"I'm very conservative," Spade says. "I have no interest in losing money."
The idea, after that first run, seemed like a bust, even though Spade had just incorporated.
"That's it for me," Spade recalls that she told her partner Andy. "I'm not a gambler."
The trade show had been productive, however. Barneys and Fred Segal department stores spotted her bags and agreed to start selling them in select stores. So Andy suggested they hold off on giving up.
"Katie, you've got two of the best stores in America. Why are you crying?" Andy told her. "Let's not quit."
Before pursuing entrepreneurship, Spade had taken a more traditional route.
In 1985, Spade graduated with a journalism degree from Arizona State University and then backpacked around Europe. The next year, she moved to New York and landed a job in the accessories department at Mademoiselle magazine.
By 1992, Spade saw no future for herself at the publication and quit. She had decided over dinner with Andy to pursue a new direction: Making her own handbags. For the next few years, they relied mostly on Andy's income and mutual savings. At one point, they even liquidated their 401(k)s.
"When you don't have an income coming in," Spade says, "you're doing whatever you can to make it happen."
Spurred by a sense that the situation was do-or-die, Spade searched Yellow Pages and used her fashion magazine network to find supplies for her handbags. She had no experience in design, so she found a pattern maker who worked out of an apartment. There, Kate became a de facto apprentice — clipping big sheets of paper and fabric samples until the new skills became habit.