Gossiping About Hailey Bieber’s Haters, Ami Colé’s Diarrha Failing Fast & Forward into Skims, & How To Win With An Unfair Advantage (Maggie Sellers Reum & Katie Sellers)

0:03In case you missed it, you're allowed to be hot, smart, and rich. So let's get into it.

0:14Oh, I thought you weren't going to clap with me and I got a little upset. I'm always here to clap. Well, I love when you're on the podcast for so many reasons, but also because I can use my phone for our notes, which I never usually do. But also because I have someone to clap with me and I feel like people get to really hear my voice. Yeah. And our like banter back and forth, just like group chat. It's interesting because we've been doing a lot of surveys of the community, both like formally and informally. And some of people's favorite episodes are with you and I. I'm flattered. Honestly, when people say that, I'm like, I never expected that.

0:47I'm like a filler episode. Well, I wouldn't say you're a filler, but I think it's the best way for people to get to know the people behind the brand. And it's interesting because HSR, the media channel is growing at what percent? You said 71 % in the last 90 days. It is growing so much faster than even my own personal channels. And so it's amazing because it is like HSR is growing on without me, but obviously I'm still the host. And these are so fun for people to get to hear my opinions on things. And I'm just so glad that you're back. Me too. And it's been a while since I've been in LA, like two months.

1:19We've done other trips and stuff together. New York do, but it's just nice to be like in your house, sister vibes, hanging out with Courtney also. Like it just as my husband. Yeah, it's just a fun trip for me, honestly. But this time you're wearing shoes because the feet people found us. The feet wikis have found us. So for those of you that don't watch the podcast, the whole goal, and this is actually very intentional. So like when you're trying to interview someone, at least for me, it's trying to get them into a really comfortable state. And I find the best conversations are when you're just sitting on the couch, chilling, you're not super formal, super buttoned up.

1:55Hence why I wear the same outfit almost every single podcast. Today I'm switching it up. If you're not watching, I'm wearing a burgundy jumpsuit. Love it, actually. With some jeans, no shoes. And I feel like I need to identify my Steve Jobs winter outfit. I mean, this is giving a vibe and I'm here for it. Like a little bit of lighter hair, the burgundy, like I'm really into it. But yeah, so in the last week, we have been infiltrated by, I don't even know what their name is, like the feet people. who when we first started filming this podcast and you had no shoes on guests would be like I think I'll keep my shoes on because like Lindsay Arnold was like I actually have like a foot wiki page Allison from Mara also yes and so we were kind of like that will never happen to us and then they have found us but I will say I have really nice feet and I have a great pedicure it's always just the worst when you don't have a good pedicure just one of the things that a girl has to worry about hence my Birkenstocks yeah so we just spent time together like we were saying at Duke, which was so cool for me because I never would have gotten into Duke.

2:59So to be asked to speak as a professor, not at a club, in a curriculum class with Professor Seema Sistani was such a life highlight for me. One of the most interesting things for me, though, one of the questions that has really stuck with me is when someone from the class asked how I, as a female leader, deal with my cycle. And it's interesting because I think having been my own boss for a few years now, we can obviously set our own schedule when we're going to have hard conversations. And it actually threw me for a loop to answer the question because going back into being a corporate employee, it's a lot harder to actually manage that than it is when you're an entrepreneur.

3:43So that's one of the questions that has really stuck out to me. Did that surprise you. It did. I think since I've become self-employed and an entrepreneur, it's become a lot more culturally acceptable just like in conversation for women to talk about their cycle, where they are, am I luteal, am I follicular? And so it's been an interesting transition and it just never even occurred to me that it's something that in a corporate environment you would manage around. Which countries do, by the way. Yeah, which some countries do. And like you said, I don't think like the trading floor at Goldman Sachs is going to give you feedback at the optimal time for your cycle.

4:23But like, it's just something to be more consciously aware of. But I think that there's things that you can do as a woman where you don't schedule high intensity workouts that week. You don't overbook your schedule. You take a lot of time to relax and nurture yourself. So even if your employer isn't going to, which realistically, like even us, like if someone came to us and was like, I can't, you know, work at full capacity, I'd be like, babes, like I am using five tampons every hour because I have a head of flow. Like we have to figure something out, you know? Um, but I, I did that stuck out with me.

4:53And then the other thing that really stuck out with me is this is a class of 45 women who are aged from a freshman to a senior. And it's all about the next generation of female leaders. So professor Sistani has brought in her amazing accomplished friends that are doing all these different entrepreneurial pursuits, big CEOs and CMOs of huge corporate 100 companies. And it's really to paint all of these different patterns to get to your dream job. Because what was very interesting, even after the class is so many women coming up to me being like, I never knew that I could be in a financial adjacent role and not go into investment banking.

5:27I guess Duke is a very finance heavy focus school. And so it was cool getting to share our story. Yeah. Obviously coming from two totally separate things, but like just painting that picture that there is a different way and to get a little vulnerable I went on to a podcast with two people that have that traditional finance archetype right it's like they are you know incredibly successful women that went to the ivy league schools and worked at the goldman sachs and my story and tone of voice and positioning did not land with their audience like did not did not land like they did not enjoy my type of candor my journey the way that I talk and it really hit me hard for a few days like I actually had to stop looking at the comments because it was like whoa you guys totally don't understand me and then I was the one that was like this is amazing this is what I want like I am not for everyone and I am targeting that girl that is like sitting around being like I don't want to go work at Goldman Sachs I don't want to go and do my MBA?

6:31Like, how do I do something different and creative and still get to that spot that you're in? And so it's interesting because I was so proud of myself for having that development and that growth. And then interestingly, I haven't even told you this yet, but I got a message last night on LinkedIn from a girl in law school in Toronto. And she found me through that podcast. And it's the first nice message I've received from that podcast. There was a lot of hate. There was a lot of hate. And it just was so cool to see how it resonated with her and she was like I don't think that I'm in law school for the right reasons I think that I'm here for my parents and it just made me remember that like we're doing this with our way this is our way and it's not going to be for everyone but it just it was interesting to see the duke in real life of that and then also the online side of it and being like whoa I really know who our customer is yeah I'm reading this book what book well the diary of a ceo book the 33 lessons.

7:26And one of them, like there's a section in it about one of the chapters is like to not be wallpaper because wallpaper ends up blending in. And when you are for everyone, you're for no one. And really like finding what is the most absurd thing about you and using that to market yourself. Hot, smart, rich. And the way that you talk about life, business, love, relationships is it is polarizing but that's exactly the reason why it finds the people and I think you and I both you also said this in the class grew up in an environment where and it's so interesting because both of our parents are creative like our dad who actually is like a Bay Street Seven Sisters partner no one knows what Bay Street is listening to this podcast but it's like Wall Street in Canada was a stage manager and a production manager for like live shows in university and wanted to be a rock star and wanted to be a rock star and still ended up getting put down the path of like corporate go to law school same with you and which is what he did to us which is what interesting that he pushed us that way pushed us that way where it was like I ended up at a big four accounting firm you ended up in sales at salesforce after both going to business school and I think we've both had this like magical revelation about what it means to be able to be your highest fulfilled self in all areas of I'm creative, but I'm business oriented.

8:51And there are more than like Mary said in her episode, Mary Holland Nader, there's seven jobs people are aware of when they go into college. Lawyer, doctor, nurse, like investment banker. And it stops there. It stops there. And there's roles where even working at Missouri, like VP of creative operations, I would be so good at that job, but you never would have put your hand up for that. And I never knew it existed. Yeah. I truly didn't know it existed. Well, that was another lesson that I talked about on this podcast, which did not hit in that way. But it was about like women putting their hand up before they were ready.

9:28And I've done that in every single capacity of my life. And if you weren't ready, you wouldn't have the opportunity. I was applying for roles that I was not qualified for like eight years before they said that the requirement of experience, which a man would do by the way, which a man would do and women wouldn't. And so like, yes, my tone of voice is not going to be for everyone, but like, I think that's okay. And I'm actually getting used to that being a good thing. Okay. Speaking of Missouri, this is a really important conversation to have because this week you are not going to be able to go onto social media without seeing your favorite and not your favorite influencer.

10:03Talk about the Sephora biannual sale. We both have worked at brands, which never went on sale, except for once or twice a year. How do you think you become a brand that doesn't go on sale? Doesn't have to go on sale. Okay. Doesn't have to go on sale. I think honestly, it comes from like foundationally how you build your business, like unit economics, how you train your customer and making that decision very early on. Are you the row or are you whatever brand is going on? like when there's a sample sale for the row there is a line wrapped around New York City because it never happens on sale and it doesn't even go on sale online you physically have to be there and almost be invited so I think it's like very early brand development commercialization and brand strategy so being in a business where we only went on sale once a year and it was for seven days only seven days and it I think it grew into being seven days over time but that brand was developed where like the unit economic structure of the way the business was built could support that.

11:09And it was positioned in a way where it was like accessible luxury and not something that you would expect to go on sale. What I learned in that business, and I remember it, we had to make a decision when COVID first started. Are we doing a sale just to like reinvigorate the brand, the customer base to try and get cashflow into the business? And we just had had our new CMO join. She had been at Casper previously. I love her. And she, Nikki obsessed. She's in LA this week, but she's an HR girl. She was like, you will get addicted to the drip. You will see the conversion. You will see the money coming in.

11:46And it's not that you need to keep doing it, but you get addicted to it because you see how it changes the performance of your business. But then in turn, it completely changes the entire perception of your brand. It's also just around expectations. Everything in life is expectations. If your customer expects that you have a sale once a month or once every two months, like they aren't going to buy from you because they've been trained not to do that. Like the gap. Hello. Yeah. Like whereas with Sephora, I have hacked the system because every single time I'm running out of products, yes, it might be like I'm waiting a month to buy something, but I genuinely need a refresh at the time that there's a sale.

12:23Yeah. But if I am shopping at Sephora when I know it's not a biannual sale, like I'm not asking for a discount, you know, you're not expecting that and you're not going to not buy it because it's not on sale. Correct. Which I find what's the one thing that you're getting at this sale that's like a high ticket item that you've been waiting for? I mean, I'm the same as you. Everything is depleted. Like my Charlotte Tilbury contour stick. Which I hate. I like it. I don't think it works. But I'm like bottom of the barrel, like squeezing stuff out of there. And then I do need another new setting powder because the Huda Beauty one that you got me is like also bottom of the barrel.

12:58Those are the things I need to refresh. Okay. Well, the Laura Mercier translucent loose setting powder is definitely my new fave for me. I have been actually loving experimenting with a big barrel. Okay. So I actually want to get like the biggest barrel possible because what I want to do is like with keratin, you can't really do a big blowout, but you can fabricate it by curling your ends with a huge barrel. And my hairstylist did it my last appointment. And I was like, that is something I need to fake the blowout look. And then by the way, I'm no longer doing keratin and I'm going to be doing Brazilian blowouts.

13:31Yeah. We talked about this in Duke. It's like, there's no life to the hair. There's no life to the hair. And the Brazilian blowout helps calm the frizz down while still keeping the volume. Yeah. Okay. Can I talk about a brand that I have to watch right now? Yes. This is a little shocking. So there's a brand from Canada called Drink Benny. It just launched into 2000 Target stores today with Emma Leger. She's the face of their new sugar plum fairy flavor. The craziest part about this story is that a ray just launched into Target, which we just saw nationwide. They came on the podcast and told us that they were doing a hundred million dollars of revenue.

14:08Okay. Benny, this beverage last month posted that they just hit their first million dollars in revenue. Million dollar month? No. Oh, they just hit a million dollars of revenue. Oh, wow. And they're launching into 2000 target doors. It's really interesting because obviously getting into retail is huge. Now being an omni-channel brand, I was just on the phone with a very large executive at Ulta and I asked them, I was like, what does it take to get on shelf? Because you don't just want to get on shelf. You want to sell through. And it's a little intimidating, right? When you haven't built the base up, people don't really know who you are like how are you going to sell through 2 000 target doors right and for them i think every brand is stealing from the sephora playbook like the targets included it's like building the brand in retail and having that be like almost the only distribution point for these brands there's exclusivity and there's exclusivity in that and obviously i don't know the terms of the deal with any of these but it was interesting because when i was talking to this executive at ulta they were like no like we don't only look for these big brands it the real kind of like maturity we're looking for is just like, can you get your product to our DC and like a case shelf ready pack?

15:20Because which is actually a lot harder to do than you would think. But that's like their only requirement. They're not like, oh, you have to have this many Instagram followers or this much foot traffic in your other like they're willing to take a bet on you, which I just thought was interesting. And so my mind is definitely on a brand like Benny. And I was so happy to see they used Emma because Canadian, Canadian, but Emma also has like a huge U.S. audience. Yeah. And it's interesting because even as we're starting to like incubate things and help, you know, brands that we're investors in like use different talent, we do look and ask a lot for demographics.

15:55Right. And my audience is 30 percent Canadian and pretty much the rest U.S. Pretty much the rest U.S. And I think even now with the show growing, it's even more U.S. actually, which is good. But like it would be cool to do something with a Canadian brand because I still have that audience. Yeah. Okay. We need to talk about road. Oh, road. I was reading their 8k on the plane on the way here yesterday. So this is such an amazing story. Haley Bieber's haters are absolutely going to hate this, but you can't argue with numbers. No. And the coolest part about being acquired by Elf is that they are a publicly traded brand.

16:34And we now get to see the entire P &L of Rhodes business. There are a few main takeaways that I think are worth calling out. Because one, despite what people think, this is not just a celebrity beauty brand. This is a real business. It's a commercial business that's making not just profit, but significant cash flow, which is not even the highlight of the story no there is something called an operating margin which elf is operating around 19 which is very healthy for that age and stage of a publicly traded company like a 19 to 20 operating profit is good right and you mentioned obviously there are incredible cash flow they're doing around 200 million of revenue so obviously that's incredible top line growth for elf to acquire but the biggest headline of this story is that road is operating at a 33 operating margin which is crazy hence they are driving up the bottom line value of elf as a publicly traded company so in my mind already this is in a creative acquisition like this is and and when everyone was doubting haley saying like oh they overpaid for this it's like no they didn't No, because it's immediately bringing up their bottom line and how they're going to get valued on the street.

17:53And the other huge headline to me was, okay, Elf made a bet that the first 200 million of revenue was driven by Haley and not having really any marketing budget attached to that. If they had had already 50, 100 products, I would be doubtful that they could do it for the next 200 million. Elf made a bet that the halo effect of Haley is going to bring in the next 200 million because they've only had 12 products, which I actually think is a pretty safe bet to make. They have a lot of room too, that like if they have to leverage some sort of marketing to reach the next 200 million of revenue, they have that flexibility.

18:33They've earned that right because of how they started building this business. And I think looking at the P &L yesterday, like the operating profit and the marketing are clearly like the standout winners. And looking at it from from a CFO perspective, there's room in a lot of other areas for them to improve. Like with their gross margin being around 60%, like it's good, but it could improve, which I know Elf will be able to help with, with economies of scale, packaging, formulations, like all that kind of stuff. And then the one, I think like people have talked about this, their GNA line item is a little heavy.

19:07And I think - And what would that like account for? So that would be like their payroll, their office expenses, like everything else. Would it be like travel, like PJs? like is Haley taking pj's running the pj's through the road pnl because the statements are also audited so like someone is also attesting to them being correct when things get audited do you actually look at the executives the c-suite executives what they put through on their expense reports and if things are like no that shouldn't be there they have to be removed but wait can we talk about the fact that there is actually a report that more c-suite executives at Fortune 100 companies are expensing PJs.

19:43Well, I mean, so we don't know. Let's start doing the PJs. We need Haley on the podcast to describe if like - Are your PJs in your G &A? But yeah, it would include things like travel. It includes like all the stuff that's not marketing and product in a business. It's sitting in G &A. That's the one thing that was a bit heavy that people have said were like, that can definitely be fine-tuned a little bit. But like, I was blown away impressed. And I have seen the full skims like raise deck and financials from when they were raising back in like 2021, 2022. And it's like synonymous with the power of Kim Kardashian and the marketing efficiency she was able to drive in that brand.

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21:08This is why we partner with Recharge and why they're giving the HSR community 90 days free, helping brands test, learn, and grow their subscription business with zero risk. To claim this incredible offer of 90 days free, click the link in the show notes. it's really interesting because i was at an event last week with like the typical private equity guys and so they see things like this and they're like it's every single celebrity brand you know and i'm like it it isn't though like this is the anomaly and it begs the question like what can people that don't have a hailey bieber learn from this i think it comes down because i actually in the article that I'm going to be quoted in, in Beauty Independent, I talk a lot about Chomps, which doesn't have a celebrity founder, doesn't actually even have a publicly facing CEO.

22:02And they've been able to achieve, although we don't have the exact financials, like rumor on the street is that they've been able to achieve astronomical numbers in a similar way. And looking at that business, like it comes down to the fundamentals being right. And if you even listen back to Amy Liu's episode of the podcast, she talks a lot about making sure your hero products have the right unit economics because you could have the number one seller of your business. And then it's like, if that's a cost center and not a profit center, like that will ultimately kill your business in the end. So I actually think that, no, you need to be able to find one really distinct competitive advantage.

22:42Ours happens to be our tone of voice, the way that we talk, the way that we bring news to the market, it's in a digestible, relatable way. It's not, we're not trying to be highbrow. We're not Goldman Sachs. We're not Ivy league. And I remind myself of that. Like that is our competitive advantage. If I can do it, you can do it. Yeah. And I think when you're looking at a business like road, it's so easy to compare yourself to that and be like, well, I don't have Haley Bieber. But I think like what I wrote down is like leaning into whatever your unfair competitive advantage is. I said community, innovation, storytelling.

23:15You don't necessarily need to outspend your competitors, but you do need to out execute them with whatever your unfair competitive advantage is. And I think about that from Sheena's episode with Kosas all the time. It's what's your unfair competitive advantage. And there's never one silver bullet. It's doing all of the things all of the time that builds the momentum. And that's what we've done with our business too, like with HSR. And I'll just use the Instagram as an example. It's doing all of the little things all of the time, testing the data, being obsessed. What does the customer want? What are they resonating with?

23:49Changing course if it's not working. And that is truly how you hack the system. Totally. Is being obsessed, out executing and figuring out how can I do these things better than anyone else? And that's how you're going to build the next road. Okay, but if you're not going to build the next road and your business like amy kolay doesn't make it there is a second life i'm so excited to talk about this amy kolay jarrah shut down and then her next chapter being with skims as the head of beauty evp of beauty and fragrance massive how amazing is that evolution the instagram that she posted this morning it was a reminder to like fail fast and forward like publicly and publicly if you're going to fail fail fast and move forward and she is the prime blueprint of why because she was brought it out onto a public stage which a lot of people wouldn't do we know founders who have swept failures under the rug to the point where like it has pissed people off and she probably included yeah you included she brought it to the front was very public about it and explained why and now it has landed her in a position where she's an EVP at Skims.

25:04Do you think that she had that role before she went on to the podcast? Aspire? Yeah. No. I don't think so either. I don't think so. I think they probably had a, like you have with guests who come on, like you kind of do have this otherworldly relationship that you build with people who come on and they kind of bear their soul to you. And as the host, you develop a very interesting, deep relationship with the people who come onto your podcast so I feel like they probably also had their like you know come to Jesus conversation where they built a relationship it was genuine and Emma the like businesswoman that she is was like you need to come do this you need to come to skims and because Jara is also building her own public persona and I think leaders like Emma and leaders like you and I understand this like there is a balancing act to like having your own personal brand as you are a leader in a company Like you cannot make that your primary focus, but it does help.

26:02Like I do think for us too, like I do want people at HSR to be able to like live and breathe the brand and promote it. And if they have like Brooke is a great example, Brooke, who is our HSR global angels ambassador. Like it is incredible that she is building her own personal brand, leveraging HSR to do that. And then in turn, like we benefits off of that. so I think similarly like that team understands that where it's like having their own personal brain which Jara is doing is actually a really competitive advantage for them and by the way people cheer for the underdog yeah it's exactly what I said on the podcast with Mary we praise women for being relatable until they start winning everybody loves a comeback story everybody is now not looking at it as like oh that's Kim Kardashian's like beauty brand that's like no that's Jara putting her blood, sweat and tears into this, taking all of her mistakes, all of her failures, and people are going to be rooting for that.

26:59And that's why people love a second time founder also, which like inherently I kind of see Jarrah's going in and doing for Skims and their beauty business because of all of the like, you know, skin by Kim, selling to Cotty, buying it back. Like there's work to be done on that brand there. They have not figured it out within the Skims ecosystem, how beauty and fragrance are going to work for Kim Kardashian yet. So I'm really excited to see what happens. And I think what you and I also talked about today of like, there are other interesting ways to build in the consumer ecosystem other than being a founder.

27:34Katie Welch. Katie Welch. Katie Welch is leaving Rare Beauty to become the new head of US branding communications on their leadership team in the US. At Chanel. At Chanel. I love this because so often our identity gets wrapped into what we do and like katie welch has been known as the cmo of rare beauty for a really long time like that's a big role they have a big company she's been very front-facing and she's kind of in my opinion the person that goes to these like sephora meetups and things when selena can't but there is also a time and place where it's like you've done what you can do and it's time to move on yeah and so i think just seeing these two women that are not on like they're not CEOs, but they are entrepreneurs.

28:19And I think that's another thing that the best companies do is they really empower the leaders to be entrepreneurs and residents. They don't try to make their roles so defined and like give them this prescription because that just doesn't end up ever working. No, you have to, especially at that level, build a relationship based on trust and knowing that these people can come in and execute and do what they need to do. So it was just like great news all around this week for women again reinventing themselves taking new risks moving on and doing great things that are not just like oh well I gotta like build something from scratch and be the founder and put my blood sweat and tears into something like and we said this to the girls at Duke as well go and learn on someone else's dime like I make fun of myself so much but I'm like babes I spent and learned on an 18 million dollar budget when I was reporting to a CMO of a company and I was like sponsoring the opening art Basel party spending millions of dollars a year on out of home like opening retail stores and now I know exactly what not to do and I never would have been able to do that if we had just been an entrepreneur out of school but like everyone glamorizes building a personal brand having something when you're in your early 20s And it's like, I actually don't believe that's how you build longevity.

29:39Look at Amy Liu, even Jara. Like she was at L 'Oreal for years. And so I just love all of these big moves for women. And I also love, that's why I'm so happy that we have women like Seema on the podcast who like, yes, she was an entrepreneur, but she also went into Weight Watchers as a CEO. Like there is a way to be a leader in organizations and not have built it yourself. If that makes sense. Like one day we will hire a CEO for HSR. it won't be either of us no I'm fine with that I think we actually have the perfect dynamic right now though because we're going through a negotiation which we're going to be able to share with you guys soon and it was funny because my husband who's the chairman of our company officially was kind of like I think you need to let Katie do this like and there was a gut instinct inside of me that was like not that you can't but like I can do it better and that is and you can And I can.