MBA Program: New York University, Stern School of Business
Industry: Online apparel
Founding Student Names: Lia Winograd
Brief Description of Solution: Pepper is the first affordable, comfortable and, most important, well-fitting bra option for women with small cup sizes (AA, A, B). One-size-fits-all designs and mass-retail marketing marginalize certain body types, demoralizing women who fall outside the “standard” fit. For small-chested women, market bra offerings result in digging underwires, falling straps, and dreaded cup gaps. Pepper re-examined every detail of the bra – from the depth of the cup to the length and shape of the underwire to the type of fabric – to optimize fit for small-chested women. We are championing the body-positivity movement for this unique audience and our ultimate mission is to empower women by helping them feel beautiful and confident in the bodies they have.
Funding Dollars: $400K pre-seed round and prepping for a $2M seed round
What led you to launch this venture? When men get to define how women should look, act and feel, it creates huge gaps. It’s not just between the products companies offer and the demands of their customers, but between the expectations placed on women and what they actually need for their physical health and emotional well-being. I was tired of traditional bra brands, most of them run by men (e.g. Victoria’s Secret, Calvin Klein, Aerie, Adore Me), dictating body standards that are impossible for most women to meet and dangerous for them to want to attain. So, I became passionate about building a community where women could band together, celebrate each other, and overcome stereotypes. When we started Pepper, we always knew it was going to be more than a bra company. Our mission was and is to positively influence overdue conversations around women and their bodies.
I’m also proud to be able to grow a business in the US that has connections to my Latin American roots. Our factory is located in beautiful Medellin, Colombia, where I grew up and where my grandfather built his business. We chose this manufacturer because of their long history of quality craftsmanship, and also because of their commitment to social responsibility. It is important to us that our partners pay their employees fair wages, offer benefits, and provide opportunities to women.
What has been your biggest accomplishment so far with your venture? Pepper originally launched as a Kickstarter campaign in April 2017, while my co-founder and I were working full-time jobs. Initially, we had a goal of reaching $10,000 to meet the minimum production requirements in Colombia, where I had forged a partnership with a female-led, socially responsible manufacturing partner. We achieved that goal within the first 10 hours; after 13 days, we had attracted 950 backers and surpassed our goal by 370%! Our online pre-order store sold over $100,000 worth of bras before we had even finalized our prototype. Since then, we’ve managed to grow the company to a $2MM revenue run-rate, with just $400K in pre-seed investment (a 4X return for our investors) and two full-time employees (myself and my co-founder, Jaclyn). Our team motto is to achieve BIG results with SMALL resources; our competitive advantage is how creative and scrappy we are in the way we approach problems.
How has your MBA program helped you further this startup venture? Stern was a once-in-a-lifetime opportunity for me, albeit not in quite the same way it was for many of my classmates. For two years, I enjoyed total freedom to scale Pepper, all the resources and connections I needed to thrive in doing so, and none of the immediate pressures of failure. Classes taught theory I could apply in the real world. Professors offered advice on problems I was facing in real-time. If, for whatever reason, Pepper did not grow the way we hoped, I would still be graduating from Stern with a wealth of knowledge, experience, and contacts.
But Pepper did grow, significantly. And thanks in part to the network I gained at Stern and in New York—the heart of direct-to-consumer e-commerce—we raised a pre-seed round from investors who included the NYU Innovation Fund, a Stern tech and entrepreneurship professor, and a Stern alumnus who runs one of the country’s biggest healthcare organizations. When I entered business school, Pepper was a pre-launch, pre-product, Kickstarter-backed company with as much uncertainty as potential. By the time I graduated, my co-founder and I were able to pay ourselves full-time salaries, hire a team of contractors and freelancers, and operate our own warehouse. None of those achievements show up on my MBA transcript, but together, they represent to me personally a kind of second diploma.
What founder or entrepreneur inspired you to start your own entrepreneurial journey? How did he or she prove motivational to you? My passion for entrepreneurship is deeply rooted in my upbringing. Everything I had growing up, everything I’ve achieved as an adult, I owe to my paternal grandfather. An immigrant orphan who couldn’t speak a word of Spanish when he stepped off the boat in Colombia, he risked a great deal to escape the Holocaust and create a better life for himself and his family. It took him decades to work his way to the top of a button factory and—later, as its owner—transform it into a successful business that provided for us and hundreds of other Jewish families. I believe that most of the best entrepreneurs out there have to be immigrants like my grandfather. When you have nothing and you step into a new country, your instinct for survival forces you to be creative and identify market gaps to find a place for yourself. His entrepreneurial story inspires me every day, and I know even in the days when I’m financially challenged, I’ll push through and figure out a way to succeed.
Which MBA class has been most valuable in building your startup and what was the biggest lesson you gained from it? It may sound counter-intuitive, but I made a conscious decision upon entering the MBA to avoid classes that focused on entrepreneurship per se and instead devoted my energies to big, boring subjects that founders often dismiss as relics of the traditional business world. I figured that Pepper was already my entrepreneurial classroom; if I was ever going to take the time to learn finance or accounting, it was best to do it at Stern, which excels in those areas, and where I’d have friends to soften the agony. I’ve already found those classes to be highly relevant to my day-to-day work at Pepper and know that the skills I derived from them will only become more important as Pepper continues to scale. However, the most impactful course I took was Collaboration, Conflict & Negotiations. Just last month, I was able to negotiate better payment terms with Pepper’s manufacturers, optimizing our cash flow and freeing up resources for further reinvestment and growth to reinvest. I didn’t always enjoy the tedious work of learning the business basics, but between McKinsey and Stern, I’ve dealt with challenges I otherwise never would have been able to—and feel confident that I can manage whatever new ones present themselves in the future.
What is your long-term goal with your startup? Our vision for the future for Pepper is to be the commerce, community, and content destination for the $15B lingerie market. Unlike most lingerie companies that grow by increasing their cup size range, we plan to grow by expanding our product categories—from just bras to other apparel like swimwear, tops, athletic performance gear, and dresses – all designed to perfectly fit the small-chested woman. We want to build online and offline communities where women can connect with and empower each other, and produce content that sparks meaningful conversation around body image in our society.