Here’s a story that took one man and his company from nearly closing down shop to a half a million dollar deal on national television. From failure to fame, I explore the story of Shark Tank deal-maker Stephen Hersh, CEO of Biaggi.
ABC’s hit series Shark Tank averages 7.9 million viewers an episode. The popular show depicts the “demo day” scenario, where entrepreneurs pitch products to known investors, better known as Sharks. What Shark Tank doesn’t show you, is the arduous journey behind the 15 minutes.
The ups and downs of entrepreneurship aren’t always pretty. Behind the glitz and glamour and the allure of fame and riches, is a real struggle that most of us will never know. Biaggi CEO and Shark Tank deal-maker, Stephen Hersh, opens up on his long road to success.
Q. Can you tell us a little bit about your company and your journey?
CEO Stephen Hersh: All the work I put in, the countless hours, (deep breath) yea.
We went from a traditional luggage company, then transitioned into a tech start-up structure. Our traditional method was corporate. Our monthly overhead; showroom $8k rent, salaries $40k, etc. Our mindset was to grow into a large space. We thought our product was so unique it would have no problem taking off, but at the end, customers told us that they weren’t willing to spend money, even if it folds.
Now we have a Lean start up approach. Totally different. We operate like a tech start-up. During the transition, I worked like a maniac for a year, but then I got a break with Shark Tank. Every order on the website, tracking records, order entry, processing, answering customers, etc, I did it myself. After a year of this, things were falling through the cracks. It just wasn’t humanly possible. From 7:30 in the morning to 11:00 at night. I wouldn’t recommend it, it was crazy. I did this for about a year.
Q. What did you do differently during the lean start-up phase?
CEO Stephen Hersh: We changed things to doing only what was necessary.
Working on expanding our line, made sure we stayed away from gimmicks and focused on best sellers. Building on 4 styles, like the Zipsak line. Getting factory prices down, making the bags lighter, less expensive and staying away from gimmicks like tech-bags. You have to do what works. Now we are doing other shopping channels around the world because we know that model works of us. The next step is to have success in big box retailers – still unproven, but getting a shot this year.
Q. Can you give us a sneak peak into what's next for Biaggi?
CEO Stephen Hersh: We are setting up retail-tests in early 2016. Upon retailers getting us, we need to build an infrastructure. We're looking at 100 Target stores; a test run that can become a 2-3 million dollar account.
What’s your morning routine?
CEO Stephen Hersh: I'm a single father. I get up at 6:45am, put the kids on bus at 7:15am and then I read for 15 minutes. It could be anything; the paper, magazine, something that is specifically not work related.
Q. How was it working with Lori "The Shark" and QVC?
CEO Stephen Hersh: In the very beginning I was skeptical we were going to turn it around. After Shark Tank and after working with Lori Greiner our sales doubled. QVC sales were $20,000 a minute. Lori Greiner's advice was to only do one bag, which went crazy on QVC. I got a break with shark tank and QVC was a major success for us.
Q. What was going through your head during your Shark Tank journey?
CEO Stephen Hersh: I got a break with Shark Tank. My father started the business then he left the business. I wanted to continue but didn’t have support as I watched everyone jump ship. I was considering to walk away and during this incredibly hard time I got contacted by Shark Tank.
I wanted to get on there - at the very least - to get exposure and give it a shot. About 40 thousand people applied and only 105 actually got on air. There's 200 people that pitch but only half get on television. You need some luck to get on the air. Was a long shot – but the first round they narrowed it down.
Q. How long will does it take to become a semi-finalist?
CEO Stephen Hersh: Takes a month and a half before they tell. I gave it a month and a half. Then I had weekly calls to work on a pitch with a producer, to modify it for TV. They work on questions and prepare you. If you prepare well and you have it in you to get on, you’ll have a good chance, you’ll make it happen.
If you do a deal, you’ll get aired. My goal was to get air time and exposure. I didn't just want an agreement with a Shark – I actually needed help. I would have done a deal regardless, it's a guarantee to get on TV, get national exposure and also to come out of there in front of America, to make a deal with celebrity entrepreneurs – that gives you a better shot to get the right exposure.
Q. Were you relieved with the outcome?
CEO Stephen Hersh: Couldn’t have worked out better. We closed the deal off camera. My lawyer looked over the agreement and thats that. My deal was half a million for 30% of the company.
Q. Any Advice for entrepreneurs?
CEO Stephen Hersh: Yes. Ask yourself the hard questions. Is my product really needed? Are we viable or are we fooling ourselves? Run tests, research, focus groups etc. Then develop a track record, focus on being a top performer. Adopt the lean start-up operation and focus on what works for you.