Jim McCann
Chairman and CEO, 1-800-Flowers Inc.
We're following our customers to see what other products or services they would like that would help them to have better relationships in their lives.
Summary
This week, Alan was joined by Jim McCann, the Founder, Chairman and CEO of 1-800-Flowers. Jim founded the company back in 1986 and has led 1-800-Flowers for over 30 years and has made innovative strides in the ways businesses operate in the modern day, using new and emerging technologies to establish new channels through which retail stores can reach their customers.
Throughout their hour-long conversation, Jim and Alan discuss the early beginnings of his flower and gift giving empire, his experience working with family, and his philanthropic efforts with his non profit organization Smile Farms.
Mentions & Resources in this Episode
Guest Bio
Jim McCann is a highly successful entrepreneur whose vision and energy have helped grow 1-800-FLOWERS.COM, the company he founded in 1976, into the world's leading florist and gift company.
The man who revolutionized the floral industry grew up with a bare patch of lawn outside his home occupied not by flowers, but by weeds. How ironic that Jim McCann would go on to take a single flower shop on Manhattan’s East Side and turn it into a billion-dollar omni-channel retailer, and one of the world’s leading gourmet food and floral gift providers. It was Jim’s belief in the universal need for social connections and interaction that led to his founding of 1-800-FLOWERS.COM, Inc. and today as a highly successful entrepreneur, philanthropist, public speaker and published author, Jim’s passion remains the same – to help people create better, more meaningful relationships.
Jim’s willingness to embrace new technologies that enhanced customer engagement, such as 800 phone numbers and e-commerce, often long before other retailers, has consistently kept 1-800-FLOWERS.COM, Inc. ahead of the curve and positioned it as a leading innovator in the marketplace. His strategy for growth has included an effective combination of birthing and acquiring new businesses and brands that resonate with customers for their gifting and celebratory occasions. The company’s offerings include such iconic brands as Harry & David®, PersonalizationMall.com®, Wolferman’s Bakery®; Cheryl’s Cookies® and The Popcorn Factory®, as well as Simply Chocolate®, Things Remembered®, 1-800-Baskets.com®, and SmartGift Inc. among others.
Jim is also deeply involved in philanthropy and is especially devoted to helping individuals with developmental disabilities. This includes Jim’s continued work as Founder and Chairman of Smile Farms Inc., a 501c3 not-for-profit organization established in 2015. Smile Farms provides meaningful work opportunities for people with disabilities, allowing them to master new skills, experience teamwork, contribute to their community, and, importantly, take home a paycheck. Today, Smile Farms has several campuses and serves hundreds of people and their families.
In addition to his roles as Founder and CEO of 1-800-FLOWERS.COM, Inc. and Chairman of Smile Farms, Jim also serves as Chairman of Worth Media Group, which celebrates organizations and leaders who are using their influence and success to have a positive impact on society. Jim also serves on a variety of other private and not-for-profit boards and is Vice-Chairman and lead Independent Director for International Game Technology PLC.
Episode Transcript
Alan Fleischmann
Today I'm joined by an industry-defining leader who has changed the way we connect in our everyday relationships. Jim McCann is the founder, chairman and CEO of 1-800-Flowers, the company he established back in 1986. Jim has led 1-800-Flowers for over 30 years and has made innovative strides in the way businesses operate in the modern day using new and emerging technologies to establish new channels through which retail stores can reach their customers. 1-800-Flowers has broken every barrier one can imagine over the years, thanks to Jim's business acumen and foresight on the future of entrepreneurship and on consumer preferences. Jim is also heavily involved in philanthropic efforts through his nonprofit, Smile Farms, an organization that creates meaningful employment and vocational educational opportunities for people with disabilities in agriculture and on the hospitality team. Welcome to “Leadership Matters.” It is such a pleasure to have you on the show.
Jim McCann
Alan, good to see you again. Wonderful to be on your show.
Alan Fleischmann
It's been really fun. As you and I were talking and reminiscing a little bit, I had the pleasure of being in your company many years ago. And I've certainly been a big admirer of your leadership over the years and it is true that you saw things that nobody else saw and you created things that, frankly, have kept up with the time so you keep innovating. Let's talk a little bit about your background. You grew up in South Ozone Park in Queens. Tell us a little bit about life growing up around your house. You're the oldest of five children. What were your siblings like, your parents, your mom and dad. And just tell us a little bit about growing up in that home.
Jim McCann
South Ozone Park Queens is a community in South Queens. On one side, you know it for its location near Aqueduct Racetrack. And the other side would be John F. Kennedy airport, though when I lived there, it was Idlewild Airport. Now the famous JFK. So a neighborhood of working class people. I was born in 1951. So it was a lot of young men who had returned from service during World War II, all starting their families starting their careers all around the same time. So there were lots of kids. It was a busy, noisy place. Made up of a lot of civil servants, policemen, firemen, sanitation workers. Once in a while, there'd be somebody who would put a suit on and go into the city, the city for us was Manhattan. And they do something in an office and couldn't quite figure out what the heck they would do in an office. But we were a community of shopkeepers, tradesmen, laborers and civil servants. So it was a very humble, but fun upbringing.
Alan Fleischmann
And tell us a little bit about your mom and dad and your siblings.
Jim McCann
My mother and father grew up in that community. My dad was a painting contractor, so his father and several generations before him were all in the painting business. And so my father is a very young man, his father died very young, 48 years old, and back then there was no safety net in terms of social security or any other kind of way to fend for yourself other than what you earned. And so my grandmother realized she couldn't have this five foot one little Irish lady running a contracting business with a whole bunch of men working for. So she told my father that he was in charge. He was the oldest of three boys and just out of the service. And so she may believe he was in charge. And so he and my mom married very young, started a family right away. And as you said, I was the first of five. So I have two brothers and two sisters. My youngest brother Chris, was 10 years younger than me. So we were four in about four and a half years. And then several years later, this surprise my brother Chris came along.
Alan Fleischmann
That's amazing.
Jim McCann
They're all living in the same area now. So we do all live in the same area, we have one sister, the black sheep of the family who moved far, far away. She lives in New Jersey. The rest of us still live in the real world of New York and Long Island.
Alan Fleischmann
I love that – so far away.
Jim McCann
One of the primary reasons, I think, we're all still local, Alan, is that my middle brother, Kevin, was born with developmental disabilities. And that had a big impact, of course on him and my parents, but on the rest of us, the siblings too. And I think one of the big reasons none of us have ventured far away is that our parents instilled in us a real sense of responsibility. To make sure Kevin was cared for, it was a tough circumstance in the community we grew up in because it was, frankly, in the 50s and 60s, the dark ages of attitudes about disabilities, particularly mental developmental disabilities. And there was not a lot around in the education system to provide for the special needs people. And so it was a rough and ready kind of situation, it had a big impact, a huge impact on my parents. And they didn’t have a lot of means. So it was especially challenging. But what we learned from my parents at a very young age was that we had responsibility. And we had to be there to protect and care for my brother. And to see them. In an absence of capabilities, and a real sense of desperation, organize themselves to find other parents in the community had similar challenges. And they borrowed space from a local churches, and have Saturday morning get togethers for coffee with other parents and their children. And so a lot of our best friends growing up were were the kids who came from families with people with developmental disabilities or special needs of some kind or another. So it's been the centerpiece of all education, our learning and our social environments to understand that there are people among us with special needs, and they require and deserve our attention. So it's had a big impact on our lives.
Alan Fleischmann
I know that's been a big part of your philanthropic focus over the years as well.
Jim McCann
Well, that's how we met those many years ago, Jean Kennedy Smith, the President's sister, created an organization, the Special Olympics, which had a big, big impact on my family and our lives. Because my brother Kevin was active in the Special Olympics. And that was, that was a big, big learning opportunity and a big investment on my family's part to be involved in to have Kevin have his things. You know, he wasn't going to have his high school graduation. He wasn't going to have his events like we did religious things like confirmations and baptisms, and all of that Special Olympics were His activities. His special day is his reason for us all to gather and celebrate. And then, of course, Jean Kennedy Smith created the very special Arts, which was all about bringing art to the disabled communities.
I was lucky enough to be asked to get involved there for a while, and I did on their board and it got to meet you and Kathleen Kennedy Townsend and because Jean, and Will Smith and so many really, really wonderful people. It was an important chapter in my life. And of course, getting the hang around with a Chief of Staff of Jean Kennedy Smith, that famous guy, Alan Fleischmann, was, you know, on my calendar and one of the great moments in my life.
Alan Fleischmann
But it's such wonderful memories of those, getting together with you and a few iconic CEOs like yourself, and you know, celebrating life but knowing that each one of you was committed to doing good in the world, and you've kept that up ever since. And I I can see. I can see how much Kevin's legacy of love from your parents onward has been such a profound impact in your journey. You attended Monmouth College for a time, before you attended and graduated John Jay College of Criminal Justice in Manhattan. Let's start with –
Jim McCann
Just making fun of the fact that I got thrown out of college. Is that what you're making fun of?
Alan Fleischmann
I wanted you to tell us a little bit about that experience with the month off and then and why school wasn't quite the right fit for you.
Jim McCann
You're betraying your geography and that you're not from the New York/New Jersey area because it's Monmouth College, not Monmouth University in Monmouth County, New Jersey, right on the Jersey Shore. Well, I I went to a Catholic high school in Brooklyn called Bishop Lachlan, which is an all boys Catholic High School and a tough community in Brooklyn, where we were 400 boys in each class, so 1600 boys in the same building, so there's a lot of noise and testosterone running around. And it wasn't automatic back then that we would all go to college but toward the end of the high school said, Well, maybe we'll go to college and having gone for at that point, 12 years to Catholic school, grammar school and then four years of high school.
My buddy and I decided we were gonna go someplace nonsectarian. And, and we didn't have great grades, so we had to figure out where we'd go we wound up taking a day off, we were allowed to take days off to go visit a college. We borrowed his sister's Camaro Convertible, we drove down on a spring day to Monmouth County, New Jersey, found this beautiful, idyllic little college, decided that's where we were going to go. And we did everything but plan on the academic side of things. So we had a great social time. And we, we roomed together, and we had fun, and forgot about that going to class and staying out of other kinds of trouble.
So after a couple of years, they decided that I should probably find another college to go to or just get the heck out of that. So it was an interesting experience. It was a learning experience, but not a great academic experience for them or for me.
Alan Fleischmann
Did you have a little gap there before you decided to go to John Jay?
Jim McCann
No, I didn't have the option of a gap. Because I had to provide for my own. My own means I didn't have anyone to fall back on, I was told. So I got into John Jay College right away and was working. I was working at St. John's Home for Boys at that point. And John Jay was a great place for me to go to school because it was the police college, it was a criminal justice school and police university in New York, and even a finer institution today than it was way back then. But my path I thought would be to go into the police department. It was, you know, prestigious, it was my my son, my heroes and role models in the community were part of the police department.
I always thought that's where I’d go. So when I had the opportunity to get into John Jay College, it just cemented my interest in that as a career. But I had already started working at St. John's Home for Boys as a living counselor. And the nice thing about JJ is it’s structured for police and firemen, corrections people run classes. If you went to class, it was Monday, Wednesday, or Tuesday and Thursday, and the class ran eight hours apart. So if you went 10 o'clock in the morning on Monday, that same class with the same professor would be taught again at six o'clock at night, so that people working different shifts, changing shifts, could attend the college. So that worked out beautifully for me, because my shifts were changing at St. John's home working nights working days. And so I could go to school. And it was a tremendous find for me.
The school when I went to it was based in the New York City Police Academy in Manhattan. And it was primarily civil servants, policemen, firemen going to the school. And they were just starting to open it up to outsiders. And so I got in early and had a wonderful experience there. I'm on the board of John Jay College now. And they're always talking about how do they shorten the time that it takes people to graduate from this four year school because it was averaging six years. And they said we have to do something about this. And I protested. I said, Let's not be overly focused on that everyone who goes here is primarily first generation to go to college, a lot of children of immigrants, and most 99%, I would say are working in addition to going to school, so let's not get hung up on how long it takes them just as long as they do graduate. And I remind them that college for me was seven of the best years of my life.
Alan Fleischmann
Why did you end up majoring in psychology there?
Jim McCann
Because I began to question the idea of whether or not becoming a policeman was the best career path for me because I was really, really enjoying what I was learning and doing working at St. John's home, which we cared for primarily teenage boys who had had some desperate circumstances in their lives. Sometimes it was an alternative or of them being incarcerated. But I was enjoying it so much learning so much that I kept postponing the decision on the police department. And then I shifted my studies from criminal justice to psychology, because it was more of what I was interested in at the time.
Alan Fleischmann
That's very exciting. In many ways, I can see how you applied that into your entrepreneurial leadership as well. We'll get back to that in a minute. But the fact that you focus on psychology, once you're a professor, where they're leaders that you met at school, who had a lasting impact, I knew I know that. I'm sure you remember some mentors along the way. You've mentioned Blanche Cooke, as one of your professors who had a pretty big impact on the way you thought about your goals and your issues. curious a little bit about that and what role she played but anyone else as well?
Jim McCann
Well, I'll take you back to how I came to be very conscious of that situation. It was probably 20, 25 years ago. My wife and I were to dinner, I think it was in Aspen, Colorado put on by an investment bank. And it was a table of 10. There's a beautiful tented spot in Aspen. And, you know, we didn't know anyone else at the table. And there was one woman on the other side of the table, who was just a real leader. And she sparked a conversation. And she asked a question at a table and went around asking us for our responses. And the question was, was there a teacher in your life that really had an outsized impact on you? And that might even last till today?
When they came to my turn, I thought about it and I said, Yes, it was. It was a woman at John Jay College who taught government and history and constitution. And she was a member of the classes, most of the classes armed, because they're off duty policemen. And we as a group tended to be quite conservative crowd. And here was this, this young professor with his big afro and mini skirt on and knee high boots, and she'd get the class rockin with provocative statements and challenges. And it was not, it was not unheard of, for the people will be standing in yelling and a lot of noise from a classroom. And I just got a kick out of how she enjoyed being provocative. I realized that I would go out of my way never to miss a class because it was going to be interesting. She and I developed a friendship and we would chat often.
So I told that story at this dinner about how she really had a big impact on my life. And the woman across the table looked at me and said, Are you by any chance talking about Blanche Cooke? I said I am and how do you know that, she goes Blanche is one of my best friends. And then she asked a really provocative question, which was, have you ever told this to Blanche? I thought about it. I said, “No, I haven’t.” And I made it a point to say to myself, I have to correct that.
So soon after, I reached out to Blanche, who was and still is teaching at John Jay College. And it renewed our relationship. And we're friends today. She's emeritus now and she's had a huge impact on the leadership of the college of the leadership of NYPD, on me and so many other people who have gone through the doors of John Jay College. When I was there, it was a few hundred students. Today. It's 14,000 students. It's quite amazing. And Blanch has been a driving force of education, private preoccupation of all different types. She's an amazing lady, an expert on Eleanor Roosevelt. I think she's written four or five different volumes of research on Eleanor Roosevelt. And she's just a force of nature.
Alan Fleischmann
Wow. And her full name is Blanche Cooke?
Jim McCann
Yep.
Alan Fleischmann
That's so amazing. Because, you know, I think there was a book on Eleanor Roosevelt that she wrote that I may have actually had at one point, she sounds so familiar to me. But you know, the way you described her class, is exactly what you want to college. We like to debate, have lively discourse, be provocative.
Jim McCann
You want engagement!
Alan Fleischmann
The fact the you said, “gosh, I don't want to miss that class.” Because you just knew there was theater to this, that things were going to be discussed.
Jim McCann
You weren't going to sit there and listen to someone drone on – you were going to be involved.
Alan Fleischmann
That's amazing. Just to show your work ethic here. For many years, you were to the Catholic boys group home and you mentioned, at the same time, you also were doing other things, right? You were a bartender. You were getting involved in real estate, maybe flipping buildings a little bit. Tell us a little bit of that journey and how you were juggling several jobs at once?
Jim McCann
I've never known any other way. I think it stems back to growing up. Again, it wasn't a peaceful little neighborhood. It was a gritty, gritty neighborhood. And my parents didn't want me with a time off from school hanging around the neighborhood, because that's when trouble happened. So I think my father's philosophy was old enough to walk old enough to work and if I had time off, he put me to work in his in his painting business. So the painting business – McCann painting – specialized in churches, funeral homes, and schools, mostly through Queens and Brooklyn and once in a while on Long Island.
But Queens and Brooklyn were our backyard. And so rather than hanging around the neighborhood on a Saturday or, or sometimes he put me to work until I was old enough to go get a job someplace else, which I did in a hurry. Because it was tough work. I did all the work that the men refused to do. I remember one time we were doing a church in Brooklyn. It had a big steeple. And because I was a young kid, maybe 13 years old, 14 years old. They said, Oh, tomorrow, you're going to be painting the steeple. But you're going to do it in a boson chairs, boson shaped things. What kind of equipment is that, that they're going to bring in? I didn't know a boson share was a rope with a piece of wood that made a seed out of it for you. And then we're going to hoist you up. Because you would have smallest and most disposable. But so I did all the work that men who was much smarter than me knew not to do themselves. I did all the cleanup.
Alan Fleischmann
And when were you doing that?
Jim McCann
While I was in grammar school, while I was in high school, and unless I had another job working someplace else. I was going to work from my father. So I made sure I remember work.
I have a vivid memory of one, early one Tuesday morning. Wood painting a school in Brooklyn Sheepshead Bay, Brooklyn, and it was my job to go around and get the orders from the men and what they wanted for their coffee break. They want a buttered roll, they want a bagel, they want a cup of coffee, they want a tea, maybe one or two would have a different kind of beverage. And so I go around and take their orders, go out to the store, bring it back. So when they took their coffee break in the morning, everything would be lined up for them.
I walked past this young man, maybe a couple of years older than me, and had a beautiful pair of slacks on and a beautiful shirt. And it was sweeping up very lightly in front of the store that was about to open at 9:30, 10 o'clock in the morning. And I said now that's how I should be working. I'm not scraping paint, though I don't stink all carrying this heavy stuff, get into the job site by 6:45 in the morning. I said it's 930. He's just getting about starting his business day. So there was a wonderful men and boys clothing store in my community. Our shopping area was Liberty Avenue. And it was where all the stores were and it was a big, very successful men and boys clothing store. And a buddy of mine worked there. So I told him if there's ever an opening, and sure enough, he called me a week later said hey, we got an opening interested.
So frank gave me a job there and I worked there for 20 years off and on even when I was still working at St. John's I had my flower business going on aside. Yes, I still had some real estate I had bought fixed up and was renting out. But it was such a good place of camaraderie and spirit that Father's Day was not a busy time in the flower business. So I remember going working probably five or six years, every Saturday a Father's Day when this men and boys clothing store would be busy as can be. I work those Saturdays in that store. Because yeah, I had the flower business. Yeah, I had St John's. But I had the Saturday where I couldn't take it off because it was such a feeling of teamwork and accomplishment in this crazy crazy busy day. So it was work but it was social too.
Alan Fleischmann
You're listening to “Leadership Matters” and leadershipmattersshow.com. I'm here with a great guest today. It's Alan slice Fleischmann, your host, and I’m with Jim McCann, the legendary leader, founder, and CEO of 1-800-Flowers. And actually we're just talking now about I guess your first flower shop that you got involved in, it was called what?
Jim McCann
FloraPlenty. The way that came about, Alan, was, let me the stage for you here. I started working in St. John's I worked as a living counselor for a couple of years. Then I became the manager of a different group home where it wasn't living anymore, or at least not all the time. When I married very young, I started a family very young. Working in the social services is wonderful, but it doesn't pay very well. And now I'm the 24 years old, one of the administrators of the home so it's not a 24/7 job anymore.
I needed to supplement my income because having a couple of kids and a wife and working for social services pay was not covering it. I did have an interest in real estate. I buy a building in a tough neighborhood and would fix it up and sell it off because I learned those skills working with my dad. And I just sold a building. I think it was in Greenpoint, Brooklyn, and I had a $10,000 profit in 1976. And I returned to my roots. If you're an Irish Catholic kid from South Queens, you have a genetic requirement to be a bartender. And I was working as a bartender on the Upper East Side Friday and Saturday nights, where you can make a lot of money in a couple of days.
One of my customers who would stay late on Saturday nights and chat with me as we were wrapping things up on the flower shop across the street from the bar on First Avenue. And he mentioned to me that he's going to be selling it and I thought of a flower shop. Now there's a florist in my old neighborhood in Queens that seemed to do pretty well and seemed like it was involved with people in a pretty nice celebratory time in their life. Retail, I've been working in retail long time, I think I understood it. I didn't understand the flower business, but I thought I could figure it out. So I said, Nick, how much he asking for that business. And he said, $10,000. And I'm sitting there with a $10,000 profit in my pocket from this building I just sold.
I’m thinking this is serendipity: I have to buy this. So I asked him if I couldn't come to work there a couple of Saturday afternoons before I went to the bar. So he said, Sure, but why? I said, Well, maybe I'm your buyer.
I did that I worked there a couple of Saturdays before I went to the bar, I spent a lot of time talking to Nick and decided to buy their flower shop, but I bought it with the idea that I would build a business not just become a florist, which of course I did. But I bought it with the idea of trying to build a bigger business. So I kept my full time job at St. John's hired a buddy of mine to run that flower shop. And then six months later open the second and six months later a third until we had a whole lot of flower shops.
Alan Fleischmann
And they were all in Manhattan.
Jim McCann
No of the second one was in Staten Island. Third one was in Queens, fourth was in Queens, fifth was in Brooklyn, six to some, you know, so all around the New York metropolitan area. We had them in New Jersey, we had them in Westchester, Long Island, all around the area.
Alan Fleischmann
What was Flowerama?
Jim McCann
Flowerama was a company we bought about a dozen years ago. Great floral chain in the Midwest. And it's still going strong and and shops are doing really, really well.
Alan Fleischmann
So I got confused a little bit there with the origins and the original one. Got it. But it quickly turned your $10,000 into one flower shop, you quickly started to see the opportunity. Is that because you just knew there was such an interest in demand that there was a gap?
Jim McCann
It was actually a mistake? Alan, I thought there would be a kind economy of scale, and 10 years into it. I said, oh my goodness, I have all these flower shops, and there is no economy of scale. In fact, it just gets more complicated and you bleed in more different directions. So I realized that model wasn't going to work. I couldn't operate flower shops, in increasing distances. It wasn't a good model. I had made a big mistake. And it was 10 years in.
So in 1986, as you mentioned in the introduction. A group started a company called 800-Flowers. Not yet 1-800-Flowers Just 800-Flowers. And they launched his business in Dallas, Texas and it crashed and burned right away. But I was a fulfilling florist in New York area because I reached out and called them and said can we have a relationship? And, you know, it was only around a couple of few months when it just stopped. And I contacted them and I wound up buying what was left of the company he had failed. And I bought it. It's the company to get it as assets and his only real asset was the telephone number.
So I did that. It was a terrible business mistake. Because I wound up assuming its liabilities personally without knowing it. Because I was such a smart aleck that what do I need bankers and lawyers and accountants to do is this due diligence thing. So I did due negligence and didn't have that representation, and wound up assuming its liabilities, which then over the next several months, I discovered was about $7 million in debt that I had inherited and took responsibility for without really knowing it. So it was a deep hole I had to dig my way out of but that caused me to become a franchisor. Flowerama is another franchisor, because I started selling those shops to families to run and operate, which is a better model. They run them better, they own them, they put them all into them.
That was giving me the capital as I'd sell one or two or three of the 40 or so shops we had at the time that gave me the capital to invest in changing the name of the company to 1-800-Flowers and changing the name of our stores to 1-800-Flowers which everybody thought was nuts. And, in the next five or six years, lo and behold, we became a phenomenon and because of the emergence of 800 numbers in the 1980s as a new way of doing business, and we became the poster child for that movement, the first company whose name was a telephone number that was that was unusual. And it was pointed out to me the reason we changed it from 800-Flowers to 1-800-Flowers is people didn't get why is it? Why are you calling stores 800-Flowers? Don't you have more or less than 800.
So we decided, Well, nobody's getting it. We put the one on the front so that people would get that it was 1-800-Flowers, a telephone number. I remember commuting to Dallas and I sat on an airplane on an American Airlines at the time. And I sat next to a man who was clearly clearly a Texan. And he had his big, beautiful cowboy hat in a rack above us. He had those beautiful cowboy boots on a bill buckle. And it was a nice old gentleman. And you know, 800 Flowers was a pretty big deal for the several months that they existed in Dallas, and I just laid out $2 million, which I'd been able to accumulate in 10 years of operating his business and assume the other $7 million in debt. And he's chatting with me, buddy, what do you do Services? I'm an URL business. I said what? He said the URL business. I said, Sorry, Sorry, sir. He says, URL son, oh, URL. I said, this is a genuine Texan.
So what business are you in son? I said, Well, I'm in a flower business. And he said, Well, that's nice. And he says, What do you call is this business yours? I said, what's here? It's 1-800-Flowers thinking, surely he's heard of it. He's in the business community in Dallas. A lot of who's who had Dallas was an investor in this company before it failed. So I look for that look of recognition on his face. And he goes, Well, that's nice. So why wouldn't you call it 799 flowers? I said, Oh, we got a lot of marketing to do.
Alan Fleischmann
So you bought the name, but then you decided to change it anyway to the name that actually works. Yeah.
Jim McCann
Thank you.
Alan Fleischmann
You're welcome.
What did AOL and you create? AOL came along later. But you were you were the first one of the first merchants on the platform. And if I'm not mistaken, you were the exclusive floral provider on AOL as well?
Jim McCann
We what we were the first transaction of any time of any kind that you can do on AOL. So I think Alan, that we benefited from a lot of people being excited about this online world, not yet really referred to as the internet. It was called the World Wide Web, the online world. And a sudden, three really smart guys that I got to know and like and still have relationships with to this day. Steve Case, Bob Pitman and Ted Leonsis, were running this company, AOL.
And there were other choices. And there was CompuServe. That was a few different prodigy that IBM and Sears own. So I mean, a rocket Gibraltar, right. But my brother Chris, and I got to know the AOL people. I remember being down in Virginia visiting with Steve and Bob and Ted, and saying, Look, you know, we've been to see the Prodigy people, and they have beautiful suits. And we've been to see to counter serve people, and they have fancy offices. And these guys couldn't even afford to pay the check when they took us out for dinner. But it was all about relationships. And I said, these are three of the smartest, best guys I've ever met. And Chris and I agreed on that. So we said, let's, let's, let's throw in with them. Let's make a bet on people, not on brands or big fancy offices. And we bet on them because I couldn't figure out what they were talking about. But it sure seemed like they knew what they were talking about.
So yes, in fact, Alan, we were the first thing you can do on AOL. And I think a lot of people just wanted to do something online. And they can always think of a birthday or an anniversary or, or an expression of some kind with a flowers would be the appropriate gift. So we got a big push from that where people were happy to be able to do something online. And the first and a few things you could do was send flowers and it was with one angel flowers. And yes, we were exclusive with AOL at that point that's gone on to great success. And now he's a DC resident and has an amazing fund. That does a lot of venture cap. will invest in private equity investing. And he's also a big proponent of making sure that markets outside of New York, LA and San Francisco and Seattle get to see some of that venture money. So he's a big proponent of communities like Cleveland and Columbus and Chicago and Nashville, you get to see get to see their entrepreneurs get properly funded and get the opportunity.
Steve has done amazing things. Bob is a legend. Not only in the industry, he came from Ember he, he was he and Steve quarterback, the deal to acquire Time Inc. and, and now he runs iHeartMedia. And he's just an amazing guy and Ted leonsis, also, a resident of the Capitol district owns the basketball team, the building and the hockey team there in Northern Virginia. So three amazing guys, and Chris and I were so lucky to get to know them, invest in them, build our brands with them, and learn from them
Alan Fleischmann
That's amazing, Steve is a friend, and he's been on the show here before too. And you're right. He's all about building out the heartland of America and trying to create opportunities outside of Stanford and MIT.
Jim McCann
Three amazing men very different. And Steve, as you say, very passionate, he wants to do well, but he wants to do good too.
Alan Fleischmann
They are the greatest role models. And then you had Harry and David and Cheryl's cookies, we had popcorn factory, you expand it. But you know, it is amazing. I don't even know who your competition is, actually. And that's, that goes with the name, it's very easy to remember how to get in touch with you. And to have sort of the key.
Jim McCann
After AOL, that was in 1990, and then 1995 was a public offering for Netscape, which created the browser, which organized the internet before that AOL was the organizer of all things online. And now you had a browser, so we had a web site. 1991 or two didn't matter. No one could find you. That's why everyone came to you through AOL. But 95 When the browser came along and organized the internet, it really began to really matter to us. And so we were faced with a decision, we had a name that was all about a telephone number. And what do we do we change the name of our company, and finally almost added to false we said, Well, why don't we just put.com on the end of it? You don't have to ever talk about convenience because your name screams convenience.
But then too, it was pretty anonymous sounding name. And there was a fellow who I was lucky enough to meet in Dallas. But an even Tony Wainwright who's a really smart, big time ad agency guy. And he came to me one day, and we had lunch together. And he said, Jim, you have this anonymous name. And I know that there are real people, a real family, real florists behind that name, but the rest of the public doesn't know that. And so he suggested that I consider appearing in our commercials to make the point that you don't have to say we are convenient because I get it 1-800.com I think I can figure that out. And we're 24/7 credit you know, we did a lot of things that other people hadn't thought of credit cards over the phone 24 hours a day seven days a week coverage International. So that will work for us. But he convinced me to to appear in our commercials at that time to show people that we were real people behind this brand and that was an important decision for us.
Alan Fleischmann
What was Chris's? Your brother Chris's role during all this?
Jim McCann
He joined me about 10 years into the business. He graduated from very prestigious University College up in the Hudson Valley called Marist College, where my family is involved. And Chris is still on the board there and he's the vice chairman of the board, I believe, it's a wonderful college in Poughkeepsie, New York, right on the Hudson River. And my dad still had his painting business. And when Chris graduated from Marist, he started working with my dad. And I remember my dad and I had lunch in Queens and Woodhaven on Woodhaven Boulevard at a restaurant. And we did a deal.
I said to him, Look, I really would like Chris to come work for me. And so I had to pick up the check. And then maybe there was another bit of cash consideration, maybe a future draft pick. And it was agreed that Chris would come to work with me on Monday morning. That was a Thursday at lunch. And on Monday morning, he was going to report to me and now is a great move for me and for us. And so he's been working in the business now almost almost 40 years. And and he he rose to become CEO seven years ago replaced me Unfortunately, he had to step down for some health reasons back in June, but he's still on the board, still very active in the company, and the other family members of the company.
We've had family in and out of the business over all these years might, my mom would work for us and accounting, she, she did the payroll, who can you count on more to do your payroll than mom, brothers and sisters, nieces, nephews, aunts, and uncles all have gone in and out of the business, we have a rule in our family that we mimic from other families who we admire and respect. That is you have to work while you're in school. You know, you're not you can't go to college and get everything paid for along the way. You have to work part time or someplace. You can work for us. But it's not required. But when you graduate from university, you cannot work for us for at least five years before you can apply to come back and you have to accomplish something before you can apply to come back. That is a graduate degree or achieve something working somewhere else. That was noteworthy because we didn't want anyone to feel like it was an easy path, you can just come back into the business after graduation, and skate through life that you had to had accomplished. So we've had a dozen or more children and nieces and nephews come to work for us. We have I have a son that's in the business now and has been for about 10 years. And after he did a whole bunch of other different things, startups in different businesses he was in. I have a niece who, after she went to Harvard business school, worked in big companies, startups did a lot of things. And she came back just a few years ago now, I'd say, four years ago. So I think those are the only two family members currently into business out of 5000 of us.
Alan Fleischmann
That's amazing, actually, and you've, from every bit of your reputation, an excellent judge at discovering what the next big thing in business might be. First, obviously, with your investment in the name, then with being one of the first companies to take your business online, as we discussed, and then on onto a mobile app, as well. You're one of the first. And then there's the voice assistants like Amazon's Alexa, you've gotten involved in that as well. Tell us a little bit more about how you decided which are the innovations, you invest in or want to put your efforts in which ones you don't?
Jim McCann
I was smart enough to delegate that to Chris. So he comes out of college. You know, the PC era was well underway. And he was interested in technology. So I charged him with, Okay, what's coming along, it's going to change our world. So he's the one back in, say, from the time we became 1-800-Flowers in 1986, through 1992 when we got involved with AOL. We probably tried, I think we did just about 50 different technology experiments. Most of them failed quickly. I remember, we put catalogs, paper catalogs, we took the imagery, and we put them on CD ROMs, that was a technology we thought was going to have some promise It didn't. But there were 50 different things that we tried.
But the one that Chris kept coming back to is this online world being able to use your computer at that time, to order product. And, and so because we had come along with no money, in fact, a lot of dead and become a national slash international brand. And just a half a dozen years, from a very, very deep hole, told us that embracing a new technology has a promise, not the guarantee, but the promise or the opportunity to really disrupt a marketplace and become a brand. So we had done it by accident. And so we were always sensitive to what's next, what's the next change technology that could really rock our world.
And so from that experience, Chris, just having started with us when we were already an 800 number, and pressing us to try all these new technology experiments and then that one, this online world, which later we referred to as the internet really took over our business. Yes, people still call this by the way. Yes, we still answered an 800 number and we have 1500 2000 people who answered the phones for us every day. But the majority of our business, 90 plus percent of it is online. And we still have stores so we don't walk away from any access modality if you want to come into our stores. They're wonderful places if you want to work. If you want to order via the telephone, if you want to order online, if you want to order on an app on a mobile device, or if you want to use a voice bot, we've always saying what's next? It was always foundational.
I learned this from Bob Pitman very early on: be convenient. Convenience wins. And he said that in 1994. And I heard him say it on a stage at a conference in Miami in December of 2023. So just at the end of last year, I heard him say it again on stage, convenience wins. And that's been ringing in our heads ever since? How can we be more convenient? How can we invest in technologies that allow members of our community, our customers to act on their thoughtfulness? And if that's all mantra, and we're going to be embracing what comes next, and we're going to be early to it.
People like Amazon or Facebook, which have used us as the first thing you could do on Facebook's chatbot on Amazon's Alexa they came to us to say hey, we want we looking for someone to partner with to do something first. Because we've developed a reputation and internally a culture. That's about doing things early, getting to the new technology early, embracing it, and being a really good partner. So we've benefited from our culture and our reputation. So that big, amazing companies like Amazon and Facebook and Google have come to us to say, hey, we want to do something a little strange, a little wacky up for it? And the answer is usually, yes, we delivered five or six years ago, we delivered flowers in Mountain View, California, with a delivery robot. We worked with Amazon on using one of their drones to deliver one of our hiring David gift products. So we like to be early. It's part of our culture. It helps us to attract wacky and talented and progressive people too.
Alan Fleischmann
Is AI transforming this too, is AI going to be a transformational element going forward?
Jim McCann
I think it changes everything, Alan, I think it changes everything. It's already changing how I work this, you know, broken down old guy here. It's changing how I work every day, changing how we think about things. I think it's going to be scary. I think it's going to be disruptive. And I think it's going to be exciting and fun too. And it already is. I mean, I'm hard pressed to think that this is something that will not be chatting about five years from now.
Alan Fleischmann
And how has it been incorporated into your day?
Jim McCann
Well, it's it, we've had dreams for what we want to become as a company on that we don't have the technology to fulfill it. So the the technology isn't there for what we dream we can become in terms of how we help our customers, express themselves and connect all the important people in their lives. AI tools help that dream come true. We can do a lot of things we're envisioning, and already doing a lot of different things to help our customers have more and better relationships in their life. Yes, we're a gift company. And but we're helping customers to express themselves and connect. Even if it doesn't involve a transaction. We we've realized a long time ago that it looks like we're in a gift business, and we are. But we're really in the relationship business. And we're in the business of health. And we have a very selfish motivation here. If I help you, Alan, and we have over the years, to express yourself, and you have more and better relationships, we're going to benefit because that's more birthdays and more anniversaries and new bit more new babies. And we'll get wells that you're going to express yourself for because you have more and better relationships.
Alan Fleischmann
That's amazing. I love that. The ways it enhances communication, connectivity, and even being pre-emptive or being proactive around what people want. You've been a family, your family, your business, obviously, you've been at the helm all these years. But what was it like when you became a publicly traded business in 1999? And tell us a little bit more what the transition was like for you and the family but also since then. Has it changed?
Jim McCann
It’s been very good for us and. The aforementioned story, where Chris and I were down at AOL for a visit in January of 98. Maybe 99 I believe it was. And we were at war with competitors that propped up in those crazy .com boom days. We went from having no competitors to having 21 distinct financed competitors. And Chris and I went down to Virginia to visit with Steve Case, Bob Pittman and Ted leonsis, who we had this long relationship now at that point, six or seven or eight years. And we'd stop in there every once in a while, because they’re too smart not to go spend time with, and good people too.
I remember Bob Pitman walking Chris and I out to our taxi out in the parking lot. And he said, How you guys doing financially? How are you financing this because it was getting really expensive to have all these competitors. And we were doing this all out of pocket, you know, we were bootstrap entrepreneurs. And so we talked about it. He said, Have you thought about going public? I said, Well, yes, we've talked a lot about it lately. And the markets were very frothy. And, and it was Bob's advice on that walk that day that stood and talked for 45 minutes or so. And he said, No, I highly recommend that you think about going public. He said, Because the capital is there, you're gonna get a good valuation. And, and who knows how long this war for eyeballs is going to last. And whether or not you have enough resources, your own means. And so it's a long conversation. And but I remember Chris and I in a way back saying that was probably the tipping point for us to decide.
So a few months later, August of that year, we went public. And we were advised by some bankers to dribble out our stock, just take a little bit and then walk the valuation up and dribble out a little bit more. And we're conservative. So we decided to raise all the money we thought we'd need in one shot. So we got a wonderful valuation, we raised a couple of 100 million dollars. And that's all we needed. And so we sold a minority of the company to the public. And I think being a public company has been good discipline for us for these 25 years now. And, and we were lucky that we went public when we did, it's much harder to get public now.
As you might know, with all the work that you do at Laurel Strategies, the IPO market has probably been closed. Now, at the same time, capital has gotten very, very expensive. So we always have a new crop of competitors in one arena or the other. But frankly, if you're not profitable now, and you need to go raise new capital, you're finding what we hear from the people you talk to in, in all categories, they're finding that the terms if they get any offers, or what they call punitive, and most of them aren't able to find the capital. So we were lucky to get public when we did, raise a good amount of capital. It's been able to fund our growth, we followed up our customers path of gifts that they wanted to send, we just follow them down the path of other things that they wanted to send in addition to flowers. And so we acquired Harry and David 10 years ago, which is a company we longed for, for a long time.
We birthed companies, we both birth, buy and build. And we bought some companies. We bought a cookie company called Cheryl's which is now probably 10 times as big as it was when we bought it. Because we have a platform and infrastructure and customers who we can expose those products to. We have a chocolate company called Simply Chocolate, we have a popcorn factory, as you mentioned early on called the Popcorn Factory. So we we have a company called 1-800-Baskets. We have a newest, our newest company is called Personalization Mall. So it's all gifts that you could personalize. So this could say a couple’s getting married, we'll do your wine glasses with their names on it with the date of their wedding, we can send them a doormat on their first anniversary with their family name on it. So we have all those wonderful personalized gifts.
Our newest addition to that stable is a company called Things Remembered, which has been around for a long, long time, failed as a company closed their 600 stores over time and we were able to acquire the intellectual property and relaunch that brand personalized gifts and beautiful commemorative gifts that they have. So we continue to grow in those three ways we build our businesses, we we buy businesses and we birth new businesses like one 800 Sure baskets which we birthed. And we're following our customers and what other kinds of products or services would they like that help them to have more and better relationships in their life?
Alan Fleischmann
I love this birth buy and build. It's amazing. So when you Chris, you have down for health reasons as a CEO, you stepped into CEO, and I know we have a couple minutes left. I also want you to mention Smile Farms. But has that been an easy transition for you to come back to as CEO? Is that something you're enjoying and sticking with?
Jim McCann
Well, I'd say all the above Yes. It wasn't hard because I never really went away. I was the executive chairman. So I was here every day. I miss him and I miss working with him every day. So that's not that's not fun. But there's a wonderful group of people here who have been here for a long time. And we just think that the opportunities in front of us, Allen now are bigger and better than they've ever been as a set of opportunities. You mentioned AI, we think it has a dramatic impact on how we think about and serve our customers and how we think about what we become as a company in the pursuit of helping them to have more and better relationships. So it's an exciting time. It's a challenging time. It's an interesting time. And, yes, I'm enjoying it. And yes, I'm looking forward to all the things that we can build together, and I get to work with some pretty amazing people every day.
Alan Fleischmann
Retiring is not in the cards, at least for now?
Jim McCann
What is that? I don't really understand that word. What is that word? You speak of retirement? What is that?
Alan Fleischmann
I love that. You're obviously still very young, and you've got a long runway ahead of you. But it's exciting to know that you can be the CEO of a company you founded. You're constantly innovating, you're about the transformation. And for those who care about the company and feel like it's part of their DNA, to know that you're at the helm, and you're constantly rebuilding, or building and enhancing, it’s very inspiring, actually.
Jim McCann
The thing that you mentioned that is also on our radar screen of things that get me excited is about eight years ago, my brother Kevin lives in. My brother Kevin, who was born developmentally disabled, lives in a wonderful group home here on Long Island in an agency called IGHL: Independent Group Home Living, founded by a terrific guy named Walter Stockton about 45 years ago. He started it with one group home and today this not for profit serves 8000 people every day, they now call themselves Konnection, with a K, Konnection. And they're a collection of agencies that takes care of people with disabilities, all over Long Island, Brooklyn, Queens, Nassau County, Suffolk County, and they do wonderful work. And my brother lives in one of the group homes.
Walter called Chris and I eight years ago and said, you know, Kevin's doing great, but he would be doing better if I could find him some kind of work in the community. And he said, but I can't find that job for him. And I have hundreds of other people that would benefit just like your brother Kevin would. But I can't find them jobs either. But I have an idea. Why don't we get together for dinner and bring a checkbook. And his idea was that we buy a piece of property, in Moriches Long Island, and we build some greenhouses on it. And we create a little garden center with a little retail front on it. And we create jobs for people like my brother Kevin, that they could work and grow plants and grow foodstuff and ornamental product, and they would always be able to sell it because our wonderful florist, our franchisees, would certainly be willing to buy their product if it was good. And indeed it is.
So that's eight years ago, Kevin works there. There's 36 people work on that campus. And if we're going to be involved with it, we realized but is a whole lot more people than those 36 who could benefit from the experience of having a job and you know, Alan and more than anyone that a job is a lot more than a paycheck. It's who we are. It's our reason to get up in the morning. It's, it's what we do. It's part of part of our definition. It's always on the tray, and it's social. It's social.
My brother Kevin is flourishing working at Smile farms, which we created in that first of all, we now have 400 or 500 people working in one of a dozen different campuses we have we partner with different agencies who are the primary care provider, and we create good everyday work opportunities we grow and sell beautiful product. And my brother Kevin, who is 70 years old, just celebrated his 70th birthday, was just told that he cannot retire because the board of smile farms met and voted that he was way too talented. And way too important to the smile farms operation, too much of a leader and a trainer. And so we voted a new five year contract for him to be subjected to renewal so that he doesn't have a choice of retiring and he was very excited about that at his surprise birthday party.
The impact, Alan, that Smile Farms has had on me, my brothers and sisters, my brother Kevin, our families, our nieces and nephews and now, in my case and all of my siblings cases, we now have grandchildren, that are getting involved too and running our fundraisers and taking this not for profit smile farms and making sure we're growing it every year because the need is enormous. Not a week goes by that I am not introduced to or meet a family that says the same thing: I have someone with special needs, son or daughter and niece and nephew, and they've just aged out of the school programs. And thank God school programs really stepped up. And there's so many of them in there, that they're really quite good and beneficial. But when they age out of school programs, there's nothing for them to do.
It's socially isolating. It causes mental health difficulties both for them and their families. And then when they do have a job, and they're doing something meaningful, and they do have that social engagement, to see those lives turn around. It's impactful. I'd love to see my 14 year old now 15 year old granddaughter, begging your mom to take the afternoon off from school because she wants to go volunteer at the fundraising gala we're doing that night she wants to work the reception desk, and to see the values of my parents now instilled in us now going on to the next generation.
The wonderful young people who work here at the Flowers companies who volunteer take their days off. This is a group we were told, Alan, “they’re lazy, they're self centered, they're not going to do for anyone else.” It's nonsense. We get 50, 60, 70 of them to volunteer to take a day off on their own time, their own nickel to come work the golf outings and the dinners and the luncheons that we run to raise money to employ these 500 or so people. So it's, it's something we're passionate about, we love getting to do it. I love the impact it has on my family. I love the impact it has on our community here at flowers. And the only frustration is that the need is enormous. And we have to figure out how to go and grow faster.
Alan Fleischmann
That's so inspiring. That's amazing. I'd love to get involved actually, it sounds like it's so essential. So needed. And you know, it creates quality of life and dignity for those who are often left on the outskirts of our lives.
Jim McCann
Indeed it does. And we get to meet so many wonderful people, Alan, who hear about it and say I want to help and indeed they do.
Alan Fleischmann
Oh, I definitely want to follow up with you on that as well. You've been listening to “Leadership Matters,” and leadershipmattersshow.com I've had the great fortune, we have had the great fortune, to have Jim McCann, the founder, chairman and CEO of 1-800-Flowers on the show today. Honestly, Jim, we could have the second hour. And I would encourage you to come back. Because I think there's a lot of lessons learned over the years that you have learned and that you can share more than even shared today and you shared much today. And then also how you continue to innovate and you don't get afraid by technology. You embrace it and create new innovation around the corner. And at the same time, you get involved in family and community so we're gonna have you back on if you're willing. But I just want to thank you for joining us today.
Jim McCann
Alan, a pleasure. I'm glad we reconnected and I can't wait until you're coming to New York so I can buy a hotdog.