Madison Reed: Amy Errett

Transcript from https://podmenti.com/t/d34641a3556bdbbd

We had four co-founders when I started.
and all three of them are gone from the company.
Through
Some of the most painful
experiences that I've ever had in my life.
These were three people that I cared deeply about. Two were personal friends.
And I thought I could will it to work.
And it didn't.
And it cost
The I would say it costs the company a couple of years in retrospect.
And
I learned a lot. M my series A investor said Amy four co founders is too many, and I said, No, it's not.
And boy was he right.
Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
They built.
I'm Guy Roz and on the show today, how Amy Eric decided that hair color needed a makeover.
And how she built Madison Reed into a national multi-channel brand.
The startup world is full of stories about young people who take huge risks.
And when they fail, it can actually be pretty great, because when you're young, obviously you can recover from a significant failure.
You have time on your side.
Which is part of the reason why I have so much respect for founders who take those risks later in life. Because
If you're older, like forty five or fifty.
The stakes are higher.
If you lose everything at that age
You might not have time to get it back.
But being older can also have huge advantages.
You have experience, perspective, probably a bigger network, and you have to be really deliberate about the kinds of risks you take.
Which is exactly how Amy Erit had to operate.
Amy was fifty-six when she launched Madison Reed.
It's a hair color brand that you can find at Walmart, Ulta, Target, and thousands of other locations across the country.
The idea for Madison Reed came in part from Amy's wife, who was having a hard time finding a decent at-home hair color product.
Amy saw an opportunity.
The same kind of opportunity that led to companies like Harry's Razors and Dollar Shave Club.
Take an old school product with a frustrating experience and offer a better option.
Now at the time Amy didn't know anything about hair color.
She did know that about half of American women who dye their hair do it at home.
And at first, that's exactly who Madison Reed was built for. Now, before she launched the brand, Amy had a completely different career. She was in banking and finance, consulting, even venture capital. But eventually, she realized she didn't want to be the one listening to pitches.
She wanted to be the one making them.
And as you will hear, Amy dealt with a pretty big setback before Madison Reed.
She was fired as the CEO of a company she ran for several years, but she took the lessons she learned from that experience and tried to apply them to her new role as a startup founder.
including a painful decision to separate from three of her co-founders.
It's a story I've rarely heard a founder speak so candidly about, and it's worth hearing.
Anyway, before all of that, Amy Eric grew up in the sixties and seventies in Philadelphia and Long Island.
After college, she did an MBA and then worked in banking and finance before starting her own consulting firm called Spectrum, which specialized in mergers and acquisitions.
And so
The idea was we will help th these deals go through and you get a cut of the percentage of the sale.
Exactly.
And um and it turned very quickly as well.
that we would do the transaction and then the buyer would ask us to come in to consult about how to integrate
that business into their business which then turned into
consulting fees that kept us going.
And did you run a pretty lean operation or did you guys start to hire I mean hire
A bunch of people.
We started to hire a bunch of people. I think at the Apex
Um, we probably got up to about forty people in the firm.
Wow.
So so you were
Guys are doing really well.
We were doing well. We were a profitable company from the first six months and never w became unprofitable, never needed to raise any more money. So
It was a very different thing than uh raising venture money, which
Um get to. Yeah, we'll get to it.
Yeah, I I guess uh for for business and personal reasons, um
You eventually decide to to move spectrum from
where you'd founded it, which is New York City.
to to the Bay Area. Um how did you
Find
San Francisco in the nineties.
It was exciting.
And remember that I had spent my whole career in
New York City on Park Avenue or down in Wall Street. And it was completely different. The whole fact that people didn't put a business suit on to go to work.
was like a mind blower. I mean we had an office and I hired an assistant here.
And Halloween happened and the assistant came in there.
Um costume.
Which was very customary.
in a place like San Francisco, but in New York you would never go to work in your costume.
And um so things like that were just foreign to me.
And what about socially? Did you start to feel like you could breathe?
Definitely.
It was much more gay friendly.
Uh I had told my family
Uh before I moved.
And I had a lot of acceptance, so I wasn't somebody that
was struggling with their family.
Uh rejecting them, which
You know, I have a lot of friends that's happen to and it's
for me it was shocking that it was happening, but it was definitely happening. But yeah, I
I met a social crowd. I had a lot of friends and
Um I s I had told my business partner
And I was out at work.
And and also like
At that time, the early n even in the early nineties, there probably just weren't as many resources available for
For people who
who you know, were we trying to figure out
their identity, right? Like there just weren't as many books and obviously the internet wasn't what it is. I mean, there just weren't as many tools to connect with people.
Most people did that through their friend circles.
you had a close knit group of people and that's who you sort of did everything with. And you met other people in their circles of people. So really
communities were very tight.
much more than today where
for instance, my wife and I have an equal number of gay friends and straight friends. Like it just doesn't in those days you if you had straight friends, that was outside of your gay circle.
Um, you mentioned your wife, Claire, you met her in San Francisco.
And what is she what was she doing at the time?
She was a massage therapist, so n yeah very different.
Uh and we met each other through a place that I had gotten very involved in called Glidechurch.
And um
This is a a well known
Yes. Methodist Church in San Francisco. Yeah. Uh yes, Methodist Church and has
Large set of social service programs.
um in the city.
Фуд програм, хаузін програм.
um recovery program.
So I was very involved, and I'd gotten on the board, and I was actually chairing the board.
and Claire sang in the gospel choir.
Right. And and how did you get involved with that in that church? I uh
A friend took me.
Um, because my step
mother was dying of cancer.
And I
Um
was going through a hard personal time. I was close to her and so I watched the
uh dying process.
and was a caretaker for her back east. I used to go back and forth. They lived in Florida at the time. So I was in
uh a grieving stage.
And a friend.
Told me about the spiritual
pieces of Glide and uh
That's why I started going because of that.
Yeah.
Um, and and did you grow up?
Going to church is I grew up Jewish.
So this was uh yeah, my
My mother uh who just
unfortunately passed away uh at the end of last year. Very hard moment.
Um
uh had this famous saying that I've talked about all the time.
Um I was okay when you came out as a lesbian, but now that you're chairing
A Methodist church, you're killing me.
So that was her uh comment about uh
But I didn't grow up.
Religious, I grew up more with traditions.
I would say.
Mm.
To this day, it wasn't about reading the Bible. It was about helping people and the goodness of paying it forward. That's where my spirituality lies today.
All right, so back to the timeline. I guess around nineteen ninety six, this is about six years.
After you launched.
The consulting firm after you launch Spectrum.
Uh you get acquired.
And
From what I gather, the terms are pr pretty good. Like I I ha and I have to imagine, Amy, I mean this is
I mean for somebody who who grew up with not a lot of money
Um I have to imagine that this was
Really a a a
life changing transaction for you.
Yes.
A absolutely life changing
uh transaction for me.
But I was three years of can I get more money'cause these earnouts are about
You get a payment.
And then you spend the rest of the time chasing the remaining payments.
And so uh I did that.
Um, and I was really focused on the bottom line of that.
I mean at this point let's let's
Let's be frank, you probably didn't need to work. You probably could have stopped working, which is not interesting for most people.
I I don't think that's true.
No, okay.
Yeah.
I don't I made a I made a good amount of money, but I didn't make enough money to live the lifestyle that I wanted.
So I was still chasing more.
Yeah.
Yeah.
Um
You get a job in a completely different
industry in in in travel. You got uh h you got recruited I guess to be become the CEO of a company called Olivia. This is a company that's still around. It is a travel company that at the time I think was focused primarily on gay women. Today it's it's says I I will look at the website Lesbian and LGBTQ plus
Women.
Yeah, we actually they were very large vacation.
experiences. So we would rent Holland America ships, cruise ships.
and reinvent the entire experience, the entertainment.
uh the activities, thus excursions.
to tailor it to
Um what
uh gay women would want.
So it was a premium. It was a a great experience. And you know, we had people like Melissa Etheridge or the Indigo Girls or people that were iconic
In the um

Community.
Alright, you're there, you would you you'd end up being there for five years and the
The
Um let's see the let's say the ending was not.
You had imagined. Um
You were you were actually like you were fired, which is I was fired in a hotel lobby on a Monday morning completely blindsided.
completely blindsided. There for five years, you grow in the business, you think everything's going well, and
The founder had a health issue.
And so I hadn't seen her.
In a really long time, but was reporting
to her in the form of emails or sort of updates. So I thought we were just having breakfast.
Ha ha
We weren't having breakfast, by the way. W what did she wha I mean, what would did she give you a reason? Did she say hey, I'm not happy with h
What's
Like what was it?
Well
I walked into the lobby and she was there sitting.
on uh a couch.
And I went to give her a hug and she sort of moved back and I thought, Well that's strange. And then she handed me an envelope and said, We're taking the company in a completely different direction. You're no longer
Uh the CEO.
And I
was completely startled.
What was in the envelope?
A lawyer's um
A letter describing how I was being uh let go for cause.
And cause was very nebulous.
Uh, and so I was really blindsided and
Um
Yeah.
It was um
It was
one of the hardest things in my life and it was one in in retrospect the best thing that ever happened.
I mean it was a it must have been particularly hard because it it it was a public

lesbian focused travel agency and there's this kind of s internal rift and it was covered by The Advocate and and other publications. So it was it was out there. People people could read about this,'cause you eventually
decided to sue and then they counter sued and now
It's a bigger story beyond just a
Uh
You know.
U an employment dispute.
Exactly.
First and last time I've ever been in a lawsuit.
And you guys.
They just basically settled for an undisclosed amount, and
That was it.
You were you were out of the picture. Um
Tell me.
You said it was a the best
It was the hardest but the best thing, I th paraphrasing what you said, to happen to me. Tell me why getting fired.
Was
was in some ways the best thing that had happened to you.
I started to understand what motivates me and I had a m the Madison Reed was a little kid, three years old at the time.
Your child. Your human child named Madame. My human child named Madison Reed. Correct.
Yeah.
So I felt financial pressure.
Uh, but I also, as you said, felt
A lot of shame.
And reputation.
um you know damage.
Uh and
Yeah, I started to go down a journey.
Uh I got a therapist.
And I think it was my first
Um
opportunity to understand that things don't happen to us.
uh we have a hundred percent responsibility for what does happen.
Um and
Uh I was really unhappy in the job. And in fact my wife
Had been telling me
For about a year, I don't think this is a great job for you. You're frustrated, the business
Um you know it won't you
You
You had bigger things you could do.
And so I don't understand why you're being loyal and staying there. And I just blew that off.
And uh thought I was you know, I had made a commitment and so I was gonna stay and
Try to do the best.
I could.
And I think that's just an important lesson in life.
that sometimes shit happens to you.
Yeah. And the key for my life has been
Uh
a certain amount of resilience and persistence.
And so I knew what was true about me.
And so I just decided that I needed to release myself from that shame.
And um
Just put my head down and
Fallo my heart.
important word heart, not head. I tend to go to my head a lot to the analytics rather than the feelings.
And I made a conscious decision I wasn't going to go take a job again.
That
Didn't satisfy me.
It it sounds like that was a
quite a transformational shift for you mentally. Like it it sounds like if I'm reading between the lines
You really were not
somebody who kind of confronted your emotions. You were focused on
success, you were hard charging, you were, you know
But now
you are forcing yourself to kind of
peel back the the the onion.
Just
Uh I'll I'll go back to not being able to be out.
Right.
There is
Some analogy here.
with
uh absorbing
uh a certain amount of

Things that that
You
don't want to be true that are true.
Uh and when you're not out, you're living in a
sort of numb state.
Anyway?
And so I think I was used to living in a numbed
State.
I wasn't being in my life at work, I was doing.
And why I say it's the best thing is that I got really clear about what motivates me.
And what's important to me.
Um all right, so you
You're sort of get through this you're going through this this kind of mourning process of being fired and losing a job and also a lawsuit
But you get
You do find you get back on your feet, you find a job. Um
in
Inventure.
um in back sort kind of back to the world of finance again.
And this is um this is a a venture firm called Mavron.
which is uh which was founded by Howard Schultz, who was his venture capital firm. Correct.
What are what are
some of the things that you'cause I'm assuming you had some FaceTime with Howard Schultz, who's been on on this show before. What are some things that you
You learn from him.
I learned that this thing inside of me, which is mission based and values based, was an important factor in whatever I did next.
And so he validated that that could be true and be have success through that.
And I had the good fortune of walking into stores with him and seeing that he started to get on the line when there was a line taking orders.
Right, that he was just part of Starbucks regardless of
him whatever role that he was in.
Um I also learned that he saw things before other people saw things. He had a gift about spotting a trend.
Um I will never forget it was the fall of two thousand and seven.
And we had an investment meeting in Seattle, and he walked in and he said, We need to slow down our investments.
Now you remember that bank collapses happened in the fall of two thousand eight.
Yes. But this was 2007, a year before that.
Well. And he was seeing a trend about the purchasing patterns at Starbucks.
He was starting to see the consumer's pain.
Or the consumers, um
You know.
The afternoon drink, so to speak, was
was something that uh I think they were starting to experience that slow down.
So um
Validating one's gut?
is an important part of what I saw in Howard.
And uh
Excellent brand builder as well.
I have to imagine that you as somebody who really is not
Built to work for other people. Um, here you are working for other people, and obviously had immense respect for Howard Schultz.
But you're seeing all these like founders come in, energetic, they're psyched about their business ideas.
You're vetting them.
You're I have to imagine you're starting to get like
A like.
like FOMO here. Like I'm I I need to be on the the other side of the t uh uh the other side of the table.
Absolutely. I remember my experience being on the in boards.
where I'd be watching the CEO wishing I was that person.
While all the other investors got in their Teslas
as I say, and drove away. Uh probably completely relieved that the board meeting was over and I was sitting there thinking, What would I do if I was in their position? And that became more and more and more of what I was feeling.
And and tell me where that comes from because look at this point you're you're you're N V C, you've got now you've built up a considerable net worth, like you've got a nice life.
And you probably could spend a bit more time with your daughter, like I don't know, m but
What was it about seeing these startup founders who were just grinding working a hundred hour weeks?
That made you think I want to do that.
I never felt like I had the big outcome that
I want it.
I had a really nice outcome.
But I didn't have a big outcome.
You're you're you're, you know, seeing other people who have like
hundred million dollar plus exits and you're thinking
You know.
Uh I I could probably do that.
Yeah.
And
This is one of the things that
Uh I'm not sure when I say that guy that I feel proud of that, but it's
It's a vulnerable
thing to say, which is that
I did not think
that I had the outcome that other people that I was hanging out around with, you know, I am in something called YPO.
And my counterparts
You know, or the you know
the top of whatever mountain there is in Silicon Valley. And I'm thinking
I'm smart.
I need to do that.
So I think it was ego driven.
as much as it was
Uh and I think I used the excuse, which I've done all of my life as a working class kid.
That
I needed more money.
I think I used that excuse.
Because
When is enough ever enough of anything in life?
Ha.
I I really appreciate that vulnerability because I think
What you just said is something many people think but don't say.
And
And we do, especially when you're in a status conscious environment, you know, when you're in the San Francisco's or the New York's or Los Angeles's of the world. I mean that story can be told again and again and again in many different industries and categories.
And yeah, I mean I I I hear you.
When you're a working class kid
And the first one to go to college.
and you go to Wharton and you work at a blue chip bank.
And you just keep trying to prove.
That
You can be successful.
This is a game I can play my whole life.
I can decide that no matter what happens at Madison Reed, it's not big enough.
Because there will always be an AI company that's bigger. There'll always be a SaaS platform that's bigger.
And
Uh I have a hard time seeing myself as successful.
I don't think of myself as a successful person.
Yeah.
А і міфтисторіт.
with your time at at Mavron, you would be a successful person by any
definition of that word. But we haven't even gotten to the thing that that we're about to get into, which is the which is the marquee part of this story.
And and so
You are
Back to the timeline, you are seeing all this happen and you start to think to yourself.
I
I gotta start something.
I gotta get back in the game. Gotta get back in the game.
And
And you land on this idea to to do
hair color.
and we're gonna get to that in a moment. But but and what it what it was gonna be. But how did you
Tell me what you started'cause in your I imagine in your mind you're like I'm gonna start something.
What
But but you probably didn't land on on sort of the cosmetics or the hair care industry or whatever it was gonna be right away, did you?
No, not at all. And I would say that where I landed initially, the a little bit of a twist to what you said.
is that I want to be an operator again.
Uh, like that that in in the n and that's the way I was thinking, like, oh like do I wanna be an investor
Like I was bored.
You do a deal a year.
You s kiss a lot of frogs.
It isn't results oriented for ten years or eight years or right. So it's just a different lifestyle.
And people that love it or great at it.
And
I found a way to be good at it.
But I wasn't
great at it because it isn't my passion point.
It didn't
Make me spring out of bed every morning saying, I'm I'm
I'm here.
I'm ready.
Uh so the operator part was an itch.
And
Uh
We saw an investment at Mavron called Dollar Shave Club. Yes.
And we passed.
I know the story well, he was on our show.
Michael Dubin.
Michael is now my independent board member at Madison Reed. So you had passed on that and then I think they were eventually acquired by Unilever. Correct. They were eventually had a very good outcome.
Yeah. And I
Was intrigued by the concept of
Disrupting
Consumer products.
by the internet.
And bypassing someone's shelf.
And that's exactly what
Dollar shaved.
Club did.
Yeah, so how did you land on
On hair hair color.
Uh I had an analyst who worked for me as a summer intern from GSP.
And
She did a scan of
analogous products with repetitive use in the women's
beauty category or women's category and hair color was the number one thing.
The came up.
And I kept saying, This can't be true. These numbers just seem very large.
And um
That's what came up. And then I started to do a bunch of research about online solutions for buying hair color. There must be something
That I'm missing.
And um
I wasn't.
Missing it.
So
I think at this time
uh it was like ten billion dollars. It was a a report that showed ten billion dollars was was was spent on hair colors uh globally
super fast growing category.
uh and like in the US alone. I'm I'm just reading from from my research that n at the time ninety million women
Colored their hair.
So so every six weeks. Every six weeks. So it's a huge opportunity. Yes.
All right. So twenty thirteen
Yeah.
You
Is the year that you founded Madison Reed named after your daughter, but what did you s what did you start to do? I mean, I'm assuming you start to buy some hair dyes and just t test'em out and and find a pain point or or something you could improve on.
Yeah, so I'm a believer of synchronicity in life.
And so while I I can't make this story up while I'm thinking about this, my wife, who turned gray at twenty five, who spent every ten days sitting in a high end stylish chair.
because she doesn't want to be grey, um, was saying a lot of things about what are what do you think is in hair color? Like I'm doing it this often. It doesn't feel that good. Like it smells, it burns, it's kind of crazy. Uh I'm in Whole Foods.
Doing a Saturday morning shop.
And she text me and says, Do you mind buying me a box of hair color?
And I text back
At Whole Foods.
She says, Yes. I said, Well where where is it?
And so you go I go over to the beauty section and you know have to uh there are six shades.
I say this is not high quality. Like why are you gonna do it at home? She said well at whole foods it must have better ingredients.
And so I buy a
Box with dust all over it, meaning it's been sitting there a long time, of the darkest black hair color that I can find.
And the next stop on the Saturday morning errands was Walgreens.
And I was picking up prescriptions and happened to walk down the hair color aisle.
And turned, and if you've ever looked at it, it is crazy. There is no there's no product differentiation, it's all ten dollars. It's just an inferior consumer experience, and I bought thirty boxes.
Randomly.
Just put'em in my basket.
And went home.
And
Now Claire and Madison are like, what are you doing? And I'm taking them apart looking at the consumer experience and seeing like this is torturing a woman.
Smelling the developer torturing a woman.
Uh, and the irony of it is she's supposed to feel beautiful at the end.
And so, um
That was part of the mix.
of all this research that I started to do talking to a lot of friends, how often do you get your hair color? Do you care what's in the ingredients? And just I spent about six months digging deep into just is this a good idea?
Could it work? Why hasn't somebody
had a thirty dollar prestige box.
What are the limitations of that?
And then uh
Found out.
uh the access you get when you're a V C is that I
uh ended up getting
uh what was supposed to be thirty minutes on the phone
Uh with an executive at L'Oreal.
And
uh just started to ask a bunch of questions, not under the guise of me starting it, but like I wanna find out about the industry and what goes on and
He started asking me questions.
Like
Are you gonna start something?
Like, are you gonna like why are you asking this? And then I finally said, I'm contemplating this
And he said, Well
This is something that somebody needs to disrupt because there's no prestige box that goes to somebody. And if you do it, I'll invest.
Well L'Oreal executive. Yeah. And he he he left like two months later, so I didn't know that he was leaving. And he he was like
This is a really good idea. It's hard, but it's a really good idea.
Um
Now I just want to put this into context because
And I this is really, I think, my favorite part of the story in some ways, which is
You're all fifty five, maybe fifty six.
And you decide
Just
To do a startup.
At that age which I think is
Awesome because
you really I mean, you're at a point in your life where you could really kinda throttle back and then
But you're
You're hitting the gas.
Yes.
Uh I never doubted did I have the energy, did I have the
you know, brain power, did I have the persistence? It was like
Everything I've done up to this point.
I felt like positioned me uniquely to be successful at this business.
I'm a better CEO'cause I was an investor.
And because I got fired.
And because I faced into adversity and boy do you face into adversity every single day in these jobs.
So what dawned on me was like oh
I've waited all my life for this.
I have waited all my life for this one.
When we come back in just a moment, Amy launches Madison Reed with a group on deal.
Which does not go according to plan.
Stay with us, I'm Guy Raz, and you're listening to how I built this.
Hey, welcome back to How I Built This. I'm Guy Roz. So it's 2013, and Amy is trying to learn all she can about the business of hair color.
And one of her best contacts in the industry is this guy she knows who happens to be an executive.
And L'Oreal.
I emailed him and I said, Hey
This is a crazy question, do you know scientists?
And he said
I know these these people who have a consultant
Company.
that help people develop hair color and you know the private label industry is all in Italy.
Uh and
So
I went to Italy with these scientists, these hair color expert styliст.
That you hired as consultants.
And they introduced us to thirteen.
hair color manufacturers.
And the f what were you what were you looking for before we talk about the the the meetings? What were you
You wanted to just find somebody who was willing to make uh
Uh die for you?
Yeah, I wanted to figure out whether
You could do it without harsh chemicals.
Like was it really
Feasible.
There must be a reason that people aren't doing it.
Right. I kept thinking I'm missing something. I'm missing something.
And um the first ten contract manufacturers I met with were all guys.
Uh, and they they literally laughed at me.
They said you have to use Ammonia. PPB resource and all
Yeah. Sulfates. This is all the things that stabilize hair color so it works.
And you're gonna try to sell it on the internet.
So they were like, I I don't understand.
Um
And then Nuck lucky number eleven.
Um
I spent five hours with them.
And I was meeting with the CEO. He's since become a very close friend.
And he's listening to this idea and he's like, Yeah, you can take the chemicals out, but nobody wants to do that. Like it's more expensive.
And
you need to spend more time in the lab and you need to
really do uh a lot more testing and stabilization.
And then he paused and he said, And you're a venture capitalist and so are you gonna raise money for this? And I said, Yes.
And then he said he we laugh about it today, he says
Well, you have to pay me up front a hundred percent for the first run and all in euro.
Wow.
And and how much was that gonna cost?
Uh, I think altogether it ended up being like maybe a hundred and sixty thousand of US dollars. Cause remember the first run was
a limited, you know, minimum order.
Quantity. And when we launched, we only had nineteen shades. You wanted nineteen shades.
They only could make nineteen shades. I wanted as many shades as possible. That but that to me sounds like uh for a first run, I'm thinking nineteen shades. Like
I'm thinking about ice cream. Like if you're starting an ice cream business, you just start with vanilla chocolate and strawberry because all of the data shows that that accounts for most of what people order, and then you get into the chocolate chip cookie dough and the honeycomb brittle and whatever you want.
And I'm thinking it's gotta be the same in hair dye, right? Like probably only No, it's not. No. I mean look at every
Person.
has a different hair color.
So the nuances of your hair is very specific to who you are. So
There's
You know, fifteen today different brunettes.
You know, and twenty different shades of blonde.
Right, and eight different shades of red. So we had to have a full enough spectrum
Uh um

People could take us seriously in order.
And so um
We started out with nineteen.
And nineteen this is going from what to what?
Like blonde to
Dark black, yeah.
Okay. We have close to a hundred today.
I mean I it sounds like a lot to me, but I don't know this ministry. The last time I dyed my hair was when I was in junior high and I was a punk rocker. Spray it. But I mean how long between that visit
And the time that they actually had a formulation ready, like
Did they have to do a lot of research and a lot of work on it? And we had to spend a lot of time there because one of the things you do is
Uh when you make a colour it has to sit
Uh in
testing sort of quarantine for three three months.
For stability. To make sure that it's gonna be shelf stable. Exactly.
So you're just waiting for three months and then we're getting models.
So we recruited models in Italy.
that come into their salon.
And then
They color their hair, and then we see what it looks like pre and post.
And then you start doing things like looking at it in sunlight, looking at it under UV, looking at to make sure that it's actually the representation of what the consumer thought they were gonna get.
What were you willing to spend before you went out seeking?
seed money. Like was there a number in that two hundred thousand dollars. You said I will spend two hundred
And then if it doesn't work, I just I'll eat it and move on.
Yes.
But clearly that didn't happen. I mean, so so as they're developing this product in your and you're building the business model,
How were you gonna sell this? Were you gonna
It was gonna be a wholesale model, were you gonna go to to cosmetics brands and and Walgreens and Walmart? I was gonna do what Dollar Shave Club did, which is direct to consumer online.
Yes.
Because that is more profitable if it if it can work. Absolutely. More profitable, higher gross margins. And the one little thing that I realized.
was color matching.
the person coming into our site was going to be the most important thing. When you walk into a stylist
They're looking at what your hair looks like at that moment.
Yeah. And they're deciding what your hair could look like.
If they put various colours on it.
That's what they get trained to do. There is science.
to this, not just art.
And so
I
was thinking, well geez, maybe
We could do a quiz.
And it had eighteen questions that you were answering, including what color is your hair now, how much gray do you have when the gray grows out, what's the texture of your hair, and then what is your desired result.
And we started to see very early on.
actually measuring customer satisfaction and net promoter score.
Whether or not this algorithm
'Cause that's what we built, machine learned algorithm.
Worked.
And that was the moment
that we understood we had something here because the retention from the beginning and the color predicting from the beginning was very accurate.
All right, so you were gonna sell this direct to consumer.
And y and you had a hunch that there was an opportunity here.
So here's a question. One of the was one of the ways you you you thought about positioning it
in in in relation to your competitors, your potential competitors was
We are safer or we don't have harsh chemicals, or did you want to avoid that because that's also can be like a
Uh a minefield.
Uh.
Um we uh marketed and still market as ingredients you could feel good about.
And
We talk about an eat free formula. So we're very um
We're factual.
Yep. Uh we're not aspirationally, we don't use the word clean.
Because that's a word it's a meaningless. It's it's a meaningless word, but lots of people use it.
So we knew that if we got early adapters, maybe people that had been sick
And they cared more about
uh what they were putting in and on their body.
That we had an opportunity
And so the
the marketing in the beginning was about uh better for you.

And and looking for in like influencer types initially?
Uh looking for influencers. Um
But also
we saw an opening with the age group that we were actually um targeting, which was women that are starting to go gray.
So like late thirties? Yeah. Thirty eight.
To be exact. Uh thirty eight and older.
That's when acceleration of gray hair starts showing up.
En or business model.
make sense is based on the repetitive usage. So the more someone colors their hair, the more money they're worth to us.
And so we we it was very important to get that market.
Fifty percent of women in the US color at home.
So that is a bigger market than people thought.
And um that's who we were focused on the at home user.
that wanted a prestige product with better ingredients.
who had gray hair.
So all right, so it's twenty thirteen year
Working on the formulation you find this Italian
manufacture and
you decide to raise or you need to raise money because you're you can't
You don't have the funding to do it yourself.
Um and in April, I believe April of that year of twenty thirteen, you raise four million dollars.
In a series A round.
Um with participation from Mavron and and
where you'd worked.
And you weren't gonna launch until remind me when w when were you actually gonna launch? July. July fourteen.
And so and I believe that even before you launch into series B round.
That is correct.
So um
Was the idea here to go in big, to really go in hard in case some of the established players.
catch on and try to compete was the idea. We're gonna go in well funded and we are gonna go out of the gates.
just like guns blazing.
Yes.
And the idea was since we knew that we wanted it to be a subscription based business.
That building the
the core of the subscriptions.
would scale the business faster.
So you have to
You need a splash.

the sort of noise.
For these women.
And
figure out a way to stop them from using what they're using now.
And have them come to you.
So I
My having been a VC, I knew
that it was gonna cost a lot to acquire customers initially.
And the cost was gonna be through advertising, presumably. Correct.
Yeah. All right. So so
In
Um
Yeah.
twenty fourteen, July twenty fourteen, you are ready to launch. You've got a website ready to go
What was the launch plan? How were you gonna get on people's radars?
So we had hired a
PR agency that was pretty well known in beauty.
And
We had developed a launch plan of getting a very famous stylist.
To tell people that this was
efficacious that this was salon quality hair color that they could trust and use at home.
And we had a big
What
would now be called an influencer event.
in their salon in New York City.
And lots of
Press came.
A lots of people let us do their hair, believe it or not.
And it was very, very successful. And so now all of a sudden all of these blogs
all of these magazines, all the online magazines and content are saying this hair color is amazing.
And you can buy it online and it's got it's better for you. And so initially the first
Bang, if you will.
was really PR and influencer driven.
And you do I think early uh deal early with Groupon. Yes. The the uh which we've also told the story on the show is an amazing story. Yes. Um and at the time it was one of the hottest, you know, startups
maybe the hottest start up in the United States and and
Uh
And what was the deal that you did with them?
uh they could offer to their base, which was extensive.
a free box of hair color if people came to our site gave us their email address.
And um
It was trial.
Right. The whole concept was trial.
W how much
Did that cost you? I mean, you must have skipped given away a lot of free boxes. We gave away a lot of free boxes. The good news of our business is it's very high margin.
Right. So it appear like a lot of money.
But compared to the cost of acquiring a customer, it wasn't a lot of money compared to a Facebook ad.
So I'll I'll never forget.
Um
One of our engineers early on.
Said.
Uh I'm gonna I'm gonna build this thing in the office where a bell would ring.
And the bell would ring.
Every multiple of fifty eight because our first address was fifty eight South Park.
And the Groupon thing went live on Groupon.
And the bell just
There was like three days where the bell was ringing every millisecond.
Wow. There were a lot of people that took the offer for the trial. And did you pay for the shipping cost too? Yes, we paid for everything. Oh wow.
So that was a
Big big risk. Yes. Cause you're you're basically saying
Look, we might give away a million, two million dollars worth of this stuff.
and uh you know retail price or who knows, I don't know, but but it it's a big risk, I mean, because you're hoping that people are gonna come back to you exactly and buy you.
Yes. And so um
We had really good success.
with the n we were shocked the number of people who took the box, but then again it was free, but it was hair color and a big risk.
Do you remember how many people Yeah, I think that it was maybe seven thousand or something like that. So i in a small company
Uh that was substantial from the beginning out of the gate.
You got seven thousand customers.
Yeah.
Then the knock
Good thing happened.
Very few of them came back.
That's Groupon. That was the Groupon story. People went to the
the mochi shop and got their matcha lattes and whatever, but they never came back. Yeah, that's called not the business model wasn't sustainable.
And for us it was like oh okay this was deal seekers. That's what we thought. These are just deal seekers. It the box is probably sitting there, never used.
Right?
Um
And so that taught us like a lot about these kinds of deals.
However
The boomerang of that was all that email that went out to people that didn't take the offer, there was all of a sudden a lot of exposure.
And the PR articles.
And the influencers talking about it.
And slowly but surely
We started to introduce
In those days just Facebook.
Adds.
uh which in those days weren't expensive compared to what they are today.
And um we were able to start targeting
that's very specific thirty eight plus
Woman
professional of a certain household income level.
And sta sales started to trickle in. Trickle.
The word trickle.
Uh
But the great news was people that purchased it stayed.
Yeah. So
We learn trial by free, not so good.
If I pay for it
And I ha love the results, they stay. And and that has been a hallmark of the company, high retention.
Amy, I'm curious about fundraising, right? Because on the surface somebody could say, Okay, well
you know, less th you know, in twenty fifteen, so you know, about a year after you launch, you raise
do a series C and it's sixteen million. By this point you've raised thirty two million. A lot of
people might hear that and think.
You know, wow, she had no no problems raising money. There were people throwing money at her.
Um you were an if a a very experienced VC, you had run several businesses, you had started your own business. So
you were very experienced. I mean you're in your fifties
And there there are reasons why somebody
at at that phase in your c career was going to be successful. But
I don't think that's the entire story, even though the number looks high, from what I understand, it w actually wasn't as easy as it might seem to raise that money.
Uh the series A was highly sought after for some of the reasons that you talked about.
And
Then when we got to the series C, not so much.
And from that period on.
It has been a difficult business to raise money for. And they here's the
Here's the key.
Most people invest in things they can relate to.
Yes.
So if you are a guy
And you know nothing about hair color.
And you don't color your hair, or if you do, you're not telling anyone.
Um
You don't
Pay attention to how much your wife or your daughters or those people are doing it around you. It isn't relevant.
So it wasn't a it w in retrospect, it felt very personal at that time.
R remember I identify myself with being successful. Successful. What do you mean you said no?
Um my are you telling me my baby is ugly?
But in retrospect, I've come to realize that this was not personal.
It was just relative to using your capital, this isn't the place that you'd want to invest in. Cause you didn't think this is the important part that we get venture returns.
Right.
Venture the it's the ret it's not I don't believe you're going to have a successful business, Amy. I don't believe you can give me a 10X.
Alright, that's the
That's the that's the piece.
Alright, so
You've got this you've you've got uh you know, you're sort of growing, but imagine it's gonna

you know, the kind of growth that that that that you were hoping for.
Um but I mean this again this is
An exciting category.

You're getting more and more attention for it. And I know in twenty sixteen you kind of start to explore
Like a physical shop, you do a pop up.
in New York. H at that point had you already started to talk to people about
Having like
coloring locations where people could actually go like salons, or were you not quite there yet?
Um
There were two things that happened that spurred that one stylist
started reaching out to us asking if they could buy our color directly from us.
to apply to their customers' hair in their salons. Like at at a whole at wholesale. Yeah. And that was like, oh curious. That's curious to me. And it was not like three, it was like hundreds.
And at this point we had
Maybe eight
stylist that were in our call center.
And I started to ask them.
Do you think this product is good enough?
to use as salon quality as we advertise. And they're like, absolutely.
Um these are people that used to work in salons. So yes, we o I went to the board
And the board
Said.
Interesting idea.
Why do you think you can disrupt salons?
Because the only reason to do this is if you could do it better than a traditional salon.
Which took us down a technology path.
much like the path of that color matching quiz.
Could we make appointments on a mobile phone?
Could we keep all the data for the customer? Could we build an app for stylists that work for us?
that made the application only be ninety minutes.
Which is part of the model.
You're in and out in ninety minutes.
Um
And so
They said you have seventy five thousand dollars go wild.
See what you can do. So we opened a small pop up in Flatiron.
We spent twenty five thousand of the seventy five.
for out of home advertising, like billboards on sides of the buses and phone
booth still phone booths in New York.
And in five weeks we were totally full.
And we had no idea what we were doing.
And uh it had been an operating salon, so we didn't need to do the renovation to put sinks in and stuff.
But it was really clear that there was a lot of things that were going well, but
A lot of things that we had no idea.
But that was the that was the channel. That was where you were like, We've gotta have a permanent
location, a permanent color color bar. Hair color bar. We need to play in a hundred percent of hair color.
Not just the at home box.
And and I know the model was direct to consumer.
And now you've got s you've got
Colour is stylish, you know.
contacting you so now you're thinking okay here's another distribution channel
And then the color bar would be your own salons. Correct. Um

So
I mean now you're talking about, you know, much more diversified
distribution model.
But not yet, still not yet thinking about working with
Re with with retailers.
Uh actually
Yeah.
I believe the pop up happened in sixteen, but shortly after in the beginning of seventeen, Alta contacted us.
Ultra contactity, all to beauty and they said
Hey, we wanna sell these in our s which is great to be contacted by them rather than try and pitch them.
Uh
Yeah, it's amazing how branding works. I do radio and podcast commer
Commercials.
to tell the story about naming this after my daughter.
Yeah. And the a very senior person at Alta.
Kept hearing it on the way to work.
And went into the buyer.
And said, Do we have that hair color that's named after a founder's kid?
'Cause it's better ingredients and we're going in that direction. And the woman was like, I don't know what you're talking about and they then they contacted us and it just again, synchronicity. The buyer used to work for our head of product at Sephora.
They knew each other. It was just
Serendipitous.
And in my infinite wisdom I said, We don't go on other people's shelves.
We are D to C model, we control all of our own business.
And my head of product looked at me and said, Amy
I think we should just hear what they have to say. I think you're crazy.
Tell me a little bit about your hires, you know, when you started to raise money
you know, let's go jump back to sort of twenty fourteen when you launch.
Did you did you think I'm just gonna go for the top people in this
you know, in the industry and I'm gonna
recruit them and try to get them to work with me.
Yes.
Uh
And we had four co founders when I started.
And I
Believed.
that they all represented sort of the cream of the crop from where they came before.
And
Uh
All three of them are gone from the company.
Um
Through
Uh
Some of the most painful
experiences that I've ever had in my life. These were three people that I cared deeply about. Two were personal friends.
And in one case I've lost that friendship.
That is
Um
Really hard.
And um
It set us back.
as well.
Because when a business starts scaling but the people that you have there can't scale with it.
The business moves at the rate of the slowest senior person.
Yeah.
That's what I've come to understand.
And
I learned a lot. My series A investor said Amy four co-founders is too many. And I said, No, it's not.
And boy was he right.
When we come back in just a moment.
Amy learned some very hard lessons about hiring firing.
Moving on.
Stay with us.
I'm Guy Raz and you're listening.
how I built this.
Hey welcome back to how I built this.
I'm Guy Roz. So it's shortly after launch, around 2014, and Amy's discovered that running Madison Reed with three other co-founders
Is a lot harder than she thought.
This was on this is on me.
This is
definitely on me. These are four you know, three extraordinary human beings, wonderful human beings.
This was Amy's
of magical thinking, as I call it.
to put something together with a group of people that I liked.
Which is a bias.
By the way.
That one hires for liking a lot.
has a certain bias that I would suggest.
Everyone start thinking about
It's not just about like.
Um
And I thought I could will it to work.
And it didn't.
And it cost the I would say it cost the company a couple of years in retrospect of
Of what I would call
Um
substantial
Uh
developmental leaps that we needed to take.
I mean it's it's very hard like I think a lot of co founder success stories
happen because of luck, or really do. It's like marriages. But um you know, some people have certain strategies for figuring out is this person gonna be the right fit.
W what do you think happened? I mean, were you just do you think you were mainly focused on sort of resume and credentials rather than
Is this person a right fit with me?
I think that all four of us were the right cultural fit with each other.
Like we wrote the values of the company together and they're still the values of the company. So there wasn't uh
A difference of
if you will, what how we wanted the company to operate or how we treated people or what were the values.
I think that I
Did not get
the level of expertise that one needed to be in a technical business like this.
So
You know, one co founder was focused on
Finance.
And
The supply chain.
And a supply chain part of this business is really a big deal, especially when you have product coming from Middle East.
And
What I thought was that his experience would suggest he knew how to do that and
That
started to fall apart as soon as the company scaled.
How did you
How did you unwind that? I mean, you are now the only you're the last last person standing here out of the four
Um, how did you
I mean it must have been so complicated because you're running a company, you're raising money, you're trying to
be a leader in this category and then you've got this executive team that you realize it's not the right
It's just not the right team.
I had to learn really quickly.
Honesty.
And directness with people.
And
to be really clear about expectations.
And to try to separate that I like you from
This isn't working. You're not doing your job. Here's tangible examples of what is going on.
In the first case the
it it was just clear to everybody in the company.
that this the first guy that left just
w he was going through a hard personal time which made it even worse because, you know, it was a hard time and his life
And uh so there was a lot of honest conversations between us, and that was amiable in the leaving.
Um I think the key about someone's leaving is to figure out what
They need.
Вот би ОК.
And
In that case
You know, kept a desk
being listed as a co founder kept an email address.
А і не секен кейс.
It was clear that
Um
this person couldn't do their job as the CMO of the company. That there were no the it we we couldn't get things done. The hiring was slow
Uh the branding was not as crisp as it needed to be. The media
Allocation of dollars was off.
And that required that was my closest friend, and that required
Just really honest.
really honest painful conversations.
Uh we have r uh
remended that relationship, but it took a long time.
And then the third one was the hardest because he was the closest to me.
uh as the co-founder and handled finance and handled
uh logistics.
And I'll never forget that two other
Um relatively senior people came
to me and asked me to come into the conference room and said, Amy
Where are you?
And I'm like, What do you mean? And they're like
So and so is really terrible at his job.
And why aren't you doing anything about

Like
Are you not paying attention and so
My denial I have the saying now when you know you know.
And we sp I have spent a lot.
of time like rationalizing and this would be bad and here's the reason why I can't. And
Every single person that is no longer at Madison Reed has gone on with great things in their life with.
courage and dignity and we've treated them well.
But I could have skipped I could have skipped a bunch of humiliation of them.
I think it's humiliating for someone to do a bad job.
Yeah.
Alright.
So let's get back to to the timeline of the story because where we left off was you were
Now ready to open.
A permanent salon.
um a permanent location. And I think the first one was in New York, right?
The first one was the pop up and flat iron closed and we found the permanent space one block away.
So Flatiron was the first one. In New York, Flatiron. Okay. Yep.
And that was in twenty seventeen. Correct. Um
But now imagining imagine
Uh there are two things happening. One is or three things. You've got
Altar.
they wanna get into the Madison Reed business and sell your stuff at Ulta stores.
You've got um
A plan to grow to
to create more of these color bars or people could go in and get their hair dyed instead of doing it at home, you know, or they'd have an option. The third thing
was you were really leaning into early into AI.
You guys were like
You
I think you really thought and maybe even still think of your company as
almost like an AI company that that
Using
the tools that were available and they w they weren't as good as they are now.
to I guess to help people
Choose the products.
Yes.
We have a technology enabled company.
We all know that a busy woman lives her life with her phone.
And so the camera, you you know, we talked about taking a photo. The camera became something and is something where we
Let you take a picture and on one side of your hair, you see your natural color, and then you can swipe and see Madison Reed colors and see what you might look like.
When somebody uses that
They convert thirty percent more than
Any other customer that doesn't use it.
Well,
And in addition.
Um
The same quizzes given
to every customer on their first
Madison Reed hair color bar visit.
because we have a belief that we should allow you to go to any one of our ninety five locations and have the same outcome.
And so if we don't log in the color that the stylist puts on your hair, that wouldn't be possible. How many shades do you have today, by the way? Close to a hundred.
Wow.
It's a lot of shades of hair.
What what is the biggest
sort of challenge in in terms of
convincing people that this is what they should buy. Like there's L'Oreal's of you know the eight hundred ton gorilla on the block here, and they probably sell more in in a week. I don't know what it is, right, or globally. But but
Can you say this is safer or is that kind of treading I mean, could you say, Hey, you know, we
because of the ingredients we use.
you know, you're not gonna die of a some disease You can't say that, right? But I mean how close can you g get to saying
to making claims without running the risk of getting sued.
So we've invested a lot here to be safe about this.
Um
And we talk about uh better for you formula, and we are very factual about these.
eight things that we factually have taken out that nobody else has taken out. Okay, you're gonna test my uh my ability here to remember all of them, but just Ammonia, PPD, Resortinal.
Thale
Pluton.
Blah blah blah, right?
Got it. Um and we've put in three things ginseng root extract ergon oil
uh and one other thing and
that it is our hair color um is much gentler on people's hair so we can use words like that
I'm curious about the branding again though side of this because when you look at a Madison Reed box at Ulta,
It doesn't say that on the box right away, it just says hair radiant hair color kid, or you know like you know sometimes you see like
food like an ice cream brand. It says like you know, ten hundred calories and three grams of sugar and blah blah blah. Just in b like the macros, right? They c call it in food.
Is
Would there be an advantage to putting those macros or macro equivalent like
Argon oil for beautiful blah blah blah, collagen, for great skin. Like I don't know, would would that help? Would that make a difference?
On the box back of the box it says those things. But I think you know
Have you thought about being a CMO?
Guy?
I I'm I'm right. That's my next job.
That was pretty good. Um
As you okay, so
As you begin to expand by twenty nineteen, you've got nine locations, New York, San Francisco,
Dallas and then
Uh and then to expand.
You come into twenty twenty
With like
a hundred and thirty percent growth in sales, you're you're reportedly generating like a hundred million revenue.
And then
We've got the pandemic.
Yeah. At this point you had nine
Locations.
That had opened up.
And you gotta shut'em down, especially
hair I mean salons that's th they were hit so hard, like restaurants.
But um but you did something interesting, which is you did not
I mean you didn't furlough the three hundred people who worked at these color bars. You basically I guess what, retrain them to be sales reps?
Yeah, one of the things that was happening was r the online business exploded.
But it was a lot of women that went to salons, so they had no idea what color to

So our inbound, we were getting sixteen thousand inquiries a day.
Wow.
Yes.
So you can imagine how overwhelmed our customer service department was. And so I decided, I said, I don't know how long this is gonna last, but these people need jobs and we need more trained colorists. The majority of the people in our customer service are ex colorists.
So we had a way to say, Okay, out of the three hundred, how many of you want to stay?
And we'll send you a we I think bought well we bought
uh three hundred goo Google Chromebooks.
in two days with headsets and shipped them to the people that wanted to stay and then did what would have been months of training in four days.
And put them to work.
Some of them are still in customer service and never went back to stores.
I mean but but from a business perspective, where you did you have I mean, we've had a lot of brands on the show that r you know, they were running out of cash, they were not doing well, their sales went down eighty percent overnight
It sounds like the opposite was happening with you guys.
Yes, the opposite was happening.
Uh
However
I had this instinctual thing like this is gonna come to an end.
So um sure enough
Uh
Past po you know pandemic.
our e commerce business started to you know, we weren't gaining as many customers. But we also did an interesting thing was we took a lot of real estate
because we understood that
Uh commercial real estate in four walls was at an all time low. So basically you took advantage of all of of the cut rate prices to to do to sign leases and that enabled you to expand. Yeah, you're never gonna get real estate in places that we have it today. We could never afford it today.
if he's for brand new deals. And
I knew that all those people that came to us were gonna go back to their stylist.
Yep. So could we give them an opportunity to stay in Brand?
And
It's hard to measure that.
We think a number have stayed brand, but we've also grown since then. So our numbers as a company never went down. We kept the doubling of the business and then have grown since then every year.
Crazy Covid days were you know
m many of your customers or most of your customers they couldn't go to their stylists.
or the colorists. So they were buying your products, doing it themselves, calling the
the customer service line getting help.
knowing that there was a possibility that they were gonna go back to their colorists and they were not gonna buy your products, was there a
Any moment where you thought
Now is a good time.
to see about getting acquired. I mean we met we talked about Dollar Shave Club. He founded it in 2011, I think he was acquired in 2016.
Yeah.
Did you ever
Did that ever cross your mind like, hey, we better strike while the iron is hot?
Yes.
But having been an investor, I thought the chances of that were slim.
Because remember, in the pandemic a lot of these strategics just went away. They're not going to be able to get they pulled back. And in addition, remember, I have a very nascent business model.
So I got it really quickly, like, oh, this could be really good, but not now.
And there's a other window that we had already passed.
Uh many of these strategic buy things that are sub one hundred million dollars in revenue.
When something gets bigger.
it becomes harder for them to get the board to approving. Then you have to go to a Unilever or a Pro and Gamble at that at that point. So our window
Sort of
We self

qualified ourselves out of a certain window.
And um
And now I will say that to you that you know there's a limbo window now.
A significant limbo window for consumer companies now. Tough window because for consumer general because the conventional wisdom that if you're not AI, you're you're not something that's gonna
Give venture returns.
Yeah. Of course the founder's gonna tell you how different we are.
Right. I'm gonna uh uh the as I call it the lies one tells themselves. That's one of the things I talk about in the company all the time. You can believe your own
Stuff because you're used to saying it.
I mean everything is cyclical, of course, and w and so we're now talking in mid twenty twenty five and yes, I I hear this across the board that for consumer brands it's just a different category r especially in food. Like it used to be if you had twenty million a year, you're gonna get acquired for, you know
six, seven X of that, you know, and and now it's a different world. You have to be doing at least a hundred million to get even
the attention of a big
multinational choir, um
And
And so when you say there's this limbo window, you mean
There's a certain uh threshold that you have to hit to even attract the interest, or there just is a lot of
Well, the the you know, when Mike sold Dollar Shave Club and in those days growth was the factor that everybody looked at, right?
Profitability wasn't.
Now the world has shifted to wanting both.
People want you to grow
You know, at least twenty plus percent top line, but they also
require profitability. And to do both those things is not easy. Very hard. Yes. Extremely hard.
So and if you look at the IPO window, it's non existent for consumer companies.
So
We're still like anybody else fighting the good fight.
I mean it's not gotten easier.
So I mean, here we are, twenty twenty five and
Um you have a lot of stores and
It is a
Yeah, a known
Brand in in in this space.
And it's kinda changed the conversation around hair hair color.
Um
But it is a b it is a more challenging time for all consumer brands for a variety of reasons.
You know.
There's uncertainty in the economy and and there's competition, tariffs, all kinds of things going on.
I mean did you when you when you started this process in twenty thirteen
Did you think that?
It was something that you would probably sell or would get acquired in about within about ten years or d or or was that not
On your mind.
I thought it would take ten years.
I thought that this kind of category because
You have to build your reputation and efficacious
feedback, you know, really different than a razor.
Right, this is like you've altered my appearance.
So now I gotta figure out whether I'm willing to give you the business to take that risk.
So I thought it would be slower.
I also thought that
We had a chance to build something that was a legacy, an iconic brand that changed the industry. Remember, we're using the same box of hair color in our hair color bars that we sell.
It is not a different product. It's the same.
So we're an omni channel business where
the box of color we think is superior.
Um
Would I have predicted this curveball now? No.
So I
Just like every other entrepreneur in growth stage company, because that's what we are, we are more a private equity.
Target.
I wouldn't have predicted the IPO market closing. I wouldn't have predicted
uh some of the instability that consumers are feeling.
But
My head's down every day because I want that big outcome.
And so now that the goal
not just for you, but for virtually every consumer brand is growth profitability. Exactly. You gotta you gotta hit both of those things.
And we are doing both. We are a profitable company now. We crossed profitability last year. Congratulations. Thank you.
Um
And
We are growing.
Uh pretty significantly.
Um
And it's still heart.
I think consumers in general are
fatigued and
scared of the price of eggs and gasoline and
For any consumer company it has
It has an impact on the emotional state.
Of your buyers.
I also think that h this is a good thing for us to prove that hair color is pandemic proof.
And recession proof.
Because that just means it's gonna happen no matter what happens.
Like lipstick.
Like lipstick, the lipstick effect.
Yeah.
when you think about the the journey you took and and all the twists and turns of where you are now
Um
Again, I know that's the word success, you have a difficult relationship with and which which I think is healthy. I think a lot of a lot of pe uh people actually do. I do too.
Um but would you say that your success
has more to do with how hard you worked or has has more to do with
Just luck.
And being at the right place.
I think there's an element of both
I think I work really hard.
Really hard.
Uh and I think I've been lucky.
As I used to say in venture.
a great venture capitalist position themselves to get lucky.
You know, they hang around in the right places and they talk to the right people and they know enough relationships and they have the capital.
But
Most of the time their outcomes have some luck.
To do with it.
So
I think it's a it's a healthy mixture.
Of both those things. And
I feel grateful for that.
Um, I my only concern, and I'm just gonna be very frank with you, is that
If you
do get acquired, you're just gonna you you've such itchy feet, you're gonna start another company.
You can be like seventy five in your own. Thank you, really appreciate that. I'm ready to go. That's a that's yeah, I'll be as I joke with my investors, I will have a walker as I ring the bell on the New York Stock Exchange. Um, twenty picture desk. By the way, they're kind of of similar age, so we'll be together with three walkers. And so
So uh I don't know. You know I'm
I don't think I'm cut out to retire. I think you're not. I think you need it.
Yeah, I
You know, I think a lot of it is upbringing. I was raised by a strong woman.
You know, in some ways the harder it gets, the more I dig in.
Uh, my coach and I talk about, well, could you still be really motivated but not have to torture yourself? That's the essential question. And I think the answer to that is yes. I'm getting there. My wife would tell you I'm much more pleasant to work with.
That's Amy Arrett, founder and CEO
of Madison Reed.
By the way, since the hair color is made in Italy
All of the shades are named for Italian cities. There's Parma, Positano, Siena, Napoli, Verona, Milano, and Amy's favorite, which she happens to use on her own hair.
A light icy hue called
Roma Blanche.
Hey thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And if you're interested in ideas and insights from the world's greatest entrepreneurs, sign up for my newsletter at gyros.com or on Substack.
This episode was produced by Sam Paulsen with music composed by Ramteen Arabui.
It was edited by Neva Grant with research help from Iman Ma'ani. Our engineers were Patrick Murray and Quasey Lee. Our production staff also includes Casey Herman, Alex Chung, Carrie Thompson, Katherine Seifer, Carla Estevez, Nor Gill, Ramel Wood, Andrea Bruce, and Elaine Coates.
I'm Guy Raz and you've been listening to how I built this.