I spoke with Stephen Hersh, who pitches his foldable luggage line called Biaggi in episode 613, prior to his air date. He said he was very excited after months of having his life consumed by appearing on Shark Tank. Like every other entrepreneur who appears, he's been keeping a big secret for months. Now, he can shout about his Shark Tank appearance from the rooftops.
Mr. Hersh got contacted by a Shark Tank producer last spring (2014). “They reached out to me through the company that hosts my website,” he explained, “and suggested I apply to get on the show. I filled out an application, sent in a video, then stopped thinking about it. They emailed me about a month and a half later; that's when it started to get more real. I had to send in another video and they ended up calling me to LA to tape in mid-June (2014).”
“I'm a casual fan, but I think it's a great show. My 13-year-old son is obsessed with it. I love that he likes it, it gives him a lot of new ideas, but it was tough keeping him ‘under wraps' once he found out I was taping! It was exciting, but I knew the goal is to maximize the experience as much as possible. Appearing on Shark Tank takes up a lot of your life, but I still have a business to run.”
Stephen Hersh and Luggage
Stephen wasn't always a luggage entrepreneur, he was in the real estate business in New York for 10 years. His father was a rep for a handbag company who started his own handbag business with a Mr. Stephen Chen from Taiwan. They'd worked together at another company and struck out on their own. Together the elder Hersh and Mr. Chen built a HUGE business around “organizer style” handbags. They sold that company for $162 million in 2006 – right about when the real estate bubble burst. That's when Stephen started thinking about getting into the folding luggage business.
“Stephen (Chen) was the product genius in my father's company, he's always a step ahead. My father had all the connections with buyers and Stephen knew how to design a product. When I told Stephen about my idea for Biaggi, he designed the prototype. We decided to build a business. Like my dad did with his handbags, we wanted to make Biaggi our company identity and design the business around it. The thing is, luggage isn't as glamorous or easily understood as handbags. I mean, you LUG it around. Our product requires a lot of explanation.”
Educating the Consumer
“Our biggest challenge is consumer education,” he explains, “things sold in retail stores need to be self-explanatory. We'd ship our bags to a store flat, and they'd display them opened up. There's no differentiation. We did poorly in department stores, except for the Container Store. They merchandised it with a display of folded and opened luggage and the consumer got it. We did well there. When the customer understands our product, it sells. Now, we are strictly selling online and each product is shipped wrapped in a panel that tells the story and how it works.”
Unfortunately for Stephen Hersh, consumer education wasn't enough. “We essentially ceased operations for a year. We were running the business like my father's handbag business and not like a start-up. We had all this big company infrastructure in place and we were burning through cash, but we hadn't figured out how to educate the consumer. We basically pressed ‘pause' for a year and stopped shipping product. My father left the business, but Stephen (Chen) is still involved.”
“We had in-house PR before we shipped any product. What needed to happen is we needed to develop a product identity. Biaggi is cool, it looks cool, it doesn't take up much space; it's a product you can talk about. Luggage is pretty boring, but the travel press loves us because we know how to talk about it now. Once the press starts coming, it keeps coming.”
Stephen Hersh in the Tank
“I was waiting to get out of ‘pause mode' until after Shark Tank. I went to LA to do a deal with a Shark. Once we air, we'll be back up and running. We redesigned our website to be product-centric. The site focuses on available product and capturing customers. The idea is to develop an audience that wasn't there before and use social media to help build that audience.”
“We use Big Commerce as our web platform and we've upped the server capacity for Shark Tank. They've worked with other Shark Tank entrepreneurs and they've only crashed once for about 30 seconds, so I feel good about Friday. Our factory lead time is about sixty days, but we are stocked up and ready to ship! Before the Shark Tank, the company needed a boost. My father and Stephen (Chen) already made a lot of money, so we saw the appearance as a great opportunity to re-launch the company.”
“Biaggi has other products in development. There's the Zipsak, which is on the show; and we've partnered with another brand who makes hard-sided luggage. It'll be a low-priced, lightweight, hard luggage. We'll brand it and work on making it foldable. Consumers want hard luggage, so we decided to reserve the right to make other cool luggage.”
Stephen obviously couldn't tell me what happened in the Shark Tank, but he did say he was “shocked” at how nice Kevin O'Leary was to him. “I thought he'd slay me over my business issues.” Stephen also said “something happens that's never happened on SHARK TANK before!”
His favorite entrepreneur from past shows was Nick Romero from THE AVE Venice. “I LOVE his product. I actually stopped by his shop when I was in LA and the place was packed. His business is booming. I also liked his pitch. He went in thinking he was going to get the Sharks to like his product or be super defiant. I think he planned it that way and it made people want his product more. I took the same approach, I didn't want the Sharks to criticize me and then be meek. That was one of my options; when you go into the Shark Tank, you need a plan and options because you never know what's going to happen.”
“I think the most important thing for a start-up is to create an identity for yourself and your business. Be prepared to talk constantly about what do you do, how do you do it differently and better, and drive the point home constantly. In today's day and age, people get very distracted so you only have a short time to create that identity.”
“As for advice about Shark Tank: remember it's show business. It's about your company, but it's not. Be entertaining. You are auditioning as a character on TV. If you have a good story, tell it, if you are a character, use your personality.”
I had one other question for Mr. Stephen Hersh. He answers it on The Hot Dog Truck.