How to get your product into celebrity hands (and recover from every possible mistake)

As I read the bio for today’s guest, I thought, “Wait, is she really going to talk about that?”

It was a bio full of incredible accomplishments but also disasters that most people don’t want to talk about outside of dinner at my house or a scotch night.

Sarah Shaw is the founder of Sarah Shaw Consulting, which acts as a virtual CEO for service and product companies.

Prior to that, she ran a collection of companies, largely in fashion but not exclusively and what she did that I’m especially impressed by was she got a lot of press. She got product into Jennifer Aniston’s hands, which got her into a magazine.

I wanted her to come on here so we could learn about the whole ups and downs of entrepreneurship from someone who’s so impressively open.

Sarah Shaw is the founder of Sarah Shaw Consulting, which acts as a virtual CEO for service and product companies.

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Full Interview Transcript

Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com. It is home of the ambitious upstart. Boom.

And today, I’ve got a Mixergy fan who wrote in to volunteer herself as an interviewee. As I read her bio, I thought, “Interesting…” Then I thought, “Wait, is she really going to say that? Maybe not. Let’s keep reading. Is she really going to talk about that? Let’s keep reading.” And it was like a full bio of incredible accomplishments but also disasters that most people don’t want to talk about outside of like dinner at my house or a scotch over here. I thought if she’s willing to talk about it–I see you, Sarah, nodding, so you are–she’s going to make for a great guest.

Sarah: I love it.

Andrew: The woman who you see on your screen right now is Sarah Shaw. She is the founder of Sarah Shaw Consulting, which acts as a virtual CEO for service and product companies. Before she was a virtual CEO for all those businesses, she ran a collection of companies, largely in fashion but not exclusively and what she did that I’m especially impressed by was she got a lot of press. She got product into Jennifer Aniston’s hands, which got her into a magazine.

She also had some issues as we said earlier. She closed a company because of investor trouble. She had partnership issues, which happens so much. Most people aren’t willing to admit it, even to themselves. But she is. She’s willing to talk about it. And I wanted her to come on here so we could learn about the whole ups and downs of entrepreneurship from someone who’s so impressively open.

This interview is sponsored by two companies that Sarah already knows because she’s been listening to Mixergy. The first is HostGator. I’ve got to tell you about a funny thing that’s happened with HostGator recently. HostGator is a hosting company. I’ll tell you more about them later. And it’s sponsored by Toptal. There’s one thing that I do that Toptal keeps telling Sachit, our ad salesman, “Tell Andrew to do more. We love it.” And I’ll do more of it when I tell you guys about Toptal later.

But first, I’ve got to welcome Sarah. Sarah, good to have you on here.

Sarah: Oh, I’m so psyched to be here with you.

Andrew: Me too. Of all these businesses, was the biggest on Sarah Shaw Handbags, your handbag company?

Sarah: Yeah, I would say so, and my consulting. I don’t know. All my businesses have kind of spanned over time. I’ve always been one of those people, have lots of fingers in the fire, have lots of businesses going at once because when one is up the other is down and you’re making money on one and you’re killing it on the other and the other is dead and you never know where it’s coming from.

Andrew: With Sarah Shaw Handbags, how much revenue did you generate?

Sarah: In five years, we probably did about $4 million.

Andrew: $4 million over five years. That’s impressive. It must have sucked when you closed down the company and what happened to your name after that?

Sarah: I lost it. I lost the trademark. So, I don’t have the rights to use my own name anymore.

Andrew: So, should I be calling you like Samantha Shaw here in the interview?

Sarah: Well, my dad said to me, “You might not be able to own the trademark, but you were born with that name and it’s on your passport, so you can use it.”

Andrew: All right. So, what can’t you use the name Sarah Shaw for?

Sarah: Well, I just can’t trademark it. I can use it for anything I want. I just can’t risk trying to file the trademark again. It is actually up for grabs, but I don’t really want to live looking over my shoulder at somebody who might come after me. I’d rather let it go.

Andrew: I could come after you. I could call myself Sarah Shaw.

Sarah: I’m talking about old investors who might come after me.

Andrew: Let’s talk about what happened with these investors. But the whole thing initially started before you had investor trouble, partner trouble, before you had the $4 million from that and the revenue in the solid business that you’re building now, you were working in Hollywood for 11 years doing what?

Sarah: Costumes for movies.

Andrew: Do you remember like a favorite day or one of the favorite days you had doing costumes in movies, one of the days you had to maybe even pinch yourself?

Sarah: It’s a really tough job. It sounds really glamorous and all that, rubbing shoulders with movie stars and things like that, but it’s probably one of the toughest jobs, I think, in the world, and it actually really gave me, I think, the foundation for being a successful entrepreneur because it really grinds in. One thing I learned from one of my biggest mentors in the costume designers I worked for a few times was never take no for an answer.

So, I grew up essentially–I started working in film when I was 22. It was my first job out of college. I didn’t know any different. I’d had some babysitting jobs and things like that, but I never had a real job. When you hear someone say to you, “Don’t take no for an answer, there’s always a workaround,” it trains your brain.

Andrew: How did you do it as a costume supervisor? Do you remember? Do you have one example of that?

Sarah: Yeah. For example, I worked on “Star Trek VIII,” which was the one with the Borgs and the Borg queen. It was my first really big movie. I turned in a costume budget of $1.2 million. That was really small for the $70 million budget for the film right? I walk into the production manager’s office and I’m like, “Here’s my budget.” And I’m feeling so proud about it and thinking I made this major accomplishment and he laughed in my face and said, “I don’t know what movie you’re making, but this budget is not happening.”

I was like, “I didn’t write the script. If you want to make this movie, that’s what it’s going to cost.” So, he said, “What can you cut out?” I said, “What can you cut out? Why don’t you cut some scenes out, come back to me?” I was like, “I don’t know what else to tell you.” Here I was, I was probably 27 years old or something and I was one of the youngest supervisors out there to work on such a big movie. I was feeling pretty proud of myself.

So, I go back to my office, walk in. I burst into tears. I was like, “What am I going to do? This is such a nightmare.” And the costume designer was like, “This is what it’s going to cost. Your budget is right on.” So, they cut out all these scenes that were kind of ancillary. So, we redid the budget. By the time they finished hacking us apart, we were down to probably just over half a million dollars. They were like, “That’s more like it.”

So, as the movie goes on, the producers are just loving what’s happening and the look of the movie and everything is going really well and Paramount Pictures is really happy. They slowly said, “We think we’re going to add this scene back in. How much more is that?” I’m like, “You’ve got the budget. It’s whatever, $100,000 or whatever it was.” Slowly, they kept adding back every single scene that they finally did. I came in at $35 under my $1.2 million budget in the end.

Andrew: Wow.

Sarah: And it was one of those moments where you’re like–for me, it was somebody looking down on me and kind of putting me down in this situation and having to say, “All right, well, it’s not my movie,” and being able to let go of what I was holding onto, which was this beautiful budget I’d put together.

I think it really relates to entrepreneurship because you have to be able to ebb and flow as an entrepreneur. You can’t wake up and say, “Here’s my list of the ten things that’s going to happen today.” Well, you can have that good intention, but thing number one goes wrong and you have to put that fire out and then you go on to four, five and six and seven blows up in your face or your production doesn’t come in or your websites explodes or your servers go down.

Andrew: Would you have been willing to lose the job over your budget. Essentially you were saying, “This is what each one of these scenes is going to cost. I can’t get you any lower than that.”

Sarah: Yeah.

Andrew: And you were willing to and that’s what got him to say, “If she’s not backing off, maybe it makes sense. I have to cut some scenes.”

Sarah: Exactly.

Andrew: I see.

Sarah: I didn’t have a choice. It was one of those moments where you have to decide that your integrity about what you’ve done is where you’re going to plant your feet. I think that really an entrepreneur is the same thing. You have to take a stand about everything you do and every decision you make, whether it’s good or bad. You’re going to make mistakes and learn from them, hopefully.

Andrew: While you were doing that, you started two companies, one of them was Rack and Roll Rentals, which did what?

Sarah: We had that for ten years and did about $100,000 a year. So, we’re somewhere around $1 million.

Andrew: I guess so many people expect me to ask about revenue, that you assume that’s what I meant. I meant what did Rack and Roll do as a business?

Sarah: So, we built three wardrobe trailers and we rented them to the film business because when a movie is on location and not at the studio, maybe people have seen mobile movies around town somewhere and they have lots of different trucks and each department has their own truck. So, we bought 48-foot semis, kind of like the grocery truck you see on the highway. So, we would just have it basically tricked out, racks and refrigerators and dressing rooms and drawers and things like that.

Andrew: So, you bought it? I guess you got a big loan to be able to do it and then how did you rent it out? How did you find customers?

Sarah: Well, we just started calling transportation captains and trying to get on their radar. I had a business partner in that company. He and I both worked as costume supervisors. It kind of came about when he was like, “Why are we renting everyone else’s trucks? Why don’t we just build our own?” So, in ’97, we built our first one and then 2003 and 2004, we built the other two. They got progressively cooler.

Andrew: Did you rent it to yourself?

Sarah: Yeah. We rented them to ourselves a few times. We had a corporation–

Andrew: But that’s not where the bulk of your revenue came.

Sarah: From other people.

Andrew: I guess because you knew the industry and you knew other people who were doing what you did, you figured you could call them up and be like, “I’ve got this tricked out truck.”

Sarah: Exactly. And our friends too who were costume supervisors would rent them from us because they knew we had nice equipment.

Andrew: I see. So, that’s kind of like me looking around saying, “What do I need here? What am I already paying for?” And then creating that and selling it to other people. So, it might be, “I’m doing all this editing anyway. Why don’t we do it in house and I call all my podcaster friends and say, ‘Can we edit your interviews for you?'”

Sarah: Exactly.

Andrew: That’s the model you used. And you sold the business.

Sarah: Yeah. I sold it in 2013.

Andrew: Okay.

Sarah: I wanted to move out of California and my partner was always on the road. He was on location all the time. We just kind of felt like movies were really moving to Atlanta and Detroit and it was getting harder to rent them. So, we sold it to a transportation captain who would do two or three shows at a time and he could easily rent them.

Andrew: Was it the kind of business that you could run or that would almost run itself or did you have to make a lot of calls, drive the trucks a lot?

Sarah: No. We had a parking lot. They would leave them in the parking lot. My business partner got us the lots for free because he did so much work out of this costume house that they just gave us some sports. It was a super low-maintenance business. Basically all I did was bill people and take the money to the bank.

Andrew: Oh wow. That’s super easy. It sounds like you sold it for a nice profit.

Sarah: Yeah, we did.

Andrew: All right. And then at the same time, you also had another business, Rags to Order. What did that do?

Sarah: Well, when I was working in film, I realized that we needed some opportunities to make large scale manufacturing, like doing a war movie or something like that, you need thousands of uniforms. I was on a film and we made some clothes Downtown LA and I met this guy. He made some clothes for us. And then I told somebody else about it and he’s like, “Oh, thanks for the job referral.” I said, “What are you making?” He said, “I’m making all these Chinese coolie outfits.” So, I said, “That’s great.”

It was a referral from a friend. It turned out that it was for “Forest Gump” and of course, we didn’t know that it was going to be a hit when he was making all those clothes. He said to me, “Hey, this could be a real business. Why don’t you go out and solicit those jobs and send them to me and I’ll manufacture it and we’ll split the profit.” So, I thought, “All right. Why not?” So, we had that company for probably ten years, eight years maybe and made costumes for all kinds of big movies, “Matrix” 2 and 3.

Andrew: Did that take a lot of your time?

Sarah: Sometimes it did. I had to go for a lot of fittings and going to see the costume department and getting the fabrics. That was my end, kind of the sales part and then doing the fittings and taking modifications back Downtown to get things adjusted. But other than that, it was kind of a cash business, 50 percent up front, make it, deliver, get 50 percent on the back end within a week of delivery. It was fun. We did costumes for probably 25 or 30 movies.

Andrew: So, you were doing both of those businesses at the same time that you’re a costume supervisor. According to this old Forbes article that I read about you, you felt like you were in glamorous positions with a lot of perks, but also really overworked and tired. Was that a mistake to run those two side businesses while you were taking on such a challenging career?

Sarah: I don’t think it was the businesses. I think it was more my costume career. We were often at work at 5:00 in the morning and worked until 10:00 or 11:00 at night.

Andrew: Could the businesses have survived if you left?

Sarah: No. I see. I was definitely the driving force behind those.

Andrew: Could they have survived if you left the job you had?

Sarah: The film business? Totally. I had them both after I left the film business and started my handbag company, I still ran both of those businesses as well.

Andrew: So, I tend to think that if you have a job and then you have two businesses on the side, the businesses aren’t going to do well, you’re going to exhaust yourself and it’s not going to work. You need to do one thing and give it all of your energy. But you’re the opposite of that. You actually are proving the opposite works. Am I right or am I misreading things?

Sarah: No. That’s exactly right. I think it was because they were specific types of businesses. I couldn’t run three consulting companies or something that really takes a lot of my brainpower and physical presence. I imagine you can only do so many interviews in a day.

Andrew: Sometimes we challenge that. Today I’m going to be recording three interviews back to back in addition to having to come in here for an early business meeting. I left the house this morning at–I woke up at 6:00. I played with my son for about an hour. Then I left the house in the pouring rain at 7:00 just so I could get my run in before my meeting. But it was worth it.

Sarah: Good. You’ve got pouring rain. We have dumping snow.

Andrew: You’re a mom also. Were you at this point in our story a single mom?

Sarah: I am.

Andrew: What about at this point in the story when you were taking on a full-time, very demanding job and running two businesses? No. You weren’t a mom at that point.

Sarah: No.

Andrew: Okay. So, then according to this old Forbes article that I found, you said, “I can’t keep going on like this. This is really challenging. It takes a lot of my time. I need to find something else.” Did you ask yourself, “What would Martha Stewart do?” Is that what led to the next business?

Sarah: No. But that’s a good thing. No. I actually, with some of the women that I knew in the film business, we were all a little bored with our jobs from time to time. So, we started this weekend craft club. We did a lot of projects from Martha Stewart magazine and different places that we would find things because this was back before the internet. So, this is probably like ’95 or ’96 or, I should say, before I was on the internet.

So, I just had this idea. I saw a little packaging idea that Martha Stewart had in a magazine. I thought, “That would be kind of cute if you turned this into a purse.” And I was like, “Whatever,” and stuck in a drawer and thought about it for a year before I actually ever did anything about it.

Andrew: What was the thing?

Sarah: Well, I decided that I was going to make this bag. I was having brunch one morning with my boyfriend at the time and I was reading an article in The New York Times about this handbag designer. I was literally cursing at the newspaper. He’s like, “What is your problem?” I said, “I’ve had this idea for this handbag for over a year and it’s just been sitting in a drawer and I’m too afraid to do anything about it and look at this girl. These things are hideous and she’s in The New York Times.”

He was an entrepreneur and inventor and he was like, “Why don’t you quit bitching and moaning about it and do it. I kind of took him up on the dare. So, I went and got some materials and figured out how to make this bag and got out my sewing machine and luckily it was just some straight lines because I’m not an expert seamstress by any means.

I sewed a few samples and then showed them to another costume designer I’d been working for, for years and she was just like, “Oh my god, this is the cutest thing I’ve ever seen.” We went out to dinner that night and I had the bag just up on the bar. We were sitting at a bar. A woman came up and I asked where I got the bag. I just looked at her like a deer caught in the headlights. My friend says, “Oh, she made it. She’s the designer.” I’m sure I turned like 50 shades of purple.

The woman turned out to be a buyer from a store. She said, “I can’t buy it from you. We only buy from Italy,” but I knew her store because it was in this big mall but I knew her store because it was in this big mall where I shopped for a living as a costumer. I’m sure I spent millions of dollars in there over the years. So, she said, “But you should really go for it. I’ve never seen anything like it and I go to all the shows in Europe.” So, that was kind of the beginning.

Andrew: What was it about the bag? I read that the bag looked kind of like a brown lunch bag but was made out of felt or am I reading about one of the other bags?

Sarah: No. It was. It was called the Pinked Bag. It was cut with pinking shear edges, which are those little zigzag scissors. The one I saw originally looked like a lunch bag. That was the Martha Stewart one, like an old brown bag that we had when we were kids. It looked exactly like that, but it was felt and cut with these pinking shear edges and I thought, “That would be really cute if you turned it on its side and put handles on it. It would be a cute purse.” That was how I came up with the idea. So, I got some pinking shear scissors and cut these bags and made them and that’s how I got started.

Andrew: I could see how that would get someone’s attention, especially at a bar where you’re not used to seeing stuff like that.

Sarah: No, and it was red.

Andrew: All right. I want to come back and ask you about who the partner was in this business because I know there were partner issues. I want to ask you about the investors because there were investor issues. But first, let me tell people about HostGator and these weird set of emails that I got.

Over the holidays, someone in our audience signed up to HostGator, had trouble, emailed I don’t know who, but I saw the email too because he’s someone who’s part of Mixergy and he must have emailed it to someone on the team or maybe he got one of my obscure email addresses and he sent it in and I saw it. I forwarded it on to someone at HostGator.

Sarah, the collection of back and forth emails over this one guy complaining–nobody could let it go, “What was the problem? How did it happen? What was going on?” was insane. Frankly, if someone complains about us with a problem like that, I’d say, “Thank you. I’m going to adjust something. I’m sorry I pissed you off.” I’ll give you refund for sure and move on.

These guys are like back and forth. “Make sure that this is okay, that this customer is fine.” Then our team is making sure that HostGator is good. Does anyone else have a problem with HostGator? Back and forth endlessly. I just stopped reading the emails because it was way too many back and forths, but I was in admiration of HostGator as a company for freaking caring and our team for caring so much about one listener having a problem with one sponsor that they would go back and take it so seriously. I was really, really proud.

So, I can tell you at the end of this that if you signed up for HostGator and you have a problem, first of all, I know you can contact support because I’ve contacted support. The phone number is easily available. They pick up the phone within two minutes. I got it within 90 seconds, number one. And number two, apparently, if you email me at Mixergy, we’ll help you out also. It turns out we’ll help you out also.

It turns out the problem was one little pricing issue. HostGator was testing out a price. The price difference was insignificant but this person caught it. I think that’s what it was. Overall, it was all resolved.

HostGator–what do they do now that I’ve told you about how good their customer service is? HostGator does web hosting. They’re really good for lots of different kind of web hosting but I would recommend is you use them for WordPress. You see a lot of people out there, a lot of podcasters talk up all kinds of other publishing platforms, but when you look to see what do they really publish their main sites on, it’s very often HostGator, not HostGator necessarily, but it’s WordPress. Very often it is on HostGator.

You think, “Why?” Well, because WordPress gives them the flexibility to build, to grow, to adjust their businesses to do whatever they want. If they don’t like their hosting company, WordPress allows them to move over to a different hosting company. So, if you want to host a new site, take it on WordPress.

If you want a good hosting company that will be there for you, that will actually take your complaint seriously–I think a little too seriously, but still, that’s good–go to HostGator. The best way to do that is to go to HostGator.com/Mixergy. When you do that, you’ll get 30 percent off and you’ll get tagged as a Mixergy customer, which apparently makes people care a lot more.

I really appreciate HostGator for doing that and really, frankly, if you’re out there and you want to start a new site, go to HostGator. If you want to move your site, go to HostGator. They will make your migration really easy. I really urge you to check them out–HostGator.com/Mixergy.

Who was your partner, Sarah, in this business that you started with an idea on your own?

Sarah: We’re talking about the handbag company, right?

Andrew: Yeah.

Sarah: Since I’ve had so many partners. Well, about two years in, a childhood friend asked if she could come on as my partner. She had just finished business school at UCLA, Anderson School and thought she could really bring something to the business. And I was struggling at that point.

I had zero idea what I was doing. My margins were horrible. I didn’t know how to price anything. It was kind of a disaster. I was thinking at that point, “I’m just going to close my company, sell off everything. Maybe I’ll lose $10,000. But I know so much more now, I’ll just start again and I’ll really build it.”

So, I decided to let her come on because her idea was to bring on friends and family and raise about a quarter-million dollars in financing. So, that was all I could see was dollar signs. I thought, “This is really going to turn things around for me.

So, she came on and we raised the money and brought in about 24 friends and family and they put in anywhere from $5,000 to $20,000 apiece. And she put in nothing and got 20 percent of the company as the COO of the company and was going to be working essentially for sweat equity.

Andrew: Did she bring on a lot of the investors herself or was she pushing you to get your friends and family?

Sarah: She did about half of the investors and I brought on half.

Andrew: Okay.

Sarah: I was getting her as my COO and she wasn’t going to be paid. So, she didn’t need to work. She had a husband who could support her. So, it was fine. So, one of her jobs was to pay the bills that she chose that for herself. I didn’t choose it for her. So, somewhere around Labor Day, I get a notice from my car insurance company or car insurance that I don’t have car insurance, that I’m expired.

So, I left her a message or emailed or something and was like, “Hey, what’s up? I don’t have any car insurance. You didn’t pay the bill. Where is it? I need to get this paid. I can’t walk around with no car insurance. I have three companies. I own a home. Let’s go.” And I’m really vigilant about that kind of stuff.

Andrew: I am too.

Sarah: I was really focused. So, somehow either she or I paid the bill. I don’t remember. And two days later, I got a resignation letter from her. This was two days before 9/11.

Andrew: Why? What did she resign over?

Sarah: Over the fact that I clearly didn’t like how she paid the bills.

Andrew: Okay.

Sarah: And she didn’t want anyone to tell her how to do her job. So, that was basically it. It was a short, three-line letter, basically I quit.

Andrew: Well, because I didn’t know what I was doing when I brought her on and I actually had a company attorney who was a friend of a friend of hers, someone’s husband. And he was a good attorney, but nobody suggested that I get my own attorney. So, legally, corporate attorneys have to do everything in the benefit of the corporation. They can’t do anything for the benefit of the officers or anybody like that.

So, I didn’t know that at the time. I sure do now. So, she had her shares, her 20 percent. We just gave it to her. So, when she quit. She took her 20 percent with her and left the company in a really bad position. And of course, she didn’t acknowledge to anybody that she left the company in a bad position because we couldn’t bring on somebody else and sell them her shares. She’d only been with the company maybe nine months at this point.

Andrew: Wow.

Sarah: She basically turned all of her friends who were investors against me and just made my life really difficult. Then because 9/11 happened two or three days later, it put us in a lot of financial jeopardy fourth quarter.

Andrew: Why? Why did 9/11 cause trouble for you?

Sarah: Nobody bought anything.

Andrew: Even though George Bush came out and said the best way to support the country is to buy?

Sarah: Yes. Exactly. Everyone said, “Thanks, buddy. No thanks.”

Andrew: Wow. Okay.

Sarah: So, we had no internet sales. All of our tradeshows were cancelled in September, actually. We had two shows coming up in New York. Those both got cancelled. They got postponed a couple months. I went to New York, I remember, in October completely freaked out. No buyers showed up because they were way too freaked out to even come. It was probably like 10 percent attendance or something.

And then people–we did have our January tradeshows in New York and all over the country. We had reps in every major city. But it was just really difficult. Fourth quarter is where we made probably–we were close to $1 million that year already and we were supposed to do $1.5 million that year and we probably got that to $900,000. So not making that extra $600,000 in fourth quarter that we’d planned on was a huge blow and we had so much inventory and all these things that were already in the works that we already owned in the warehouse and everything.

Andrew: There had to have been more with the partnership that caused her to leave. What else was going on that caused her to leave within nine months?

Sarah: I think she finally realized too that–and I’m [inaudible 00:28:11] because she wouldn’t speak to me again after this–so, is that all the investors were thinking that I didn’t know how to run the company. And I kept trying to explain to them, “Well, that’s why she’s here because I don’t want to run the company. I want to just be the designer. That’s my forte. I’m a good designer/creator type. I’m not a good CEO. I can’t do both.”

You can’t be worried about the money and how the company is going to run and try to be creative and come up with 500 different handbag designs in a year and do five tradeshows.

Andrew: I see. You were still the CEO though at the time, right? I see. But you didn’t want to do the CEO work. You wanted to be the designer. You wanted her, the COO to do the day to day stuff. She wasn’t doing it. She wasn’t getting it done and she was upset that you were. So, if you could do it over again, would setting clear expectations upfront help with that? But it wouldn’t solve the problem.

Sarah: I think that bringing on investors of any kind or even running any kind of business, I think you just have to be really honest with yourself about what you’re capable of, what you like doing and don’t like doing. That’s one of the first things I always tell my clients–make a list of everything you have to do and then separate out what you love to do and then let’s find someone else to find the things you don’t like to do because that’s going to just drag you down. You’re going to be resentful and hate it or not good at it or fail at it. That’s the way to completely ruin a company.

Andrew: So, if you could do it over again, you would make that list for yourself and then say to this partner, “Let’s be clear. I’m not doing these things. I’m not paying the car insurance. I need you to be clear that you’re going to do it or let’s find someone else who’s going to do it. But we can’t expect each other to do stuff that we don’t want to do, that we’re not going to do.”

Sarah: Right. Exactly.

Andrew: You had a business with some sales, with some revenue before you got the partner. I’m wondering how did you get your first big sale in the handbag business?

Sarah: Well, my first really big sale was to Anthropologie.

Andrew: Wow.

Sarah: I had been kind of moving along. My first year, I did maybe $125,000-$150,000 in sales my first year. I was really excited about it. Maybe halfway through the year, my friend who I had started the Rags to Order business with, he actually made clothes for Anthropologie. That was his business. So, I said, “How am I going to get in touch with this buyer?” He actually said to me, “She’s coming with my buyer next week to Market Week or something. I’ll see if I can get you a meeting with her.”

So, he got me the meeting and went up to his office and just showed her some of my bags. It took probably about six months for her to bring them into the store, but they ordered 800 of them and put them in the stores. They only had 14 stores at the time and also their catalog. That was sort of the beginning. For me, that was what signaled to me that I had really had a company.

Andrew: Was it just enough to get into the office with the buyer?

Sarah: Well, I know lots of people who have gotten their stuff to Anthropologie buyers over the years and haven’t had orders. So, I think it was she just thought my bag was really different and the other part about it was I was only making two sizes at the time. She said, “Can you make it for me in a 10×12? I need more of a tote size.” So, I had dies that made the bags for me, which were kind of like gigantic cookie cutters. The pinking shear die, the metal came from Germany.

So, it had to get ordered and manufactured and these big cookie cutters were made. A special place uses a big press and they kind of stomp it out like you would use a cookie cutter and cut out cookies. So, it was a process for me to make this bag. I had to test it and make sure that it was going to work in this larger size. It was great because it turned out to be my best selling size over the years. It was just fortuitous.

Andrew: What I’m getting at is if someone is listening to us who wants to sell to bigger stores, is the key getting in front of the buyer or is it something about what you say to the buyer that gets the sale or is it something that you do before?

Sarah: It’s kind of a combination of everything and none of it. I think everything is circumstantial and it depends. Sometimes it might be the fact that you get in front of the buyer and they’ve never seen your product or that you actually had some amazing press or got it to a celebrity and then the buyer saw it that way and was like, “We have to have that.”

Buyers are always looking for their next bread slicer. So, they want to be the next hippest–they want to have the hippest product that’s coming up and they want it before everybody else if possible and want to be the trendsetter, not the follower.

Andrew: So, how do you show that you’re the trendsetter?

Sarah: Well, I think if you’re showing something that has never been on the market or you’ve improved something to the point where you make it ultra-cool or you’ve got a new face cream that gets rid of wrinkles in 20 seconds or something, that kind of stuff, people want things better, faster stronger now. So, being able to show that you’ve done your homework, that you are aware of trends and that you actually know what’s going on I think helps you.

Believe it or not, most people think that buyers are like the be all to end all and they know everything about fashion and about their field, but it’s not true. A lot of times they rely on the designer to present to them actually what is happening and the trends that are coming up or that are the new hip thing that you’ve created.

Andrew: Between the time that you had the first purse that you put up on the bar that got attention and the time that you got in front of Anthropologie, had the purse evolved in terms of feedback or sales?

Sarah: No.

Andrew: It was still the same thing.

Sarah: Yeah.

Andrew: Wow. How did you get the first few sales, the ones that led you to Anthropologie later on?

Sarah: Well, like I mentioned, I used to shop for a living when I worked in the film business. So, I went to see a few of the buyers from the stores that I used to spend a lot of money in and ask them, “I’m starting this bag line. Would you carry some of them on consignment?” So, I got into two big stores, two fabulous boutiques in LA and just gave it to them on consignment and just kind of worked it with them.

I went back every few weeks and checked what they had sold and brought more stuff with me. One of the stores did really well with it. She kind of couldn’t keep them in stock. The other one was not as fruitful. So, I just had this idea of consignment because they were like, “I’ve never seen anything like this bag before.”

Kate Spade was just coming on the market then and she’d been around maybe a year or so had really become popular because her bag was in “Clueless,” the movie. That really propelled her to stardom. So, I was kind of competing with her, in a sense, for the shelf space. Because nobody had seen anything like mine, it was kind of nontraditional. I kind of had to go the consignment route.

Andrew: And I see why consignment would work for them, partially because the nice thing about consignment is they don’t have to pay you for it until they make a sale. They do have to invest something in it. They’re still giving you space in their store, right? So, it’s not a slam dunk but it’s an easier sale for you to make.

Sarah: Yeah.

Andrew: You got press for yourself and your handbags. You got attention. What’s the first thing that you did to get attention? What’s the first bit of attention that you got outside of the stores?

Sarah: Well, I was really lucky and ended up getting a free publicist in the beginning, a woman who had been doing publicity for beauty and wanted to get into handbags and accessories.

Andrew: Is this Lizzie?

Sarah: No, that’s my sister.

Andrew: Oh, okay. Lizzie Shaw, I’m seeing, is listed as your publicist at one point.

Sarah: Yeah. This is way before she was a publicist. So, this was another woman. She said, “Hey, can I do your publicity for free so that I can learn how to do it for accessories and clothing. I don’t have a mailing list. I don’t even know who the editors are. So, I’m starting from scratch too.” I’m like, “Sure. I’ll take any help I can get.” I didn’t know what to do. So, the first piece she got me was an interview in the LA Times magazine section.

Andrew: How?

Sarah: She just called them up and told them about a girl who had left the film business and started a handbag line and had a really unusual handbag. I come from–both my grandmothers were in the fashion business in New York. They both did really well. My maternal grandmother–you know the little picture of JFK Jr. saluting his dad’s casket in the blue coat?

Andrew: Yeah.

Sarah: Well, my grandmother made that.

Andrew: Which one, the coat?

Sarah: The coat, not the casket.

Andrew: Wow. I meant like the hat or… Okay.

Sarah: And my other grandmother had a bathrobe company. Lana Turner and Katherine Hepburn would wear them in movies. I didn’t know that grandmother. She died before I was born. But I was named after her. But the other grandmother I did know. I kind of watched her in her fashion business growing up as a kid. It just didn’t sink in. I never thought in a million years I was going to be an entrepreneur.

Andrew: I know. We asked you–you were someone who in addition to a full-time job had two other businesses. You had more businesses that we’ll ever be able to list in this interview. We asked you, “What did you do growing up? Were you entrepreneurial?” You said, “I was a babysitter.” You weren’t selling candy. You weren’t starting businesses back then. I want to come back and dissect a little bit more of the PR strategy that you had.

First, I’ve got to tell people about Toptal. I’ve been listening to myself, Sarah. I don’t think I pronounce Toptal clear enough. I keep trying to enunciate it. It’s top like top of the mountain and tal. But I should be slow–Toptal.

Anyway, what they do is they have a network of top developers and now designers too. If you need to hire someone, you just get to contact them. There’s a real human being who’s going to call you up. Some people have been amazed that they’ll call you up within minutes. You get on the phone very fast with them. If not minutes, you’ll get on the phone with them within a day.

But you tell the person what you need. What’s the new project you’re working on? What’s your crazy work environment like? Are you all in the same office? Do you use Slack? Do you use something else? What languages are you programming in? What makes for a good developer at your company and what makes for someone who’s just not going to work out?

Toptal goes out, they found the right person from their network. They introduce you. If it’s love, if you’re ready to get connected, they’ll hook you up. There’s no marriage obligation. You’re not supposed to stay with them unless you want to and then you can stay with them forever. But what they do is they get you started with them often within the next day or 48 hours. People who have listened to me at Mixergy have signed up.

Here’s the thing that Toptal really liked. They asked me as an experiment if I’d be willing to give my email out and offer to make introductions for people. So, I did. Here’s what I said in past interviews. I said, “If you want my guy over at Toptal, just email me, Andrew@Mixergy.com and I’ll introduce you to someone at Toptal, the person I work with. I’ve hired them. I like them. I’ve gotten good responses from them, Sarah, but not so many that I imagine that Toptal would keep coming back and buying ads based on that.

I think what they like about that, Sarah, is that I am saying to people not, “You have to email me if you want to connect with Toptal, but what I’m saying is, “I like Toptal enough I’ve got a guy over there. I can connect you if you want it so we’re close.” So, even if people don’t take me up on that–you’re nodding.

Sarah: Oh yeah. Everyone wants the inside line, you know?

Andrew: Yeah. So, I know most people are going to Toptal.com/Mixergy and they’re signing up for it there. But the idea that you could reach out to me and connect with me is important, probably kind of like having a phone number. If you go to Toptal.com/Mixergy, I believe there’s a phone number right up on there. I might have seen it… Yeah. There it is, right at the top right. I’ve never called them. I just like to know that if I need to, they’d be there. So, probably the same thing is happening with my email address when I give it out.

All right. If you go to this URL that I just gave you and I’ll give you again, you’re going to get–here’s what you get that other people don’t have. You’re going to get 80 free Toptal developer hours when you pay for 80. That’s in addition to the no-risk trial period of up to two weeks. If you’re not 100 percent satisfied, you will not be billed at Toptal will still pay the developer.

It’s an incredible deal. They’re offering it to Mixergy members and to anyone listening to me right now because they want Mixergy people to sign up because they know that you guys are the ones that everyone else comes to and asks, “Who should I talk to if I’m looking to hire someone.” You’re the opinion leaders, so they’re offering us a deal to get you on board. Go to Toptal.com/Mixergy to get that discount.

All right. They’re a good sponsor. They’re a back and bought a bunch of ads. I’m going to have to really sit here and record a lot of interviews to make up for what I promised them for the ad buy.

So, Sarah, what did you do to get publicity, to get attention? I feel like you’re especially good at that. Give me some of the tricks in the handbag business.

Sarah: So, some of the things we did–one of the main things was get products to celebrities. So, it’s funny because coming from the film business, you’d think it would just be a no-brainer. I’d be like, “Oh yeah, let me call up some of these celebrities.”

Andrew: I was worried you would say that and then it would make for a horrible interview for my audience because they don’t have those connections.

Sarah: I didn’t either.

Andrew: What do you do?

Sarah: We never had access to their contact information. We had to go through the casting office. It’s not like I had some awesome rolodex. So, we basically–that was before the website ContactAnyCelebrity, which is out now.

Andrew: That’s a good site?

Sarah: Yeah.

Andrew: It works? ContactAnyCelebrity.com?

Sarah: Correct. You pay–it’s very inexpensive. I think it’s about $30 a month. You can get anyone’s information from that website. But this was before then. So, we just started reaching out to managers and agents and just asking if we could send the bags to these different people and most of them just said, “Sure.” No one was doing it yet. It was kind of an anomaly.

I had heard from my costume designer friend who was with me at the bar that night, she had actually been complaining to me a couple months later, “I’m doing this movie with Donald Sutherland and they’re making me use all these Donna Karan clothes. I’ve never had to use anyone’s clothes before. This is ridiculous. I’ve never heard of such a thing.” She’s going on and on.

Of course, my brain is like, “Wow, Donna Karan is putting clothes in a movie for free. I should start doing that too. Why didn’t I think of it?” That was sort of what was the catalyst for me to think about doing that.

It really worked. It got me into In Style magazine a bunch of times and People and we got a lot of publicity from that. Once we launched our website in 2000, I think, we really got a lot of sales from that because we could direct people from the magazines to our website directly, which seemed like such a novelty at the time.

Andrew: This is interesting. So, you send it out to them. They, I guess, use your handbags. Is it for budget reasons?

Sarah: Yeah.

Andrew: Couldn’t they afford to buy another handbag?

Sarah: In the movie business?

Andrew: Yeah.

Sarah: Yeah, except that all the money they can save in the costume department, which is kind of like low man on the totem pole, even though the actors can’t be naked on camera, they seem to find it to the low man on the totem pole, kind of down there with craft service, the food people. But any penny they can save there, they can use for special effects or to pay an actor or put more money in the producer’s pockets or whatever the situation. So, now the studios have huge product placement departments that have developed over the last 10 to 15 years.

Andrew: Because they’re selling it?

Sarah: Yeah. A lot of them do. But coming through the film business starting at the age of 22, I never bought a pair of tennis shoes in my whole life. I got Nike, Adidas, whoever was promoting our show. We would all get free shoes. It wasn’t until I left that I actually had to buy my first pair of shoes.

So, when I started doing some product placement in films, I didn’t have to pay. I went straight to the costume department because they didn’t have a major–product placement was more for sports stuff. So, I knew some of the costume designers and I got a bag in “Legally Blonde” and I made a bag for Julia Roberts for “Ocean’s Eleven.”

Andrew: You customized it for her?

Sarah: Yeah.

Andrew: What kinds of adjustments did you need to make for your handbag to get it to her and to get it in the movie?

Sarah: Both of these were completely custom.

Andrew: They specifically asked you for something completely new and you said, “You know what? I’ll do whatever you need.”

Sarah: Exactly. The costume designer had drawn out the bag, the picture. So, I basically just manufactured it for him with the rights that if I liked the way it turned out, then I could sell it in my line and he didn’t get any royalties from it. So, just from getting into that film, we got into In Style Magazine and then Bergdorf Goodman picked up the line from there.

Andrew: So then the next thing I’m wondering is who got it into all these magazines? Did you then get your photo or your screenshot from the movie and then send it out to them or did they pick that up on their own?

Sarah: No. We just told them. We sent them a picture of the bag and just said, “This bag is being used by Julia Roberts in Ocean’s Eleven. It’s filming right now. Here’s the release date.” In Style at that time, they knew me because I had been in there so many times that they believed me and I didn’t have any stills at the time. They just put it in.

Andrew: Wow. So, I can see how this would not work anymore with Hollywood movies and with celebrities less. But I can see it working in other industries. Like I kind of feel like the tech industry in some way are the new trendsetters. I’m wondering if there’s someone out there who’s creating a new suit or something, can they hand it out to tech celebrities who aren’t really celebrities, but who will wear this stuff and then get photos and then send that out to the tech press and use that as a way of launching themselves?

Sarah: You can totally do that. Celebrities still sell like crazy. I have clients how come to me specifically for me to help them get their products to celebrities.

Andrew: Is that one of the things that you do?

Sarah: Yeah. I’ve been doing that for years. Through that website, ContactAnyCelebrity, we’ve built master lists of men, women, pop stars, things over the years and update them every once in a while. I have a whole series of emails and follow ups and phone call templates and all those things that we use. I have a client recently who sells kind of like TOMS shoes. She does one to one t-shirts for cancer patients.

Her company is called Brave Hoods and they have hooded t-shirts. So, not a thick hoodie, but it’s actually thin t-shirt material. Her child is a cancer survivor and hated having a bald head. So, they could never find the right hoodie. So, they made them and now they do a one for one. Within a week, she used my templates and got one of shirts to Ellen DeGeneres, Taylor Swift and Cameron Diaz.

Andrew: Where are these templates?

Sarah: They’re hidden.

Andrew: Are they on your site somewhere?

Sarah: No.

Andrew: You know what I’m thinking–first of all, I’m so glad you told me about the site and that it works because if I would have seen it, I’ll be honest with you, this site looks like a piece of garbage.

Sarah: I know.

Andrew: They’re not putting any effort into this site. But if it’s working for you and you’re someone who knows this stuff, I believe it. It’s not expensive to get a membership. I’m thinking maybe we do it to get Mixergy interviewees on. But it’s not enough to get somebody’s contact info. They’re not going to get–just because I have their email and email them and say, “Can I interview you?” let alone yes to whatever else other people are asking.

Can you tell me a little bit about what your email process is like for getting a celebrity to say yes? I’m obviously not going to copy it because we’re doing something different, but I wish we were doing something the same.

Sarah: I’ll give it to you.

Andrew: In addition to getting it, I’d like to also understand what’s the thought process behind it so that I can adapt it to here.

Sarah: So, you want to find a way to relate to the celebrity because they’re people too. If somebody just called you up and said, “Hey, I’m a dog trainer. You want to interview me?” You’d be like, “What’s the catch?” So, you have to sell yourself to somebody. So, you have to sell yourself to the celebrity and find a way to relate to them.

For you, I could see you interviewing Jessica Alba, for example. She owns the Honest Company. She’s a celebrity and entrepreneur. Or Gwyneth Paltrow with GOOP, they’re in your wheelhouse, right?

Andrew: We were just making the list of ideal people.

Sarah: So, it wouldn’t be a far stretch for you to go to them and say, “Hey…” And you would be able to tell them about what you do and how the interview would benefit the world and help them get more publicity for themselves. The thing for celebrities is either receiving free product is being interviewed is always good press. It’s not about their divorce or their affair or that they fell down drunk or whatever. They’re always looking for good press. You want the good to outweigh the bad.

Andrew: So, “Here’s what we have in common. Here’s what I can give you. Don’t worry. It’s a safe space.” The safe space applies to me, not necessarily someone in their audience who’s trying to customize their own email. I’m just anticipating their objection and answering it.

Sarah: Usually the first step, really, is to draft a letter to their gatekeeper. So, usually we go through the manager or the publicist because their agents–even though I said I went to those people, I didn’t know any better back then. They’re really the contract makers and the money people, whereas managers and publicists manage the life and the visual aspect of the celebrity’s life. So, usually you’ll have a better change through them.

So, we contact them with the letter written more in the third person. Then you kind of redraft that same letter to the celebrity to hopefully send to them as well, especially if you’re sending them a physical product, you’re going to wrap it all pretty and put it in a box and put this letter in. Then it’s really just the process and the dance of trying to get this gatekeeper to get back to you and the back and forth of that and trying to either book the interview or send them a gift.

Andrew: You’re doing this not via email but via physical mail?

Sarah: Well, first it’s via email to make sure that they’re a willing recipient. Then with physical products, yes, you actually have to send them the physical product.

Andrew: And the letter written in the third person, what does that mean? Where does that go?

Sarah: To the gatekeeper. You might say, “Dear Gwyneth Paltrow, I would love to interview you,” but then you’re going to say to the gatekeeper, “I’d love to interview Gwyneth Paltrow because of X, Y, or Z.”

Andrew: Got it, “Please forward this on to her.”

Sarah: Yeah.

Andrew: Got it. Okay. Going through the agent is a problem. We went through an agent for something for a conference I was speaking at. People invited me not to speak at conferences–sometimes they do. I try to get them to ask me to do interviews. Someone said, “Can you get Penn Jillette to do any interview?” I thought, “I don’t think I can.”

But my assistant jumped in quickly and she emailed his agent. The agent said, “Yes.” We thought, “That was super-fast. Why didn’t we think to go to agent?” Then she got on the phone with him and he goes, “All right, it’s going to be like $20,000 and here are the questions.”

Sarah: Yeah. “And you can only ask these…”

Andrew: “I think I need somebody else.” So, it’s the manager. Don’t go through the agent.

Sarah: The manager is more lifestyle. Yeah.

Andrew: Let me close out the handbag business with you now are not getting your sales because of 9/11. You’ve got this issue with your partner. Your partner is talking trash about you to your investors. Eventually, you get to a point where you’re in your pajamas crying about this.

Sarah: So sad.

Andrew: Why? When things stink for me, I know what I think about. I think about all the people that are listening to me this minute, I’m going to imagine all of them as one big glob without a face going, “This guy is such a failure. He thought he knew everything in these interviews. Write big loser on his forehead. I can’t wait to see him. I’m going to smile when I see him, but really I’m going to think…” So, that’s where my head goes and that’s what really makes me sad and upset. What about you? Where did your head go when you were in those pajamas crying?

Sarah: The exact same place. For me, because the people who invested on my side were my parents, really good friends of my parents, aunts and uncles and a couple of friends of the family who have been like my parents’ friends for 50 years-type of thing, I just saw them all staring at me, like, “What happened?” And I’m like, “I didn’t call the terrorist act. It just happened.” I just felt like such a failure. It wasn’t my fault. But it’s hard to separate yourself from that when it’s your name on the door. My company was called Sarah Shaw Handbags. And it’s not like I could hide behind anything at that point.

Andrew: You know, this is a good lesson, really, for anyone out there. Be careful of naming your company after yourself. It is so tough. Part of the reason it’s tough is I think entrepreneurs have a hard time selling their businesses when their name is attached to it.

Sarah: A little bit yes and no. I might disagree with you on that.

Andrew: Tell me.

Sarah: Well, with a product-based company, especially in fashion, most people do have companies named after themselves.

Andrew: No, I mean it’s harder to let go of a business when your name is attached to it. I remember Ted Turner, I thought there were times when he could have sold and would have sold his business earlier, but it’s Turner Broadcasting. Does he really want his arch nemesis, Rupert Murdoch, to own the name Ted Turner? I don’t think so. But you’re right, in fashion, I definitely see the opposite, that you’re expected to put your name on things, which makes for a tough trademark loss.

Sarah: Yeah.

Andrew: So, your name is on. Is this when you started calling up investors and seeing if there’s any last-minute thing they could do? What happened?

Sarah: Well, just before, I was actually in Dallas at a tradeshow when I had another big investor besides these 24 people and I had a company that was sort of just backing me. They just paid for my inventory. So, if I ran production, they would say, “Here’s a bill for $50,000.” They would pay it. They didn’t have any equity in the company, but they said, “When you sell this business, we want 20 percent.” I was like, “Wow, you want nothing now? You’re giving me all this money? Great deal.”

Andrew: They get 20 whenever you sell the business? I see. So, whoever buys is saddled with a partner.

Sarah: Exactly. So, they were just–no, they wanted a buyout. Whatever I sold the business for, they wanted 20 percent.

Andrew: Oh, of the money you got.

Sarah: Of the money.

Andrew: Got it.

Sarah: So, they called me in January when I was in Dallas and said, “Today’s our last day of investing in you because they were a handbag company that manufactured for Walmart and did about $80 million with Walmart, but because of 9/11, all the boats were stuck out in the harbor, at LA Harbor, so their orders were getting cancelled left or right. They were like, “We have about $12 million worth of merchandise on the water that now we have no home for. We can’t deal with you and your $200,000 problem.”

Andrew: That sucks.

Sarah: That’s when I really sat down on the floor and sobbed. So, when I got back to LA, I had actually just had an article the week before I went to Dallas. There had been a cover story in the LA Times business section about my company and these particular investors. It was a big deal. About 50 other bankers and investors called that Monday and left all these messages. But we just took a list of it, deleted all the messages and I thought I’d never look at it again. So, of course, I’m in Dallas and I’m like, “Get the list out.”

So, I got home and I looked at the list and I actually recognized a name of somebody I’d met a year before who had been an advisor at Kate Spade. A friend introduced us and I was like, “I can’t afford $5,000 a month in consulting fees, but thanks for lunch.” So, I called him up and I said, “I didn’t know you were an investor.” He said, “I didn’t know you needed one until I saw that article.”

So, I met with him and his partner. I literally had not showered probably in three days. My hair was in a ponytail. I had no makeup on. I was in sweatpants. I walked into this meeting and said, “Here’s my P&L and my balance sheet. You have until 5:00 today or I’m closing my company.”

Andrew: Wow.

Sarah: They were like, “Okay. Can you explain a couple things? Go sit in the corner over there while we discuss it.”

Andrew: Why not shower before that?

Sarah: Why didn’t I? I was too distraught. I literally couldn’t function. I was like five years of my life is about to disappear. I felt like such a failure. I couldn’t not pull it together. That was like the one and only time that’s ever happened to me.

Andrew: Where you didn’t shower? When you were so low that you couldn’t shower or so low you couldn’t present yourself well?

Sarah: That I just could not pull myself together. It was like literally an effort to print out the P&L and the balance sheet and hand it to somebody, just because they usually looked really good. Because of 9/11, it looked really bad. For anyway, I sat there for about half an hour and they looked at me and waved me over and said, “We’ll invest. We need to determine the value and all this stuff. You’re not going out of business today. Go back to work and do what you need to do.”

Andrew: Wow.

Sarah: So, after I had a good cry in the car of joy, I went back to work. I immediately fired my sister, Lizzie Shaw, who was my publicist at the time.

Andrew: Sorry, Lizzie.

Sarah: And then I fired my assistant sales girl. I just kept my production manager and my shipping clerk and I rolled up my sleeves and we got to work trying to rebuild the company at that point. But these guys, they weren’t able to save my company because their whole theory was, “Let’s go to Korea, move your production over there.” I was manufacturing in LA at the time. “We’ll reduce the cost and we’ll get the Korean factories to invest in your business.” Well, nobody wanted to invest in America at that point.

So, in May of 2002, I just called it quits. I said, “I can’t do this. I resign as the CEO. If any of you guys want to come in, come on.” And nobody did. You can’t legally run a corporation without a CEO and a director. So, I told them that I was quitting and that I would stay on as the designer. So, it went into a long drawn out nightmare.

Andrew: What was the nightmare in all that?

Sarah: Just the thousands of investor meetings. I had to retain an attorney to protect me because everyone was looking like I had destroyed it. The attorney put that to rest and was like, “She hasn’t done anything wrong.” It basically came down to they wanted to sell the company. I said, “Great. I still own 60 percent of it.” I was like, “Rock on. Sell it to whoever you can for the highest bidder because I’m out.”

Andrew: Did they?

Sarah: They never did. I had to maintain that the company was in good standing. We had a lot of debt. I didn’t want to go bankrupt. So, I ended up writing a letter to all the creditors and saying to them, “I don’t want to go bankrupt. This is how I’m going to do it. I will try to get you as much money as I can.”

We just did all these crazy online sales. It was actually my first real experience in marketing because we had a guy that did all of our online marketing for us at the time. I didn’t know how to do it. We used constant contact then and I didn’t even know how to make an email. So, we just started sending out these emails saying, “You’ve been selected at random to receive 30 percent off Sarah Shaw Handbags. You’ve been selected to reach 40 percent off.” We ended up doing about $80,000 in six weeks.

Andrew: Not enough to save the business, but wow.

Sarah: So, we liquidated probably about half of our inventory at the time, maybe a little less and could pay down a lot of debt. I ended up paying all the creditors $0.70 on the dollar. I felt pretty good about that.

Andrew: That’s a lot. How did you face your friends who invested in the business?

Sarah: I wrote a lot of letter sand made a lot of phone calls, asked for forgiveness and apologized.

Andrew: How did they handle it?

Sarah: My side was totally fine with it.

Andrew: Her side?

Sarah: I think they invested knowing that it could be a throwaway. And we also made all the investors sign something. It was a separate piece of paper in the shareholder agreement saying that they understood that this could be basically flushing your money down the toilet.

Andrew: Why did you do that? Where did that come from? I’ve never heard of it.

Sarah: The attorney advised it. He wanted to make sure that hey signed a piece of paper knowing that this was an extremely risky investment.

Andrew: Partially because they weren’t accredited investors. Is that right?

Sarah: Yeah. Also to try to preserve the relationship, since they were friends and family.

Andrew: That actually does make a lot of sense. People would sign that in the beginning, wouldn’t they?

Sarah: Totally. They all signed it. No questions asked.

Andrew: Wow. You know, let me just say something. You walked in feeling like such a failure. You hadn’t showered. You put your hair in a ponytail. I remember feeling that way too at one point. I felt like such a failure. I walked over to–I had a greeting card company before. It was to American Greetings. I sat down and I talked to them and they gave me this offer to buy the business and I was feeling so down and I said, “All right. I think we’re going to do it.”

I go back to my brother–for some reason, he didn’t internalize any of this. He didn’t feel like a loser based on how the business was doing. He said “This is the stupidest deal. What are you doing? They’re going to take our money to buy our company, cash out of the business?” He had to like basically verbally slap me in the face to wake me up.

But the thing I took away from that was to not allow myself to feel so low, like such a lower, such a failure that I would be willing to just accept anything at that point. It’s hard not to because so much of my personal self-worth and my personal identity is tied up in the work that I do. If Mixergy stinks, if my interview with you stinks, I take it personally.

Sarah: Right.

Andrew: Which is a good thing in some way, but we just can’t, as entrepreneurs, allow it to take us to a place where we are willing to fold or give our company away to American Greetings. They’re good people. I really liked them. That’s the other part. I liked them and I thought, “They’re going to save me.”

Sarah: Yeah.

Andrew: “They like me back where I don’t like myself right now. This is great.” I read this article about Donald Trump. I think it was in the Washington Post, which has been doing incredible work lately, I’ve been loving reading their stuff, about how he was so low at one point that he basically was on the verge of tears when he went into these financiers offices, had to make one phone call to convince an investor to go. He was really low. And as soon as he got on the phone, picked it up and he like put on the whole fake Donald Trump heirs. I’m not a huge fan of his, but there’s a lot to learn from that. I’ve got to remember that next time this happens.

Let me ask you this one question. This is a hard thing for me to ask because I like you and I want you to like me back and you’re a member and I want you to keep being a member. But the thing I wonder is after you go through that, how can you be someone else’s CEO? How can you teach other people that way you had for years how to run a business? How do you do that?

Sarah: I knew you were going to ask me that. When I said that, “He’s’ going to wonder how I do that.” Well, the thing is that I learned. I learned so much from all the mistakes over the years from all my businesses, even when I kind of flippantly said that my Rack and Roll and Rags to Order were easy companies. They were relatively, but they also had learning curves to them too because I didn’t know anything about business. But it was really, I think, having all these things happen to me throughout the years.

It didn’t stop. After my handbag company, I had two more accessory companies. Those, again, I had massive learning curves in both of those with different business partners and patents and sales staff and all these different things that I’ve been through. I know how to deal with all these things. I think my secret sauce in a way, because these things have happened to me, I know how to anticipate what’s going to happen to people’s companies.

So, I can see the future for them in a way that they can’t. Also partly because they’re in it and sometimes it’s hard to see through the forest when you’re so emotionally attached to all the stuff that’s going on around you. But because I’ve had these experiences, I’m able to anticipate for them what’s going to happen. I’ve done contracts. I’ve reviewed contracts. Even though people have lawyers looking at it, I’m like, “No, these five points are going to get you totally in trouble. You’re giving away this or that. Sometimes attorneys, they’re not perfect either.

But I only know those things because it’s happened to me. It’s like I can tell people how to run certain aspects of their business or whether their sales pages are good or their product description is good or actually if anyone is going to want to buy that product or even being able to dissuade people, “Hey, there are 47 of those out there already. What makes yours different?”

People sometimes think that they’ve reinvented the wheel. I’ve had even friends of mind, “Oh my god. I’m going to patent this thing.” I’m like, “Great, why don’t you have a patent search done,” because just because it’s not in the marketplace doesn’t mean it’s not patented and just sitting there dormant.

Most of them have actually found that paying an attorney to do a patent search that the product is already there and you can’t make it or you’ll have to path that person royalties or get their permission to do it. So, there are so many different aspects that nobody would think of just because it hast’ happened to you.

I kind of equate entrepreneurship in a way to building a car engine. If somebody sat you down with a car engine in millions of pieces and said, “Go for it,” you’d probably sit there and cry. I would. Maybe you’re a mechanic. It’s that total confusion when you don’t know what goes where and what connects to what and why the carburetor does what it does and what do spark plugs do and why do you need this wrench or that wrench.

To me, there’s a way to build a symphony of a business. If you only know how to play the flute and the violin, it doesn’t make music. So, buy having somebody who’s been there before and had all these experiences–I’m not saying everything in the world has happened to me, but a good portion of things.

Andrew: Yeah. We haven’t gotten to so much of it. What’s your proudest accomplishment at Sarah Shaw Consulting as someone who’s helped other entrepreneurs or other businesses run? What’s one proud–I hate the proudest.

Sarah: I have so many clients that I’m so proud of. For me, I think it’s watching people overcome their fear of being an entrepreneur. So many people want to be one and they have this idea of what it’s like. I even did too. I’m like, “I’m going to work for myself. I can have lunch when I want. I can do all these fun things. Well, the hard reality is when you’re building a business, if you’re not working 60 to 80 hours a week, it’s probably not going to happen.

I think watching people’s eyes open to how their business actually functions and works and what the best way to run their business is–to me, when I can get someone to that point, it feels like the biggest success. Some people are like, “Can you help me manufacture this product?” To me, I can do that in my sleep. That to me doesn’t seem like a big accomplishment, but getting them to see how their business runs and what the purpose of it is, is more beneficial.

Andrew: Yeah. To me, one of the questions I was going to ask you, but I think we’ve run out of time How do you get purses manufactured? I wouldn’t even know where to begin with that. But I can understand that that would be an easier thing to solve than how do I get my head clear about these issues?

Sarah: And the fear–so many people have fear of sales. Especially in the product-based world, you’ve got to get out there and sell and be able to talk to buyers. Just like in the service space, you’ve got to be able to say what you deliver to people and be able to explain it in person and on the phone and on your website.

Andrew: Look at this. You have something called Instantly Famous Products–I’m on your website. Anyone can check it out. It’s SarahShawConsulting.com. It looks like you do have–here’s what it says. “Want to see your products in magazines, in movies, on TV and in the hands of celebrities?” And then you teach people how to do that too.

Sarah: That’s actually a few services that I offer, whereas if you sign up on the mailing list, we get requests from magazines and subscription boxes and we just send it out. You just hope you can apply for it. We have some special software that you submit and then hopefully you get some press from it.

Andrew: Wow. Yeah. All right. Impressive. Sarah, it’s so good to meet you.

Sarah: Yeah. You too.

Andrew: Thanks. Good talking to you. Guys, check out her website. It’s SarahShawConsultng.com. If you like this interview, please subscribe your friends to it. Whatever podcast app you’re using, you should be able to grab their phone and subscribe them to Mixergy. They will enjoy it and I’m thankful to my two sponsors for paying for it. It is Toptal.com/Mixergy. If you need a website hosted, go to HostGator.com/Mixergy.

Sarah, thank you.

Sarah: Thank you.

Andrew: Thank you all for being a part of it. Bye, everyone.


  • Thanks for having me on the Podcast Andrew…… was so fun to chat with you.

  • Andy Hayes

    This was a great interview, one of my favorites of late. Thanks for all the transparency and great stories,@Sarah Shaw! Looking forward to checking out your offerings.

  • deborah

    Fantastic interview….LOVED it!!!

  • Great interview, Sarah! It’s nice to hear the honesty of both sides of the story – the ups and downs that businesses go through.

    Andrew, I’m surprised about the hosting plug – I’m not a fan of Hostgator at all – I had hosted with them for years – they used to be great, but once they were purchased by EIG and all of their shared hosting accounts were merged with other hosting companies which were also bought out by EIG (BlueHost, DreamHost, JustHost, and many others http://researchasahobby.com/full-list-eig-hosting-companies-brands/ ), Hostgator support chat takes 10-15 minutes to answer. hosting became really slow due to overcrowded servers (including mine – it’s why I jumped ship with them). I’ve even opened support tickets on behalf of clients and not gotten a single response from Hostgator in over 3 days – ridiculous… No need to start an email chain, I realize it’s a paid advertiser, but I have to disagree about Hostgator caring to help ;)

  • Great interview. Guest was interesting from beginning to end, fascinating story, great attitude.

  • Really great episode — intriguing to hear about the world of Hollywood costuming (where a friend of mine currently works) as well as fashion/accessories, which make no damn sense to me! It seems that the common thread — no pun intended — in all of Sarah’s work is her ability to manage a supply chain and to find the materials and people she needs at a moment. Not to presume, but I imagine success in bags, for example, has a lot to do with whether or not your company can even pull off the operation, let alone get super creative and run a media ground game. If you can’t fill an order, or if the quality suffers, or if you can’t make a profit on each bag based on high material or labour costs, then game over.

    Side note, there was definitely some drop-outs on this episode. Was that in transcoding or was that a Skype thing? Was it just me or did others notice it to? As a podcaster myself I know that it’s hard to control both sides of the conversation from a technical point of view.

  • jenniehernandez

    After 5 years I finally abandoned my old job and I never felt this good… I started to work from comfort of my home, for a company I found over internet, for several hrs every day, and I earn much more than i did on my old job… My last month payment was for 9 thousand dollars… Amazing thing about this work is that now i have more free time for my loved ones… http://chilp.it/728813e

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