M.M.LaFleur: Sarah LaFleur (2020)

When she was working corporate jobs in New York City, Sarah LaFleur hated getting dressed in the morning; the choices in her closet felt overwhelming, many items didn't fit right or wore out too quickly. So in 2011 she launched a line of clothing for working women that would be simple, elegant, and well-tailored. She had no experience in fashion but partnered with a top-line designer, Miyako Nakamura, to create M. M. LaFleur. Today it's a multi-million dollar company with loyal customers from Capitol Hill to Silicon Valley. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:46Guy Raz?

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• 1:32Guy Raz?

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• 2:14Guy Raz?

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• 4:23Guy Raz?

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• 5:07Guy Raz?

  Visit mobili fuels.com for details. Hey, everyone. Just wanted to let you know that our team is working super hard on a whole new lineup of fresh episodes for 2022, which will be ready for your ears starting next week. But in the meantime, we're going to run another one of our favorites from the archives. And as you will hear, when I did this interview with Sarah LaFleur back in 2020, we had no idea that a pandemic was about to hit and that the sudden shift to remote work would threaten the entire premise of her business. So be sure to listen through to the end, because I will have a little update on how Sarah and the company are adjusting to a very different world.

• 5:53Speaker 01

  We still continue to do trunk shows. We had revenue goals for the month. And so if we weren't meeting our revenue goals, then we would, you know, set up a trunk show stat.

• 6:02Guy Raz?

  Right.

• 6:02Speaker 01

  But online, it was just a totally different story. We could not sell our dresses.

• 6:07Guy Raz?

  I have to assume your cash reserves are getting close to running out.

• 6:11Speaker 01

  Not only did we run out, it actually went into the negatives. Our bank account, I think, at one point said like negative 2,000 or something. And I didn't know you could draw down beyond zero. So that was a wake-up call.

• 6:28Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:40Guy Raz?

  I'm Guy Raz, and on the show today, how a relentless morning routine inspired Sarah Lafleur to build a simpler wardrobe for women in a multimillion-dollar brand called MM LaFleur.

• 6:58Guy Raz?

  Back in 2004, an American psychologist named Barry Schwartz published a book called The Paradox of Choice. Barry's argument, and we've talked about it before on the show, is pretty straightforward. He concluded that having lots and lots of choices has actually made us more anxious and less happy. I mean, think about it. Do you ever get anxious at Chipotle or In-N-Out Burger? I'm guessing you don't, because they have very few choices: burger, cheeseburger, double cheeseburger, taco, burrito, bowl, quesadilla. You get my point, right? Having fewer choices actually decreases anxiety. Now, imagine waking up every morning and agonizing over what to wear. You go to your closet, and you either

• 7:41Guy Raz?

  hate everything in it, or you can't decide what would look good. And I suspect this is not a thought experiment for many of you. In fact, this was how Sarah Lafleur started her day every morning as she went off to her corporate job at a firm in New York. And Sarah wasn't alone. The research is pretty clear. On average, women spend a lot more time getting ready in the morning than men. So Sarah decided to try and tackle this problem by tackling the closet, essentially by coming up with a line of clothing that was simple and elegant, without too many options, that would speed up the morning routine, clothes that were well-made, looked great and professional, at a more reasonable price.

• 8:24Guy Raz?

  But like so many of the founders I've talked to, Sarah had this ambitious plan and not the slightest idea initially of how she was going to carry it out. For starters, she knew nothing about the fashion industry. She had no idea how to make a dress or a pair of slacks. She just knew what she liked. But since she launched MM LaFleur, it's grown into a business closing in on $100 million in annual sales. And a lot of the company's designs are inspired by Sarah's childhood in Asia. Her dad was an American diplomat, and for most of Sarah's childhood, the family lived in Japan, where her mother was from. And Sarah grew up speaking both English and Japanese.

• 9:06Speaker 01

  It was tough. The term that people use in Japan to describe biracial kids is "half." I guess we say that too, "half Japanese, half American." But my parents always said, "You're not half, you're double. You're both Japanese and you're also American." And so I think they were really insistent on that fact. But I think on a day-to-day basis, like I remember when I was in Tokyo, I really didn't want to use my last name LaFleur. In Japan, your last name really signifies whether you are Japanese or not, so much so that Korean-Japanese people or Chinese-Japanese people, they will change their last name to signify that they are truly Japanese. And so I kind of hid my American last name. And then I would say simultaneously, when I came to the US, I had the opposite experience, especially around college.

• 9:50Speaker 01

  I went to a school that was incredibly preppy and that prep culture I'd never seen before in Japan.

• 9:56Guy Raz?

  Tell me about your mom. Did she work?

• 9:59Speaker 01

  Yeah, she did. And I mean, really, a huge inspiration. I would say the reason I started my business in many ways goes back to my mom. She is Japanese, raised in Japan, and very, very unusual person for someone of her generation. She worked throughout her life, continues to work today. She loves her job. She runs a business selling travel jewelry out of Tokyo, which she started because I think in many ways, it's tough being a diplomat's wife. You have to move every three to four years. And I think the common assumption is that the wife usually gives up her career so that she can be the diplomat's wife, host receptions, et cetera. But she always says, "I can't wait for Monday." Your kids are like, "What?

• 10:44Speaker 01

  Excuse me? How about us on the weekends?" But she loved going to work, and I think that was a real inspiration for me and my sister. You know, we never assumed that we would not get jobs. That was the only thing we assumed.

• 10:58Guy Raz?

  So, I mean, looking at your mom as this kind of inspiration for how to be an entrepreneur. I mean, I can't imagine as a kid you thought, I'm going to be an entrepreneur. Or did you? I mean-

• 11:10Speaker 01

  Oh, God, no.

• 11:10Guy Raz?

  Yeah.

• 11:11Speaker 01

  No, not at all. I mean, she didn't hide how hard it was, trying to start the business with her friends, having her friends leave the business all of a sudden, out of nowhere. Financial struggles, just hard, personal conversations that she was having with her business partners. And I remember as a kid, I would come down in the middle of the night to grab a glass of water, and I would see my mom sitting in the armchair with a light above her head, sipping whiskey on the rocks. And I just remember thinking, wow, it is hard.

• 11:46Guy Raz?

  So, when it came time for you to go to college, you went to Harvard's. I mean, you must have been, you know, a pretty good student.

• 11:54Speaker 01

  Yes and no. I think I never fancied myself to be this super smart person. I knew I was a really hard worker, and my mom always used to say, you know, this is in Japanese, "Doryoku-kan no sarachan," which means like, you're the kid who tries hard. And so, my mom meant that in an encouraging way, but I never in my mind thought like, well, you know, I'm going to be the smartest person in the room. Actually, I've probably never thought that in my life. I just knew that whatever I wanted to do, it would have to be through sheer willpower, sheer determination.

• 12:25Guy Raz?

  Yeah. I mean, when you graduated, what did you think you were going to do with your life? Did you think, okay, I'll get a job and go work somewhere and figure it out?

• 12:36Speaker 01

  I should take a step back and say, like, basically, from the time I was in high school, I wanted to become a refugee camp officer. I wanted to be a logistics officer. And I started researching refugee issues, got really, really passionate about it. And then I thought, gosh, that's what I want to go do. And so- The summer between my junior and senior year, I had this opportunity to go volunteer at a refugee camp in Zambia.

• 12:59Guy Raz?

  Wait, you did this, you did this while you were still a student?

• 13:02Speaker 01

  Yeah, yeah, yeah, yeah. You know, I think if I can point to one life-changing experience that I've had, that would definitely, that would be the one. I mean, this refugee camp was, I think, like 10 hours from Lusaka, which is the capital of Zambia. So we would drive to this small town that was two hours away, and I would buy random pieces of furniture there, and then we would, you know, paint this building that we fixed. I mean, it was, it was basic stuff. It was, it was basic stuff. But I think I also, I think simultaneously, I realized the powerlessness of it, of myself, really being in that space. I would have people come up to me just as I was, you know, walking back to the dorm where we were staying, and he would say, "I have AIDS, my, my wife has died, I have

• 13:46Speaker 01

  one kid who's dying, is there any way you could help me?" And this, you know, and this would just happen on a daily, if not hourly, basis. And it just fundamentally changes the way you see life. And I went with this nonprofit organization, and one day, the leader asked me, "Okay, so we are, we're short on money, and so we're gonna have to make a trade-off. We can either continue to buy lunch, or we can continue to spend on fuel." And I was looking at him, being like, "Wait, we have to choose between lunch and fuel? What kind of a choice is that? Like, how are we supposed to work like that?" And then I came back on campus, senior year, I had all these friends who were coming back

• 14:26Speaker 01

  from their investment banking internships with $5,000, $10,000 signing bonuses. And I just, like, couldn't believe the, like, you know, that was more than the money I had raised all summer. And it sparked some sort of curiosity, I think, for me. And then a mentor that I had, who I'd been with at the camp at the time, she was someone who had worked in investment banking, and she said to me, "You know, Sarah, it's, it's never a bad idea to go learn how to work with the big boys."

• 14:55Speaker 01

  Kind of hate that expression, big boys.

• 14:56Guy Raz?

  Yeah, yeah.

• 14:57Speaker 01

  But I knew what you meant. And the money, I just couldn't believe that you could sign a piece of paper and you could have $5,000 in your checking account.

• 15:06Guy Raz?

  Yeah, and I guess you sort of got drawn into that because after college you went into consulting, right? You went to work at Bain.

• 15:14Speaker 01

  Yeah.

• 15:15Guy Raz?

  And what did you do there?

• 15:17Speaker 01

  I was what was called an associate consultant. And you are working on a case, which if you are at a company like Bain, it's usually for a Fortune 500 company. And you are trying to solve a problem that the company presents to you, which might range from, you know, anything from we're trying to enter a new market, how should we do that, to we have to cut costs, how should we do that?

• 15:40Guy Raz?

  Yeah, I mean, a lot of the, you know, a significant percentage of people who've been on the show, I'd say more than 10%, worked in consulting for a couple of years, early in their careers, where you're basically paid to learn everything about a business in order to give them advice for how to be more efficient or to run a better operation.

• 16:00Speaker 01

  Yes.

• 16:01Guy Raz?

  And then oftentimes, these, you know, people who were in consulting are sitting around saying, wait a minute, I think I could do that better. And they go on and they start a business. But it is actually really useful. I mean, it's super helpful in kind of training you and giving you expertise in an industry that you otherwise would have known nothing about.

• 16:20Speaker 01

  It's so true. You know, I mean, I didn't know how to do really basic things, like I didn't know how to write a business email. I didn't know how to do PowerPoint. That's like, that's a life skill. But they whipped me into shape. So it really, I think, set a certain standard for me that I knew I had to meet if I wanted to be taken seriously.

• 16:41Guy Raz?

  So you, I guess you stayed at Bain for about three years, which is, I think, the sort of the average length of time, unless, you know, for people who decide that they want to make a career out of it.

• 16:50Speaker 01

  Yeah, that's right.

• 16:52Guy Raz?

  And you got this opportunity to go to work in South Africa.

• 16:56Speaker 01

  Yes. I worked for a nonprofit called Technoserv. So that was started by a bunch of former McKinsey partners. And the idea was that South Africa had a really, really interesting challenge. Having gone through apartheid, you have this dual economy. You have the white economy and essentially the black economy, and the two operate incredibly differently. And the question was, how can we get the black South African farmers to plug into this incredibly successful supermarket economy? That was what I was working on. And so I think that was the moment where I discovered nonprofit wasn't for me. It wasn't the mission of the work. The mission of the work is so important, but my personality was wholly unsuited for it.

• 17:41Guy Raz?

  Yeah.

• 17:42Speaker 01

  I think what irked me was the amount of delicacy and diplomacy that's really needed to push projects through in the nonprofit sector. It's a really admirable skill and you need to have it to be successful in that world. And it was not something that I naturally had.

• 17:58Guy Raz?

  Yeah, I mean, it's interesting because you are the child of a diplomat and had aspirations to work in refugee camps, but the combination of where you were in life and your sort of wanting to move quickly just wasn't the right fit at the time for that job.

• 18:16Speaker 01

  Yeah.

• 18:17Guy Raz?

  You, 2011, you come back to the United States and you go to New York and get a job at a private equity firm.

• 18:23Speaker 01

  Yes, yeah, so you can see how I ping pong in my career.

• 18:27Guy Raz?

  And you're still in your 20s at this point. And private equity is intense and you're looking for companies to invest in and it must have been exciting. And you get to New York and what was it like?

• 18:39Speaker 01

  Well, I will start by saying it was, this might be weird after saying that my dream was to work at nonprofit to say this was my other dream job, but it really was. I thought what they were doing was fascinating and when I got the job, I took it and I started, gosh, January of 2013. And I thought this was going to be my dream job.

• 19:00Guy Raz?

  So this is January of 2013?

• 19:01Speaker 01

  Oh, January 20, I'm sorry, January 2011.

• 19:04Guy Raz?

  Sorry, so January 2011, you get to New York and... You were just there for four months, which seems seems like something happened. It just seems unusual. What hap- why? Why were you there for such a short time? Why'd you leave?

• 19:18Speaker 01

  You know, I um, I loved the job, but the short of it was that it was a terrible cultural fit for me. I was one of two female investment professionals, I think, out of dozens, if not hundreds. The company culture was hyper masculine, aggressive, swaggering, which all looks very cool on TV. And I'm sure there was a part of me that idolized it, too. But the truth is, it was terrible for me. I was, I think I professionally performed just fine, but internally, I mean, I started hyperventilating at work. I developed a weird tic. It was just very clear, I think, from week one, I was like, oh, I made a mistake.

• 19:56Guy Raz?

  What was the breaking point? Because four months is, you know, it's a short time, and there must have been something that happened that you you just said, I can't come back here anymore.

• 20:07Speaker 01

  The breaking point was me just like crying uncontrollably and calling my friend, being like, I don't want to go to work tomorrow. I just, I generally felt like a loser. I mean, here I was, I spent three years at Bain and I moved to South Africa, thinking that's gonna, that's gonna be my thing. And then, you know, after a year, I decide, okay, it's not for me, so let me, let me give this thing a try. And I'm, I'm there for four months. Like, the narrative I had written for myself was that I was a loser. And so it was, it was really, it was just a devastating time for me.

• 20:39Guy Raz?

  When you told them you were leaving, were they shocked?

• 20:43Speaker 01

  I think my boss was surprised. I think private equity is filled with a bunch of people who are incredibly determined and want to climb the ladder. And here I was saying, like, I've been here four months and I'm out. And I remember the first thing he said to me was, don't you want to become vice president here? And I was like, that's honestly the last thing I want to do. And so you, you start to have real moments of doubt about who you are as a person. And um,

• 21:07Guy Raz?

  Yeah.

• 21:08Speaker 01

  Up until that point, you're always like, Sarah, who goes to college? You know, Sarah, who works at Bain? Sarah, who blah? So much of my personal identity was tied up in the job that I had. And so to go from Sarah, who works in private equity, who flies on private jets to Paris, to Sarah, who doesn't have a job and is worried about how she's gonna pay her COBRA payment next month, that was a That was a sucker.

• 21:32Guy Raz?

  So at this point, you're like 27, 28, maybe.

• 21:36Speaker 01

  Yeah, 27, I think.

• 21:38Guy Raz?

  And you would rather leave without a plan than to stay.

• 21:41Speaker 01

  Yes, and I would say would is a, that's a strong word. Like, I felt like I had no choice but to leave without a plan. I just needed to get out. So I still remember that feeling when I like took the Metro North on my last day back into the city. You can see out in front, the rail way in front of you. And I just remember thinking, oh, my gosh, freedom. I'm free again. And so, yeah, I left without a plan. I like cried for a month. I had started seeing my psychiatrist about a few months into, a couple of months into that job, because I was, you know, I was a nervous wreck.

• 22:17Guy Raz?

  Yeah.

• 22:17Speaker 01

  And so, you know, I was spending a lot of time, actually, in her office. I think I was probably going like two, maybe sometimes even three times a week, just to feel normal again.

• 22:26Guy Raz?

  Yeah.

• 22:27Speaker 01

  And that was around the time I had always had this idea for starting a clothing company for working women.

• 22:35Guy Raz?

  Wait, you always had this idea, or?

• 22:37Speaker 01

  Yeah, well, I should say always, as in like when I, when I was working management consulting, because I could never find good clothes. And so I think, I think a lot of women can relate to that. So, so I had always had that idea, I guess, since working at Bain and since needing those clothes myself, but...

• 22:51Guy Raz?

  This is this idea?

• 22:52Speaker 01

  Yeah, idea.

• 22:53Guy Raz?

  Like, we all have ideas, right?

• 22:54Speaker 01

  Exactly, exactly.

• 22:56Guy Raz?

  Somebody needs to make a better pickle, or I shouldn't say great pickles. But whatever it is, right? We all have these things. And this was your thing. It was like, but it wasn't really a serious, like, you weren't sitting down at night and weekends writing a business plan for a clothing company.

• 23:10Speaker 01

  No, I mean, I was just like, what? Fashion? Like, I'm not even interested in fashion. I just, I was like, but however, I am a consumer of clothes.

• 23:19Guy Raz?

  Yeah.

• 23:20Speaker 01

  I have to wear clothes every day. I care about looking good and gaining the respect of my peers and my clients, so I'm going to put effort into it. But, God, it is so hard.

• 23:30Guy Raz?

  Yeah. But, so this is like the spring of 2011. You quit your job, and now you've got time, which, I'm sort of like one, if we're like watching one movie on this, you've got time, and then you get, you know, you're excited, and you think, now I can start this business. But there's another movie, which is you're going to see therapists. I have to assume that you were experiencing some depression from, you know, leaving that job. That can be a hard time to get motivated, to feel like, right? Did you just take some time to just kind of be sad and depressed? Or were you thinking, I'm gonna jump into this next idea?

• 24:10Speaker 01

  I remember being terribly sad and depressed and unwell. And I also remember thinking, I need to get moving or else I'm gonna get stuck. And so I only remember this because I remember the dates that I signed certain contracts. I signed for a WeWork office starting May 1, back when WeWork was still very small. I think they had like two buildings in New York. And then I officially registered as a LLC June 1 in Delaware. So I just, I have records of those contracts, which makes me think like, okay, there was a part of me that kept pushing myself. Yes. But then I also remember going on a run and stopping in the middle of the run

• 24:54Speaker 01

  because I had to like cry for 30 minutes. And I think that was mid-July, right? So it was kind of, it was a parallel process. It wasn't like, okay, now I'm done being sad and I'm gonna go start my company. It was, I was working through both things at the same time.

• 25:08Guy Raz?

  So as you started to, as the kind of the gears in your head started to turn more and more about this idea of professional clothing for women, did you have a sort of a solid vision of what that would be? Or was it still kind of abstract in the spring of 2011?

• 25:24Speaker 01

  You know, surprisingly, my, my vision for the product was very clear. My mom, before she started her jewelry business, had worked in high-end fashion. And so I think through her, I got to see and touch a lot of these beautiful pieces of high-end clothing that she would bring home, not because she bought them, but you know, as samples or as gifts. And I think she dressed also in that way incredibly tailored and polished. And I think my big question when I was starting this business was, why aren't there clothes like this for regular working women? You know, the clothes that I was shopping for at the time, it was always ill-fitting. It would rip a lot easily. I would always have to get it tailored. It would wrinkle easily.

• 26:09Speaker 01

  I mean, there were so many things that were wrong with it, and I was spending so much money trying to dress professionally for work. So I knew exactly the kind of clothing that I wanted to create, which is really like I wanted to sell dresses that would sell for $2,000 for a fraction of the price. And I wanted to work with a luxury designer because I wanted my customers, I wanted regular working women to wear luxury quality clothing.

• 26:30Guy Raz?

  So you register an LLC. And I mean, if I said to somebody, all right, let's go start a clothing company, like, I would have no idea what to do. Okay, I register the LLC, and then what? First of all, you need money, right? So how much money did you have at the time to start this thing?

• 26:50Speaker 01

  Very little. I had about $35,000 saved up, which is not very little, but you know, in the context of starting a business, it does not get you very far.

• 26:59Guy Raz?

  Right. But you had saved this money over the course of your time at Bain and this private equity firm?

• 27:04Speaker 01

  My entire life, yeah. It was like the piggy bank that I had kept.

• 27:07Guy Raz?

  Yeah. And what's $35,000 going to do? I mean, it's gonna last?

• 27:14Speaker 01

  Yeah, it doesn't go very far, which was the short story. My parents also lent me $35,000, so they said, okay.

• 27:20Guy Raz?

  So you got $70,000.

• 27:22Speaker 01

  Yep. So I started with $70,000.

• 27:24Guy Raz?

  And by the way, the idea was to see how far you could go and then eventually fundraise? Or did you think, I'm gonna go for fundraising right away?

• 27:33Speaker 01

  Yeah, it was, I mean, I couldn't even think about fundraising. Like, I knew through The Grapevine, you know, the Bonobos founders, Warby Parker founders, both worked at Bain. And so I think, I mean, in some ways, they served as great role models. You kind of saw from afar that maybe it was possible to fundraise. And so I think in those initial days, it really, it wasn't like, this is the business plan, let's go raise some money, let's go start this business. It was like, does anyone know anything about making clothes? Because if you do, I'd like to talk to you.

• 28:04Guy Raz?

  Yeah, I mean, we've had conversations with founders who, at this point, the first thing they do is start to reach out to anybody who will talk to them. They, you know, they'll send like cold emails and cold-call people for advice.

• 28:19Guy Raz?

  Is that, is that who you, who you are? Like, is that your personality? Is that what you did?

• 28:23Speaker 01

  I would say it was more organic. Again, I didn't know anybody who worked in fashion. So I remembered that there was a woman who was a couple of years ahead of me at college. She had gone to RISD to study interior design and I think textiles in interior design. And I was like, well, that's, that's one step closer to fashion. So I reached out to her and I was like, "Hey, do you know anybody who works in fashion?" And she was like, "Actually, I do know one person from RISD who went into fashion, so let me put you in touch with her." So she was the one fashion designer that I knew. And she put me in touch with her five headhunters in fashion, most of whom had no time for me. You know, they were like, "What, Bain? Like, never heard of it. Don't care. Like, please come back when you're serious. I've got Calvin Klein on the other line."

• 29:07Guy Raz?

  Yeah.

• 29:08Speaker 01

  But one of those five headhunters decided to take a chance on me. He, you know, said, "Let me see if I can help you out."

• 29:15Guy Raz?

  Help you out with what?

• 29:16Speaker 01

  Recruiting, recruiting.

• 29:18Guy Raz?

  So, oh, so this headhunter, so he said, "Let me see if I can help you find somebody to join you."

• 29:22Speaker 01

  Find somebody as a co-founder.

• 29:24Guy Raz?

  Because you could not, you felt like you couldn't do this by yourself. You didn't have the understanding or the knowledge of the industry.

• 29:30Speaker 01

  Yeah, that's right. And I think it's not only that I couldn't do it, I didn't want to do it. You know, I wanted to design the most beautiful dresses in the world. And I have not trained as a designer.

• 29:40Guy Raz?

  Yeah.

• 29:41Speaker 01

  And so it was really important to me that I had a high-end fashion designer. I had other designers who said, you know, "Why don't you just, you can do it yourself. Like, you can just copy these designs, you know, add a sleeve, you know, add whatever and sell it." And I was like, "No, no, that's, that is not what I want to do. I don't, I don't want to create more of what is already out there. I want to fundamentally actually create something different."

• 30:03Guy Raz?

  So there's this guy, he's a headhunter, and he agrees to kind of help you out. And he identifies somebody who's a fashion designer, you know, who you should meet. Her name is Miyako Nakamura. Who was she? What was she doing at the time?

• 30:17Speaker 01

  Miyako, at the time, I think, had just left Zac Posen. She was their head designer. She was known in the fashion industry and You know, she, we were just in totally different worlds. I think that was actually my other kind of surprising moment. You know, I thought I understood what New York was about, but it was one of those moments where I was like, wow, I literally don't know anybody in the fashion world.

• 30:38Guy Raz?

  Yeah.

• 30:38Speaker 01

  And yet, like, the capital of fashion is New York City. The garment district is in New York City. And, and our circles did not overlap at all.

• 30:45Guy Raz?

  So, so you meet Miyako, and what's your pitch to her? Like, you say, hey, I'm, I'm starting this company. I want to make really beautiful, you know, clothing for professional women that is, you know, relatively affordable. Is, was that how you described it to her?

• 31:02Speaker 01

  Yeah, basically. She was like, what? You know, she, the way she described it to me, she says, I thought everything in the world that needed to be designed had already been designed.

• 31:12Guy Raz?

  Hmm.

• 31:13Speaker 01

  And I think she herself at that time was going through a kind of career crisis where she didn't really understand the point of design anymore because she thought it's all, it's all already been done. Like, why, why bother?

• 31:25Guy Raz?

  So, this is what I'm, I'm curious about. You meet Miyako. She had been the lead fashion designer for Zac Posen, a major fashion brand, you know, designer brand. You've got $70,000 in seed money between you and the loan you said. You have zero experience. Obviously, you're intelligent, but no experience in fashion. You've got this kind of harebrained idea to start a company. And that's pretty much in a WeWork hot desk. Like, why? Why would she say, yeah, sure, I'll, I'll go work with you? I'm, I'm just, yeah, wow. Why would she agree to do this?

• 32:02Speaker 01

  Well, I'm, I'm just irresistible in person. No, I'm, I'm totally joking. Every investor that I've ever spoken to, I mean, frankly, like, anybody I have ever spoken to about this in any sort of detail, their follow-up question is usually, like, what was she thinking? And why would she come and work for you? Totally fair question. You know, I don't want to answer for her, but I think for her, it was so different. It was so unlike anything else that had ever been proposed to her. This idea of designing for a group of women that she didn't even really know about, working women, this idea that, she always says, "I never actually seen my clothes on a real person," that means a non-model, "I've never actually seen my clothes on the street."

• 32:46Speaker 01

  You know, she designed Oscar gowns. I think she designed a gown once for Natalie Portman. That was kind of the world she was moving in, but she said, "There was no practical element to the beautiful designs that I was making." And I think that was a big question mark for her.

• 33:02Guy Raz?

  I mean, that, I understand, the creative side of it, right? But you couldn't even offer her a steady income. You know, you could offer her a partnership, but she was not going to have an income for who knows how long.

• 33:16Speaker 01

  Yeah, I mean, I think, I mean, all of your questions are fair. I'm sure this could have played out very differently. I think the only way to describe it is that we had some sort of connection. I was actually going to go with a different designer. I had met someone else who had been the head designer of another very famous brand. And I actually wasn't even going to meet Miyako. I told the headhunter, "I really like this other person. She feels like the right person. I don't really even care to meet with another candidate." And he was like, "No, no, just meet with her because I think you guys are going to really hit it off." And even when we first met, and I was telling her about the kind of women I wanted her to design for, I said, "Don't you know those women? They walk to work in their flats and they have their heels in their bag.

• 34:01Speaker 01

  And once they get into the elevator, they change out into their heels." And she was like, "No, I've never met anyone like that." And I was like, "Wait, what world do you operate in?" And she was like, "Everyone I know walks to work in heels and stays in their heels all day." But at that point, I didn't even know what was involved in designing clothing. I share this story just to level set just how elementary my understanding of clothing manufacturing was. I remember Miyako, early on, said to me, "We're going to need to find a pattern maker." And I was like, "Oh, no, no, don't worry. We're not going to do any prints. We're only going to do solid colors." She started laughing in my face because a pattern maker, to the uninitiated, in fashion manufacturing is like the architect of the dress.

• 34:46Guy Raz?

  Yeah, the person who cuts out the shapes.

• 34:48Speaker 01

  Exactly, exactly. The person who designs on a white piece of paper how the different pieces of fabric are supposed to be laid out and cut. And I thought pattern, she meant like floral patterns or checkered patterns.

• 34:59Guy Raz?

  Or plaid.

• 35:00Speaker 01

  Yeah, exactly. I thought that's what a pattern maker was. So I was like, don't worry, we're just going to do like navy dresses. And so that is, that is how much I didn't know.

• 35:14Guy Raz?

  When we come back, how Sarah got a crash course in dressmaking, how she tried and failed to raise money, and how she and Miyako discovered what it means to have a bank account with a minus sign. Stay with us. I'm Guy Raz, and you're listening to How I Built This from NPR.

• 35:36Guy Raz?

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• 36:18Guy Raz?

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• 36:42Guy Raz?

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• 37:27Guy Raz?

  expert-created business guide in your hands today. It's called "Aligning for the Agentic Era: How AI is Changing Everyday Work." And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it. If your revenues are at least in the seven figures, get NetSuite's free business guide, "Aligning for the Agentic Era: How AI is Changing Everyday Work", at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built. Stripe is built for whatever comes next because the pace of change

• 38:11Guy Raz?

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• 38:53Guy Raz?

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• 39:08Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2011, and Sarah's teamed up with a well-known designer named Miyako Nakamura. And they began to imagine what a new line of clothing for professional women could look like.

• 39:23Speaker 01

  I'm embarrassed to say that I once bought 20 somewhat odd thousand dollars of clothing from a luxury department store, which really only amounted to like seven pieces because each one was so expensive, because I wanted to show Miyako the kind of clothes that I wanted her to design. And by the way, I did return it.

• 39:42Guy Raz?

  You returned them, yes?

• 39:43Speaker 01

  Yes, I did. But I was-- the scariest 24 hours of my life were the 24 hours where I had those seven dresses in my possession in my apartment. I was like, what if we have a fire? But I, you know, we-- and then I just started showing her. I was like, you know, this style, it's so beautiful. It would actually be perfect for work. But it cost $25,000.

• 40:02Guy Raz?

  And describe the style, like clean lines, dark blacks, grays? Like, what did they look like?

• 40:09Speaker 01

  It was tailored, and I think, most importantly, the fit was good. And when I say the fit was good, so I have since learned a lot about pattern making and fitting clothing. Most brands, if you're lucky, the designer will fit the garment on a real fit model once before it goes into production. If the fit on something you buy is off, it's probably because it wasn't fitted correctly, or it went into production before all of the errors were corrected. Luxury brands can afford to do three or four fittings to really perfect the fit, whereas lower-priced brands, they might be fitting it once, or maybe never. They might just go straight to production. And, I mean, there are so many things that

• 40:54Speaker 01

  are involved in good fit, but that was really one thing that I wanted her to understand is the way your body feels when you're wearing a well-fitted garment, it's magical. And you just can't get that at most of the price points that are out there.

• 41:08Guy Raz?

  And who did you tell her to imagine she was designing for? Like, what?

• 41:11Speaker 01

  Oh, me.

• 41:12Guy Raz?

  And what was the job? Was a woman working, doing what?

• 41:17Speaker 01

  You know, we had always three tests. One was called the taxi test. So if you're climbing into a taxi, can you jump in without ripping your scheme?

• 41:25Guy Raz?

  Right.

• 41:26Speaker 01

  The other one was the bend over test, which is if you bend over, can the person sitting opposite from you see your cleavage or your bra?

• 41:35Guy Raz?

  Right.

• 41:36Speaker 01

  Because that's strike two. And then strike three was can you see underwear lines? Every morning while I was working at Bain or Private Equity, I would always turn around and check the mirror to make sure that my underwear lines weren't actually showing through whatever I was wearing. And those were the three tests. And so with every garment that we were making, I said, I just want you to make sure that those three bases are covered. And so I would just move around in every single garment that she made to make sure that it met those things.

• 42:04Guy Raz?

  And I guess this is a good place to kind of talk about confidence in a work environment, right? I mean, it sounds like you were looking to design something that would make women feel more confident in the workplace. Is that more or less right?

• 42:20Speaker 01

  Yeah, that's, I mean, you put it perfectly. I just didn't want women to have to worry. Working women have to worry enough

• 42:27Guy Raz?

  Yeah.

• 42:27Speaker 01

  about whatever it is that they're doing. The last thing I want them to worry about is the clothes that they're wearing. And I'm sure men can relate to this, too. When you leave home that morning and you're not quite confident in whatever it is you're wearing, like maybe your sweater has a hole in it, or maybe your pants are a little bit dirty, or maybe they're not quite fitting right. And it's always in the back of your mind a little bit. And I just wanted to do away with all that.

• 42:56Guy Raz?

  So, once you had sort of the first prototypes or agreed upon designs, how did you get them made? Where did you get them made?

• 43:05Speaker 01

  In the garment district of Manhattan. I didn't realize the extent to which manufacturing is still very much alive in New York. And, you know, just when I was working at Bain, I was working right in Times Square. And I couldn't believe that, you know, these factories were literally two blocks, three blocks south of me. And you open the elevators and it is just rows and rows of sewing machines. And I just didn't even know this industry existed. But that is where we made our first run of dresses. And make it sound easy, but it wasn't at all. Most factories are not willing to work with a no name because, I mean, small designers come and go. And so I didn't realize, like, I was like, well, I'm willing to pay you money. And they were like, it doesn't matter if you're willing to pay us money.

• 43:49Speaker 01

  Like, we need sustainable businesses. So if you're not going to be around in a year, which was true of most fashion brands, then we don't want to start this partnership. And so, you know, we had to beg our first factory to make the dresses for us. And at this stage, they were just samples. We weren't even doing factory runs. But I think Miyako's experience was everything. So they trusted us because Miyako was doing it. You know, and I was just the woman who signed the checks.

• 44:16Guy Raz?

  And so you got a factory to agree to make you just a few samples of each item?

• 44:21Speaker 01

  Yeah, that's right. So, you know, the other thing that's scaring retail businesses is inventory. And because we only had $70,000, I didn't want to tie up my cash in inventory. And so we decided that we would do trunk shows. And we would bring samples, and we would bring one of every size, and we would have people try them on. And based on that, we would place orders.

• 44:42Guy Raz?

  Right. And a trunk show is literally like bringing a trunk and going to someone's apartment or some small space, and hopefully people will show up, inviting people to come.

• 44:51Speaker 01

  That is correct. I think we did, gosh, a dozen or so in the first year. And it was hard work. You know, you're lugging around suitcases. I was lugging around fabric, rolls of fabric on my shoulder through the garment district. It's a very physically intensive experience.

• 45:08Guy Raz?

  And who did you invite to the trunk shows? How did you even get people to show up?

• 45:13Speaker 01

  Friends and former colleagues.

• 45:15Guy Raz?

  Coming to where?

• 45:16Speaker 01

  We rented this hotel suite. We turned the bathroom into a dressing room, the shower stall into a dressing room. I think we created one more makeshift one. And the first two trunk shows, I think, you know, legitimately, it was really just my friends and friends of friends coming to be supportive. But I think by the third trunk show, I hardly knew anybody there. And what started happening was... Women would be telling each other at the workplace. We had zero money to spend on marketing. So it wasn't like we were inviting editors or taking out ads or any of that. It was women just telling other women.

• 45:50Guy Raz?

  Yeah.

• 45:50Speaker 01

  Remember, there was a group of women from Goldman at our third trunk show. And I was like, how did you hear about us? And they were like, oh, well, Jenny saw so and so wearing this dress. And she asked her where she got it. And here we are. And most products that people make, you rely on editors, magazines, ads to spread the word. It's essential for your business. And I think one thing I didn't quite realize, you know, women, they're not looking to fashion magazines to tell them what to wear to work. They're turning to each other. They're asking each other, where'd you get that? Where'd you shop for that? And so that was hugely beneficial in the early days.

• 46:26Guy Raz?

  And so you and Miyako would just be at these trunk shows describing the clothing? Or was it just you?

• 46:32Speaker 01

  Yeah, no. So it was me, my other co-founder, Nuri, who is someone I worked with at Bain.

• 46:38Guy Raz?

  You brought her on because you needed somebody with a different skill set that...

• 46:44Speaker 01

  No, it was actually the opposite of Miyako. I needed someone who could do what I was doing because at that point, I was getting stretched too thin. I should also share probably at that point, I wasn't taking a salary. I was tutoring to make ends meet. So usually every day from, you know, I would wake up and then I would work. I would be running around the factory, the pattern maker, the factory, the pattern maker. And then from 4:00 to 7:00 p.m., my apartment would turn into a tutoring facility. And I would be teaching the SATs or fifth grade math or seventh grade English.

• 47:17Guy Raz?

  Wow.

• 47:18Speaker 01

  And then I would start working on my business again in the evening. I mean, I just had no time to attend to everything that I needed to. And Nuri was someone who I worked with. She was actually the first person I managed at Bain. And so, you know, I said, I want to take this company to the next level. Do you want to come? And she said, sure. And she also didn't have a salary. I couldn't pay her salary, so she started tutoring too. And that's how the two of us made ends meet.

• 47:45Guy Raz?

  All right. So in 2012, you're doing trunk shows and you're getting some people to show up. But I mean, you can't sustain a business doing trunk shows, right? And I have to imagine that you guys were not making any money in that first year.

• 48:01Speaker 01

  You know, I think it was after we did our first set of trunk shows. And by the way, we sold out. I mean, that was, we had made about $50,000 at that point. And we said, OK, this is a quote unquote, proof of concept. We're going to go raise money now.

• 48:15Guy Raz?

  So already in 2012, that's where you said, all right, now is time to go out and raise money.

• 48:20Speaker 01

  Yeah, that's right. I was like, you know what? Not only did we have product, we have made money now. So this raising money thing, it's going to be a piece of cake.

• 48:28Guy Raz?

  I mean, you hadn't really made money because your money was, right? You had expenses and you had to pay for the fabric.

• 48:34Speaker 01

  Yeah, we had generated revenue. You know, I think it was in the fundraising world, they talk about pre-revenue companies and post-revenue companies. And so I was like, well, we are a post-revenue company. And, OK, we said, you know, I don't know, do we want to raise a million dollars? Two million dollars?

• 48:51Guy Raz?

  And so who did you, who did you reach out to?

• 48:53Speaker 01

  We started with friends and family. This is a trick that I pass on to other entrepreneurs who are trying to raise money in the very early stages because a lot of people, I think women especially, tell me they feel bad about asking for money. They feel nervous, what if I lose their money, et cetera, et cetera. And what I tell them is rich people get asked for money all the time.

• 49:14Guy Raz?

  Yeah.

• 49:14Speaker 01

  It's you and 500 other people asking for their money. And one phrase that I developed, which I started using in all my emails, is if you or anyone you know might be interested, please let me know. I think the you or anyone else you know gave the other person an elegant out if they weren't interested. You know, they could say like, yes, I'll think about who I know. Or if they're interested, they'll say like, actually, I'm interested. Or they really might connect you with someone else.

• 49:41Guy Raz?

  Were you able to raise any money in that, in 2012?

• 49:45Speaker 01

  I raised, so contrary to what we thought we wanted to do, which was like, I don't know, a million, a two million, we raised $400,000. And it took me nine months.

• 49:57Guy Raz?

  So then, what, you continue to do these trunk shows? Because that's not going to, right, that's not going to cut it. You're talking about other companies like Bonobos and Warby Parker and...

• 50:08Guy Raz?

  These are e-commerce companies, right? They've got websites where people can order stuff.

• 50:13Speaker 01

  Yeah, that's right. And around this time, this direct-to-consumer was becoming a thing. And so online was where it was at. And I think I foolishly had this notion that if you launch a website, your customers come and they shop and you become millionaires.

• 50:26Guy Raz?

  Yeah.

• 50:27Speaker 01

  Of course, I think we have all learned since then that that is not the case. But at the time, there was such a media frenzy around these new DTC businesses. And I just thought, like, wow, it's so easy. Like, let's launch a site. And so we did. Can never forget this, 3:00 a.m. of January 1, 2013. That was the official launch of our e-commerce site, mmleffleur.com.

• 50:50Guy Raz?

  And the name MM, I mean, obviously, LaFleur is your last name. Where did that come from?

• 50:55Speaker 01

  Oh, it's my mom's nickname. Her nickname is Meme, which is a child's way of saying eyes in Japanese. And she has really big eyes, and so that was her nickname. And initially, actually, it was called Meme LaFleur. But Meme in French means nana. So after a while, I realized, like, nana flower doesn't actually have the best ring to it. Like, maybe we should change that. And so we took the initials of Meme, which is MM, and made it Mmleffleur.

• 51:21Guy Raz?

  All right. So 2013, you launched the e-commerce site.

• 51:24Speaker 01

  Yeah.

• 51:25Guy Raz?

  And it was the same kind of model? People would order something and then you would have it made in the factory?

• 51:30Speaker 01

  No. At that point, we did decide to hold inventory.

• 51:33Guy Raz?

  How many did you have made?

• 51:34Speaker 01

  Let's see. We probably did a run of 50 for each, because I think that was the minimum. So we probably have 350 dresses.

• 51:40Guy Raz?

  So 350 dresses.

• 51:42Speaker 01

  All sitting in my apartment.

• 51:43Guy Raz?

  All sitting in your apartment. You put up the website, sit back, you're like, waiting for the orders to come in, and?

• 51:49Speaker 01

  And crickets. Crickets is the short of it.

• 51:54Guy Raz?

  Like, no one is clicking on the website and?

• 51:57Speaker 01

  Like, I don't know. Maybe we get like 10, 15 orders on the day of launch. And then afterwards, we get like three. Two, I'm sure there were days with zero. I mean,

• 52:10Guy Raz?

  And those three or two, it might be $200 or $400.

• 52:14Speaker 01

  Correct.

• 52:15Guy Raz?

  And you thought, just putting up a website, people would find you.

• 52:19Speaker 01

  Yes, that was my very naive assumption.

• 52:22Guy Raz?

  And presumably, you didn't have money to do a lot of marketing.

• 52:27Speaker 01

  No, I mean, yes, we, it was really still continuing to do trunk shows. We had revenue goals for the month. And so if we weren't meeting our revenue goals, then we would, you know, set up a trunk show, stat, and try to make some money off of that. And the trunk shows, actually, were always quite lucrative. You know, we knew that when our customers actually tried on the clothes in person, they loved them. So often, women were buying multiple dresses. But online, it was just a totally different story. We could not sell our dresses.

• 52:58Guy Raz?

  When we come back in just a moment, how Sarah and her team figure out how to sell a lot more dresses to the point where revenue starts to double and even triple. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 53:16Speaker 02

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• 53:49Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2013, the very first year of business for M.M. LaFleur. And it does about $300,000 in sales, which, on the one hand, sounds pretty good. But on the other, it's only a fraction of what Sarah was hoping they'd make.

• 54:09Speaker 01

  I think, actually, that for the first year, my goal was like a million. So we felt quite short of that. And in 2013, we had hired three other people.

• 54:18Guy Raz?

  And presumably, you couldn't pay them a whole lot.

• 54:21Speaker 02

  No.

• 54:21Speaker 01

  You know, we were paying ourselves very, very little and, you know, we're watching the cash dwindle.

• 54:28Guy Raz?

  All right, so that first year, you're doing a third of what you were hoping to do. You get into 2014, and I have to assume your cash reserves are getting close to running out.

• 54:39Speaker 01

  Not only did we run out, it actually went into the negatives. Our bank account, I think at one point, said like negative 2,000 or something, and I didn't know you could draw down beyond zero. So that was a wake-up call, and I had to go out and fundraise again.

• 54:55Guy Raz?

  Same people, same seed folks?

• 54:57Speaker 01

  No, no, no. I knew I couldn't go back to them because we haven't done what we said we wanted to do on the cash that we had raised at that point. So I had to go out and fundraise again. And the most amazing part of this story is meeting Bob.

• 55:15Guy Raz?

  And who's Bob?

• 55:16Speaker 01

  Bob Deutsch. Bob was a CFO at these two insurance companies. I had gone to meet my husband's friend's father, who was a very successful entrepreneur, for some advice. Secretly, I'm also hoping maybe he'll invest. But he said, you know, you got to meet with my former CFO, Bob. Bob and I have started two companies together. They sold both incredibly successful. And I go and meet Bob, and I say, hey, Bob, I'm just having a really hard time trying to raise money. Can you please give me some guidance? And he said, well, you know, the first thing we should think about is, how much should your company be valued at, and how much do you want to give up? And I was like, I'm willing to have my company valued at anything, just to keep the business

• 56:01Speaker 01

  going.

• 56:02Guy Raz?

  Yeah, right, just keep it afloat, yeah.

• 56:03Speaker 01

  Exactly. And he's like, no, no, like, step one, let's go do this. And so he essentially gives me a homework assignment.

• 56:08Guy Raz?

  A homework assignment to help you figure out what you think the company's worth?

• 56:12Speaker 01

  Yep, and how much I should be raising. And I go back to Bob, and he says, this is really interesting, like, these are the facts that you need to go out with when you go and talk to these VCs. None of the VC conversations actually go anywhere, but armed with this information, I'm able to say, my company, we've already generated revenue, similar companies, when they were at my size, were raising this amount of money at this valuation. Can we talk?

• 56:39Guy Raz?

  So what did you value the company at at the time?

• 56:41Speaker 01

  Oh, gosh, it was 6 million, maybe?

• 56:45Guy Raz?

  When you are out of money and you've got to raise money and Bob is helping you kind of develop a pitch and you went to VCs, and what was their response when you pitched them on this company?

• 57:00Speaker 01

  Their response was the same response that I would basically hear for the next three to four years, which is, congratulations, it looks like you started a real great niche business for yourself.

• 57:11Guy Raz?

  But we're not interested.

• 57:12Speaker 01

  Oh, yes, yeah. Niche business is essentially, it's code word for, this is small potatoes. And, you know, I'm thinking to myself, like, what about working women is such a niche business? You know, there are 30 million women aged 25 to 45 who work in some sort of corporate environment. And these women spend, on average, for women making 75K and up, $4,000 a year on clothes to wear to work. And so, that's roughly a $100 to $120 billion market. You know, to me, nothing about that was niche.

• 57:44Guy Raz?

  But were you, I mean, were you mostly pitching to men?

• 57:48Speaker 01

  Yes, yes.

• 57:49Guy Raz?

  And not to, I don't want to pile on, but I have to assume they didn't quite, you know, they were not going to be able to relate to this. This is, maybe they didn't fully understand the opportunity?

• 57:58Speaker 01

  Yeah, there was a lot of that. I'm sure you've heard this from your other founders, but there was a lot of, oh, I'm going to have my wife, who is a stay-at-home mom, try it. You know, nothing against her, but she's been at home for 30 years and probably has different needs for what she wants to wear every single day. Or, you know, I'll have my 17-year-old daughter try it. But just, just kind of lumping in all women into the same category. You know, the most honest thing I heard was, I had an investor call me after we did the pitch, and he said to me, we really like you, we really think there's a lot to like about the business, but it's just so early and we're four guys sitting around the room and we just can't get a gut feel on the product.

• 58:42Speaker 01

  I've repeated that elsewhere and people are like, oh, my God, I can't believe he said that. How sexist. But to me, it was, it was a relief. That was the first time where someone said to me, like, it's actually not you. It's, it's, it's us not being able to understand the product. But then I think the, the part that I didn't share was that Bob, after seeing me go through a couple of these VC meetings, you know, I think he's seeing how determined I am to, to raise this money. He says, you know what? I'm willing to write a check, which I, I honestly, at that point, wasn't expecting because he's more coaching me through this process. And he was like, you know, I'm, I'm willing to invest 50, maybe a hundred thousand dollars, which is a lot of money for us at that time.

• 59:24Speaker 01

  And he says to me, and are you interested in raising maybe a little bit more money from me and my friends? And I said, you know, absolutely. And he says, okay, give me, give me 24 hours. And so 24 hours later, Bob calls me and he says, okay, Sarah, I've put together $400,000 for you.

• 59:43Guy Raz?

  Wow.

• 59:44Speaker 01

  That is the quickest any single investor has put together around like that for me. And I think Bob has these very close connections with other business people, well-established business people, and, and they do deals together all the time. I think they, they pass each other deals and they move together, they talk to each other, they invest together. And I just never saw that with any of my other female angel investors.

• 1:00:14Guy Raz?

  Here's a question now, right?

• 1:00:15Speaker 01

  Yeah.

• 1:00:16Guy Raz?

  Because I think a lot of people who start businesses, this is a challenge, right? You've got to balance, you know, your independence and your vision and what you, you know, the ownership you want to retain, but you needed money.

• 1:00:28Speaker 01

  Yes, it's so true. And I, I think you're actually, you're pointing to something really important there. And I catch myself doing this too now. And I, I really try to stop myself from doing it. Which is telling other entrepreneurs, like, don't just take anyone's money. Or be really careful who you take money from. That's all well and good when you've got cash in the bank.

• 1:00:47Guy Raz?

  Yeah.

• 1:00:48Speaker 01

  When you don't, it's really unhelpful advice because it's true. You really want to make sure who you take money from, but you also just want to keep your company alive.

• 1:00:57Guy Raz?

  So you had, you were in that position in 2014, which means that, you know, you had to be willing to give up, you know, quite a bit of your, of this company that you started.

• 1:01:08Speaker 01

  Yeah, that's right. You know, I think that's where, I mean, meeting Bob, and he ended up being a phenomenal partner, but Bob could have also been someone terrible. He could have really screwed me over.

• 1:01:18Guy Raz?

  Yeah, because everyone's seen Shark Tank where they're like, I'll give you $25,000 for 70% of the company.

• 1:01:24Speaker 01

  I, you know, I was just like, I can't watch that show anymore because every time I'm like, walk away, walk away. But, um, yeah, $75,000 when you've got negative $2,000 in the bank is pretty precious.

• 1:01:36Guy Raz?

  It's a lot, yes, all right. So you get this money, 2014, you're saved from extinction. But meantime, you've got a website and no one's going to it, and you've got inventory piling up, which is not a good place to be in because at some point, designs are going to change, or tastes are going to change, and that, you're going to end up shredding all that stuff.

• 1:01:56Speaker 01

  Yes. You know, we had moved into a really humble office in the garment district on 35th Street. It was above a methadone clinic. And I would just walk into this tiny room, and I would see it flowing to the ceiling in, in inventory. And I would think to myself, oh, my God, we are going to die under a mountain of dresses. And I think that was the point where I was like, I saw the dresses and I said, what if we just sent our existing customers an email asking them if we could send them a box of dresses? Because we somehow have to physically move these dresses out of here. And so we, we sent our, I think we had like a thousand customers on our mailing list at that time, and we said, we'll send you a box of products that we think you'll like. And if you like them, you can keep them.

• 1:02:40Speaker 01

  If you don't, you can return them. And so that was the pitch.

• 1:02:44Guy Raz?

  So this was more like a, now, like, we're going to send you a box of stuff, and what you want, you keep and you pay for, and what you don't want, you return to us.

• 1:02:51Speaker 01

  Yeah. And... 18% of customers responded to that email saying, "Sure, send me something. I don't have time. It would be so great if you chose it for me." And we ended up sending those 180 boxes out and making more money in that one week than we ever had in any month leading up to it.

• 1:03:12Guy Raz?

  I mean, that model was starting to be out there, right? There was literally a company called Trunk Club and Stitch Fix and some of these companies that we don't know. And you guys were not doing that? You weren't picking outfits for people, sending them and letting them pick and then send stuff back?

• 1:03:27Speaker 01

  No, we were not. You know, I think we just thought... It was actually, it was interesting because even when I suggested this initially to my team, there were a lot of, when I say a lot of people, there were four people who said, like, "Oh, no. I would never want someone else to pick out what it is that I should wear. Like, I want to choose for myself. Why would I want someone else to pick for me?" And, you know, I kind of had to say, Annie, Annie was my CMO. Annie and I were in the camp of, you know, we're not fashion lovers. Like, if someone else who understands fashion better than we do told us what we should be wearing, like, that's actually a pretty amazing service.

• 1:04:08Speaker 01

  So we launched this, I guess you could call it the beta, in February. And operationally, it was a total nightmare. I mean, we sent the wrong size to people. Some people were like, "Why did you send this to me? I don't understand." There were a lot of those things. But the numbers really spoke for themselves. We, there was more demand for that, that service than, than we had ever seen.

• 1:04:30Guy Raz?

  I'm trying to figure, I mean, how did you even know what to send to people?

• 1:04:34Speaker 01

  For a good number of those 1,000 customers, we had met them through trunk shows. And so they had already purchased something with us.

• 1:04:40Guy Raz?

  Right. So you had some data about them?

• 1:04:41Speaker 01

  We had some data about what they had picked and we knew their size. And then, actually, that was a really brilliant moment by Annie, who said, you know, "I wonder if we should try this with new customers." And so she said, you know, "Why don't we email a group of people who've never shopped with us before and ask them to fill out some basic information about themselves? And based on that, why don't we tell them we're going to send a box of dresses to you?"

• 1:05:03Guy Raz?

  And you called them bento boxes, right?

• 1:05:05Speaker 01

  Yeah, we did. We didn't call them bentos back then. But when we launched it in its official form later that year in the fall, we called them bentos.

• 1:05:13Guy Raz?

  And that really actually started to move the needle, right? Like, you actually started to see... Real revenue coming in that seemed to point in the right direction.

• 1:05:24Speaker 01

  Yeah, that was the moment that Silicon Valley calls finding your product market fit. We launched it in its official form, October 2014. We suddenly went from not being able to pay rent to tripling our revenue, you know, oftentimes month over month.

• 1:05:40Guy Raz?

  And by the end of that year, 2014, did you, do you remember what your, your revenue was?

• 1:05:46Speaker 01

  Yeah, it was eight million, but we had made more than half of that in the last 12 weeks of the year.

• 1:05:52Guy Raz?

  Wow. So, I mean, I mean, obviously, that model, right, like the, the choosing and sending people clothing was working, but it, it still doesn't explain to me why it would just like explode in the last 12 weeks of the year.

• 1:06:08Speaker 01

  Yeah, I mean, I think when you walk into a clothing store, price is maybe one of 10 things that you're considering when you decide you want to buy that thing, you know?

• 1:06:17Guy Raz?

  Right.

• 1:06:17Speaker 01

  Do you like the feel? Do you like how it fits on you? Do you like how the salesperson is selling it to you? Whereas when you're shopping online, first of all, it's really hard to tell what, what products actually look like. And when you see this like really simple black dress, it's not going to jump out at you and you're thinking like, am I really going to spend $195 on a pair of black pants? And I think what Bento did in many ways is it took that decision paralysis away because we were getting our products into our customers' hands and only once they, they tried it on were they really understanding why these pants cost $195, you know? And then they start to say, oh, okay, I get it. I get, I get why this costs $150. I get why it's worth it.

• 1:07:03Speaker 01

  But it is really hard to make that case online in e-commerce and I, I think things have changed a lot since then. People are buying $2,000 Peloton bikes online. So I think that, that sentiment has shifted a lot, but

• 1:07:16Guy Raz?

  Yeah.

• 1:07:16Speaker 01

  Back in 2014, it was a really tough sell.

• 1:07:19Guy Raz?

  So I want to touch on a slightly sensitive topic, which is cost, right?

• 1:07:24Speaker 01

  Yeah.

• 1:07:25Guy Raz?

  Some people might look at your clothing and say, you know, I get it, it's not designer, this is not Chanel, but still, you know,

• 1:07:32Speaker 01

  Sure.

• 1:07:32Guy Raz?

  $240 for a dress, or, you know, $225 for a pair of trousers. What am I getting out of this that I can't get from Zara or H and M?

• 1:07:45Speaker 01

  Yeah, we hear that all the time. And we were actually briefly, briefly talking to a department store, a luxury department store, and, you know, they said to us, you could sell these dresses for $700. That's what we would sell it for. And we said, exactly, but the point is we sell it for 200, 250. That's the, that's the point. But it's little details that I think most fashion designers wouldn't care about. And I think that's really, that's really where we set ourselves apart and, and try to justify the price point. You know, does it have pockets? Can you zip it up yourself easily? We're always checking to make sure that you can zip up yourself because you might be traveling by yourself and be in a hotel room by yourself.

• 1:08:25Speaker 01

  You know, does it, does it feel comfortable on the skin because you're going to be spending 14 hours in it? It's my incredibly practical nature, wanting machine washability and wrinkle resistance and comfort in everything that I wear. And then Miyako really saying, I've spent 20 years training to deliver the best designs in the world, so let me figure out how I can do that for, for working women. And I think the place where those two things meet, that's M and M Le Fleur.

• 1:08:54Guy Raz?

  Hmm. All right. So as you really started to, to see traction, presumably your, your biggest market was in New York and then, and then where, where were you also, like, what other markets were you seeing traction in, you know, by 2014, 2015?

• 1:09:10Speaker 01

  New York was always number one, still is number one. But we saw ourselves growing in two other markets, which was DC. And then the other one being San Francisco. And DC was fascinating. You know, we have a lot of congresswomen, a couple of senators who wear our clothes, and staffers, too. You know, I was on Capitol Hill a few months ago and walked into the congressional building and immediately saw a number of our customers.

• 1:09:36Guy Raz?

  Wow.

• 1:09:36Speaker 01

  And then on the other end, we were seeing customers in San Francisco, which became our third-largest market. And these women were saying to us, you know, "I don't actually want to go to work in jeans and a hoodie. I make money. I want to wear nice clothes. And at the same time, if I dress too nicely, people think I'm interviewing."

• 1:09:52Guy Raz?

  Yeah.

• 1:09:52Speaker 01

  And in some ways, the dress code is even more nebulous. Can you help me figure out what to wear? And so, Miauca actually started working on what we're calling Power Casual, a Power Casual line for them, where it's much more relaxed. It's a lot of pant-based, knit-based offerings. But it's a more dressed-up version of the jeans and the hoodie. And so, we have a really loyal fan base out in San Francisco as well.

• 1:10:15Guy Raz?

  So, once you started to get, like, members of Congress wearing your clothing and women in DC and San Francisco, and did it, at that point, become easier to raise more money?

• 1:10:26Speaker 01

  I don't think it had anything to do with who was wearing it. You know, what we started to see was traction and revenue. Four years into it, around 2017, a VC investor approached us. And he said, "Hey, we're just interested in learning more about you. Could you tell us?" And I think at that point, I had a big chip on my shoulder because we had had total failure trying to raise from VCs.

• 1:10:50Guy Raz?

  You're four years in, and you had not raised any money from VCs at that point?

• 1:10:53Speaker 01

  Yeah, that's right. And so, I was like, you know, "We're gonna do this without VCs." Like, that's just the way it's gonna be. But then, we met this investor who was just really wonderful, and his wife was a customer. And he said to me, "You know, I know nothing about women's clothing, but I'm a good student, and I'm willing to learn, so will you teach me?" And just came at it so differently, which really got me thinking about VCs in a different way up until that point.

• 1:11:20Guy Raz?

  And so, they did invest at that point?

• 1:11:22Speaker 01

  Yeah, they did.

• 1:11:24Guy Raz?

  And because up until that point, the first four years, all your money came from friends, family, and then, like, family investment firms are not, right?

• 1:11:33Speaker 01

  Yeah.

• 1:11:34Guy Raz?

  And I'm sure that was frustrating that VCs were not throwing money away. I have to imagine that that was a huge advantage because VC money can be a real double edged sword, as we've learned from previous guests on the show.

• 1:11:47Speaker 01

  Yes. I got to hold on to a lot more of my company because we couldn't raise for a while. But the result was, we were, I think, in a position where we could better absorb those financial resources. So there wasn't risk of other investors coming on and saying, like, wait a minute, wait a minute, like, you've got to change your product because this isn't working.

• 1:12:14Guy Raz?

  I'm assuming that your financials are not public because you're not a public company. But the last number I saw was for 2017 where you did 70 million in revenue. I have to assume it's higher now.

• 1:12:26Speaker 01

  Mm-hmm.

• 1:12:27Guy Raz?

  I mean, do you, at this point now, do you know how much money you've raised in total?

• 1:12:34Speaker 01

  Yes, I do. Yes, I do. We don't disclose it. And it's so funny because I think there's a real, there's a real dark side to talking about how much money you've raised. And I think what happens often in startup culture is that that is what you become known for. Oh, you're the-

• 1:12:51Guy Raz?

  That's your legitimacy.

• 1:12:52Speaker 01

  Exactly.

• 1:12:53Guy Raz?

  Your badge of legitimacy is how much you've, and that's your status.

• 1:12:55Speaker 01

  Exactly.

• 1:12:56Guy Raz?

  And it sounds like you were, you believed in that for a while, like, when these VCs weren't giving you money. Maybe you thought that they, that money would give you this veneer of legitimacy.

• 1:13:05Speaker 01

  Oh, for sure. It's a, if you can't tell already, there's, this is like a constant process of self doubt and me thinking that I'm a loser and trying to navigate throughout this process and not being able to raise from VCs repeatedly when other DTC companies are raising money. It just makes you question a lot. But I think the result is, like, what I did was I ended up just spending a lot of time with my customers.

• 1:13:32Guy Raz?

  Yeah.

• 1:13:33Speaker 01

  Internally, we call our customer Samantha. But where is Samantha working? How do we make her happy? How do we make, make products that she really loves? And so by the time we took in that money, that precedent was already set. Like, investors, while I am so grateful for them and very thankful for them, they don't direct the future of the company.

• 1:13:51Guy Raz?

  When you think about how hard it was to convince people that this was going to be more than a niche business, right?

• 1:13:59Speaker 01

  Yeah.

• 1:14:00Guy Raz?

  Do you, I don't know, does part of you kind of feel like, see, I told you so?

• 1:14:05Speaker 01

  I feel that way, that I told you so when it comes to working women not being a niche category. I feel very strongly about that. You know, I feel like I'm always being tested. I've never really had this moment where I've thought like, I've showed you. I feel like I'm... The startup world has a way of always putting you back in your place.

• 1:14:27Guy Raz?

  Yeah, sure, sure.

• 1:14:28Speaker 01

  I mean, the whiskey on the rocks in the middle of the night, that never ends. I feel like I'm running a different company every two years. And this stage of the business brings a whole different set of challenges that the first two years did. You know, I will, I will qualify that by saying the first two years were by far, by far the hardest two years of, I think, my life. It was, it was just incredibly lonely, incredibly hard getting this business off the ground.

• 1:14:57Guy Raz?

  When you think about your, your journey, how much do you think about that, you know, that this all coming as a result of your hard work and skill and versus luck?

• 1:15:06Speaker 01

  Oh, it's 99% luck. I always go back to that experience I had in Zambia. It is mostly luck, being born to the right parents at the right time. Even just like watching how different my mom's journey was as a female entrepreneur in Japan versus me, born, you know, 37 years later, and the benefits and the, the funding I am able to get in a way that I know that she was never able to. That is all luck. And yes, a lot of hard work, too.

• 1:15:35Guy Raz?

  That's Sarah LaFleur. She's the co-founder and CEO of MM LaFleur. And by the way, a business that's all about dressing women for the office has to pivot pretty fast when all of the offices get shut down due to COVID. And so, over the past two years, MM LaFleur has really leaned into those power casual styles that Sarah talked about. The clothes that feel comfortable to wear around the house, but still look good in, say, a Zoom meeting. And by the way, if you want to know more about this, just Google "How I Built This Resilience with Sarah LaFleur." You'll find the interview I did with her at the beginning of the pandemic, just when she and her team were starting to make some of those changes. Hey, thanks so much for listening to the show this week.

• 1:16:20Guy Raz?

  Please do follow us on your podcast app so you always have the latest episode downloaded. If you want to contact us, our email address is [email protected]. And if you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. Our Instagram account is at How I Built This NPR, and mine is at Guy.Raz. This episode was produced by J.C. Howard, with music composed by Ramtin Arablouei. It was edited by Neve Grant, with research help from Candice Lim. Our production staff also includes Casey Herman, Farah Safari, Liz Metzger, Julia Carney, Carrie Thompson, Blaine Coats, and Harrison V.J. Choi. Our intern is Catherine Seifer. Jeff Rogers is our executive producer.

• 1:17:00Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This. This is NPR.