In 2011, a British newspaper wanted to write a story about Julie Deane, a Cambridge-based businesswoman who had created an iconic bag that was all the rage among celebrities and models at New York Fashion Week. The problem was, Deane was running The Cambridge Satchel Company from her kitchen table. She was worried that her business might not look professional enough to the press.
So when the reporter asked over the phone who worked at the company, Deane gave the journalist her mother’s name, as well as the name of a part-time employee she had hired to help pack shipments. But it sounded like the reporter was expecting her to name more employees. So Deane said, “And we have Rupert managing security, because the bags are very valuable.” It was unfortunate for Deane when the newspaper’s photographer swung by several days later only to discover that Rupert was, in fact, the family dog.
The Cambridge Satchel Company now has a staff of over 100 people, sells in 120 countries, and brings in $21 million a year. The business has grown so large, in fact, that Deane can no longer manage it from her kitchen table, much to her chagrin. Two years ago, she had to move into proper office space and manufacturing facilities.
But go back a few years and it is clear exactly how humble the brand’s beginnings were. Deane started the company in 2008, with only £600 (about $1,000) in capital. Her only goal was to make enough money to take her daughter out of the school where she was being bullied and enroll her in a private school.
Deane’s business plan was simple: she wanted to bring back the classic leather satchel that was popular among English schoolchildren in the 1960s, but that had fallen out of favor over the last few decades. Today’s children generally carry cheap plastic backpacks–often emblazoned with pictures of Teenage Mutant Ninja Turtles or characters from the latest Disney movie–that they are expected to discard after a couple of years. Deane believed that if she could find a way to recreate the beautiful leather bags that were designed to last a child’s entire education, people would come flocking to buy them.
And she was right on the money: not only were the satchels an immediate hit among parents buying their children’s school bags, they also struck a cord among glossy magazine editors who saw them as a charming throwback to 1960s fashion.
But even after the satchels became a highly coveted item, regularly appearing in top fashion magazines, Deane wasn’t willing to take on any risk that might endanger her family’s financial stability. She refused to rent warehouse space, invest in her own manufacturing facilities, or even hire full-time workers. This meant that, for years, she singlehandedly packed hundreds of shipments a week.
“I was supplying Urban Outfitters stores in the States from my kitchen,” Deane says. “Every day, packing and shipping packages was all my mother and I did.”
Deane firmly believes that people should be able to start businesses without taking on major risks. While many entrepreneurs think that launching a company requires taking out loans or soliciting private funding, Deane preaches that if you play your cards right, it is possible to grow a thriving global business without overly endangering your financial future. “You’ve got to think about how you can take the risk out of your business,” she says. “If you take a big bank loan up front to pay for an advertising campaign, there will be incredible pressure to make the repayments. So my advice would be to try to think of clever ways to get around that kind of risk.”
When she launched the company, she turned to existing manufacturers rather than setting up her own factories. She had a clear idea of the kind of bag she wanted to sell and she scoured the United Kingdom–and the internet–to find someone who still made the satchel she had in mind. She discovered one craftsman who made that exact bag at a reasonable price, hopped in her car, drove six hours to his factory, and begged him to produce bags for her new business.
She also handled all her own publicity to avoid hiring costly advertising, marketing, and PR experts to get the word out about her company. Deane decided to arm herself with business books–like The Startup Guide to Guerrilla Marketing–and do all the outreach herself. Instead of hiring engineers, she built a simple e-commerce website with a Microsoft web-building tool. Without any prior experience, Deane sent emails to schools, magazines, and blogs.
Slowly, orders began trickling in. In her first year, she was able to send not only her daughter but also her son to a new private school–although she had to ask the administrators to let her pay the school fees by month, rather than by quarter, since she still had limited cash flow.
Buzz about the bags began to spread organically. Deane started getting orders from famous London fashion editors and celebrities. Her satchels were all over the blogosphere. In September 2011, Elle Magazine featured neon-colored bags from The Cambridge Satchel Company, sparking massive interest within the fashion industry. Big labels like Vivienne Westwood and Comme Des Garcons wanted to partner with The Cambridge Satchel Company to produce limited-edition collections. American buyers from Bloomingdales and Saks wanted to stock their shelves with the bag.
Deane was getting thousands of orders a week, and her trusty manufacturer couldn’t keep up with the orders. “I only had one option, which was to start my own factory,” she says. “That was a big mountain to climb. I had to start from scratch with no knowledge of manufacturing.” In a moment of panic, Deane does what she always does when she feels lost: she Googled. As with her previous decisions, she was fiscally conservative: she chose not to invest in brand-new equipment, instead leasing old machines that got the job done.
For someone as risk-averse as Deane, this was a very difficult time, but ultimately, this risk paid off. “Looking back, it was the best move we’ve made,” she says. “With your own factory, you are always the number one priority. From the agility of sampling products to the ethics of being able to know how your workers are treated, it has been a massive advantage for the company.”
For years, venture capital (VC) firms had been courting Deane to invest in her business, but she repeatedly turned them away–largely because she didn’t need their money. Last year, however, she decided to accept $21 million in funding from Index Ventures.
“I realized that the money came with deep expertise from the partners that would be very valuable as we continue growing as a business,” she says. “All of this is completely new to me and I could really do with advice about what our next steps should be.”
In 2013, Deane was the first woman to be named Entrepreneur of the Year by the European Business Awards. She considers it a great honor–but it also means that she has to rub shoulders with other entrepreneurs who have very different business philosophies than she does. For Deane, being an entrepreneur has always been about making careful financial decisions to protect the people that matter to her in her family and in her company. It has never been about making big profits in the shortest amount of time possible.
“I really don’t like the hollowness of taking a lot of money from an investor and creating an exit plan even before you’ve created a business,” she says. “Even though I secured my children’s educational future years ago–which was what I set out to do–my company has become about so much more than that. I developed a team of a hundred people who are like a family to me, and I don’t think they would be very impressed if I walked into work and started talking about my exit strategy.”
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