Bogg Bag: Kim Vaccarella. The $100 Million Business She Almost Abandoned

27:23You need to be able to work with me here. I'm not paying$25 ,000 for a mold. Well, but that's a thing. They have to make a mold in order to make your prototype. So how much was that going to cost you? The initial mold costed me$5 ,000. Okay. So they were going to charge you five grand to make. And did you make a commitment to them that if you liked the prototype once you got there, you would do a minimum order? No. Nothing? Nothing. When do you remember receiving the first prototype? In 2010, I believe. So about a year and a half after you first had this spark of an idea. Yes. Okay. What do you remember about seeing that when it arrived?

28:09So my husband was the first to see it. And because he worked nights, he was home during the day. I was at work. And he called me up and he's like, you need to come home right now. So, of course, I'm thinking disaster. Something happened to one of my kids. I was like, I can't leave work. I don't have that luxury to be able to leave. and he's like, you just, you gotta get home as soon as you can. So I'm like, well, I'll get home at the normal time that I normally get home every single day. So I get home and there are three bags sitting on my dining room table. And he's like, this is the coolest shit I've ever seen.

28:48While we come back in just a moment, Kim takes her bags to a trade show for the first and almost the last time. Stay with us. I'm Guy Raz and you're listening to how I built this.

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30:15Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2010 and Kim's just received the first prototypes of her sturdy, washable beach bags. Three of them in three separate colors. Olive, yellow, and pink. Yep. So I take the pink one. You know, I show it to a couple people, family members and whatever. and they're like, oh my God, that's amazing. And like, I'm like, are they just being nice? Did anybody say, eh? At that time, no. Okay. At that time, no. But I took it to a store that was called Pink Bungalow in Ridgewood. Okay. Is it nice, like a boutique that you liked? It was a beautiful boutique and there was a girl in there, Mary Frances, and she was their buyer and she always merchandised so beautifully and everything looked so nice.

31:06And I walk in with this pink bag and I am scared to death because I can talk to anybody, but like now I'm like trying to sell something and I wasn't a salesman. It's crazy. You had the confidence to do a lot of difficult things. But when it came time to you face-to-face as a sales rep, you got nervous. I was petrified. Yeah. So I walk in and I had met Mary Frances before. So I was like, hey, I have this new product. And she just looks at it and she grabs it with her hands and she goes, I don't know what the hell this is or what it does, but I think I need it. And that was my first order. Wow. I really didn't even know what a pitch was or how to present it or I didn't even know the cost.

31:56Yeah. She's like, I love this. I think this is great. How much are you selling them for, Kim? Yeah. So I ended up, you know, I doubled the cost of the product. Okay. And then I doubled it again. So you're going to sell it for$60 and I'm going to sell it to you for$30. Literally made that up while I was standing there. It was not based on any calculations. It was just an instinctive number. It was, yeah. At that time, it was absolutely instinctive because I didn't know about wholesale and retail and margins and anything. I just made up the number. And she said, great. I'd say, that's great. I'll take, how many did she say she'd take?

32:39Somewhere between six and 12. Let's test them out and let's see how they do. Okay. You got to put an order in in China, or maybe you had already put the order in. Yeah, I was ordering 300. 300, okay. And by the way, how much was that going to cost you to order 300? Under 10 ,000? It was under$10 ,000, yes. So you got 300 bags being made. Did you have a name for these bags? Oh, yeah. It was already in the mold. So it was bog. It was in the mold. Bog. Okay. So bog was embedded or embossed in the bag. And tell me about that name, bog, because it's, you know, I'm sure that initially some people were like, bog, like a marsh?

33:20Like, what is a bog? Or a toilet. Yeah. Yeah. Which I didn't know at the time. The bog. That's right. In the UK, they call the toilet the bog. Yes. Yes. In England. That's right. Yeah. Okay. So bog. So how did you come up with that name? I was literally looking for a four-letter word to go with croc. So it was going to be something by crocs or something by croc. And I started thinking about the waterproof nature of the material, the washable nature of it. So for some reason, I had frogs in my head. And then I started rhyming. And I went frog, pog, tog. And then in an English accent that I clearly don't have, I said, bog, it's the new bag.

34:03And not even knowing that in the UK, it was a toilet. And I would be reminded of this at my first trade show by a 25-year-old master of marketing. And he's like, you know, you're never going to sell a bag with that name. I said, well, I already bought the bags and it's in the mold. And he's like, I'm telling you, listen to me. I have experience. And he goes, do you know what that means? It means toilet. And I said, at least it's effing washable. And I walked away. I had no choice. I couldn't change the name at that point. So it was going to stick and I was going to make it work. Okay. So you've got the name and you've got these bags coming and you get six to 12 of them in this boutique.

34:45Now, tell me about that first batch of 300 bags. So the 300 bags, so I have six to 12 in Pink Bungalow. And now the bags are selling, but I'm still not convinced because I don't know if it's family and friends going in there. I don't know who's buying the bags. Like I couldn't say like who bought them. You know, I just had to be happy that they were selling. They also sold at their other location, which I believe was in Montclair at the time. So they placed a reorder. I put more bags with them. And then the other ones, I didn't know what DTC was. I didn't know direct to consumer. I didn't know how to build a website.

35:24I didn't have the money to build a website. So I went with what I know and I know how to talk to people and tell them about my product. Yeah, right, because you had 12 of them in the stores, but then you're still left with – I still have all these other ones. Yeah. Right. So I became friends with a group of women on Facebook. It was a mompreneurs group. And people started talking about trade shows and trade show season is coming up. And I'm doing this trade show and I'm like, what the hell is a trade show? And I think I need to be there. So I convinced myself I had to go to Orlando for the Surf Expo trade show.

36:04So I got the cheapest motel. It was like the Bates Motel. But that's what I did. And I went to this trade show. And I'm next to all these brands that like – This is like a gift, a big gift show or – Yeah, but it's more surf. And I figured surf fit us, right? Like your surf shops are going to buy it or your beach shops are going to buy it. So there's O 'Neill and Hurley and Billabong and all these big brands and these massive boots. And here I am with like 12 bags. I have no idea what I'm doing. I had guests on my wholesale pricing. I put together an order form that I probably did on Excel or Microsoft.

36:41And yeah, and I just started selling bags there. How many orders did you walk out of that trade show with? Over 10, which according to the guy across from me who created the slap watch said, that's pretty good for your first trade show. 10 orders of like roughly? Well, I made them by a certain amount. So I made them by six bags. Okay. And a lot of people were like, oh, six, nothing. No big deal. No big deal. So we had some early on people that were like, okay, I see what you're doing here. But I'm making nothing, right? Because I have legal fees that I still haven't paid yet. And, you know, the manufacturer had to get paid and, you know, things needed to be replaced.

37:24So I'm making nothing, but I'm selling. And by the way, through all of this, you're doing your job, your day job. You're doing your job as a controller at a commercial real estate agency. Yes. And I'm using vacation days for trade shows or to go here or to go there. So it was a lot. It was a lot. I was doing, you know, bog at night and work during the day and, you know, kids in between and all the things. Okay. So I want to ask you about – so you're getting some traction, right? But still very, very small. And I know that around 2012, I mean, you must have been gaining confidence because you spent that year.

38:07I think you managed to sort of cobble together some money and you put in an order for 1 ,200 bags from this factory. And I read it was going to cost you about$30 ,000. Yes. So I was anxiously waiting for this 1 ,200. And this was going to go again. You had orders for boutiques, mainly small boutiques, but no website selling these at this point. No. Okay. So you place this order. The container arrives. It's a$30 ,000 order. Yes. There's a problem. Yeah. It's midnight. It's pitch black. And at this point, I rented an extra space storage unit. The container shows up late. We have – it's my husband there.

38:53He pulled a couple of guys from the police department to come over and help. We gave them food. We had one or both of my sons there. And I'm like, this is our first full container. Like this is full of cardboard boxes. But the excitement is palpable. Like I'm like, this is amazing. Like my kids were excited. My friends were excited. Like to see a full container roll up, right? And we start unloading them, putting them into the storage unit. And I just want to dig in. I want to open up a box. And I wait a little while. But when I open up the first box, I see black streaks. Now, functionality, perfect.

39:33Color, beautiful. Everything was exactly as I wanted it, except it had these black streaks. Like what color the bag was like pink or yellow and had black streaks on it? Yeah, it could have been red. I think at that point I had five colors. So it would just have these black lines, almost like a pen line. Right. And it wouldn't wipe off because I tried, believe me, with everything, anything I could possibly find to wipe off this black mark. That was only in one box. No, that was in every box. It was in every box. I will not say it was on every bag, but it was in every box. At this point, we went to three per box.

40:10So if I was getting one good bag out of 10 boxes, it was literally I was so sick to my stomach and I was like, I failed. I'm done. Can I just pause for a sec? Can I ask you why? Like, could could you have not gotten away with selling those bags? I mean, maybe people wouldn't notice. Maybe they think it's part of the design. I could have, and I later realized that they would not have noticed. But it was not what I wanted for my first time out. This was my first large order, and I had always envisioned it as a Nordstrom's bag or something like that. And I said, I can't sell a product that I can't stand behind.

40:57So what happened? Why were there black streaks in the bags? Well, basically what it was was laziness. It was sheer laziness. Basically, that barrel that they're mixing the color in has to be cleaned thoroughly. It has to be washed. Right. It has to be washed. So somebody was lazy in washing it. So there was some of the prior color left in there when they put the new color in there. So when it was getting in there, it was burning. So it was causing this little like fleck. So this black fleck. I'm assuming you contact the manufacturer and you say, hey, guys, you screwed up. You've got to send me a new batch.

41:34And? No. No what? No, we're not sending you a new batch. As a matter of fact, we have more to send you. But then send me a refund. Yeah, well, good luck with that. $30 ,000. They said, no, we're not going to. And you said, look at these bags. They're fine. But they're damaged. Yeah, what you're saying makes perfect sense. But that is not how it went. They said, no, no, no, sorry. Right. That's what you ordered. You know, at one point they did agree they would send me more bags. But my concern was you're just going to send me the more bags that you already have manufactured there and I'm going to have the same problem.

42:16So basically what we did was at that time is I did have orders to fill. So I had to literally pick through everything and see if I could piece or parse together an order just at least to keep the customers that ordered them happy until I could get some more product. So you were able to fulfill the orders, but you probably were left with what? How many bags would you say were defective? Between 800 and 1 ,000. Wow. Okay. And 30 grand is a lot of money. You had not raised money. This was not investors' money. This was your savings. This was my savings, yeah. Well, my husband and my savings, yeah.

42:55And my kid's college fund. And your kid's college fund. Yeah. It was heartbreaking. It was, you know, I was disgusted. I was, but all in the back of my mind, I was still like, I'll, I'm going to figure this out. This can't be the end. But then at one point I decided because life was getting busier, you know, I had one son playing three sports and one son playing two and just, just daily life. And I just, I literally shut down. And I think that was in this portion of my life, probably one of the first depressions of like, I have let my family down where I was like, what did you do? So this situation combined with, well, the defective bags and the money that you spent on it and just the frustration, you decided to just freeze the business, stop entirely?

43:58Well, the first thing was, now what am I going to do with these bags? Because I can't now pay for an extra space storage unit for bags I can't sell that I can't use. What am I going to do with these bags? And it was around the time that Superstorm Sandy hit the Jersey Shore. This is October of 2012. Yes. Huge storm that could cause billions of dollars in New Jersey, New York, and Connecticut. Yes. And it literally came through 30, 40 foot waves came through the same beach that the idea for Bog Bag was born. Houses were literally wiped from their foundation. Just a huge disaster. It was insane.

44:44And this happens just at the same time as you're going through this disaster with this order that has just cost you all this money. I'm trying to figure out what to do with these bags because again, the functionality and the color were beautiful. And I was like, there's got to be something to do. And then the idea clicked one day is like, hey, what about all the people that work their entire lives in Bergen County, which is already way too expensive, all to just move to the Jersey Shore? And then now their houses are gone. So I was like already in this funky state. And now I'm thinking about this.

45:24And I thought about, hey, why don't we see if we can go down there and we'll use these bags as the vehicle to hand out supplies to people. And we started collecting all of these things, Clorox wipes and paper towels, water bottles, granola bars, flashlights, gloves, masks, anything that they could, you know, there was no electricity still. So they're going into these houses that are probably likely filled with molds. They're sopping wet. Everything is dirty. They needed, you know, large garbage bags to take all the debris out. And so I had this idea and we called the mayor of Tom's River. Right.

46:08On the Jersey Shore, that town was like totally devastated. Yeah. So now I had to get a trailer to now bring these bags. Everybody coming over the bridge when they finally opened it, like just the looks on their faces. They're like, this is this is catastrophic. It's terrible. And it looked like a third world country. I mean, there were burning barrels and army reservists and people just standing there like warming. It was freezing, freezing, freezing cold. and we got a personal escort in because we said we're coming with all these supplies. And then we started working with the Army Corps of Engineers and we had this massive group of people here to help us distribute bog bags.

46:53And it was kind of like a, here we are with this big ass yellow bag and we're like, here, but take these things to make your life a little bit easier. Like we're trying to do whatever we can. and we handed out every single bag. And that was it. That's essentially you got rid of 800 bags as you just donated them. Yep. I mean, I understand. Earlier you mentioned depression, and I mean, I understand. You had put a lot on the line here, and it was rough. You were struggling. And but it sounds like you didn't necessarily – you weren't necessarily saying this is over. You were just putting it on pause.

47:41No, I was done. You were done. This was over. I was done. I failed. And it was what it was. And all my focus now was what do I need to do? And that could be wait tables again to replace the money that I had lost. Kim, you had sold bags. You'd order some trade shows. Boutiques were selling them. I mean, weren't any of them like contacting you and saying, hey, we are ready to do a new order? I mean. They were. But I could not, you know, it was part of the depression. I couldn't get myself to get past that point to where I'm like, hey, you know, saddle up. We're going to get through this. And it took a little while.

48:29In my mind, I was done. anyway. But what happened was I had a Facebook page for the people that were coming to get supplies from us called Bog Bag for the Beaches. And this was the charitable arm of what we were doing during Sandy. And on this Facebook page, you know, it was a lot of like, hey, like checking in on everybody, seeing how they're doing, blah, blah, blah, blah, blah. And people would post things about Sandy on it. And then between nine months and a year after Sandy. Now, all these people have had their bog bags in the worst possible scenario. All these people who got a donation. Yes.

49:12Everybody that received a donation had these bog bags in molds, dirt, sand, water, you know, in like the worst situation possible. So the recipients of the bog bags with all of the supply started reaching out through Bog Bag for the Beaches. And they were like, wait, I need to buy like more of these bags. I need one for my family members. I want to buy them for gifts. I want them for Christmas. I want them for... They didn't notice the black marks. They didn't care. They loved the idea of the bag. This is not a religious show. I don't want to push anything on it. But I'm just like, sometimes you have to think that there's forces that are working that you just don't understand at that moment because you're giving these bags away.

49:58But then those people who receive them, they're not coming and saying, oh, thank you for your charity and we want to show you good faith. They're saying, we really love these bags. They're really great. We want to order more. Yeah. Yeah. Yeah. I can't explain it either, but it happened at that time and it was one of those moments where I sat and I said, shit, now I got to make this damn bag. Like, did that start to kick you out of your depression? Yeah, for sure. Because now I had that renewed energy again, right? Like, I was like, oh, my God, wait, these are people I don't know that I don't have personal connection to that are finding value in something that I built.

50:40And yes, that did absolutely re-energize me. And the first thing was to call up the factory and figure out how they were going to help me and what they were going to do for me. But this time you were actually going to visit – you were going to fly to China for the first time. Yes. Okay. So you go to China to this factory to figure out what went wrong and how they could fix it. Right. Okay. Figured out the issue is what I said. It was the flak burning off, getting into the bags. They weren't cleaning the – The barrel. The barrel, huh? Yeah. So we go there. We meet – first of all, just going to China for the first time and being outside of the country and then going to China.

51:19Is that your first time out of the US? except for like the Caribbean, yes. Wow, that was so, and you were at this point, I mean, in your 40s, right? Easily. I was in my 40s, yes. So we get to this factory, but I was not doing well. From the flight to the four hour car rides, like I was already on edge. We get to this factory and when we got there, it was nice. They offer me tea and we're sitting down and there's obviously a language barrier, But we go down and we look at the factory and I'm seeing all the bags there and I immediately just start picking through them. And I'm looking at them and I'm like, these all have black streaks.

51:59They need to be discarded, whatever. And I said, and you need to make me new bags. And once you make me those new bags, then there will be orders for more bags. But until we can figure out this situation, like we're not moving forward. So I don't know why I thought I was going to be able to get this done. But I went in there with like, this is what's going to happen. This is what you're going to do for me. And basically, they were like, no, you need to take these bags first so that we have more room in the factory so that we can make you more bags. And I said, I'm not taking any of these bags.

52:38And the guy said, well, we'll just sell them then. We'll just sell them on our own. We'll just sell them on our own. doesn't matter that you own it created it whatever we'll just sell them on our own and I just turned to him and I said I will burn this effing factory to the ground and I could have been in jail in China for all I knew but I was so furious my husband's like you need to calm down I said if you sell them I will burn your factory to the ground and I left and that was it and I went back and I was like, okay, now what?

53:17When we come back in just a moment, Kim does figure out how to make more bags and when she can't afford her own booth at a trade show, she puts together a timeshare. Stay with us. I'm Guy Raz and you're listening to How I Built This.

53:47Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2013, and Kim has decided to make more bags. But she's also decided to fire the factory that originally made them. So with no factory and no good leads, she gets on social media. I go back to my mom entrepreneurs group. The Mompreneur Facebook group? Yes. Okay. And after a little bit of posting, one woman replied and she was having a, she makes a breast pump bag and she was having her breast pump made at a factory in China and offered to make an introduction. Did that factory work out? Was that the one that you decided to go with? I still use them to this day.

54:30That's wild. So they weren't making anything like this, but they had the ability to do this. Yes. Okay, so you have a new factory, but you have a problem, right? Because you still need the cash to get these bags. And I should just paint the picture. You're still doing your day job and you decide to revive this business. And that means going back to trade shows and working nights and weekends and needing cash for an order. First of all, let's talk about the cash. How are you going to do that? So I started putting together what I needed, and I refused to use any more of my own money at that point.

55:17There was nothing left. It was like take out another loan or whatever. In the meantime, the attorney in our office, who I had worked with at that point for years, he's like, you know, my wife has a little bit of money she was looking to invest. Maybe she'll want to do it. I said, Jordan, you know I have no financials. I have no nothing. He goes, no, but I know you. And he used to call me kiddo all the time. He wasn't that much older than me, but he used to call me kiddo. And he's like, kiddo, I know you. So I meet his wife for lunch, and I run her through it. And she's like, okay, let's do this.

55:54And I get$120 ,000 for, which is exactly what I needed to the penny to get the first order, to pay the bill, and to move on. None of this was to pay myself, do anything for me. It was just to get out of the rut and then to get a new. It was to get back going. And we signed the paperwork and I gave them 25 % of the business. And that was – and it was just a – it was like a very straightforward trust deal. I mean, they – again, you didn't have a data room and all this stuff for them to go through. You didn't have it. And you couldn't – so it was purely just trust and instinct. Like they knew your work ethic and they were like, okay, we'll give you 120 grand and we'll take 25 percent of the business.

56:41I don't even think they asked for 25 percent. I think I offered it. Yeah. Okay. You know, at the time it was like, if I'm going to make this and somebody is willing to invest in me without any financials and no proven track record at this point. You got to give them some skin. Right. So I'm going to give them something. And with this money, you were able to put in another order and then now go back into the trade show world. Correct. But what was something really something really cool happened out of this mompreneurs group again is that there were a lot of us that were struggling that could not afford to go to these shows.

57:16I mean, these booths, they're used car salesmen at these shows. Yeah. Like they're like 10 grand for a booth. Or more. Or more. And they will tell you it's the last booth left. If you don't commit right now, you'll never get into another show. So you're in a full on panic. So it's clearly frowned upon to share a booth. But I said, screw it. Like, let's just try. So I gathered this bunch of women who all wanted to try trade shows. And we would put five women in a 10 by 10 booth. Selling different things. Completely different things from a sarong to a wine glass to a bog bag to whatever it was. But we would make it look as cohesive as possible.

58:00and all five of us couldn't stand there at one time. So we would have to kind of stand off to the side and we would share hotel rooms. These were women I didn't know, but I didn't care and it worked. I mean, there was probably at least seven and maybe up to 10 trade shows where I did this until I actually broke out on my own several years later. Wow. Okay, so, and this is all on your vacation time and weekends and, right? Like, okay. How are you just personally managing? I mean, you got growing kids, teenagers, and you need to be driven around, and your husband's got a busy job, and you've got a busy job.

58:38And I'm assuming you did not have enough money to have a nanny or help. Am I right? Am I right? No. We were able to make it work as much as we can make it work. And I remember being at my youngest son's junior high school. and Anthony, such a smart kid and he's a great kid, but he would always find himself getting, very much like his mother. We're sitting down talking to the therapist in the school and she's like, so what's been going on? And once you start saying it out loud and I'm like, well, I work 40 to 60 hours a week and then I'm going to the warehouse at night and then I'm picking up Anthony or dropping off Vincenzo or Rosario is doing this.

59:28And we had figured out that we were doing this for nine years. Wow. It's probably one of my greatest regrets is just not realizing that time that it was moving so fast. It was working and it was getting done. So it didn't cause me pause to have to really think about it until she put it into perspective and said, guys, you've really been going for the last nine years. It takes a toll. It did. It did. I mean, it could, you know, it. I mean, this is the thing that I think a lot of people interested in starting a business don't fully appreciate until they do it, which is a lot of things are happening in the background that require huge personal sacrifice on families, on marriages, on relationships, kids.

1:00:24Sorry. It does. It's hard. It does. And when you, you know, it just reminded me again. Because you're still, you have a steady paycheck that you need. You can't just jump ship. You still need that paycheck from the real estate company. Yeah, I needed every bit of it. And it was just you, right? Yeah, it was just me until we got the product again. So once the product came in again, I have to hit it heavy with the trade shows. I have to get a DTC site up. Everything was literally left up to me and my husband when he could and my older son when he was available. But I asked my son. Your older son?

1:01:12My older son. I said, do you have any friends that want to work? And the only person that responded was a girl. And it was Julie. and Julie is still here to this day. She was my first employee and she would go to school and I would go to work and we would meet at the warehouse at night and we would kick ass. We would pack boxes, label them up, get them on the truck, get them off the truck, do whatever we needed to do. We would be sweating and dying in there and then we would go home and we would come back and do it all again the next day. How long before you were able to pay back that$120 ,000 loan?

1:01:54I believe somewhere in 15 or 16. That's fast. Yeah, it was fast. So you paid that back. And I think by 2017, you're in the hundreds of thousands of dollars, right? You're doing a few hundred thousand dollars in sales. Yeah, we did a few hundred thousand dollars in sales. You know, the team grew from two to like three in a warehouse worker. So, you know, now I had payroll and I had taxes that had to be paid and all of these other things. I mean, there's just so much more than selling the product. It's crazy. Okay. So what gave you the confidence to leave your job after 26 years and give up a paycheck, a steady paycheck and go all in?

1:02:36Because you made this decision in 2018. What gave you the courage to do that?

1:02:44I was tired. Now I'm in my, at that point, however old I was in my 40s, 48. And I had worked a long, long time and a lot of hours. And this wasn't so that I could get a break. It was just I could not do both anymore. I decided in July, I think it was coming back, we took a vacation. And coming back from that, the pile of work left for me at work. And just all of it. And I just, I said, I have to leave. I told my husband and he's like, I'll support you, whatever you want to do. And I wasn't taking a paycheck from the business at all. So I made up a number in my head and I said, I need to sell a million dollars this year if I'm going to leave my job.

1:03:31And that would be enough to pay yourself. I don't even know. I just made up that number. I didn't know if how I was going to pay myself, if I was going to pay myself. I just knew I needed to sell a million dollars. So this wasn't – I said the courage to leave, and it sounds like you would argue that it wasn't really courage. It was just exhaustion, and you were just – you couldn't do both of these jobs. I couldn't do both anymore. But you had enough conviction in this other thing that was growing that it was worth taking the risk. I did. I said, you know what? It's been – at that point, it's 10 years now, 2008 to 2018.

1:04:09Like, shit or get off the pot. I'm either going to go full into this or what am I doing? Yeah. So I give them notice in July that I'm going to leave the end of July. And I didn't end up leaving until October. And at that point, I'm like, now I only have three months to get to this million dollars and to make this work. How are you going to do that? Just pounding phones, just checking in with customers, reorders. Calling everybody who'd done orders, just calling them back and saying, do you need more bags? Yeah, posting on social and building an organic following and talking about the stores. That was one of the most, I think one of the most beneficial things that I did early on was I would talk about whoever was carrying me.

1:05:00You would talk about it to who? To social media. We didn't have a bazillion followers. We didn't even probably have 10 ,000 followers at the time, but there was engagement on it. So I was like, if you're looking for a bog bag in easily South Carolina, go see so-and-so. It was the personal connection that I had created with these stores that I wanted to see them succeed. So you had three months to hit a million dollars. That's a lot of pressure. Yeah, it was. But we did it. We squeaked it by. And, you know, we're flying high going into 2019 and then COVID hits. So 2019, well, you got 2019. And how did you do in 2019?

1:05:48Do you remember what you did in sales? Like probably double 1 million. Yeah, I think it was two or three. Yeah. And then COVID hits. And I imagine that's going to be a huge problem for you because you're in small boutiques that are probably in many states they had to shut down. Yeah. Thankfully, we kept everybody employed. And in the state of New Jersey, we fell under manufacturing. So we were able to stay open. But how are we going to sell bags and who's closed, who's not closed? No trade shows. Right. Trade shows are canceled, but we had our group of customers and we had social media to talk to them.

1:06:31And we started seeing creativity come out of the stores because they needed to keep their lights on and their employees paid. And we started seeing them using Bog Bag as the vehicle for Easter because Easter was coming up. And you couldn't go to the store and buy Easter baskets. So they would use Bob Bag and they would use something that could be just sitting on their shelves or sitting in the back storeroom for the past six months. And they would package it up as one kit and caboodle and they would sell it. And it would be curbside delivery. And where every other brand that I knew went D to C only during COVID, we kind of took the opposite.

1:07:09And we went wholesale heavy. So I was about 90 % wholesale over COVID. And basically, the shops where you were selling it, they were promoting you. They were promoting your product. They were promoting because they were showing pictures of the product. So then it was giving more people the idea. And then we went viral during COVID, and not by my doing or anybody else's doing, but by Peloton Moms Group. Because Peloton Moms had bog bags that they would keep their sneakers in, and they're all on the screen together cycling. and they all started talking about bog bag. So now our D2C starts kicking up.

1:07:49Our stores are looking for more product and we end up COVID in a two-year backlog of products. Wow. Yeah. I saw something that one of the things that, or maybe one of the reasons why they took office because people were so freaked out about germs and bog bags are washable. Well, that's what it was too. We had a lot of teachers. We had hospitals buying our bags because they weren't allowed. You could spray it with Lysol. Right. You could just wipe it down. They weren't using – it's a non-porous material, so they weren't allowing leather and canvas. Do you have an estimate of when you hit$10 million in sales, in annual sales?

1:08:30Somewhere around 20? 2020. Yeah. So that was – okay. So end of COVID. So wow. So you're coming out of COVID, all engines blazing. And people are discovering this bag and you are eventually approached by a potential acquirer, which we don't know the name because there's been a bunch of NDA signed. So we don't – believe me, I looked. And it's a good well-kept secret. But a publicly traded company approached you for a majority stake, and they would have given you a lot of money, like more than life-changing money, money that will change your grand and great-grandchildren's lives. Yeah, 100%. Tell me what happened.

1:09:18You get a call out of the blue? I had a retailer and the owner of this group of stores happened to be friends with the CEO at this company at the time. And everything's such a weird set of coincidences, right? I didn't need the money. We were profitable. So there was no real need. The only need was I was probably in the$20 million range at that point, and we had no systems. I was taking orders on pen and paper. Everything was done manually. And I was like, as we continue to grow, things were going to get more difficult. So I really needed infrastructure. So we had great conversations, met several times, and they were great.

1:10:14And I just, you know, we instantly jived and everything was going really well. And then I started looking into them a little bit more. And I'm like, okay, well, they're on a little bit of a downswing. And I had known them. I grew up with this brand. So I was very familiar. But I was seeing that they were kind of on a downswing. And then I'm looking at their expenses. I mean, they're not showing me any financials or anything like that, but they're a publicly traded company. So there were things that I was able to look up and I'm looking what the CEO is making and I'm like, oh, I'm never going to have a CEO that makes that much money.

1:10:49I was like, that's insane. I was like, for a company that's not doing that great. I was like, the numbers weren't making sense to me. And I will never claim to know that at that time I knew what the numbers were. I still struggle, but I'm like, okay, I don't know if this is making sense to me anymore. So at the end of the day, the number would have been huge. I get the offer. I was like, I can do this. I can push through. But they wanted the majority share. And so I struggled. But I said, this is stupid. How could I possibly turn this down? How much would you make? Over$100 million. Wow. Yeah.

1:11:30That's a pretty hard offer to say no to. Oh, it was, it was, yeah. Why did you say no? Because of all of those things, all those factors. You know, I go a lot on gut and I just, there were two major things. I wasn't ready to give up my baby yet. I wasn't ready to give up control. And I had read horror stories about people giving up control. And I still felt like I had more time to give to this and to give it the old try. the worst thing which is the craziest thing that I was upset about is I'm very close with my sister brother I now have young nieces and nephews as um and but we don't talk finances but what I had talked to my husband about is I said I want to take everybody to Disney World when I close this deal and this is when I still thought I was closing the deal so for Christmas I got my niece's luggage with Disney.

1:12:34And I was so excited to take 15 people to Disney World. And I was going to pay for it all because I was going to have a boatload of cash. Right. So I'm like, this is awesome. And I decided after Christmas and in the early part of the new year to not do the deal. And that sent me into a spiral. And I'm like, I can't afford to take them to Disney now. That was probably the second largest depression. And that one hit hard. That was, I was going to work every day. I was functioning. I was doing my work. I would go home. I don't think I showered in five days. I would literally just sit there and just say, what did I do?

1:13:28What did I do? And I couldn't get myself out of it. And probably about day three of that, you know, like week stretch, I just said, well, maybe if I write down how I'm feeling, like what's upsetting me the most? I just started writing and I wrote 35 ,000 words in three or four days. And it started at like early days and then it kind of came up to present day. Imagine writing that down helped a lot. It did because it helped me see how far I had come. Yeah. Did that help you get out of the funk quickly? Yeah, it definitely sped the process along. A couple of the good things that came out of the whole experience was there is value to what I'm doing.

1:14:26And that was a very difficult thing for me to really accept and take in and believe in that I was doing something valuable and somebody else was noticing it. But it's just, like I said, my mind never allowed me to go there. You know, the goal always in the beginning was to, you know, I wanted to be a millionaire. And then that kind of came and went also and then you're like, then it becomes so much more than that, right? It's, if it was about the money only, I would have sold it and I'd be sitting on a beach somewhere. Yeah. Like, you know, now I'll be 57 years old. Like, what the hell am I doing?

1:15:08Like, I'm still in work every damn day doing all this stuff. So it becomes more about - Your identity and your life. Your identity, the people you work with, the story that you can tell. So, yeah, it's interesting. I really appreciate that insight because I think that's right. I know that there are forces, things that happen, and they're not explicable, right? Because not that long after this whole deal fell apart, I guess you get another call from somebody else interested in also doing some kind of deal. And I guess through a series of calls and connections, someone eventually puts you in touch with an investor, Andrew Rosen, who I guess is a pretty big deal, right?

1:15:56But when you hear about him, you don't even know who he is. Yeah. And I look him up and it's, you know, I see quotes like Godfather of Fashion, New York City. And I'm like, oh, I'm like, that's Andrew Rosen. OK. He was involved in Rag and Bone and Calvin Klein. And so anyway, we set up a call and we have a great conversation. And Andrew's like, get her in touch with Hussein right away. Hussein is another partner of theirs? He's involved in everything. Kind of like Andrew's... Consigliere, maybe. Yeah, yeah. I mean, he knows about all the brands, knows all the players. All right, so he calls and he started...

1:16:42Okay. He calls and Hussein and I hit it off immediately. You know, I consider him family now. And, you know, it was... We had a follow-up meeting and that was with Andrew and Lou Frankfurt. I had to look up Lou Frankfurt, too, because I didn't know where he hailed from. But, you know, he's the basically the godfather of coach, you know, I mean, he didn't. He turned coach, I think, from a five million dollar company to a multibillion dollar brand. Right. Right. So we started the process and we did due diligence for probably the greater part of 23. and at the end of 2023, we had five people and some warehouse workers.

1:17:25None of us had any experience in what we were doing and we closed 2023 at$50 million. Wow, unbelievable. It was insane. We ended up closing the deal with the group. I think they bought a 40 % stake. Yeah, 40 % stake. So I maintained control, which was, you know, the issue with the other deal. And, you know, we started the ball rolling. And, you know, I moved six times in five years warehouses because each warehouse needed to be bigger. More and more space. More and more space. And, yeah. It's amazing. And so when they bought a 40 % stake, I imagine that was really the first time at that point you're, you know, in your 50s, right?

1:18:13You're in 52, 53. I imagine you were able to take some money off the table. And at that point, you, for the first time in your life, were truly financially secure. Yeah, that is the first time that I was truly financially secure. But more importantly, you own 60 % of a company that's worth a lot more money than it was before 2023, for sure. Correct. And that is a different place to be in life, for sure, from where you started. From where I started, yeah, 100%. No, I have zero regrets on anything. Better than waiting tables. For sure. But if all else fails, I can always go back. Yeah. So with this new partner, when you did the deal with them, I think you had like five or six employees, right?

1:19:02Mm-hmm. This is 2023. So this is not that long ago. And I read that you now have close to 100 employees. Is that right? Yes. So that's a huge shift in, you know, and obviously your sales are much higher. You're now well over$100 million in sales. What is it like to go from managing four people, you and four people, to you and 99 people within two years? it's a lot it was probably so how many how many depressions did i give you two so let's let's say the third was you know now you're hiring people with titles that you've never heard of before um and they're coming from brands that are way bigger than your brands and you're trying to fill all these roles and there's different personalities and different types of working so it's it's a very difficult thing.

1:20:03It actually caused me to shut down a little bit in probably in the first year because you're getting people with deep experience in the industry who may have worked in some of the right, the biggest names and biggest coming corporate offices and they have a playbook and they've been successful. And you did not come from that world. No, I didn't come from that world at all. So it was very, you know, I don't know if intimidating is the right word. It definitely played a role, but it was more like, hey, I guess I just have to let people do what they do because who am I to correct them when they're already successful in this area, right?

1:20:47Who am I to tell you how to do it when you've been doing it all of this time. And I had to gain that confidence back and said, no, you've been doing it too. You just may be doing it in a different way. And then there's gaining even more confidence and saying, no, no, no, no, no. This is the way this needs to be done. I don't care how it worked at X, Y, and Z. This is the way we need to do it for bog bag. So tell me what you want this to be. I mean, it's a much bigger brand than it ever has been. Do you imagine it being a billion-dollar-a-year brand or more? I mean, what are the ambitions? I believe it'll be a billion dollar brands.

1:21:41That is the goal. I'll continue to work until that's done. And just personally what I want for Bog Bag is I want it to be a legacy. I want it to be something that my kids and their kids and their kids talk about and say that this was part of our family. Kim, when you think about the journey you took, you know, what I really love about this story is it's not an overnight success story. This is a long, step-by-step, methodical, up-and-down, and-at-one-point-you-abandoned-it story. It's a get-rich-slow story, which I think are the best stories. But when you think about where you started, you know, you dropped out of high school, right?

1:22:33You know, a lot of people would have written you off. And look how far and what you built, right? And when you think about that, how much of it do you think happened because of all the work that you put in? And how much do you think had to do with moments of serendipity and luck? Serendipity, yes. Luck. It's hard to say. I don't like to lose. I don't like to fail. And I wanted to be able to, since an early age, call the shots. And I was, I mean, I've gotten so much better. I was a massive control freak. Like everything had to be done a certain way and it had to be done fast. And maybe it was the environments that I worked in that made me that way.

1:23:19I don't know. But it's there's a lot of intervention, luck, love. I don't know what to attribute it all to. It can't just be, you know, one thing.

1:23:36That's Kim Vaccarella, founder and CEO of Bogbag. By the way, Kim may seem like the kind of founder who would have been perfect for Shark Tank, but she never made it on the show, even though she applied like four times. And if you want to see what her audition looked like, you can still find part of it on YouTube. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode. And as always, it's free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please do sign up for my newsletter at GuyRoz.com or on Substack.

1:24:16This episode was produced by J.C. Howard with music composed by Runtina Ravlui. It was edited by Neva Grant with research help from Sam Paulson. Our audio engineer was Jimmy Keely. Our production staff also includes Casey Herman, Chris Messini, Alex Chung, Carrie Thompson, Carla Estevez, Catherine Seifer, John Isabella, and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built This.

1:24:46Amen.