Podcast Summary: How I Built This with Guy Raz

Episode: Madison Reed: Amy Errett
Air Date: August 18, 2025
Host: Guy Raz
Guest: Amy Errett, founder & CEO of Madison Reed

Overview:

This episode delves into Amy Errett’s journey building Madison Reed, a disruptive at-home hair color brand. Amy shares candid stories—from her beginnings in banking and consulting, rising through venture capital, facing a very public firing as CEO, and ultimately launching Madison Reed at age 56. The discussion explores entrepreneurship later in life, the challenges of founding teams, women’s consumer needs, and balancing resilience with self-reflection.

Key Discussion Points and Insights

1. Early Career & Personal Background

• Transition from Banking to Entrepreneurship
  • Amy started her career in banking, consulting, and then venture capital.
  • She co-founded Spectrum, a successful M&A consulting firm that was "profitable from the first six months and never became unprofitable" ([07:06], Amy).
• Move to San Francisco & Coming Out
  • Experienced culture shock moving from NYC finance to SF in the '90s ("people didn’t put a business suit on to go to work" [07:37], Amy).
  • Felt greater acceptance as a gay woman, both socially and professionally ([08:16], Amy).
• Personal Life & Values
  • Became deeply involved in Glide Church for spiritual support during personal hardship.
  • Emphasizes values, empathy, and community, prioritizing "helping people and the goodness of paying it forward" ([11:46], Amy).

2. The Experience of Public Failure and Personal Growth

• CEO of Olivia Travel & Getting Fired

  • Joined Olivia, a travel company focused on LGBTQ women, as CEO ([13:00], Guy).
  • Was fired unexpectedly after five years; the event made public through media and resulted in legal disputes ([15:32], Guy).
  • Amy reflected: "It was one of the hardest things in my life. And it was one, in retrospect, the best thing that ever happened" ([15:06], Amy).

• Embracing Responsibility and Resilience

  • Used therapy to process shame and rebuild confidence.
  • "We have 100% responsibility for what does happen" ([16:39], Amy).
  • Realized the importance of following her heart, moving beyond just analytics ([17:35], Amy).

3. Venture Capital Insights & FOMO

• Time at Maveron with Howard Schultz

  • Learned importance of values in business ("He validated that that could be true and have success through that" [20:17], Amy).
  • Saw Schultz’s legendary ability to spot trends, e.g., warning of economic downturn a year before 2008 crisis ([21:12], Guy).

• Itch to Operate vs. Invest

  • Felt "FOMO" seeing founders pitch ideas:

    "I remember my experience being on boards where I'd be watching the CEO wishing I was that person...I was sitting there thinking, what would I do if I was in their position?" ([22:14], Amy)

  • Driven by desire for a "big outcome" and self-admitted ego ([24:46], Amy).

4. Idea Creation & Industry Disruption

• Origin of Madison Reed

  • Inspired by wife Claire’s frustration with existing at-home hair color and market research showing a massive gap.
  • Saw opportunity to create a "prestige box" with better ingredients and a tech-enabled buying experience ([29:10], Amy).

• Research and Product Development

  • Traveled to Italy, meeting with 13 manufacturers before finding one willing to develop a less-toxic, prestige hair color ([37:05], Amy).
  • Needed at least 19 shades to be taken seriously; today, Madison Reed offers close to 100 ([39:01], Amy; [69:51], Amy).
  • Tech differentiator: built an 18-question color-matching quiz; high accuracy and customer retention.

5. Business Model, Launch, and Go-to-Market

• Direct-to-Consumer (DTC) Focus

  • Aspired to do what Dollar Shave Club did for razors ([27:12], Amy).
  • Subscriptions & online quizzes at the core of early model.

• Launch Tactics and Early Setbacks

  • Big PR & influencer push; notable initial partnership with Groupon offering free boxes for trial ([48:03], Amy).
  • The result: huge trial numbers but poor repeat business, teaching the team about the perils of deal-based acquisition.

    "Trial by free, not so good. If I pay for it and I love the results, they stay. And that has been a hallmark of the company. High retention." ([51:18], Amy)

• Fundraising Challenges

  • Despite raising $32M by 2015, raising funds wasn’t always easy:

    "Most people invest in things they can relate to. Yes. So if you are a guy and you know nothing about hair color...it isn't relevant." ([52:18], Amy)

6. Scaling, Hiring, and Hard Lessons On Co-founders

• Painful Co-founder Exits
  • Started with four co-founders ("all three of them are gone now"), resulting in personal pain and business delays ([02:42], Amy; [58:20], Amy).
  • "The business moves at the rate of the slowest senior person." ([58:20], Amy)
  • Amy reflects on magical thinking and emotional biases in hiring friends ([62:32], Amy).

    "It's not just about like, and I thought I could will it to work and it didn't. And...it cost the company a couple of years." ([62:32], Amy)

  • Each exit involved difficult personal conversations but was ultimately necessary.

7. Expansion into Physical Retail and Omnichannel

• Color Bars & Retail Partnerships

  • Organic interest from stylists ("hundreds" reached out to use the product in salons [54:18], Amy).
  • Pioneered permanent "color bar" salons, using proprietary tech for consistency ([56:19], Amy).
  • Ulta contacted them after hearing branded radio ads ([57:04], Amy).

• Omnichannel Brand

  • Madison Reed now sells via online, in-home, at own salons, and through retailers like Ulta and Walmart.
  • Emphasizes "the same box of color in our hair color bars that we sell. It is not a different product" ([79:48], Amy).

8. Technology and AI Integration

• AI as a Differentiator
  • Early adopter of AI/image analysis to match hair color and ensure consistency across locations.

    "If we don't log in the color that the stylist puts on your hair, that wouldn't be possible." ([69:49], Amy)

9. Pandemic Response & Adaptability

• Aggressive Shift During COVID-19
  • Transformed colorists from shuttered salons to virtual customer service—trained workers in four days ([72:58], Amy).
  • Saw DTC business boom overnight, "16,000 inquiries a day" ([73:18], Amy).
  • Smartly acquired leases at low rates to fuel brick-and-mortar expansion post-pandemic ([74:50], Amy).

10. The Modern Consumer Brand Landscape

• Profitability and Growth in 2025

  • Madison Reed achieved profitability and sustained growth despite industry-wide consumer slowdowns ([81:07], Amy).
  • Considers brand pandemic and recession-proof.
  • Market for consumer exits has cooled: acquirers expect $100M+ revenue and profitability; IPO window is "non-existent" ([78:45], Amy).

• Legacy, Success, and Self-Reflection

  • Amy doesn’t see herself as "successful" in comparison to peers, but recognizes her privilege and luck ([24:46], [82:20], Amy).
  • Not planning to retire; motivated by challenge and impact.

Notable Quotes & Memorable Moments

• "When is enough ever enough of anything in life?" [24:21], Amy
• "Sometimes shit happens to you. The key for my life has been a certain amount of resilience and persistence... Important word, heart, not head." [17:35], Amy
• “I don't think of myself as a successful person.” [24:46], Amy
• "We have 100% responsibility for what does happen." [16:39], Amy
• "The business moves at the rate of the slowest senior person." [58:20], Amy
• "As I used to say in venture, great venture capitalists position themselves to get lucky." [82:20], Amy
• "I will have a walker as I ring the bell at the New York Stock Exchange." [83:11], Amy (on her future ambitions)

Timestamps for Key Segments

• [02:42] Amy on co-founder breakups—painful personal and business lessons
• [13:00] Olivia Travel CEO years and public firing
• [16:39] Therapy, resilience, and taking responsibility after setbacks
• [20:17] Lessons from working with Howard Schultz at Maveron
• [22:14] Desire to operate vs. invest—FOMO for the founder’s role
• [29:10] The Madison Reed origin story: inspiration from Amy’s wife, lack of decent at-home options
• [37:05] Meeting the Italian manufacturer willing to develop clean hair color
• [48:03] Launch partnership with Groupon: trials, errors, learnings on customer acquisition
• [54:18] Stylists start to request Madison Reed color for salon use
• [58:20]/[62:32] Reflections on the difficulty and cost of unwinding the founding team
• [69:51] Near 100 shades—technology and AI tie-in
• [73:18] COVID response—training and redeploying in-store staff as customer service
• [81:07] Achieving profitability and navigating the tough CPG/beauty market

Takeaways for Listeners

• Entrepreneurship is not linear. Amy’s story is full of highs (successful businesses) and lows (very public ouster).
• Later-life founders have unique strengths: Amy credits experience, network, and perspective.
• Co-founder alignment is crucial, but hard: Friendships do not guarantee business compatibility.
• Disruptive ideas often come from lived, personal needs.
• Resilience and a willingness to learn from failure are at the heart of entrepreneurial success.
• Even with strong credentials, fundraising in unfamiliar categories is tough.
• Technology and omnichannel strategies are keys to modern consumer brand success.
• Adaptability—especially in crisis, as seen with COVID—is essential.
• Despite achievements, self-doubt and drive for the next ‘big outcome’ remain strong motivators for founders.

End of Summary