The Entrepreneurial Journey – How Andy & Kate Spade Built a Brand
August 14, 2018
The late Kate Spade, along with her husband Andy, took the entrepreneurial journey together, accepting the lows and battling to reach the highest levels of success. Anyone wanting to take this path can learn from their journey.
In February 2017, Kate and Andy Spade sat down with NPR to tell the story of how they built what would become an iconic fashion brand. Their story goes back to when shoestring budgets and sparse living foretold little of the glamour and riches they’d later come to know.
The Spades took risks, putting everything on the line to position themselves for success.
They worked constantly. If they failed, it wouldn’t be from lack of effort.
But they didn’t go into things blind. They knew their marketplace and had a knack for making connections at the right time.
If you have the entrepreneurial bug, listen to this interview. Within the conversation is powerful advice on what it takes to build your own business.
We’ll highlight a few important points, with takeaways on how to apply them to the development of a marketing strategy.
Understanding the Market
At the 9:00 mark of the interview, Andy Spade makes a vital point. He realized that Kate knew the fashion bag market better than anyone.
At that time, Kate was a successful fashion editor. Through that job, she’d amassed a vast collection of fashionable handbags.
The Spades asked the vital question: What’s missing from this market?
And they had an answer. Kate realized that at the time, fashion handbags were overly complicated. The busy designs had a cold, unapproachable feel.
She was drawn to simple designs using inviting colors. Her designs had an approachable architecture to them.
Takeaway:
A new business idea gets its spark from discovering a market need that’s not being met. If you haven’t identified a need, you don’t have a starting point.
The number one reason new startups fail is they find there’s no market need for their offer.
She Quit Her Day Job
Kate makes another interesting point to consider (10:00). When she made the decision to start her handbag company, she quit her job as a fashion editor.
She recalls a moment of panic. Why did she quit her job? The sensible thing would be to work so she’d have a paycheck. Then she could build out the business in her spare time.
But in retrospect, she realized she would never have made it that way.
“I remember thinking at the very beginning why didn’t I stay, I could have made an income while I was working on this. And someone said to me ‘the truth is you never would have done it if you’d stayed’, because I wouldn’t have been as scrappy. It was kind of do or die, so I think if I’d still been working I would have been…a little more lackadaisical about it, whereas when you don’t have an income coming in, you’re doing whatever you can to make it happen.”
Takeaway
If you decide to start a business or launch a new product, you’ll inevitably get the advice “Don’t quit your day job!” Most will advise you to work with a safety net.
But take Kate’s point to heart. If you want to make it in a competitive market, you have to take the leap. You’ll claw, scrape, and bleed for your business. You must be ready to out-hustle the competition in a state of total determination.
Andy did work so they could eat, but they chose to live lean while they built their company. Much of what he made was invested into their business. In time, they would burn through all their savings and even their 401k to keep the company viable.
As an entrepreneur, you’re seeking a career that’s central to your life. To give yourself a chance at that career, you may have to give up your job.
Lasting Through Lean Times
Fast-forward three years. While the Kate Spade brand made headway in the fashion world, the company still isn’t making money.
They’re living in a loft in Tribeca. It serves as their home, their office, and their shipping warehouse.
In their fourth year, they manage to pay themselves 15k in salary.
Takeaway:
We drive this point home all the time with new marketing clients. It takes time to build a profitable business. If you’re introducing a new product, it may take years to turn any type of profit.
Part of your plan needs to involve how you’ll stick it out through the lean times when orders are minimal.
It also involves being realistic about expectations. The Spades got rich, but they didn’t get rich quick. The worked their butts off, making no salary for years.
Crossing the Chasm
There was a point in which they were going to quit. Things looked bleak.
But they hung in there, in part out of respect to equity investors who’d seen no ROI.
Then in 1995, they won an award from the Council of Fashion Designers. Big department stores took notice and started ordering more of their product.
They stood before a crucial juncture.
At 26:30, interviewer Guy Raz asks if there was a business decision they made that was the key to turning this around, or was it that they’d persevered through the tough times and – finally – they got discovered.
Kate responds:
“That’s exactly what happened. I mean it really was, kind of a snowball effect. It got a little bigger and a little bigger and a little bigger…I think when the larger department stores started picking us up, we realized we might have a business here.”
Takeaway
What Kate is describing is an important moment in the product adoption cycle.
They crossed the “chasm”.
The chasm represents the leap that a product must make when it moves from early to majority adoption.
Kate Spade’s story demonstrates that a product crosses the chasm not with a single, huge leap, but when the popularity starts to snowball.
Their brand exploded when the popularity of the products in the marketplace became the main marketing for the brand.
Seth Godin describes this as hitting minimal critical mass. It’s a point in which buzz creates its own buzz, popularity and usage create more popularity and usage.
Your goal in marketing your product is cross the chasm. To hit minimum critical mass.
It’s unrealistic to think you’re simply going to advertise your way to success. Eventually, you must reach a point where people talk about your product, touchpoints multiply, and organic growth happens on its own.
Few business ideas cross the chasm. Andy and Kate Spade’s story gives a glimpse of what it takes to get there.
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