Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
Alumnus Entrepreneur Profile:
Kathryn From MBA’91J
Entrepreneur, turnaround specialist, investor….
Former owner and CEO of Bravado Designs
Canadian-born Kathryn From had always intended to start or run her own
company. However, on graduation from McGill University, where she
earned a B. Commerce, Marketing and Entrepreneurship, her first job was
as a consultant for The Monitor Group. As part of its career development
programme, Monitor’s young recruits were offered help with tuition fees to
study for an MBA. Kathryn, however, had other ideas.
“I always knew I would be an entrepreneur. Therefore studying
for an MBA had not been part of my life plan. However, my boss at
Monitor pointed out that I might be asked to run a large company
later in life, and for that I would need the letters ‘M’, ‘B’, ‘A’, after
my name. It was a convincing argument and so I applied for
INSEAD. It was the obvious choice: it was just one year; had a
good reputation for entrepreneurship; plus it was in Europe.”
INSEAD turned out to be a life-changing experience for Kathryn. It allowed
her to pivot out of consulting and live in Europe for five years. On
graduation she took up a post with 3M as European Marketing
Communications Manager in Paris.
“It was critical for my career path, gaining hands-on experience
in running a business. Monitor had offered me a bonus to help
with tuition fees for the MBA if I returned after graduation. I,
however, preferred to pay for the year myself leaving me the
freedom to decide what direction I would take post-INSEAD. It
also meant that I was more focused when I was on campus as I had
personally invested in the year.”
INSEAD prepared Kathryn well for the challenges at 3M: she could easily
negotiate with different cultures and nationalities from suppliers to
customers and staff.
In 1995 Kathryn returned to Canada. Although she had been offered a job
in 3M’s US office she preferred to set up her own consulting business as a
short-term measure until she knew exactly what her next career move
would be. It was during this time that Kathryn came across Bravado
Designs, a maternity and nursing lingerie brand. It was founded by two
young mothers in 1992 who were frustrated at the lack of comfortable,
stylish and affordable nursing bras on the market. The company interested
1
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
Kathryn and after further investigation she was keen to be involved in
helping to grow the business.
“The creators were passionate about breast feeding and their
product, whereas I had no children at the time but was passionate
about building a business – and this one was struggling. They had
a wealth of knowledge in the category but lacked the business
experience that I could offer.”
Kathryn bought out one of the partners in 1998 and by day two she was
thrown into the first of three turnaround situations that she would
successfully guide Bravado through over the following years.
t with comfort of body comes comfort of mind. Both are essential for breastfeeding success.
“We closed on 14 January 1998 and on 15 January the bank called
to tell me that they were pulling the credit line. Despite its debt to
equity ratio standing at 6:1, (banks in Canada only usually finance
a 2:1 ratio) I was convinced that Bravado had a huge potential.”
Fortunately for Kathryn, having an MBA after her name enhanced her
credibility when approaching the banks as they were confident in her
managerial skills to turn around the company. Kathryn finally had three
banks bidding on the business and the company was soon back on track.
The second turnaround Kathryn steered Bravado Designs through was in
2004 when the business suffered from the strengthening Canadian dollar.
Kathryn once more successfully managed to retool the business by moving
its production to Mexico; hiring a senior management team; updating the
brand; launching new products and expanding further into international
markets, thus allowing the business to move forward.
Next, Bravado faced a massive cash flow crisis in late 2007 despite its
profitability and booming business. Once again Kathryn had to navigate
Bravado through rough waters. By this time she was the majority
shareholder.
“We were developing a new line – but we ran out of cash. It
transpired that the financial controller hadn’t been updating the
cash flow charts resulting in a cash flow crisis. The controller was
fired immediately and I took over for eight months. I wrote a new
business plan for the banks. However, this was just before the
crash in September 2008, and they were already starting to
tighten activities.
It was a tough time travelling to New York constantly in search of
funding. At one stage I considered moving all Bravado’s financing
2
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
to the US as the situation in Canada was so challenging. However,
at the last minute HSBC in Canada came through with an offer.
One very hard lesson I learnt through the third turnaround was
that no matter how profitable you are the cash flow should always
be watched carefully.”
Time to sell?
Bravado grew organically over the years under Kathryn’s guidance but to
take it to the next level Kathryn knew she would need to sell.
“The experiences of the three
turnarounds and the search for
funding made me think about
the next stage of expansion. I
didn’t want to take on more
debt or sell equity to a numbers
driven investor. I wanted a
strategic partner.
Although I was not ready to sell
I decided to put out some
feelers to gauge potential
interest. With this in mind, I
attended a trade show at the
Celebrity mums wear Bravado
end of 2009 in Las Vegas. What
nursing wear
I hadn’t expected was that
Medela, one of the largest breast pump manufacturers based in
Switzerland, would approach me with the view to collaborating
with Bravado. They had just launched a line in nursing and
maternity lingerie that had been unsuccessful. The Medela brand
was well known and reputable but their nursing garment range
had some major issues.
One of the senior people at Medela1 told me that they would fix
their problems with or without me. I hadn’t intended to sell at this
stage but I listened to what they had to say. I was resolute in my
demands: one of which was that Bravado would continue to
operate in a standalone fashion.”
Negotiations began in secret with Medela - only Kathryn, the CFO and
their lawyer were involved.
1
Currently President of Bravado.
3
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
“We didn’t want a banker to take commission - we were capable
of doing it ourselves with a good lawyer. I enjoyed it but it was
hard work. It took a year and half before we closed in April 2011.
During the day I was running the business as normal but the
evenings and weekends were spent dealing with the
negotiations.”
Kathryn recalls one morning in particular while she was waiting for the
train at 6am in Zurich when the Global CEO called to say that they would
have to postpone the sale because the company was embroiled in a major
FDA2 challenge at the time. Astounded, she told her: “No we are too far
down the road and I have neglected my business long enough. There is
only one month. If we don’t complete I’ll sell immediately to your
competitor.” The deal went through.
Medela insisted that Kathryn remain in the company for three years. This
was a tough time for her having run the show for so long.
“I would deliberately phone the boss in Switzerland late so that I
didn’t have to talk to him. Eventually they left me alone to get on
with running the business. It was the loss of freedom that I
mourned the most. After all, freedom was my biggest reason for
wanting to be an entrepreneur.
The result was that when I finally left in 2013 the company was
doing US$25million in sales. The chair told me that there are lots
of people who can take a company from 20 to 100 million in sales,
but not many people who could build a business from 0 to 20
million in sales. I love that part of growing a business - the daily
struggles when everything matters from suppliers to customers. I
like to roll up my sleeves and make a dream a reality. Once you
break the 20 million bracket it’s tedious.”
When Kathryn left Bravado, by her own admittance, she slept for six
months. She wanted to spend more time with her family who were still
young when she had been working flat out building the business. She is
now an angel investor through her company Wonderment Ventures
focusing on early stage start-ups with zero revenue – which Kathryn refers
to as the small ‘cowboy stage’. Not only does she invest financially but
holds a board seat and helps the start-up when she can, mentoring them if
required. Currently Kathryn has three companies in her portfolio with
another one due to close shortly.
2
US Food and Drug Administration http://www.fda.gov/
4
Rudolf and Valeria Maag
INSEAD Centre for Entrepreneurship
“The idea is to always have four to six start-ups in my portfolio but
not to take an operational role. I love small businesses. It is
amazing to bet on an entrepreneur. I don’t invest in technology as
I don’t know the industry. One of the recent investments I made
was in INSEAD venture competition winner Johanna Griffith’s
Knixwear™ brand. I am also involved in several angel investor
groups, a consortium of individuals that collectively invest across
a broad portfolio of early stage businesses.”
Another project in the pipeline is to write a book sharing her experiences
of running Bravado from fires and floods to embezzlement and fraud.
“It’s a different world from working in a well-financed company.
There were times when we existed on a shoe string. I had to
leverage my house and borrow money from friends and family to
make the payroll. At one stage I had no salary for a year.”
Advice to current students?
“Choose all the entrepreneur classes while on campus. Take
advantage of working in teams with so many diverse cultures – it
is invaluable for any business to have this experience and
knowledge. I would also advise working for a large company
before launching into your own venture so that you can make
mistakes and learn on other people’s dime. Have a good time and
explore everything.”
Kathryn has just one warning, however, for MBAs looking to take the
entrepreneur path:
“Don’t spend all your time chasing money. You need to take time
working on all aspects of the business from hustling sales to
talking to suppliers. Running a business is 90% execution and
managing employees is a lot like managing a group of six year
olds. But ultimately love what you do. It’s not about the money,
that comes later.”
Anne-Marie Carrick, Research Associate ([email protected]), September 2015
5