0:00

I got fired for the first

0:02

and only time in my life.

0:04

Amy Eret is the founder

0:06

and CEO of the hair color

0:08

brand Madison Reed, but just

0:11

before she struck out on

0:13

her own, she found herself

0:15

in a hotel lobby in

0:18

total disbelief. I walked out

0:20

and I had a convertible car

0:22

and it was a

0:24

Monday morning at 930. And

0:27

it was beautiful day in the

0:29

Bay Area. And so I put

0:31

my top down. And I was

0:34

driving and the first thing that

0:36

I thought I was, oh my

0:38

God, people walk around at Monday

0:40

at 9.30. They're not in offices

0:42

like, you are as a maniac.

0:45

And I came into the house

0:47

and I told my wife Claire

0:49

what had happened. And I said,

0:51

we must tell Madison. Now

0:54

why I wanted to

0:56

tell a four-year-old is, you

0:58

know, you're not rational. And

1:00

so Claire and her wisdom

1:03

grabbed Madison and said, Madison,

1:05

good news now, mommy works

1:08

at home. And Madison took

1:10

me by the hand and

1:13

took me up the stairs

1:15

to my office and took her

1:17

hand and signaled to the

1:19

chair and said, mommy, welcome.

1:22

Now she has disrupted the lucrative

1:25

hair color industry. You gotta

1:27

have incredible talent at every

1:30

position. There are fires burning

1:32

when you're going out. Can you believe

1:34

it? Such an idiot. And then you

1:36

go back to, this is totally going

1:38

to be amazing. There are so many

1:40

easy ways. So I have no idea what

1:43

to do. Sorry, you made a mistake. But

1:45

you have to time it right. Oops.

1:47

Or do you have a free

1:49

bedroom apartment? Stuff that just seems

1:51

absolutely nutballs 10 years later. Well,

1:53

that's just how you do it.

1:55

We haven't made it just how

1:57

you do it. This is Masters

1:59

of Scale. I'm

2:02

Jeff Berman, your host. More than 5

2:04

million people have tried. Madison reads

2:07

hair color products since Amy

2:09

founded the company in 2013.

2:11

She has excelled by finding

2:13

innovative ways to create quality

2:15

products with cleaner ingredients and

2:17

by listening to clients about

2:19

the features they really want.

2:21

Amy says her business is

2:23

all about empowerment. She's laser

2:26

focused on creating more opportunities

2:28

for women to thrive. Amy,

2:31

welcome to Masters of Scale. Thank

2:34

you for having me. I'm thrilled to

2:36

have you. You and I've known each

2:38

other a long time, longer than either

2:41

of us probably cares to acknowledge. But

2:43

one thing I did not know until

2:45

I was prepping to sit with

2:47

you today is that part of the

2:50

reason that you were the founder of

2:52

Madison Reed is you got fired from

2:54

a job. I'm imagining that most of

2:57

the people who are watching or listening

2:59

have felt like they've been fired.

3:01

And it can knock you on your

3:03

butt. Yes. And it can take a

3:06

minute to get back up. Did you

3:08

need to take a minute to

3:10

reset? Yeah. I got myself into therapy.

3:12

And I tried to understand why it

3:15

was so big, what was the trigger.

3:17

And it took me down a path

3:19

of understanding a lot of things about

3:22

myself. And was there a particular

3:24

lesson or set of lessons that came

3:26

out of that, that inspired what was

3:28

next for you? Yeah. So I really

3:31

suck at working for someone. Like that

3:33

was the big thing that came out

3:35

was like the therapist was like,

3:37

okay, let's go through that again. And

3:40

so I learned very quickly that putting

3:42

myself in that position is setting me

3:44

up to fail. Everybody has a genius

3:47

inside of them. And I think life's

3:49

path. Might be to find what

3:51

that is and then have acceptance about

3:53

the things that don't work for you

3:56

And what are the things that work

3:58

for you? So the first thing it

4:00

was really clear like going back to

4:03

work for somebody Was not going

4:05

to be a good thing for me

4:07

Did you? also identify what your genius

4:09

was? Yeah. I love taking really juicy,

4:12

hard, almost impossible problems and figuring

4:14

them out and building a group of

4:16

people that has a mission and a

4:18

purpose to do that. And for me,

4:21

it was important to have a product,

4:23

it was important to do something that

4:25

spoke to... something that matters to

4:27

me and will get into it, which

4:30

is women's empowerment. But what I also

4:32

knew, and this will be interesting as

4:34

I talk about my VC journey, about

4:37

why that didn't work, is I don't

4:39

like to do things solo. Right?

4:41

Like I'm not a great individual contributor.

4:43

I like teams. I like building teams.

4:46

I like rallying teams. I find that

4:48

whole team experience of taking a group

4:50

of people through an impossible journey together.

4:53

and understanding those dynamics and figuring

4:55

them out to be. So they just

4:57

fascinate me. Yeah, and you light up

4:59

when you talk about it. Yeah, I'm

5:02

obsessed with the fact that, you

5:04

know, Madison Reed today has over a

5:06

thousand people, right? And in my mind,

5:08

what we have is a huge social

5:11

experiment. There's a business, but it is

5:13

a social experiment of a thousand people

5:15

with all their lives coming together

5:17

who have to embrace a single mission

5:20

and accomplish that every day. That is

5:22

really hard and I find it just

5:24

completely fascinating, which is why. I spend

5:27

25% of my time on culture. Yeah.

5:29

So I want to come back

5:31

around to that because you referenced your

5:33

time as a venture capitalist. That's when

5:36

you and I met. And it's not

5:38

obvious that that's where you would go

5:40

and what you would do when you're

5:43

so passionate as a team leader,

5:45

a team member, as someone who wants

5:47

to be a part of a team

5:49

to build and solve problems. VCs talk

5:52

about that a lot. They don't always

5:54

do that. Why did you choose to

5:56

become a VC and what was

5:58

that experience like? The truth is that

6:01

I had an association through the place

6:03

I got fired from Mavera. Seattle-based. Yes,

6:05

Seattle-based Howard Schultz. And they had

6:07

wanted to invest in the company that

6:10

I had just gotten fired from. And

6:12

so they were sort of reaching out

6:14

to me saying, what the heck happened?

6:17

And then said, hey, we really liked

6:19

you. Why don't you come hang

6:21

out with us? And the theory was

6:23

I'd be an EIR, which is an

6:26

entrepreneur in an entrepreneur in residence. and

6:28

then start something. Right, and the maveron

6:30

would likely invest in it. Yeah, exactly.

6:33

But as I started to do

6:35

it more, I did become intrigued by

6:37

the problems I was seeing and the

6:39

juicy, it's really hard to be a

6:42

great VC. It's like almost virtually impossible,

6:44

so that was a hook. Because why?

6:46

We did early stage investing. So

6:48

you have to see things around the

6:51

corner before other people do. you have

6:53

to have a great read on people.

6:55

And the biggest element is that what

6:58

people don't understand is there is an

7:00

element of luck that you could

7:02

never replicate. So it's right place, right

7:04

time, right people. Now what was great

7:07

was they never had a Bay Area

7:09

office. So if you think about

7:11

it, it was like I was given

7:13

a task to do a startup of

7:16

an established brand already within a region

7:18

that they weren't represented in. And that

7:20

was really fun. When that was over

7:23

and the office was running and

7:25

we were getting deal flow and the

7:27

brand was established was when I started

7:29

to have an itch again. And then

7:32

I did incubate Madison Reed in their

7:34

office. How long were you at Maveron?

7:36

Six and a half years. And

7:38

while you were there, Dollar Shave Club

7:41

came in and pitched? Yeah. And Maveron

7:43

did not invest? No. Why not? Well

7:45

first of all, I don't think that

7:48

this qualifies for bad judgment of anybody

7:50

at Maveron. I think it's just

7:52

was a moment in time in time.

7:54

And you have to remember, you know,

7:57

the irony is Mike Dubin is now

7:59

on my board, which is, and

8:01

we stayed close as friends. and he's

8:03

been a mentor to me. He's a

8:06

wonderful guy. Founder of Dollar Shave. Founder

8:08

of Dollar Shave Club. And we passed

8:11

for all of the reasons that one

8:13

might think at that time didn't

8:15

make sense about shaving, you know, size

8:17

of the prize, how do you take

8:20

Gillette on, who's going to buy this

8:22

stuff direct to consumer. But the irony

8:24

of it, it was the sort of

8:27

seed. of what happened with Madison

8:29

Reed. Because after we passed and I

8:31

stayed close to Mike, I had a

8:33

summer GSP intern do a analytical scan

8:36

of what would be the women's analog

8:38

to shaving. Wow, what a great summer

8:40

internship project. What came up to

8:42

the top of the list and I

8:45

kept saying to her go back these

8:47

numbers can't be right was hair color.

8:49

Because the numbers were huge. They're huge

8:52

and repetitive right like shaving and We

8:54

couldn't find anything online that owned

8:56

the space Wow so dollar shave was

8:58

in some ways an inspiration to explore

9:01

Yeah, and so when the summer intern

9:03

what's their name? Rebecca Rebecca when

9:05

Rebecca came back and said no, no,

9:07

no, no, these numbers are real like

9:10

this is the addressable market. This is

9:12

not a washing machine which people are

9:14

going to buy every 10 years. This

9:17

is a frequent repeat, right, yes.

9:19

Sorry, I love you guys. Right, right,

9:21

right. No, I think you just triggered

9:23

some PTSD for some investors out there.

9:26

But this one of the things about

9:28

consumer products is a high repeat purchase

9:30

or subscription product has so much

9:32

more value. and consumable. Right. So when

9:35

Rebecca presented this to you and you're

9:37

sitting there and getting her on the

9:39

numbers, are you starting to get the

9:42

itch now? Are you really? Yeah, no,

9:44

I have the itch now, but

9:46

I had also been intrigued a lot

9:48

that we were incubating things. So I

9:51

was sort of thinking, well, I'm going

9:53

to find a great entrepreneur who's going

9:55

to know how to do this and

9:58

I'm going to help them and

10:00

I'll be the board member and put

10:02

the board member and put the money

10:04

in that was the first iteration. Then

10:07

I remembered one important thing as

10:09

I was going through this. I kept

10:11

thinking, well, they're going to have all

10:13

the fun. Now that is an incredibly

10:16

crazy thought process for pain and suffering

10:18

in the future. But I remember that

10:20

all the boards I was on

10:22

when I was at Maveron, I used

10:25

to be jealous of the CEO. I

10:27

used to want to be in that

10:29

seat. Definitely control my behavior because... The

10:32

investor that wants to be in that

10:34

seat is quite dangerous, by the

10:36

way. I don't think any of my

10:38

entrepreneurs would say that. I was there

10:41

to be helpful. But all the other

10:43

board members, Jeff, would get in their

10:45

car and get the heck out of

10:48

there when the board meeting was

10:50

done, and I just wanted to chat

10:52

with the CEO and see if I

10:54

could understand how to help, right? So

10:57

that started to get me to

10:59

kind of scratch the itch, and again.

11:01

Claire, my wife, who knows nothing about

11:03

business but is right all the time,

11:06

damn it, said to me, I don't

11:08

really understand why you're not doing this.

11:10

Now, the second part of the

11:12

story is that Claire started to go

11:15

gray when she was 22 years old.

11:17

So in order to be, I think,

11:19

create a great set of products, you

11:22

have to understand a pain point. And

11:24

this consumer pain point was this

11:26

person was going to get their hair

11:28

colored every two and a half to

11:31

three weeks, sitting in the chair for

11:33

three hours, and is one of those

11:35

people who cares about ingredients. and could

11:38

not get the stylus to even

11:40

begin to tell them what was in,

11:42

what was being put in her hair

11:44

every two and a half to three

11:47

weeks. Yeah, yeah, and probably not spending

11:49

a small amount of money to do

11:51

this in the process. No. Right,

11:53

yes. So you saw the problem. I

11:56

saw the opportunity. You saw the opportunity.

11:58

I saw the opportunity. What happens next?

12:00

How do you get medicine read

12:02

off the ground? Yeah. So the first

12:05

place was, could we make hair color

12:07

with better ingredients and in if enough?

12:09

and could we color match people without

12:12

seeing them? And those are juicy real

12:14

problems. So because I was a

12:16

VC, I had access and I got

12:18

somebody that was running something large at

12:21

L'Oreal to talk to me on the

12:23

phone for two hours. And at the

12:25

end, I was asking enough questions, the

12:28

person said, are you thinking about

12:30

doing something? And I said, well, I'm

12:32

not sure I may fund it, and

12:34

this person stopped and said, If you

12:37

do, count me and I'll put money

12:39

in. Wow. That's how big this problem

12:41

is. Wow, from L'Oreal. From L'Oreal.

12:43

This is not some small. Yeah. Yeah.

12:46

And he was running something adjacent to

12:48

a hair color brand, right? And then

12:50

I said, well, do you know scientists

12:53

or know people? I can talk to

12:55

him and he said, here's three

12:57

consultants that do this for people, who

12:59

knew. Right. And I connected to all

13:02

three, picked one. And we went on

13:04

an adventure to Italy together. Why

13:06

Italy? Because it is where most private

13:08

label hair color is made. And the

13:11

EU has very strict regulatory environment where

13:13

basically you can't put certain things in

13:15

personal care products. So I knew we

13:18

had a chance. It was a

13:20

hard problem to solve to take all

13:22

of the nasty stuff out and put

13:24

good stuff in. And so we went

13:27

to Italy. We met with 13. private

13:29

label providers. The first 10 just completely

13:31

laughed at me. I mean, it

13:33

was, you know, just... Because their business

13:36

is basically like, you pick our formula,

13:38

you put your label on it, your

13:40

brand on it, and it's on somebody

13:43

else's shelf. Right. Right. Right. Right. We're

13:45

making it for European distribution, Middle

13:47

East distribution, or right. Selling hair color

13:50

online as a D to C company

13:52

with enough shades, and you want us

13:54

to take the ingredients out, and

13:56

you're going to... divides a way to

13:59

color match somebody. off your rocker. Yeah,

14:01

lucky number 11. And what happened

14:03

in that last meeting? The owner,

14:05

who is still our partner today,

14:08

just was listening and listening

14:10

and listening and he stopped

14:13

me and he said, I don't know why

14:15

I'm going to say yes to this, but

14:17

I'm going to say yes, but here

14:19

are the two criteria. You have

14:21

to pay me all the money for

14:23

the first run up front and it's

14:26

got to be in euros. Wow. And

14:28

I, without even even pausing said,

14:30

okay, no problem. Do you remember how

14:33

much that first run cost? Yeah,

14:35

that first run cost about, I

14:37

don't know, maybe $80,000, and I

14:39

funded it myself. You funded it

14:41

myself, right? I put in my

14:44

suitcase 19 shades of the color

14:46

and brought them to the person

14:48

that used to do my hair,

14:50

who's the most famous stylist in

14:52

San Francisco, and I said to

14:54

him, listen. If I bring a bunch of

14:56

women in on a Friday night and

14:58

buy the wine and cheese, will you

15:00

get 19 different shades put on

15:02

people and let's see in reality, and

15:05

I'll give you some part of the

15:07

company to do it. Wow. And he

15:09

did. Wow. So 18 of the people. were

15:11

thrilled. It was like nothing I had

15:13

ever seen in my life. And I mean,

15:15

and one my ex-college best friend

15:18

was screaming at me. So I

15:20

also learned, she's like, Amy Aaron,

15:22

I'm going to see my effin

15:24

husband in 45 minutes. You better

15:26

effin fix this. Let's be clear,

15:28

she's not your ex-best friend. No,

15:30

she's still a really close friend. And

15:33

we knew how to fix it. Well, I

15:35

didn't put the stylus date. Right,

15:37

right. But I saw the elation?

15:39

Yeah. and I saw the absolute

15:41

sheer terror. And that was an

15:43

important moment for

15:45

me. More with Amy about

15:47

her incredible story of

15:50

disruption in scale in just

15:52

a minute. Welcome

16:00

back to Masters of

16:02

Scale. You can find

16:05

this conversation and more on

16:07

our YouTube channel. You know that

16:09

you've got a massive market. You've

16:11

tested it on a group of

16:13

humans and you've got a 90

16:15

plus percent satisfaction rate in your

16:18

first shot. That one was really

16:20

not good. But the lessons from

16:22

that one. And then you got

16:24

to figure out distribution. So what

16:26

do those look like? What happens

16:28

next? So the first place we

16:30

then started was sizing the price,

16:32

right? Because I remembered again, I

16:35

had a playbook for being an

16:37

early stage investor that it's Tam,

16:39

so total addressable market, it's product

16:41

differentiation, bingo, and it's team. And

16:43

I knew that I could put

16:45

together a team. I'll talk about

16:47

a big mistake. I did not

16:49

have a technical co-founder. and it

16:52

costs us, I would say, about

16:54

18 to 24 months of really

16:56

good digital product and commerce experience.

16:58

Did you hire like an agency

17:00

to do that work for you?

17:02

No. We did it internally. I'm

17:04

an internal person. I use very

17:06

little agencies, just kind of a

17:09

little pet peeve. I think when

17:11

you're obsessed about your brand, when

17:13

you out sorts that somebody else

17:15

can't care as much as you

17:17

can. That's just the truth. So

17:19

what happened was we had hired

17:21

a VP of engineering and it

17:23

just was clear that I should

17:26

have had a co-founder that was

17:28

a technical co-founder. There were too

17:30

many co-founders. There were four of

17:32

us. That was a dire mistake.

17:34

Why were there three other co-founders?

17:36

Because I was generous and somewhat

17:38

naive and kind of... fell into

17:40

the trap that multiple of the

17:43

people had very good Silicon Valley

17:45

sort of credentials. And they're very

17:47

good people. I'm still close to

17:49

them. But... What you start learning

17:51

is when you start something from

17:53

ground level, the ability that you

17:55

need to have people have to

17:57

do two important things. Get at

18:00

30,000 feet at any moment and

18:02

go what I call subterranean at

18:04

any moment. Right. So you need

18:06

to be the one that knows

18:08

how to get your hands dirty

18:10

and churn mitigation. Like go down.

18:12

the list of the number of

18:14

things that the granular and the

18:17

strategic need to match. So you

18:19

start really understanding very quickly, like

18:21

who can keep up with that

18:23

pace. So as the company scaled,

18:25

those people eventually left all courageously

18:27

and nicely and still friends. But

18:29

I learned a couple of lessons

18:31

in that that I think were

18:34

worthwhile. Lesson number one for me

18:36

is a blind spot. So that's

18:38

the other part that I come

18:40

back to when I talk about

18:42

your genius. Everybody has a genius

18:44

and everybody has massive numbers of

18:46

blind spots. Yeah, I was going

18:48

to say it's not just one

18:51

for me. So yeah, yeah. And

18:53

once you learn what they are

18:55

and are curious about them, but

18:57

don't blame yourself. And once you

18:59

learn what other people's are and

19:01

don't blame them, but you're actually

19:03

curious, then you could just make

19:05

decisions from a place that's not

19:08

overly clouded with all of your

19:10

tripups, right? big thing for Amy

19:12

that's been something that's plagued me

19:14

my whole career has been when

19:16

I know I know and then

19:18

I take too much time to

19:20

let someone go and it's out

19:23

of a kind place but it

19:25

ends up being something that over

19:27

time I love you I love

19:29

you and then you're dead to

19:31

me yeah and so I never

19:33

I don't have to get to

19:35

the you're dead to me place

19:37

I've learned that so yeah going

19:40

back to it so we have

19:42

the product we have the digital

19:44

product and then Once we had

19:46

a team that was working and

19:48

knowing the product differentiation, it actually

19:50

wasn't hard for us to get

19:52

funded. I'm thrilled to hear it

19:54

wasn't hard to get fun. We've

19:57

had a number of women founders

19:59

on who've founded companies that are

20:01

creating products disproportionately for women. Tracy

20:03

Ellis Ross with pattern and Lauren

20:05

Wong with Flexco and others who

20:07

haven't had the easiest road. What

20:09

was your journey like? I think

20:11

I had a immense advantage having

20:14

been a VC. I won't even

20:16

chalk it up honestly to that

20:18

it was a better idea than

20:20

anybody else's. Remember the luck word.

20:22

And it was a time when...

20:24

DDC was exploding. And it was

20:26

a unique thought process. And so

20:28

I had competing term sheets and

20:31

I had an advantage of knowing

20:33

who I wanted around the table.

20:35

You also had a product at

20:37

that point. We had a product

20:39

that was tested already, not at

20:41

mass. So we didn't have boxes.

20:43

But we could show a demo,

20:45

we could show how to color

20:48

match that was kind of sexy

20:50

then. So yeah. And the trope,

20:52

Amy, is that the male VC

20:54

would say, well, I need to

20:56

ask my wife or daughter about

20:58

this to understand. Well, before I

21:00

let anyone do the series, I

21:02

actually told them to do that.

21:05

So I went and I said,

21:07

listen, you guys may think this

21:09

is a good idea. You actually

21:11

don't know. So I want you

21:13

to go home. And either your

21:15

wife, your partner, your kids, your

21:17

cousins, your aunts, and I want

21:19

you to ask them about this

21:22

problem and how big the prize

21:24

is, how many times a year

21:26

do they do it. Because here's

21:28

what I don't want. I don't

21:30

want a yes, and then it's

21:32

a half-fast yes. Because misaligned goals

21:34

around the boardroom are a cluster.

21:36

And I've been there on the

21:39

other side, and I don't want

21:41

to be there on this side.

21:43

So I actually forced the hand.

21:45

their wives have been early adapters

21:47

to the product and love it

21:49

now. Some of them have moved

21:51

to our stores instead of doing

21:53

it themselves. And I have to

21:56

say that I have had the

21:58

blessing of the most supportive and

22:00

to some extent not always agreeing,

22:02

which is good, disagreement is good,

22:04

but I have a very supportive

22:06

board. That's fantastic. How much of

22:08

you already so far? 240 million

22:10

dollars. A lot of money. Yes.

22:13

The company has scaled to, you

22:15

know, magnitudes that are meaningful. We

22:17

are a 200 million dollar top-line

22:19

business that's profitable and growing 20

22:21

plus percent every single year. We're

22:23

an omni-channel business, so we have

22:25

a lot of distribution. Okay, so

22:27

you're growing, you are building your

22:30

customer base indeed to see, you're

22:32

starting to go into retail. We're

22:34

starting to put our toe into

22:36

the retail market at Alta. And

22:38

then a pandemic hits. We were

22:40

selling a box of color during

22:42

the pandemic every five seconds for

22:45

months. You close the stores down.

22:47

Alta closes, there stores, but online

22:49

goes crazy, and our online site

22:51

goes nuts. Wow. So how did

22:53

you manage that growth and keep

22:55

quality consistent and keep your culture

22:57

which I know is so important

22:59

to you and to the company?

23:02

Keep your culture consistent. Five values

23:04

that we had day two in

23:06

the business, love trust, responsibility, courage,

23:08

and joy. And cultures can be

23:10

words or they can be actions.

23:12

And we take actions. So there's

23:14

so many things that happen in

23:16

the company. that reinforce those words.

23:19

So the first place I start

23:21

is it's all about traditions. And

23:23

it's all about creating a community

23:25

that has consistency, that can believe

23:27

in what you tell them, and

23:29

then you deliver. And if you

23:31

don't, and you screw up, you

23:33

apologize. So the first thing is

23:36

that from the first week we

23:38

were in business I had lunch

23:40

with the company at 1215 Wednesday

23:42

Pacific every Wednesday And there's only

23:44

been a handful in 10 years.

23:46

I've missed Zoom's helped that a

23:48

lot But the truth is I

23:50

have lunch every Wednesday It's mandatory.

23:53

Pacific 1215. And the same format

23:55

has evolved. Some has happened every

23:57

Wednesday. It starts out with welcoming

23:59

new people, two truths and a

24:01

lie. Everybody in the company votes

24:03

on what the lie is. People

24:05

go crazy. There's balloons on Zoom.

24:07

There's a way to welcome somebody

24:10

that's saying, come in. You're here,

24:12

right? Your teams want to be

24:14

seen. They want to be seen

24:16

for their contributions. They actually want

24:18

to be seen for where you

24:20

think they need to improve. They

24:22

want to be seen as human

24:24

beings that make a difference. And

24:27

if you see them, the productivity

24:29

is insane. So it's like, I

24:31

don't understand when businesses don't want

24:33

to see their people. And the

24:35

same thing, there's a ritual within

24:37

the hair color bars of how.

24:39

So the whole key to a

24:41

store is the general manager. The

24:44

most important factor in our business,

24:46

we have a supply and demand

24:48

business, right? There's demand for hair

24:50

color, and we have product, and

24:52

we have people in stores that

24:54

can deliver it. The average colorist

24:56

in the US. makes less than

24:58

$35,000 a year. This is not

25:01

the person in Beverly Hills. So

25:03

a lot of people listening to

25:05

something like, oh, that's, no, no,

25:07

this is a super cuts person.

25:09

This is fantastic Sams, or this

25:11

is somebody coming out of cosmetology

25:13

school. 25 grand in debt. They

25:15

are below a poverty line. Most

25:18

of the time, it's a woman

25:20

of color that has kids. If

25:22

people don't believe that that that

25:24

is my mission to solve. They're

25:26

wrong because at the end of

25:28

the day if this little tiny

25:30

engine that could Can take women

25:32

of color and give them jobs

25:35

that they're making 80 grand a

25:37

year and we we pay their

25:39

medical benefits And all of a

25:41

sudden they can buy their first

25:43

house and I get slacks all

25:45

week long of women who slack

25:47

me Amy I bought my first

25:49

house. I did it my kid

25:52

is seeing me work hard. Like

25:54

how people change is because businesses

25:56

decide they're going to create the

25:58

Petri dish, right? Now, whether everybody

26:00

can grow in the Petri dish

26:02

is a separate issue. When people

26:04

can't grow or they're cancer to

26:07

your Petri dish, you get rid

26:09

of them, right? Because that is

26:11

the antithesis of the core values.

26:13

But my mission is as much,

26:15

you know, I have three customers.

26:17

I have the customer that buys

26:19

a product, I have my investors

26:21

and shareholders, and I have my

26:24

team. I serve at the pleasure

26:26

of my team. They are my

26:28

customer. If they don't buy in,

26:30

I don't have a business, right?

26:32

So to me, it's very simple.

26:34

So living a life that is

26:36

authentic about that. And there have

26:38

been plenty of times, Jeff, where

26:41

I've done some bozo thing, right?

26:43

And I'll be on the lunch,

26:45

and I'll start the lunch by

26:47

saying, listen. apologizing. People are just

26:49

blown away, right? But the first

26:51

place you start is we're all

26:53

human. Which means we're all going

26:55

to make mistakes? Yeah. If you'd

26:58

asked me, you know, yes or

27:00

no, what are the chances that

27:02

Amy brought Bain in to help

27:04

with Madison Reed, I would have

27:06

said, oh my God, no way.

27:08

She's an incredible operator. She's deeply

27:10

experienced. She has relationships out the

27:12

wazoo. Why did you bring Bain

27:15

in? A simple reason. Six months

27:17

into the pandemic, I had no

27:19

idea who our customers were anymore.

27:21

So if I went to the

27:23

board, always lead a board meeting

27:25

with what isn't going well. Your

27:27

board should be your best allies.

27:29

You should never chest pound. You

27:32

should just be completely authentic with

27:34

them saying, like, by the way,

27:36

guys, I need your help. Right?

27:38

That's why you're here. So I

27:40

went to the board and I

27:42

said, yeah, there's good news, bad

27:44

news. This thing is exploding. We're

27:46

keeping the wheels on the bus.

27:49

But if you asked me what's

27:51

going to happen in six months,

27:53

I have no idea. And I

27:55

don't know who my customers are

27:57

anymore. And so I, from a

27:59

strategic standpoint, I don't know where

28:01

to go. Should I open more

28:03

stores? Should I still be in

28:06

retail? You know, blah, blah, blah.

28:08

And remember, I have two term

28:10

sheets from, don't get bad at

28:12

me, PE Friends, Masters of the

28:14

Universe. And so, you know, basically,

28:16

we went in a bake off.

28:18

I knew the Bain folks. they

28:20

took 50% in equity in their

28:23

fee. So that said a lot.

28:25

Fantastic. And they came in and

28:27

they did a complete study of

28:29

the market and a study of

28:31

the segmentation of our customer base.

28:33

And they gave us so many

28:35

amazing insights, turned mitigation model, like

28:37

all sorts of stuff that were

28:40

great. But the one insight, and

28:42

so this is the pearl of

28:44

wisdom that I believe, and so

28:46

my Bain friends listen carefully, will

28:48

be a thousand X of the

28:50

value of the company as the

28:52

following. I had asked them to

28:54

find who is the hair color

28:57

bar, our store's customer, because I

28:59

knew we needed to hit a

29:01

gas pedal, but it was just

29:03

instinct. There was no data that

29:05

suggested I was right. So in

29:07

the segmentation, they identified the bulk

29:09

of women were called salon lovers.

29:11

They liked to sit there, they

29:14

want to schmooze with their friends,

29:16

they tell the stylist everything. But

29:18

they were of a certain age

29:20

group that was elderly. Then they

29:22

identified an emerging group called Salon

29:24

Realist. Convenience, fair price, cared about

29:26

ingredients, want to get in and

29:29

out, same day appointments, mobile enabled,

29:31

bingo. Strong Wi-Fi, U.S.B. ports, yeah.

29:33

No mirrors. Yeah. Nice cup of

29:35

espresso. Yeah. Bingo. So what they

29:37

did was we took that and

29:39

we said that. is the core,

29:41

let's start marketing that message and

29:43

that's when we got the stories

29:46

ramped up. Amazing. My last question

29:48

for you, Rebecca, a business student

29:50

who did that summer project for

29:52

you, where is she now? She's

29:54

a very successful BC. Wonderful. And

29:56

she's one of the nicest people

29:58

in the world life. adore her.

30:00

So thank you, Rebecca. I love it.

30:03

I love it. Thanks for being with

30:05

us, Amy. I have had such a

30:07

great time and you do a wonderful

30:09

job. So thank you for having

30:12

me. You make my job easy. I

30:14

love Amy Eret's focus on

30:16

finding your genius and then

30:18

building a team with genius

30:21

and complementary forms. It's an

30:23

important reminder that diverse teams

30:25

do make us stronger. I'm

30:28

Jeff Berman. Thank you for

30:30

listening. Masters of

30:32

Scale is a wait what

30:35

original. Our executive

30:37

producer is Eve Trot.

30:39

Our senior producer is Trisha

30:41

Bobita. The production team

30:43

includes Tucker Lagurski, Masha

30:45

Makatinina, Brandon Klein, and

30:47

Timothy Lou Lee. Our

30:49

senior town executive is

30:51

Stephanie Stern. Mixing and

30:54

Mastering by Aaron Bassinelli

30:56

and Brian Pugh. Original

30:58

music by Ryan Holliday.

31:00

Our head of podcasts

31:02

is Letal Molad. Visit

31:04

masters of scale.com to

31:06

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31:08

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