This Founder Didn’t Want to Become CEO. When She Did, Revenue Grew 10x

By: Annabel Burba

Jacqueline Tatelman didn’t trust herself to lead STATE Bags, the backpack brand she co-founded with her husband, Scot, in 2013, until it almost went under.

For the New York City-based brand’s first two years, Tatelman says she and Scot relied on consulting firms to run “the business side of things.” Tatelman, who has a background in product development, served as the brand’s creative director. Scot was head of its philanthropic arm, which supports American families in need.

In 2015, they hired a CEO, moved away from the consulting company, and staffed up. State was “starting to grow a little,” Tatelman says, but before long, cracks started to show. The company was operating wholesale-first, which Tatelman says made it overly reliant on retailers and left it without any way to sell excess inventory. Meanwhile, State was contending with a bloated budget. “'We have no money,'” Tatelman recalls thinking. “'Like, if we have a $1,000 day, we’re celebrating.'”

The co-founders replaced that CEO with the company’s fractional chief financial officer in 2018. Tatelman says this new leader “made a lot of really crucial changes,” like cutting wholesale partnerships that weren’t profitable, sunsetting product lines that weren’t selling, and slowly building up State’s direct-to-consumer business. But money was still “going like quicksand.”

Two years later, in 2020, that CEO quit, leaving Tatelman to temporarily take over amid a challenging time. “I spent all of Covid in my fuzzy bathrobe,” she says, “doing everything I could to keep the company alive, to maintain our production in China.” State had to furlough its 10 employees and let go of its office space.

Tatelman’s efforts paid off. That fall, State Bags had earned enough money through back-to-school sales for Tatelman to hire back its staff and release a line of kids' luggage she had designed just before the pandemic. The collection, which became an explosive success, propelled the business to new heights. Read More...

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