← Money Rehab with Nicole Lapin
Money Rehab with Nicole Lapin
A Multimillion Dollar Deal, a Product Recall and a New Chapter: Gwen Whiting on the Good, the Bad and the Ugly of Acquisitions
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- [00:00]
Narrator/Host
What is your bank doing for you and how much is it costing you? That's a serious question because if they're charging you $8 a month with zero extra services, I've got to stage an intervention here. What are you paying them for anyway? To hold your money for you. You deserve better. That's what I love about Chime. There are no monthly fees, no maintenance fees. My younger self would have definitely benefited from this. It's not just the no fees thing, it's what they have to offer you too. If you set up direct deposit, you can get paid up to two days early automatically. And with qualifying direct DEP, you're eligible for free overdraft up to $200 on debit card purchases and cash withdrawals. Plus they have over 47,000 fee free ATMs. So seriously, ask yourself, what is your bank doing for you and just how much are they charging you to do it? And if the math isn't mathing, think about making a change. Work on your financial goals through Chime today. Open an account in just two minutes@chime.com MNN Chime feels like progress. Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bancorp Bank NA or Stride Bank NA members, FDIC Spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file. Fees apply at out of network ATMs. Bank ranking and number of ATMs. According to US News and World Report 2023 Chime checking account required. Support for today's episode comes from Square. The easy way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. On this show and in my books, I always talk about how important it is to have multiple streams of income. But how do you actually go from hobby to hustle? The answer Square I have seen many times in real life. Just this weekend at the Farmer's Market, there was a mom selling banana bread. We love banana bread. And I could not resist. In the past, I might have missed out because I never carry cash. But with Square, she was able to take my card in seconds. I got my delicious treat, she got paid, and neither of us had to stress, with Square you can get all the tools to run your business with none of the contracts or complexity. And why wait? Right now you get up to $200 off square hardware@square.com go. That's square.com G O M N N as in Money News Network. Run your business smarter with Square. Get started today. Today's episode Includes descriptions of sexual assault. Please take care while listening. For a lot of founders, selling your company is the ultimate dream. But for Gwen Whiting, that dream was actually a bit of a nightmare. Gwen's the entrepreneur behind the Laundress, a cult favorite brand that turned laundry into a luxury business without a single dollar. Gwen sold the Laundress to Unilever for a reported $100 million. But after she left, the recalls started. We talk about how she built it, what really happened during the Unilever acquisition and the fallout that followed in the show notes, I'll also link the articles that Unilever responded to so you can see their side of the story. Gwen also shares what she wishes she knew before she signed on the dotted line and why she's back now in the game with her new venture, the Fill. We also talk about how Gwen manages professional challenges while dealing with personal ones. At the end of our conversation, Gwen shares her experience as one of the 567 known survivors of a now disgraced Columbia OB GYN. It is a brave and important conversation about personal trauma, public accountability, and reclaiming your voice. Interview right after this.
- [03:21]
Nicole (Interviewer/Host)
Gwen Whiting, welcome to Money Rehab.
- [03:25]
Gwen Whiting
Thank you. I'm so happy to see you.
- [03:28]
Nicole (Interviewer/Host)
I'm so happy to see you. It's been a hundred years, it feels like, but it hasn't.
- [03:33]
Gwen Whiting
It's been seven, six and a half, kind of. That's kind of in dog years. It's 100.
- [03:38]
Nicole (Interviewer/Host)
I know. Like, the pandemic happened. You built, you grew, you sold, you.
- [03:43]
Gwen Whiting
Broke up with rebirthed.
- [03:47]
Nicole (Interviewer/Host)
Things have happened. We got a lot to catch up on, sister. So let's start with when we met. You were building laundress.
- [03:55]
Gwen Whiting
We met. Actually, I think I just sold.
- [03:59]
Nicole (Interviewer/Host)
The way you described it to me made me a believer, like your passion about laundry. I had never, not once, not ever, like, really thought critically about my laundry. And I completely just wanted to buy whatever you were selling. So I did. But tell me why you decided to sex up the laundry business.
- [04:21]
Gwen Whiting
I mean, to me it was just such a personal need. The landscape of products and options for cleaning in 2002, when I started and I launched in 2004, was super limited. It was the garbage at the grocery store and a dry cleaner. That was it. The vocabulary for me. I was a designer, apparel designer. I had a textile background. But, like, I didn't. There wasn't the terms of white space or this. You know, it wasn't until after 2008, 9, when people just like woke up and were like, oh, here's an opportunity. I'm gonna do mattresses. This was my own personal need. And it was so obvious that it could be better and it should be better.
- [05:00]
Nicole (Interviewer/Host)
You were not an entrepreneur before, right?
- [05:04]
Gwen Whiting
Or I mean that also wasn't really a word. In 2002, you were a business owner where you started a business, where you ran a business. My dad had his own small business and ran a company. So I came from a house of. That was a lifestyle, was creating a business and you know, a life for yourself. And in college I had lots of ideas and I was started. I started a Thai business in high school. I had a business plan in college that I, you know, did a lot of research and went down the road, but needed a job.
- [05:39]
Nicole (Interviewer/Host)
I think there are a couple kinds of founders. One who wants to be a founder, so they are out there hunting for a business idea and another one who has a business idea so they become a founder. It sounds like you were a little bit of both.
- [05:51]
Gwen Whiting
I was like, oh, I need to start something. It was like, I want to get a job, I want to create, I want to do all these things. But then this was the idea that was worth going for. And I did it on a smaller sort of cottage industry level those other ways. But this was really the big business idea versus like a small side hobby or a passion or something fun to do.
- [06:16]
Narrator/Host
Yeah.
- [06:17]
Nicole (Interviewer/Host)
And when you started, also the idea of raising money and taking on VC was not as popular.
- [06:25]
Gwen Whiting
Yeah, it wasn't a thing, it wasn't a roadmap. It was something that I didn't know how to do it. I built, you know, a very small, responsible, bootstrapped company very, very differently. I built with credit card debt instead.
- [06:42]
Nicole (Interviewer/Host)
Well, so you never raised money for the laundry. You had a SBA loan?
- [06:47]
Gwen Whiting
Yeah, I launched with a hundred thousand dollars SBA loan. That was the money that funded my first production run in the launch. But that doesn't last very long.
- [06:58]
Narrator/Host
No.
- [06:58]
Nicole (Interviewer/Host)
And when you were in those early days, how did you get into the credit card funding zone? Because a lot of entrepreneurs, if they're gonna bootstrap, there are good days, there are bad days. You have to get scrappy and scrappy.
- [07:15]
Gwen Whiting
I mean I say that my 16 years of the laundress was a never ending startup. It was scrappy through and through the end and self funding and is that's just the nature of the game. You don't get money thrown at you to like build a luxe office or throw money just like out there that to just to spend it because you have it. It's a very different approach. So there's, you know, bottom line and the responsibility and a compromise for every spend. But I never carried a credit card balance in my life. That was not something that our family did. Our family didn't use credit cards. We had a credit card for rental cars, like to travel once, you know, once a year, it wasn't a thing. But. And I was raised that, you know, credit card debt was the worst thing you could ever do possible. But, you know, the money, the $100,000 went quickly. In an inventory based company, you have to buy your inventory and I needed access to cash. And it's very comical because there's like this small mini female founder movement, like a very mini movement. And they're like, oh, you're a woman, you can get money. And that was like really small loans that were at 9% and the interest rates then were like 2, 3%. So it was, it was, it was better to get a credit card apron and like a $20,000 line of credit. And then that continued. And this is the day when you actually got the applications in the mail. And I would probably get a, you know, I got an envelope almost once a week and if you just filled it out, they actually gave you a card and a line of credit. So I was like, I became a pro at rolling over credit card debt from one card to the other and jumping aprs and jumping credit limits and, you know, quarter million dollars later. That's how I funded the laundress. And that all came down in 2008 with the financial crisis.
- [09:21]
Nicole (Interviewer/Host)
Yeah, I mean, the way you talk about that is, is similar to how my husband, who's an entrepreneur, talks about it. Just getting through Covid, like through credit cards to try to make payroll. I bootstrapped my business like it's, it's a slog every day. And it sounds like there's a lot of memories that probably stick out to you of things that you did to try to save money. I don't know if you've seen the Instagram trend. That's like the unhinged things I did early in my career, but do you remember any?
- [09:49]
Gwen Whiting
Oh my gosh. I mean, it was unhinged for the whole time, you know, what I put myself through and that carrying that debt and living hand to mouth all those years is incredibly unhealthy. And, you know, everything's trending and on Instagram and people see and think this is like such a sexy, luxurious lifestyle to be a founder and get money thrown at you. And you get, I go to these events and it's like, I'm series C and series B and series, series, series. And it's like A, I don't know what you're talking about. B, like that's not impressive to me. Like, that's such a badge of honor. And I'm like the outlier who walked away with selling my company with the majority ownership, you know, with. So it's a, it's a very different landscape of at the end of the day, what presents as sexy versus the reality of keeping your company and keeping your equity and having that versus giving it away all those years.
- [10:56]
Nicole (Interviewer/Host)
Totally agree. It's something that I get asked all the time too. And I'm like, I, I don't understand how this has gotten to be the thing that every entrepreneur wants to do. Because I started, I'm sure you started to be your own boss and then. Your own boss.
- [11:11]
Gwen Whiting
Exactly. It's like the minute you raise money, you just gave your, you just gave that away. You're not your boss anymore and you have stakeholders and you just gave your autonomy and authority and away independence, the whole thing.
- [11:25]
Nicole (Interviewer/Host)
Were you tempted at times to take on outside capital or.
- [11:29]
Gwen Whiting
No, because it, no, because as horrible as it was, I knew that I couldn't give any part away for my own protection.
- [11:40]
Nicole (Interviewer/Host)
So did you have an idea of what you ultimately wanted the outcome to be?
- [11:47]
Gwen Whiting
I mean, I loved what I did and I was so passionate about it. Which you experienced. I was so focused on just getting through the day and the week and the month and the year. And so I had a concept of the business plan that I wrote was like a five year plan of you do it for five years and you exit. And at the time when writing that in 2002, the only other brands that had like a niche or a small brand or a creator brand outside of the giant corporate structures were acquired really quickly. It was like Bobby Brown and Bliss Spa and Frederick Fakai and you know, there's a bumble. There's a handful of really small niche prestige brands that was like the birth of something non giant CPG and their track records were like really quick acquisitions. So I just assumed that that was like the lifespan of this kind of journey. Not because I wanted to exit or understood what that even meant. I just thought that's how that worked. And then the 2008 financial crisis changed that. And then, you know, you wake up one day and it's 16 years later and you're still doing it. But I did expect to exit not From a financial perspective, not like, oh, I'm going to cash my chips and have a windfall. And like, that was never part of my understanding or sensibility of it. My. My feeling was that I could only take my brand and my company so far, and a giant or, you know, or a larger parent company need. I needed that for my brand to, like, go to the next step. Why did you think that? Because it just seemed like it was needed to be bigger and get into different distribution categories and things that I didn't necessarily have experience with. Maybe I didn't have that much also interest in, like, getting into the grocery store business, but I just was like, okay, that's for someone else who. Who does that. And again, this is also sort of the understanding of what happened in the landscape, what other brand trajectories were.
- [14:10]
Nicole (Interviewer/Host)
And knowing what you know now, what would you tell?
- [14:15]
Gwen Whiting
I mean, that no one is more qualified or competent or passionate or the vision of the brand than me, period. But I was also in a complicated situation. I'm saddened by what happened, but I can't regret it because I was in a very, very complicated, toxic partnership work environment. So I kind of did what I had to do, but I didn't expect the outcome.
- [14:48]
Nicole (Interviewer/Host)
So how did we even get to that outcome? So, 16 years later, spoiler alert. Unilever acquired the laundress in 2019 for a reported hundred million dollars. I heard that they first approached you.
- [15:02]
Gwen Whiting
They came into my store on Prince Street. I had a retail store, Prince Street. As I talking to my sales associate, like, it was so bizarre. It was completely unprofessional. And, you know, you kind of, like, always are like, what are you doing here? Are you, like, sussing out? Are you copying? Are you, like, looking at the competition like, what are you doing? And you're having a dialogue with. With someone from my team, which is also strange.
- [15:31]
Nicole (Interviewer/Host)
But they're not, like, wearing a Unilever polo shirt.
- [15:33]
Gwen Whiting
No, but there's like, like, what are you. What are you doing? What can I help you? What are you looking for? Where are you from? And he's like, oh, I'm from Unilever. I pull in from O. Like, is Gwen? Is Gwen here? I was like, that's crazy. It's crazy. So this woman calls me from the store at my office 30 blocks away, and she's like, gwen, Gwen, I think you need to get down here right now. There's a guy here from Unilever. And I was like, please pass the phone. Put him on the phone. And I was like, excuse me, what are you doing? Like, you're in my store, in my space, in front of my team. Like, if you want to have a conversation, like, do you want to call me back? My. Step outside and call me back.
- [16:12]
Nicole (Interviewer/Host)
And then what happened?
- [16:13]
Gwen Whiting
So that. Then the dialogue. He stepped out and called me back. But I guess in retrospect, I should have been like, what is up with these people? Like, this is their process.
- [16:23]
Nicole (Interviewer/Host)
I mean, it's. It's wild because, you know, I think some people have this delusion that they're going to be, like, discovered on the street back in the day, right? Like modeling scouts or something. But that's not a thing in entrepreneurship. I mean, you joke about the idea that you didn't know about an exit. Of course, you. You knew more than you're giving yourself credit for. But, like, typically a sale process, you get a banker, you do a process. Yeah, the whole thing, like, somebody doesn't just, you know, Undercover Boss show up.
- [16:50]
Gwen Whiting
Exactly, exactly. And I always said, because historic is sort of like the last thing on the business plan to do list, because I. It was important to me to feature and showcase my whole vision in a brick and mortar place that you could understand what the whole world of the laundress was. And I came from Ralph Lauren. I was a designer for Ralph Lauren. So we were very much in this creating of a world and an environment. And so my whole vision was on the website. It was, you could be on a shelf in the Container Store, Bloomingdale's or whatever. And I had stores in Asia. But I was like, I need to have my own showcase. And I joke that it's like hanging the fly paper, and one day someone would walk in. I didn't actually, like, mean that literally, but it happened. That's exactly what happened.
- [17:45]
Nicole (Interviewer/Host)
So without talking about specific numbers, I know you can't. So this guy steps outside, he goes into your store, you start a negotiation.
- [17:54]
Gwen Whiting
So, yeah, the next. The next call was like, come to New Jersey and like, kiss the the ring. That was the week after.
- [18:00]
Nicole (Interviewer/Host)
So a meeting with the executive team.
- [18:03]
Gwen Whiting
Correct.
- [18:04]
Nicole (Interviewer/Host)
What was the opening offer or what.
- [18:06]
Gwen Whiting
Started the dialog of. Of like, do you want to be in the family? You know, the Unilever family and, like, drinking the Kool Aid. And I always believed that my brand acquire or ideal, like, date for the prom was seven generation. I thought we shared. We shared a value system, and I was just the prestige version in a shared ecological product value system. So then when Seventh Generation was acquired by Unilever about three years before Us. I was like, okay, like, they care. And so that started the discussion. But the. The negotiation went on for, like, 13 months. It was quite disastrous. Their first offer was like, a joke. And. And the response was like, this is a joke. Correct. You know, like, we are a incredibly profitable business, and there was no value in our valuation to them of being profitable. And I was like, you just paid this, like, stupid ketchup company who's not even profitable, like, this amount. Like, are you kidding me? Like, we're a perfect, pristine, clean, profitable business. Like, where's value in that? And they're like, oh, we had to pay that investor guy. And, like, the Belgians. And like, they were jerks. And I was like, oh, I'm sorry, because we don't have a pool of investors. So you think you can, like, get off cheap over here?
- [19:41]
Nicole (Interviewer/Host)
Did you think about saying no?
- [19:42]
Gwen Whiting
I did say no. I was like, yeah, no, don't think so.
- [19:46]
Nicole (Interviewer/Host)
But they kept coming back.
- [19:47]
Gwen Whiting
Yeah, it was a. It was a long process.
- [19:52]
Nicole (Interviewer/Host)
So it sounds like they got to the terms that you wanted.
- [19:55]
Narrator/Host
Yeah.
- [19:56]
Nicole (Interviewer/Host)
And were you truly willing to walk away if they didn't? Because I think that's where the strength in any negotiation lies, when you're truly, truly willing to walk away.
- [20:07]
Gwen Whiting
Yeah, I have to. I do have to give credit to our female banker who, like, made all that happen. And she was like. She knew the terms and she, like, got them where they needed to be. And that was really her. Her doing of. Of getting. Getting that. Getting that done.
- [20:29]
Nicole (Interviewer/Host)
How did you find her? Or, like, if another founder, probably not in the same way that it happened to you, but if they get approached for some sort of M and a.
- [20:42]
Gwen Whiting
Transaction, that's really clanky, awkward situation because we weren't ready for market and because we had never raised money, we never had any of this, like, system set up where if you raise money, then you kind of have done a little bit of, you know, you have this deal structure. You have, like, your lawyers. Like, you have some of that slightly put together or way more put together than me just operating a normal business. And my business partner and I were not on the same page in any shape or form. So that was like a whole nother layer to this. So we, like, fumbled with a lot of not great fit in the very beginning and trying to get to the right team. This banker was actually recommended by Unilever because she had done the dollar shave club deals, and so she had done big deals. And my business partner didn't understand. She was like, that's like taking A divorce attorney recommendation from the. Your husband you're divorcing. And I was like, you don't really get it. They like to do business with who they know. Like, that's, that's how, like, a lot of these companies are. Like, they want to work with the people that they know. And certainly her precedence was like, she shook every penny for the dollar Shave club. So she's this woman was like, not giving businesses away.
- [22:08]
Nicole (Interviewer/Host)
And I know there was so much IC followed. But at that point, if we could go back, I'm sure, or I'm hoping that you celebrated when the acquisition happened.
- [22:20]
Gwen Whiting
Yeah. So the night before the deal closed officially at 9 o' clock on Monday morning. And everything was so touch and go and a nail biter to, like, the last minute. But on Friday afternoon, I like, it was all set up. The wires were set. Like, the press release was set. Like, everything was set. So on Friday afternoon, I called the guy who did my, like, New York wedding dinner at the Waverly Inn and set up the back room at the Waverly Inn on Sunday night. And I just started calling people and I said, hey, are you any chance you're free for a dinner on Sunday night? And so all these people showed up and they just thought it was my husband. And I invited them for dinner and I got my mom in and there was like 35 people.
- [23:11]
Narrator/Host
And.
- [23:12]
Gwen Whiting
And, you know, my mom walks in and sees, like, my best friend from Boston is like, what are you doing here? Everyone thought I was going to roll in with, like, a baby. I was like a baby. My mom was desperate. It was a baby announcement. And instead it was. I had just sold my baby. So it was a surprise sell party the night before.
- [23:38]
Nicole (Interviewer/Host)
That's cool. And when the wire actually hit, how did you feel?
- [23:42]
Gwen Whiting
It was a very unbelievable gasping moment to just. And I was sitting at my desk chair and my open floor plan, and my team didn't even know yet. And I'm just like, having this moment of like, holy shit, holy shit. And trying to keep it together. And, you know, my. My business partnership was so toxic. Like, there wasn't even like a hug, like, high five. We did it.
- [24:11]
Nicole (Interviewer/Host)
Did you feel at that moment that you did it? There are a lot of founders who go through, like, a depression after selling their company. You refer to it as selling your baby? Yeah, a lot of founders do. So was there mixed emotions at that point or were you just on cloud nine?
- [24:31]
Gwen Whiting
I didn't really comprehend what happened or was happening. I was in such, like, adrenaline mode for all those years. And then so I had a trip planned right after. So I like literally left right away and went to France with some girlfriends that was planned and had like an amazing girls weekend and then was in Switzerland and I, I remember I couldn't breathe in Switzerland. And I was like, what is going on? And I had so much adrenaline that I, I could like it was pumping and I had nowhere to put it and it was like giving me this gasping, unbearable chest pain that like I couldn't breathe because I was like, I don't need all of this anymore and I have nowhere to put it. So there was that initial physical response. But I, I had a two year contract and I understood my contract that I continued as is and it was very awkward of like, what is my role? How does this work in my like mama bear, protect everybody mode. So I went from like, you know, we were all a team and then I pivoted to mama bear, like I gotta protect everybody and protect my tribe here. But I kept waiting for like, where is the system of Unilever? Like where is it? And this is where things went, went off the rails, which was I said we had this perfect plan in the deal room to execute, follow. Like it was so perfect. It was just like, here's like the path to success. Obsessed, like this is amazing. And then that literally got like left in the deal room never surfaced. And there was no one in charge or like this is your person or this is the process. There was this like enormous like ambiguity of you don't own it, but we don't have anyone. You're not in charge, but you are in charge. But it was like a disaster. There was no process at all. And that basically the same Ish, it was the same. But you're like floating in the university. Like if they were just like you are here and just like we'll call you, we'll have like a monthly call. So it was like where's the lane? And then they start like throwing garbage at you. Like unqualified people and processes that make no sense and like accounting firms for like no reason. Like it was just this like never ending toss of processes that were pointless and had no value. And if anyone is listening and goes through an earn out, like you will never get paid because of all that crap that they throw at you that you have no control over. Luckily I didn't have an earn out but if I did have an earn out I would have zero takeaway within the first three to six months because they like throw out this layers and process and Nonsense that like I was incredibly profitable. But after the six months of Unilever nonsense. No.
- [27:55]
Nicole (Interviewer/Host)
And just for layman's terms, can you explain what an earn out is?
- [27:59]
Gwen Whiting
Sure. It's when they, it's like the salesmanship when they dangle the carrot and tell you how much more you're going to make because they're so awesome and they know everything and you don't and they're going to make you so much more money and then you're like, okay, great, I'll keep an upside for all that amazing money that you're going to make and bring into our organization. And so you only take a certain percent off at the table, at the sale and you leave an open amount for your future upside. But from my experience and what I know of other Unilever deals, no one gets an upside because you're. They say it's not based on sales or EBITDA or whatever, but fundamentally they throw all this expense at you which then affects your bottom line and your ebitda. And you have, as a seller generally have no control over what they throw into your organization.
- [28:58]
Nicole (Interviewer/Host)
Yeah, it's similar to book sales. So like you can earn back your advance but you also have to pay for a lot of the publishers overhead and marketing expenses and. La la la, la la.
- [29:09]
Gwen Whiting
Yes, yes, yes. The ad and the paper and the. Yeah.
- [29:14]
Nicole (Interviewer/Host)
Did you think that once you were done with that two year obligation you would just retire?
- [29:18]
Gwen Whiting
I was in my early 40s, like retire? What does that mean? I was so, my head was so like in the moment that I really wasn't thinking what life would be like after the fact. And the second year was 2020. So my second year was like three, like three months in the office. And then I walked out of the office with everybody else in March and never came back. So I had actually planned a, intentional last year of how I would wind out and step back and, and pack up and like off board, which never happened. So. And then I'm like with everybody else in like crazy Covid times, which is hard enough for everybody, let alone in this incredible career shift, identity shift. What am I doing? What now? What, like what's going on? There was so much change and shift that I was so personally intertwined with the brand that it was a personal identity. It was what I did, it was my life's work, it was my legacy. I knew that I needed to create space from that chapter into before the next chapter. And sitting in nothingness for someone who's been like on the move was really Difficult.
- [30:51]
Nicole (Interviewer/Host)
Within the Unilever universe, Ben and Jerry are trying to free their brand from Unilever. Jerry just quit saying that. Unilever is stifling their commitment to social justice. And in the acquisition process they said that they would have autonomy, et cetera, et cetera. What advice would you give to Ben and Jerry?
- [31:14]
Gwen Whiting
I mean they had a, such a different deal structure than I did and they did have covenants for that. You know, from what I understand, and I'm not an expert, but you know, it seems as though Unilever is really breaching those terms that they had at the same time. Unilever spinning off the ice cream business. So they're like, we don't care. Like we're getting rid of this entire division anyway, you know, and I don't know where that plays in. But if their, their deal wasn't transferable, I don't know. They had autonomy for a very, very, very long time, which is incredibly impressive. And seventh generation did too. They had really built in structures in the deal of like commitments to sustainability, commitments that they were able to get. The difference with Ben and Jerry is that they still care and they're still around and still fighting. Whereas seventh generation, I was there when like things were loosening up and the stakeholders were finally leaving who did care and the Unilever sheep were moving in. So like that's the sort of progression of, of what I witnessed.
- [32:33]
Nicole (Interviewer/Host)
Well, I really appreciate that you do not mince words about all of these issues with the acquisition. I think it's so refreshing and so sobering to so many people who might be starting businesses and think that this is the end all, be all the dream.
- [32:47]
Gwen Whiting
It's like nice and sexy to market it that way. But it doesn't help anyone if like everyone just believes that and isn't going in like full awareness of yeah, scrappy startups, not so sexy. But the other thing, it's not sexy is when you over fund and you overraise and you have like such low percentage that you would have been better off sticking in your corporate job financially after 13 years of like killing yourself with a startup, you know, like that's not cool. But no one, no one's sharing those stories.
- [33:21]
Nicole (Interviewer/Host)
Well, we try to share them or like options which I sometimes call magical beans. All of these things that you learn through the process that you know, equity in a company sounds really sexy until you know that company raises money and they invest. Investors add pref, like preferred shares on top of it and then nobody in common gets paid out.
- [33:40]
Gwen Whiting
Yeah, exactly.
- [33:41]
Nicole (Interviewer/Host)
We did an episode about this. It's one of our most popular because there's so little discussed about this idea of equity, like within a private company and how it could be dog.
- [33:52]
Gwen Whiting
Yeah, nothing. Yeah, I mean, nothing. So that's not sexy either. But it is important for me to. To share all, you know, my learnings and the reality and hopefully educate people and so that they can be informed, to make their own decisions that work for them and just understand the implications of taking money, understand the implications of exiting. I wish I knew more.
- [34:20]
Nicole (Interviewer/Host)
I mean, sometimes it can be amazing, but sometimes it's not.
- [34:24]
Gwen Whiting
And I think, yeah, I. And I think that my advice is just be prepared for the worst case scenario.
- [34:30]
Nicole (Interviewer/Host)
Well, speaking of worst case scenario. So I told you I became a believer after meeting you. So I had all the laundress products, was obsessed. Got the black and white iron board cover that I love so much. It burned in the fire recently, but it made like ironing fun and I truly like, was all about it. Then I got an email, I think that there was a recall in 2022. And I was like, what the heck? And I didn't know because you weren't talking about.
- [35:05]
Gwen Whiting
Yeah, it was like I never was officially excused. So there was no nice handoff. Like it was just kind of like slithered into the.
- [35:15]
Nicole (Interviewer/Host)
The ether, the slithered away. So you weren't there. There was this massive recall, allegedly stuff in there.
- [35:23]
Gwen Whiting
I found out similar to you. My friend forwarded me an Instagram post.
- [35:28]
Narrator/Host
That's crazy.
- [35:29]
Gwen Whiting
I was getting my hair done. I was like, what?
- [35:32]
Nicole (Interviewer/Host)
So thinking back, how did that make you feel? You never had an issue like that? Obviously.
- [35:39]
Gwen Whiting
I mean, no. And that was. I ran such a squeaky clean operation.
- [35:46]
Nicole (Interviewer/Host)
Literally.
- [35:47]
Gwen Whiting
Literally. Like there was never a complaint, never a return. I think there was literally one return where someone wanted to send back their 45 La Labo detergent because they didn't like it. But it had. The bottle happened to be empty when we got it back. So like that was the extent of that complaint. And so, you know. No, nothing, Nothing, nothing. Totally unconceivable that this was a situation and this was completely self induced by unilever incompetence, period. They imploded themselves.
- [36:30]
Nicole (Interviewer/Host)
Do you get nervous talking about all this so openly?
- [36:34]
Gwen Whiting
No, it's the truth. I'm being honest and it's the truth and so I'm not concerned about that.
- [36:44]
Nicole (Interviewer/Host)
Has anyone from the company reached out to you to mend fences or on the flip side come after you legally?
- [36:52]
Gwen Whiting
No, not yet.
- [36:53]
Nicole (Interviewer/Host)
Has anyone reached out to you about trying to buy back the company?
- [36:59]
Gwen Whiting
No.
- [36:59]
Nicole (Interviewer/Host)
Potentially. Would you ever do that?
- [37:01]
Gwen Whiting
No. And that was a classic like dude response of oh, just buy it back for a dollar and like do it all again. And I was like, I don't want their mess. Like I did it. I created the most beautiful baby. She was perfect and I don't need to fix her. It's not my problem. I can't. I don't want someone else's mess.
- [37:23]
Nicole (Interviewer/Host)
Were there red flags in the contract that you would warn entrepreneurs about? You know, you obviously had like I'm assuming a non compete, non disparagement, all that stuff that's no longer in place.
- [37:35]
Gwen Whiting
Yes, it was a five year non compete, non disparaging. The only thing I actually fought about or pushed back on was the five year non compete because they crossed it into personal care. And I just thought that was like egregious. Not that I wanted to go make personal care, but it just seemed incredibly egregious to add that with laundry. But I at the time I was like the last thing I want to do is ever make a product again. So like, see you later. And then I didn't even really register on the non disparaging detail until after the recall and I had to like panic and pull out all the contracts and make sure where I stood and what was going on and revisit all of that. And that's when I like really understood the non disparaging agreement because I like never thought it like mentally had that in my mind also to exercise what I deal wise, whatever, fine. What I do wish that I understood and had in place and this is something that I would recommend to other people in this process is to have a very clear agreed upon plan of transition. And that was what we did not have. Zero. And it was, I had an employment contract that said you just keep doing what you do that was like incredibly loose and vague. But there was no transition plan. Zero. And that it was the downfall of many is that there was no proper transition plan or what that looked like or a person or a process. And now that I've spoken to other companies and other CPG then like they share their process and like, oh, they're like we put one person in the organization. All these different really strategic, like normal processes that you would think a giant CPG brand who had acquired a ton of brands previously would have a system and they didn't. And that was like my Pollyanna assumption that like, oh, they do this like all the time. There has to be a very clear playbook. And there wasn't. And that was just like so stupid and my assumption. But it is incredibly. That's like my one thing I would say understand exactly the playbook and who does what and how it happens. And like really button up that.
- [40:13]
Narrator/Host
And.
- [40:14]
Nicole (Interviewer/Host)
Any other protections or perks or rights that founders should be thinking about.
- [40:19]
Gwen Whiting
I mean, if you go down an earn out path, that's like a whole nother situation of protecting yourself and like really putting the guardrails on of like how you can lose that. But again, just go in with worst case scenario, like not that that will never happen. Like every worst case scenario you could ever dream of. That's what you plan for and have again, have a good therapist, like ready for you.
- [40:48]
Nicole (Interviewer/Host)
Also so important. Try to put that in the contract.
- [40:51]
Gwen Whiting
Yeah. Like, get that ironed out right away. I was not prepared. Not prepared.
- [40:56]
Nicole (Interviewer/Host)
And when people were just dming you about the recall, I know you couldn't respond. But once all of this expired, did you ever respond to the people who reached out to you?
- [41:08]
Gwen Whiting
You know, I didn't. I had to wait a long time. And I'm actually not that savvy or involved in Instagram, so I didn't. And it was very heartbreaking. Like, this woman wrote me about she just washed all of her sweaters and she was freaking out. And like, what's. And I do, I boil. And it's like, you can't put in hot water. It's just like. It was so heartbreaking. I was like, your sweaters are fine. There is nothing wrong with your products. Like, I couldn't say these things. I couldn't say there's no bacteria. There's nothing wrong with your products. You are fine. Like, this is a sweat. You're like, I couldn't say that. And I was like, the minute I open up, like, one thing. Like, I couldn't. So I just had to. Silently. Yeah, I just had to like, silently.
- [41:52]
Nicole (Interviewer/Host)
So you decided to get back in the game. Begrudgingly. How did you come up with the idea for the film?
- [42:04]
Gwen Whiting
It was circumstantial. So Unilever implodes, self destructs, pulls everything off the market, doesn't sell anything for nine months. Nine months. Not a single product was sold. Not even a laundry bag. Not even your ironing board cover. And I knew, I had a hunch what they were going to do. I waited to see what they did, and they did exactly what I expected them to do, which was relaunch the brand with the seventh generation formula with My label on it with some nod version to my fragrance. Because they like banned. Unilever has their own rules that are not like actually health and safety like rules by the U.S. government or the international standards. So the fragrance was like completely stripped down to like, I had a fine fragrance as a perfume and then I dumbed it down to like a Unilever style fragrance. They just, they're so arrogant that they thought my customers were like, were dumb and that they wouldn't notice that they were getting a seventh generation formula. And I was like, no, my customers are actually like really savvy. They are not dumb. They're sophisticated, they're savvy, they see results and they understand the value and like you can't play that game. And so they came out with like a dumb, dumb version. And I had 85 products at the sale. When I sold to Unilever, they came back with like 5ish. And so I was like, okay, here we go. Like, I can't, I can't leave all of my customers, you know, hanging to dry. Like and they, I had customers that relied on my products for 10, 15, almost 20 years. Like, I was not going to leave my customers abandoned with like the stuff that they could already be buying all along. I wasn't going to leave my customers hung out to dry. So I, I stepped back into the laundry room and it was fun to reimagine and recreate this product category 20 years later with a different, you know, I'm a different person. I have a different sense of, of, you know, different orientation of a different sense of what luxury is. The laundress was the luxury of fine fragrance. And now my luxury is aromatherapy essential oils. Getting results through aromatherapy while I'm cleaning, that I'm doing anyways, like that's where I get a, you get a sensory bonus with the fill. There is a lot of improvements that, that and fun things, fun upgrades and materials and formulations to play with at the same time. And then pushing sustainability, you know, to the next level where I came out with, you know, PET 100% recycled bottles in 2004, which was unheard of. They were clear, it was concentrate, it was plant based. Like all these things that were unheard of then. What's the, what does it look like now? Everything is in the refillable pouch with a reusable bottle that you can decant into and more saving on plastic and doing the sustainability and pack packaged goods is not. There's no perfect answer but kind of pushing the, the space to, to Be better.
- [45:45]
Nicole (Interviewer/Host)
I'm just dying to know, would you ever sell?
- [45:48]
Gwen Whiting
No. This business is not made to sell. I would, I would, I would probably retire or hang up my hamper before I sold.
- [45:58]
Nicole (Interviewer/Host)
I know we've talked about this before, but an acquisition, of course, does not have to be an end all, be all. It's a really, really important message for founders, especially profitable ones.
- [46:11]
Gwen Whiting
Profitable. And that's what it is. It's the greatest luxury, Nicole, as I'm sure you know, is to love what you do, have a purpose, work with amazing people, create jobs, positively create the economy. You know, my, you know, I was so proud that I had hundreds of factory workers employed because of my brand. Like, those are the wins. And selling, it's. Everyone just thinks you're gonna go to the beach with a pina colada, but you can't stop. There's a satiation of creating and doing. And for, for me, I have a creative itch and I need to be doing something purposeful. And when you sell that and you lose that, it's very difficult. And it's like, wow, I had, I loved what I did. I had all this amazing stuff. And like, I think that's the biggest thing that people don't really understand what they love about what they do or what they love about their businesses. And like, that's the best gift, is to truly appreciate that. And, you know, you're profitable and growing and running a great business. That's. That's the win.
- [47:26]
Nicole (Interviewer/Host)
I personally agree for you, it sounds like the end all, be all for your new venture is being profitable and.
- [47:34]
Gwen Whiting
Being independent and just making beautiful product and being happy and, you know, doing it for fun and, and having fun with it and working with amazing people.
- [47:45]
Nicole (Interviewer/Host)
Well, sister, while you've been building this new venture, you have been going through a lot personally, to whatever extent you're comfortable talking about it on the show. You're one of 567, I think, patients sexually assaulted by an OB GYN at Columbia. That's 567 patients who are involved in the settlement. But potentially there could be more. According to some reports, there were more.
- [48:10]
Gwen Whiting
Because there was a settlement before mine.
- [48:12]
Nicole (Interviewer/Host)
Oh, wow.
- [48:13]
Gwen Whiting
So there was a first round. So, yeah, there are, there are thousands of women that were affected by this doctor and at Columbia, which, by the.
- [48:24]
Nicole (Interviewer/Host)
Way, I, I didn't go to this doctor, but that was my OB GYN when I was in New York too. Completely shocking when I saw this. You have written that you didn't realize he was a predator until you saw a Commercial. What happened?
- [48:38]
Gwen Whiting
Yeah, so I, I had the allegations and sort of rumbling that he was a predator or a sexual offender was around 2013. And the sort of people would maybe recognize because Evelyn Wang, when Andrew Wang was running for president briefly, she came out about, she was in the, the action actual criminal case. And that's sort of when I kind of became a high profile handful of women in the criminal case against him. And he essentially was acquitted by the same judge that acquitted Jeffrey Epstein. So if you google Jeffrey Epstein and Dr. Hadden, you'll, you can get the facts on that detail. So I heard these rumblings of these other cases, but it wasn't until the TV commercial where this was now the class action for being a patient of Columbia and Dr. Haddon that was now available as the Survivors, the Victim Survivors act that they opened up a few years ago. So that's where all of this case and this opportunity to come forward in the class action came up and why that happened. But if you read the essay that's in Mary Claire, you kind of follow my journey of understanding. I'm a 49 year old woman now. I started in my early 20s and he was my first gynecologist, my first real doctor with my own insurance card at Columbia in New York. We thought we were like stars being taken care of. Like I had made it. And he had a protocol and a process that he, he had a routine that he followed with people who he could take advantage of because there was no point of reference. He didn't, you know, I didn't know any better. I didn't know what was supposed to be a proper exam and what wasn't. And so joining the class action and, you know, lifting the rug and, or I should say opening the filing cabinet after all these years and really processing and understanding what my reality was that I kind of like shoved in literally in this filing cabinet was significant abuse.
- [51:19]
Nicole (Interviewer/Host)
I'm so sorry, Gwen. And your essay was so beautiful. You talk about this idea too, that you want your story to be a catalyst to harness collective power among the women. So what is working with or talking to other survivors taught you about making your voice heard?
- [51:38]
Gwen Whiting
I had a small group of victims that I knew, you know, we, I knew we all had the same doctor. And so we had a small group going through it together, which was like, I couldn't have done it without, with doing this alone. So I'm so grateful. This is also, like I said, this is like a power of friendship and as much as a story of abuse. But just how I've been so adamant about sharing the realities of my business journey and, and I, I feel like I have this platform. I need to use my voice and I'll cover any topic and my ego doesn't prohibit me from doing these things. I am willing to sort of self sacrifice my privacy for the purpose. And this specific case is 100% the power of numbers. Because I truly believe it was only the power of numbers of all these victims that we were able to get to this far of this class action. And like when it was very early on with Evelyn Yang and was only a handful of victims, they were like dismissed and pushed aside. But now it's like so much bigger and powerful. And I wrote that essay throughout the two years of going through the process and the aftermath. The goal was to create a safe space to have shared conversations. And whether it's people writing me privately and sharing or using this as a piece to open up dialogue with people in their family or their friends or loved ones, or just being seen or heard or feel a shared sense is we need to leverage all of that power.
- [53:30]
Nicole (Interviewer/Host)
Thank you for doing that. You're amazing.
- [53:34]
Gwen Whiting
Thank you.
- [53:35]
Nicole (Interviewer/Host)
You're truly amazing. And thank you for being so open, honest, unfiltered and vulnerable. Gwen, as you know, we end all of our episodes by asking guests for a tip that listeners can take straight to the bank. But with everything that you've just opened up about, I would actually love to hear a tip for anybody who needs to do something good for their mental health while going through business chaos. Is there something that you've done to protect your peace in the midst of all of these painful experiences?
- [54:00]
Gwen Whiting
I, I thought about this question and to me it's have a person. And I went through so much of the laundress alone, so much alone without a person. I, I just, there was, I didn't know anyone, you know, creating a business or struggling and it's just like things that I didn't feel comfortable sharing. But this, A person doesn't have to always be the one person or one person doesn't have to be the everybody person. So it's whether it's a person for the hard stuff or a business person or a relationship person or, you know, the therapist or whatever, just to have a person in whatever you're going through, who's there for that topic to give you a safe space and not be alright.