boy growing up here to go fit in a box and be quote American. And I just said, Well, you know, Mom and Dad You did a pretty good job yourselves. Like you didn't fit in a box you immigrated here. You left the Korean War and you came here. This was the tension that we saw. And so what was the question was that what was the angle that we would be able to address this so my first town hall, which is some of the things that maybe you're thinking about to in your own way I went there with childlike simplicity, and I said to everybody, my name is James. We're literally stripped naked. I have no credentials here. I am the least qualified person to run this company. The issue is I'm the only one who showed up. I'm not a woman. I'm not black. I'm not plus size. I'm not fashionable. Like this is after a lot of years of effort. I'm still not there. And just said this is who I am. This is this is all I got. And it was liberating. Actually, it was liberating to just be janked. And I just said Would you please help me learn this business teach me because we can figure this out together. But there has to be a reason why you're still here after 22 years there has to be. And I went around for six months. I honored my commitment. I basically worked in the stores I hung jewelry, I learned about peplum, and Marylands and shark bites. I learned all of these things. They even convinced me to get out of the pleated khakis and they made me go buy fashion denim. They said James You can do it. Right. You can wear this it's fine. And so after six months, I came up with a plan I just said all this business has nothing to do about clothes. The product is all those intangible things that I'm seeing the product is why some of the customers who knew I was sort of not a typical person in that store said Sir, are you all in trouble? Do you want me to go home and bring back the clothes hangers? Will this help you? I said that the product? We people just don't know that this is the point they don't know that historical significance of this business. Everyone knows it intuitively, but it hasn't been told yet. Does that makes sense? And so I went out begging for money. I said this is what I found. I know I don't look the part. And I know that maybe you don't see oftentimes a Korean American private equity guy working so closely with black women across the country. I know. Would you please pause and just like just listen and no one listened. I went around begging for money and for the entire world and I'm pretty wired in that world and sadly everyone said no. And so I went back to the drawing board I said in addition to that story, can I tell you another story? that the future is not what you think it's going to be? I think people can be really lonely. There's a reason why Margaret Atwood and Butler and Bradbury why these stories are being told again. There's a reason why you think that this technology that's happening. There's no social consequences. In the antebellum period, they thought that telegraph would prevent the Civil War, right that we would communicate better together Telegraph's going to solve everything. I was like, Do you not see any of these patterns? No one listened and so after six months I came home and this world that we have lived in that we've been a part of, was about to go. And the premise was and I hope that this resonates with you that in the future may be things that are irrational, that are analog that are emotional. Maybe those things will have value. Maybe those things are the things we'll trust the most, because it's truth, because humanity is flawed. Like things are not meant to be in zeros and ones. I'd rather live my life as a two. I don't want to be stuck by zeros and ones. I want to be a two and the woman and I sort of looked at each other and we had failed.
So the next part of this whole story is that sometimes you have to take things into your own hands. And so after looking at my team and us being together for six months, we decided to exercise agency, but we did it with the Herald and the Purple Crayon where we said we're just going to have to build our own future to what Alison was saying we're going to build our own future. We can't listen to what everyone says because they're saying the same thing. Everywhere. There's so much groupthink. They say the same thing. Amazon's gonna wet you can't do this. Okay. You keep saying that. We're going to exercise agency over our own future. And so we'd read Harold in The Purple Crayon. I make MIT executives read this book before my class in innovation. Because I thought Harold he's like the best entrepreneur ever. He always makes room for the deserving porcupine and moves whenever he's in trouble. He pauses he doesn't panic and he draws a balloon. He doesn't panic. He doesn't use pens and pencils he's not afraid to erase. He uses a crayon. And so that's what we did. And so so much of this was defining what agency was. That is not perfection. It's just making a really informed decision. And it involves surrender. It involves not controlling the results. It involves family it involves making mistakes. Agency is just core to being human. And it sounds simple. But this definition of what agency means it was liberating for our group. So I'm not expecting perfection. Let's just do it our way. And the way that we're going to treat each other and then premised on this was that in order to exercise agency, that we had to have balance and the only things I could come up with, I got laughed at. You have to picture this. The lawyers are coming, it's chaos. And I just said can we be kind and mathematically right? And people just want and I hadn't said the WORD kindness since like confirmation class. I'm sorry. I don't think I had said that WORD. It just came out. And I remember saying it and saying oh geez, where did that come from? And math. And when I look back now, these visceral things he's and I'm talking a lot about intuition right now right about just trusting your intuition, your gut these things that will never be artificial intelligence. That can't be they came from a very human place from from here, and what kindness is, after many reflecting I you know, if you read a lot of the writings by Rousseau and Adam Smith, they were the two most prolific writers about kindness. Kindness was not always a quote, religious term. The whole concept of free markets and democracy was grounded in kindness because kindness in my reading of it is when one gives someone else agency. That's what kindness is. And that's why I think when you think kindness, you think about your favorite teacher or your favorite coach. They invest in you so much, and you don't want to disappoint them. Right and whenever you disappoint them, you say, Oh, I disappointed you and they said, No, you disappointed yourself. I think that's what agency is. It's like, you're a rescue. You're not asking someone to be someone that they're not that your job as a leader. is to make sure that the clarinets oboes french horns, violins, violas play their best piece and that they all sound together as an orchestra. I believe that's what a great leader does it distributes agency. The math part it's easy to confuse. Math is not accounting we are all stressed about money. Money is not math. Math is a science, we discover it. It's it lives somewhere else. It lives in the realm of like of nature. So these two things transcended all human conventions. And that's what I basically was asking when I said kindness and math. Are you did I know that at the time? No. But that's what I said. And so in order for us to be free to really fly free, we had to balance kindness and math and this is effectively what I said. I said, kindness involves exchange of agency. And we can use math to quantify that portion of the exchange that can be quantified. The other portion that cannot be quantified. Maybe the WORD goodwill and Chun have something to do with it. And I know you have a lot of this going on in your stores, right. So we started with the balance sheet like a lemonade stand would we have to start from the beginning and this is an important point I want to make I'm gonna go into a deeper in the breakout session. In this country. We are so obsessed with income statement measurements. I think we teach people wrong. What's your sales? What's your income? What's the GDP? Everything is top line. We don't teach balance sheet.
What's on your balance sheet?
What are your assets? What are your liabilities? What's the equity account? It's what you own that makes your income. There are many businesses I've been associated with that have been Income Statement positive and growing, but they've gone out of business. I've met a lot of businesses that income statements coming down, but their balance sheet is getting stronger because they're managing their cash. It's very different and we'll go in the breakout session but cash is a balance sheet measurement. Sales is an income statement measurement. Silicon Valley Bank went belly up because its balance sheet was broken, not because of its income statement. And so think about that as that applies to you. And so I said this I said Ashley Stewart, what's on our balance sheet? People said we have nothing We own nothing. I said that's not true. You have 22 years of relationships, goodwill, all agility, loyalty, resilience, grit. We're going to figure out a business model that puts this front and center and shows the world and tell this story. I kept saying to them accounting tells a story and it's often not true. So how did we do it? So I
said all these things and there were some faces like,
oh, geez, because there's a little bit of a perspective change, right? It's the same perspective change of my parents saying, Oh, hi, the kimchi because it's not American. It's just changing perspective. It's the same perspective of me saying to the ladies of Ashley Stewart, what if we were to design a world where you were the majority? What would that feel like? I wonder. And we are changing. The demos of this country are changing. It's very hard for people to wrap their heads around right to have that change of perspective. So what was the best way for me to show kindness and math? I didn't just I didn't do it on a chalkboard. I didn't do PowerPoint slides. I relied on art. I conveyed this new reality through music and art, and said Can you picture this and so this is what I played for people and said this is the product of Ashley Stewart capital P.
I played tennis, and I asked,
I said, Who are you? Who's Ashley Stewart, we get? We're Beyonce. I said, Yeah, that's what you do. And that's one of the things I love most about this performance is that this was a nervous reality star and Beyonce rarely gives up centerstage she did. You can see it and everything she's doing right she made Alexandra Brooke better. If you listen to the whole performance, you can hear her sing better. I said this is what you do. And this is what I've seen you do for six months. I've seen it every day. This is what the product is. It's complex, right? It's just being yourself. And I said that you see how that lack of confidence people telling you that you didn't fit in? It affected your lowercase p product. You were buying camis and basics and turtlenecks and dull colors. If you really understand the capital P product to this business, you wouldn't do that. you'd buy fashion. Right? It'd be tight. And I didn't know any of these words like like, what's the what's what's the key home? I didn't know what it was I was like more of that. More than I do. So the whole perspective and mindset of what a brand is it actually affects the way you buy your product. And so once this light went on and they said we're not working for a clothing company. It changed. It took a few months quarters years for to really spread. But it became instinctive and decisions that were made like three, four years prior people said how could we have done that? So I want you to take a close look at that. What you're seeing right there. You're gonna see it again in a little bit. After we had spent
two years
doing this, measuring correctly thinking about our assets and liabilities, this is what ends up happening the helicopter was ready to fly. We hovered for two years getting it right getting it right getting the team is this an asset liability we learning something which I'm going to go over in a couple hours here's some examples for you. I'm going to put now here's my little private equity and mighty head on for like just for two minutes. Okay. Like it says and then he'll go away. Accounting is I'm gonna say it again is a story. It is not truth. It is not math. It is completely made up. And it's I'm not holding accountants understand but has to be one language that compares. Everyone speaks the same language right? So you could compare its relative performance. But accounting doesn't mean it defined who you are and how you operate your life and your business. It's different. So let me give you some examples. So we stopped focusing on sales. We focused on like things like gross margin return on investment. We focused on cash flow. I said oh, we're down 5% In sales, but we're up in 12% in cash. Great Year. Right? You're up 10% But down 20% in cash. Not a very good year. We changed the entire compensation system on this too. We forced people to sort of behave on a balance sheet way. And other compensation we had open dialogue we it was this is much more civics coming into business. It sounded more like John Locke or Rawls. What's the veil of ignorance? What would we do? What's fair? So the whole social contract of employment we spoken that way. What do you want for compensation? Some cash? Yes, we're not Amazon. We can't We can't compete. What else? What else can we do? Top Top Notch healthcare. Got it? with top notch healthcare. That's the most important thing for you. Yeah. We're gonna get that general education, ability to sort of keep learning totally high school teacher. My colleagues got basically a JD MBA while working Ashley Stewart. It was part of the social compact. And I would say to them, it's okay for you to leave it okay. Right. This is part of the compensation package ecommerce, because we weren't scared anymore. There was fear of tech. Right and because tech is the story of tech is it's cool, bro. Cool Patagonia vest, right? I'm like no, like we're gonna put in tech like we need Wi Fi. Right? We we can't we can't do this. But we're only going to put in the tech that enhances the capital P and lowercase p product. It's not cool. Tech will make us better. They'll make us have more time. To be Beyonce. You'll make us buy better for our balance sheet. It disappointed a lot of the tech people who interviewed with us because they wanted to sort of innovate. I'm like for what? Tell me why you want that? Is it better? So ecommerce for instance, we put it in and the store managers at first were scared then they weren't. I said do you really think that I would ever put an E commerce business that would drive you out of business? I came here for you. I'll never do that. E commerce ended up being 35 40% of the business and of that 40% or so we're not black. We introduced this brand by being our authentic selves to an entire new demographic. And those cash flows those profits, what do you think they funded? wage increases? tech investments long term investment. We were one of the only companies designed to have a capital surplus visa vie non black neighborhoods. Does that make sense? The entire business model the math advanced the goals that we wanted to do. There were no that we didn't we rarely use acronyms. And you know, philosophically where I stand and believe in D IESG. CSR, we didn't use those acronyms. We put it in the operations. So I'll give you one more example. Worker's Compensation, here's an idea for you. We had ridiculously high workers comp people getting hurt. Because people get hurt when they're either not happy, not focused, or the ops are haphazard. By the end of this, our workers comp claims were down like 99% for every year. We won the highest award given by the actuarial industry ever. And they came in and said, How did you do this? We've never seen this happen before. And I said, Oh, just kindness and math. That's it and the premiums went down so much, that we took those premium savings and we dividend it out to our managers because they're the ones who earned it. So they became synthetic owners in the operations of the business, right if the insurance dollars went down, why shouldn't they share? We earned it mutually in a collective way. So a lot of these things was a much more mutualistic form of capitalism, which by the way, exists in almost every other country other than capitalism is not one dimensional. There are many different forms of capitalism. And so the other thing as these things kept spreading this is how it spread. I took inspiration from like fractal theory. Let's just start really small. And let's just keep doing it and it spread this way. And soon it became this. The bottom row is the first two years of our life. It was in the stores in the neighborhoods across the country. We did the best we could for ourselves, not for anyone else. It was for our own colleagues. We'd been through so much. It was just a two year celebration of just oh my gosh, like we're doing it together. And then it started spreading. You know, as Allison said, The The National Retail Federation took notice and said, Do you want to talk about this with the CEOs of Walmart and Macy's and HSN and I giggled and I said, Do you want to Ashley Stewart to sort of open up and then NRF Yes, we do. I said, Oh, wow. And then Carla Harris and Morgan Stanley, all the Wall Street folks called and said, What in the world is going on here? Do you want access? James? We know what you're doing. You we need to sort of keep that world intact, but you also need connectivity to capital markets. Yes, we need people in the capital markets who allow us to speak and be an operate the way we want to operate. Will you partner with us? Next, Tim Ryan, the CEO of Price Waterhouse, and then the CEO of Salesforce, and that's Carolyn Everson from Mehta. So the largest tech conferences invited us to keynote their tech conferences three years after having a Wi Fi. And I giggled a lot. The best part of all this was when the celebrity started calling. Right when Whoopi Goldberg calls and says young man, come over to my house for tea I would like to talk to you about what's going on here. And when the Kardashians you know whether whether you like them or not, like think about this. We were decidedly quote uncool for a long time. But when the Kardashians start calling and say we think you're pretty cool. Ashley Stewart's cool. Yeah, great. Thank you.
Like we think we're doing pretty good.
Do you want to partner Sure. These calls started happening and this is what you're seeing here is us taking our internal story and other people hearing that story and saying, We empathize with that story. It's a good story. And people came to help. And they shared their balance sheet with ours. It gave us tremendous leverage. We were never we didn't want to be the biggest company or the we didn't view success in that way. But these larger relationships came and said we will we want to be part of it. And so that middle thing we produce three huge concerts in New York. Does it remind you of the Beyonce video? I shamelessly took that video and said these are 3200 people stomping their feet, the king's theatre with invoke and salt and pepper all of a sudden this clothing company that sold plus size clothes was a media business because that capital P product extends laterally. It's not just this we took our relationships and expanded it and it kept going. You know the middle picture. You know some of the women who worked with me said this is awesome. We wish we learned this when we were 1618 20 years old. Go teach our kids. So I did. So part of the business model I went to PMI predominately black institutions, first generation, first generation institutions in HBCUs. I taught my curriculum that I had been teaching at Duke for 10 years. Like this is the stuff I didn't know here. Your mom and aunties want you to know this. So I'm coming. And what did that lead to? All of a sudden the younger women said Hey, Ashley Stewart pretty cool. We'd wear that clothes. Oh, do you want to juniors line product extension and they pulled in the demand online. And then their pictures all over the place? One of my favorite moments was when the black leadership of JP Morgan called me and said there's something called Asian American month. Do you want to come in and talk about it? And I said, Wait, the black leadership is calling the Asian guy to keynote Asian American month. And they laughed and I said I was like yeah, that's I'd come in, but I want the whole firm there. Bring everyone and so for three or four years now I'm like one of the few people that bring in like it's like the women's group, veterans LGBTQ. A lot of the group's Why aren't you all working together?
Work together.
The ultimate litmus test this is where
it gets a little sad.
During my seven years ago, there was a lot of quote joy, there was a lot of sadness. My dad died. And in 2015 and then in my last year there, my mom died. She got diagnosed with pancreatic cancer. I lost her in three weeks. And why it took me so long to write this book I needed to really actually get over it. If I'm honest with myself. I was depressed. I just couldn't believe what what happened. But these words that came from my colleagues when I told everyone that it was time for me to go, I don't know how to measure this.
You know, like it's,
and we're still friends to this day, but I think about my parents I think about my mom and how much they reminded me of my mom and my mom have them. I think one of the best moments for me, which I won't spoil in the book was when my dad's my dad died first. When a lot of the women that Ashley Stewart came to my dad's wake surprised me and they hugged my mom and said all Mrs. Re you know, your son's a pretty good dude. And that, to me is success. And that moment I'll take with me for the rest of my life and you cannot put that in the accounting statement. Just kidding. So the day my mom died, we visit my old home where I had the red helicopter story. And so my kids saw the little family rooms tiny with shag carpeting and wood paneling. It still looks like that they didn't renovate 40 years that red helicopter I held at my TED talk that was given to me by a woman at Ashley Stewart. She just showed up on my desk one day she just said I liked the story. And the women actually stood gave me a red helicopter just more intangibly I found myself again. It was just I just did I'm never gonna lose that guy ever again. I found myself again. And by being kind and being the boy that gives half a sandwich. That doesn't mean I'm any less good. If not, I think I'm better at finance, law, accounting, marketing. I think I'm better at it. There's no baggage, it seemed clearly. And then on the way home to Boston from my childhood home, we stopped by my dad's office. This will be the equivalent of kind of like your bookstore. This little office was still not occupied. For 10 years. 12 years at this point, it has laid dormant. My dad, just the relationships that came with him. He gave life to a space that had no business having a life, which is a lot of what you will do every day. Think about the goodwill and Chang in the office that no one wanted that space. And so that's me and my children in front of his office three days after I buried my mother. And then office is to this day, it's it's it's empty. And so that's how important the role that you all play in your communities. It's really important. And sometimes I know you know that, but it's nice sometimes to hear from one cheerleader. I'll tell you like it's really important. And so after sort of being depressed, and taking a break for six months, I I got a call from Dr. Frederick at Howard asking me to be the Johnson Chair of entrepreneurship and I cried. I told him I didn't think anyone really saw what we did. And he's like, we saw and so it's not an insignificant appointment. Just if you look at this and everything. It's they gave me hope. So then I said, Oh, maybe I can have the courage to write a book. I'd never written one before and this is what I came up with.
It's just this that if you are kind and
mathematically true, that I think you create goodwill, I think the economists will say you create positive externalities. And we live in a country that doesn't penalize negative externalities. So I want to be involved with things that create and reward positive externalities. We have to and that may be theirs. To do that. You have to sort of tell your own red helicopter story and be honest about present past future. And that if you can be honest with that life, then maybe the next part is that the rear Prop has to sort of you have to get the money kind of right. Right, like really see accounting correctly, really be balanced, integrated in your ops. And that once that balance is there, maybe you can spread it and get new customers and new faces and innovate without losing life and money. Right and being honest about it. That the connect those three fractals
goodwill, so this is my
my shift now just about where this is all going. So this is the quote that gets most quoted in my TED Talk. And in this little sentence, I hope there's a lot there's a lot of texture in here where it's kindness, it talks about distributing problem solving, which is really code for agency and it creates a safe environment that unleashes it doesn't prescribe it unleashes what was great at Ashley Stewart was always there. I think the thing I did really well I just listened. And I gave her space to just be to sing. And I didn't get in the way. And then once I heard it, I put some cartilage around it. To let it thrive. And it turns perceived liabilities into assets, which means you have to be a little bit versed in accounting, that not everything accounting tells you is an asset is an asset. And liability is not a liability, some of it are assets and to be really discerning about it. That's really what this means and it took me 40 minutes to get to this place. It takes me 350 pages to get to this place. But it requires an understanding of three or four disciplines in the integrated way. And so this is where it's going. It's just I think sometimes simple truths. There's nothing I'm saying on the stage, just like our shockingly original or innovative. It's just maybe a simple reminder of some basic truths that maybe sit inside your chest somewhere that and hopefully just giving you permission to sort of have confidence to say it. There are a lot of people who feel it and we need to come up with a collective story. So these things are just spreading. People want to tell the story and so it's spreading this way. It's being taught in the classrooms of universities all across the country, at Small Business Centers at Howard at JP Morgan with Ashoka. It's spreading across industries and ideologies. It's not partisan, it's about humanity. It's a collective song. And I'm going to end this by showing you like this is what it looks like. We're converging flywheels like these are communities that really sort of work together. But they're coming together around just something simple called kindness and math and sharing the red helicopter story. And importantly, the local commerce is getting involved, the mayors, the Small Business Development Centers, the that the schools, like its local decision making, realizing that they have to mobilize and then it requires orthogonal alliances that haven't existed before. Not in the past, but certainly they should in the future. And that's kind of why what I see happening now as an investor, less as an author about sort of what I see is coming in this country that that there's going to be a convergence of very interesting ideas and alliances, that hope we all give space to allow that to happen. And so if I have two minutes, that this is all about stories and story about my mom, my dad and me and the women have Ashley Stewart, who befriended my family, who came to mourn my mother and my dad. It's a story of all of these people that you see I think it's a story of actually America at its quietus but at it's a good America actually. That's America that I grew up with in a suburban Long Island, but where I bought these books, is quiet. That humbly did its thing. The other way to tell these stories is not just through words and writing and through storytelling verbally and pictures, but I wanted to sort of just play one last thing for you that hopefully, if you don't remember anything I say said you'll remember the next two minutes. It's a song. It's an original arrangement. It's written in counterpoint. So in counterpoint, you know you're an owner and person business in life a counterpoint there's no harmony. It's two melodies. That big exist together perfectly and they create a third melody. No one's asked to sort of sing differently. You sing. So this song is written in counterpoint. The first tune you're going to hear is Adi Dong, which is the most important song in Korean history to be Korean. It is the song. It's like an old folk song. The other song you're gonna recognize, and I hope you're hearing this song, something that you can identify with. There's a lot of struggle and pain in the song but there's a lot of joy as well.
think that the future I think that the future of the independent
booksellers is very books rosy to me, truth communities, small business, but it's not going to be without a little bit of hardship. And I hope that that song sort of gives you the strength to keep going and to keep yourself open. I hope that you see a lot of these new faces that come into your your stores and supplement the existing customers that you have. So thank you very much. For your service to our country. Thank you