She raised £6.5mn then everything changed - Sharmadean Reid MBE | Part 2

0:00Sharmadean Reid MBE: If you're not increasing the valuation of brand, is the resource worth it, is the effort, is the investment worth it? We're going to run out of money if we don't do something because we've got no revenue. If I was to say a mistake I made, I didn't pivot the business quick enough. And if I am going to start a business again, here's how I would do it differently. I think there's a problem with too much success sometimes, you know, business can be really successful and then be stretched in lots of different ways. Welcome to the Business Leader Podcast with me, Sir Richard Harpin. This is the second part of our interview with Sharma Dean Reid.

0:34Make sure to check out the first part of the interview if you haven't already. Sharmadine grew up in Wolverhampton, set up a cult nail salon in London and then her success became overwhelming. She returned to Wolverhampton, rested and learnt all there was to learn about venture capital. In 2015 she moved back to London with a clear plan. And now something from our sponsor, RBC Wealth Management. You're making decisions that matter to a lot of people. But what about your ideas? Ideas for what you want your money to do. Ideas that need the time and advice they've never been given. At RBC Wealth Management, with over 100 years of expertise, our advisors build plans around your ideas, not just your assets.

1:25Ideas happen here. Talk to us at RBC Wealth Management. Capital and any income from it is at risk.

1:33Sharmadean Reid MBE: The plan was this. If you're transitioning from one industry to another, I never expect to just jump into that industry and be welcomed. I want to prove that I'm serious about it. So step one was to open a brand new salon, but make it tech enabled and tech powered and a salon of the future. That would show investors that I wasn't just this random beauty girl that actually knew what I was doing. I also am very good at thought leadership and socialising the idea. So I wrote a few articles about how I went to a very innovative tech school. I went to a school called Thomas Telford. It was a school of the future in the 90s.

2:11Sharmadean Reid MBE: Like tech has always been this thing that has powered and enabled my life in a way that I took for granted. So I just shared that. Things like, you know, and I told you I built the WA website and just tweet HTML. Like not everyone would know how to do that back in the day. So I did thought leadership. I opened a brand new salon in Soho. And what was the difference between if you had side by side your old nail salon and the new one in Soho? Huge difference. Firstly on the ground floor we had I built the coolest thing with a friend that I met we built a nail virtual reality experience so you could put a headset on and you could move your hands and you could change your nail colours it was like super fun and at the time vr was everywhere but it was all shooting games and golfing games it was very masculine dominated vr so i was like i'm going to build a nail salon in virtual reality so lots of girls came in in fact not even just girls people had never seen that before so a lot of tech people who came in and tried it the other thing we did is i built a booking chat bot to um not to get too nerdy but like our booking system the old one we just use the API and then the front end was a chatbot so you would talk to Kimmy you would say hey Kimmy I really want an L appointment today you know here's what I want and the chatbot would talk and book the appointment with you and I built that and I did those two projects very intentionally so that the tech community would understand that I knew what I was doing.

3:49Did you need external help to do those two things?

3:51Sharmadean Reid MBE: Yeah I found two great partners. How did you find them? So the first partner was through just my fashion like I built a network of people who loved fashion and tech so if you're at the intersection of like innovation but also creativity we kind of I'd organize little drinks little dinners you know and one of them was like you have to meet this girl Kim she's like really cool and Me and Kim are still friends today. We talk today all the time. Kim was developing and designing really innovative things for fashion and tech. She did the app for Bottega Veneta. She did the website for Kenzo. It was just super cool.

4:30Sharmadean Reid MBE: So me and Kim worked on this project all summer. It was so fun. You can still see it on YouTube now, actually. But this was all based upon you building a network of people that you could then call them. Oh, yeah. I would say since the day I moved to London, I have collected people. I just act interested. I am interested. Most people collect stamps and coins. I collected beer mats. Do you? I used to. Oh, I'll send you on from Wolverhampton. I'll send you on from Banks' Brewery. I'm Richard Harpin, a Yorkshireman who sold my company, HomeServe, for£4 billion. and this is a Business Leader podcast where we look at the stories and strategies behind modern businesses.

5:13I'm passionate about helping British businesses scale and succeed. I think it's the key to unlocking Britain's economic growth. Founders and CEOs of mid-sized companies can be members of the business leader community for coaching, peer-to-peer forums and exclusive learning events. So do get involved. Sign up to our weekly newsletter at businessleader.co.uk slash newsletters. It's free and it helps us grow the community. Collecting people, I love that expression.

5:46Sharmadean Reid MBE: Yeah, I do. I collect people and I save them. Sometimes I meet people and I'm like, I really am attracted to what you're doing and I don't know if it's right right now, but it will be in the future. That's actually how I have my co-founder today, which I'm sure we'll talk about. But like I collected people who I think are doing something interesting that if I worked with them some magic would happen so that's what happened with Kim we built this system we're still friends today and the chatbot was really interesting because I'd read a blog post by a founder about chatbots and then he said you know if you're interested in chatbots DM me so I did Ron and we ended up building this app together and those two projects launched the now salon the salon looked incredible looked very space age futuristic and that you know i'll open that and then the minute i opened it i invited all future investors for the software to it so i had a showroom effectively and that included um index ventures yeah yeah so um they came later actually my first investor was saul klein at local globe who I just think is amazing.

6:59Sharmadean Reid MBE: And it was Saul Klein who introduced me to Danny Reimer. He took Danny to a Beauty Stack pop-up we did. And Danny is amazing. I feel so lucky with the mentors and leaders and bosses that I've had. So like from Nicola and Kim and a Joanne Furniss, a magazine editor, then Saul, then Danny. These are all people who have really believed in what I do. How many mentors do you think you've had over the years? I would say informally, because someone might mentor me, but they don't know they are because I'm just asking them the right questions and they don't know. And I check in with them regularly and I haven't formally said, will you be my mentor?

7:43Sharmadean Reid MBE: But they are, you know what I mean? Like right now, I would say one of my mentors is Mark Wadwa, who is the owner of 180 Strand. You know, he doesn't know it, but he's mentoring me because I'm really good at taking information, you know, and then using that information. But in terms of formal coaching, I've always had a coach. So I've had a paid business coach. A paid business coach. So when I launched Beauty Stacks, when we first got our first... Wait, I'm skipping a bit. I had the idea for the software system. I then did a pitch deck. I then got our first check from Local Globe. And then I got building.

8:23Sharmadean Reid MBE: so with Waugh I felt like it was quite difficult to do both businesses at the same time um so then I closed it on its 10th anniversary 10 year anniversary but in hindsight I wish I didn't because it was the best showroom for the software and actually if I'd kept that open even a couple of years longer you know it would have been a really amazing office showroom and you could could have opened more couldn't you and had them in major cities around the country and then it's showcasing your nail art and showcasing your software well you know this was one of my many mistakes in business which was I did not um I did not document the playbook of what made while special so if you came to our nails or richard if you ask any woman between the ages of like 35 to 45 about the nail salon any cool girl around that time she'll have a memory of it because it was very special and it was special because i made it special and i just didn't document what that was so i felt at the time that it couldn't be scaled because i'd made it too special this was one of my big learnings in business is to document the playbook from day one so that you're not the keeper and the blocker of what makes something cool and special and where is beauty stack at today so beauty stack we had to completely do a pandemic pivot and this is where I experienced my first, I would say, business challenges.

10:09Sharmadean Reid MBE: If I'm honest, since I was a kid, everything I've wanted to do, I've done, and everything I've wanted to do has only been within my own responsibility or power to do. The pandemic was my first ever business trauma, I would say. everything was going amazingly we'd won awards we'd you know raised a lot of capital how much how much did you raise so for beauty stack in total it was about six and a half million um and you know everything was going amazingly and then the pandemic happened right when we're about to launch publicly because we'd been in beta mode for a while so no one could book beauty so we didn't know what to do and then George Floyd was murdered which was very tough on me because I was one of the few black entrepreneurs in tech so there was a lot of eyeballs on how am I going to deal with it as a leader with my team and then I just remember thinking oh this is out of my control and I've never been in a place before where things have not been within my control and it was a really challenging time and I would say that the seven years from like 2009 I would say 18, 19 up until about a year and a half ago was some of the most toughest professionally and personally that I've had because I just felt like I was constantly pushing a rock up a hill and all of these different obstacles were in my way so yeah it was really tough but we had to you know it got to the end of 2020 and I thought we're going to run out of money if we don't do something because we've got no revenue I won't be able to raise again if I was to say a mistake I made I didn't pivot the business quick enough what I should have done but hindsight's 2020 I should have pivoted to video calls as quickly as possible because a lot of people were doing video calls what I did instead was pivot to a media and community company which we then launched in 2021 with the remaining funding that we had and that's when we launched the stack world but I really miss I beauty stack to me is still an incredible business idea that doesn't exist it was gen z beauty before we called it gen z beauty and the thing about beauty is it only ever rises the the people just love buying beauty they love experiencing beauty and it's one of these industries that is in the hundreds of billions globally that people don't often think of as a serious industry you know so i really miss beauty stack but that's that but what does what does stack world do so then the stack world started out as really being a membership community at a period where women felt very lost and very isolated in the pandemic that they were working hard not being rewarded getting burnt out and we provided business and self-development events communities coaching and we did that for five years and it's um was so amazing the feedback I get from that like I'm really changing women's lives on the emails I get and the comments it makes me want to cry because it's just like you know got a lot of messages that these zoom calls saved me in the pandemic you motivated me or inspired me but the thing that was really important about the stat world is i encouraged people to connect with each other so a lot of people talk about communities today but it's not really a community if the people within the community cannot connect with each other outside of you and how big was the community there's about 30 000 women on the app so really healthy um and then we had 600 different communities on everything from ADHD to South Asian women in business.

14:21And so you'd opt in to something of interest within that.

14:25Sharmadean Reid MBE: Precisely. And then you would host your own events or you could attend other events. And then we as the company did regular programming as well. Like we do an annual conference, like three, 400 women would come and we'd do full days of panels and workshops. The energy was electric. It was amazing. But then it's really funny because with beauty stack I'd been thinking about it for 10 years you know one else came from like a visceral reaction to something beauty stack really came from me seeing this problem and seeing this new economy that was growing of freelance beauty practitioners and the stack world was something that I felt I had to do because I was kind of being pushed to do it I'm very good at if you give me a product I can build you an entire story around it in a matter of minutes like I'm very good at retrospectively saying this is what the product's all about and this is the inspiration and with the stack it felt like a very rushed process to launch it but because I'm good at it it worked great you know we worked with some incredible clients we had so we would produce events for a lot of brand partners like Google, Berkeley Co we had a partnership with for a long time where we'd organize their community events as well so it was working really well but then I just felt very burnt out again you know one thing I've noticed about my life is I seem to return home every 10 years so now I'm 38 39 and I'm exhausted for all of the pandemic for being a community leader to thousands of women to you know raising a small child and I just think you know I think I'm gonna go back to Wolverhampton again so I moved back to Wolverhampton when I was 39 and I just thought I was gonna be there for a year I was I'm just gonna have a little sabbatical I'm gonna turn 40 my book's coming out I'm gonna really just rest for a bit and then on my 40th birthday I was lying in my garden staring at these fields because I live on a farm and I was thinking you know if I if something bad happened to me today I wouldn't really have anything to show for it that was like legacy building you know I'd have a lot of cool projects and have a thriving Instagram account but I'm not sure I've got anything I can truly pass to my son and I'd been reading a report in Bloomberg that said the median wealth for black people in the UK is zero and that is from lack of property and lack of assets that are they can pass on generationally you know so I was thinking a lot about this and thinking about how I can build ownership again in a different way and I was also just reflecting on all of the reasons why I'd started different businesses and how I might want to do it differently.

17:33Sharmadean Reid MBE: That year I spent a lot of time writing. I wrote a book proposal about women and ownership, looking at all the different ways that women can acquire ownership and keep ownership. I then was writing you know a lot of newsletters and I wrote kind of guardrails for myself and if I am going to start a business again here's how I would do it differently and it was effectively the opposite of everything I'd done in the past before and then I looked at all of the industries that I was interested in and I thought what industry do I have the potential for a billion dollar exit if we wanted that that's what you talk about a lot and obviously there's finance there's tech there's property but in beauty there've been quite a few billion dollar exits that year so it was very top of mind beauty is one of these industries that has very similar margins to tech but no one thinks of it as you know investable as tech you got a 70 80 margin you definitely don't need as many employees as you might need in a tech company not high salaried ones anyway and yeah I was like you know even though I haven't done beauty for a while people still respect me in this industry I was like I think I'm going to start a beauty brand but I'm going to start a beauty brand that I will never not be interested it in and who was it inspired by so the brand itself the first iteration of the brand was inspired by queen cleopatra my middle name is alexandria and one of the coaching um exercises that i'd done with someone before which you might have done is to think of three people that you admire so it was cleopatra it was virginia wolf and it was my friend's mum alexandra jackson and I then made a list of the attributes of these people what I admired about them and it turns out the coach told me that these the attributes you think of for yourself where you want to be and also the negatives you see in yourself so then I was reading Cleopatra's biography and as I was reading this biography that summer I was like she's kind of a badass queen she's amazing she's cool I didn't know any of these things about her she's been misunderstood and you remember I say that you know where I feel misunderstood or like an outsider I resonated with that so for my 39th birthday the previous year I actually had a party called 39 BC and I wrote this very detailed invitation inviting 26 of my friends to come to the court of Queen in Cleopatra, which was a hotel in Windsor called Oakley Court.

20:26Sharmadean Reid MBE: But you need to come dressed as your ancestor or a noble woman in your lineage from history. So, you know, I have a very diverse friend group. There were friends who were Korean, African, Brazilian. They all came in costume and it was incredible. I'd love to see those pictures. I will send them to you because they were actually the most viewed pictures on the Stackworld website that we put on that year. Because it really resonated with people. There was something about returning to self, returning to identity. And you've got to remember, this is we're still in post-pandemic era, you know, so people are still recovering from a loss of thinking about what their normal life might be.

21:05Sharmadean Reid MBE: I wrote this essay called Call on Your Ancestors. I printed the essay out for the party. We had an amazing dinner and conversation. And then that just kind of sat with me and I didn't think about it again. But I knew there was something in it. I knew there was something that resonated with women. And as I said previously, I'm very good at spotting a trend right. So I was like, there's something about this that's working. Fast forward to being age 40, thinking about what I'm going to do next. I'm going to do a bathing brand that's all about ancient bathing, inspired by Queen Cleopatra and Mark Antony.

21:39Sharmadean Reid MBE: And I'm going to make it so historical and law driven that you're never going to get bored of the brand because there's so much information to consume. because let's be real a body wash or a shower gel is easily replicable but a story and a narrative and a brand is not like if you go as detailed as we're going because that's the other thing i was thinking about with beauty it's very saturated there's like 10 000 versions of vitamin c what what beyond the science why am i buying this one why do i want it on my shelf so it's the brand and the storytelling and you called it 39 BC. Yeah well in the beginning I didn't know what to call it.

22:21Sharmadean Reid MBE: I was going to call it Salona, Balneum, all these different Latin words and then it just hit me one day 39 BC. I knew I wanted to build a brand that included men. I wanted a gender neutral name. I knew I wanted it to pique curiosity. This is something I've always done with my businesses. make them look undeniable like what is that like I need to know more so you know I was actually around the corner from here having a doctor's appointment and I had a 39 BC bag and the doctor said what is that bag and I was like well funny you should ask that and that's what I mean I'm very good at designing a brand that makes you curious about it so I had the idea I then started with my philosophical statement about what I'm trying to disrupt in the bathing and body category it was very much driven by the perfumification of everything I saw come so again you remember I said these two wolves inside of me the art and the business the art story I had that nailed Cleopatra Marc Antony sensuality history return to self bathing because I take two baths a day the second side was the commercial side the body care category was growing but it was very much about active ingredients retinol medical serum you know but I was like let's return to sensuality the fragrance category was growing and I was like why don't I do a body care brand meets a fragrance brand so make body wash but with the same level of detail as a perfume brand would launch so you know you launch a perfume brand you have four six eight bottles you put it out in liberties or selfridges that's the perfume that's what i wanted to do for body wash you know a body wash normally launches and it's like coconut and vanilla and that's it you know i wanted to do it with the same level as a perfume brand was so that was the real commercial um insights was that both fragrance categories growing globally especially niche fragrance and the body care category is growing also in those exits that i mentioned previously there are a lot of body care exits and the reason for that is is that body care or bath and body however you want to call it crosses lots of different demographics and also repeat purchase absolutely repeat purchase but you can go into hotels restaurants you can be on aeroplanes you can be in duty free you get what i mean whereas if let's say i had a makeup brand i can't put makeup in a hotel so i was like and also with this category huge gifting and what is interesting about the british customer is we love spending for others but not necessarily on ourselves it's like this kind of self-deprecating thing like oh I don't deserve that but I'm gonna buy it for my mom the hotels and the aeroplanes bit was the opportunity to do the sampling and endorsement big time sampling endorsement but really scale and like I said to you I built this business so differently I was thinking about the scale from the beginning I was like I need a product that I can like when this takes off I can produce like at scale so really year one in the business is about how do we be in the right places in front of the right people so it might be about saying no to some things it might be saying no to developing mainstream products too early it might be no to a mainstream retailer too early because with a brand like ours with 39bc you've got to phase it correctly you know it's like get the right playbook and learn to say no with a not to-do list whereas in your earlier businesses you said yes to everything and it was my downfall my downfall was yes to everything because i just stretched too thin had no clear strategy didn't know what i was doing so like having a not to-do list was really really important for me did it just take one well-worded email to get into self-fridges or how did you do it this time around so leveraging the things that i'm good at is something i think about on a weekly basis because business especially consumer businesses are so competitive right now and there's so much content and noise about successful businesses in a way that there wasn't 10 years ago.

26:57Sharmadean Reid MBE: It's very easy to get distracted by what somebody else is doing. All right. So when I started working on my business, Rode had been acquired for a billion. Hayley Bieber, amazing celebrity, Rode, an amazing brand. And I literally was panicking because I was thinking, I'm not a celebrity, not married to Justin Bieber, not with a famous family. I'm not someone who likes to be on Instagram all the time you know in modelling how am I going to build a brand as successful as this when I don't have those qualities so I made my own playbook I wrote this down in the notes phone my app what am I good at and what do I have that no one else has well number one I have a 20-year network of fashion and beauty people in London who respect me and rate me for the work I've done.

27:53Sharmadean Reid MBE: So with Selfridges, it was quite simply a case of, I already knew people in Selfridges because I've just been around the block long enough. And okay, I did do something. So you want to know. Yeah, what did you do? I knew that if I, remember what I said, everything about this brand is geared towards what is the long-term plan of a potential acquisition and what would an acquirer look for? an acquirer looks for your ability to build a world and that world is a physical world not just a digital world so i knew that one of the first things i would do is a pop-up and not just be d2c because if you d2c with your nice website they can't picture how will i buy this brand and build 100 stores around the world you know so we had a launch party and i invited all the retailers we wanted including selfridges including selfridges and they came they came to the pop-up and they stayed till the very end and she was loving it and i made it very experiential there were scent experiences all the books that i read to build the brand like the historical books i laid out i really showed them the making of this product you know it was beautiful roman red i got um a central arts college student to hand sew a 39 bc roman banner and hung the roman banner above it was just it was brilliant you know how big is the business today well we're only nine months old yeah revenue run rate so you so we've just finished our second quarter and we're on track to our first million revenue that's what i will say great yeah it's only nine months it's tiny So you wrote a book back in 2024 called New Methods for Women.

29:46What are the key messages that people should take from that?

29:50Sharmadean Reid MBE: So New Methods for Women was a book that I started writing when I was 28, 29, I have my first existential crisis. Every time I tried a new method, I would document it. So there's actually 51 methods, which is a lot. but if I was to summarize it I would say that knowing yourself and your own identity and staying firm and strong in that identity for women is absolutely important in a world that tells you to be someone else all the time you're constantly bombarded with images with messages of who you should be and how you should think and what I wanted women to understand is that they have the choice and the autonomy to choose and think for themselves so that was a big thing so the the book is chronological so it starts with method one is know thyself and then the second method is know your body and how your body works and then it's all kinds of things like understand how to negotiate um return to nature which is a big one know when to cut the noise know when to cut toxic friendships it's kind of it's written for someone who's like 25 to 35 and that critical point in your youth when you're just figuring things out and yeah it was built on a lot of books that I read a lot of brilliant books I read like for example one of my favorite books is Ray Dalio's Principles but I read that book thinking but Ray Dalio doesn't know what it's like to be a black woman who's 20 who's not being taken seriously because of who she is or where she's from so I was kind of thinking what would my principles be um and yeah that's what it was about and is there one principle that would apply to um men as well oh I would say like 60 % of the book is applicable to men also I would say it's fairly even though it's written to women for women I did have quite a few men email me and say I've actually read some of the essays and I find them really useful like one of them is control your media diet that's applicable to everyone and then there are other methods like develop adult friendships which is all about building your peer group which is something you talk about as well and you know we say how developing adult friendships is absolutely key rather than just being with the same lads that you knew from school even though you might not have the same interest as them anymore so yeah I would say a lot of it's applicable to men also and finally Sharma the the biggest tip that you'd have for anybody that is scaling a business right now from your your businesses and your learning so far so my learning and what I'm applying today is every single decision in the brand is to increase the valuation of the brand if you're not increasing the valuation of brand you know is the resource worth it is the effort is the investment worth it because I think there's a problem with too much success sometimes you know business can be really successful and then be stretched in lots of different ways and I'm like if this is not going to increase the value of the brand I don't have the resource to do it right now and that's really hard for me because I like doing fun parties and partnerships and things but saying no to say no learning to say no is absolutely key Sharma Reid thank you very much really enjoyed that thank you so much for having me I learned the power of Collecting People, which is about having a big network that can help you in business.

33:24And on Sharma's fourth business, 39 BC, she started with the exit in mind. Thanks for listening. Please do rate us and subscribe and make sure to sign up to our weekly newsletter at businessleader.co.uk slash newsletters. With more people on board Business Leader, we can have better conversations and inspire the UK's next wave of business leaders. You're making decisions that matter to a lot of people. But what about your ideas? Ideas for what you want your money to do. Ideas that need the time and advice they've never been given. At RBC Wealth Management, with over 100 years of expertise, our advisors build plans around your ideas, not just your assets.

34:13Ideas happen here. Talk to us at RBC Wealth Management. Capital and any income from it is at risk.