How They Started a Multimillion-Dollar Brand and Side Hustle

This Side Hustle Spotlight Q&A features Aaron Luo, co-founder with Carmen Chen Wu of Caraa, a New York City-based handbag and accessory company founded in 2015 that’s seen more than $50 million in total sales, and Mercado Famous, an artisanal Spanish charcuterie business founded in 2022, which surpassed $1 million in sales in its first year. Responses have been edited for length and clarity.

^{Image Credit: Courtesy of Mercado Famous}

How did the two of you connect as co-founders, and what inspired you to team up for your first venture, Caraa?
How Carmen and I met is a story of fate, chance and a little bit of fairy dust.

I am Chinese. I grew up in Madrid, Spain, and was educated in the U.S. Coming from a long line of textile entrepreneurs — my great-grandfather founded the largest thread company in China, Flying Wheel, in 1929 — I always knew I wanted to get back into the fashion and textile industry after spending a decade in corporate finance.

Carmen is also Chinese, born and raised in Valencia, Spain. Coming from a family of third-generation artists, she attended school at Central Saint Martins in London and Parsons in New York City. She is a CFDA-awarded fashion designer, spending most of her time in luxury fashion design since her early design career.

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We first met in the early 2000s, and after a quick exchange of family history, we found out that our grandparents were actually business partners in Spain. My grandfather founded the first Chinese law firm and helped many Chinese entrepreneurs flourish in Spain, including Carmen’s grandmother. At that time, we both had dreams and aspirations of creating a luxury handbag brand rooted in simple, elegant designs and functionalities for the modern woman. This is where Car + aa (Carmen + Aaron) was born.

Having spent decades in the fashion industry, we always felt that many inspiring designer handbag brands were beautifully designed and crafted but lacked innovative features such as organization, light weight, smart straps, etc. We were eager to disrupt the handbag category with a brand that not only cared about innovative designs but also provided a product that could withstand the daily usage of the busy modern woman, still using the same materials as some of the world’s best luxury brands and crafted at the same workshops and factory.

The chances of two Chinese-Spanish entrepreneurs with grandparents who did business together meeting in New York City and wanting to start a luxury fashion brand together is probably one in a million, and we always felt that fate brought us together to create Caraa.

How did both of your professional backgrounds help inform how you built Caraa?
I have always admired Western corporations and am mesmerized by how they function and their ability to scale globally. My 10-plus years spent working at a conglomerate like General Electric, managing businesses across 12 countries and seven industries, including retail finance, oil and gas, healthcare, appliances, television and media, wind energy and professional services, allowed me to start, grow and scale Caraa with its foundation in operations, finance and global supply chain.

Carmen spent her early days working for luxury fashion brands across both the UK and the U.S. Not only did she work closely with head designers from the many luxury brands she helped grow, but she also spent several years working at a premier handbag craftsman shop in New York City, working exclusively with a handful of luxury brands to sample and fabricate unique designs. This gave Carmen an extensive understanding of the essence of handbag design, including concept, material sourcing, construction and the engineering mechanics required to create innovative designs.

While running Caraa, you started Mercado Famous as a side hustle. What inspired it, and what were the first steps to get the idea off the ground?
Mercado Famous came out of desperation, from our love for Spain and Spanish food. Growing up in Spain, charcuterie was part of our daily diet, something that we often consumed with friends and family. It is a staple of our Spanish cuisine. However, having lived in the U.S. for over 20 years, we always struggled to find premium Spanish charcuterie at honest retail prices. The options were extremely limited. Either we found charcuterie that was good but overpriced or mediocre products at still elevated prices. We were determined to change that.

After spending over two years looking for the perfect Spanish farm with the right farming practices, we found a third-generation family farm with a century-old recipe and the scale to bring what we believe to be the best Spanish charcuterie to American consumers at honest retail prices. The goal for Mercado Famous is never to sell more charcuterie but to bring our memories from Spain to the U.S. and share this wonderful cuisine and culture with the diverse U.S. market.

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How did you balance working on Caraa and Mercado Famous in those early days?
It was not easy, and honestly, we are still trying to figure this one out. Both brands are on a high growth trajectory and require a lot of tender, loving care both Carmen and me.

There are many synergies between the two brands, and 90% of our teams work on both brands daily. Functions such as ecommerce, content creation, social media and graphic design are designed to support the needs of both brands.

For us, it came down to prioritizing the right areas of focus: people and process. On a daily, weekly and monthly basis, we ask questions: Do we have the right set of people helping to run the brands, and do we have standard measurable processes that help us scale the brands? Anything that doesn’t help us answer “yes” to these two questions gets deprioritized. So far, this has been the right formula and the north star that has guided us through the rise of both brands. As we grow, the balance of priorities will change, which we constantly calibrate to ensure our tefocussing on the right areas for both brands.

How did you leverage your experience growing Caraa to help expand the side hustle?
Caraa is a decade-old brand. It is part of the first wave of native digital brands that leverage digital platforms to tell the brand story and discover new customers.

We learned many lessons along the way, and our goal was to take all of the lessons learned from Caraa across content creation, social media, technology, branding, growth marketing, CRM and logistics and give them all to Mercado Famous. There was certainly some fine-tuning when translating our strategy from Caraa to Mercado Famous — after all, one is a fashion brand, and the other is a premium consumer packaged goods brand.

However, the soul of the two brands is the same: to create world-class products at the core and identify the right customer base to tell the brand story. From Caraa, we quickly learned that the age of mediocre products with fancy marketing is long dead and that product innovation will always prevail over marketing.

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When did it become clear that the side hustle had the potential to be a full-time business, and what were the next steps to help make that happen?
I often read business stories where other entrepreneurs are asked this type of question. Their answers are often related to sales and growth. “When we made our first million” or “when we landed that one account X” or “when we hit our first 5,000 customers” is when we knew we had a business. And although none of these are wrong, that moment came when a group of Spaniards wrote to our customer services and said: “Thank you for creating Mercado Famous. I am a Spaniard living in Iowa, and after discovering your products, we no longer need to smuggle Spanish jamon when returning from Spain. Keep up the good work!” This was when we knew we found our base and that there was longevity in our brand.

The next step is to scale the brand. Our goal now is to find the right channel to tell our brand story and get the product to as many people as we can. From our initial testing phase, we believe that American consumers already love our products; they just don’t know it yet. Take our Italian counterparts, for example; Italian charcuteries have widely penetrated the American diet. When you look at the taste profiles, they are extremely similar to our Spanish charcuterie products. Our goal is to offer the Spanish charcuterie as an alternative for those who already love the Italian charcuterie.

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What are some of the challenges unique to running a food business, and how did you navigate those?
Navigating and understanding food safety was extremely important to us from day one. The USDA heavily regulates the charcuterie space, which we believe is great for our industry. Because of this, we had to partner with several agencies and our selected farm to ensure that it followed all of the proper food safety processes, and we obtained the correct certifications to bring this marvelous product into the U.S.

What does your involvement with both businesses look like now?
This changes weekly, but on average, I divide my time 60-40 between the two businesses, where 60% of my time is spent running Caraa, and 40% is spent nurturing Mercado Famous. Even though Mercado Famous is still significantly smaller than Caraa, it is a brand in its infancy and needs a lot of attention from us, an investment we are happy to make.

What have the growth/revenue trajectories been for both Caraa and Mercado Famous?
Although we don’t publicly disclose revenue numbers, Caraa is on track to be under $20 million in revenue this year, and Mercado Famous is on track for under $5 million in revenue.

Caraa has seen more than $50 million in total sales, and Mercado Famous exceeded $1 million in sales in its first year.

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What’s your best advice for people who want to start side hustles or full-time businesses of their own?
Do it out of passion, and never let financials drive your decision to start a side hustle. The path to entrepreneurship is long, dark and never straight. You will find challenging moments that will test your limits, especially when you have more than one business or job. This is where the passion will kick in and help you push forward even when you can’t see financial gains at the end of the road.