For many successful small business owners, always doing right by others isn’t always an option, but for Tereson Dupuy, CEO and founder of FuzziBunz, it’s the only option. Since her company’s inception, she has watched its growth explode from her revolutionary cloth diaper invention to nearly seeing it go under due to a costly divorce and later a crippling patent infringement to eventually reaching its zenith when she appeared on ABC’s hit show Shark Tank. And she’s witnessed it all while following a simple philosophy: Operate with integrity and do the right thing. Period.

On Oct. 5, FuzziBunz celebrated its official 12-year anniversary, exactly one week after Dupuy was featured on Shark Tank where she unsuccessfully pitched her pocket cloth diapers to its panel of veteran business moguls. But Dupuy’s journey from her first $5 investment of a yard of polar fleece — the key ingredient in her modern cloth diaper formula — to her business’s selection on a primetime TV show has been a long one, wrought with struggles that would have left many other entrepreneurs jaded. To this day, she remains as passionate as ever about her charge.           

RMay_121009_7038Fuzzi

Photo by Robin May

FuzziBunz was established in 2000 in Dupuy’s home after she noticed that her newborn son had a severe diaper rash, which she fought with for six months before devising her own solution.

“I started putting fleece liners in his cloth diapers,” recalls Dupuy. “It wasn’t long before I started making stuff to sell. I cut up pieces of fleece and put them all on the website — whatever the website was — and literally started selling strips of fleece.”

As orders for her new product began to pour in, Dupuy continually kept reinvesting her profits into growing what would later become FuzziBunz.

“I knew that I wasn’t trying to profit,” she says. “I was trying to grow something from the start. Once I knew it was going to be a big thing it was inevitable; I had to reinvest everything I made.”

But as Dupuy’s venture continued to snowball, its first major hurtle quickly presented itself. Dupuy’s marriage dissolved in 2005 and, under Louisiana’s community property statute, the court began to define her private property, most notably her business, by its projected sales value over the next 10 years rather than its current cash value. According to Dupuy, this tacked more than $2 million in debt onto her company’s head at a crucial point in its development.

“If you have as much debt as revenue then nobody is going to lend you any money, nobody will finance you and nobody is going to invest in you,” laments Dupuy. “They placed financial handcuffs on me as far as growth, and I’m still recovering from that because it allowed a lot of competition to bypass me, competition that had venture capital, more money and more resources than I did.”

But Dupuy took this as she has everything else: in stride. However, just as she began managing this lingering constraint, misfortune decided to pay her another visit. Dupuy had been using an overseas manufacturer to distribute her “bread and butter” line of cloth diapers, but thanks to a combination of an admittedly weak patent and misplacing her trust in a particular Chinese manufacturer, her original designs were given away, leading to a rise in nearly 70 different knock-off brands of her original pocket diaper formula.

“I thought the good ole boy system only existed in the Deep South,” she says, “but apparently it exists in Hong Kong, too. I really had to switch manufacturers overnight because I had new stuff I wanted to come out with and I wasn’t going to do it in that factory just for it to be handed over to someone who can compete with me. It’s uncool.”

According to Dupuy’s estimates, her company is missing out on what would have been 70 percent of the market share of the cloth diaper industry, or potentially $30 million-$40 million in sales.

“All of these products have a huge chunk of this market share and even though it’s 40-50 different brands, people are still buying them,” she says. “They’re smaller companies, but it’s still taking market share away from FuzziBunz, which holds the patent.”
As regrettable as the whole experience was and continues to be, Dupuy says she received an invaluable lesson in business ethics.

“Trust no one,” she says with a laugh. “It really is unfortunate but trust no one and have a lawyer do everything — words of wisdom.”
Despite this open wound her company is still trying to heal, Dupuy refuses to be anything except confident in the future of her business.

“Between an investment, marketing dollars, new products and taking care of the infringement issue, I’m fairly certain that I’ll be able to grab back at least 30-40 percent of the margin and hopefully license the rest,” she says.

The exposure on Shark Tank has also given FuzziBunz a crisp outlook and generous surge in business. According to Dupuy, she is now seeing a slow but gradual upswing in business with direct-to-consumer sales rising between 75-100 percent.

“The big opportunities come with investments, manufacturing and other marketing and partnership opportunities that are presented, which will then lead to increased volume and increased gain,” she says of the post-Shark Tank reception FuzziBunz has received.

And though she wasn’t chosen by any of the Sharks for an investment, Dupuy says she remains content with how things played out.
“I don’t think I would have wanted to partner with them because I think they’re driven by money,” she explains in earnest. “I think my philosophy of doing business would’ve gotten in the way of that and it would have probably been a conflict because I do believe in doing the right thing, and the right thing isn’t always that green. But I feel good about myself and I can go to sleep at night.”

Dupuy’s plans now are to secure a new U.S. manufacturer to launch her new organic line of FuzziBunz. She also has just introduced her own website, TeresonDupuy.com, which she hopes to use as a springboard for one of her other pet projects, the “Make It Happen” workshop — an online course designed to aid aspiring entrepreneurs in achieving success by helping them learn from the mistakes she made in building FuzziBunz.

“I’m very passionate about helping other people and I’m very passionate about entrepreneurship and business,” says Dupuy. “I have been through so many struggles over the last 12 years I want to give back and not have people struggle the way I did. So I kind of want to give them a road map of how to take a product, how to bring it to market and how to do it the right way without all the same struggles.”

After more than a decade of setbacks, Dupuy’s underdog mentality has finally carried her and her business to a height where she can enjoy her success without fear of compromising her integrity for the sake of further growth.

“In the long run, FuzziBunz is a company that people respect, and I’m a businessperson that people respect and I don’t need to have all of the money in the world,” Dupuy says. “That to me is truly being rich and truly being profitable. I think that if you run your company in a good way and you don’t rip people off and you just do the right thing, all the rest will come back to you. I think good things come to people that do good.”

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