Oct 24, 2022 · 1h 11m · how-i-built-this
Bluemercury: Marla and Barry Beck
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 'How I Built This,' host Guy Raz interviews Marla and Barry Beck, chronicling how they pivoted their failing dot-com beauty platform into Bluemercury, a premier multi-brand luxury cosmetics chain acquired by Macy's for 210 million dollars.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Guy holds 31.9% of the talking time here. How this is scored →
Guy as informed peer 3.2 Guest teaching 2.9 Guest disagreement 1.4 Guy pushing back 1.8
speaking balance: gold is Guy, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 1:00:45 Rejecting the recession excuse for mall failures
Barry strongly pushes back against conventional executive excuses, admitting they hid behind the recession when opening mall stores was actually an unmitigated operational error.
Hardest push from Guy ▶ 18:58 Pressing on taking outside VC capitalGuy presses Barry on why he chose to dilute ownership and bring on demanding investors when he had enough personal capital from his prior exit to bootstrap.
Biggest teaching moment ▶ 35:30 Pitching the bank VP on doubling downBarry vividly explains how he navigated an insolvent acquisition by telling the bank's vice president that doubling down on their bad loan was their only mathematical chance of recovery.
Guy holds their own ▶ 15:10 Contextualizing the late 90s beauty retail landscapeGuy demonstrates deep historical retail knowledge by noting that Sephora had barely entered the US, Ulta was selling cigarettes, and department stores had an iron grip on distribution.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Guy as informed peer | Guest teaching | Guest disagreement | Guy pushing back | Why |
|---|---|---|---|---|---|---|
| First Meeting: A Boardroom Pitch and Unconscious Bias | 3 | 2 | 1 | 2 | Guy Raz frames Barry ignoring Marla in the boardroom as 'unconscious bias', which Barry openly acknowledges. The exchange is warm and humorous as both Marla and Barry recount their disparate first impressions. | |
| From Advisory Meetings to an Entrepreneurial Partnership | 2 | 2 | 1 | 1 | Guy playfully teases how Barry turned business advice meetings into courtship, guiding the narrative seamlessly into their decision to start a business together. | |
| Identifying the Beauty Opportunity and Independent Brand Boom | 4 | 3 | 1 | 2 | Guy demonstrates contextual knowledge of the cosmetics landscape and independent brand rise in the late 90s, while Marla details her early hobbyist knowledge of West Coast indie brands. | |
| Crafting the Pitch Deck and Securing Fast Seed Capital | 3 | 2 | 1 | 2 | Guy probes why Barry sought external venture money instead of self-funding, prompting Barry to explain the prohibitive $600k tech costs of 1999 e-commerce compared to modern free platforms. | |
| The Dot-Com Reality: Weak Launch and Looming Insolvency | 3 | 3 | 2 | 2 | Guy probes the harsh reality of launch day and why no orders came in, leading Barry and Marla to reflect on how being too early is indistinguishable from being wrong, facing immediate insolvency with 20 employees on payroll. | |
| The Physical Store Solution: Acquiring EFX and Doubling Down | 3 | 4 | 2 | 2 | Barry educates the host on corporate opportunity legal rules when investors refused to back physical retail, and details his high-stakes negotiation with BB&T Bank to double down on an insolvent Georgetown shop. | |
| Transforming the Store: Client Service and Local Notoriety | 4 | 3 | 1 | 2 | Guy questions how DC's conservative reputation could support a trendy beauty boutique, prompting Barry and Marla to explain the Walmart effect and the highly educated, international diplomatic clientele. | |
| Surviving the Bubble Burst and Expanding to Philadelphia | 3 | 4 | 2 | 2 | Marla clarifies how the consultative client-service model baffled traditional investors who wanted self-service supermarket scale, explaining why high-touch advice drove retention. | |
| Brand Politics, Industry Consolidation, and a Growing Romance | 4 | 3 | 1 | 2 | Guy asks why luxury brands were reluctant to supply them despite growing buzz, leading Barry to unpack the complex Venn diagram of luxury brand protectionism and exclusivity optics. | |
| Navigating Sephora Competition and the 2008 Mall Misstep | 3 | 3 | 2 | 2 | Barry refutes the convenient excuse that the 2008 recession caused their mall expansion trouble, openly admitting that mall shoppers were fundamentally mismatched with their customer profile. | |
| The Macy's Acquisition, Family Milestones, and Luck vs. Hard Work | 3 | 3 | 1 | 1 | The conversation closes with an analytical breakdown of why beauty persistently resisted online migration compared to other retail sectors, culminating in reflections on resilience and luck. |
Statements from this episode (16)
Marla Beck: Anita Roddick bought The Body Shop name from a Berkeley store
“She actually bought the name from this first location in Berkeley.”
Barry Beck: Internet retail disrupted department stores on convenience and selection
“I think that we, at some point, had a hypothesis that the department stores were really created for sort of two reasons, right? A convenience And breadth of selection. And that we saw a possibility that they could no longer be convenient because of just travel…”
Marla Beck: 1990s indie brand boom opened up the cosmetics industry
“It was the rise of the independent brands, which is, for the first time in a very long time, you had founders that were breaking into the industry. So, you had Bobby Brown, you had Marcia Kilgore, you had Lev and Alina Glassman at Frosch, you had Francois Nars…”
Barry Beck: Building an e-commerce site cost nearly $600,000 in 1999
“I think it probably, to build out at that time, would probably cost, it cost probably nearly 600,000 dollars to build an e-commerce site, and today,
You can build it on Wix for free.”
Barry Beck: Carlyle Group partner signed a blank seed check for Bluemercury
“Yeah, I think our first, one of our first checks, we went down to the Carlisle Group, and Dick Darman and Ed Mathias wrote the first checks, and I sort of remember, just to underscore the point, is that Ed signed a blank check, and then called out to his assis…”
Barry Beck: Being too early is functionally equivalent to being wrong
“I think that what we realize that sometimes being too early is really just being wrong.”
Marla Beck: Competitors Eve.com and Gloss.com raised $10M to $20M each
“Eve.com, gloss.com, all of these other companies had raised 10 to twenty million dollars each, and so we were way behind.”
Barry Beck: Bluemercury hit $150K cash and 60 days runway with 20 staff
“But when you're down to your last 150,000 dollars in the bank, and you look around the room, and you have 20 employees, and you realize you have 60 days of cash left, but you have to make some tough calls.”
Marla Beck: Bluemercury Seed Investors Demanded Pure-Play Internet Business
“At that point in time, all of our sort of e-commerce techie investors only wanted pure play internet businesses.”
Barry Beck: Bluemercury Founders Formed Separate Entity to Acquire First Store
“They rejected it, and in fact, what they said was, if you want to buy the store, Barry and Marla, buy it with your own money. And what we did was we formed a company called 29 Street Partners. We, Marla lived on 29 Street, and we caused that company to acquire…”
Marla Beck: Traditional Department Store Beauty Models Served Brands, Not Customers
“The department store model was designed to serve the brands, not to serve the customers.”
Marla Beck: Conglomerate acquisitions of indie brands created barriers protecting Bluemercury
“All of these independent brands were purchased by L'Oreal, by Estee Lauder, and Shiseido. So, overnight, we were then in business with the big companies, and that did two things for us. It provided a wall around us for new entrants, because the indie brands di…”
Barry Beck: Bluemercury founders sold equity in 2006 to de-risk personally
“Candidly speaking, we wanted to rebalance our risk equation. And so that, yeah, that we were interested in selling some of our stock to fuel our lifestyle because we poured our entire life into this business.”