← The Foundr Podcast with Nathan Chan
The Foundr Podcast with Nathan Chan
613: Why Most Beauty Brands Fail - and How to Beat The Rest | DIBS Beauty Founder
00:52:27
DIBS Beauty went from zero to one of America’s fastest-growing makeup brands in just four years, with founder Jeff Lee scaling the business into the mid–8 figures and landing a top spot on the Inc. 5000. In this interview, Jeff breaks down the strategy behind their explosive growth, the creator-led launch that built a 20,000-person waitlist, and how DIBS is winning in one of the most competitive categories in ecommerce.
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- [00:02]
A
Hey, founder fam. I want to talk to you about something super exciting. We're officially partnered with Omnisend, the email marketing and SMS platform built specifically for e commerce founders. We've been recommending Omnisend to founder students for a while now because it just works. Whether you're launching your first store or you're scaling to seven figures, it really helps you automate your marketing and get real results. Did you know on average OMNISEND customers make $68 for every $1 they spend, which is an insanely good return. And because you're part of the founder community, you get 50% off your first three months with the code FOUNDER50. Just head to omnisend.com founder without the e to get started. All right, now let's jump back into the show.
- [00:49]
Welcome back to the Founder Podcast. What if building an eight figure beauty brand wasn't fancy marketing or a massive ad spend, but rather answering customer service calls on a personal cell phone and literally getting mistaken for a shoplifter while watching customers bo your products in ulta? Well, today's guest, Jeff Lee, co founder of Dibs Beauty, the color cosmetics brand that's rewriting the playbook on how to build in an impossibly saturated market. And in this conversation, you're going to discover how to achieve 60% repurchase rates in 90 days by obsessively focusing on the customer. Why entering retail earlier than you think is now essential for beauty brands, and how to pick the right retail partner for your customer. And Jeff's exact pre launch framework to build a 20,000 person wait list before. So guys, this is a masterclass in launching a premium beauty product brand in a crowded market through extreme customer proximity and disciplined community building.
- [01:47]
B
Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder podcast with Nathan Chan.
- [02:00]
C
You co founded Dibs Beauty back in 2021. The company's growing super fast, but I read online that you've clocked in 120 hour week sometimes is that's what required to build, you know, an insanely fast growing direct to consumer company.
- [02:19]
B
It's not about working hard or the quantity of effort, but at the end of the day there's simply no way of getting around it. And I like to say that I do work smart and I work hard and that's probably the superpower that's propelled me through. If you're founding a company, you have to do every single job to some degree or be able to do it if someone else can. And that's what naturally leads to 120 hours a week. But there's also a piece of it which is you're founding a culture. And I'm pretty unapologetic about the culture that we have here, which is that we are absolute perfectionists when it comes to makeup. It might not be that serious of a product, but the fact is it's a crowded marketplace and I don't believe any brand out there, whether it's cpg, makeup, dtc, no matter the kind of slice of the industry you talk about, any brand has any excuse to exist these days in the saturated world of brands unless it's absolutely putting in the extra incremental 10 to 25% above the baseline job.
- [03:25]
C
Yeah. So when you launched Dibs Beauty, you had, you launched with two products and you had a wait list of 20,000 people before you launched. Your co founder is Courtney Shields. She's a, you know, well known personality online. But like, how did you do that? Because that's pretty impressive. Like, how did you get 20,000 people on your wait list before you even launched?
- [03:50]
B
I think one of the things that was so important about creating any kind of anticipation is to give enough to make your audience feel that they are part of the journey, but also to leave them wanting more. And in this case, we followed through the same way that we think through any kind of flagship launch nowadays. In fact, we just had another product sell out within 45 minutes and one actually amassed a 68,000 personal wait list, which was that there was an element of excitement, an element of scarcity, but also enough storytelling and how we presented everything that people felt that they were along for the ride. They knew we were creating something new, something they wanted as part of their lives, and they saw just enough about it to say, okay, I'm willing to take a risk and buy something right through the Internet for 38 to $76.
- [04:42]
C
Yeah. Okay. All right. So, you know, for any founders watching this that are working on a, you know, a brand in the beauty space, it is competitive. You know, you go to Sephora, you go to Mecca, you go to Ulta. There are so many different products. You know, Korean beauty is just booming. So what advice would you give to a founder to have like an epic wait list, an epic pre launch? Like what, what, what, what do they need to do? Can we unpack that really deeply? Like, if you were to give advice to a founder right now, what should they be doing?
- [05:21]
B
Yeah, your social strategy has to be so on point. There is no launch. Whether it's in a retailer or on DTC as a pure play direct to consumer brand without knowing exactly how your content resonates with your audience first and foremost. And the KPIs of that by the way have completely changed since we launched. It used to be all about likes, shares and even comments. We actually measure a lot of the success of our content now by how much UGC we see inspired by it, how much others are creating based off of something we put out into the ecosphere. Right. So as part of a launch plan is absolutely mission critical that you are able to really hone in on what your audience is and how they're going to respond. And, and by the way different demographics and age groups react and perform very differently. We are an upper millennial brand. She's heavily focused on Instagram and remains so kind of counter polarity to the TikTok audience these days. But I also believe fundamentally that you capture the audience's attention within the first two microseconds of the of the content coming out. Now it doesn't mean that you go out and create something incredibly offensive, clickbaity, splashy or brand denigrating, but have to understand that in this day and age you are selling in a social first economy where attention is a scarce resource.
- [06:49]
C
Yeah. So how many pieces of content would you recommend that a brand creates for their pre launch and when it comes to their social strategy like or your guys social strategy like how much do you need to spend on ads? Do you need to spend on ads if you're first starting out like talk me through that. Yeah.
- [07:06]
B
I think you really have to think very carefully about how you're going to relate to your community. Ads can actually be highly counterproductive especially if you're doing spray to play. We actually are very proud to be a creator brand. Obviously Courtney's a creator. I'm very active on social myself as is most of our, you know, community base. Whether they're 500 followers or 50,000 likes per post or 800 UGC generated by the new metrics I just noted. And one of the most important things to do there is to basically kind of say look, if I'm going to commit to that kind of strategy, let's just say I'm committing to an influencer creator strategy first. I'm going to actually tier out the content I'm putting out there before I launch. I've got a tried and true topple the pyramid, significant following and engagement that can add as act as immediate brand advocates and then legitimacy to the launch. And then I got Lower tiers on the pyramid in terms of, for example, reach that have the potential to go viral, that can really kind of build a micro community. And those have to basically by nature be much more of a lottery pool. You're doing many more hundreds, if not thousands of cents. So we actually invest a lot more in the creator gifting than we do paid ads. And we invest a lot in the education as well. Because you need to make sure that the live person that is selling your product can convey that messaging as if you approve the ad itself.
- [08:33]
C
Yeah, interesting. Okay, so for the, for your first launch, 20,000 person wait list. How many, how many ascends did you do to. To like, you know, in terms of, I guess, working with creators?
- [08:48]
B
Yes. Approximately 500. So we did about 500 at the time. They were trusted and true folks that we had personal relationships with, which really do continue to matter. Right. It's the cost of playing in the creator game has just skyrocketed. Now people are inundated at every level with gifting and pr and having a personal touch really actually does, you know, put you straight to the front of the line in terms of getting their attention and certainly their follow on enthusiasm. Approximately that number for initial gifting. But we also made sure that we were activating within communities. So, you know, we started the brand with a focus on Austin, Texas. We invented very quickly there, and being there in person, on the ground gave a lot of people this kind of anecdotal reassurance, like, this is a real brand. This is not just some Internet scheme or product.
- [09:42]
C
Yeah, got you. Okay. And you sent out the product.
- [09:47]
To creators and then they were posting and the call to action was to join the wait list before you even launched. Right.
- [09:58]
B
Yes.
- [09:59]
C
Got you. So you built a lot of hype and anticipation. So then when you guys did launch, obviously you moved a lot of product. Okay, interesting. And how did you meet Courtney?
- [10:13]
B
Well, it was almost like a blind date. I was coming out from having worked with a Rod, Alex Rodriguez, the legendary Yankees player. And I worked on a couple CPG companies with him, as well as Jennifer Lopez, who he was with at the time. And, and you know, basically the joke there was, you know, I had to do baseball in order to do beauty. So I'm a former corporate lawyer. I have had a lifelong interest in beauty. In fact, I'm also a professional beauty pageant coach. I'm one of the best in the world in that business. And I was always passionate about beauty. I met Alex Rodriguez, he said, why don't you do baseball with me, we're doing a lot of beauty ventures on the side. I ended up working on those. And then I was introduced to Courtney through the founders of Tula and Bobby Brown, guys named Ken Mandis and Dan Reich and. And Courtney had done a collaboration with Tula that had been enormously successful. So the guys basically said, look, why don't you two meet? We think that there might be something, some chemistry there. And within the first five seconds of the zoom, it clicked and you know, we. I really believed that she understood product market fit and customer like actually matching a customer at where they're at. And I think she saw me probably the complimentary set of skills needed in a founder.
- [11:28]
C
Yeah. Okay. And talk to me about product market fit. Like, how did you guys know that you'd had it? Talk me around, you know, MOQs. How much did it start to launch? Because you had launched with two products. Like, talk me through the numbers. Like people really want to understand that stuff.
- [11:42]
B
Yeah. Well, you know, first of all, in cosmetics, right, your standard MOQ is 5k, can rise to 10k if you really want to do it well. And that's actually, I hate to say this for those who are really bootstrapping their enterprise. It's a fairly low barrier of entry. So the manufacturer, so CMS have a very tight block on new brands, are not well funded or don't have a clear idea of what they're doing. And it's very easy to launch in the US in particular with 5000 SKUs of a white labeled formula that's not highly differentiated in any way. The manufacturers do size you up. First of all, no one owns their own manufacturing here unless you're at the level of a Lauder or you're a highly specialized medical or science backed brand. Most every color cosmetics brand here works with the top contract manufacturers. And you know, we brief them on the formulas and the specs and the components and then they create the product. They size you up right away. And in our case, because I'm a veteran in the industry, they had seen me do a very large launch in Sephora and a very large launch in Ulta, both highly successful. They I had the credibility and in terms of understanding the product market fit, Courtney has been talking about doing her own makeup to a million people across this country for 10 years now. So there was a very clear understanding that this is a customer that was very much in the heartland of America that loves makeup, that wants ease and has specific problems that we can solve in a differentiated way that let us have the confidence A to raise the seed round and B, to fund more differentiated products than we might otherwise have launched with. And our initial MOQs were still conservative. We didn't think we would have that kind of a wait list. So you know, honestly, I ordered like 10k on the first round and then immediately was scrambling to fire up the factories. And even nowadays where we have vastly outstripped that, we just celebrated a million sold of our hero skew, the desert island duo. We still, it's an imprecise science. We can benchmark against the industry and everything what we think our customer wants. But we're sometimes surprised, often pleasantly.
- [13:55]
C
Yeah. So look, the brand is growing super fast. You launched only in 2021, so it's only four years ago. Can you give us for the audience and community just an understand of like understanding of how fast dibs is growing and like what top line revenue is. I've got here that you guys have grown 700% on year.
- [14:18]
B
Yes. I mean that was, you know, mapping against the. The last year prior. This year is going to the. The growth will slow down a bit by nature just because, you know, we have also started to enter retail. So, you know, we really, you know, have. We were actually just recognized as I have the trophy right behind me, the 11th fastest growing consumer company in the Inc 5000 overall rank. We were in the top 209. We were 219th but 11th in consumer goods. And the retail expansion actually has been even more important for us because I can't share with you the exact number, but I can tell you that we've broken out of the pack of comparable color brands. We are well into the mid eight figures there. And one of the things that's been so important for us is to transition from a 3, 3 years of being pure play DTC into a true omni chann brand. For the founders listening, I don't know that you could do that today if you were trying to enter beauty. I think that back in 2021, being a DTC brand directly could give you a lot of Runway to grow to the size that we had into the muscle, into retail. If you're entering color cosmetics or beauty in general, I think that there's a lot more pressure to enter retail earlier in your cycle. Now there are some ch, there are some DTC brands that really manage to hang on and then the alternative is really to go to Amazon. But in the US being a DTC brand, a pure play DTC brand alone is still doable but incredibly hard. And for a brand like ours, which requires people to see color and really feel it and experiment with it. My feeling is that the retail channel has really only added fuel to the fire for the overall company.
- [16:09]
C
Yep, got you. So look, impressive growth. I know you said you can't talk exact numbers, but mid, mid eight figures, you know, in four years, that's, that's pretty impressive growth. One thing, one statistic I've got here is you guys really prioritize the recurring customer and you know, your 90 day repurchase rate goal in the first year was reported to be exceeding 60% in 90 days. Is that correct? And how did you do that?
- [16:42]
B
It's correct, yes. And actually I believe it's still holding as of this last quarter, which I'm pretty impressed by.
- [16:49]
C
So how'd you do that?
- [16:50]
B
She's a stable customer. And I think first of all, the core items are cycled on a 90 day replan. So we do test and size our makeup so that it will last your average user 90 days. I'm very happy to see very little trading out, which, you know, means that we're playing defense, at least on the existing customer very well. We have a constant pipeline of newness that is all designed to excite and innovate in different ways. The brand is what we call made for more in the sense that there's always an additional surprise and delight or value element. Whether it's two ends, two colors, two functions, hidden aspects of the product that make it more than a simple lip gloss. So the customer has basically come to understand us as constantly surprising, delighting. We pay a lot of attention to our CRM, to the customer retention funnel. At the end of the day, even cx. I hate to say this on a podcast with this level of viewership, my personal phone number is still floating out there and I get about 12 to 20 customer calls about their orders. Still like is somehow routes to my personal phone and they're answered as in like, you know, like they're. I immediately take the notes and send them over to our team. Similarly, both Courtney and myself receive DMs all the time. I like to joke she's the first person in customer service and I'm the second. And whether your order got eaten by a dog, your husband accidentally burned the the Christmas presents along with the tree. That's something they do in Idaho here in the US or a car ran over your your delivery. All real things that have happened in the last year, we will answer. Sometimes we personally will answer the founders and that's never going to change. And I think that that's something that, you know, people very much feel connects them to the brand and encourages that loyalty.
- [18:55]
C
Yeah, that's really. That's really crazy. And I think.
- [19:01]
When it comes to scaling your business, as you scale, you add more people, you add more resource, you can do more things, and you get further away from on the ground.
- [19:17]
I'm curious, do you. Are you effectively saying that founders need to be as close to the customer, even if you're growing super fast, and they should still have access to speaking to customers every day, if possible, even at your level?
- [19:31]
B
I mean, that is. You know, I was speaking with Melanie. Well, and, you know, who used to be the CEO, SoulCycle. And she said that was one of the most important things that, you know, the company ultimately lost track of during its tough days was the distance between itself and the customer. And that's actually, I think you can see that charted across the history of great brands is that the second they lose that proximity to the customer, it all goes to hell. The fact of the matter is you need to. You need to avoid, in my mind, a couple mistakes. One is to think that you are the customer. I am not our customer. Our customer is an upper millennial woman who generally lives in what I call the 50 states, meaning I am a California kid who lives in New York City, not in my geographies. She's living in Arkansas or Louisiana, which is where I was last week. I'm headed to my 49th and 50th states next month. But I am not our customer. I don't live near her. I don't, you know, I am certainly not her, but I do everything I can to understand her. The second piece is to never let your children, for example, go out there and dictate, you know, what is cool or interesting to you because you might be from a different generation. I'm very proud to be a millennial. I think I just turned 40. And, you know, I might not be of the TikTok crowd, but I'm certainly not going to go out and ask kids what they think of it. I'm going to ask people who are doing it correctly how they're approaching it. And the third piece of it is to never use surveys as a substitute for substantive conversations with your customers in the store, because you can ask the question and the customer can answer, and they might. Neither of you might be arriving at the property truth of the matter. And there's actually no substitution to a having the conversation about her lifestyle and how your product fits into it, even More than, do you like this pink or do you like this gloss or do you like this format? But understanding her lifestyle, but also, and I'm going to sound like a total stalker here, like, watching her in her natural shopping environment. So one thing I do when I go into store is I'm not the one standing there beckoning you to the end cap, saying, here I am. I'm the founder. Please purchase something. This is amazing. I'm frequently the guy, like around the corner peeping at you, trying to see how you walked towards our display. If you brought your mom or daughter, what caught your eye, what you tried on and what you put down. And I like to joke that in Ulta, there's a saying called Nora. We have a Nora, which is need officer right away. And I am pretty sure I have been identified as a Nora in at least 10 stores across this country. But there's no substitute to those pieces of data and understanding on top of the ongoing conversation and relationship with the.
- [22:34]
C
Customer to understand or watch how she buys in Ulta, how does that help you?
- [22:40]
B
Because it gives you a great idea of what you're comp. Not only what your competitors are doing, but how she sizes up your product, even the way that she approaches. And whether or not she's, you know, for example, picking up a blush from the top or the third shelf in the format and seeing her expression can tell you, is this a customer who is familiar with this format and likely to quickly purchase it if given more options? In this kind of similar vein, is this a cover customer who's discovering something, stepping out of her shoes and needs more education? So your marketing has to change, or maybe you do, you know, tone down your assortment and there are all manner of different pieces of that information you can gather. And that's part of this whole exercise I've been doing of visiting every state in this nation, which is that customers obviously all behave very differently, but customers within communities and demographics tend to have similar patterns. So even understanding that an upper millennial is very likely across this country to bring in her mother or her daughter with her and to shop in a conversation with those two generations has been enormously disposited to our brand decisions.
- [23:59]
C
Yeah. Okay, interesting. And so you are, you, you have said that you guys are a 50 state brand. What do you mean by that?
- [24:08]
B
You know, I'm, I was very lucky to actually be very close friends with Alexandra Keating, who is the daughter, I believe, of a former Aussie prime Minister. She just launched her body brand called Uni in the US and you know, I think it's jarring for her living in California to see a Texas customer and how they approach things, things right. And like this is a country that is very, very politically divided that we all know, as is the rest of the world. But we are also a country that loves makeup. And when you get beyond the California New York customer who's highly devoted to a Sephora, often a minimalist makeup look, and you get inside of the country, this woman loves to use color. And when we talk about the 50 state customer, it's understanding that there has been a gigantic majority of this country that has not had a brand speak to them, cater to them, design for them. And there are a million people in New York and LA that have brands that they can pick from every single day, but not women in Nebraska or women in the Dakotas. And we view them as just as important, if not more so than the coastal customers.
- [25:22]
C
And talk me through the retail piece. You talked about it before and you said that, you know, times are changing and more than ever retail to, to really bolster growth is important. You guys, you know, entered Revolve in July 2022. We, we interviewed the founders of Revolve actually about four or five years ago. It's a long time now. But you know what, why, why, why did your projections exceed, you know, like going into Revolve? Talk me through that.
- [25:59]
B
Well, we shock in awe wherever, in anything we do right. And we go all the way. So when we went into Revolve, we went with the whole idea of this is the first time we're ever going to sell outside of our own.com, so let's go in, drive massive amounts of traffic by having a gigantic week long series of influencer and creator and community events in Miami, which was a high value customer base for Revolve and continue to drive across the board. And we also put key SKUs and promoted them. We would for example, sell out of one shade. It was of our hit duo. And then drive people towards Revolve.com I believe at one point we were actually recognized in their SEC earnings report as like a top three SKU in the whole company, which is rare for makeup when it's a heavily apparel sized business. But one of the most important things is that you have to pick the retailer that's right for you. Revolve customers love fashion and they want it quickly. And it made an enormous amount of sense because this is a customer that loves to go to Revolve. It follows the Revolve girls and Those influencers are our community. They're congruent with us. It would not have made sense for us to go to a Violet gray or a cause bar for that relationship. And, you know, it was a great dress rehearsal for, you know, the even bigger things have been coming.
- [27:21]
C
Yeah, I see. And so the thing that I'm hearing, Jeff, is you guys are really kind of getting close to the customer. Retail has been massive for you guys. Partnerships has been massive from a creator standpoint and community building. A lot of founders, you know, they want to build a great community. Who doesn't, right? But in the early days, you guys really doubled down on community. So what advice would you give to founders that want to build a community, early days with their brand without paid marketing? And how would you do it? And how did you guys do it?
- [27:57]
B
You had to be so judicious with your time, because community requires enormous amounts of input from yourself. You had to be in constant communication, whether it's with your purchasers, with your influencers, your affiliates. And if you know you're a founder, you're strapped even if there's two of you, right? Like, you know, you cannot be in constant communication with everyone that wants to talk to you. You cannot physically be with everyone that wants to be with you. But you had to pick and choose. In a lot of ways, the moments and the people that do count while making sure that you're touching everyone. One thing that's key, for example, is to have someone that's dedicated to that function in your team in some way, shape or form. Their title might not be community manager, but having a person that helps you Rolodex and index every touch point. And having the backend system to do so is incredibly important. Because the worst thing to do is to have, for example, 50 people come to your launch event grow, and then come back to the city and then lose track of those connections and have those bridges be burned. So because you slided them out of lack of bandwidth from your end. So I think that there does have to be some level of judiciousness in on top of the meticulousness that it takes. But building a community is fundamentally. It's, you know, people always, I think, take this part of the conversation to say authenticity. And I always, like, love to say that. Like, that is the word that drives me so crazy. If we were truly authentic, we would not have brands because we would just be saying all the crazy crap that comes into our head, how we're feeling, how cranky we are. We would be turning people off with like, you know, the lack of a filter, because that's how I view true authenticity to be. And maybe if you're barstool sports, that works for you, but not for most CPG brands where you have to sell something aspirational. For me, it's actually more of the concept of maybe comfortable inauthenticity, which is that, you know, you are giving the slice of yourself that allows people to connect with, right? You're not necessarily. You're giving them enough that. Where you both feel that comfort level without truly being so authentic. And, you know, we're in this age of performative authenticity. The LinkedIn post, I cried to my, my, you know, daughter, you know, by the side of the road. And then like, you know, like, space, space. Click for more, right? It turned out that, like, the monkey over there was the boss that was going to interview me, right? Like, soft story. I love that, like, account best of LinkedIn. I'm prolific on LinkedIn, but like, for my. For LinkedIn is just like, here's what I did. Humble brag or not humble brag. Me, me, me, me, me. Like, here you go.
- [30:42]
C
Enjoy.
- [30:42]
B
Engage with it or don't. But I think that that's so tough to navigate these days because people are smart, they can pick up on it and don't even try. My view of it is don't even try to chat GPT your way around it because, you know, those things, those interactions drive me crazy. Similarly, right? There's an inauthenticity even in social media that we see now, right? People feel the urge to create cry because they fired people. That CEO who said, I wouldn't even call him a CEO, right? Like, he was just kind of like this guy who was like, oh, you know, I. Jay was the worst day of my life. I had to lay off, like, the people of my company and crying selfie. I just have a lot of derision, you know, for that, honestly, because it takes that calculus all the way to the edge, right? Like, you're trying to be authentic and in a way, you're actually, you're not. Like, you're not ever able to give people true snapshots of your life. Even someone like Courtney, who lives her life like an influencer, under a microscope, she's really only giving you about 10 minutes of her life that she chooses to share with you. But you can connect with it because you're seeing 10 minutes and you feel like you've lived the whole day with her when really you only saw 10 minutes. And you know I will say that that's the truth of entertainment and brands going back to the dawn of time. Right. People love the great entertainers because they present, they can cry on command, they can make us feel emotions, but they're still only presenting slices of themselves, even if they come off as so authentic and real and down to earth. And so for founders building community, you had to do that on a microscopic level, frequently with people, one on one. I do believe in practiced, comfortable inauthenticity. You know, it's probably a quote that would bite me, you know, in the ass. It was taken out of context. But there has to be an understanding of what you present and, you know, put out there.
- [32:35]
C
Yeah. And you talked about you as the founder. You guys hired a community manager early. Why?
- [32:42]
B
Because from day one we viewed ourselves as a brand that was going to be built by creators and influencers. Right. And you know, at every level. And by that I also mean that as the person who has, you know, 50 friends in her Facebook group that doesn't post anywhere else on social media or the advocate to her local community who can bring in more people into a store than an influencer. And because we believe that that relationship building was such a fundamental proposition of the brand, that was the statement we made with it being our first hire and we have three full time members of the team, but I that specialize in it. But really everyone in this company is a community manager. Every single person, no matter the role, has some kind of relationship with one of our influencers or one of our partners or affiliates. Everyone is asked to go in store and meet the guest, the ulta customer buying our product. Everyone attends and pitches in at our events. They meet the champions of the brand, whether they have 5 followers or 50,000 or 5 million. And that's just never going to change in our DNA.
- [33:56]
C
So talk to me around your co founding team. You've got Courtney Shields, yourself, Dan Reich, Ken Landis, you, you've said before that you guys have complementary strengths or superpowers. How do you ensure across, you know, four founders that, you know, you guys are making the right decisions. There's, you know, efficiency, there's not a lot of up and back. You guys are growing super fast. Talk me through that dynamic, right?
- [34:30]
B
Well, I think like a lot of companies, I mean in tech in particular, frequently has this number of founders. You know, it very quickly shifts with the size of the company, you know, and you know, we very quickly, you know, evolved where, you know, Dan and Ken are really, you know, they sit on our board but they're really not involved in the day to day and really where they serve, first of all is along with our major investor, which is Alcadon, the private equity partnership with lvmh, they provide, you know, the guidance at the quarterly board meetings that we have, which are very important to me and my management team. And you know, within the day to day, you know, Courtney and I have two different lanes, right. That we. But we are in constant communication with each other on the lanes that we don't occupy. She's our creative, you know, our product genius. You know, she is a social media master and you know, she's our chief evangelist in a lot of ways for the product because it's something she truly believes in. And when it comes to the business. Right. You know, we're very autonomous in a lot of ways and I'm very proud now that. And really it's not even about the founders, but rather the team. Right. Like the, the team that is executing. And one of the hardest transitions for me has been to be the CEO of a company that, you know, was obviously just where I, at one point I was the only full time employee to now, you know, almost 30 employees and more than 150 part time contractors and freelance is I, I've now had to train people to be the CEOs of their own domain means. And that's a part of letting go that I'm going through right now. As a founder, I'm obviously a micromanager, I'm a lawyer and I'm so neurotic that I'm going to every state in this union, obviously. Like I'm going to micromanage every single label. No product goes out without me understanding and quizzing the team on every single ingredient. But part of being effective is letting go and trusting your vice president, your directors, your department heads and the people under them to manage slices of the business. And that's really hard for me to let go because I, I really want to have my fingers and everything.
- [36:40]
C
Yeah, talk me through, I guess, you know, someone would look at dibs what you're building and be in awe of the growth and the speed in which you've grown in these incredible products. And you walk through Alta, you know, your products are stocked on the shelves. What is the dark side of entrepreneurship that perhaps people don't talk about when it comes to growing a company at the speed and you know, the notoriety that you guys are building?
- [37:11]
B
The first one is that founders like myself find it tempting to say that our success or our growth was because of the things that we did versus luck. The fact of the matter is, I will never have so much hubris to think that Dibs was successful entirely because of my team's decisions and my decisions and our grand strategies and my 5 and 25 year plans. Because luck plays a huge role in it. We would not be where we are if we had launched a year ago. The environment would be completely different now. Would we be alive or thriving in a different way? Sure, because I believe in making my own luck and I'm always going to keep knocking on the door and figuring out a way. But the fact is, we also got lucky in different ways. Right? You get lucky that a brand didn't launch a compet eating product at a certain time. You got lucky that you got the right person. I think I'm a great interviewer for new hires, but I got lucky with some of my best employee picks. Like, luck plays a huge part of it. And the idea that, like, founders, like, hate, I think to admit to themselves, is so much of your success, however you choose to measure it, which is whether by the size of your enterprise or your exit, it's luck. You know, I'm, I candidly, I'm very proud to be from a family of entrepreneurs and people who work very hard. My sister, I like, you know, hates publicity, so I'll give her a shout out on this gigantic podcast. I like. I think it, like, intimidates people. I tell them my sister is far more, like, accomplished than I have by any metric, you know, and the fact of the matter is, you know, I just, I got lucky. I got to be an entrepreneur. And, you know, she, on the other hand, put her head down and worked her ass off to, you know, become a C suite at an ipo, a major tech company. But she also got lucky as well at times. And, you know, luck plays that role. The darkest side though, of entrepreneurship is, look, founders have to win. You have no choice, but you will. And people will only invest and believe in you if they believe that you are in it. Because you cannot lose. And that means that everything else does fall by the wayside. I don't have pets. I don't have difficult plants to take care of. I can be on a plane at any given moment's notice. After this, I have eight more hours of work to do. And I'm not saying this because hustle culture, oh my God, it's so amazing. It's going to make your work. No, it's because you need to do what it takes. And if I have to get on a plane with one hour notice, which has happened in order to get a deal done. Or if I had to build an alter display myself with a, well, those weird little metal screwdriver because I couldn't get an actual screwdriver. Or if I have to drive up and down across the Midwest to get something done, I will do it because I know that I have people with me who are willing to do the same. But that is a huge sacrifice. And if you don't want to do it or can't do it, that is also fine. Because you have to love it for the game, right? Like you have to like love it for the journey. I mean, otherwise what's the point?
- [40:38]
C
I agree. Have you ever felt like giving up?
- [40:42]
B
No.
- [40:44]
I would say.
- [40:47]
I felt despair and fear, but never giving up, whether in this venture or anything else. And you know, one of the things I'm very, I pride myself on and maybe that's not the leadership tactic that others would take, but it's my style is my team, especially my executive team. The ones that report into me and see me every day know exactly how I am feeling and what is up or down. Now I try to shield them from some of the more macro stuff at times. So the fact is they can read my face. They know by the way I'm touching my hair or if I'm like, you know, picking my nose or something how I'm feeling because I'm transparent with them. Because there's never, I don't have time to BS to them. We're up, we're down, you know, and they know. And so they know when I have felt despair, they know when I have felt fear. And they also know when I feel extraordinary joy, pride and accomplishment, especially when it's a win from a team member. But giving up?
- [41:46]
No, no. I mean, absolutely not. I have never felt this compunction. You know, it's, it's one of the things I respect about, you know, rest her soul. The late Queen Elizabeth, right, was, I believe she had a conversation with the Queen of the Netherlands. And in the Netherlands it's common for their monarchs to abdicate when they get old or like don't want you to do the job or like when you, you know, hang out in retirement and they just hand it on and apparently she was so offended by the idea, she's like, this is a God given privilege to be the monarch, to be born into this privilege you serve until you die. Now I'm not comparing myself to an autocrat by any means, but God Gave me the opportunity to do this because I never thought I would be an entrepreneur. I never had any idea how to do it. It was intimidating to me and I got the chance. And, you know, if God gives you the opportunity, be grateful for it.
- [42:40]
C
Yeah. Look, I really appreciate your honesty and openness and I agree with you. Like, the highs are highs, the lows and the lows are lows. But there is an element of fun and adventure that is just part of the journey. And I can see you smile like you know what I'm talking about. Like that, that.
- [43:02]
It'S a wild ride.
- [43:04]
B
I mean, you know more than that. Right. You really discover a lot of joy and things that you wouldn't have before. You discover joy in seeing people train up and level up. Right. Like and surprise you. And nothing makes me happier than to write the promotion emails announcing when somebody has earned a title. We have a company of moms. My company is almost all female. The actual full time employee team is just myself and our head of east coast sales who are men. We're all women otherwise working full time in this company. And that includes single moms and watching single moms who, you know, like, I mean, I can't even imagine raising a small human being or doing that job and then advance beyond what you would ever expect them to do into greater roles of responsibilities without ever going to school for it. I went to three very fancy schools. I had like seven degrees. I have no idea where anyone on my team went to college. After the initial interview, I don't remember. I don't care. I actually think some of them didn't graduate college. And I really just do not care because what matters to me, right, so much more is can you grow and learn things that you weren't taught in school? And I mean, watching some of our team members do that is the greatest joy ever. I'll also say it brought me closer to my own family because once you understand what it's like to own a pnl, you can relate in such a different way. I have very traditional tiger parent, like mom and dad. And like, you know, I was going to be a lawyer for the rest of my life. I think they were like, why? He's out there selling makeup. But now the question is always, how are sales? What is your gross look like? What does your net look like? I always say, like, my mom would be the most terrifying CFO for a company ever. She would just be like, I need two more points on the margin by tomorrow or everyone gets in. But you know, it's it's added a different level of dimension to our relationship and that's been really, really wonderful too. And so I, I hope anyone on that founder journey is able to find those surprises because I did not expect that at all going into this.
- [45:17]
C
Yeah, thank you for sharing. We have to work towards wrapping up, but I'm keen to hear your take on AI. You guys are leveraging AI for scenario planning, creative direction, business modeling. As consumers move beyond Google search, talk us through how you're using AI. What is dibs concrete strategy for, you know, ensuring product visibility and discovery using AI and you know, this new universe of search.
- [45:45]
B
Yeah, well, first of all, there's a, what I love to say is that you just need to go back into fairly recent history or maybe I'm dating myself, which is when the, I think the Alta Vista CEO went out and said we have one search searches over and a year later Google lands onto, you know, the playing field. Right now the battle for the next universal app, especially for discovery, is not over. We have no idea who it will be. And I think history has shown that second mover frequently overtakes the first. So rather than constantly contingency plan or drive towards the idea that it's going to be just a chatgpt universe, we are very focused on a couple concrete things that we can do. The first is understanding what in your assortment needs to be discoverable and focused on by the customer in two to three years time. And you can't, if you are a makeup company, you by definition have 50 to 70 SKUs. If you're in a medium stage of development, you can't hear all of them. You need to know what you're going to pick. The second piece of it is understanding what are the sources of authority that will most likely position you. So there are certain publications, certain platforms and sites that when they reference you, we view that as more valuable than anything else. I would rather get a New York Times article than a random, you know, glossy magazine piece on the brand. I would rather have people talk about us in Quora and talk about us in a specific way than, you know, try to plaster elsewhere for, you know, our influencers. There is a prohibition right now, I believe, on scraping stories, but it's becoming the, the norm at the expectation that at least static content over time will be or permanent content like the grid content as we call it, will be scrapable. You got to start preparing for that world. But we're still in the universe where we don't know where everything is headed. And I think anyone that tells you that they have a strategy for when, you know SEO goes by the wayside, is BSing you like, you know, in terms of like a full roadmap. But we're doing what we can there. And the last thing I'll say on it is when we look at how discovery is going to shift, we are only going to continue to reinforce the current customer journey, which is that she's discovering us in any number of different ways and seeking validation before she purchases. Because it's makeup, it's cosmetics, it's. There's so many options. You need to fall in love with the product. So you might discover us through ChatGPT. I hope we're ranking for you and right now if you're asking the right queries or discover us through Rando app in two years time, but you still need validation before you convert. And it's making sure we're hitting that in the ways that we know best, whether it's retail presence, Salesforce, Random founder coming up to you, asking you what your routine is. We have to make sure we also lock in on that part of the funnel too.
- [48:53]
C
Yep, makes sense. Look, I've got a friend who runs the largest digital agency for SEO. They only focus on SEO. He's got a team of like a hundred, 100 plus, all focused on SEO as an agency. So he sees the data to all the big cpg, all those big brands and in. And he said, nathan, the number one thing you need to focus on when it comes to discoverability is digital pr. Exactly what you're talking about. Focus on digital pr. So whatever the platform is that does become the big discovery machine, it's all going to be crawling the same stuff. So digital PR and that presence and authority will net, you can't lose. And yeah, so you're spot on. I agree with what you're saying. Okay. All right, we have to work towards wrapping up. Final question. I touched on this at the start of the interview. I want to delve a little deeper. So, look, your personal philosophy emphasizes commitment, intense commitment and you know, seen in your history, you've worked your 120 hour weeks. Don't know if you're still doing that now. Training in Equinox every single day. What is the one most actionable productivity hack that you can give to founders that you can use to work on what's urgent, not urgent, what is truly important, but it's still like preventing burnout and scaling your team.
- [50:18]
B
I'm going to give you two just because I'm going to cheat here. Number one, I've learned how to master my sleep schedule and that's so key for any founder. As a corporate lawyer, you have highly unpredictable hours. Same here as founders. 15 minute naps work for me because I can stack them together to get my solid eight hours of sleep. If you are someone that needs a longer period, figure that out. Mastering your sleep schedule to me is more important than any other input that you can put into your physical well being. The second piece of it in terms of understanding urgency versus importance is you always have a rotating board of directors of people, peers, including people you don't like necessarily that you can call on for countervailing opinions. Don't call on the same five people year after year. Rotate them in and out and pay them the pay the favor forward. Because I think getting the counter, you know, balancing view is so important for understanding and tackling some of these issues. And you can't work in an echo chamber, especially in an org, if you're the leader and especially if you're a founder. Even despite your best efforts, people are going to try to massage what they really feel or think. And that can really hurt if you're not hearing it from someone else outside of the org.
- [51:32]
C
Awesome. So Jeff, we have to wrap there, but just I wanted to say thank you so much for your time and being so open, honest, and just really laying out the source of how you're building this incredible company at the speed in which it's growing. Congratulations on all of your success thus far and thank you again.
- [51:50]
B
A real pleasure, a real honor, Nathan. Thanks so much.
- [51:52]
A
Hey guys. If you love this episode, you've got to check out my interview with Davey Fogarty on how he finds trends in under capitalized markets and turns them into multimillion dollar businesses.
- [52:03]
B
I'm generally looking for trends globally. We find trends that haven't been kind of capitalized in certain markets or in certain marketing channels.
- [52:12]
C
Yes.
- [52:13]
B
And then we also obviously add our flair to it. You need to differentiate your product.