The Exchanges

Q sort of build this business plan. She goes off, and we know what happens with the Honest Company. Um, I mean, you're going to get into cosmetics, into beauty products, but, but, but before we hear the story, how did it, how did the idea even start to come to you? When did you start to think about, um, Beauty products and makeup and cosmetics and then you making it.

A I had become impassioned with the environmental health movement, and as I made changes to my life, I found that there were opportunities in the marketplace. You know, I, it was really easy to switch my household cleaning products or just start washing my floors with water and vinegar. It was easy over time to switch from plastic to glass. It was easy to take my shoes off at the door. There were solutions out there in certain aspects of my life. But when it came to skincare and color cosmetic products at the time, there were some really great sort of all natural types of brands, but most of them Didn't really work very well, or they didn't smell very good, or they weren't presented in a way that was aesthetically pleasing to me. Then that was how I ultimately came to decide to enter into the beauty space. I had been introduced to Christy Coleman, who was a leading makeup artist during my tenure with Jessica, as I was exploring a whole bunch of different things, and I, she and I really clicked. She was the first leading makeup artist to Clean up her kit and start working with what was then called green products. She and I just started talking about what her dreams were in terms of, you know, creating safer makeup and my dreams about really taking on this, this industry. And we, we started having a lot of conversations.

AI assessment note: “that was how I ultimately came to decide to enter into the beauty space.”

Q Pre-internet. So, it was like a, yeah, how did it work?

A So, what she was doing was, she was getting a lot of the very fancy British people to come into this townhouse that she had created. Her sister's a famous handbag designer, Anya Heidmarch. Anya had the upstairs, and Nicole had the downstairs, and you would come, if you were a bride and groom at the time, would come in and have a cup of tea and talk to her about your life, how you like to entertain, what you like to do, and she would then help you put together a list of presents that you might want for your registry, but she didn't actually go and get the things at the time. It wasn't like It wasn't a store. It was a showroom, and then once someone was, had gotten married, she would go to the couple, and she would say, okay, you have 5000 pounds, I'm making this up, worth of credits. Now that we've gotten your, your list together, what do you actually want? Do you want a full set of China, or would you like a Cuisinart, or would you like, you know, what do you want? And she would then run around London and Purchase all the things for the bride and groom.

AI assessment note: “she would then run around London and Purchase all the things”

Q That's what the message said in the envelope? That's, and did it, were you, were you totally shocked? I mean, was it totally unexpected?

A I knew there was tension, but yes, I was shocked. I mean, first of all, being fired by Messenger is just, that was, that was shocking. Maybe, maybe if she had sat me down and said, this isn't really working, we're not agreeing on things, maybe that wouldn't have come as such a surprise, but being fired by Messenger was absolutely shocking. I think I remember walking out and telling the team that I've been fired, and I remember walking back into my office and starting to pack up What I could bring with me, and I, I think I remember calling my friend and asking her to come pick me up. And, and, like, losing it. I, I feel like she picked me up, and I was, like, sobbing, and I think we drove out of town for the night. Um, but yeah, it was humiliating.

AI assessment note: “I knew there was tension, but yes, I was shocked.”

Q And by this point, right, like if you wanted to start a makeup brand, um, you could, I mean, there are, there are co-manufacturers all over the U.S. and Switzerland and Japan that make high-end beauty products. Was it just a matter of finding a place and saying, this is what I want to make? Or was it more, was it more challenging than that?

A Well, it was way more challenging because as one of my partners later on used to say, for us to make the makeup or, or skincare products that I wanted would be the same as going to the fanciest restaurant in town, having the most decadent chocolate cake and saying, I want that same chocolate cake, except you can't use flour, eggs, or sugar, and I want it done in six months. So we were called Brutal Counter, and people found me really challenging, not me, but us as a company, really challenging. They, they bought into my dream, and the idea that you could create high-performing products that were void of certain chemicals of concern, because just to be clear, not all chemicals are bad for you, and water's a chemical. There are lots of things that are perfectly safe for health that are being used in the cosmetics and personal care industry, and there were some offensive chemicals that were there that I wanted out, and so what was really hard was that there was no such thing as clean beauty. People were still calling it greens, In general, clean beauty didn't exist. There were some environmentally friendly natural brands that were successful, but the combination of high performance, being significantly safer, void of chemicals of concern, that was not widely being done.

AI assessment note: “Well, it was way more challenging because”

Q ever, I'm curious, like, were you coming home and thinking, oh God, this was a mistake, or not, maybe not that, but like, was this the right decision to work with a private equity group? I don't know. I'm, I'm curious because, okay, this is a normal question that would come up for a founder, right? Like, did you start to have some of those concerns or doubts or worries?

A Look, I think as a, as a CEO, you were always worrying about the state of the business, and you're always looking to what's going to happen next month, next year. Your job is to, so yeah, I was feeling the pressure, and I was worried, but I wasn't that worried about it. I felt like we were having a moment where the world was kind of going nuts, and I was trying to say to them, take a deep breath, like, this is going to smooth out in the fall. Like, things will start to turn around. Let's not make any Rash decisions right now because I, I feel like this is all gonna calm down. I, and I did feel that way.

AI assessment note: “so yeah, I was feeling the pressure, and I was worried, but I wasn't”

Q Okay, so you've got this business going, and I mean, was it showing promise? Was it, were people adopting the model? It seems still pretty early, right, for e-commerce, but how, like, how to do it?

A We immediately garnered press in the U.S., and the couples really liked it because unlike walking around Bloomingdale's on a Saturday afternoon, just scanning something, you were actually met by a consultant who said, okay, tell me about your life. What do you do? Do you like to entertain? Do you like to cook or do you not like to cook? So for them, it was like they were getting to set up their lives in a way that tailored their needs. And then on the other side, I think, you know, over the And two years or so that we were really running things, people became more comfortable shopping online. Some people still wanted to come to the stores, but people adopted it, and we exceeded all of our revenue expectations.

AI assessment note: “people adopted it, and we exceeded all of our revenue expectations.”

Q Mark Cuban got really lucky because they sold their businesses at the right time. Um, right, and others, uh, others didn't. Um, you, you were Now in a situation where, and financing dries up, right? Like we, we've had these stories on the show, you know, and so I have to imagine that, that like most companies that were venture funded, you guys are in trouble after the market crashes.

A Yes, we were in trouble, and it was really frustrating because it forced us to sell the company prematurely and not in a particularly successful way. When the dot-com market blew up, you know, I remember our investors saying, we're not going to fund anymore, but unfortunately for us, and this is a lesson learned, they were so bullish, and this happens all the time. They're like, let's go, let's go, let's go. Growth at all costs, growth at all costs, and that's all good when things are going well, but if you're doing growth at all costs, And the tides turn, whether that's of your doing or not, and you're out over your skis, you're screwed, and that's basically what happened to me because we were expanding, you know, the retail presence faster than I would have otherwise done, and it was a good lesson learned, so we were forced into making a sale.

AI assessment note: “Yes, we were in trouble, and it was really frustrating because it forced us to sell”

Q Yeah. Got it. Okay. And, and so eventually you found one facility or manufacturer that would work with you, or did you have to find multiple?

A Multiple. Because like any other industry, My opinion is you go to the company that specializes in the thing that you want to make, and so the company that's really good at doing a lipstick or a lip gloss may not be the company that's really good at doing shampoo and body wash or lotions, and also I think it's just a prudent business exercise that you're not putting all your eggs into one basket because then you become incredibly dependent. You lose power to negotiate, but also if something goes wrong with that facility or that company, You're kind of screwed. So from day one, we, we worked with a handful. I did want, one of the things that I was intentional about is I wanted to create jobs in America, and I wanted U.S. manufacturing, and I wanted a decidedly American brand. I felt like the lot of the aspirational brands were either coming from Asia or from Europe, and I just really cared about creating jobs and, and being able to physically visit these places and not outsource everything to China. I really wanted, uh, To make our products in the US. So I had to take my time finding those people.

AI assessment note: “Multiple. Because like any other industry, My opinion is you go to the company”

Q So, uh, tell me about your plan. How are you gonna sell this?

A I knew that e-commerce was going to be- Critical. At this point, at point in time, you know, it's everything, right? You have to have an e-commerce platform. People are transacting online. And I didn't want to go into the department stores because the shelves are being controlled by the incumbents, and they didn't want the stories getting out there of safer ingredients because it didn't serve them particularly well, a lot of them at least. And again, remember, this is, this is now, I'm having these conversations in People want a touch and feel product. They want to match the skin tone to their skin, and it's, while it's possible to do online, and many people do, it's not as easy to do it online as it is in a physical store. So, a friend of mine at the time said, you know, maybe you should consider direct sales, to which I said, hell no. Like, I don't like those business models. You have people over-promising and under-delivering and all this stuff.

AI assessment note: “I knew that e-commerce was going to be- Critical.”

Q the middle of twenty-twenty-two, you leave. Um, we'll get to what happened, but What did you do? I mean, I imagine you would want to take a break, because that's a lot. I mean, you, you've been through a lot at that point, and I don't know, if it was me, I would just kind of say, you know, I want to just kind of enjoy not doing anything now.

A You might. If it was your choice to leave, you might feel that way. I mean, I just, I think that that, that first summer, um, I was devastated. You know, when you, when you start a business and you build it for a long time, Period of time, and you're the face of that brand. You're inextricably linked to that brand. No question about it. It's like, it's like your identity. It's like, you don't even know who you are without that anymore. I've had so many friends who have sold their companies or lost their businesses, and they literally have to pick themselves up off the floor because they don't know who they are without it, and I think publicly, because of what was said, you know, it looked like I just peaced out and was hanging on the beach, and I did go to the beach, but it was a really dark time for me because I, I I was really sad, and I was angry, you know.

AI assessment note: “I did go to the beach, but it was a really dark time for me”

Q And now you are working for Martha Stewart. And, and, I mean, what was that like? I mean, I, I've met Martha Stewart before. I have a lot of respect for her. I've seen the documentary on her. She's obviously a hard charging, I mean, she's a, she's an incredible entrepreneur. Um, what, what was it like working for her?

A Well, it was a different time. You know, her house that she shows in the documentary is actually, I think, where I might have arguably had my first kiss. My friend's family had that property, and it was like a kind of a, not dilapidated, but it was kind of an old farm, and she turned it into this extraordinary piece of property, and we used to place it in the bottle there, literally, so it was such a full circle moment for me. I will say this. Well, first of all, I worked directly for Martha, and I also worked directly for Sharon Patrick, who was the chief Operating officer at the time. Martha and Sharon fought a lot. They had differences of opinion on just about everything, so that was the first thing, and I think dual reporting of equal measure is challenging. Um, Martha was, Martha is exceptional. I will, I will give her that. She's highly intelligent, and she is truly one of the most creative people that I have ever met. Ever. And she was able to take the average middle-income woman in the United States of America and make her look like a goddess in her home and done on a budget. But Martha was incredibly demanding, and, and I think that people have no idea what it was like in the nineties in the work world, and getting yelled at by your boss was just It was, it was par for the course, and it happened constantly.

AI assessment note: “Martha was incredibly demanding, and... getting yelled at by your boss was just”

Q make a commission, and you buy more, but, um, what, what can happen is people will spend a lot of money on product, and then they just are not successful selling it, and they're stuck with all this stuff, and, you know, and, and that's, that sucks, and it can be financially devastating for some people. How is your model different? You, people still have to buy the stuff, right?

A Well, first and foremost, we never sold the dream. There's a, there's a thing about the old school, and I, and I want, it's actually, I'd love to break this down, because I do think that there are some really great companies out there doing really great work in the world, and I think that Tupperware's been doing it for a long time. Yeah, and I think that, you know, before we had the right to vote as women, Avon gave women an opportunity to gain some sense of financial independence. There are a lot of wonderful attributes to this business, to certain of these businesses. For me, the way that we broke it down was we weren't going to allow you to buy product. You could buy samples and, but we, we flagged it. So if there was any, any order that came into our website over a thousand dollars, we would flag it because not only did we not want people spending money and losing money, but we also wanted to control the brand experience. And so I didn't want someone selling a bunch of product out of their garage. That's not the brand I was trying to build. So every single transaction came through our e-commerce platform and was shipped directly Directly from our warehouse. You could earn a commission if you sold a product. If they built a team, they could get, earn a small percentage on that team, but most of them weren't making very much money. Most of them only gave us one to three hours…

AI assessment note: “we weren't going to allow you to buy product. You could buy samples”

Q And the plan with Counter is similar. I mean, also to use affiliate sales reps, um, but also have direct-to-consumer also to be in shops. What's, what is a similar multi-channel strategy?

A Well, we do have regular affiliate relationships. You know, we're on platforms like ShopMy. We have our, one of our little stores that we used to have on Nanteca, which we'll be opening again this summer, and of course our e-commerce platform, which is driving the majority of our sales today, but, um, we do have a community of women we call brand partners, but one key differentiation is that they, they cannot build teams, so they are paid all Exclusively on, commissioned on their own sales, and mostly they're selling online, or on TikTok, or wherever they are, uh, Instagram, and they are building this community with us that will help us to continue to really fight for a standard for clean, because clean means nothing today, and yet to me it means everything to us, it means everything, and so I would really like us to fight to create a new standard that everyone Can understand so that if something is marked clean, that you actually know what clean means.

AI assessment note: “we do have regular affiliate relationships. You know, we're on platforms like ShopMy.”