In 1995, when Lee Rhodes was the 32-year-old mother of three young children, she was diagnosed with lung cancer. While she was struggling through chemotherapy, her husband brought home a dark orange cup he’d made in his glass-blowing class. She dropped in a votive candle and found the combination of color and light had a calming effect. She got the idea to sell the votive holders, which she called Glassybaby, and from there she has built an unlikely Seattle-based business, with $20 million in revenue expected in 2016, 338 employees, and eight brick and mortar stores in California and Washington. Martha Stewart is a fan and billionaires Jeff Bezos and Laurene Powell Jobs are investors. Rhodes, 53, sells the cups for $44 and $75, depending on their composition. Glassybaby has given away $6 million to more than 400 charitable organizations, from local non-profits like food banks and PTAs, to national groups like the Red Cross. In this interview, which has been edited and condensed, Rhodes describes starting Glassbaby with no business experience, building it on a series of hunches and lucky breaks, and learning that the most important lesson was sticking to her mission.
Susan Adams: What did you do before you started Glassybaby?
Lee Rhodes: Nothing. I had worked as a contractor at Nike in their merchandising department. Then I had three children in three-and-a-half years. I don’t recommend that! When my youngest son was two months old, in 1995, I was diagnosed with lung cancer. It took me three years to get better.
Adams: How did that lead to starting a business?
Rhodes: My husband at the time was taking glassblowing lessons and he brought home this tiny colorful vessel he’d made and I dropped a tea light into it. Color and light together is truly the most beautiful thing in the world. At the same time I was in and out of chemo rooms. I started noticing that people who should be there were absent. I’d never given any thought to the fact that some people weren’t coming because they couldn’t afford the $16 an hour they needed to pay for parking or they didn’t have child care or the fast food restaurant where they were working wouldn’t give them time off. I thought I could sell the glass vessels and give 10% of the money away.
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Adams: How did you get your business off the ground?
Rhodes: My husband didn’t want to make them so I went around Seattle and found local glassblowers. I thought, I’ll sell these in the parking lot at the University of Washington football game on a fold-out table and I’ll give $1,000 a year to the University of Washington cancer center. I had parties in my garage and I would invite everyone I knew. I charged $25 each.
Adams: How much did you pay the glassblowers?
Rhodes: I paid them by the hour. I would spend $1,200 and get 40 or 50 Glassybaby. I lost a ton of money. I had never run a business. I was still stunned that people bought these things.
Adams: How could you move forward if you were losing money?
Rhodes: In 2001 there was a vacancy in a big building and I spent $300,000 putting a glassblowing studio in there. I was a crazy person.
Adams: Where did you get the $300,000?
Rhodes: I went to every bank and said I want to make something handmade in Seattle, one of the most expensive cities in the country, and give away 10% of the revenue. I had to self-fund.
Adams: How did you support yourself while you were building the business?
Rhodes: I had one husband who was super supportive of me and then a second husband who was very supportive. My first husband owned a nursery and my second husband started Conservation International.
Adams: How did the business do?
Rhodes: In late 2003 we hit our stride. We made the Glassybaby more uniform. We got these gorgeous boxes. We got a lot of press coverage in Seattle. We were giving to local 501(c)3s and they would talk about us. We never advertised.
Adams: What was your revenue in 2003?
Rhodes: About $300,000. At that point I was doing the books and the payroll.
Adams: What was your first big break?
Rhodes: I loaned 16 Glassybaby to a friend who was having a dinner party. A guy came to the party who was flying back east to go to Martha Stewart’s birthday party. He asked if he could take them and give them to Martha for her birthday. She called me the next day and said, these are amazing. She told me she wanted me to make a Glassybaby the color she was going to paint her dining room. Then a week after that a call came in and they said, we’d like you to be on Martha’s show with actress Laura Linney. After the show in September 2005 things went insane. We had thousands of orders on our website.
Adams: Were you prepared to fill those orders?
Rhodes: No! We would get 1,200 orders a day and it took us six or seven weeks.
Adams: Were you still charging $25?
Rhodes: Yes but in early 2007 we lost our lease. I saw a building for sale and bought it the next day. We took our price from $25 to $44 with the move.
Adams: How did you pick $44?
Rhodes: It just seemed like a nice number. It also allowed me to stay in business after the move.
Adams: How much were you paying yourself?
Rhodes: Nothing at that point.
Adams: What was your next break?
Rhodes: In 2008 our revenue was $1.1 million and I got a call from Jeff Bezos. I didn’t even call him back at first. When I did, his office said, why don’t we send him out to visit you? He came for an hour and a half. He was the smartest, the nicest, the kindest. He ended up buying 22% of the business for $2 million. I’ve since said I wanted to buy him out. But he said, no way, I love you.
Adams: What kind of advice did he give you?
Rhodes. None. He knew way ahead of me that I was not going to go under.
Adams: What did you do with the $2 million?
Rhodes: I grew. I hired some good people and I put together a good health insurance plan for my employees. He gave me a cushion that lasted a long time.
Adams: Where did you get the idea to have so many colors for your products and to name each one separately?
Rhodes: Every single color has a different recipe of elements, just like paint. We have 469 colors, including 19 different greens. When we were selling them on the web, it was hard to differentiate them, so in 2003 we decided to name them. Numbers didn’t seem right. Since 2010 my son, who was then a sophomore at Williams College, wrote descriptions for them, so they have names and stories.
Adams: What was your first expansion?
Rhodes: We went to New York, to the Village. But Glassybaby each weigh a pound. People in New York don’t have cars and nobody wants to carry around six pounds. We survived in New York but we weren’t making it. I shut down the store and opened two more stores here.
Adams: What was your next expansion?
Rhodes: Two years ago we started looking for a place to put a glassblowing studio in California, because that was our second biggest market. We found a place in Berkeley and built a studio that’s three times the size of our Washington studio. In the middle we have a studio and around it, space where you can have a dinner party.
Adams: How much did that space cost you?
Rhodes: It was expensive, $1.2 million. We have four stores in California and that brings in about a fifth of our revenue. Our California program is break even. We only opened last year, around Halloween. By the end of the year we might be profitable.
Adams: How has your charitable giving evolved?
Rhodes: We like to give to any organization that helps people, animals or the planet heal. We partner with people who come to us. There are two different ways to take advantage of our giving. Anyone can apply through our White Light fund. We also do what we call single color giving, like with the University of Washington or the University of California at San Francisco cancer center, or the Red Cross. We dedicate one color to that organization. They have to let their community know and they have to do a road show.
Adams: How does the road show work?
Rhodes: We have these vans and the organization meets with our giving team and gets people to come to an event. An organization can make $100,000 or $200,000 a year from Glassybaby if it promotes things right.
Adams: What mistakes have you made?
Rhodes: Early on, everyone said to me, you’ve got to make Glassybaby in China. They said you can’t hand-blow glass in Seattle. We went to China and brought some products back. They just didn’t support my story. I support glassblowing in Seattle and paying a living wage. My people work 29.5 hours a week and get health benefits. Going to China was a complete disaster. I lost $157,000 and the products from China sat in the back of my warehouse until I gave them away.
Adams: Have you made any other mistakes?
Rhodes: I went through this phase where I hired people who were completely different from me. That doesn’t work in a mission-driven company. I hired two CEOs because their skill set was the antithesis of mine. The first had run a local angel investor group and he had an MBA from Wharton. That’s what I thought I needed. I’m just a housewife. He had my entire team switch from communicating and talking and helping, to a language of spreadsheets and financials. It was a huge change and there wasn’t a lot of coaching. I told him it wasn’t working out.
Adams: Why didn’t you want to be CEO?
Rhodes: I don’t think it’s my skill set. I’m fine with spreadsheets. I’m self-taught, but I’m very conservative. I never took a bank loan. If we didn’t have the cash, we didn’t do it. I just wasn’t going to be able to give the business the structure it needed to grow.
Adams: What happened with the second CEO?
Rhodes: He was more of a culture fit than the first one. We needed the store in California to be successful. But he had young kids and going down there didn’t work out for him. Also he wanted to hire an expensive outside marketing firm. We didn’t need that. My gift is brand protection and messaging. The hard part is managing the operations, managing HR, building a business that can grow, figuring out how to fit financial modeling into the budgets. I told him this isn’t going to work.
Adams: Who is your CEO now?
Rhodes: My brother, Bill Cummings. I hired him a year ago April. I called him and said, I need some help putting a business plan together. Our growth is going to be all about operations, HR, the financials and getting the budgeting down. That’s the skill set he has. He’s worked with companies with revenue of $10 million or less and grown them to $50 million or $60 million.
Adams: What has he done for you thus far?
Rhodes: In January he raised $2 million from Laurene Powell Jobs’ company, Emerson Collective. We’re going to hit growth of 30% this year.
Adams: How big can Glassybaby get?
Rhodes: I think we can get to $1 billion in revenue.
Adams: That’s incredibly ambitious.
Rhodes: The flower industry is a $38 billion industry. You buy a Glassybaby for someone the way you buy flowers, for someone who lost her mom or whose daughter just got engaged. We’ll have to have hot shops across the country. We will open one in Cleveland, in Texas and somewhere on the East Coast. Stores will spoke out from there. I’d love to be at $70 million in revenue in another three-and-a-half years.
Adams: It’s a long way from $70 million to $1 billion.
Rhodes: I think there’s a niche we can fill.
