In The Cobbler: How I Disrupted an Industry, Fell From Grace, and Came Back Stronger Than Ever, American fashion designer and entrepreneur Steve Madden reminiscences how he took his eponymous shoe company from a startup selling shoes out of the trunk of his car with $1,100 startup capital to a multi-billion dollar global brand. Along the way, Madden made some mistakes that landed him in prison, he speaks at great length about his battle with alcoholism and drug addiction, family trauma, lessons learned, and his path to personal re-invention.
Madden writes about his Attention Deficit Hyperactivity Disorder (ADHD), his losses (Grief, Divorce), and his wins (Grass to Grace to the bottom and getting back up). As of March 2022, Steve Madden has a market cap of $3.13 Billion. From selling shoes from his car trunk in the 90s to a billion-dollar company. Very Inspiring.
Steve Madden’s Memoir is a very great read and I found it to be insightful, thought-provoking, and intense. Madden is very vulnerable, down-to-earth, non-pretentious, admits his failings, and describes steps he took to get back up. Every chapter is named after the part of a shoe. Steven Madden is featured in The Wolf of Wall Street, which is based on the Jordan Belfort memoir.
Steve Madden’s The Cobbler favorite Takeaways:
Drive: Fear of being broke and losing it all drove Madden.
The Cobbler
Jordan Belfort, the infamous “Wolf of Wall Street,” first called me The Cobbler back when we were friends, as he took my company public and invited me to work with him on other deals too. And while that relationship represents one of the biggest mistakes of my life, one that led to a painful downfall, I have to admit that the name he gave me fits in more ways than Jordan ever could have known.
Growing Up
Growing up, I always felt like an outsider. The kids I went to school with were almost all from the same type of upper-middle-class Jewish families, but I was different. My dad was Irish Catholic and from the “other side of the tracks,” while my mother was a local Jewish girl. I was the only mixed, half-Jewish kid to be found.
His parents gave birth to him late
My dad was already forty-four and my mom was thirty-six when I was born, the youngest of three boys. My parents had grown up during the Depression and were in their twenties dur-ing World War II. They knew what it was like to lose everything,including family members who went off to war and never cameback.
Exposure to a range of generation
Being exposed to such a wide range of generations affected me in ways I wouldn’t fully understand until I was much older. When it came to my business, I’ve always had an old-school, blue-collar mentality. From day one, my team and I were scrappy and worked on a shoestring, pulling ourselves up by our bootstraps, if you will.
Fear of losing everything
My father worked hard, but the textile business was tough. He never made the big bucks, and the overall feeling in my house when I was a kid was that we might lose everything at any moment. Every weekend, my father would sit me down and read me the bankruptcy notices in the newspaper. “Look at what is happening in this country!” he would tell me.
My parents had been so traumatized by what they’d seen during the Depression that they lived in constant fear of poverty. There was a lot of fear in our house: fear of the floor falling out from beneath us and fear of my father’s temper.
Dad’s Alcoholism and eventual Empathy
My dad was something of an egomaniac—he drank too much, and he was hard on me, but he was a good man. I may have judged my father harshly when I was younger, but now I see him for what he was: a poor boy who never went to college, who was cut off from his family, and who worked like a dog to provide for his kids.
Lesson learned from Dad
He taught me my single most valuable business lesson, and that is, first things first. You have to take care of the fundamentals—putting food on the table, paying your bills—before anything else. He lived by that rule, and from the moment I started my business.
Impulsiveness
At school, I got in trouble for constantly speaking out of turn, for tapping my hands on the desk, and for being a class clown. I was impulsive, and I couldn’t stop my mouth from interrupting the teacher or making a wisecrack even if I’d tried. At home, I was just as loud and obnoxious, a smart-ass.
Learning Disorder
My mom couldn’t stand me, but my dad tolerated me a bit more. Maybe this was because I tried to tone it down around him, ever wary of his mood. I only succeeded sometimes. Nobody imagined that I had some sort of attention deficit or learning disorder. There was no such thing back then, really. You were either a good kid or a bad one, and I was definitively the latter.
Labeled Troublemaker – Drive to succeed – Prove them wrong
As I absorbed the disappointment of my mother and my teachers, I made a caricature out of myself. It wasn’t a conscious decision, but I had been written the role of trouble-maker, and I played right into it. I broke the rules and acted obnoxiously just to prove them right. There was a moment that this flipped, but that came much later, around the time I started the business. At that point, the same urge to act out mutated into an intense work ethic and obsessive drive to succeed at all costs in order to prove them wrong.
Avid Reader – Biographies
As a kid, there were two times I could focus: when I was reading and when I was playing golf. I never did well in school, but I was an avid reader, and I especially loved biographies of movie moguls like Louis B. Mayer and Samuel Goldwyn. There was something about the intersection of art and commerce that intrigued me even then. These guys were interested in the whole vision of a project from beginning to end. They were businessmen like my father who went to the office in a suit and tie every day, but they were also artists. That was a completely new concept to me.
Despite everything, I was still an avid reader. Books and drugs were my favorite escapes. I was thrashing around the room doing God knows what when the cinder blocks collapsed, and the books came tumbling down.
Brothers also battling alcoholism and addiction
As the years passed, though, it turned out that John, Luke, and I had more in common than any of us would have expected. Each of us has faced our own slightly different battle as part of the same larger war with alcoholism and addiction. It’s a tough fight, one you can never really win outright. The sad truth is that to some extent both my brothers lost their battles. I’m still fighting mine a day at a time.
Generational Trauma
Growing up, alcohol was ever-present in our home. It was never really a problem, but it can’t be a coincidence that my father’s three sons all turned out to be addicts. He definitely liked to drink, probably too much. Like many men of his generation, he enjoyed his martini lunches. But he always functioned, worked hard, and never made a public scene. No matter what, he was on that same train every night.
Duality
I found myself uniquely situated to take in the message from the older generation to work hard and the opposite ideology from the younger generation to opt-out. I’ve done both, and this duality has shaped my life and my business. In high school, it seemed like I was heading more in the direction of opting out. I started cutting class and smoking pot with my crew of buddies pretty much every day.
The Rhythm of Retail
At Toulouse, I started to learn the rhythm of retail: how a woman tries on a shoe, what she’s telling you she wants when she twists this way and that in the mirror, whether her mind is made up when she asks to see a certain shoe or you should bring her another color too. It was sort of like dancing or kissing, an intuitive give-and-take. And unlike either of those activities (at least back then), I was good at it.
When a woman came into the store, I’d help her pick out the shoes she was going to wear every day. Those new shoes would change how she walked, how she dressed, and even how she made her way in the world. I got a rush out of helping design her lifestyle in this way.
Personal Reinvention – Good for something
This was a game-changer for me. It was the first time I thought it might be cool to create something that hadn’t been there before, and, just as important, that I might actually be able to. Until then, I had been looking at myself through the eyes of others and concluded that there was something wrong with me. My experience at Toulouse offered me some redemption, a bit of hope that I wouldn’t always be a good-for-nothing.
Lasted one year in college and was cut off by Dad
I lasted one year in college. After seeing my grades, my dad called me on the phone in my dorm. He was in his sixties and was getting ready to retire, and he had no patience for my foolishness. “You’re cut off,” he told me gruffly. “You’re not taking school seriously, and I refuse to waste my money. Go get a job.” And that was it. I don’t recall saying one word in that conversation. What was there to say?
The cut-Off was a Blessing
Now I can say for sure that my dad did me the biggest favor of my life by yanking my ass out of college. What I needed was to fend for myself and work hard, not an all-expenses-paid, four-year vacation. If I had stayed in college, there’s no doubt I would’ve fallen deeper into the hole of addiction. Not that this isn’t exactly what ended up happening, anyway. Some things are truly unavoidable. But at least my father wasn’t complicit in my fall.
Selling Shoes at Jildor
Thanks to my experience at Toulouse, I got a job right away selling shoes at Jildor, a popular shoe store in nearby downtown Cedarhurst. With all three of their sons out on their own, at least temporarily, my parents had sold their house and moved into a small apartment in town. For a while, I slept on a pullout couch in the living room until the building’s management company asked my parents to get rid of me.
Eat your own dog food
At Steve Madden, salespeople are not allowed on the floor if they are not wearing our shoes. Period. I spend a lot of time in our retail stores, and whenever I see sales- people in another brand of shoes, I walk right over and tell them, “Get off the floor.” It may sound harsh, but it all comes down to pride.
Without Jildor, there would be no Steve Madden.
Lesson from Jay
As much as Jay taught me what to do when I started my own company, he also taught me what not to do. He was a great shoe man with two major flaws: One, he could not let go and allow other people to be the boss. And two, he wasn’t great at paying his bills. My perception was that he liked having some level of control over his salespeople when he owed them money, but I saw how this hurt him in the long run.
Nick and Sal
Nick and Sal were two older Italian men who had been successful in the shoe business separately for decades. Sal owned a broken-down shoe factory way out in East New York, Brooklyn. He was a real character who loved nothing more than sitting at his decrepit desk in that fac- tory with the suffocating machinery noise all around him. Nick was a shoemaker who was famous for going on his band saw and making tremendous platform shoes. When he was done, he’d have sawdust all over his face.
In other words, I owned the brand, and they owned the business. This meant I had to cover all the expenses that went along with designing and selling the shoes out of my 10 percent, and they’d handle everything else. That 10 percent may not seem like much. If we shipped thirty thousand dollars’ worth of shoes, I’d get three thousand. But it was a good way to start a business when I didn’t have any money. I scraped together the sum total of eleven hundred dollars I had in savings and used that to fund my side of the business until our first invoices came in.
Stratton Oakmont – Pump and Dump Scheme
Stratton Oakmont was a classic pump-and-dump stock company. They would take crappy companies public, artificially jack up the stock price, and then sell off their shares at a huge profit. Hence the name: pump (inflate) and dump (sell). Every day, Jordan hyped his team of brokers up like rabid dogs before they got on the phone and used scripts Jordan had written to intimidate people into buying shitty stocks at inflated prices.
In the late 1980s and early ’90s, the times were ripe for firms like this to bloom. Stratton was simply the most effective and infamous of the lot. They called it the “boiler room era” of brokerage houses because interest rates, which had been insanely high throughout most of the 1980s, were finally starting to come down. While those rates were high, venture capital funding had pretty much all dried up, so for the first time, the markets start- ed allowing initial public offerings (IPOs) on companies and even ideas that were still unproven. For the next decade or so, tons of IPOs hit the market for companies that were basically put together with spit and paste.
In those early dealings with Stratton, I wasn’t innocent or taken advantage of. I wanted in, and I got there in my usual way, by launching a full-on charm school offensive. If Jordan was a shark or a wolf, then I was like a mini-barracuda in my own right.
Money is not everything
I could say I wish I hadn’t done it, but that’s an empty thing to say. More than that, I wish I hadn’t been compelled to do it. I wish I didn’t have the feeling back then that money was everything. I can tell you now that it’s not everything. Not even close. But that was my core belief back then, and once I was hooked, I would have done anything.
Money was my new drug, and in the hands of an addict, it is just as toxic a substance.
Taking shortcut: Patience is the key
Meanwhile, I was scraping together every nickel I could find just to stay in business. So, when they asked, I was happy to flip stocks by buying and selling shares on the day of a company’s IPO and make a quick twenty to forty grand that I could invest in the business.
Today, I liken those deals to taking a shortcut. They helped me solve my cash flow issues at the time, but, like most shortcuts, they weren’t actually the best way to get to my destination. If I could go back and tell myself one thing, I would say to be more patient. I have no doubt that with the right team and the right products, we could have made it without taking a shortcut. But I’ll never know for sure.
LOTTERY – Lie to self to justify bad behavior
As for me, I went from constantly worrying about cash flow to being a multi-millionaire within three hours. It was a lot like winning the lottery. But as most people who have actually won the lottery will tell you, fantasy and reality are not the same. I knew Stratton had manipulated the stock and that the whole thing was probably too good to be true, but I told myself it was another grey area. Maybe it wasn’t exactly ethical, but it wasn’t strictly illegal, either.
Deep down, a part of me knew this was bullshit, but the thought allowed me to sleep at night and use that money to rapidly grow the company and hit the next level of success. This in turn earned money for those unwitting investors and put food on the table for our rapidly growing number of employees and their families.
Going to Prison
As depressed as I was, knowing that I would be going away for some time motivated me to shore up the company. It had to be as solid and strong as possible to withstand my absence. In addition to prison time and fines, part of my sentence would likely be a ban from acting as an officer or director of a publicly-traded company, which meant I would have to step down as the CEO of Steve Madden.
Sentenced to 41 Months in Prison
Later that day, I went before Judge Gleeson, and he confirmed the sentence: forty-one months in a federal penitentiary. That’s three and a half years. Three Christmases. Three birthdays. A lifetime in the fashion industry. And for what? Money. It all seemed so foolish to me now. So incredibly stupid. But the time for regret was over. I had to pay for what I had done.
For the most part, the hardest thing about life in prison wasn’t actually life in prison. It was the heartbreak of the world moving on without me while I was stuck in there, trapped in this strange limbo On some days, I thought, This must be what it feels like to be dead.
Teaching Business Class in Prison
My work assignment at Coleman had been stacking books in the prison library, but I was messing around too much and got fired. I waited for my new assignment, and when it came, it was a nontraditional re-quest. The guards asked if I would teach a business class to the other guys and offer them some tools to help them get work when they were eventually released. I was more than happy to do this, though I wasn’t sure if the guys would be interested in what I had to say.
To me, being an entrepreneur doesn’t have to mean starting a business. It can be anyone who breaks the rulebook and has a creative way of doing things.
Getting Married
In January of 2006, just nine months after I was released from prison, Wendy and I got married. My instinct was to go to Vegas and do it quietly, but it didn’t turn out that way. Instead, our wedding was a big affair at the Rainbow Room on top of 30 Rockefeller Plaza in Manhattan.
I didn’t want to be normal. I just wasn’t made that way. And while I’d learned to embrace my differences and make the most of them, it still didn’t feel entirely natural to be doing something as ordinary as getting married, especially at this big, traditional wedding with a huge white cake and a live band.
Blessing in Disguise
This is one of many reasons I’m so grateful for every step of my journey, including the most painful ones. If I hadn’t gone away, I probably would have stayed on as CEO indefinitely, and I’m certain that if I had, we wouldn’t be nearly as successful a company as we are today. After being forced to step aside, I saw that my talent was not to be the CEO of Steve Madden. I am Steve Madden.
The CEO has to take calls all day and deal with confrontation and stay organized and, worst of all, remain calm. Impossible! The truth is I wasn’t suited to it.
Legacy
In the program, we say that it doesn’t matter why you come to meetings. Just keep coming back. And I do that for selfish reasons, too, because I love my kids, and I want to be there for them. I haven’t won the war, and I never will. But every day, I’m still fighting. With the pieces of my legacy in place, I’m free to spend time with my kids, contribute to the company in ways that are exciting to me, and enjoy the fruits of my labor.
All the Best in your quest to get Better. Don’t Settle: Live with Passion.
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