Deepa Gandhi is founder of Dagne Dover, a new brand offering luxury quality accessories like handbags at affordable prices that will be launching on the web this spring. She is also a graduate student in the Wharton entrepreneurial program and is scheduled to earn her Masters of Business Administration (MBA) degree in 2013.
Knowledge@Wharton High School: Tell us about Dagne Dover. Where did you get the idea for the business and how did you make it a reality?
Deepa Gandhi: Dagne Dover is a new online-only brand for the modern woman. We’re looking to ensure that women no longer have to compromise their personal style while also being organized. We are starting this spring offering totes and clutch wallets and a variety of accessories that go back to the idea of fashion meeting function. They’ll be beautifully designed on the outside, but with extreme interior organization and the idea of lifestyle functionality at the core of the business model.
I got the idea through one of my co-founders, Melissa Shinn, who prior to going to Wharton to also pursue her MBA had worked at Coach [a luxury leather-goods company that makes purses and other accessories]. When she came back to business school and had to carry a laptop and binders and notebooks and all the crazy things you have to carry to go to class every day, she realized that while her handbags were beautiful, they were not functional. They didn’t do what she needed. All of us realized we were doing the two-bag schlep, if you want to call it, stuffing everything into one. Your life feels like a disaster, even though you’re not a disaster.
So we came up with the idea of Dagne Dover so that women no longer have to feel that level of discomfort or displeasure with the organization in their bags, while still maintaining their level of fashion and sophistication. We believe this is the perfect bag for anyone [who is] busy and on the go and lives a very active lifestyle. She’s looking to go from the gym in the morning to work or classes during the day and then has to go to some sort of professional activity or extra-curricular activity after school. She can carry it all, but still feel very organized and effortlessly chic.
KWHS: I’m wondering where the name comes from.
Gandhi: The name Dagne Dover is our idea of the modern woman. She is someone who is able to balance her professional or career aspirations on one end — that’s the Dagne side –and then Dover is our designer, Jessie Dover’s last name, and that’s the creative side. Every woman nowadays is a balance of both left brain and right brain, and Dagne is actually a Nordic name that means “new dawn.” We believe it’s a new dawn, a new day for handbags.
KWHS: This seems like a particularly crowded marketplace. How do you differentiate your business in this competitive market?
Gandhi: Handbags, absolutely, it’s very saturated. There are many competitors out there. You have Coach, which dominates the market space, and Michael Kors is creeping up on them. But within this space, there is no one that is actually providing the product that we are to the niche that we are looking for. In a saturated market, it’s important to then identify white space where nobody else is addressing a pain point.
To us, the pain point is the lack of functionality for fashionable handbags. You have certain brands that offer the carry-all organizational options, but they’re not stylish and they’re often not high-quality products. Then you have a slew of other brands that are affordable luxury or high-end luxury — Hermes, Louis Vuitton, Prada — but none of them ever focus on the internal smart design. The idea is to pull together something that’s currently not offered in the marketplace and then identify your target demographic that this really speaks to. We’ve identified a pain point, and we’re working backwards into how do we solve that pain point — our pain point in our minds is universal handbag problems.
KWHS: Tell us a little bit about your personal entrepreneurship journey. Have you always been business minded?
Gandhi: I’ve definitely always been business-minded. [My family] has owned a family business my entire life, so it’s in my blood to want to be an entrepreneur, to want to run my own business. As a very little kid, I’d say I’m going to take over my dad’s business, which isn’t interesting to me anymore, so I’ve gone my own route. Even in high school — I went to the Bergen County Academies in Hackensack, N.J. — I had a great opportunity. While my high school focused on science and technology, I found very early on that I was not as passionate about science and technology as I thought I was at the age of 13 when I applied to the high school. While I was there, I decided to pursue my interest in business, and I worked with a couple of classmates to open up a café, which was exciting. We were able to go through the budgeting process, the merchandising — at that time I didn’t even know I was doing merchandising — picking which snacks and which drinks, what we should offer and what were the peak times for students to come and visit the café.
In my senior year, my high school offered an internship program where every Wednesday, students did a senior-experience internship. [When we were juniors], we went through the entire job-discovery process, going through the résumé building and interview process, the networking process, all the way through actually having an internship at a major company through our senior year. I felt this really built a foundation for who I’ve become as an individual and as a professional through my life. I was very passionate about fashion. I always read every Vogue and In Style that came my way. I was able to, through my personal network — and personal networks are very important — find an internship in the fashion closet at Harper’s Bazaar, [a woman’s fashion magazine].
At the age of 17, I realized that I had a passion [for fashion]. Then when I went to [college as an] undergrad, I decided to take a little bit of a detour and go more the traditional route. I went into finance when I first graduated from undergrad. Then after a year of working in finance at a great job — there are people who are very interested in [finance] and passionate about that and that’s what drives them — I realized I still loved fashion, but I was business-minded. So that’s how I found my way back into the retail and fashion industry, working on the operational and financial side of the business. That’s what led me back to business school, so that I could eventually pursue my own entrepreneurial endeavors.
KWHS: Sometimes when people think of entrepreneurship, they think of one woman, one company, one journey, but it really is a collaborative effort. Can you talk a bit about that — the different parts that fall into place to help you create your business?
Gandhi: I think that’s a great comment and question. I would be nowhere without my community, as I like to call it. People say building a family takes a village, building a business takes an entire community. So to start, it’s not a one-woman show. I have two co-founders who are unbelievably talented. One of my co-founders, Melissa, as I mentioned, worked at Coach before going to business school. She focuses on the marketing and the branding and the high-level strategy of our business. I work on the operations, inventory management, sourcing and production. It’s a balance between what the two of us do to run the overall business, and then we have our designer. We’re a fashion business at the end of the day and we have an unbelievably talented designer in Jessie Dover. She went to Parsons [School of Design] for her undergrad and was trained in handbag design.
I believe you can only start a business if you have a strong team. We’ve [also] had multiple people come and help us, whether it’s with graphic design or with the fundraising, and our families and friends are unbelievably supportive. They’re going to be the first people to buy our handbags when we launch, but more importantly get our name out there. It’s also very important to learn from the experience of your peers and people who have actually been through this. I’ve been lucky to have a couple of mentors come on who really walk me through what it means to be an entrepreneur. When it’s midnight and I’m like — ‘What am I doing with my life? This is just craziness. I’m overwhelmed. Are we ever going to launch?’ – when there are production issues and all these things are happening, it’s great to be able to have people who give you their advice and support and help you go through the process.
A great thing about going to a school like Wharton is that whether you’re on the undergraduate or graduate side, there are other people going through the same process as you. We’ve built this great little community that’s very tight-knit, and we’re there for each other. Whether it’s just answering a simple question because somebody else has been through that before, or just listening and hearing. It definitely is a community effort, not just a single individual with an idea.
KWHS: And you also get support from programs like the Wharton Venture Award, right? Can you talk a little bit about that?
Gandhi: [One of the] reasons I came back to business school to start my own business was that there is a community and there’s institutional support to build your business. [My team] has really benefited from Wharton’s venture initiation program. They select about five to six businesses every semester from the undergraduate or the graduate population to support them and go through the entire initiation process: How do you build your business plan? How do you get your product to market? I’m very proud to say we also won a Wharton Venture Award, which is a $10,000 award given every summer to five businesses. If you’re an undergrad, you’re eligible between your junior and senior year, and if you’re a graduate student, you’re eligible between your first and second year.
If you have an idea that not only you but the entire school believes in, the school wants to support you through the summer to make sure you don’t have to work another internship or work another job. They say, ‘Go for it. You have three months to throw your entire heart and life into this idea and figure out if it’s viable.’ We won one of those awards and it was amazing because we didn’t have to worry about the little start-up expenses like legal fees and filing fees. All of those little things were taken care of over the summer because we had the award, and then we were able to push out the actual fundraising and financing process till this past fall. We’re currently still going through the fundraising process, which is another whirlwind of excitement and lots of learning. But it’s great to be in an environment where they’ve built entire programs to help the venture initiation process.
KWHS: Can you talk about the financing part? You have investors, correct? Did you also have to have some seed investment that all of you contributed to the business?
Gandhi: It depends on where you are financially — so for us, we had minimal seed investment from the actual founders. In terms of the fundraising process and financing, we’ve chosen to do a friends and family seed investment fundraising round so that we can have the people closest to us who believe in us give us our initial investment. [That investment] is under half a million dollars. Between them and a couple of angel investors who are high net worth individuals who know the fashion and tech space and the start-up space very well and also come with their own networks and their own advisory abilities, [we have financial] help to get us through the next year. [We are figuring out thse questions]: Is it a viable product? What is the actual demand? What type of sales projections can we actually achieve, and what can our company potentially be valued at over time? As our business needs evolve, we’re going to figure out what our next financing options are.
It’s always important to keep in mind that there are a couple of different ways to finance your business. The ideal situation is that you’re able to self fund, and depending on what you do and where your family comes from or what your professional prospects were — for example in my case, before coming back to business school — you can potentially self fund.
The second is what we’re doing, which is a friends and family financing round, so you keep it close, you keep it to the people whom you trust. If it’s a more capital intensive, more expensive business to build, especially in the tech space or in the health care space, you might want to look for larger institutional investors, [such as] venture capital or super angels or very, very high net worth individuals who can invest like a venture capital fund. That comes with its benefits and also its downsides. You often have to give up control too early in your business if you go for the venture capital funding, so it’s important to keep in mind the balance between getting the funding that you need and maintaining control of your business early on. If you’re as passionate as I am about it, you want to make sure that you’re able to really impact what that final business ends up being over the next couple of years. Debt, or taking out loans, is always a good option once you have a minimal, viable product.
KWHS: I’m sure this has been an incredible learning experience for you thus far. Do you have one or two lessons that you can pull out? You still have a way to go on the journey of building the business, but what really stands out to you as a lesson learned that you’d like to pass along?
Gandhi: Focus on what you’re passionate about. This is not just something I learned through the entrepreneurial experience or journey, but also through my life from [college] undergrad to today. Know what you’re good at; know your strengths. For me, it’s the fact that I am business-minded. Becoming a doctor was not the right way to go for me. Within [business], you don’t have to take the traditional route, which is often finance or consulting. If that’s what you’re passionate about, go that route. But if there’s something else that gets you up in the morning and gets you excited when you’re reading articles or watching interviews with executives, find a way to build a career out of that.
I went into a traditional finance career after undergrad and even when I was there and working — I was on a sales trading floor as an equity sales trader — it was the mornings when they talked about potential trades for retail companies that I was inherently the most interested. I said, ‘I don’t want to be on this side; I want to be in the industry. I want to actually be making the decisions that these businesses are making.’ Through my personal network, I was able to find a job and work at Ralph Lauren and Club Monaco. [I was] still on the business side, but [I could start] getting perspective on how the actual industry works. There are so many different ways to build your career. Make sure you focus, though, on what you’re interested in and inherently passionate about because you’re going to be that much more successful when you care about what you’re actually doing every day.
Also, while at Club Monaco, I had some entrepreneurial experiences, so I was able to build my own businesses within a larger company. That’s when I realized that I wanted to be an entrepreneur. Having learned the lessons of going to finance and then going to retail, I said, ‘Okay, I’m going to leave this and go to business school and start a business.’ I’ve definitely tried to learn from my own experiences.
The other big lesson I’ve learned is that you have to be resilient. You have to be able to roll with the punches. Make sure that you survey people and listen to what other people have to say, because everybody who gives you advice who you trust is going to give you constructive criticism. Listen to that, and once you get to a place where you think you have a product that you can get to market, go for it. It’s going to be rough, and you’re going to have the highs and lows. I’ve definitely had days when I’ve had the best things happen, but then also the worst all within a 24-hour period. You have to go with it and be resilient.
You’re going to get to the other side. Whether you succeed or fail with your first venture or your second venture, you’re always going to learn something, and it’s going to make you that much stronger as a person. We’re all young; I’m 27 years old. I have a lot of time ahead of me. It’s better to do it now and learn from it. In 20 years, I’ll be able to look back on this experience and either say, ‘Well, that was the most successful thing I’ve done,’ or ‘I learned so much from taking on that risk.’
KWHS: What is next for Dagne Dover? What can we expect in 2013?
Gandhi: 2013 is the year of Dagne Dover, as we like to say. We will be launching our beta in the early spring, so in the next month or so.
KWHS: That’s your website.
Gandhi: That’s our website, so you’ll be able to buy our product, you’ll be able to preorder and then get deliveries this April and then in the fall, in August or September of 2013, we’ll have our official nationwide launch – new products, everything. We’re really excited. Everybody should be excited to be fashionable and functional at the same time in 2013 and also going into 2014.
KWHS: Great. Thank you so much.
Gandhi: Thank you very much.
Starting in high school, how many times has Deepa Gandhi changed her career focus? How long has she had a passion for fashion?
How is Dagne Dover garnering the majority of its start-up capital? What were some of the other financing options?
What does it mean to be resilient? What might be some challenges that test your resiliency as an entrepreneur?