How R. Riveter Survived the Shark Tank
Investor: Mark Cuban
Shark Tank Appearance: Feb. 5, 2016
Deal: $100,000 for a 20 percent stake
Results: Sales increased from $300,000 to $2.4 million.
While studying for her MBA at Brandman University in Southern California, Lisa Bradley wrote a paper about FedEx’s hub-and-spoke system. Through a “kind of carpooling for packages,” as the company likes to say, parcels are collected in a central location, sorted and then rerouted to their final destination. “Even though you might be sending packages in the opposite direction of where they’re ultimately going,” Bradley says, “hub-and-spoke systems can be both more economical and efficient than taking direct routes.”
Years later, in 2011, the hub-and-spoke idea would become the inspiration for R. Riveter, the company that Bradley and Cameron Cruse co-founded in Dahlonega, Georgia, where they were living with their Army Rangers husbands and families. Military spouses or, riveters, across the country make the individual parts of the handbags. Some are created out of upcycled material, such as retired uniforms, tents and wool blankets. Then each component—lining, straps, pockets—is stamped by the maker and mailed to the warehouse in Southern Pines, North Carolina. There, the handbags are assembled and shipped to customers or sold in the nearby brick-and-mortar retail store.
As Bradley and Cruse explained to the investors when they appeared on the Emmy-winning Shark Tank reality series in February 2016, “This is about more than a product. It’s about empowering military spouses who want something more than a part-time job.” With military families moving every couple of years as active service members are reassigned to new posts, military spouses have résumés that show only spotty employment, making it difficult to land a job, let alone build a career.
Mark Cuban saw Bradley and Cruse as disrupters. “You are a social network through action,” he told them with admiration. “You could be, literally, the future of manufacturing.” With Cuban on board as an investor and adviser, R. Riveter has seen sales increase nearly 700 percent and has a workforce of 55 team members. As the company has thrived, Bradley and Cruse have learned some important lessons.
Choose the right partner.
Robert Herjavec and Kevin O’Leary, along with Cuban, offered Bradley and Cruse the exact deal they were after. They knew that Cuban had experience with other businesses started by military families, including Bottle Breacher, which makes handcrafted bottle openers, and the shoe company Combat Flip Flops. “The relationship Mark has with other military families in his portfolio has been a big asset,” Bradley says. Even more importantly, Cuban shared the founders’ passion and commitment. “The whole time that we were in the Shark Tank, you could just tell that Mark truly cared about military families and got what we were doing,” Bradley says. “He’s always there for us.”
Don’t get comfortable.
“Learning and growing is hard,” Bradley says, “but as an entrepreneur, you have to keep doing both. Mark has pushed us not to get too comfortable.” When Bradley and Cruse mentioned to him they were thinking about offering a wider selection of handmade items on their website so more military spouses would have business opportunities, Cuban encouraged them to move forward right away. They did, creating Post to Pillar: A Curated Marketplace for Military Spouse Makers. The collection includes apparel, jewelry, handcrafted clay mugs, pillows and blankets, and represents 15 percent of R. Riveter’s sales.
“Learning and growing is hard, but as an entrepreneur, you have to keep doing both.”
Play to your strengths and those of your team.
The first time Bradley tried assembling a handbag, she sewed a pocket in upside down. “A customer told me she loved her bag but things keep falling out of the pocket,” Bradley recalls with a laugh. “That’s when I got fired from sewing.” Since then Bradley has focused on the business side of R. Riveter, while Cruse, who has a master’s degree in architecture, handles design and operations.
Stick to your convictions.
Bradley remembers sitting down with a consultant in the early days of R. Riveter and explaining the company’s working model: They ship raw material to military families and the riveters ship the finished pieces back. The consultant told her it would never work because production costs would soar. “That was a big moment for me,” Bradley says. “I was determined to make the company succeed just to prove him wrong. I was convinced that manufacturing in America could be done in a different way. We’ve shown that it can be.”