How The Flex Company founder Lauren Wang disrupted menstrual care

0:00Scaling a business in the US can feel like a maze. Each state has its own payroll, benefits, and compliance rules, pulling your focus away from growth, which is why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert, plus Fortune 500-level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So, if you're scaling, make it simple with Deal. Go to deel.com. slash MOS and get up to three months free. One of the patterns I've seen over and over and speaking with successful founders is this.

0:40They don't wait for HR problems to show up. They build solid systems early on so their company can grow without tripping over itself. JustWorks is one of those systems. JustWorks is the human resources platform that helps you scale without sacrificing your team's needs. It handles automated payroll, benefits, compliance, even international hiring, so you can scale your team without slowing your momentum. JustWorks secures your hiring systems so they don't cost you time, money, or people, which is how you scale with confidence. JustWorks for your people. I was on this journey telling everyone that I met about my idea and asking for help and saying I was looking for a CEO.

1:27And I would be CMO. Lauren Wong knew that her idea for a new kind of menstrual product had massive potential. She wanted to create a disposable, flexible disc that could be worn instead of a tampon. But Lauren wasn't sure she could be CEO of a company. That all changed one day while she was out on a run with a dear friend. He said, you know, I'm starting a company. as you know, and I really want a female CEO. And I would love for you to throw your hat in the ring. I'm dead serious. And it was that moment I literally stopped dead in my tracks. And I looked at him and I said, you know what, Dan, I'm going to do this.

2:11And he's like, do what? I was like, the period thing. He's like, you're going to do it? Like, yeah. If you think that I'm good enough that you would hire me, I'm going to do it. Lauren did not look back. She founded the FlexCo in 2015 and has achieved impressive scale in the last decade. Flex period products are now available in more than 30 ,000 stores, including CBS, Target, and Walmart. And as we're recording this in late 2024, it's the number one seller in its category on Amazon as well. The Flex story is a phenomenal example of how you can disrupt an old-fashioned industry with newfangled designs.

2:51And marketing that isn't just unafraid to talk about taboo subjects. Marketing that leans into the real talk. You've got to 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. Ten years later, we're like, well, that's just how you do it.

3:25We haven't made it just how you do it.

3:30This is Masters of Scale.

3:36I'm Jeff Berman, your host. After her own health problems caused by tampons sent her down a research rabbit hole, Lauren Wong realized that menstrual products hadn't really gotten much of an upgrade in the past century. She knew she couldn't be alone in her dissatisfaction with the two main options, tampons and pads. But it was a complex challenge to turn her bold idea for a new product into reality. Lauren, welcome to Masters of Scale. Thanks. like many of the founders we have on Masters of Scale, you have a non-obvious journey to where you are. Can you talk about kind of where you started and how you began on this journey?

4:16Yeah. So I moved to San Francisco when I was 25 years old and I worked in tech and I worked in nonprofit. And through those two networks, I started meeting some really big entrepreneurs in the Valley. And, you know, I'm from a small town in Georgia and really never, ever wanted to be an entrepreneur. My family was food insecure at certain points in my life. I'm the oldest of five kids, the first to go to college. And in retrospect, it always seemed so obvious to everyone else in the room. Like, of course you thought of this. Like, it seems so obvious, but no one else was paying attention to this space.

4:51And I had this one really obvious problem in my life, which was I was getting infections from tampons every single month for 15 years of my life. Every month. Every month. That can't be comfortable. No. One week with my period and another week with an infection. Having an infection was extremely disruptive to my life, but I didn't really know that it was being caused by my tampons until my nurse practitioner in San Francisco said, I'm not writing another prescription for you for yeast infection medication until you promise to stop using tampons. But what are you supposed to do then? Is it pads is the only option at the time?

5:31maxi pads i'm like i can't run seven miles with a super plus maxi pad so i kept using tampons kept getting infections fast forward to 2013 i'm at a dinner with eight women and one of the women starts talking about this product called the cup there is a woman that was a nurse and she had just gotten back from nepal and she was working on a program there where she was basically giving menstrual cups to women in Nepal and teaching them how to use it. And it just sparked this curiosity for me. And all of the women at the table had switched to the cup. I'd never heard of a cup. I was like, a menstrual cup?

6:09What are you talking about? But they're talking about 12 hours and they were talking about the fact that it's sustainable and this and that. And I was very intrigued. That experience in my life sparked curiosity about the space that turned into this fanaticism that turned into this hobby that ate up all my time on the weekends. What does it mean that it becomes a hobby? Well, I'm just a very curious person. And I started by wondering, well, why are tampons giving me infections? Certainly there has to be a study out there. And I talked to different doctors and they all said, you're crazy. It was just that one nurse practitioner.

6:45Tampons are perfectly safe. You know, this is something wrong with your body. And my doctors from Georgia had told me that for years. I mean, this is 15 years. I tried really hard to solve this problem, but I couldn't find any research on the internet other than some old studies about toxic shock syndrome, which is something that you can die from, but you don't only get from tampons. And there was no other information about why I'd be getting other types of infections. And the more that I studied it and the more that I researched it, the more I realized There has not been any meaningful innovation in this space in nearly 100 years.

7:21In fact, the menstrual cup was patented by a woman in the 1930s who is a stage actress. It took until the 2010s for people to even hear about menstrual cups, honestly. And why? Well, first of all, there's not a lot of money in menstrual cups because it's a reusable product. And I think we didn't have internet advertising. We didn't have social media. And most fundamentally, periods are still stigmatized. And if you don't talk about something, you can't identify when there are problems. I think that stigma is why there has been very little research and funding for women's health. So we're in the 2012-2013 range.

8:05This becomes an obsession for you. How do you make the leap to this becoming a business? How do you figure out how to manufacture a product? What do you do? Well, at the time, Evernote was a thing. I had basically a digital notebook where I categorized it by all the different things I didn't know how to do. Product development, FDA, regulatory, finance, basically everything other than marketing, manufacturing, supply chain, you name it. And then I created a second list of all the smart people I'd ever interacted with in my professional life. And I started working at IBM when I was 19. So I collected like a long list of people through the years.

8:42And then I made a third list of email addresses. And I typed up, you know, I have this idea. I want to make a new period product. And I'm really looking for, and I would have a very specific ask, someone with expertise in supply chain. I know nothing about it. I need to make my first financial model. I need to know about Cox, right? Yeah. Cost of goods sold. Right. And I think part of what's fascinating about this is while the network that you had accumulated from 19 forward didn't directly have the expertise by putting the asks out there and by exposing, like, I don't know what I'm doing, but I want to figure this out.

9:20You're then looking for those second and third degree of connections. And by maintaining these relationships over time, they're willing to help. Yeah. I found one of the biggest hacks, which was people can be flattered that you ask for their help. And especially if the ask is very specific and especially if the ask is very time bound. I would love to talk to you for 10 minutes about supply chain manufacturing because I'm building a financial model. I was just very clear and specific. And that turned into him saying, you know what, if you can come to Portland, I'll meet with you for a weekend. Right.

9:56And so what often happens is people say, can I get a half hour to pick your brain? And And it's like, I don't have a half an hour and pick my brain about like, right. It's like you want to be helpful, but like it's too generic. Yeah. So by being specific, it sounds like you got an outsized return on these asks. Yes, I did. And then everyone that I met, I would tell about my idea. But the most important thing I'm not telling you right now is I didn't want to be the CEO. Why not? Number one, I didn't think that I could. Number two, when I quit my tech job, I had the two people who I still love to this day, we're very close, who were both in C-level positions, pull me aside and say, you're making a huge mistake.

10:40You haven't ever even been CMO. How do you think you're going to be CEO? So you should go work for a very small startup first, try to get a CMO job, and then you'll get to see what it's really like to work at a super small startup, which in hindsight is fair advice, I think, for a lot of different people. But I was absolutely gutted when separately they had told me this. And they since have come back and like apologized. But I understood that they were coming from a really good place. So I had self-doubt. I had the people that I trusted the most professionally reflecting back to me my own self-doubt.

11:18So I asked two separate men who were each running a billion-dollar-plus, multi-billion-dollar company, if they would be CEO of my company.

11:32And they smiled. They laughed and they're like, you are completely capable of doing this, Lauren. but I still didn't believe them. Wow. So, I mean, Reid Hoffman talks a lot about jumping off the cliff and building the airplane on the way down but there's sort of a modified version of that where you're staying in a job so you haven't fully jumped off the cliff. You're like leaning over the edge of the cliff starting to build before you go. What gave you the confidence to leave a job where you had a steady salary, where you had benefits, etc. and go all in on this idea? I didn't feel that I was giving it a fair shake.

12:11I felt like the risk in me not trying to create a period company would be worse than the risk of me trying to do it and failing. And by that I meant I felt deeply pulled from a moral imperative that I need to do this to serve others. And I grew up in an evangelical household. This probably has something to do with it that I always thought I was going to be a missionary when I grew up. And I'm no longer an evangelical, but I think that foundation for me ties into what I want to do for society or what I believe is my place in this world is to help other people. And so I really didn't feel like I was doing right by society, doing right by women to work on this as a side hustle and try to play it safe.

13:09I felt like I had to go all in. Otherwise, I wasn't giving it a fair shot. Before we keep going, Lauren, for anyone who isn't familiar with it, could you just explain what the Flex Disc actually is? So the Period Disc is not a cup. It's not a tampon. It sits in a different place in the body. So a menstrual cup and a tampon sit inside the vaginal canal where there's a lot of nerve endings and you can feel it. The menstrual disc or period disc sits further back around the cervix. So in a place where a diaphragm would sit. And what's great about the disc is you can wear it for up to 12 hours. it holds five super tampons worth of fluid which is more than any other period product format on the market but my favorite part is when you go to pee it self-empties you don't have to take it out a menstrual cup when it gets full you have to take it on empty when a tampon gets full and you have to change tampons very frequently or pad you have to carry multiple products around with the disc you only use two disposable discs per day because you can wear it up to 12 hours because you wear up to 12 hours.

14:20We also make a reusable version that you only have to take it out once a day. So it's a set it and forget it. You feel like you're not on your period. The reason we went viral to begin with is because you can have mess-free oral or penetrative fun while on your period. I think we can say sex. We can say sex. I don't know. Like TikTok's on me these days about that. Okay. We'll call it fun. Okay. Mess-free fun. So, Lauren, you've got to figure out product development. You've got to figure out supply chain. You've got to figure out distribution. I mean, the whole list of the Evernote notes, right?

14:55But also funding, right? And a lot of the entrepreneurs who we speak with, founders we speak with, who are women or are building products that are disproportionately for women, run into a bit of a challenge because most of the capital in this country is controlled by men. How did you get your first round of funding? How did you get the company off the ground? Well, if you're making a physical product and our product, our first product, the disc required a custom manufacturing line and space in someone's manufacturing facility and labor and all of these other things. Right. And so even if you have a product design, you still need the raw materials and you need the actual machine in our case, because it's all patented, needed machinery to be able to build it.

15:41So we're talking over a million dollars. But when I would go to talk to investors and show them my financial model, how do you know that people are actually going to buy this thing? And it was this chicken or the egg problem. How do I demonstrate demand before I can even make the product? And that was a whole problem to solve. And I've had so many entrepreneurs ask me that question. And I said, this is your I always say it feels so unfair. this is your first challenge and I know it feels like the hardest one but if you can't solve this problem you're not prepared to be an entrepreneur so I went through a lot of different machinations to solve that problem and in the meantime I moved in with my boyfriend I put my apartment in San Francisco illegally on Airbnb I got caught and almost evicted and at that point I was very close to running out of money.

16:34So since I had been working at IBM since I was 19, I called Vanguard to cash out my 401k. And the woman, I will never forget, the woman on the line was begging me, please don't do this. It's such a big mistake. And I said, I don't have any choice. I'm out of money. And she was just like, you're going to pay more than half of this in taxes. I'm like, I don't have a choice. Like I have a product designer. I have to pay. I have things I have to do. Lauren cashed out her retirement and placed a big bet on herself. We're going to hear more about how that bet paid off in just a minute.

17:13Real 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.

18:03And here's the best part. Join AWS Activate today and you could score up to$100 ,000 in AWS credits tailored to your stage and network. Go to aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one.

18:47So if you're scaling, make it simple with Deal. Go to deel.com slash M-O-S and get up to three months free. Welcome back to Masters of Scale. You can find this conversation and more at the Masters of Scale YouTube channel. Even after draining her 401k, 401k, Lauren needed more investment to get her business off the ground. A lot more. So she applied to participate in Y Combinator, the renowned startup incubator. At that time, Y Combinator was being led by Silicon Valley legend and now founder of OpenAI, Sam Altman. I got the interview and I interviewed with Sam Altman. And I remember Sam was like, I don't know a lot about periods, but it seems like a really big space.

19:38And it seems like there's not been any innovation. And I think you're going to be the person to do this. Wow. And that vote of confidence from Sam was just, it was incredible. Yeah. What did you learn most from the Y Combinator experience? To do things that don't scale in the early days. Can you give me an example of that? Yeah. So I think the best example I have of doing something that didn't scale, we had a limited production run of product and we did not yet have our FDA clearance. We knew that the product was going to be FDA cleared in the US, but we didn't have it, but we had it in Europe.

20:16And I had this waitlist that I had created for the product where people just gave me their email address and their home address. And then I said I would send them, you know, two menstrual discs, two flex discs. So I had this massive list of all these consumers that wanted the product, but I couldn't mail them anywhere. So speaking of doing things that don't scale, what we decided to do at the time, Iceland Air, it was like wow air, had really cheap flights. And so we bought a flight to Iceland for, I think, 200 bucks, three of us. We had suitcases and suitcases full of menstrual discs. And we flew from city to city on budget airlines, got an Airbnb, hand-packed samples, and then schlepped these giant bags to the local post offices, mailed them out, and then hopped on a flight to the next one.

21:07We're traveling with like 20 ,000 or 30 ,000 discs, which are about this big, right? The size of like a silver dollar, maybe a little bigger. No, this, well, I don't know. How big is that? For people who are listening. People are listening. Yeah, it's maybe. It's the size of a friendship bracelet. Okay, great. Perfect. Because that's what I was telling customs that I was shipping friendship bracelets. Amazing. I literally could not think of anything else. And I didn't remember that you had to fill something out on the form. And so I'm like right in front of the postal worker. And he's like looking at me, filling out this form.

21:40It's like, he's like, what are you mailing? And the people that worked in the postal office were not happy to see us. I mean, we would have duffel bags that are about, you know, five foot nine, more than half the size of my body, full of these different packages coming in. And, you know, each postage is a very small amount because friendship bracelets are quite light, it turns out. So it was a lot of work for them without a lot of money. And it was quite awkward. There was no stamps.com for you to go print all this out and just go drop it all off. No, absolutely not. and the mailboxes were not big enough.

22:12So we went to, I think, seven different cities and maybe eight days because we were in the middle of YC. We had to go back to YC. But it was enough to be able to demonstrate the traction that we needed to by the time we got to Demo Day. Demo Day. It's the high stakes capstone event of Y Combinator. Each startup gets a chance to pitch their business to an auditorium chock full of eager venture capitalists. They put me on stage second. out of just under 100 companies. And I loved that. I was so excited. And I wasn't sure how investors would react. There were a lot of gasps in the audience. And we get off stage and they kind of usher you into a hall.

22:57And, you know, if you have any kind of a physical product, you have a little table set up. And so we had a table and I had my little Gina, I call her my anatomical model. Not Gina, Gina. Gina of the female reproductive system. and the doors to like this hall, it's like a, imagine like a big conference hall, right? And there's like 50 companies in there. The doors open, this herd of investors literally runs in and they rush over to our table and I'm absolutely mobbed. Like people are like elbowing each other to come and talk to us. I have this guy walk by, go, I'll give you 200K and walk away. and someone was like that's steve cohen and they're like no way and then someone else goes i mean these are all big vcs someone else is like did you plant do you know i'm like i've never met him in my life but i'm just trying to talk to all these so the gas from the audience are not people being like i can't believe she's talking about this they were like holy crap like this is a massive market and she's just come up with the solve for the the innovation that we've been lacking for a century.

24:06I don't know. Maybe a little bit of both. But I would imagine being a demo day, especially if you're an investor, and this is summer 2016, that you've, you know, gone to demo day for the last 10 years. And all of a sudden there's someone on stage talking about vaginas. Like you're probably a little bit shocked. And YC has since done a lot of things for women's health. And we weren't the very first either. It was just a little bit more unusual at the time. Yeah. Okay. So you get through demo day, you raise some more money. Is it smooth sailing from there? Oh, just easy breezy. Where did you hit some bumps along the way?

24:40So originally we launched direct to consumer as one did in 2016 and Facebook had just been doing their marketing for a few years, but there was still this kind of arbitrage online, you know, to do online ads. You could buy Facebook and Instagram incredibly efficiently and get put a dollar in and get three, four dollars out. It was like an ATM. Yeah. but it's really hard to hire people that know how to do that. They're all in demand. And I didn't know any of them. And I was still trying to figure out all the other things about running a business. So it took us a little while to get our actual marketing engine running.

25:16We did end up hitting a pretty significant like multimillion dollar revenue number in our first year, which was really exciting, but we didn't have like a repeatable scalable marketing engine at the time. So that was kind of the initial roadblock that we had. The next roadblock that we had was we kept hearing from women that they don't want to wait for their order to come. So one of the things that I've learned that I still learn every single month is we don't know when our period's coming. It comes every 28 days. I'm always surprised. I run a period product company. I don't know when my period is.

25:53So I kept hearing from customers over and over, no matter how quickly we could kind of figure out the shipping, that they didn't want to wait, that they wanted to just go and buy their period product at the store like they normally did. I want to go do my Target run. I want to get my Starbucks. I want to buy all my other stuff and get my FlexDisc. So trying to figure out how to break into retail was extraordinarily challenging. And now it's far more common for startups to work with Target or Walmart or CVS But in 2016, I didn't know anyone else. There were only legacy brands there. Right. So Procter & Gamble and Unilever basically controlled the shelves and you're pitching a new product that they have no reason to believe is going to move.