From The Brink of Bankruptcy to $1M/Month | Haley Pavone

One of my sorority sisters who still had her heels on accidentally stomped the ballpoint of her stiletto through my bare foot. I really wanted to create a high heel that had style and comfort without compromise. I drunkenly filled out a Shark Tank open application online. About a month later, I got a call from the production team that was like, we want to bring you in. We aired in February of 2021 and we grew 450% that year. I felt a lot of pressure to act like I had it all together, which was really hard. Personally, I'm broke. I'm in so much debt. A lot of it's personally guaranteed. Everyone's mad at me. I spend my whole day on calls with lenders. You owe me a million. You never want to admit that you almost filed bankruptcy. You never want to admit that your bank account hit negative $500K. That happened to me one time. In September, we were painfully close to our first million-dollar month. We had $60,000 that we needed to do to break the million, and we had like a day and a half to get it done. I went on TikTok. I posted the live screenshot of where we were at sales-wise. Beat it by like $20K. Got like a million 20K. I had every reason and every person telling me go file bankruptcy. And I just for some reason could not shake the feeling of like, but what if tomorrow's the day?

All right, welcome to the Maker Podcast. I am Matt. I'm one of the co-founders of Maker.

And I'm Max, the other co-founder of Maker.

and today we have Hailey Pavoni on, who is one of my favorite founders and people. Very authentic. She has an incredible story and very excited to dive in. The purpose of this podcast and these conversations is just to have really open, authentic convos about like the realities of building a company, especially at a young age. And, uh, I think Hailey is an amazing example of what that can look like. So, uh, excited to dive in. Hailey, welcome. Thank you for doing this. Welcome.

Thanks guys. Thanks for having me.

Um, so I'd love to, love to start with just like, who are you? You know, what is Passion? Obviously you're the founder of this awesome company, but for the folks that obviously don't know you, who are you, Haley Pavone?

Oh my gosh, what a, what an existential question. But yes, I'm Haley Pavone. I'm the founder and CEO at Passion Footwear. And for anyone that doesn't know what Passion is, we've invented fully convertible high heel technology. So for people that have video, I can show you, and everyone else, you'll just have to envision a high heel for a second. Obviously, everyone knows high heels are pretty uncomfortable and inconvenient. You guys probably haven't worn them yourselves, if I had to guess.

No, I have not.

I think I actually saw Max wearing some the other night.

Yeah. Okay. You never know what people do on a, on a crazy Friday night.

There's two versions of me.

There you go. But I'm sure you guys have witnessed like the secondhand suffering, right? Of women often end up barefoot. They bring backup shoes, they spray liquid lidocaine on their feet, all these ridiculous solutions. I really wanted to create a high heel that had style and comfort without compromise. And turns out the best way to do that is to make the heel removable. So if you don't want to be in a high heel anymore for whatever reason, you can just ditch it and turn the exact same shoe into a flat. We also let you swap out your heels. So if you don't want a stiletto, which I'm sure you guys know a stiletto is much more formal, maybe that, that sounds about right. I'm sure you know a lot about women's shoes.

Totally, totally clicking.

Well, let's say you don't want to have a super formal shoe, you want something a little more casual, you can just swap drop a heel on the same shoe to go down to a 3-inch wedge block, mix and match different heights, textures, colors, whatever. Basically build a shoe.

Wow, simple. It's actually like so brilliant, right?

Like, thank you.

Just from afar hearing, like, it— you think about it, you're like, why didn't I think of that kind of idea, right? Like, very much— I'm sure people say that to you often.

Oh, I joke. I think millions, if not billions, of women have invented this shoe in their head before. Um, I think I'm certainly not the first person to think, why can't I rip the heel off my shoe? I'm just the first one to figure out how to execute it at scale.

Wow.

Yeah.

Amazing. And so tell us where the business is at today. Like, obviously you've been working on this for 9, 9 years. 9 years.

Wow. Isn't that crazy?

Incredible.

Yeah, we turned 9 on October 4th, which is crazy to think because I'm only 29 now. I'll turn 30 in December. But I started this when I was a junior in college. So I've, I joke that the company's pretty much raised me while I've been raising it. It's kind of the only thing I've ever done. But yeah, I mean, it's been a wild 9 years. I'm sure we'll get into it. But as far as where we are today, we actually just celebrated a pretty big milestone. We had our first million-dollar month in September.

Congratulations!

Thank you, which is really exciting. So yeah, we're growing. We're getting the word about Convertible Heels out globally. We actually have 30% of our customers international now, which is very exciting.

Oh my gosh.

But overall, I want to say about 80,000 customers all over the world that really love our shoes and are shopping to the tune of million-dollar months. So that's kind of the extremely high level of where we're at.

Young Hailey, when you're growing up, obviously, I think that you are the embodiment of like an entrepreneur in every sense. But I'm curious just to hear like what you were like as a kid, like what childhood was like, your upbringing, because I'm sure that that probably still influences the decisions that you make and the business that you're building and just how you operate. But I'd love to just like, yeah, hear, hear who Hailey was as like a young girl.

Oh gosh, what a story. I was a menace. No, that's, that's dramatic. But I, I can say no one in my life was surprised when I became an entrepreneur. I think everyone kind of saw that coming. I was labeled the bossy kid when I was about 4. My dad's favorite way to describe me as a kid is I'd gone to preschool, so I must have been what, 2, 3? I don't know.

Yeah, it's all the same at that age.

Yeah. Little, very little. Barely even a person yet. Should not even really have a personality at this point, right? Beyond trying to figure out how to speak. Um, and my parents went in for a meeting with the preschool teacher, whoever, and, you know, asked for feedback. And this teacher, who again is talking about someone who could not have been more than 3, goes, you know, we can't tell yet if Hailey's good or evil, but we know she's a leader. So you either have a CEO or a mafia leader on your hands. I was like 3, like what kind of feedback is that? So I was always trying to run the show.

Yeah. Did they give you examples of what you were doing at that age?

I have no idea.

No idea.

It was just chaotic.

Given off.

Okay. I can think like later on in life, you know, a good example was in elementary school, I think in third grade, I saw gopher traps out on the fields of the school and that really upset me. I love animals. I did not like that we were trapping gophers. Obviously now I appreciate there was a larger issue with stability of the terrain of the field or something, who knows? But at the time I just thought, gosh, we're hurting gophers. That's horrible. Most, what, 8-year-old kids probably would not have given it a second thought. I started a petition and got 600 signatures from like parents and everyone at the school to submit to the school board to get rid of the traps. Yeah.

Wow.

They did reject my petition. So then I've had a chip on my shoulder ever since. But I don't know, it's just when I got really hooked on something, I wanted to see it through and I was never afraid to take charge and do things differently and be loud for sure. Wow.

And you feel like you were that way all throughout, like all the way up to high school?

I'd say so. Pretty much my whole life. Yeah. No one was shocked when I started a business. I think they were shocked it was shoes. No one really saw that coming, but I always kind of had that inherent leadership quality. How do we get to shoes?

What happened?

How do we get to shoes? Well, this is a good story. Um, so I went to California Polytechnic University in San Luis Obispo, and I went there specifically to study entrepreneurship because again, I knew I'm starting something. At the time, I thought it was going to be a music production studio, but I, I went, I was in my sophomore year, so I've got about half an entrepreneurship degree at this point. And so in the back of my mind, I'm hearing, you know, everything my professors are saying about find your market opportunity and your product-market fit. And so I've always got that kind of cycling in the back of my mind. Well, my sophomore year, so this is 2016, I went to my sorority spring formal as I always did, and I wore 6-inch platform stilettos because that's all the rage when you're 20 and in a sorority, especially especially in 2016. That was just the look. And again, I'm sure you guys probably haven't worn them directly, but women cannot dance in 6-inch. Yeah, you kind of, you do the wince and wobble.

Our job is to get out of your way.

Yes, exactly. Try to avoid any collateral damage. I can't do just the wince and wobble, like back, I need to bust a move on the dance floor, if you haven't gathered. It's kind of who I am. And so anyway, I solved this problem the same way most young women do of when I could not dance in my heels, I just took them off. Put them on the side of the dance floor amongst the ever-growing pile of discarded shoes and went out there barefoot to have a good time. Unfortunately, my inspiration struck very literally when one of my sorority sisters who still had her heels on accidentally stomped the ballpoint of her stiletto through my barefoot.

Through it?

Through it.

Literally like through it?

It impaled it clean through. Yeah. Oh, it hit. I'd had a toe ring on, which was also very in in 2016, and it managed to hit the corner of it And so the toe ring actually broke the skin first, but that created a hole that then the stiletto could go through.

Oh my, how painful was that? Scale 1 to 10?

Well, I think it would've been a 10 if it wasn't a sorority spring formal, if you catch my drift. Oh, I did not fully process the pain. Luckily, uh, sent myself home though. I was like, we need to, the, the night is over. Um, but I remember, you know, as I was sitting there tending to my foot, I looked around the room and it really did strike me that almost everyone was barefoot. And I started thinking about how odd that was and thinking back on, you know, when I'd made that choice to wear those heels, I'd known full well from the minute I put them on I wasn't going to make it to the end of the night. Like, I fully planned, you know, I'll have to walk barefoot to the bus, I'm gonna have to carry these shoes, will they fit in my bag, blah blah blah. And I started thinking through all the other times I'd done these mental gymnastics about my shoes. You know, if I had a presentation at school, okay, I'm gonna walk there in sneakers, I'll have to bring a bag big enough to put the heels in, and then I've got to change and do this thing, or, you know, the end of a night out, oh, I can't go barefoot, I'm on the Vegas Strip, that's disgusting, call an Uber to go half a mile, which is ridiculous.

Yeah, hiking is kind of gross too, right?

So gross. Yeah. You don't even wanna know the stories I've heard.

Oh, true, true.

People have stepped on some nasty—

Glass, shit, random stuff.

Oh, it's so bad. But it, it just struck me how strange that was that, you know, high heels are made for women, marketed to women. We all know they hurt, we all know they're inconvenient. And really the burden of that fundamental failing of the product has been put on women as the consumer of, okay, we know we're giving you this product that's fundamentally flawed, but you're gonna fix it via money, liquid lidocaine, extra shoes, what have you. And again, that sorority for me was such a pivotal moment of I'm looking around and it's like, okay, this isn't a me problem. There's 200 other women here that are barefoot. We all did these same mental gymnastics today on a product that's designed for us. Why are we having to create Band-Aid solutions for our own product? That seems so strange. And so after that, again, the entrepreneurial mind was already prepped. I just started spinning on it. I literally cut up the stilettos I'd worn that night. I brought home, cut them up with a steak knife in my studio apartment. That was my initial R&D to understand our shoes.

How long after?

No way.

Oh God, like 2 days later.

Oh my God.

I was like, I got to understand how these things are made.

Like, what is going on? What was going on with your foot? Were you able to like—

Oh, it was fine. Okay, cool. It's just a, you know, a feeding wound. Got a hole through your foot. Yeah, I put a Band-Aid on it, poured some tequila on it. Yeah, it's good. It healed eventually.

Got it.

It's fine now. There's a little scar, but it's not bad. But now I just, I really wanted to understand. I remember sitting, looking in my closet at these stilettos what has I'd worn? And I had a pair of flats that the style was very similar, but it was obviously a flat, not a 6-inch platform pump. But I was looking at it thinking, okay, what really is so different between these two shoes? From a style perspective, they're more or less the same. They just— one has a heel and one doesn't. Why is that fundamentally possible only on the heeled version? Cut them open, started to understand how they were put together and how they were made. My journey to becoming a junior cobbler, I guess. Really sophisticated product development. But after cracking them open, I realized that most high heels and flats are largely the same. They're made of compressed wood fiber in the midsole. The only difference is the heeled version has a metal shank, like a metal rod that's screwed into the wood to reinforce that shape and then has the heel attached. So I could not help but think, why couldn't we make this not a permanently attached support, but something that comes out, goes back in, And then rather than being made of wood, which is part of why they hurt, let's make it out of something more cushiony. I'd been a track runner, and so I kept coming back to my Adidas Ultraboost. I'm like, why can't we find something that's got that flexible, cushiony, feels-good midsole? And as long as it's reinforced appropriately, I mean, God, shoe heels are just a metal rod reinforcing a piece of basically plywood like that there. So it's like, reinforce a sneaker with the same thing. It should work. No. And so I decided that I was going to spend the rest of my life trying to figure that out, I guess.

So that, like, I get that you were, you know, messing around with these shoes and cutting them off with, you said it like a steak knife. What, when did it actually become like a prototype or like a product?

So shortly thereafter. So after I, so again, I'd come out of my sophomore year, cut up a bunch of shoes, spent that summer between my sophomore and junior year actually studying abroad in Florence, Italy, took some fashion courses, was like learning a little more about the industry. Well, you got into the business. I was working on the business plan kind of behind the scenes trying to think, okay, how would I actually form this? And keep in mind, at the time I'm an entrepreneurship student, so I went about it kind of hilariously by the book. I was like, oh, I got to make my SWOT analysis.

Your business plan. What's our go-to-market strategy?

What's my competitive advantage? Like, I'm doing the whole nerdy thing. But the end result was like a 14-page packet that had everything I thought I needed to know to start a business, which I look at it now and laugh. But at the beginning of my junior year, so flash forward about 6 months, I thought, you know, this is, this is what I'm going to do. I want to run with it. Cal Poly has a fantastic entrepreneurship program and a lot of resources for students that want to build startups. And so I thought, okay, I want to inject myself into this part of the university. So I walked into— they have a hatchery program that's basically set up to help advise student entrepreneurs. So I walked in on October 4th, 2016, started junior year fall with my little packet, and I gave it to the head of the program and said, I want to make Crazy shoes. And they said, fantastic, let's see what we can do. So the first piece of feedback they gave me was, you need a technical person to join your team to try to figure this out. So really it was very simple. I just opened up my sorority database because I was like, I need someone I can trust. I was very worried about IP from day one. Sure. I was like, if this works and someone gets to it without an NDA or patents in place, I'm screwed. Like I, I knew from day one this was gonna be a speed to market angle for sure.

Oh, you still believe that?

Yeah, absolutely. Now we've got a brand and patents protecting us. But I do think if, if I'd showed the concept around too early to the wrong people, it could have backfired pretty quickly.

You don't even know, right? Because you're just getting started. You're like, who do I trust?

And so I was just paranoid. Really, the biggest thing to me was I just need someone I can trust. And to me, trust meant we have to have shared social circles. So there's that pressure of if they screw me over, everyone will know, right? And so really, I searched my sorority database. I was like, okay, it doesn't have to be someone I'm really close with. But just someone that's got a degree of experience in what I need, that we have friends in common, right? It's not a complete stranger. There's that degree of trust there. And as it turns out, there was exactly one industrial technology major in my sorority, which was really the major that specializes a lot in product development and prototyping. I reached out to her on Facebook. She was a grade below me. We did have friends in common but didn't know each other well at that time. But I sent her a message, said, hey, I have a product I want to make. I know you're in ITP. Would you grab a coffee with me? I worked at the Starbucks on campus at the time, so selfishly I was like, I can get free coffee for us if you come meet me after work. And so I'm pretty sure in between shifts in my Starbucks uniform, I took her out front, gave her a latte, sketched what I was thinking on a Starbucks napkin and said, do you think you can help me prototype this? She said, sure, absolutely. So Tyler Umbahand came on as my, my first employee. She was technically the CTO at the time, but I mean, it was a 2-person company, you know? Yeah.

I remember my earlier question. I think you sort of just answered it, but was it that, did you have some technical prowess already? Like, did you have some sense of the, the, of how it would work? You obviously took the shoe apart and this was more like actually executing on the sample or what, where did this person come in and fill the gap for you?

So the execution piece. Okay. So I knew loosely how I wanted it to work. I knew about flexible midsole, removable shank. Like I had enough.

Enough to be dangerous. You had enough.

Yeah. Right. But I, I'm not a trained engineer.

Sure, sure.

Uh, and I will always admit my weakness has been math. And so just the thought of having to do math of any kind was giving me hives. I've always been more the business and marketing mind. I have a really, I'd say, and I think my, my engineer would agree, I do have a good aptitude for mechanics. I understand how things work, but if you asked me to, you know, put in the formulas needed to make it rev up in CAD, I would be useless. So I needed someone that could fill that gap of how do we take this and actually bring it to life. And so she came on and again, our university was amazing. We had a lot of free resources. We were able to use 3D printers on campus for free, 3D scanners. We scanned in regular heels and then messed around with them in CAD to try to get them to do what we wanted to do.

And so funded it all. Did they give you like a grant or something or was it?

So I competed in startup competitions throughout my junior year and my university hosts 3 every year. And technically my junior year I swept, I won all 3. So I think I'm the only one to ever do that actually. But yes, I, about 30 days after starting the company, so early November 2016, the program I was in put me up for the elevator pitch competition, which is like the first event of the year for the department. It's truly an elevator pitch. You have 90 seconds to get up, pitch the idea, no prototype needed. It's just concept. I won first and second place 'cause the audience picked second and judges picked first. So that was cool. Brought home $1,500 in equity-free funding.

Oh, wow.

Which was just enough to buy the material I needed for the 3D printer.

Cool.

And so we then used that money to work with the 3D printers, print the first prototype, which I still have, but it's hysterical. We couldn't afford the flexible material we needed for the midsole. So our solution was we printed the harder components like the heel and the forefoot, and we just super glued them onto Dr. Scholl's insoles that we cut into the shape of a heel, glued together, and spray painted black so that they would flop around. It was a nightmare.

Do you have it framed somewhere?

It's, it's on my, my bookshelf in my office to this day. I've lost a piece of it though. At some point in a move, it fell off and it was just lost to time.

Wow.

Uh, but I've got like 90% of it still. But no, we then brought that prototype to the, the second competition in the spring is Innovation Quest, which is more of a Shark Tank style pitch. You have to have a functioning prototype. So brought that in, we did the pitch together. Um, the prototype was broken by one of the judges halfway through, so I thought we were screwed, but by some grace, we won first place, brought home $50,000. $15,000 in grant funding from that one. And then that rolled right into the university's Summer Accelerator Program, which also awarded $10,000. So at, at, in all, all in all had $26,500 going into the summer between my junior and senior year to try to actually make this shoe. And really my goal at this time was, and we can talk more about this, but it was very important to me to try to have a business that could keep me employed by the time I graduated. I knew that was the only way this was gonna work, and I knew the only way that would happen is if I had funding, and there was no way I was gonna get significant funding without a working shoe. And so going into that summer program, I was like, okay, I have a year and a half, I have this summer and then my senior year to get these shoes up and running, working, production ready so that I can actually try to pursue this as a career.

Come graduation, where are you at?

So come graduation, well, backing up a bit, I guess a very big part of it was at the end of that summer accelerator program, it was like a 12-week boot camp. I again made, made the money work. I credit a lot of our early success actually to being in college of, you know, you're used to working with nothing, you're used to a pizza budget, right? So I had gotten very scrappy at how to get stuff done for fractions on the dollar. We were able to use that $26,500 over the 12 weeks to bring on a professional product development team from Nike and Adidas to help us actually make the real shoe. Wow. Found our initial suppliers. We filed our utility patent in 30 countries, got our trademarks fully incorporated.

So you went patent first?

Yeah. Oh, I wanted it patented before it was ever publicly disclosed. And a big thing— I mean, the patent wasn't issued, it was pending, but we—

There's some protections with that.

There were protections. Yes. And the big thing was the program culminated at the end of the summer in a demo day where they would invite, you know, 300 alumni that are either in venture capital or entrepreneurs or angel investors to come hear the pitches. And there's no official winner of Demo Day per se, but it's understood that if you do well, these people could and will write checks into your business. And so that was kind of the, the ticking clock the whole 12 weeks was, okay, we need to have a prototype I can show at that presentation that works. I was, I just, something about me instinctually knew if I'm not wearing a version of the shoe on stage for the presentation, then I'm not gonna get the money. I, I was very used to being underestimated. And so I had a big fear that if I went up there, you know, with like a shoe I could hold but couldn't wear, people would just immediately go, it's not gonna work. Like I had to be able to just unequivocally say, it does work. I'm wearing it right now. Like that, that was the only way this is gonna happen. And I wasn't comfortable showing people that unless it was patented. So all summer it was, okay, we need the patent, we need the product. What are we gonna do? I was able to get, the first 3D print strong enough to be worn. I think it was 2 days before the Demo Day presentation, and my engineer had said, do not wear this for more than 5 minutes because it's not that structurally sound. And of course, my pitch was 10 minutes. So I said, okay, I'm just going to stand on my tiptoes, but no one will know from, from the audience, right? They won't know. And it's actually funny. I got feedback after, you know, a lot of people when they're nervous will pace or something. I walked out on stage for this presentation in front of 300 people and I just struck a power stance and didn't move. And people were like, God, you projected so much confidence. You weren't moving. Little did they know I was terrified to move my feet. I was standing on my tiptoes the entire 10 minutes.

Did you feel the heel like starting to wobble?

Oh yeah. I was like this, I was like, the other way to not raise money is for this thing to collapse out from under me. Like that can't happen. Oh yeah.

I can imagine.

Um, but my big reveal was I wore it for the whole 10-minute pitch. And didn't tell anyone I was wearing them. No one knew I'd even gotten them in time. And so the way I ended, I'm trying to remember the line, but I said, you know, before I get to what we're all here for today and ask you for money, let me get a little more comfortable. And just ripped my heel off. And I got a standing ovation and raised $450,000 in angel funding to start my senior year. So I spent the whole senior year then putting that money to work, opening our custom molds and tooling, finding, you know, getting everything set up with our suppliers. I spent spring break in China training our suppliers on how to make the shoe.

As one does.

Yeah, it was wild, especially because I flew right from Stagecoach to China for spring break, which was crazy. And I mean, right, like I had dirt from the desert on me and just—

As you're landing in—

Yeah, you know, I was what, 21? I had a lot of energy back then. I was committed to not letting go of my college experience. I like to do everything, so I just full sent.

But you go to Stagecoach.

Yeah. You go and then you just fly to China straight from there. But flew out, did that, and got to the point where we had the first production-ready sample. So this is now not 3D printed. This is made of leather. It's made of the sneaker material. It's out of our own $250,000 custom molds. I got the first line of those samples the night before college graduation.

And the team was still 2 people at this time.

It was 3 now. It was me, Tyler, my CTO, and then we had our mechanical engineer, Seiji, who's actually still with the company today. He's been with me 9 years, which is wild. And meeting him was a funny story. We can get into it if you want. But anyway, yeah, graduated, wore the shoes. First time they were ever worn was by me at college graduation. We launched our Kickstarter 2 weeks later, and then I became a full-time CEO.

And what was the rationale? If you'd raised the $450,000, the Kickstarter was just, hey, this is an easy way to access more funding. We want to raise from our actual potential customers. Like, what was the logic behind going?

Oh, $450,000 does not get you far in shoes.

Sure, sure.

But in other words, like, why, why Kickstarter?

It was really to kind of test demand and get— fund the first line of production. So the $450K, I guess to give you an idea, when I'd met that development team out of Nike and Adidas, I'd said, you know, what's it going to cost to get an initial product made? They had all unanimously said across the board, it's going to cost $1 million and it's going to take you 2 years. And I'd said, I have $450K and I have about 8 months, so that is not going to work for me. And so, I mean, we pounded the pavement, we got everything negotiated. I worked with my suppliers to get favorable financing terms, all this stuff. But the $450K by the time I graduated was more or less spent just making again our product. My pun is we reinvented the heel, so we needed to fully develop custom molds, custom tooling, custom lasts, custom materials. All this stuff is $100K, $200K, $300K price tag. I mean, we ran through that money very quickly. And so by the time I graduated, it was like, all right, I've got enough money to pay my salary for a couple of months, you know, build an initial website kind of. But we did not have enough money to even buy the first run of shoes. It was like, okay, we've got the 10 samples. But if we want to go buy enough inventory to stock a website, we need more funding. And now at this point, I was worried if we went for, you know, venture or angel, we had no sales data. So it was like, great, you raised all this money and you made a product, but now we don't know if anyone wants it. So the point of Kickstarter was really to prove out demand and fund that first production run.

Also a really cool way to get customers advocating for the business as being supporters of it too. So indirectly.

And I think we've still got, I think we had about 300 backers, I want to say, and I'd say probably 100 of them still like root routinely buy shoes. Like they're still with the brand now, 7 years later, which is crazy to think about actually. I see comments every once in a while. They're like, I bought the first ones on Kickstarter.

Did the Kickstarter go well?

No, it went horribly bad actually. It went really bad. We had set a goal, I think, of $100,000 on the Kickstarter, and we got to about $35K in the first few days from supporters that had been following along. I'd been sharing our journey and, you know, talking to a lot of people about it, and then it kind of stalled out. And what we really learned from talking to people was Kickstarter, at least at the time, I don't know how it's changed, but it's really challenging if you're fundraising for multiple variant products because we had, you know, you, you launch a shoe business with a couple different shoes, right? And one of the trickiest things about shoes and why it's so expensive is unlike a watch, you can't launch with one from the jump. You have to launch with 12 because of sizes.

Right.

So one black shoe is not one black shoe. It's the size 5, 5.5, 6, 7.

The mold of each one.

Yes. Yeah. Very expensive to get into. And also people want multiple colors. So we launched with 3 styles, all in black. We did not, I think we had 1 shoe in red maybe, but put that out there. Kickstarter, the way it worked at the time was, okay, you know, tier 1 is you get a gift card, tier 2 is you get a free shoe, tier 3 is you get 2 free shoes, right? Problem was they'd do that and then we would have no way of knowing what shoe they wanted in what size and in what color. So then we are following up manually on email, which doesn't go well. I don't know if you guys have customer service experience. And this is not to say anything bad about customers, but you'll reach out and go, hey, what shoe do you want? And they just go, the red one. And you go, okay, that's about 30% of the information I need to get this done. So it started getting way too convoluted and people started being hesitant to commit to the campaign because they weren't sure what shoe they were actually getting, which in retrospect was fair. The buying process, again, for multiple variants was a disaster. I hope they've fixed it by now, but, but at the time If you were trying to sell like one t-shirt, it would maybe work. But other than that, you were, you were a little screwed. So anyway, what we ended up doing was shutting down the campaign. We emailed every person.

Did you get the money though? They give you $35,000?

No, if you don't hit your goal, you have to return the money. You have to return it. But what we did was we were able to get the list of people that had tried to back.

I see.

And so we emailed them and said, hey, we're launching our Shopify early because this was too messy. We're gonna send you a link. We're gonna pre-populate everything you've told us on email so far. So like some people had told us, you know, the red size 7 in this style. So we're like, we're just going to send you the draft order of what you want. Other people were like, we're going to send you a survey. Like we were basically trying to piece together what people had actually wanted. Um, but sent that out and said, you know, if you'd still like to back us, we'd really appreciate it. We'll honor the pricing that you paid. And I think we only lost one backer.

Wow.

Everybody transferred over.

It's a really good signal, right? It was. Because clearly people really wanted it, right? It worked so well.

They did. And then now that the ordering was fixed, they referred friends. So we ended up eventually actually hitting the goal we had set out to, We got about $100,000 in initial orders overall, uh, but it took way longer than we thought and Kickstarter was not the answer. Wow.

And was that kind of when you felt product market fit? Like, was it sort of like in that, hey, if the Kickstarter doesn't convert, I don't know if people want this, or were you pretty sure like, yeah, the Kickstarter may not work, but we know that people want to buy this product?

I think it was kind of a bit of both, and I think honestly I was kind of delusional. Like when, when the Kickstarter didn't work, I, my first reaction was we're screwed. Like people don't want this. I didn't understand the problem, blah, blah, blah. What was comforting was because, you know, I think as a founder you have to be a little like delusionally optimistic. And I just remember being like dazed. I was like, it can't be that the product is so good. Like it can't be that people don't want the product.

It's something else.

So I remember looking up, I think like 5 or 6 phone numbers associated with Kickstarter backers and calling them and basically being like, why is this not working? And everyone said it was the ordering flow. And so I was like, thank God it's not the product.

It's, it's the way that we want this.

We just don't like they want it. It's just not working from a sales perspective, which actually was really eye-opening for me because I think it taught me a good early lesson about building a brand. I think a lot of people get obsessed with just the product, which is amazing, but when you're building a brand, the experience and the customer service is honestly like 70% of the battle. Like a good product is important, but if people have a bad experience getting that product to them or trying to buy it, they, they're not gonna do it. Especially in fashion with impulse purchases. If someone can't check out the second they wanna check out, and have full confidence that what they want is on the way, they just won't do it. Right. So it was actually really eye-opening for me of, oh, we can't just hyperfocus on the product. The website needs to be stellar, the marketing needs to be stellar, the ops and customer service and the shipping. I was like, okay, this is a much— I put my COO hat on and was like, all right, we can't just focus on the shoe all the time. There's actually a lot more to running a company. But yeah, once I got that feedback, I was like, okay, there is a way to fix this. We just need to pivot and basically get the website up a full year earlier than we'd expected for pre-orders, basically. Yeah.

Yeah.

So we, we like paused the Kickstarter and then it was all hands on deck. Me and my two, I think two team, maybe three teammates at the time, um, spent a full week just heads down building out a web, like shell of a website to be able to collect these pre-orders and, and get that out there.

And you guys were burning cash obviously at this time too, right?

Yeah.

So there was probably some sense of like, if we do this pre-order, we can get some cash in the door.

Oh, for sure.

Like start paying for the manufacturing ahead of time. Get that.

Mm-hmm.

Yeah.

And the heat's on at this point 'cause we still had some money left over from the initial fundraising, so we weren't desperate, but I could, that was kind of my first experience seeing the writing on the wall. 'Cause at this point I'm graduated too. So up through graduation, those first 2 years I had my get outta jail free card of, you know, if it fails, my rent's paid for. But my family very much was big on, you know, you're taken care of till you're an adult and then you're on your own. So I remember like my graduation day, there was the card cutting ceremony where like the emergency parents credit card was cut up and all that. All this and it's like, you're an adult now, have fun. And so, you know, I'm basically running this failed Kickstarter like the same month that I'm paying my own rent for the first time. Wow. And I was like, okay, welcome to adulthood. This is slapping me in the face. Like, we've gotta figure out a way to sell these shoes or now the stakes are real and I, I won't have a place to live.

And you now actually have to deliver on this, right? Yeah. Because people are now buying it with the expectation to receive it. And we have heard these horror stories of people making promises and never delivering products. So for you, you're like, now it has to, has to work.

It's gotta happen. And it did. It took longer than we wanted. I think we told people they'd have them in time for Christmas that year, cuz this went down in June of 2018. Yes. So I think we told them they'd have them by December. They did not get them till I think February of 2019, but luckily everyone was cool about it. I think I said, you know, as a, as a thank you for your patience, we'll give you 20% off your next hypothetical order when we actually have more inventory at some point. So it, it worked out.

Post-graduation, when did things start to get hard?

Sure. Um, I would say the biggest challenge really, or something that I learned is there's a big difference between when you are pre-launch and post-launch. So from 2016 through 20, early 2019, we were technically not launched yet as a business aside from what we did with the pre-orders. But it's not like we had a website, we weren't really marketing. Um, we weren't really open to external factors is the way I would describe it. Of it. My favorite thing about those early days was it was really systematic and really within my control. And I think one of the most ironic things about being an entrepreneur is most entrepreneurs I know are control freaks. Like, that's, that's who we are. But the process of launching a business, there's so much inherently out of your control, except for the period where you're kind of pre-launch. It was much more controllable, and I really enjoyed that of A to B to C, right? Okay, we need to prototype a shoe, get enough money to make the prototype, find a team that can prototype it, prototype it, didn't work, fix what didn't work, prototype do it again. Like, it's very systematic. Once you launch the business, it becomes much less controllably proactive and more so uncontrollably reactive, or at least in, in my journey. And so for me, things got much harder, and really my role as CEO completely evolved, um, when we launched the company formally in June of 2019. So at that time, we had raised a little more money, uh, off of the success of the pre-order had our, you know, first run of inventory and were launching to the public. We had the PR agency, we did the pushout, we got the Forbes feature, we do the whole nine, we put the website live. And then thus began the, the actual day-to-day of operating a business, which is much different than building a product, especially for, for me. And we can get into it. I do think there's never a great time to start any business. I think most entrepreneurs are up against timing. That being said, I've talked to enough entrepreneurs that I feel like I can confidently say we got dealt a particularly weird hand from the macro timing powers that be of launching June 2019, about 3 months into operations. You know, we're still a fledgling business, we're not profitable. The first Trump trade war happened, and so very quickly we could not afford to bring in our next shipment of shoes. Like, we'd gotten the first shipment in under the wire, and then the second shipment, suddenly all the costing went up, I think, about 16%, which wasn't crazy, but considering that we were running so tight at the time was really, really devastating. So, you know, I had to try to pull together the money to get that done, bring that shipment in, and then you go into the pandemic, which is a great time to sell shoes, especially heels. Then the supply chain crisis, recession, now we're in another trade war. So we can get into all those things, but the moral of the story is once you launch a company, it becomes, you know, pre-launch, you're in this little controlled environment where you just have to make your product and you show up every day with your team. And if there's a problem, you just solve it. It's within your control. It's swapping this part for another. It's those kinds of decisions. Once you're launched, it becomes problem solving on steroids and the problems are much more existential, uh, and much more uncontrollable. And also things that you can't, you can't really do anything about.

Sure.

Like a global pandemic, you know, how do you problem solve that?

When you launched, was the pandemic kind of the first like, oh shit, this might not, we might not make it?

Um, I mean, the first trade war was a challenge, but I was able to work through that quickly. The pandemic was a full despair spiral for me. If I remember that shutdown news came, you know, it had been funny because in the months leading up to it, I was trying to raise, uh, a round at this time. I think we were trying to raise like a million dollars. Nothing, nothing too crazy. That sounds bratty. A million dollars is a lot of money. But anyway, uh, we were trying to raise like a million dollars and one of the biggest lines of questioning, uh, that had been brought up was at the beginning of 2020, a lot more people were starting to work remote, not because of the pandemic, it was just kind of the way work culture was moving with Zoom. And so a really big news story at the time was so many people are gonna be working remote. And so sales of professional wear, I think were down. It was just a story at the time.

Sure.

So I was getting asked a lot in diligence, you know, are you worried that the switch to remote work is going to destroy your business because women aren't going to wear heels to work anymore? And my response had been, well, women wear heels so many places other than work. They wear them to dances, they wear them for travel, they wear them to events a lot, wear them just day to day to the coffee shop. Nothing could ever happen where none of those things are happening anymore, right? Like, like if everyone suddenly works remote, there's still weddings and things they're going to wear heels to. There's always going to be a shoe market. Market. And then the pandemic happened. I felt like a real, a real idiot for that one. I was like, oh wow, I just jinxed myself. I've been telling everyone there's no way all use cases for heels could disappear overnight, and then I quite literally lived that on March whatever it was, 22nd or whatever of 2020. And so I remember just being completely gobsmacked, like absolutely in despair.

Like, did sales just go to zero? Like, how—

they went real— yeah, they, they plummeted very quickly. I mean, everyone was in a panic. I think sales of all things aside from N95 masks pretty much plummeted and hand sanitizer. Like no one was buying anything, let alone $180 high heels. Right. I'm getting calls left and right from investors. I remember it was driving me crazy. My investors were calling me going, how are you going to fix this? And I thought, fix the pandemic? What do you mean? Like, how can I fix this? I don't know. This is kind of above my pay grade, guys. But really the question was, you know, just how are you going to carry this business through this time period. We're not yet profitable at this point. I think we'd done $500K in sales. We'd only been on market 6 months, so it wasn't that shabby. I was proud of it, but we were nowhere close to break even. We were burning. And, you know, the only hope we had was being able to turn the inventory we had on hand into cash. And that was suddenly becoming a very unrealistic goal.

Wow.

So that was a really terrifying time.

And what was going on with you at the time mentally, physically? How were you feeling through that?

Gosh, I mean, this would've been 2020. I remember just feeling very scared and overwhelmed. I cried a lot, a lot. I felt a lot of pressure too to act like I had it all together, which was really hard. I remember thinking, okay, you know, we still have to try to raise money now more so than ever. Like all of a sudden the urgency on raising money had been dialed up to $1,000 'cause it was like, if I don't, you know, I now can't bank on sales to get money. So like I have to go raise funding immediately. And I was very worried, you know, I knew I was walking into basically a hostile situation. I'm walking into a room with investors that don't wanna give me money. They're under a lot of pressure from LPs to really tighten up the purse strings 'cause no one knows what's going on. And now I have to convince them to give money to a shoe company in a climate where no one is, is buying shoes. It was a real psychological, for lack of a better word, just mindfuck. I was like, I have to walk in and project the utmost confidence. Like, I'm completely unshaken. Like, this has no— there's no reason why this could destroy my business. Because of course, if I admitted that, no one was going to give me money.

You had to show confidence.

So I was like, I have to go in there and find a way to credibly pull out of my ass that I am not scared shitless.

Was there any feedback that you heard and you were just like, ugh, like in that process? Like, what, obviously there were people telling you, oh, we're nervous, we're scared, we don't want to do this. But was there any specific conversation you had that you were just like, wow, like, I don't know if this is gonna—

I mean, there were so many, and honestly, they all blurred together. I was so— I've had a long history of anxiety and panic attacks, and I was really at a point of having panic attacks before every presentation.

Wow.

Because again, I was so in my head of like, you have to go in there and you have to be perfect. You have to be perfect. You have to control the situation. You have to convince them this is a good investment right now. I mean, I I was totally cracking. So honestly, so much of it blurs together, which to that point, I probably did not project as much confidence as I was trying to. In retrospect, that was such a mental disaster. There's no way that I was projecting good confidence. But it really, it killed me. The recurring, you know, feedback that came out of those meetings was people just going, we have no confidence in this sector at all right now. Like, it wasn't even about me, which again, going back to being a control freak, it's not like I'm walking out of these meetings going, oh, we really hate XYZ line item on your P&L, go fix it. Or hey, we really wanna see XYZ testing data on the product, go get it.

Yeah.

Which is how normal diligence goes. If you know they don't like something, you try to fix it.

Sure, sure.

The thing they didn't like was we hate every physical product being made in existence right now. That's discretionary. Mm-hmm. Period. What do you do with that?

So what did you do with that? Like what kept you going through that? Moment?

I honestly, this is a funny story. I remember thinking, okay, raising money is not gonna work. Uh, it's not. And we are burning cash and there is a, you know, there's a cliff coming on the horizon. The only resource at my disposal right now is I do have shoes. We'd brought in all these shoes for the website launch, still had a ton of shoes. I was like, I need to figure out how to turn those shoes into money. The problem at the time was we'd always thought a big part of our marketing strategy really was gonna be grassroots referrals because of how uniquely the visual the shoe is. Like, every time a woman uses it, women around her are going to ask, right? Problem was, that all falls apart when women aren't wearing shoes outside. So the few customers that did have our shoes weren't wearing them out. Another big part of our initial strategy had actually been to go into stores quickly, and all stores were shut down. It's like our whole marketing strategy went out the window. So I'm sitting there trying to figure out, okay, how are we going to get shoes in front of people if no one can see anyone wear them and we can't get them into any stores. And the only thing I could think of, and I will be so honest, I had drank like half a bottle of wine one night. I was just, I was a mess. I was just like, I was like a whole bottle of cab deep, like, how am I gonna fix this problem? And I remember the TV was on and Shark Tank was on the TV and I literally just thought, well, everyone's bored at home watching TV. What a great time to go on Shark Tank. And so I, I will admit I drunkenly filled out a Shark Tank open application online. Honestly didn't remember doing it.

I'll just, I'll just own that.

About a month later, I got a call from the production team that was like, you're, we wanna bring you in for the interview process. I couldn't believe it. The fact that I was going through the interview process was proof enough for me to get some of the investors already in to cough up enough money to ride it out. I was like, you guys have to buy me the tech. Yeah, I called them. I was like, look, I know everyone's nervous. Nervous. I'm gonna go, I'm gonna figure out a way to get on Shark Tank. And keep in mind, at this point, I'm beginning of the interview process, so I'm like 10 months out from— I have no— they get 40,000 applicants and 120 people air. So I'm like, I have actually no reason to believe I'm even gonna air. But I was like, look, I'm gonna give it all I got. You guys gotta buy me enough time to get me onto the air somehow. And so I was able to get a little more money in. Um, at this point, I will say the COVID boredom shopping in. So we actually did start seeing some sales recovery from just, you know, running ads. People were staring at their phones all the time. I don't know about you guys, but there was a time in COVID where getting a package was like the only thing I had to look forward to.

Christmas every day.

So we just leaned into that with our marketing. We're like, why don't you try this crazy new shoe? What else are you going to do? You're bored in your house. So we had a little bit of sales coming in and I was able to get enough money to squeak out to, to getting on Shark Tank in, in Q1 of 2021. 2021. So pretty much all of 2020 was just squeeze as much money out of everything as we possibly can so that we can survive to Shark Tank, hopefully maybe airing.

Wow.

In the imminent future.

So, you know, you get on Shark Tank.

I got on Shark Tank. I did. I made it happen.

When I told my mom we were doing this interview, like, oh, she was on Shark Tank. I'm like, yeah, she was on Shark Tank.

It's what I'm most known for to this day. The girl from Shark Tank. There we go. Wow.

And what happened? Like, I'm sure so many people listening, I've always been curious, like, what is it actually like to go on Shark Tank?

It's crazy. It's very surreal, especially for me, you know, always being entrepreneurially driven. I grew up watching the show and so it was really wild to then like fly out and walk down the hallway and be in the same room as Mark Cuban. Plus I was what, 22, 23 at the time? So it was just crazy. I'm to be like 10 yards from Mark Cuban in any setting is crazy, let alone on the set of one of your favorite TV shows. I'd watched it since season 1, so it was just a really surreal out-of-body experience. But yeah, I got out there, gave it my all. I did get an offer from Kevin, which I was not expecting. Unfortunately, it was a royalty deal, which was the one thing my investors and I, you know, we'd obviously talked strategy ad nauseam before I went into the tank. 'Cause it really is, you know, I can't say too much about it, but it's very much real what goes on on the show. Like they make you an offer, you have to either accept it or reject it on the spot. Hot. It's all a live negotiation. There's no, you know, let me take a minute. Like, you, you really are under kind of a hot—

so you kind of have to have a range that you're willing to accept.

You've got to know your strategy going in for sure. Anyone thinking about going on, do not go in blind because that is a horrible idea. But I went in and what we had discussed was no royalty. We don't want to do that. You know, we're not profitable yet. We are a product company. Cash flow is king in product, and we didn't want anything undercutting that. And so negotiated as hard as I could, but he would not budge. And so I had to walk out without a deal, which was terrifying for so many reasons. I mean, first and foremost, I'd had the pressure of our product is so good for Shark Tank. And so ever since I'd started working on this years prior, everyone had said, you have to bring this on Shark Tank. So I very egotistically had thought I was a shoo-in to get a deal. So like the fact that I— thank you. The fact that I was walking out without one, like it was like an out-of-body experience. I, I was so convinced I was going to get a deal. So I had that going on from an ego perspective. Definitely had an ego death, honestly.

And were you like, should I just take in the royalty? Like, were you trying?

I was very, very committed in my heart and soul that we could not do a royalty.

I knew it was wrong.

That's a theme here in this story. Yeah, no, I really, I knew we couldn't do it. So I was confident in the decision, but it was still terrifying. I was so embarrassed. It really was like an ego death moment. On top of that, keep in mind, we really needed the money. Like at this point, I had bought myself enough time to get onto the show. I, for anyone that's seen my episode, a big part of the back and forth was I only had about 3 months of runway at this point.

Was there like a gasp moment with like 3 months?

Oh, they were eviscerating me for it. And I was like, it's a startup. We always only have 3 months of runway, right?

Like nothing's going on.

But they were really beating, you know, like leaning into me on that, which of course is hard. You know, I know I'm being filmed. I know I'm on national TV. I'm trying to keep it together. And again, like I was earlier, project confidence. It's fine. It's great. You can't admit admit. No one talks about it, but like, as a founder, I feel like there's almost always some kind of crisis behind the scenes, and you can never admit it. So you're there listening to these people go, you have 3 months to survive before you're dead, and you have to smile and be like, it's fine. But on the inside, you're like, you are literally screaming my exact worst nightmare in my face, and you're my idol. You're my idol, and you're telling me everything I don't want to hear right now and rejecting me for money at the same time. Like, you have the solution to my problem. Problem. And instead of giving me the solution, you're gonna just remind me how screwed I am, basically. Oh, it's horrible. Uh, so anyway, I mean, it was, it was crazy. It was very much my choice to not take the deal, but that does not mean it was easy. It was one of the hardest things I ever did. And I, I was a shell of myself for like a week after. I tell people it was like a traumatic experience, to be honest.

There's some hope, right, like your product is being shown to millions of people, you're gonna get, have website traffic, like you can make up for it maybe in product sales.

Well, and then that hope, you guessed it, was how I raised more money.

Let's go.

I went back out to investors and I was like, look, I didn't get a deal, but I am gonna air.

Yeah.

A lot of people are gonna see this show. And I, and I had the argument.

Well, before it aired, that makes sense.

Yeah. And I had the argument of more people than usual are actually gonna see it. Mm-hmm. Because everyone's locked down. So the viewership was through the roof. 'Cause it's—

Turned the weakness to a strength.

No one had anything else to do. And so I was like, look, I'm going to air. And I, I went, a lot of it was going to my current investors and basically saying, hey, we have an opportunity where this is gonna air in front of 7 million people. They estimate that the time slot is worth about $5 to $6 million in advertising.

Oh my God.

Interesting.

'Cause it's 15 minutes on primetime ABC. Wow. On a Friday. Right. And it is free. It's free to go on the show.

Right.

There seems to be a lot of confusion about that, but it, it is free. It's the best ROI you're ever gonna get regardless of the trauma you go through.

Just to air is a huge deal.

Deal or no deal, right? Deal or no deal.

It's priceless marketing. I mean, what, they, they say, I read an article once, you have to think about it as like projecting your brand 3 years into the future. Like it would take you almost 3 years in any other medium to get that much exposure.

Sure.

And you do it overnight. So I, I had that in my tool belt, went out and was like, you guys gotta buy me time to the airing. You just gotta do it. And sure enough, they did. We aired in February of 2021 and we grew 450% that year.

Oh my God.

Wow. Yeah, we went from, uh, like $500K a year to $2.8 million, and then that almost killed us. We can get into that too.

Yeah, let's, let's do it.

Yeah. So it's starting to work now, like really well.

It's starting to work. But the tricky thing with product-based businesses, again, the cash flow is really brutal. The faster, the steeper your growth rate in product, you can actually bankrupt yourself if you're not careful. And a 450% growth rate is definitely on the north end of that. It's on the other side of that line of you can manage it or you can't manage it.

But we have this demand.

Now we've got demand. And so, you know, I've got pressure from my investors, keep up with this demand, like keep everything going. And so this now goes into the— '21 was one of the best years of my life, and then '22 was the worst year of my life, and they were very directly related. So '21, we're exploding. As I said, we air, we start growing like hotcakes. I go from a 3-person team to I think an 8-person team. We've got the team party, life's good. We're, we're doing all this. We're not quite profitable yet, but there's profitability on the horizon. Like everything's working. Wasn't working. Is elephant in the room the word I'm looking for?

Yes.

The, the skeleton in the closet.

Okay.

Gotcha.

Whatever. You know, I think it works. The, the demon behind the curtain, whatever the heck it was, was we still could not fundraise well. You know, I went out to try to raise a real Series A, get like $5 million in, and just because of the macro climate, we could not do it. Like no one really wanted to invest in shoes. My current investors at this point, I've now asked to buy me all this time. They're pretty much tapped out. They're like, we bought you the last year and a half to ride this thing out, but like, you've gotta get fresh blood to the table. And couldn't, couldn't do it. Most VC funds still had a pretty strict blackout on consumer products at this time. So, uh, weren't profitable yet, could not get a bank loan. So I was like, okay, what we need to do is just try to sell our way out of this and just get to break even as fast as possible. But I cannot do that without scaling inventory. And so I was able to start a partnership with a, a fintech company that basically specialized in alternative financing for CPG. We'd started the relationship late in 2022. 2020. The way it worked was they would buy our inventory upfront. I would pay them 1% of the invoice total per month, per month for up to 6 months, and then it would balloon at the end. This worked actually really well for us through 2020 and 2021 because we were growing so quickly and our lead time on product was 4 months. So I would get, you know, a shipment of shoes in, have 60 days to sell it. At this point, I'm growing 70% month over month. So like, we can't even keep stuff in stock.

The cash conversion is great.

So after the 60 days remaining, I flipped it all and I paid the balloon, no problem. So like, that was really how we were able to keep up with the 450% growth. Because something people don't understand about products is, again, they take time to make. It's the hardest thing. So let's say you're growing, for simpler math, 50% every month, right? If you're trying to buy your your holiday order that needs to arrive in October, you need to order it 4 months before that. So in July, you have your current cash flows. You're going to grow 50% in July, in August, in September, then in October when the product arrives. And then you want that product to last 3 months, so October, November, December. So by the time you extrapolate out your growth curve, the amount of product you need to be in that order is 4 times more than you have on hand today.

Sure.

Like when you're growing that quickly, it just extrapolates so fast. That's why product businesses are hard. The cash flow is a nightmare. It's almost like growing too quickly. You, you will bankrupt yourself because of the bulk you have to buy and the amount of time that's gonna pass before it arrives. And of course you've gotta lay out that money up front, so then you're just broke the entire— so anyway, it's a whole mess. So this had been our solution. It worked great, uh, until 2022. We've got heat from our investors to keep up with this pace. Luckily, we had a great partnership with this company, so they extended our line to $2 million. They're like, we see the growth, let's keep fueling it, let's go for it. So I'm like, all right, if we, if we've got to keep this growth rate up into next year, I'm doing the math, I gotta go buy $1.5 million worth of inventory at once in order to afford this trajectory.

To fill the—

'Cause I'm buying for a 3-month period 4 months from now.

Yeah. But that would do what in revenue for you? You put it on—

Oh God, it would've been like a $5 million return.

So that ROI was obvious for you.

Yeah. It's obvious, but you have to stay alive long enough to Sure, sure. Issue we had was, of course, the supply chain crisis of 2022 hit that shipment in full effect. It got put on a boat. Supply chain crisis was not on the news. About 4 days into it being on a boat, irreversibly on a boat, once it's on a boat, it's on a boat. Like, you can't do it. We can't get it back off. The news was coming out that Port of LA's backed up. It's only getting worse.

I remember this.

It's compounding. There's lines of ships, shortages. Our boat sat for 11 months. Wow.

Could you track the boat? Like, did you know where the boat was?

I knew where it was.

Like, I might have to go get this thing myself.

Oh, and that's illegal. It's piracy. We thought about it.

I was making calls.

I've got friends, you know, from high school that are in the military. I'm calling them half joking, like, can you get a boat? Like, what do I have to pay you to get some buddies in the Coast Guard to go commandeer these shoes? Like, what's the deal?

You've already paid this $1.5 million at this point.

Well, at this point, the lender is. Paid it.

Oh, I see.

So I had 6 months to make the money to pay them back. You can imagine my discomfort at the 6-month mark when they come going, you owe me $1.5 million.

Was it personally guaranteed or was it on the business?

No, no. Luckily it was not personally guaranteed.

Thank God.

That part wasn't. I had other personal guarantees at this point. But they said, you know, you, you owe us $1.5 million. And I said, I, I have nothing. All my money's tied up in this shipment. I, at this point, we'd been growing so quickly, we'd sold out of everything on hand. I had almost no shoes left, so I couldn't make more money. My ability to make more money was also stuck on this boat along with all this other money. So they come and go, you owe me $1.5 million. And I, I think I sent them a screenshot. This became my number one negotiating tactic through 2022 was I would just send people screenshots of my bank account. I think people thought I was bluffing. So like, oh, you owe us $1.5 million. I sent them a screenshot of a bank account that had negative $5,000 in it. And I was just like, we are going to have to meet in the middle because as much as I do owe you $1.5 million, that is a fact. I very much don't have it and no one is going to give it to me. So, and I can't make it until I get these shoes. And I remember talking to him going, you know, any idea when the boat's going to get released? No.

Oh man. Did they have like warrants or anything that would have allowed them to take some of the company?

No. Luckily, no. They were actually a very friendly lender. And we're still on good terms to this day. And luckily we were in the unique situation of, I've learned learned the, the one upside of macro problems, something like a global supply chain crisis, you're not the only one with this issue. Every company is having this issue. If you're the only company who can't make their inventory payment, you're going to get sued.

Yeah.

If no one can make their inventory payment, now it's the lender that has a problem, not the borrower. And so, you know, I felt really bad for their situation too. I had multiple other founder friends, you know, tight community in product. We all were working with them for lending. No one could make their payments. So, I mean, it, it, everyone was hurting all around. But, but the one saving grace was it's not like it was something wrong with the business where they could come to us and go, you are a bad business, we're gonna seize your assets. It was, okay, this is a fundamental economic failure. We can't go, you know, we as the lender don't wanna pay 85 lawyers to go screw screw every single one of our clients. We're not gonna have a business left after if we do that. So it was that mutual— every— when everyone's screwed, it's better.

You're less screwed somehow.

Yeah, you're less screwed if everyone is screwed.

So did that build some comfort for you at the time, or were you still like, I don't care, like, we're— I hate this, this sucks? Like, what was—

yeah, it was horrible. I mean, it was— again, 2022 was the worst year of my life. We, you know, at this point, things got really hard of— we had no way to make money. It started what I call our debt cycle of death of, you know, we're negotiating with them, feel like you've gotta pay us something. We know you can't pay us everything, but you have to pay us something. So I have to go to predatory lenders 'cause we're not profitable yet.

Sure.

And no one's really, no one's touching product. Now how do I go into a VC meeting and go, give me money, I have 1.5 million, all my shoes are stuck on a boat. Yeah. And I have no idea when they're gonna get released, by the way. Right. They're gonna go, well, when can you start making, show me your sales projections.

Yeah.

Yeah. Well, it's zero until I get shoes.

Right.

That's the worst part is zero.

When are you gonna get shoes?

Yeah.

I've got no idea.

Yeah. What do you do?

Should have had 'em 5 months ago. They're on a boat somewhere in the middle of the sea.

Like, I have— By the way, give me your money.

Give me your money. You should really give me your money though. Great investment. Like, I was so screwed from, from every angle. And so the only option was predatory lending. I mean, really the options were bankruptcy or predatory lending. And I really was just not gonna go bankrupt. I made 2 decisions. I was like, we are going to survive. And I'm going to keep everyone employed. Those were the two things I put my foot down on. And what ended up resulting to make that happen was we need more predatory debt to basically make some kind of payment on our other debt. I had debt paying debt everywhere. I was like, as long as everywhere you—

You were doing the PayPal.

It was a ridiculous puzzle that I was running every day. That alone was mentally exhausting. I was getting called by collections 20 times a day. I was getting threatening emails. My whole day would just be back-to-back calls with the lenders and their attorneys. Oh man.

And so were you like stacking these loans or?

Oh yeah. Yeah, yeah. Out the wazza. I mean, it was a mess. It was a disaster, but it was the only way we could get any kind of money. And on top of all of it, on the personal side, again, I'd really said, you know, at this point we had 8 people on the team. The one thing I knew I really had going for me was my team is amazing. And I've, I've still got, I think basically all those people employed now.

Now.

Um, so spoiler alert, they did all keep their jobs, but the biggest thing was I cut my own pay. Yeah. So I did not pay myself for somewhere between 6 and 8 months. Hmm. And so I was living off my savings and also putting my savings into the company to make payroll. So by the end of 2022, our debt had like doubled. I had no savings left. And I hadn't been paid in like 8 months.

What was your mood level like? Would you've had to give yourself at that time?

Like, I truly tell people it was a mental breakdown. Wow. Uh, by the end of that year, I had a mental breakdown. I was hallucinating. I wasn't sleeping.

Oh my gosh.

I went through a really great period where I basically didn't sleep for like 4 months.

Wow.

More or less.

Were people kind of around you being like, is everything okay?

Like, oh yeah, everyone knew I was a disaster. I mean, I'm very lucky. I have a really good support system around me, but one of the hardest things for me too was I didn't want my team to know. Because again, I knew something in me instinctually knew I'd been— I've been very lucky with hiring. I think I said before, I've got 12 people on my team. We should have more, like 16. It works because I've hired really, really good people. And because something I'm very proud of is I've never had anyone quit. So like I said, my engineer's been with me 9 years, my marketing gal's been with me 6 years. Part of why our team produces such good results is because everyone knows each other so well. Everyone genuinely gets along, they're friends, we understand how each other works. Like, my marketing team, it's amazing watching them work. They can say like an incoherent 3 words and everyone knows what they're talking about. Like, they're just— there's a certain kind of efficiency that comes when everyone is close-knit like that and they've worked together that long. I was very worried, especially in a small team, if we lose even one person, A, that's going to be felt across the whole team. Everyone's already stressed 'cause it's still COVID, it's still the macro climate. I'm like, if they start seeing their best work friend leave to take more money somewhere else, and now I'm asking them to pick up that workload for no more money because I don't have any more money, I'm gonna start seeing people drop like flies. Like, I just knew if I lose one, I'm gonna lose all of 'em. They'll all be gone in 4 months. They just will. I just knew that instinctually. And so it's like, everybody has to stay employed. It's just what has to happen. Happen. Um, and part of that was I couldn't scare them.

So you're having a mental breakdown, meanwhile your team has no idea.

Well, I remember saying that was funny, was I'm having this mental breakdown. I laugh with her about it now. My poor marketing gal called me, um, once, and I'm like barely holding it together, and she was like kind of upset with me. Not upset, that's dramatic, but she was just like, I want to understand why I wasn't given feedback. I was like, what do you mean? And she goes, well, you just turned all the ads And I don't understand what I did wrong. I've been making all the assets. I've been making all the creative. I'm really upset that rather than give me feedback and work with me to make better creatives, you just turned it off. Like, that's kind of a slap in the face to me. And I remember just thinking, oh my God, she has no idea we can't afford the ads. I was like, it has nothing to do with the creative. The creative's amazing, but I can't afford the bill. We were in debt like $100K to Meta at this point. I was like, I physically, They've closed our ad account. It wasn't by choice.

Wow.

You didn't tell her that? I'm not, I'm not, I eventually did. I think at the time I came up with something 'cause I didn't want to admit I owed $100K to Meta ads. I was like, we can't, that's, it's a can of worms that we can't open. Now I've told her and she has since, you know, laughed about it. But so it's like, okay, personally I'm broke. I'm in so much debt. A lot of it's personally guaranteed at this point. Everyone's mad at me. I spend my whole day on calls with lenders. You owe me a million. Million, and they're all posturing. You owe me a million or we're gonna come take all your inventory. You owe me a million or we're gonna take your patents. If you don't pay me a million dollars tomorrow, we're gonna, I don't know, take your firstborn child. Like, whatever. They're all— they get your phone number, they text you, they email you. Like, you can't escape. Then I've got my team over here going, Hailey, what's the budget for the photo shoot? Which, not their fault, they have no idea what's going on. I wanted it that way, but I'm sitting here going, how the fuck do I answer this question? Yeah, without revealing how bad everything is.

Who are you turning to in these moments? Do you have someone that you can confide in? Like, who are you emotionally leaning on?

My— I have very good friends. Um, I have a wonderful boyfriend who's been with me for 7 years now, so he's seen most of the good, bad, and the ugly, and he's been a very good support for me.

How does he support you in moments like that where you're just really going through it?

Well, first of all, he knows me better than anyone else, so he knows what to say. We joke he's kind of like my coach in a sense. He was he came up in athletics, he was a professional baseball player. And so whenever I'm having, like, a breakdown, he'll sit me down and be like, "Take a deep breath. Who are you? Haley fucking Pavone. Ah!" He'll, like, get me fired up to run through a brick wall. So he'll just, like, coach it out of me. He's like, "You're gonna be fine." But he's very good at kind of giving me that reality check of, "Hey, you've seen worse. You're gonna be okay." I will say that works now. At that time, I had not seen worse. Now we reference 2022 when something bad happens, and it's like, like, this is— this pales in comparison. I will say the bright side of coming through something like that is now so many things go wrong and I just am unfazed. I'm like, after going through that, it's— I don't want to see— now something's gonna happen that's worse. Oh my God, did I jinx it? No, but after you go through that, you're like, okay, my new, uh, my new bar for what's really a problem has been like escalated so high because that was a horrible time.

Wow.

But no, I mean, I would just spend all day having horrible calls, being threatened, postured to.

So what happens to the boat?

The boat eventually arrived.

Okay.

Thank God. It eventually arrived.

You're there on the arrival day at the port.

You're just like, oh my God. But of course, you know, fashion industry is also tricky because timing is everything. So this was supposed to arrive in spring. It arrived in December. So I took thousands of lavender sandals. In the dead of winter.

Right.

I'm like, excellent. It's fantastic. It's exactly what I need. I was like, at least I have some shoes. They're all the wrong shoes.

I think lavender's cool year round.

Eh, well, you are not in women's fashion, my friend. That's true. It is a tough sell in the dead of December.

That's true.

I have to say. So no, you know, it was a hell of a year. I'm trying to be a strong leader for my team. I don't know how to answer their questions. I'm trying to project strength to these lenders and investors, but I've got nothing to give. I'm getting harassed all day, every day, legitimately. Like that, that weighed on me too, was I was like, they have every right to be mad. I have defaulted on like 6 different loans. That's a fact. But the other fact is I can't pay you. I mean, I really got out of that basically by just radical honesty of going to them and going, again, here's the screenshot of the negative $30K. No one's denying I owe you $80 grand or whatever the hell I owe I'll show you, but the fact is I cannot pay it. So our options are thus: one, you can go try to seize my shoes that you have a lien on. Would you like to get into the shoe selling business? I remember one time they were posturing and they, uh, one of the lenders said, we're, we're gonna go collect your shoes 'cause we have a lien. And I said, okay. And I gave them the warehouse address.

Wow.

I said, go get 'em. And there was like a week with no response. Then they were like, okay, we don't really wanna go get your shoes.

I'm like, I don't think, I don't think you wanna start selling shoes.

You're a bank. I don't think you know what to do with selling. I'm better at selling shoes than you are. Wow. Oh, um, so, you know, we're playing those kinds of games. I'm then not sleeping at night because all I can do is think about how utterly screwed I am. Uh, I can't even afford a vacation because I'm broke. Like, it was, it was bad.

Wow.

So yeah, by the end of that year, again, I remember I literally hallucinated. I had like a vision at like 2 in the morning of my dead grandpa telling me it was going to be okay. And that's when I was like, oh, this is bad. I was like, thanks, Grandpa. I'm going to go get some meds because this is not good. We need We need to turn something around. But yeah, that was the worst year of my life.

And then from that point, do you try to go sell more product? Are you trying to raise money? Like, where is your mindset and like, how do I save this business?

So at this point, I had a boatload of shoes, the wrong shoes, but a boatload of shoes.

Literally a boatload.

I had literally a boatload of shoes and all my money was tied up in these shoes. And what I really developed, I'd say, as a skill during that time is something I'd like to call creative resiliency of, I think there is an upside to every situation, but you have to really focus on what you can control. I've gotten very good at looking at a messed up situation and going, okay, what are the strings I can pull here? Because I can't change that it's a pandemic. I can't change that the boat's stuck. What, what can I do? And really, I'd say the biggest breakthrough at the end of '22 was I realized I needed to save myself. Of, of behind the scenes throughout all of 2022, I was trying to raise money. It was a totally failing effort. I mean, I went out to try to raise a $10 million Series A, 'cause keep in mind that year had started great. I'd come off a 450% growth year. Yeah. In '21.

You say the demand was there.

The demand was there. So January and February before it became clear how bad this supply issue was. I had put together an ask for $10 million. I'd gone out, started to meet with people. And then once that boat got held up, it all started falling apart because obviously wanting to raise that money was very contingent on meeting projections that were now impossible to hit because I had no shoes.

Were you confident though, that you would be able to sell those shoes?

If I'd had them, yes. And I would still die on that hill. We were growing like hotcakes, but this was a wrench I could not get around. There was just nothing I could do. But I'd been trying to raise raise money. And once everything started going south, I still kept trying to raise money 'cause I saw no other way out. You know, I'm draining my personal savings. I was like, eventually I'm gonna run outta money. I hadn't saved that much. I'd been a founder since I was 20. I think really I had like $30 grand in savings. Like it maybe made it through 2 months of partial payrolls for people. Plus I'd stopped feeding it with, I was now not making money. So anyway, I was frantically trying to raise money and I'd become really obsessed with this idea of a white knight investor. Investor. Someone's gonna come in, they're gonna also believe I can sell these shoes and they are going to put money in the company. And so for the whole year when I wasn't on these horrific bank calls or basically lying to my team, I was in these VC meetings just getting shit on, right? Like, you've missed your last 5 months of projections. Well, yes, Steve, I have no shoes. What am I supposed to do? And they'd basically go, well, it sounds like you need money. And I'd go, Yeah. And they go, well, we're not going to give it to you. And I'd be like, great, this is awesome. So that was like my whole year. That was the other thing that was going on was over. I stopped counting after about 227, but I did about 250 pitches that year.

Oh my, all to VCs.

And they all got rejected. VCs, angels, family offices.

Man.

Every single one said no. So I'm taking rejection after rejection.

So you almost know like within the first 5 minutes of the meeting, you're like, yeah, there's no way this person's going to—

No, I had fakeouts like 2 or 3 times where there were people people that it seemed like it was gonna make out. And then that would just shatter me into despair. That was really hard. I was like, oh, if you guys knew what I was dealing with behind the scenes, it would've been nice if you had not strung me along like this. 'Cause this was my last hope. But the end of that year, I, you know, finally got, I forced myself to take some time off 'cause I was hallucinating and not doing well. Came out the other side, nothing. I just vegetated. Oh yeah.

I'm curious, like what is doing nothing? Okay, got it.

I literally just did nothing. I was like, I need to, I need to relax and like disassociate. I gave as much work to my COO as I could, and I was like, if I don't get a grip on my head, this is gonna be bad.

Yeah.

So got a bit of a grip, came back in, and I said, okay, I have to stop waiting for a VC to come save me. I've been pounding the pavement on this for 10 months now. It's not happening. I need to switch gears and focus on what can I do today to fix this problem? The shoes had arrived. I was like, all right, I've got shoes I can sell. But keep in mind, at this point we'd done no real marketing for like 8 months 'cause we couldn't afford it. So we'd lost all that momentum. Like the $450K growth was out the, like it was gone. You gotta keep feeding that. And we had not, it had been too long. So I was like, I need to get attention on this again. What am I gonna do? And the initial thought was I need to get people talking about the product again. We should seed some influencers to make content on this new app, TikTok, that everyone's talking about. I think it'll do really well. I've heard of it. People love when we show off the shoes. And so my thought was, you know, we barely have any money at all. If I'm going to pay influencers, I need to know that the content's going to work. So I'm going to test content myself so that when we hire an influencer, I can tell them exactly what they need to make.

So that was the mindset.

That was the thought, was to basically test the playbook to then go pay someone with a following to do it. Because I was like, we're gonna have one shot. Like, it's gonna cost me— you guys don't even want to know what these influencers charge. But I was like, it's gonna cost me everything we don't have in the bank to get this partnership out.

But it's like, guaranteed, for no guarantee, it's my Hail Mary.

Like, it's what we've got to do at this point. And by one of my luckiest breaks in my career is the test content worked. Wow. So I posted on TikTok for about a week as this test, had a video go viral, and I woke up to 250,000 followers overnight.

Wow.

I was like, holy shit, maybe I don't have to pay anyone at all. And so I just started making TikToks every single day. Talk to Matt Carley.

You just come up with an idea? Like what was the creative genesis of that?

Literally just anything I could think about. I— my big thing always has been trying to make it more of a conversation with the followers. And so, you know, our product is something people have a lot of questions about. And so every day I would sit there and read all the comments on the videos I'd posted the day before, pull out as many that were questions I could speak to, make response videos. I mean, I was just constantly explaining the product and showing it off and answering what people wanted to know.

And it feels natural for you to do, or was it very uncomfortable?

It did feel natural. I will say I have a leg up of— again, I went to performing arts school, so I'm comfortable talking I think I'm relatively charismatic. Like, I was like, I can do this. Like, I know how to do this. And so, yeah, over the course of that year, I went— I'm trying to think. I mean, I really had started that year with like 200 followers, and by the end of the year, I think I had about 650,000.

Wow.

In that year alone. Now I have 950,000. But it saved the business. I was like, it's the one thing I can control. I have a phone. I can stay— I can stand here for an hour every day every day and I can make videos. I can't make anyone cut me a check. I can't even make anyone buy shoes, but I can stand here and make videos. And if people watch them, then I am one step closer to getting them to buy a shoe. And so we got back on track, we got profitable, we posted a 9% EBITDA profit that year. Wow. Because now we also had no marketing expense. It was all free. Yeah, right. So I basically flipped our entire P&L over and suddenly we went from from mental breakdown on the verge of personal and professional bankruptcy to this is a business posting 9% EBITDA margins. And I just make TikToks every day.

And you didn't have to fire anyone?

No.

You didn't have to cut anything?

I kept everybody. Oh, we cut a lot of stuff, but I, I kept the whole team employed. Yeah. That was the one thing I always put my foot down on, um, was I will not let anyone go, which is another challenge in '22. Uh, some members of my board really wanted me to fire everyone. I was under a a lot of heat to fire everyone. And I just knew, part of it was my own sanity too. I was like, it's hard enough doing this with, you know, 7 other people with me. If I cut the whole team and it's just me, I'm gonna lose it. I was like, I can't, I can't do it.

And when it starts to work this well, are you kind of like, I'm just waiting for the next shoe to drop? Like, this can't be this good. Like, why, this isn't like, what's the next thing? Or were you kind of like, no, like, I'm gonna enjoy this and like lean into this?

'23 was a great year. Okay. I was like, I, 'cause, Again, being a control freak, I was like, this is something I can control. I was like, I can get up and I can do this and it's working and we can build a business. And also you gotta keep in mind my state of mind coming outta '22. '22 had been so bad. I was like, just the fact that we're selling shoes is a thrill. I was like, what a kick. To have product in stock is a blessing. So '23 was a good year. We grew, got that profit on the books. '24, we built on it further. '24 was one of my favorite years of all time. That was a good year.

Why is that?

Grew 85% and posted a 19% EBITDA. So really proved that this new model was working. Mm-hmm.

Wow. This new model being the content-forward approach.

Yeah.

Yeah.

Content and community-driven brand advertising. I'd like to, it's hard for me to say this, but other, I, I wouldn't say this, but other people have said this to me. I think I was one of the first founders to really start building a company out loud in that sense, in public. Like it, when I started doing it, it was considered pretty radical to be making videos about the behind the scenes of building a company. And I've always been very transparent about it. I mean, from the early days I'd get on and make videos about, oh, XYZ shipment is late and oh, XYZ prototype didn't work and blah, blah, blah. Um, and so to be putting that out there was not something a lot of founders were doing. You know, you'd see the, the hype highlight reel on LinkedIn of, I'm so humbled and honored to announce that we raised, you know, $40 million. And I'm getting up here on TikTok like, 3 investors just told me that, that they hate me and they think I'm ugly or like, whatever. And so, you know, I was really putting it out there in a way people hadn't seen before. It's more common now. But yeah, it was, it was kind of a whole new marketing. It was considered a new marketing playbook at the time to do founder-led marketing on social media.

Specifically TikTok.

Specifically TikTok. Really anything like founder-led marketing as a whole strategy has only come up, I'd say aggressively in the last 3 years. And I, I have been told I'm credited with being one of the first people on TikTok to really do it.

Wow.

What do you think for, for people that have not started making content that maybe want to, maybe they feel called to, but they haven't acted on it because they're fearful of what people might think, they're scared they might look dumb or it's not gonna work. Like, what do you think that they should hear?

Well, 19% EBITDA for, for one, uh, having no marketing expenses. Fantastic. Um, I'd also say the pros really just greatly outweigh the cons. It's been so fascinating to see, 'cause again, it, it really came from a place of, it was an accident. Like I was trying to figure out how to do this with other influencers was not my goal. Now that we have built this content formula the upsides are myriad. Like we, for one, have a live feedback loop on products now, which is crazy. Like I've now got a captive audience of, I think it's almost a million. I think I'm at 990 right now, which is kind of crazy, but 990,000 people. The Passion Instagram account has then also gotten up to about 850. Whenever we're thinking about a new product we should release, we just ask and they tell us. And you feel like we've got 5,000 comments that are like, no, we would like shade of red A versus shade of red B. Like it has mitigated our product risk. We get real-time feedback. Anytime we drop something, we can see immediately, we can see what questions people are asking, we can see their concerns. Like the product feedback loop is incredible. It really builds a sense of community that's unlike anything I've ever seen. Great example is, um, this is so cute. A group of 6 women that are all Passion customers just threw themselves a retreat in Nashville a couple weeks ago. They all flew out and had a Passion retreat. None of them knew each other before, but they've all met in the comment section of our content. Oh my gosh. And like started DMing and like, you know, heel kit customization ideas and like built these relationships. And so they flew out and had a retreat.

Why do you think more founders don't do this style of content?

I think there's a few reasons. One, some people just, it's not who they are. They're shy, they're camera shy. I, and I will say for, for that argument. Not everyone can do it. Um, I always feel bad. I, I talk to some founders, they're like, I really wanna get into it. Some people cannot present on camera in the way that you need to do it. That's true. Yeah. Uh, you've gotta be able to tell a story in an engaging format. I will say you can practice that. I think it's a skill you can learn, but it comes really naturally to some founders more than others. Like, I was really lucky. I've got that background. Um, it's a little easier for me to get on TikTok and talk about shoes than it would be for like a code engineer to get on and talk about an AI integra— you know what I mean? Like, like, I think the product—

I think it's complimentary to the product—

the product can make a difference and the founder can make a difference. And so there's, there's some limitations in that sense.

Mm-hmm.

But I would say for people that are just like scared to do it or put it all out there, I think a lot of founders, and I've been there myself, I touched on this a little earlier, you feel this pressure to maintain maintain this illusion that everything is great all the time. Like, you never want to admit you got rejected. You never want to admit that your boat got stuck for 11 months. You never want to admit that you almost filed bankruptcy. You never want to admit that your bank account hit negative $500K. That happened to me one time. That was a horrible sight. Would not wish that on anybody. But a lot of people don't want to admit those things because they, they don't want to. And there's a lot of reasons. One is you're scared it's gonna scare off investors. One is an ego thing. You know, there's plenty of reasons why people would not want to share that. What I have found in doing so is it again has really bred community with my following and above all else, trust. They trust me. I think when someone just screams good news into the void, we all kind of subconsciously know a lot's getting filtered out, especially in social media today. Like social media just is life with a filter.

Totally.

But they know I have no problem getting on there and going, my bank account hit negative 30 grand today and 6 people rejected me all in an hour and I cried for an hour about. Oh, I've made videos like with mascara running down my face, like the whole nine, which is, which is weird. And like a lot of people would not want to do that, but now the community trusts me. I think the best example I can give of this is we were, um, in September we were painfully close to our first million dollar month. We had like $980,000 or something. We needed another $20K and we only had one day to do it. Actually, no, it was worse than that. We were at $930,000. We had $60,000 that we needed to do to break the million, and we had like a day and a half to get it done. I went on TikTok, I posted the live screenshot of where we were at sales-wise, and I was just like, guys, I have gone on constantly over the last 2 years and said my white whale is the first million dollar month. They know that. I've talked to them about it. I've talked about how we keep getting close and we keep missing it. Something most people would not admit, right? I've always talked about it. So I got on, there was I was like, guys, we have less than 48 hours to bridge this $60K gap. Like, I'll give you guys 20% off. Like, what can we do? We, we beat it by like $20K. We got like a million, $20K. They posted $80,000 worth of sales.

How cool is that?

Oh my God.

That's the kind of like community control that you have because they trust me, right? And they've been on the journey with me. They feel like they're building the brand with me. And what was so cool was how many people commented. I obviously posted the update that we'd done it, so many people commented and were like, I am just so proud of this company and to be on this journey with you. Wow. Because we've brought them in in a way you can't do if you're not being real and you're not being raw and you're not posting the real downs.

So for the founder that's sitting here right now listening to this and wants to know, like, you know, I wanna start, they want, that wants to get started in content, what would you tell them?

There's some, like, from a technical, like a practicality standpoint, what would be a piece of advice you do you have for them? I mean, the first thing I'd say is you just have to do it. There's no downside.

Just do it.

Worst case, you make a couple embarrassing videos. Who hasn't? We all had what, iMovie Pro or something when we were— there's an embarrassing video of everybody out there. So like, God forbid, you know, but you've just got to get out there. I'd say the two biggest things are be consistent. I know a lot of founders that are like, I'm gonna make TikTok videos, and then they make one, and then like 3 months later they try to make the next one. You've got— you do have to be consistent about it. And then really what I would say is don't overthink it is the biggest piece. 'Cause I now like get asked pretty often from founders to talk about TikTok and how to do it, and everyone overthinks it. Oh, should I batch content? Oh, does it— should I reveal X, Y, and Z? Oh, do I sound too stuffy if I do this? Oh, blah, blah, blah, blah, blah. What I like to tell people, or, or how I think about it is, you know, when, when you guys are scrolling TikTok, are you at a party with all your friends?

We don't really scroll.

I don't use TikTok. Okay.

If you're on social media, if you're on your phone, usually like in bed or like on a couch, like before bed maybe.

So you're alone?

Yeah.

What role is the content filling for you?

Escape.

Escape and interaction.

Okay. Yeah.

They wanna feel like they're talking to a friend. No one's sitting there in the dark in their room wanting to get lectured at. We're here, this like perfect poised ad. That's why we all scroll past ads when we're scrolling on our phones. I don't know about you guys, but if you see hashtag sponsored, or I know for me, the big kicker was, uh, if I see a piece of video content on Instagram or TikTok, that's clearly shot in like 1080p, I go, that's an ad. Right.

You just assume you scroll right past it.

It's an ad. I scroll. I'm not trying to get advertised to. Right. People don't. I wanna talk to people.

We're trained to skip ads.

Exactly. And so just don't, just get on there and have a conversation. Be a person. That's it. And I've tested it. I mean, we, we spent like $10K on a full production video asset for this wedding campaign we were doing. Put it out, flopped. I made a video with my hair in a top knot, no makeup on, and a sweatshirt sitting on the floor, just showing each shoe one at a time with my cats crawling around in the background. And that one got like 2 million views because it's, you're talking to a person, you're with me, the founder on the floor. There's my cat hanging out 'cause it's just a Tuesday and I'm telling you about this sick shoe. I made. That's so much cooler to watch than this scripted, stuffy HD promo. So just stop overthinking it. Just film whatever the hell you're doing.

When you say that, what comes to mind is it depends on the brand and I could be wrong. So feel free to challenge this assumption, but like, if it were to be like a, say, ultra luxurious brand, like we'll say like Aman Hotels or like, uh, you know, Dior, like, can you still do that same thing and have it be effective for the brand? Or you think that that actually hurts the brand? And like cheapens it if it makes it more human?

No, I think you absolutely can. It comes down to then separation of brand strategies. Um, and I'll use us as an example. Our shoes are not cheap. Our shoes are $180 to $300 and it has increased sales. I mean, I, I accredit TikTok entirely. We know from site traffic, uh, I'd say about 70% of our sales come from content at this point, uh, which would be to the tune of north of $10 million. So clearly it's working. Yeah, it's not— stop me being in a top bun on my floor is not stopping people from buying a $200 pair of shoes. And I think the reason is we treat the brands very differently. Hailey Pavone, the founder, is one brand. You'll notice on TikTok it's my handle posting these videos, not Passion, because again, that insight of people don't want ads, they want people. They want to talk to me, the founder, not the brand. They still like the brand, but like they want my journey. They're invested in the journey. And then we have the Instagram as like the brand space. So the way we think about it is TikTok is just me being a founder behind the scenes. It's me, the, the secret life, the, the, the secret life behind the curtain of the Passion founder. And then on Instagram you have the Passion account, which is beautiful and curated, and a fashion account. You're like, oh wow, this actually is a $250 shoe. Look how beautiful it is. But it's very separate. Separated, and that gives me the freedom to be raw and funny and goofy and like mess around without degrading the Passion brand at all. We just keep it separate.

Yeah. Haley, um, I was mentioning this earlier, but I think the thing that I admire so much about you is that you've been through so much as a founder and then you still just push your way through and just knock over any wall that comes up. Um, and I'm curious, after going And through all of this, how are you able to separate like your personal identity from the company's performance? Like, let's say another like 2022 year happens again. Like, now that you've sort of built that armor, what is the like perspective that you have?

Well, and I definitely got tested on that this year. We didn't really get into this year, but the trade war this year has been a hoot. The punches just never stop coming. But no, I mean, I'd really say it was something I had to learn and I learned it the hard way in 2022. I definitely did not do that in the early years.

Which is separating your identity.

I was not separated at all. It was very much myself versus, uh, was, was the company. And if the company failed, I was going to fail.

Yeah.

Honestly, I think a lot of it has come with time and experience and perspective. I think something I've learned through this journey is is that it does get easier as you go on, not because the work gets easier. You'd actually argue the work gets harder, but kind of what I was saying before with 2022 being the new baseline, the more you survive, the more unshakable you become, right? Of like in 2022 when I got my first collections call, I had a panic attack for like 2 hours. Now I've had so many collections calls, they call me, I just laugh and I hang up the phone. Like I don't care anymore. You know what I mean? 'Cause I've been through it so many times. Like things are terrifying. The first time.

Right.

And then once you've been through it a lot, you're fine. You know, I, I go back to again, um, our first shipment ever, like back in 2019, I think was 2 weeks delayed. I had a full mental breakdown. I was just like, oh my God, we've told everyone. I, I think I actually said the Kickstarter was a good example too, was supposed to deliver in December and it didn't come till February. I was like, how are we gonna tell all these people that their product is 2 months late? Oh my God. Then I had a boat get stuck for 11 months. So literally yesterday they were like, the holiday shipment's 3 days behind. I'm like, I'm like, yeah, okay, yeah, why are you calling me about this? This is a non-issue, you know? So as you grow and you survive more, your perspective really helps you recognize what's actually a threat. But when, when, when you're just starting a business, every problem's new, so you don't have that baseline of what is a real issue and what isn't. Now I've gotten a much better grasp on what the real issues are. And similarly, in going through all that, I think it's helped me build my identity more so of— I take a lot of credit for a lot of the things that I've done. Of when I was a newer entrepreneur, especially starting as young as I was, I very much saw the only thing I've done in my life is start this company. Like, that's it. Like, I am the company. That's it, right? Now, 9 years later, it's like, yes, I've started this incredible company, but I'm able to take a step back and think of the things I did. Me. I navigated this horrible climate. I worked my way out of that debt. I built a TikTok following on my own. That's the Hailey Pavone account. That's not the Passion account. Like, people wanna hear what I have to say. I, uh, through that account generated millions of dollars in sales by myself. I testified to Congress. Like, you know, like I've now built more of a resume and a credibility stack for myself that just comes with time where yes, the, the company, I still see it very much as my baby, but it's not me. I've achieved enough and built enough identity on my own over time to now recognize that there is a separation there.

And do you think you'll do this for the rest the rest of your life?

For a long time. We'll have to see. I, I always hate the question in meetings of like, oh, what's the exit? I'm like, I don't know. I'm, uh, you know, but we'll have to see. Someone swoops in and wants to offer me a billion dollars, I'm not gonna say no.

You know, you're out there.

Someone has a billion dollars, wants to get in the shoe business, uh, you know who to call. But I will, I will build this company as long as I am the best person to do so because I love it. I do acknowledge though there may come a where, for instance, if it ever makes sense to go public, I don't want to be a public CEO. So I would, I would leave at that point, but I'll just keep making the, the best decision I can to make the company better every day.

So you got the company profitable?

Yes.

We're debt-free today?

No.

Oh, well, sorry. We're on the way out.

Product companies always have debt.

Got it. Sorry, sorry.

We're in a healthy debt place now.

A healthy debt environment is the way we'll describe it.

But you're not drowning.

You're not. Yeah. The predatory lenders ideally have hopefully gone away.

Yeah.

To some extent.

We've, we've worked through, we've work through things.

Let's put it that way. And so what do we struggle with today? What, what, what is not working today or what's difficult today that you, you work, you're working through?

Still managing the, the growth. We're back on a growth track again. Did 85% last year, which was great. Tracking up again this year. I, you know, I'm really learning, kind of like I said, the, the pre-launch is so different from the launch. Running a business at $2 million a year is very different from running a business at $10 million a year. So I really feel like I'm I'm having to start over again on, on learning how to be an operator. So that's, that's a big challenge. Um, and especially managing that growth, 'cause having lived through that experience, I don't wanna live through it again. And so again, yeah, any, any product business that's growing, there's always gonna be a debt component. There's always gonna be a cash flow component, and the stakes get higher the bigger you get. You know, they're not, they're not $200,000 inventory orders anymore. They're $2 million inventory orders. And so it—

Point of 2022, it feels like You're kind of much more braced for these things now.

Yes.

You can sort of like—

I understand how it works. I learned a lot through that experience, so I'm much smarter with the way that it's handled now. But yeah, all that's a challenge. And then also just the challenge of trying to figure out what's next. We gotta branch into retail. That's okay. That's on the top of my list. That's okay. So we're trying to figure that one out. How do you sell a shoe that's, it's a very different shoe to sell. No one's used to shoes that come with instructions. So we have to figure out basically an entirely new sales process for in-store footwear. I'm confident we can do it. I get excited by those kinds of problems.

That's kind of cool. Like a fun challenge.

Biz dev ones are fun. Figuring out how to manage cash flow in a growing business, not fun. Figuring out how to open a really cool store is like fun. Oh yeah.

Oh yeah. Build a shoe. Let's go.

Like build a shoe. There we go. You know, there's, there's always something. The trade climate is a challenge. That's a big one. These These days, you never really know what your import rate is.

But your mood, I can already sense just your tone and like your mood is so much more calm talking about this version or this chapter of the business. Whereas before when we were talking about this, it just felt like you could feel the, like the, the stress that you were going through at that time. But just your tone and your voice and how you talk about now just feels much more cool, calm, and collected.

I'm a lot more resilient and I think it's, it's two things of one, again, the perspective of, you know, yeah, the tariff rate goes up and it's dumb and it's horrible. But I think back to, you know, at least you don't have negative $500K in the bank. Like, like your, your floor is now so low that I'm like, okay, we're, we're much higher from where it could be than 2 years ago when my frame of reference was much shallower, if that makes sense. Um, so that's, that's part of it. Part of it is just, uh, you've been on the, the train so long, you're used to the tracks now. So, you know, I'm just more used to handling stress, I would say. And then also I think it's, there is a resiliency in the business now of, you know, back in 2022, I'm going to investors saying, I'm $2 million in debt, I have no shoes to sell, I have no way to make money, and I'm not profitable, nor have I ever been. Invest in me. You know, like, that's not a great position. Now it's, yeah, look, we've got XYZ issue, but we're doing $10 mil a year, we had a million-dollar month, we're growing at 85%, we're closing 19% EBITDA. So I've got more leverage now. I'd say the longer you can stay in business and the bigger you can get, the more leverage you've got.

How are you defining success What is success to Haley now?

Well, for me personally, happiness and balance.

What does that look like? Like you wake up every day, you're just stoked about what you get to do. What, what is happiness?

I love what I do. There's aspects of what I do that I don't love, but overall I do think I have the best job in the world and I see the path to getting to a point in my career where my job is just the stuff I like. Like we're getting close to me being able to hire the people I need to hire to not ever again touch the stuff I don't enjoy. So that gets me really excited. But no, personally, I mean, just, just feeling balanced in my life. Again, when I think about the burnout in 2022, I, my, my company was me. I was a workaholic. I still work hard, but I'm much better now at— I've got a very healthy relationship. I've got great friends. I've got two cats. I try to have hobbies, you know, So, for me, it's just having a balanced life and also security and safety. Know I'm gonna wake up every day and still have a job. There's still days where that's questionable, but by and large, it's more common to feel that way now than it did a few years ago, so that's refreshing. On the company side, growth, profit. Profit's big, not for the reasons you'd think, not about getting rich. It's about control and the peace of mind that comes with that. That. Um, having been not profitable for as long as we were, nothing sucks more than that desperation, really, uh, of, you know, whatever the next offer is, I have to take it. I have no other choice. It's die or take this deal, right? Like, that is a horrible place to be. Profit gives you freedom and it gives you control to go, this opportunity isn't the right opportunity and I'm going to say no and wait for something better because I I can, and that's very freeing. Um, so I love that. And then the other thing I think at the company is, is just having a really good team and having really happy customers. 5-star reviews and nobody quits. That's, that's a win.

There we go.

Yeah. If you weren't building— what more can you ask for?

If you weren't building Passion, what do you think you'd be doing?

It's such a weird question cuz this really, again, I started it when I was 20. Like, I can't imagine doing something else. Yeah. I know if I ever part from Passion, like if we sell or IPO or something to that effect, I'd love my next chapter to to be the other side of the table. I'd love to invest in other female entrepreneurs specifically, because I think it's based on some of my own experiences and just talking to other peers. There's a lot of weird stuff that still goes on in funding female founders. I do think part of the struggles I've had have come down to my, my age and my gender, which is a real bummer. So I'd love nothing more if I, then, you know, if I make money someday, I would love to just cut checks to the next 20-year-old female CEO who's going to go kick ass and take names. I'd love to be the person in her corner that I never had. Um, so I would love to do that someday. I know, I mean, if I wasn't doing Passion, I guess I'd be running a music production agency, probably, I guess. I don't know. Who knows? Thank God it's shoes. It's way more fun.

Sounds like it's working.

It's working out.

Okay. All right, Haley, our last question for you is, if people forget everything that was shared on this, but they remember one thing, what would you hope that one thing was.

It's never over until you quit. We are only not bankrupt right now, or I've never been bankrupt ever, because I just refused to file the paperwork. Wow. There were many months where we had no money, negative money even, and my own board was saying, you need to file bankruptcy so we can try to protect something here. And I just could not. I just kept thinking, wouldn't it be a be a bummer if I filed bankruptcy today and then I meet the dream investor tomorrow. Mm-hmm. Or I get, the boat gets off the water tomorrow. Yeah. Or I go viral on TikTok tomorrow. Like delusional hope, absolutely delusional hope. But as long as you can just keep making it one more day, your odds that that day is the lucky day.

Are you familiar with the concept of the J curve?

No. What's that?

So the J curve is like, you know, these, you start by basically investing all this money and the curve is like you go into the negative and then eventually, you know, you turn turn it around. What you're describing is like you were at the, you were at the absolute bottom of the J-curve and then you were like, yeah, what, at this point, what are you going to take from me?

What do I have to lose?

What do you have to lose? Like, you literally have to take these shoes off the boat and sell them. You're not going to do that.

Yeah.

And, uh, it's just, it's amazing how you were able to turn that around and get out from under that.

Thank you. That's really where it got to.

It's a really incredible story.

But no, that's what it came down to. I had every reason and every person telling me go file bankruptcy and I just for some reason could not shake the feeling of like, but what if tomorrow's is the day. And I think that by definition is entrepreneurs, right? We're all insane. We're just convinced it's gonna work out despite overwhelming evidence to the contrary. But I mean, there was a time we had all the paperwork filled out to go bankrupt and I just never submitted it.

Oh my gosh.

And so I've never been bankrupt. Should have been. Yeah. But when, when you're down bad, you've just, you've just gotta get to the next day. Wow. And then you do it like a million times.

This is great, Hailey. Thank you.

Thank you so much. This was awesome.

Thanks for having me.