10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com
INSPIRATION CHRONICLES How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business Megan Tamte was living her lifelong dream of motherhood--and she was miserable. Launching Evereve turned everything around.
BY DAVID WHITFORD @davidwhitford
Megan Tamte, surrounded by her Evereve-clad customers, found inspiration from reality TV - and from her frustrating shopping experiences as a young mother. CREDIT: Ackerman + Gruber
Where were you on the night of May 21, 2003? Here's a guess: in your living room, on your couch, among the 38.1 million viewers watching the season- two finale of American Idol. That program is now winding down its 15-season run, but the second year's last show was its peak-- http:/t/whwew .minco.cosmt-/m wagaaztinceh/2e01d51 1e/dpaviisdowdhitefo ridn/n ostearsipeecsta htorisantyomroyre. .hTtmhle one when Ruben Studdard edged out Clay 1/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com the most- watched episode in series history. The one when Ruben Studdard edged out Clay Aiken. Do you remember? Megan Tamte will never forget. She was a young housewife then, barely 30, living in Concord, California, with her handsome, hard-working husband, Mike, and her two beautiful children, Allison and Ryan. Motherhood was her calling, and she believed in her heart that she was happy. Except that lately there had been rumblings. Persistent insomnia, tears she couldn't stanch, too much reality TV. "Mike would come home from work and I would be crying, and I didn't really know why," she says. "It just felt very weird, because I loved being a mom. I was in love with my kids, and I loved taking care of them. But there was something else going on. There was something else that wasn't quite right." She managed to keep up a brave face during the day; her children were oblivious. But at night, it was all she could do to collapse on the couch and switch on the TV. American Idol, Big Brother, Survivor--hour after hour, night after night, and it was never enough. Until, one night, there was Ruben Studdard, in his hour of triumph. Closing the show with an emotional cover of a U.K. hit single, "Flying Without Wings." "You've got to fight for every dream," he sang in a cloud of swirling confetti, "'Cause who's to know which one you let go/Would have made you complete..." And here was Megan, on the sideline, observing. That's when something clicked: "You're just sitting around watching other people's dreams come true," she told herself. Followed by a stark and deeply personal directive: "You can't be a spectator anymore." Followed--rapidly, improbably, dramatically--by an act of business creation.
Today, Megan is living her own outsize dream--and is as likely to star in a reality-TV show as to watch one. She's CEO of Evereve (formerly Hot Mama), a fast-growing, 59-store national chain of boutiques aimed at young mothers. Launched in suburban Minneapolis in 2004, with a $75,000 SBA loan and a couple hundred thousand dollars from friends and family, Evereve today is profitable, debt-free, and on pace to deliver nearly $70 million in revenue this year. "You look for certain things in retail," says Gordon Segal, co-founder with his wife, Carole, of Crate & Barrel. The Segals recently invested in Evereve, alongside Winona Capital of Chicago and the Lewis family, founders of London retailer River Island. "Obviously, product is important," says Segal. "But how is it displayed, how does it feel, and is there passion in the organization? I found all those ingredients."
http://www.inc.com/magazine/201511/davidwhitford/notaspectatoranymore.html 2/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com Megan Tamte, co-founder and CEO of Evereve, the 59-store national clothing retailer for young mothers. CREDIT: Ackerman + Gruber
We should point out that Megan's achievement coincides with what's been a brutal stretch for women's retail in the long wake of the Great Recession: Among the recent casual-ties are Coldwater Creek and Caché, both of which went bankrupt in the past 18 months. She's also part of a gender cohort that finds itself on a persistently uneven playing field: While women own about 36 percent of all businesses, only 2.7 percent of all U.S. venture funding goes to women CEOs, according to Babson College. And the scale of Megan's realized ambition is rare for an entrepreneur of either sex: A recent report by American Express Open reveals that only 9 percent of all U.S. businesses generate even $500,000 in annual revenue, and only 4 percent of women-owned businesses reach that threshold. Above all, in beating those considerable odds, Megan had to overcome one more obstacle, specific to her maternal identity and her sense of self--her "deep fear," she says, that succeeding in business might mean failing as a mother.
"My biggest dream," says Megan, "and I always owned it, was I wanted to be a mom." She went on her first date with her future husband two weeks after she arrived at North Park University, a small college outside Chicago affiliated with the Evangelical Covenant Church. Mike was two years older, blond and blue-eyed like Megan, studying to be a CPA. They married two weeks after Megan graduated (soft drinks only at the reception) and moved to Santa Cruz, California. Mike worked at a church camp and Megan taught third grade, until, at 23, with the http:/b/wiwrtwh.in co.cfo mth/meaigra zfinire/s2t01 c51h1/idladvi,d hwehitrfo drd/rneotaamsp ecctaatmoraen ytmroure.h.t mSlhe quit her job and settled in at home. "Are you 3/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com birth of their first child, her dream came true. She quit her job and settled in at home. "Are you crazy?" her friends asked her. "Shouldn't you have a career first?"
"You had a dream within you, and you weren't able to realize that dream. That caused so many restless nights," Mike Tamte told his wife.
But motherhood was Megan's career, her considered and deliberate choice. She'd been preparing for it her whole life--in her childhood bedroom with her best friend, Dawn, feeding doll babies and putting them down for naps, and next door at the Burkes' house when she got a little older, looking after five children at once. Megan wasn't a top student, she didn't play an instrument, she wasn't great at sports. "Your gift," her mother used to tell her, "is taking care of the Burke kids." Soon, she was taking care of two of her own, and she was all in--playful, supportive, dependable, and present. She put her children's needs first, made sure they were comfortable, secure, never bored. Megan's own parents had divorced when she was a teenager. Not an awful breakup--her dad moved out of the house, not out of her life--but it rocked her world. This was her chance to do better--to "re-create what I didn't have," Megan says. She felt fulfilled, happy, and whole. For about five years. "Then," she says, "I kind of went into this funk." That's one word for it. Depression could be another. "I think I was on my way to darkness," Megan concedes. "If I didn't fix it, it could have led to other things." She never saw a doctor, or sought pastoral counsel, but she did try to fix it. When she wasn't sacked out on the couch watching TV, she was waking up early, taking long walks, writing in her journal, praying. She was trying to remember who she had been before she was a mom, what else had defined her.
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An Evereve shop interior 59 – Evereve stores that have opened since 2004, stretching from Oregon to Pennsylvania; 0 - Potential monthly per-customer sales for Evereve's new subscription-box service, Trendsend. Stylists pick six to eight items to send the harried parents who make up Evereve's customers.; 30% - Average annual growth in Evereve sales for most of the company's 11-year history.; 8-10 - Evereve locations expected to open in 2016, including in Seattle and Nashville. CREDIT: Courtesy Evereve Clothes, for instance; she'd always had a good eye for style, and a strategic approach to maintaining it. In middle school, she was famous for her perfect penny loafers, her turtleneck sweaters, and her bright red nails. "Always put together" is how a friend remembers her. And if her mother couldn't afford to buy her the Guess jeans she wanted (after the divorce, money was tight), she'd clean out the basement, organize a garage sale, and buy them for herself. That's who Megan had been then. Willful, self-possessed, a go-getter, entrepreneurial. Attuned to work and its rewards. Aware that circumstances, however unpleasant, are generally alterable. But who had she become? "I wasn't owning my life," she says. "I wasn't really in control." During that period, she often recalled her first trip to the mall after Allison was born. A little retail therapy, that's all she'd had in mind. Alas, almost everything went wrong--a screaming baby, an unwieldy stroller, stores seemingly designed to be hostile to those shopping with either--and the many small slights were topped off with humiliation. The saleswoman who tried to help her that day was simply not in tune with Megan's new body or her new-mom lifestyle; the pieces she showed her were all wrong. Alone with Allison in the cramped dressing http:/r/wowowm.inc,. cMome/mgagnaz icneh/2o01k51e1d/da vbidawchkitf otred/anortsa. s"pIe cwtataorsanny'mt ofree.ehtlminl g good or powerful," she says. She left without 5/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com room, Megan choked back tears. "I wasn't feeling good or powerful," she says. She left without buying anything. "Wow, that was terrible," she remembers thinking at the time. "I want to be pretty. I want to be fashionable." But her frustrations spawned the kernel of an idea for a business: "I can't believe a retail brand doesn't exist to address this woman, this mom."
A CPA by training, Evereve co-founder and CFO Mike Tamte oversees finance and operations for his wife's company. CREDIT: Ackerman + Gruber
It was a solid insight. Empires have been built on less. Megan worked it out a little in her mind, talked it over with other moms she knew. Some, like Sarah Zeiler, a childhood pal who went on to co-found Zeiler Spirits, were supportive: "She told me her idea. I fell in love with it immediately. It touched a nerve." But most were skeptical--surely someone must have thought of this before?--and Megan went on with her life. Until, years later, unsettled by her persistent funk, fueled by restlessness, and catalyzed by Ruben Studdard, Megan finally felt ready to take the next step, the hardest step--from idea to creation. That night, she switched off the TV, going cold turkey. "Write down your dreams, and I'll add the numbers," her in-house CPA suggested. And together, they got going on a business plan. Not for potential investors. "It was for us," says Megan. " 'Can we do this? If we did A, B, C, D, all these things'--we rationalized it." The conclusion they reached: "This could be something. This shouldn't fail." http:/ /www.inc.com/magazine/201511/davidwhitford/notaspectatoranymore.html 6/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com
In the weeks following her epiphany, Megan dreamed and wrote, and then dreamed and wrote some more. A place for moms, that was her starting point. Young moms for whom family is the first priority but fashion and beauty are still high on the list. Moms who could use a little extra help stay- ing on trend, and might not know how to ask. A place where they could bring their kids and not feel like a pariah or a frump. With stroller-friendly doublewide aisles, oversize dressing rooms--also available for nursing breaks--and a play area stocked with toys for older children. (She consulted her own focus group. Allison wanted video games; Ryan, trains.) Above all, a place where harried moms would get to experi- ence what it feels like to be the object of someone else's care and attention for a change. The name came easy, inspired by the Tamtes' old next-door neighbor, a sexy hippie mom who seemed to have everything covered--great with her kids, good to herself, the original Hot Mama. This was never going to be just a one-off neighborhood store. Megan's ambition was grander than that, in ways that transcended profit and resonated with her faith, her quest to understand her purpose in life. "You can be part of helping moms realize they can be beautiful and powerful" is how she came to think about it. Meaning moms everywhere. She dreamed of scaling big.
"Most of what my kids have seen hasn't been the glory of building a successful business. It's been the struggle. But I'm a lot more alive." Megan Tamte Co-Founder and CEO, Evereve
Eventually, she turned her notes over to Mike. He came back a little while later and presented her with a number: $1,500. That's how much merchandise they'd have to sell every day to break even. Megan did a rough translation in her head--so many jeans, so many tops, so many shoes. "I can do that," she decided. The Tamtes were then living in the Bay Area, so they incorporated in California and set their sights on a property in Walnut Creek. If the rent had been just a little cheaper, they would have signed the lease. But the landlord wouldn't budge, and so the Tamtes reconsidered. "Part of jumping into an unknown endeavor was feeling like the kids were in a place we felt comfortable," Megan says. For lots of reasons--the high cost of doing business, the high cost of living, no extended family nearby--the Tamtes decided that California was not that place. Or rather, Megan decided. The impetus to return to the Midwest, where both had been raised, and specifically to the Twin Cities, where Mike's parents live, was "100 percent my wife," Mike says. They had to guarantee their first lease, in a shopping center in Edina, Minnesota, personally, with everything they owned--not a problem, since they owned so little. Megan stocked the store with inventory she chose herself on a buying trip to New York City. It didn't occur to either one of them until the night before they opened, in November 2004, that they needed tags for the merchandise and cash for the register.
http://www.inc.com/magazine/201511/davidwhitford/notaspectatoranymore.html 7/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com The Married Co-Founder Code Business partners sign contracts. Spouses make wedding vows. So if you're going into business with your romantic partner, why wouldn't you write down a new set of rules? Evereve investors Danna and Rick Atherton figured this out when they ran 12 Chico's franchises together in Minnesota. They came up with a "family code of conduct" for how to tend to their private and personal relationships, one the Tamtes have occasionally consulted. They're not strict adherents--for instance, says Megan, "we disagree at work all the time"--but the spirit guides them. 1. No Pet Names At the office, call each other what your employees call you, "not Mom, Dad, or Honey," Danna Atherton says. That draws "a line between business and family, helps staff feel comfortable, and creates a professional tone." 2. No Public Fights Formal, weekly meetings help "air any owner differences in private. Once we made a decision, we agreed to unite in public," says Atherton. "Watching the owners fight is like watching your parents fight." 3. No Triangulating Confront your partner directly instead of complaining to another family member, advises Atherton, who required the same of her workers: "No pitting one owner or employee against another." 4. No Kibitzing Clearly define each person's role, specific responsibilities, and performance expectations up front. "We each had different skill sets to bring to the company," Atherton recalls. "And then we stayed out of each other's way." 5. When In Doubt, Marriage First If your business relationship threatens your personal relationship, it may be time for a professional breakup. "We agreed we'd never endanger our marriage, and would sell the business if we ever reached that point," Atherton says.
The first few months were challenging for the whole family. Megan was in the store all day. Mike had a new job as branch manager at a credit union, their family insurance policy in case the store didn't work out; he took one day off for the opening. Megan came home for the kids between their after-school programs and the required family dinner, and then Mike's parents would take over, sometimes staying past midnight so that Megan and Mike could return to the store. Most of what Evereve sells can be found at Nordstrom or Macy's, sometimes for less. What sets Evereve apart is the experience--what it feels like to shop there, the help a mom can expect from attentive and sympathetic staff, the gentle nudge she might be looking for before she http:/f/winwaw.lilnyc. ctormie/msa goaznin et/h20a15t1 1p/daviird wohfi tfsokrdi/notnays pjecatantorsa. n"ymTroree.nhtdmyl is not the word I would use, because I steer 8/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com finally tries on that pair of skinny jeans. "Trendy is not the word I would use, because I steer away from trendy," says Christeen Paulison, a 47-year-old mother of six who's been shopping at Evereve for years. "Yet it's not classic, either. It's somewhere in between. Nothing scary." She wouldn't choose Evereve if she were going to a wedding, for instance, but she did stop by before her 25th college reunion: "I came here, and $500 later I just threw all that stuff in a suitcase and off I went." Women would walk into the store, often with their kids, not knowing what to expect. Megan would explain to them why she started the company. The kids would head for the play area. "And the moms were like, 'I get it!'" Megan says. "It was very clear to us that from an emotional perspective the moms got it. I knew in six months, 'OK, I'm not so crazy.'" Mike was soon able to quit his job. They raised more money, opened more stores, reinvested in the business. Total invested capital to date, including the recent round of private equity, is about $2 million. The company has so far paid two dividends to the original backers, totaling 50 cents per dollar invested. Since the seventh store opened, in Evanston, Illinois, in 2007, all expansion--including the September opening of the Phoenix store--has been paid for with cash from operations, which will also cover eight to 10 stores planned for 2016. Except for an 18- month blip during the late aughts, when sales were flat, annual top-line growth over the past 11 years has averaged 30 percent. There were always issues with the original name. Hot Mama sounds to some like a maternity store--and you don't want to know what comes up when you type hotmama.com into your browser. Once the Tamtes decided to expand online, the name, and its internet-porn association, had to go. Today, online sales account for 9 percent of Evereve's total. That includes a new subscription service called Trendsend, modeled after startups like Stitch Fix and Keaton Row: The customer completes an online profile, Evereve stylists send her a monthly box of clothes and jewelry, and she pays only for what she keeps. Initially projected to reach $1 million in sales in year one, expectations for Trendsend have since been revised upward by an order of magnitude. Mike hopes it's a "game changer."
These days, Megan presents more like the experienced CEO she has become than the suburban wife and mother she has always been. With her new haircut, she's a double for Robin Wright in House of Cards. Mike looks nothing at all like Kevin Spacey, but the power-couple analogy holds. Each sees the other as vital to their collective success. Mike's no expert in women's fashion--he's all about execution, implementation, and growth, and he's good at making things work. Megan is the soul of the operation. She used to spend all her time in the field. But as Evereve expanded to both coasts, and grew to 950 employees, the field got too big, and Megan was more often at headquarters. She and Mike shared an office. "A tight spot," Megan says now. "Too much togetherness." Megan started hearing the rumblings again. Her neck hurt--a body signal she'd learned long ago to interpret as "something's wrong; figure it out." She was suddenly unsure what her role in the company should be. "I'm the CEO--what does that mean?" she was asking herself. "Can you do this?" She tried working from home for a while, but that just made things worse. http:/S/whwew'.isnc b.coamc/mka agatz ihnee/2a01d51q1/udaavidrtwehritsfo rnd/noowta. sIpnec thateorra onywmonre .ohtmfflice, which is one important change. With a new 9/10 10/12/2016 How a Terrible, Horrible, No Good, Very Bad Day Spawned a $70 Million Business | Inc.com She's back at headquarters now. In her own office, which is one important change. With a new focus, one that leans more toward human resources: "If I can take care of our employees, they'll take care of our customers," she says. "I'm still learning, but I'm very confident. I have a vision. This is my new territory." And with fresh insight into how she and Mike work best together. "My job is not to develop my husband!" she says. "I think we both had to recognize that 'Hey, you know, let's learn from each other and become our best selves.'"
"I want to be pretty. I want to be fashionable. I can't believe a retail brand doesn't exist to address this woman, this mom." Megan Tamte Co-Founder and CEO, Evereve
And what of Megan's "deep fear"? Has success in business come at the expense of her children? Best ask Allison, who left for college this fall. She's old enough to remember life with her mom before Hot Mama, when "we did everything together," she says, "one on one all the time." Allison was sad when that changed, but she got over it. "It just sort of evolved," she says. And by middle school, "I was very proud of my parents. I loved telling everyone, 'Yeah, my parents started this business!'" There were accommodations, absolutely. Housework, birthday parties, holiday decorations-- Megan used to be all over that stuff. She thought, "That's the kind of thing a perfect mom did," she says. Maybe so. But somewhere along the line, Megan began worrying less about perfection and more about modeling what it means to be a parent who can love her children, fiercely and passionately, and still nurture fierce passions of her own. "Most of what my kids have seen hasn't been the glory of building a successful business," Megan says. "It's been the struggle. 'Oh, I gotta give a speech tomorrow night. I'm scared and I'm practicing it.' And, 'Oh, my goodness, I had to have this hard conversation at work.' It's seeing your mom, and your dad, embrace new things, things they haven't done before, setbacks. That's really an important part of a child's development, to see how parents work through that. I think about trying to be that perfect mom, and yet there I was at night watching American Idol. Now at the dinner table, we're having lively, great conversations, you know? It's just--I'm more alive." And all those friends of hers who worried, protectively, that she was giving up too much, too soon, for the sake of love and family? "I think what I'm living now was what those women wanted for me," Megan says. And she knows she couldn't have gotten it any other way.
FROM THE NOVEMBER 2015 ISSUE OF INC. MAGAZINE
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