Interview: Emily Sugihara, CEO of Baggu

While running the Voyager Shop had the pleasure of developing a relationship with Baggu, the NYC/SF based accessories company and Emily Sugihara its CEO. Emily is a brilliant focused product and business ninja. Recently had the pleasure of sitting down with her over some jet fueled cold brew to explore deeper into her company, practices and wisdom. Lots of treasurers and lessons shared from her experience over 10 years building Baggu.

Q: A lot of the interviews you have done before and which are published online focus on the origin story of Baggu. The origin story is really beautiful, and it’s focused on how you started in your living room in San Diego making bags with your friend Ellen and your Mom, well before you scaled production to China. The previous interviews capture a lot of Baggu’s design-focused ethos and ecologically friendly drive.

The bags are great and the company is almost 10 years old. Congrats on the success! For today’s discussion, I’m interested in focusing on questions that capture and define exactly why you think Baggu was able to have so much success.

Emily: Yup we are 10 years in January! It seems really crazy. I’m the only person I know that is still doing the same job as 10 years ago. Crazy. I started so young at 24. My little brother, who is 10 years younger than me, is now working on a company focused on pants called IJJI. In Japan, drawstring pants are called “easy pants” and IJJI is a wordplay on the term “easy”.  So… cute and fun. He is working on a nice canvas drawstring pant. He’s actually picking up his first pair of production pants today!

Q:  You guys at Baggu also started with a very focused product and your brother is doing the same kind of venture.

Emily: I think if you want to bootstrap a company, that is the only way to do it; Focus on one thing and do it right.

Q:  My friend Dennis Hoekstra, was thrilled to hear that I was going to interview you about Baggu.  He loves Baggu and thinks the product is a singular, iconic success on the lines of Square or Tile or even the iPhone. The Baggu bag is a niche product that centers the company but allows for horizontal and vertical movement from that core. It’s very interesting. My question then is how do you think people can get to that core product? How does one replicate that focus on a problem?  Do you think the product should come from an authentic self?  Just like your brother has found these pants as a source of interest to work on, and you had the original Baggu as a core product? How do you think others should get to that core problem to work on?  How did you find the bag? Was it a spark of inspiration?

Emily: That’s a great question. Ok so before Baggu I was working as a fashion designer for J Crew. I was always interested in design and aesthetics as a general exercise. I was really interested at the time in making my house feel deliberate. I also loved solving problems. Bags were the perfect marriage of an aesthetic object and functional object.  I’m not sure it was so deliberate and conscious the time but I was attracted to this unison between design and function. It’s really the perfect product, there are no sizes to worry about, it’s easy to love, they are visible and useful. I think people making the best stuff are people who are excited and passionate about their product. That passion and energy fit together with what they are making.  For me it was bags. Maybe for my brother it’s pants. He’s still exploring, but I think it’s very important to have that deep authentic connection to what one is making.

Q: While it’s clear that the your practice is very product-focused, I get a sense that when I look at Baggu from the outside and talk to you that your practice is the general skill at the entrepreneurial execution.

Emily: I think the core of the work is that mix. People need to find a mix of those elements between design and business.  There are lots of companies out there that are so product focused that they lose sense of the realities and requirements of the business.  For instance a company might make a perfect product but they miss the mark on customer relationships or how to sell their product. There are lots of elements to consider. At Baggu we are always walking that tight rope between finding the perfect balance between design and commerce. We take both parts of the business really really seriously. Without each other the business wouldn’t exist.

Q: So talking about the standard Baggu - do you think you’ve had the same success with other products you have entered into? I’m curious about the split between the Baggu line and everything else (leather goods, etc).

Emily: We’re doing about 3 fabrications right now at Baggu: leather, canvas and nylon. In terms of dollar values, were split between each category. In terms of units, the standard Baggu hands down the winner.

Q: Do you think it’s similar at all to the problem that investors in Apple are always worried about, that so much of their income derives from their core iPhone product? That they aren’t diversified enough? Do you ever feel a similar stress with Baggu and so much of the business coming from the core product?

Emily: No - since we started out with 100% of our business coming from just one style, and now we are more balanced with a much bigger assortment.  I’m still 100% excited about the standard Baggu,  almost everyone I know uses one of these almost everyday.  It has just enough fashion in the product to be interesting. The design is two-parts aesthetic and 1-part ease of manufacturing, so that we could make them as affordable as possible. Our initial challenge was that we imagined our customers needed 5 of these. Before we started making these, the only option on the market for a cool reusable shopping bags were 30 to 40 dollars each or more. Most people can’t afford to buy a bunch of those more expensive options so we focused on making them affordable but with still cool.

Q: Looking back ten years ago what do you think your comparative advantage was? Was it just price point?

Emily: No. It was the design. It was how it looked. We were so lucky with the timing to market too. When we started designing these bags no one really know what a reusable bag was. I would try to describe this to people and they often thought it was a stupid idea. But then just right when we launched people got into the “green” thing - I think we picked up on something in the general consciousness - something in the general zeitgeist. That made our initial launch naturally scale bigger and easier.  It helped since people were just becoming more ecological, aware and naturally press was interested in writing on our product.

Q: Over the last years - what are some of your favorite memories of the brand, or the company in general?

Emily: One of my favorite memories is really early on in the company. I’m still packing and shipping all of our orders. It’s late at night, I’m alone, packing boxes and watching The Office at the same time. I just had this wish at the time that I wanted to have co-workers and that I wasn’t so alone. Which is completely what ended up happening. Looking back that moment - this was the moment, I think, where everything started.

Q: Was that a sad moment or happy - melancholic possibly?

Emily: It was definitely sad moment, but I look back on that moment, and realize I really got what I wanted.  Baggu has mostly been a group of people working on computers with everyone eating lunch together sometimes and being collective. I love my team, I love going to an office every day.

Q: So over the last years, what were some of your biggest failures and what did you learn from those moments?

Emily: Our biggest failure was a product called the basic penguin. We just randomly designed a stuffed Penguin, we thought it looked cool but we didn’t really sell to stores that sold products like that and looking back it should have been clear that it was going to fail. We should have started making a few of them first, built the customers slowly and expanded.

Q: How many penguins did you guys make?

Emily: Man, so so many!

Q: Was it a toy?

Emily: It was a cross between a coach pillow and a toy. Very minimalist penguin.

Q: It’s funny, maybe they will become collectable one day.

Emily: Ha, yeah, sometimes they pop up on eBay.  At the end, we just ended up donating them all to the San Francisco Zoo and writing off the inventory.  We just realized we were just wasting money even trying to sell them so we cut our losses. Its funny now.

Q: Did that whole experience make you more cautious of entering new categories?

Emily: Yeah, for the first couple of years, all our issues were mainly with production and trying to figure out how to make enough bags fast enough to our standard. Once we got production under control the financial crisis hit, which was sort of an awesome thing, since we were very tiny and our monthly expenses were almost nothing.  Riding out the financial crisis made me a very conservative financial planner.  It made us have to work a lot harder for our money which influenced our design choices and how we choose to move forward. We run a tight ship and we employ a lot of people and I take that responsibility very seriously. Everyone at Baggu has to pay their rent.   That is the other part of Baggu that I really love. I’m very proud of the community we’ve created - of the lives we support - the people who work with us.

Q:  It’s funny, going back to your solo time packing bags in San Diego watching the Office - now you’ve created that Office and the connected lives. How do you think your managerial style has changed as Baggu over the years?

Emily: I think you get better as you do it. There is more of an age gap now. When I first started, I was very hands off and just trusted people to get things done. My belief was just in hiring great people and letting them run free.  Now as we have grown, I’ve gotten a lot more involved in the managing process, checking-in with my direct reports and I think they like that. I think everyone wants a manager who really understands what they are doing and gets their contribution.  I think people like sharing the things they are working on, the challenges they are facing, etc. So I’m more responsive now. When I went on maternity leave, Ellen did a really amazing job running stuff while I was gone for three months. She started doing some things that when I came back to work I thought were really great.  One of those great things was weekly check-ins with my direct reports. In the past, I thought that would take up too much time, but now I’ve realized how much time it actually saves. Instead of putting out fires, I’m preventing them.

Q: Yeah, it’s like gardening - you need to prune and remove the weeds before they take over.

Emily: Totally - just sitting with people for 20 minutes weekly helps you understand what is happening.  I also think it’s very important to figure out how many direct reports any one individual can realistically handle.

Q: On your business card and email note, you define your title as CEO. I’m curious about that as a young small business owner.  I’m curious, since to me it connotes a more “corporate” identity.  Does it help as a woman to have more authority? Is it an issue of bravado? I’m just curious when you started using that title?

Emily: I think I started using the title even before Baggu was an “actual” company. It happened naturally because I’d meet these manufacturers and they would always ask who was the CEO.  For a long time, I didn’t take titles seriously. Especially in the beginning. But I’ve learned that titles are important to people, and it’s a very nice way to give people a sense of chain of command and a sense of ownership. As we’ve grown we have added some more formal titles.

Q: Do you think then that you’ve grown into the title of CEO?

Emily: Yes, I do. I feel in the last year, I’ve really grown into it.  As a young woman too it’s been useful since manufacturing is still very much an old boy’s business. Not so much in China where there appears to be a lot of gender equality, at least on the level I’ve experienced, but with some of the factories in the USA it’s still very much an old boy’s business, and having the title CEO can help.

Q: That’s interesting, since Baggu straddles the world of fashion and product, which traditionally has been very female-driven, compared to some other categories.

Emily: Yeah, it’s interesting, but for leather factories in the US - it’s still very much of a dude thing.  We used to have a male leather production manager and always the factories we visited in the US would assume he was my boss because he was a guy. Originally, I was bit embarrassed to use the title CEO. I liked founder, but that doesn’t really connote to people what you do.

Q: Going back to the penguin…

Emily: Arg. I can’t believe we are going back to the penguin!

Q: Ha - no, it was interesting, you said something very interesting earlier about not having the customers for that product - I’m curious who do you think your customer is?

Emily: It’s for ourselves. We are our customer.  Women in urban areas mostly that are between 18 and say 55. While our focus shifts as we age - it’s much easier to make awesome, great shit for yourself than anyone else. If you deeply understand your own needs, it’s easier and helpful to design for yourself.

Q:  Ha , so did you like the penguin pillow then?

Emily: Ha, yeah I wanted that thing 100%. It was all my idea and I take credit for that mistake too.

Q: Ha. It’s like baseball, if you can bat .500 you’re doing great, at .800… One penguin is not a big deal.

Emily: That is only the product we’ve done that was a full flop. Some things have been slower to move or not as widely popular as we expected, but that was the true dud.

Q: Let’s talk about robots and copy cats. Last time we spoke, we were just starting to talk about robots and their usage in production.

Emily: I don’t think we are there yet, but there will be a time in the future when robots are making Baggus. We have the perfect product to use robotic production.

Q: With robots, would you then bring back more of the production to the US? Having the robots sitting in the Dogpatch making bags?

Emily: Possibly. When we first started, we were like: “let’s make 200 bags”, but as we got deeper and deeper, and we wanted to produce custom nylon, we realized all the mills and infrastructure was in Asia. There are so many parts. Its funny now though, since China now is the expensive place to make things.  There are cheaper places but the quality is good there and the working relationships are amazing.  The sewing quality overall out of China is really really high.  But yeah - super excited about robots, and would be cool to have one in the office making Baggu.

Q: Yeah, that would be awesome - you could put one in the store and make custom bags for customers on site, like Timbuktu.

Emily: That is something I always dream about - doing manufacturing in-house. which sounds fun but also sounds overwhelming. Dealing with an extra workforce, however, seems a bit overwhelming. Ha! So, if anyone is making a sewing robot please hit me up!

Q: Yeah, I think Baggu’s core competency is design. I’m curious about your relationship to copycats.

Emily: Oh yeah. Search for Baggu on eBay. Its full of copycats. On Alibaba, it’s even worse. There are two types of people knocking us off. People directly using our brand and selling directly fake product. We’ve had that level of counterfeiting since the beginning. At first, I was like: “wow, we’re like Louis Vuitton”. Now, we monitor the big sites, and file all the IP and claims.

Q: I’m curious who are the counterfeits selling to?

Emily: It’s mainly promotional products like company swag.  It’s funny, since people always would reuse our photos and when I was the first model I would see my feet on Alibaba selling counterfeit bags. So annoying! I don’t really lose much sleep over it. Then there are people copying our designs and I think since I’m coming from fashion and everyone does that - when you design something and put it out there it sort of becomes part of the ether.  Its funny seeing bigger companies influenced by us. We just focus on making new, better stuff - that’s our strategy against copy cats.  Just continue to innovate and stay one step ahead.

Q: Talking about oversees production and your focus on Asia  - you’re opening a new store in San Francisco with new stores in Oakland - Do you think you’re going to have stores all over the world, including Japan?

Emily: I would love to have a store in Japan. Japan is our biggest market outside the US. If we can figure out how to do retail stores perfectly. I don’t think we’ll have 100s of stores but I could see us having 10 stores. The stores are a great extension and experience of the brand. They are fun and profitable. I’m interested in learning to manage a diverse retail program, tight and on-brand.

Q: AESOP has done such a great job with their store program. Originally Australian, and now owned by Natura, they’ve really expanded in a tight way with so many stores that are still unique and on-brand. Have you guys ever thought about merging with larger company?

EMILY: We’ve definitely had a lot of interest from investors or people interested in buying the brand, but I’m not interested in having a boss. I love what I’m doing. I love coming into work and being in charge of something that gives us the freedom to take decisions that might not be the most commercially driven. I think that makes us unique -  and it’s the good stuff about Baggu. We occasionally do stuff that I feel an investor would not want us to do. The whole complexity of the organism and the people in Baggu is very interesting and challenging. Every year it gets more and more interesting and rewarding. Early on, people were always trying to push me to sell Baggu, but then what would I do? I really like this company.

Q: My last question then is - has your focused changed at all since you’ve become a mother?

Emily: Yeah, originally before having a kid, I thought I might lose interest in work after having a baby, but honestly I think it’s made me more and more focused. I spend 4 days in the office and have 1 day where I’m a stay at home mom. I’ve given up having hobbies a little bit, but I think the baby and my work are my hobby. I have such a major creative outlet with Baggu. I’m also really enjoying being a Mom.

Q:  The creative project and the entrepreneurial project become one. So what is in store for Baggu for the next 10 years? Retail, Robots and Bags?

Emily: Ha, yeah that’s it. Maybe in the opposite order: bags, stores, robots. I think we are interested in slow, focused, incremental improvement. Selling new products, selling at more places and being a better company. We are really into selling directly to the customer and that is very exciting. Yeah, I’m just really into making great stuff for lots of people.

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