Kate Hancock (6:26)

Hooters.

Tracy Holland (6:27)

This isn't how I want to be treated. Like, I know I'm smart enough to not have to hike my skirt up for tips, but I just didn't feel like maybe academically I was going to be super successful. And I applied to the Fashion Institute of design at 18 or 19 and got into the Fashion Institute in San Francisco and started my academic career there and learned about retail and product and wholesale and production and distribution and margin and realized that that could be something I could probably figure out and be pretty good at. And as I went through the Fashion Institute and was getting straight A's and at the top of my class, I thought, maybe I am pretty smart. Maybe I could, you know, be successful academically. And so I rolled into a four year program at San Francisco State under a foreign policy international relations and a marketing undergrad and was super, super wildly successful academically. And I think these little building blocks as human beings, when we get validation from the outside world.

Kate Hancock (7:44)

Yeah.

Tracy Holland (7:45)

About the fact that we're capable or we're smart or we can be competitive and we have a gift to bring to the world, it gives us the confidence and the momentum to continue to be willing to build and realize. That's where I began my successful career in business was just these moments of feedback, of finding from outsiders who I respected and institutions that I respected to say, look, you're not only successful, but you're at the top of your class and you can compete. And so it's shaking the beliefs, our beliefs are such a powerful impact as to whether or not we are successful.

Kate Hancock (8:38)

Yeah.

Tracy Holland (8:39)

Beliefs that we have, what we, who we think we are and what we carry in terms of the things our parents told us, our teachers told us, our influencers growing up told us that we're this or that or we're not good at this or we're good at that, or we have possibility here, but this isn't an area that we're ever going to be successful. Like unwinding that, pulling that apart.

Kate Hancock (9:05)

Yeah.

Tracy Holland (9:05)

Figuring out how to recalibrate those. Those beliefs are the most important thing, I think as people process, we go through.

Kate Hancock (9:16)

Wow. Now take me back to that time. If you remember when you're. You were in a special class. My kids are both ADHD and I have add. So while I was growing up, my Mother. I mean, she would tease at me like I'm stupid or something, because I could never remember. Right. Like, do you think it has an impact on you of, like, doing more in life or. Tell me.

Tracy Holland (9:44)

So I. I think people with ADHD are Ferrari engines with bicycle brakes. So I think it's our superpower in some ways, because I think it gives us the ability to look at the horizon and survey what's happening on multiple inputs and calibrate quickly whether or not we're working, things are working well, or things are off. Calibration. Right. So my ability to handle inbound, inbound inputs on business, I can smell issues long before they actually become issues, because I can kind of handle a lot of balls at once. The hypervigilance of ADHD also is a little bit of a drain on your humanness. Right. Because there's a point in time in which your body needs to rest. Yeah. When I say a Ferrari engine with bicycle brakes, you know, if you think about that, you have to figure out how to slow your body down enough to enjoy the moment.

Kate Hancock (11:02)

Yeah.

Tracy Holland (11:03)

Without thinking about the next moment and the next moment and the next moment. And so there's this place of finding peace in the moment that allows you to just settle in and enjoy rather than be, go, go, go, go, go. Right. Yeah. So I think of my. All three of my kids have been diagnosed with adhd. All three?

Kate Hancock (11:28)

All three.

Tracy Holland (11:31)

I thought, okay, this is like life coming full circle for me and having to deal with this challenge, which is teaching three little people how to figure out their own calibration. Right. So my daughter interprets her own ADHD issues with always feeling that word, enoughness. You know, am I enough? Are my grades enough? Am I doing enough? Is my homework enough? Am I being successful enough? Do I have enough friends? Her enoughness, that's how it shows up for her. Where is my boys in their adhd? They have to finally kind of find their social balance with their friends because they're always the kids that are bouncing around and really in their physical body and getting them to settle so that they can have a relationship and be settled in the moment physically. I feel like with boys, it shows up with their just, like, body moving all the time, whereas girls, it shows up more internally, but they're figuring it out. But boys are actually both on medication, and my daughter is not. So that's an interesting. That's an interesting consideration how it's interpreted differently for boys versus girls. So, yeah.

Kate Hancock (13:02)

One, my youngest one, he tends to bounce instrument from one to another. And he would go bored. And like I don't want to do homework because I know all these things already. I'm bored. Right? He, he's not motivated enough, but he bounds into different sports or instrument. Like he gets bored fast, right? Yes. They get, they just want to be stimulated all the time.

Tracy Holland (13:28)

All the time. You know what's really interesting that's helps that I would highly consider. If you get a second, go to Amazon and buy some kinetic sand. Kinetic sand has a magnetic aspect to it. So imagine the feeling of sand, the texture, but it doesn't go all over the floor. It sticks together. And so when you roll it around, the sand stays either in a bowl or, or it can stay in a ball and not drop pieces of sand all over. And for my boys, they both enjoy playing with kinetic sand while they watch television. And one thing I learned about adhd, especially in boys, is that their learning happens when their movement takes place. So that's why they need to move their leg or they need to pull a rubber band or use a squeezy toy that their brain actually absorbs and learns much more quickly and retains information if they have a chance to move while they're learning. So I got kinetic sand for them and it's made such a difference. Like I can get them to sit and watch a movie and really enjoy the movie if they can play with their sand or have one of those squishy balls.

Kate Hancock (14:44)

Well, that's a great tip. Now, before we started our live, we talked about the Netflix social dilemma. Can you tell me what their conversation like through your voice to your kids?

Tracy Holland (14:56)

Oh, you know, I'm so challenged because as an entrepreneur I love inventions. Right. So this idea of learning and social media and what the world comes through your phone and you can learn so much. I, I was listening to a podcast this morning with Tim Ferriss and Richard Koch who wrote the 8020 rule, which is one of the best selling books of all time. You know, 8020 rule rules my world. Actually as an entrepreneur, the best thing I think you can think of is getting, you know, doing your best and making the best decisions you can and never getting to completion. You have to make decisions and continue to move forward. So I think of social media as being such a gift to all of us. But this, this movie actually eliminate illuminated the issue that we don't talk about that faces us, which is the addiction of these tools and how the developers of these tools have actually designed the tool to prey on or to support the weakness as humans that we have, which actually Goes back to Pavlov, right. When you think of the Pavlov principle of ringing the bell, and every time you ring the bell, you get a treat or a hit of cocaine or whatever they would do to stimulate animals upon the bell ringing, a stimulus, in essence, it's the really fundamentally the same principle. So every inbound ding, every inbound Bing Bong Gong notification is intended to continue to give you these hits of dopamine, which trigger a response in you of connection and excitement. Right. And so the addiction of taking that away causes stress, depression, loneliness. And to think about the fact that a device is what brings joy or connection rather than a human being. And connection through contact is a radical shift in who we are as human beings. And not even really yet determined what the impact of that's going to be for us in 10 years, 15 years, 20 years, right? Absolutely. We're seeing, we're seeing through our devices what we think of as news. And we're reacting to it. We're getting feedback back or input on social issues and disparity in income and political perspectives. And really there's no one vetting whether it's true or not. So we're reacting and it's. And it's controlling how we think and how we act and how we purchase and what we look at and what we do and that. It's kind of mind blowing. Mind blowing.

Kate Hancock (18:24)

Yeah, it's scary.

Tracy Holland (18:25)

Mind blowing.

Kate Hancock (18:26)

Yeah.

Tracy Holland (18:27)

Right?

Kate Hancock (18:27)

Yeah, yeah, yeah. And I shared to my kids, I was like, you know, I'm kind of guilty of that. The algorithm, the vanity metrics for if you launch a brand, that we look for it. Right. But at the same time, so I communicated to them like, you have to watch it. Because me, I'm okay, I'm strong enough person that my emotions are not tied to how many likes or comments I get. Right. The younger with Lowe's coping mechanism, that's scary, right.

Tracy Holland (18:56)

And my 12 year old, Kate, this actually happened a week ago, which was my biggest, I think fundamentally my biggest shift in how I see. I'm seeing this movie. Today is a week and a half ago my daughter came to me, she's 12, she's in sixth grade, and said for Christmas I wanted to know if I could get a nose job. And I at first sight scoffed because I hadn't watched this movie yet. And I thought, you know, what a nose job. First of all, she has this gorgeous Roman nose. Her nose is perfect. Even if she were 18 or 20, past the age of parental consent. Do I think there's a surgeon who would really, in good faith do a nose job on her? I don't. To do what? Right? I mean, her nose is perfect and it's perfect for her face. So it's not even me as a mom saying, your nose is perfect. I think it. It would be weird to change her nose for any reason. But she turned and said, look, I have this, like, slight, you know, bump here. And I looked at her and she was kind of smiling, and I said, are you serious right now or are you just saying that to get me? And she said, no, I'm serious, Mom. This is really. This thing really bothers me, and I. I would like to get it done. And I recognize that you may not give me the money to do it, but at some point I'm going to have it done. And I said, what would give you even the indication that there's something here on your nose that you would need to remove? And she goes, well, my nose just isn't perfectly straight. And so I've really noticed it bothers me. I thought, God, that's so weird. I mean, it's just like, it's so kind of left field. I mean, if it's just the strangest, like, little micro nuance in the fact that she's even noticing it is odd. And then I watched that movie and I thought, oh, my God, you know, there are these suicide rates and dis. Deformity. Like their. The complex and the perspective that they have watching these TikTok videos and how they're seeing themselves. The whole thing just gave me pause. So I don't find it a coincidence that that conversation took place a week and a half ago. And then I watched this movie. So now I'm on a mission. Gotta fix this to the extent that we can. And by fixing it, I mean having the conversation, removing the shame, putting the conversation on the table and talking about it every single day openly, as much as we can with our kids. Absolutely right.

Kate Hancock (21:44)

Absolutely. Yeah.

Tracy Holland (21:46)

Because it's shocking to me that this little girl at age 12 in sixth grade would even have an understanding of what a nose job is. Right.

Kate Hancock (22:00)

Yeah. I remember my eldest, when he was. I think he was 15, I have a skincare business. And he asked me, mom, how can a light in this spot or something? I was like, wow, does it bother you because he's more tan, he gets really dark. Like, does that bother you?

Tracy Holland (22:18)

Would.

Kate Hancock (22:18)

Would bother you with your color? But I think that's over. But that's kind of like questioning myself, like, what are these kids watching? And who is really dear. Their ideal person to look like.

Tracy Holland (22:32)

Yeah. Right.

Kate Hancock (22:35)

Yeah. It is scary.

Tracy Holland (22:37)

It's crazy. So I feel like it sounds like there are some really smart folks out there who are working on this issue, and I think in the next decade, this is going to become one of the biggest topics that we're facing, because I don't think yet we quite understand the implications of what all this means.

Kate Hancock (23:05)

Yeah.

Tracy Holland (23:06)

You know, what can we do?

Kate Hancock (23:07)

Like, what is through conversation, like, like more deeper into what we know now.

Tracy Holland (23:14)

Right. Well. And think, Think about this. Right. So how many people have you talked to in the last year who have said, I made a statement. And then the next day, I looked on my Instagram and a feed came up for me of Bali or Red Roses or whatever it may be that we discussed that I've never thought of or considered in my life, and now all of a sudden, I see it in my Instagram.

Kate Hancock (23:41)

Yeah. Social listening. It's the listening.

Tracy Holland (23:46)

So that's going to become, I think, the next phase of conversation, because as an everyday consumer, I have Alexa, I have, you know, my phone. I don't think you and I walk around considering that there's someone listening to what I'm saying.

Kate Hancock (24:07)

Mm.

Tracy Holland (24:08)

Or you're saying as somewhat like, as in a Big Brother sort of way, and considering how to retarget that back to me and you. I don't think. But maybe more, more other people are more conscious of it. I don't, it doesn't even phase me. Right.

Kate Hancock (24:25)

Yeah, for sure. I know for sure. Alexa is listening. So I tried not to, like, order through it. Yeah. It's so scary. Especially with a smart home where your wall is listening to you.

Tracy Holland (24:41)

Right.

Kate Hancock (24:42)

Yeah.

Tracy Holland (24:43)

See, I always, I was under the guidance that Alexa is not listening unless you call her name, like Alexa's Layton and sitting there like a piece of equipment until you say Alexa. And then all of a sudden she's like, yes. But actually that's, I don't think that's how it works.

Kate Hancock (25:00)

Yeah. Or like, you can, I mean, I, I, I know brands could manipulate Alexa. You can do what is the top pillowcase. And you keep on mentioning that brand so it recognize it and the same as the Google voice. Right? Yeah. So it is scary. I mean, what. I, I just, you know, I feel really bad for the kids in the younger generations. I mean, like, what is their future going to be?

Tracy Holland (25:29)

It's going to be really interesting to see what happens in the next 10 years. And today we have a president who uses Twitter as a conversation platform and has been for the last four years. And so, you know, can you imagine, can you imagine five or six or seven years ago where we would have in a million years thought Obama would have some sort of one way conversation with us through Twitter? Yeah. Never like it would come through as press secretary, he would have his formal agenda, it would be discussed, you know, with the media. The media would then disseminate the information. That's how it all worked, right?

Kate Hancock (26:11)

Yeah.

Tracy Holland (26:11)

So in the last four years we have as, as constituents had conversations with our president which is not been. Hasn't been vetted. Right. He's not going through his press secretary. No one's reading his tweets before he sends them, obviously. So that's a whole new form of communication, right?

Kate Hancock (26:38)

Yeah, yeah. Are you kids on tech? Tick tock. All three of them?

Tracy Holland (26:43)

Yes.

Kate Hancock (26:44)

Okay.

Tracy Holland (26:45)

Scrolling. All the time. All the time. Although I did get this recent software program. I'll tell you what it's called. It's called Deco De. Have you heard of it? No. And it comes into your home and it controls your children's access to all electronics. So in essence it's acting as a gatekeeper to all electronic communication. And I can set settings, child, preteen, teen or adult. And so that's in essence by child, what those children are allowed to see through that device. I think the only downside to this is it can't control obviously their cell phone because their cell phone has its own wifi connection. But I do think in that movie it did say that you really shouldn't allow your kids to have phone until age 16. So I give my child a phone when they are going to a friend's house or they're going somewhere and I need to access them. But I know now that I need to take the device away when they get home and then allow them to have it as I would hand it to them and say, okay, you can use this and then hand it back an hour later and scroll through what they've been looking at. Yeah.

Kate Hancock (28:23)

It's a conversation that everyone. It's scary. It does scares me watching that movie.

Tracy Holland (28:30)

It's a huge. It's a huge aha. Because nobody has yet documented the actual. With all of these tech thought leaders that there's this plan and discussion about how to re. Engage people every hour of every day back on their device in the same addictive pattern as you would the Pavlonian theory. Right. As to how to continue. Engage. Engage users. Yeah, the profit. So that's. And have you been off your phone? Have you literally Gotten your phone and put it in to a box or taken it away from for day two, five, seven days at a time. When was the last time you did that?

Kate Hancock (29:26)

I did that. I was doing road trip. I turned off my phone for. Since this quarantine because I get, like, carpal tunnel syndrome from working through my phone. So I tried to turn it off and. Or I put like the heaviest case, so I know my hands can't handle it. So I ended up not using it. Like. Yeah, I was able to do it, April, for like five days.

Tracy Holland (29:53)

Wow. Yeah. How do I feel?

Kate Hancock (29:55)

It feels so good. My stress level dropped.

Tracy Holland (30:00)

Yeah.

Kate Hancock (30:00)

Because I don't have to watch and I don't have to, you know, I stop watching the news a lot. I kind of limit to watching political stuff because it's stressful and what's going on. So, yeah, I. I tried to camp in Joshua Tree and have my peace. I love it. It's like I have better clarity not relying on watching my phone all the time.

Tracy Holland (30:22)

Right. It's a big deal. It's a big deal. Did you feel stressed and overwhelmed when you got back and you had 100 texts and 500 phone calls?

Kate Hancock (30:35)

I even try not to return calls and a lot of junk. Like, I would just like, I was fine. I think I was doing a lot of road trip. You have to do it constantly to get used to it. Yeah, yeah. So I'm fine not relying my phone.

Tracy Holland (30:51)

And do you let people leave voicemails for you and do you return them?

Kate Hancock (30:54)

Yeah, yeah, yeah.

Tracy Holland (30:56)

I have a girlfriend who. Her voicemail is. I don't do voicemail, so if you leave me a voicemail, I'll never return your call. Did it work for her? It works. You know for sure she's a beauty. At Big Beauty Entrepreneur, Tony Co. Do you know her from Nyx?

Kate Hancock (31:17)

No. What was the brand?

Tracy Holland (31:19)

Nyx Cosmetics. Oh.

Kate Hancock (31:21)

Oh, yeah, yeah. Nyx. Right. Like they get acquired by L'Oreal.

Tracy Holland (31:26)

Yeah, yeah, yeah. She has a message on her phone and it says, so thank you for calling. I don't do voicemail. So if you leave me a voicemail, I will not call you back. If you want to reach me, text me, but otherwise, I'm out. I love it.

Kate Hancock (31:46)

I love it. Now, Tracy, let's talk about Hatch Beauty. What was the.

Tracy Holland (31:51)

What was.

Kate Hancock (31:52)

Tell me, how did it. How did you come up with a name when it all started? Tell me the story.

Tracy Holland (31:58)

So my business partner, Creative Gentleman, who's super creative, came up with the name Hatch Beauty. We had Scout and Hatch Beauty, which In essence, the idea being hatching an egg or coming up with a new idea. So he had come up with the name back in 2009 and the idea actually came in the early 2000s, frankly, early to mid, when I would see, long before Hatchb formed as a company, I saw the need that retailers had to have incubated concepts that felt like third party brands. So it felt like a L'Oreal brand or it felt like a Unilever brand. But they wanted to have exclusivity. So they really, at that time, Walgreens and CVS were very concerned about each other and market share. Target and Walmart very concerned about market share. At that time, Sephora was kind of more concerned frankly about department store than they were about Ulta. Now I would say it's a Sephora Ulta thing. But that was really the genesis, which was retailers were really looking for a unique point of difference. They wanted a unique proposition, something that felt exclusive, but they wanted it to have all the bells and whistles of a third party brand. So they wanted, they're not interested in control brand, they weren't interested in private label. They wanted a brand that had social media. At that time, social media was Facebook and website. Like, you know, in the beginning of this idea of incubating brands, it was really how do you have a website presence and then how do you drive Allure and Cosmo and Vanity Fair and at that time magazines, how do you drive awareness of the brand through traditional print media? And the big business idea that I had to form Hatch Beauty, which we were truly the first beauty incubator in the United States at that time, next to Mesa, which was one of our competitors, who was a French based company. And their primary business was frankly in Europe. They had very little business in the U.S. when we started, they're primarily a fragrance business. So they would do a lot of private label fragrances for Zara and companies like that. But the idea was really born from the needs of the retailer. And then when I was In Europe in 2004, 2005, I saw what, what Boots was doing at the time with number seven and with botanics. And then in 2005 I saw Boots bring number seven and botanics to the US market and put it inside of.

Kate Hancock (35:04)

Right, Is that Target?

Tracy Holland (35:06)

Yeah. And they had 18 linear feet inside a target and 18 linear feet of Boots based brands including Soap and Glory, which was Marcia Kilgore's brand. After she left Bliss, she went to go develop Soap and Glory with the Boots team. And then as I dug into it more. I realized that Boots had a fully vertical organization, so they had an incubation arm internally. They had an R and D arm, they had a marketing arm, they had a manufacturing arm. So they own contract manufacturing facilities. And I was so impressed as an organization as to how they thought. So as a retailer, their solve for how to find a point of difference from other competitors in their market was to create brands that they would own and they would drive the distribution and the strategy around marketing and promotion within their own stores. But then what I found fascinating is that they successfully took that brand and put it into another potential competitor retail set, even though Target wasn't necessarily a competitor at the time because it was in the US Market and Boots at that time, Boots and Walgreens had not.

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Tracy Holland (38:36)

Nuke, you know, and a US based entity. So I was fascinated at the idea that someone like Target would find a retailer owned brand compelling. And I thought, you know, there is an opportunity to incubate brands with exclusive retailers as a launch pad to get the brand into distribution and then look for complementary retail partners to co launch with after a certain exclusive period. And I wonder if we could do that and it would work and it was really that simple. Like this seems pretty interesting and nobody else is doing this in the US market. I wonder, you know, at that time Target was probably the closest retailer to Boots. They had Sonia Kushek and so they were developing Sonia Kushik product through their procurement and development teams and they were working with her as the influencer and the creative arm and then they would go seek suppliers to fill those items for them. But really there was no other retailer in the US market that was capable of doing that. And so I thought there's a really big business here and I wonder what it would take for us to launch this concept. And year one, Trader Joe's and Over Weighty were our first two retail clients. And year two, CVS was our first big retailer client and then Target and then Walgreens and then Walmart and Sam's Club and Costco. And we just kind of continued to build our business momentum. And so from 2010, January 1st or January when we opened our doors, by the end of2016 we had generated over 450 million in revenue.

Kate Hancock (40:41)

Wow. Wow. What was the first brand you launched those retailers?

Tracy Holland (40:49)

Our first brand in year one which is actually full circle come around this year in Covid. Our first brand in year one in 2010 was a trader Joe's hand sanitizing product because we had H1N1. Wow. So we did over a million units of plant based hand sand that year. So we had an aloe vera and just kind of plant related product. But we did quite a bit of hand sanitizer in 2010 and then we developed a Bath and body range for Overweighty, which is a west western Canadian based grocer, much like Kroger up in Western Canada. And we developed a line of bath and body related products, all fruit and fragrance and scent based. My business partner had been formerly with Bath and Body Works, so he kind of took the heritage of what we had done, what he had done at Bath and Body Works and brought it into our year one product with Overweighty.

Kate Hancock (41:57)

Wow.

Tracy Holland (41:57)

It was fun. And that year, that year we did 2 million. Year one of our business opening, we did 2 million in revenue, a million of it was consulting income. And then about a million of it was product sales.

Kate Hancock (42:11)

Love it.

Tracy Holland (42:12)

And then year two we did almost 10 million in revenue, about 8 million was in product sales or maybe almost 9 million in product sales and almost a million in consulting. Whole thing that's. And then year three, 13 and a half million and then year four, 50 million.

Kate Hancock (42:36)

Wow. I love how you remember your figures. No, yeah, yeah. Now how do you deal with that? Like, because I know for sure cvs, they have it a different look and then the packaging a different one. Like they have this different. How do you handle with that as a brand? Like, because they, because they like different things, right?

Tracy Holland (42:58)

Consumer does, yes and no. I mean at that time we were working with Salma Hayek and she had a real vision for what she wanted for her brand. So we, we developed skincare, hair care, body care, color cosmetics and nail for Selma. And CVS was the customer. What I think we realized as we, you know, each of our brand incubation projects requires the retailer to come with consumer data and consumer shopping habits and kind of what's happening on their extra care card. Because in CVS's case, there are more extra care card holders than Visa holders in the United States. So you have to imagine they're coming with incredible data on what their consumer is buying. When she buys X, when she buys Y, where is she purchasing? Is her price sensitivity around certain price thresholds and what are her considerations in terms of purchase and what does what incentives incents her to purchase. So that's hugely helpful. But one of the things we realized, and I think the aha for Hatch Beauty which we stumbled upon, it wasn't actually thoughtfully a strategic decision, but we had an aesthetic for prestige. So imagine the type of product that we would buy or shop for was something that we would purchase at a Sephora Ulta. But we figured out the value chain of how to bring that aesthetic to a mainstream mass retailer and make it feel prestige So I think we were truly the first company who interpreted the trends of what was happening in prestige and the trends of what was happening in terms of package, in terms of product efficacy, performance, and then successfully brought that to a mainstream customer for a reasonable price. So we certainly were not the cheapest brand in the store ever. Nor was that ever. Our intention. Our intention was to deliver great value to a customer on trend with a product that they would be excited and love to use at a price that was maybe a third of what you'd find at a Sephora.

Kate Hancock (45:23)

Yeah, yeah, absolutely. Now, knowing what you know now, what would you do differently?

Tracy Holland (45:32)

I would have had a buy sell clause in my operating agreement with my partner, which would have allowed us a very easy transition on a buyout. And just like getting married, when you get married to someone, you're at a certain point of your evolution as a human, and so you fall in love or you end up getting married and realizing that you see everything eye to eye because you know, you're at that stage of your path. And hopefully as you get married, you both are seeing the world the same way and you're excited. But as you know. How long have you been married?

Kate Hancock (46:11)

Well, I got remarried. We've been married for two years now. My first one was 13 years.

Tracy Holland (46:18)

Okay, so you know what happens in 13 years? You become a complete, completely different person, potentially. Right. And so sometimes that works and you can grow together and find new connection and find new perspective. And sometimes you get divorced and it doesn't work. The same thing applies in a business relationship. And what I made the mistake of doing when I first established Hatch Beauty is we had had a mutual understanding of what we would expect from one another and what we wanted for each other and the business and our lifestyle. And so because we were short on funds, we actually hired a corporate attorney who represented the company in the operating agreement, not me and not my partner. So we didn't have individual representation and we were trying to save money, and we both saw everything eye to eye. And why would you need each of us to have our own attorney and haggle through any kind of operating agreement issues? And the reality is, because everybody needs the right to shift at a time in their life where it may not be, it may not work for you to be full time. It may be, there may be health issues, there may be family issues, there may be liquidity issues. And so each partner needs to have a very clearly defined expectation for what their performance is expected and to show up. Because what also happens is two partners get Together, and we're both 60 hours a week or 70 hours a week. And then one of them falls madly in love with a guy who lives in the Caribbean. And then every two weeks, they're off with their partner or they're dealing with, you know, other things, and their time is not as. Not as focused. And so it causes resentment and it causes challenges. And when those things happen, which is part of. Part of life and part of life path, it's actually a simple solve, if you've discussed it up front.

Kate Hancock (48:35)

Yeah, right. Yep.

Tracy Holland (48:37)

All you have to do is have that hard conversation in the beginning that says, hey, if you and I are no longer a good fit, or if you and I no longer see eye to eye, or if you and I no longer want the same thing, what's the mechanism for exit?

Kate Hancock (48:54)

I think there's a book for that one, The Slicing Pie. Someone discuss it, like, read the book. Right. Did you read that book?

Tracy Holland (49:04)

No.

Kate Hancock (49:05)

Yeah. Okay. So, yeah, you know, I think I have to go through that. He actually created a. A form to make sure, like, you guys are evenly split the responsibilities. If this are changed, what would be your, you know, equity?

Tracy Holland (49:23)

Look, like, I'm gonna write this down right now. Like, this is really, really, really key. Slice the pie.

Kate Hancock (49:33)

Yeah, something like that. I'll send you. I will send you a link or I'll look for the.

Tracy Holland (49:39)

Yeah. I think it should be mandatory that every entrepreneur, before they start working with someone, has to read the book.

Kate Hancock (49:47)

Yes. You have to read the book and make sure you have to hire your own lawyer for operating agreement, make sure you're protected.

Tracy Holland (49:56)

Totally.

Kate Hancock (49:57)

Yeah. It's just like I just signed a. I just signed a lease a week ago. My husband, I said. I told him, make sure you don't sign a personal guarantee. Because we learned that lesson, right? Yes.

Tracy Holland (50:10)

Yes.

Kate Hancock (50:10)

Those are the things that we don't know in the beginning.

Tracy Holland (50:14)

So that's another great one, Kate. Never sign a pg.

Kate Hancock (50:19)

Yeah.

Tracy Holland (50:20)

Do not sign personal guarantees. There's no. There's enough collateral to not have to sign a pg.

Kate Hancock (50:28)

Yep.

Tracy Holland (50:29)

You have to sign a pg. Don't sign it. Yes. How's that for.

Kate Hancock (50:34)

Yeah. Yeah. And it's actually like a simple ask to a broker, like, hey, I'm not willing to sign this. Yeah. What are you willing to do? And so he said, well, you just come up with a hire down payment, which is not a big deal all day long.

Tracy Holland (50:49)

Yeah.

Kate Hancock (50:50)

Yeah. There's little things that cost you a lot of money that not thought of doing.

Tracy Holland (50:58)

Yeah. Wow.

Kate Hancock (51:00)

Now, Tracy, what was. What have been the most challenging experience while running a business that you've had to overcome.

Tracy Holland (51:10)

What's the most challenging? I would say continuing to fall in love with the business you've chosen. As entrepreneurs, we become very excited about new ideas, but you have to take care of the hand that feeds you. So knowing when it's time for you to leave and find a manager to run your business so you can go fall in love with something else is really important. And having a plan for that, knowing when it's your time to go, when you wake up and you feel drained every day and you're not excited and it feels heavy, it's time to go. And then knowing that you're not trapped and finding someone who can run your business the way you would want them to and working with them as a collaboration partner is I think probably the biggest challenge. Right. Because we're, we only have a limited amount of time on this planet. Yeah. And so I don't know about you, but I have like 15 more businesses that I want to develop.

Kate Hancock (52:20)

Yes. Well, that's my ultimate goal. I try not to work in the business. I want to work above the business.

Tracy Holland (52:30)

I love it.

Kate Hancock (52:31)

Yeah.

Tracy Holland (52:32)

Advice. Yeah.

Kate Hancock (52:34)

So you just hire and hire the best team and you just look at strategy and you can create other things. So I ran three businesses and I know someone that run 20, 30 different businesses, which is amazing. So that's my goal.

Tracy Holland (52:52)

Do you use an assessment test to find your leadership or how are you. How do you find the right fit for the person who's going to take over for you?

Kate Hancock (53:01)

Yeah, there's a lot of tests that you can do that they can take and see if that's the right fit. But again, you have to find that right person and the right bus. Right.

Tracy Holland (53:11)

I do, I do the cultural index.

Kate Hancock (53:14)

Okay.

Tracy Holland (53:14)

Which is called CI. It takes someone five to seven minutes. But I can really, really determine somebody's fundamental strength. And then I do a disc test, which has been very helpful. But yes. And then generally I look for someone who's an integrator who really doesn't necessarily have a vision, but they know what the integration process should look like and they really like tracking cross functional meetings and tasks and to do's and are highly organized.

Kate Hancock (53:54)

Yeah, that's perfect because sometimes, number two, they're visionary. Then you guys will clash because they want to create. Yes.

Tracy Holland (54:02)

Yeah, it doesn't work for me.

Kate Hancock (54:04)

Yes. So I just met Vern Harnish, the scaling up guy. He's wonderful guy. So I just started reading his book Scaling Up.

Tracy Holland (54:15)

Yeah. Great book. I would also say there are a couple of really great tools. There's something called EOS that I've used.

Kate Hancock (54:30)

Yeah. I think he said that was one of his students. Yeah. Eos. Yeah. Use eos.

Tracy Holland (54:35)

Yeah. Traction has been huge. Every week we do an L10 with the exec team. I attend every L10, and it's, in essence, the various areas of the business that need an update. And then we track 10 kind of flagging issues.

Kate Hancock (54:55)

The rocks. Is that the rocks?

Tracy Holland (54:56)

And then we hand out rocks. They have 90 days. They bring it into pebbles for their team, and then we review every single week in our two hour L10 the status of our rocks.

Kate Hancock (55:10)

Love it. EOS is the way to go.

Tracy Holland (55:13)

I know, right? Highly recommend hiring a great EOS leader.

Kate Hancock (55:18)

Yeah. Now, Tracy, what advice would you give to an aspiring female entrepreneur?

Tracy Holland (55:28)

Lean in and be okay with being afraid that that means you're alive. It's okay. Two is, I personally have always run my business on cash flow. I've never taken money to run a business. I've never taken on debt before. I've generated income. So if I'm spending my own money, I am okay with that. But I haven't taken other people's money upfront. And I do that because I want proof of concept, but I also want to have the confidence that I can build it and scale it. And so I would say if that means you have to work full time during the day and launch your business by night, for me, that's a better way to go than to lose equity upfront and take someone else's money on an idea before you've proven it and start, in essence, tipping the scales to become an employee for somebody else who's providing the income. But in, I would also say, surround yourself with mentors. I mean, as a woman entrepreneur, the biggest. The biggest, you know, I think acknowledgement that I received was the 2017 for Los Angeles Entrepreneur of the Year. For my category, I was the only female on stage. There were 14 men, and I was the only woman on stage who had received an award. And then I was actually from the Los Angeles region, the single person that was promoted into the national. The national region to compete on a national level. And I came in fourth nationally. Wow. Entrepreneur of the Nation in my category for 2017. And I think it was the first time I ever realized that I actually was pretty good at what I was doing and that all the money I had made over the many, many years of building a business, almost generating almost a half billion dollars in revenue by year eight with no loan.

Kate Hancock (57:48)

Yeah, right.

Tracy Holland (57:49)

No uncle Rich uncle. That never made me feel successful. I never looked at that and said, wow, I'm pretty successful at this. It was the standing on stage and having someone else say like, you're really good at this. And I thought, oh, thanks. Oh my God.

Kate Hancock (58:06)

Yeah, love it.

Tracy Holland (58:08)

My God. That say, you know, like, just be kind to yourself. Your talk track and how you speak to yourself, the conversations you have, the way you communicate with yourself, the messaging that you give yourself is really, really important. And being kind in how you speak to yourself is really important.

Kate Hancock (58:31)

Love it. Solid advice. Now, Tracy, how do you want to be a. Remember.

Tracy Holland (58:39)

Don'T you feel this like, okay, now I've, I've, you know, done the money thing and I've done the house thing and I did the kid thing. Right. And so all of a sudden there's this turning point, at least in my own life journey that's been about what, what does it mean to be here? Um, I'm reading the book Unreasonable Success by Richard Koch. Koch, incredible entrepreneur. Incredible, incredible success. Incredible story. I highly recommend, if you have a minute to listen to Tim Ferriss's podcast with Richard and the interview with him. Brilliant. Amazing. He wrote the 8020 rule and then just recently wrote a book on what's called Unreasonable Success. So he's looking at 20 of the most game changing humans in our lifetime and he includes Lenin as one of the game changers. And what he's saying is it's not unreasonable success in the way you and I may see it, which is just a stock market number or something. He's saying, like, these 20 people have actually changed the way human beings interact and face the world. Jeff Bezos is obviously on that list. So I guess where do I want to be remembered? I wanted to start taking bigger risks. I want to help a lot of women, mentor a lot of women. I'm talking millions of women on independence and thinking independently to become their own entrepreneur if they choose. So I'm working on some projects there around that. And I think if, you know, I do a good job with my kids and they become good humans and they treat people well, then I think I've done okay.

Kate Hancock (60:33)

Love it. No, Tracy, I enjoyed our conversation a lot. Thank you so much. Thank you.

Tracy Holland (60:39)

I did too.

Kate Hancock (60:41)

Where can they find you? What's your handle to website if they want to hire a company for launching a beauty brand?

Tracy Holland (60:50)

So it's called From Potential to Powerhouse and that's on the new digital platform. I'm launching and the website address is potential to the number two powerhouse.com and then they'll be able to track Instagram. And we're going to have weekly conversations with women entrepreneurs. They're going to be we're going to be tracking my a docu series on taking women entrepreneurs from where they are and doubling the size of their business in the six months that I'm working with them. So that's exciting. Yeah, it's a bit of a roller coaster fasting, fast tracking for young women or these incredible women entrepreneurs who want to grow their business. I'm working with them to do that. That's so inspiring. We're recording it and we're bringing it to everyone who wants to watch it so that people can tune in and listen and, you know, figure out tips and figure out ways to think differently about how they're growing their own business.

Kate Hancock (61:58)

So I love it.

Tracy Holland (61:59)

Yes, I appreciate it. It's so nice to meet you.

Kate Hancock (62:02)

Nice to meet you.

Tracy Holland (62:03)

We all need a moment to really breathe. So here's your chance to take a deep breath in. Now give a nice long exhale and repeat another 10 or so times. This healthy suggestion is brought you by Regents Blue Cross Blue Shield of Oregon.

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