Emma Grede, Mellody Hobson & Angela Ahrendts on inclusive leadership

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1:19When you see a founder that's able to build a business, create an infrastructure, employ people, put their kids through school. You know, that to me is what this is all about.

1:35That's Emma Greed, the co-founder of the Kardashian fashion brand, Good American. Emma shares some stellar lessons from her entrepreneurial successes with us in this episode. And later on, we hear from Melody Hobson, the president of Ariel Investments and former DreamWorks chair, who weighs in on DEI efforts, which, as you may have noticed, have been in the news of late. There's this sense that it is a zero-sum game in the society, that if someone's winning, someone else is losing. I do not prescribe to that. Our economy and our society has been built on the fact that the pie keeps getting bigger, and the greatness of America is that you had this middle class and others who could share in that over time.

2:20you gotta have incredible talent at every position it's like this huge push there are fires burning when you're going home can you believe it such an idiot and then you go back to this is totally going to be amazing there are so many easy ways i have no idea what to do sorry we made a mistake but you have to time it right oops working out of a three-bedroom apartment stuff that just seems absolutely nut balls 10 years later like well that's just how you do it we haven't made just how you do it. This is Masters of Scale.

2:58I'm your host, Jeff Berman. One of my favorite parts of our annual Masters of Scale Summit is when we get to witness incredible minds together on our stage. This week, we're sharing two of those conversations, both led by Angela Arendt. Angela's impressive career includes roles as CEO of Burberry and Senior Vice President of Apple. In this first segment, she talks with Emma Greed. Emma is the CEO and co-founder of the inclusive apparel brand, Good American. She's also a founding partner in Skims and creator of the 15 % Pledge. Let's head to the stage to hear Angela and Emma's conversation. I think what I love the most about Emma, which is why I agreed to do this, is because this is a founder, partner, investor, and incredible visionary.

3:49And I won't make her tell you how old she is because I think she's about half my age. So let's start with founder. Because in 2016, you revolutionized the fashion industry by coming up with a good American, an incredible all-inclusive concept. So did you ever imagine that it would ignite such a powerful shift? It started so many things that happened. And did you think that would happen? And then what surprised you the most after the fact? The short answer is no, I didn't. And I have to be honest because, you know, my background was actually, I had an agency. And so for a long time, I was a very frustrated consultant that kind of worked in this, you know, first generation of talent and brand partnerships.

4:36So I ran this beautiful agency that I started and I loved my job. And I really kind of, you know, crafted this company that sat at the intersection of entertainment and brand. And it was that first generation stuff where, you know, you'd see Natalie Portman as the face of Dior or Tom Brady as the face of Hertz. And I was there for that. And as that, you know, business progressed, what happened is I became known as the go-to girl for startups when they were looking for a talent to take some equity in their company. And after doing a few of those deals very successfully, you know, I was lucky enough to start Good American and I've started some other businesses in that space.

5:14And they've been incredibly successful, way beyond anything that I or my partners honestly imagined. And I think it's really interesting because honestly, I think we're just on the crest of a wave. I think in the next five years, we're going to see hundreds of talent or influencer or creator billionaires. And, you know, I still look at it as an almost imperfect model, what I do, right? Because nobody follows the rock to see, you know, him advertise tequila. You know, you follow him because you love him. And he also can't, you know, authentically speak to his audience if he is always talking about his brand projects.

5:48So I'm really interested in the future of my business, how you start to see talent, you know, own their data, become the network. And I honestly, I'm always looking at the future. I'm always going forward. And I start to think about what's interesting to me next more than anything. But I'm going to stay on founder for a second. Stay on founder. But as a founder too, you had to find investors. Oh, yes, I did. Ain't it the truth? So again, you've got a lot of founders in the room. So any advice on when you're pitching a new concept that nobody's ever done before, and you know it's a big opportunity.

6:26Yeah, I mean, how do you? Don't listen maybe to what they say. You know, I had come from a background where I wasn't an apparel person. I wasn't a founder for the audience that I went out to, right? When you have an agency, you're not necessarily who people are looking at to, you know, give millions of dollars to start a new brand that they have no experience. But I had a very strong instinctive feeling about what was needed and where the industry and the business was going. And that came from a personal need. And I was very, very clear about that. And I think all I could say is, you know, I have a rule that I don't take investors that I don't, I wouldn't want to have a drink with, that I don't want to spend time with, because you end up in these relationships that are really complex.

7:11They hopefully go on for years and years and years. And I did it all wrong the first and second time around. I'd love to say I learned the first time, but I didn't. And so I think that I'm at that point now where once you've had a little bit of success, you can be a little bit more choosy. But I do just keep that simple rule. And I think about that for everyone I come across, right? If you work with me or for me, if you're coming into one of my companies, you need to understand, you need to be along for the ride and the mission. And you really need to believe in what it is that I want to do. And so I think it's been a good rule for me.

7:43So it's probably similar because you're also a partner. You've got a portfolio of businesses. You have a tremendous amount of partners. And I read somewhere where you assess a partner by authenticity. And so not dissimilar as you're talking about investors. Is there any other unique attributes you look in for partners? I honestly, I think about people that want to go on a journey because what I've learned is that nothing that I've done has had a quick result. It looks like that and it may appear that way if you look at Instagram or whatever. But I think that I choose my partners very carefully.

8:15And I also choose my partners based on my own weaknesses. And I think that's the same way I think about building teams. I'm very acutely aware of where I'm good. And I think, you know, I spend an enormous amount of my time hiring because I know that bringing the right people into the right culture is what building a business is all about. And nothing happens on your own. You know, I get called like self-made all the time. And I think, God, I'm not self-made because if you knew the hundreds of people that work around me every single day. So I think about investors, partners, team building, all is the same.

8:48And I say that because I really do think the most important part of my role, aside from thinking about product development and innovation, is really like honing in on who are the right people that I'm going to do this with. And who do I want to spend that amount of time with, quite honestly, because you've got to be in it for the long run. Yeah, absolutely. Well, and I think that's why, you know, in the press, they call you a savvy investor. And no, but I love that. And I love the fact that you've been a founder. You've got a tremendous amount of partners, but now you're investing and you've always invested a little, but I'm sure at your scale now, you're making some big bets.

9:23And I think, you know, when you, you have an ethos. Yeah. And so take us on the journey just a little bit from an investor standpoint on kind of how you looked at it when you started out. And now at this stage, how do you think of investing and what's important to you? Well, you know, when you start out, your deal flows bad, right? So people would come to me and I had a little bit of money and I would just, you know, do that gut instinct thing. I think the further I've gone on in my career, my entrepreneurial journey as a black woman, specifically in this country, because I came here just English and I came here seven years ago.

9:54there is this sense of responsibility about leaving the door open right and about investing in people that might not otherwise get the opportunity I left school when I was 15 I'm not on paper someone that is you know worth taking a bet of hundreds and hundreds and hundreds of millions of dollars and so there's a part of me that has a sense of responsibility about who fits the mold of people that make sense for me to invest in um but also you know I'd be lying if I said I wasn't as opportunistic as anyone. I try to do what I know, but I've done a lot of things that I feel a sense of like, if not me, then who?

10:29And that really is my guiding principle. And you're incredibly instinctual though. Yes. I mean, I think in everything you do, where does that come from? And how do you hone that? I don't know. I think that comes from the streets. I don't know what else to say, but when you grow up in East London and you grow up how I did, you get this sense of instincts by just trying to keep yourself safe and ready, right? And there's a part of you that is always looking for opportunities and always looking to take advantage of a situation. And I don't think that that is different from how I think about things today.

11:05Maybe I've, you know, I've moulded that a little bit into trying to solve problems and specifically like women's related issues. But at the end of the day, I get a hunch, I get a feeling, I catch a vibe and I go for what I think is going to be right. Incredible. And is that how the 15 % pledge came about? Well, you know, I'd love to take... Tell them what it is first. Well, the 15 % pledge is a social justice initiative. And it was actually started by a... Who became a dear friend of mine, a girl called Aurora James. And it was essentially in the... We love Aurora. Everybody loves Aurora. But it was essentially started in the aftermath of the murder of George Floyd, when so many brands and so many people and so many prominent individuals were coming to pretty much anyone who was black and in a position of power saying, what should I do?

11:54You know, how can we help? And Aurora's point of view was you can help in a really meaningful way. You can actually put your money where your mouth is. And the premise of it is that black people make up about 15 percent of the population of this country. And we're asking brands and retailers all over the country to dedicate 15 percent of their annual spends towards black owned brands. and really at the root of that it's about demystifying the idea of who gets to be successful who gets to have a business because half the time you know and I really I really believe this in my core institutions brands are not racist right it's just what do they know what are those buying and merchandise departments come in contact with who do they know where do they find their ideas and so what we're doing is saying that you know black brands aren't just for black people in fact if you make an amazing lotion, then anybody can use that.

12:42And so the idea is about really thinking about how you usher in newness, how you can create, you know, new businesses in places that are maybe a little bit stale and not thinking about in that right way. And I think that pretty much anyone can get behind the idea of supporting small American businesses. And at the heart of the pledge, that's what we're doing every single day. Amazing.

13:11But, you know, you also have some of the most incredible minds in this room and founders and visionaries, et cetera. So how can they help? You know, there's so many ways that you can help. And I think that in this moment in time when D, E, and I is like a dirty word or a dirty bunch of words, I think it's really about thinking what kind of world do we want to live in and how do we make incredible companies that we can be proud of? And I think at this point in my career, of course, I'm obsessed with making amazing companies and amazing companies are made of amazing profits. But they're also made of doing things that whether the time is right, you know, the notion is right.

13:51And so I am obsessed with bringing people on this journey. And I think that one of the things that I've seen, we've created a 14 billion dollar pipeline of opportunity for Brack owned brands in this country. but the other side of things that we've done is created amazing profit and revenue streams for all of these businesses that have taken the pledge so to me it's just a great business proposition it's like how do you do more how do you better serve your customer and and that's what this is all about this is about infiltrating customers and communities that perhaps are overlooked and I think it just makes so much sense so we want more and more brands to take the pledge and I've been so happy with the results and the impact because you know the Pledge has been going for what, three and a half, like nearly four years now.

14:34And there are 750 brands on the shelves of Sephora and Nordstrom and Macy's and Bloomingdale's and everywhere else that just weren't there before. So when you see that impact, when you see a founder that's able to build a business, create an infrastructure, employ people, put their kids through school, you know, that to me is what this is all about. It's about taking what you know and taking your power and taking something that you do uniquely well and being able to say, okay, let's pay this idea forward. And if it's a business proposition, it's just a win-win all round. Absolutely. Well, and I think what you're sharing with a lot of founders and people in business is, I've always said the same thing.

15:11The focus is always on the P &L. Yes, it is. And why shouldn't there be a P &I? Why shouldn't we focus on the people and the impact they're making first? Because that's really what drives the P &L. 100%. Yes, it does. And so I think that, you know, the challenges as they're running and starting businesses is what is there? You know, you what is I call her a social visionary because who comes up with that? And 14 billion later. No, but it's absolutely incredible. So using your instincts and all of the things we just talked about. But I just think that in the future, it is a company's responsibility.

15:48And the larger the company, the larger the responsibility. 100 percent. Just like us as individuals. Right. Absolutely. So is there any, since you are such a savvy investor, is there anything, any sectors, any areas that you're looking at now that excite you? You know, what I'm obsessed with right now is women's sports. Like that's all I can think about. Obsessed. But, you know, I think about what I can do. You know, I always think about there being a time and a moment in culture when there are things that customers are willing to accept. Right. And we just happen to be at this incredible infliction point for women's sports.

16:29I've been watching women's sports for years. I live around the corner from the UCLA campus. And so women's basketball was a big thing. I take my kids. But again, it's about like, when is what you do ready to be accepted? And so I love this idea of like timing and culture aligning beautifully with what it happens, what I happen to be good at. And so that's a space that I'm interested in. Amazing. Any others? No, well, I mean, listen, I don't do what I don't know. I'm not here for AI because that's not my space. I'll let like other people in the room do it and I'll catch on like too late, you know.

17:04Do what you know, let's be fair. And then, again, because you are a founder and a partner and an investor and a social visionary, how do you think, and I would also argue that you're probably an incredible marketer. So, again, it's a very important part when you're launching a business and you're scaling a business. How do you think of marketing in this day and age? Well, you know, I think I am a marketeer first and foremost, right? That's what I know. That's what I understand. That's why I've built the businesses that I have. and what I can tell you is that whatever worked last year is not working now that's for sure right it's like there's no arbitrage in social media anymore and I think for a long time I built these very digitally native businesses that relied on you know whether it was Facebook in the beginning and then moving on to Instagram and then TikTok for like 25 seconds like that time is over it's done and the only thing that we can guarantee is that meeting customers where they're at having a business that solves a real problem and serves a real purpose.

18:03That's the only continued way that you can connect with customers. And when I think about the things that have really shifted my business, it's the initiatives, frankly, that I didn't think about. Becoming B Corp certified was a turning point in Good America. And honestly, I'd love to sit here and say I thought it was a really important initiative. I didn't. It was a cost nightmare and a time suck. It was like a complete, I just thought, what a distraction for a business that's two years old. However, my team really understood the importance of it. And it did two things. Number one, becoming B Corp certified taught me a lot.

18:35But for that group of team members that really spearheaded the movement, you know, they are probably the most loyal group of people that I've had in any company I've ever started. But they're the ones that are the boundary pushers and they're coming up with everything that is driving the company forward. And then you look at the customers because that team, those team members were smart enough to bring customers and the community along on the journey. What happened is that we created this like cohort of customers. I mean, they literally have their own data segment in my business. It's like we call them the Beacled Bees.

19:09And it's so crazy what happened within those two things that you ended up with this unbelievable team mentality and this group of customers that valued it so beyond anything else that it became the reason to come into this brand and make that choice over that one. And so it's not always the things that you think that are really going to move the needle. And from a marketing point of view, we never thought about B Corp in that way. It was like, how can we clean up what is otherwise a very dirty, pollution-inducing business? But it was something that actually I look at it now and it future-proofed our business in so many ways.

19:43And so it's something that I feel very proud about. Yeah, absolutely incredible. So final question. You've started all these digital native businesses, but you have a pledge that says get 15 % on the shelves. So how do you think about physical retail in the future? Oh, I am, I mean, I'm the most physical. I'm opening about a store a month at the moment. And that is really doing so much for our businesses because people are craving in real life experience, they're craving community. And when you ultimately are in the business that I am, which is apparel, right? however you want to dress it up, people want to touch and they want to feel.

20:22But more than that, they want the in-person interaction. And I'm so happy that we didn't think about retail as an afterthought. There is so much value to traditional bricks and mortar. There's so much value actually to partners in wholesale. And so I think that anyone starting a business to feel like in the beginning, you have to be so focused in one lane actually ends up stopping you a little bit. I I just say go, like go into the channels that make most sense for your customers and customers are everywhere. If you ignore anything, it will it will really stifle your growth. So I'm happy that I didn't do that.

21:00So listen to your customers. You know, not not all customers are sitting online waiting to discover your new amazing thing. Right. You have to catch a customer where they are. And if that happens to be because they're in Nordstrom shopping for something else and they happen across your brand, then be there. Right. Don't be a snob about it, because I don't think that's how customers think and it's not how they discover. And yeah, I mean, that is what is worth. That is what has given me the value and the valuations, quite frankly, that those companies have today. Yeah. Well, you're incredibly dynamic.

21:29You're agile. You're flexible. You use your instincts. You look forward. But any other advice for this incredible, brilliant group of people that you get? Yes. You know, I it's so funny because I always get asked for advice and I get asked for like leadership ethos. And I feel like, you know, as a 16 year old school leaver, for me to give this room advice feels like what? You know, it's like I missed that day at school. Sorry. It's the truth. I think what I know to be true is that as a person that has teams of hundreds and hundreds of people, what do people really want? right? And we're in a time when it's very difficult to tell the truth.

22:13It's very difficult. Like we talk about authenticity a lot. And I don't know that that is where the world is at right now. It certainly doesn't feel that way to me. What I try to do is tell the truth. And what I try to do is be really honest about my expectations, what I need from people, where we're going. And that seems so basic, but it's really served me incredibly well. And that means that, you know, when people want to come to work three days a week, that's cool, but that's just not for me. That's not the business that I run. It means that when people need to see themselves in a certain way, like you're going to get the truth and honesty from me.

22:50And it also means that, you know, we're going on a journey together and I'm going to be very open and sharing about what that means. And I think as a founder, just being who you are and being incredibly honest has just served me really well and it isn't really made for corporate america it isn't what my hr and people department like the most about me quite honestly they're like shut up don't say that and i'm like yeah but you know and i do think it's what's drawn people to me i do think it's what's enabled me to hire like the best in class people it's very straightforward you get what you see and nobody is in the dark ever and i think about you know companies we talk about transparency we talk about authenticity.

23:33It's like, just tell the truth and you'll never get in trouble. Incredible. Thank you.

23:43Still ahead, a conversation between Angela and the iconic investor, Melody Hobson. They discuss Melody's mission to improve financial literacy for young people, the importance of DEI efforts, and more.

24:07Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25. If you're ready to take your startup from idea to impact, then AWS is your launchpad. From data storage to machine learning to secure app hosting, AWS gives you the tech trusted by the world's fastest scaling startups.