Building A Beauty Empire - Natalie Mackey - Winky Lux - Episode #60

So we kind of piv. We just pivoted. We shuttered the marketplace and went full boat into, into the brand. And then we got a taste of like, the most competitive industry in the world.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys.

Today's guest is a serial entrepreneur and brand builder. She actually began her career in finance, but soon transitioned to entrepreneurship. She started her current company, Winky Lux, in 2015. Winky Lux redefined the beauty industry. They've been celebrated for using ethically sourced ingredients, ensuring products are both high quality and responsibly made. After growing the company for the last decade, they sold the company to a private equity firm. Last year, she just hired a new CEO and she stepped into a creative director role. Please welcome co founder and former CEO of Winky Lux, Natalie Mackey.

So great to be here.

Very excited we're finally doing this. We had to move this a couple times, but I'm, I'm very excited. Let's jump right into it. So first, first question. What is the one thing that you've done, big or small, at Winky Lux, that had the biggest impact and you do again if you're CEO of another company in the future?

The biggest thing that we did, we did a lot. There were a lot of tentpole moments throughout the company's history and they were all different throughout different eras of, to use the Taylor Swift term, the different eras. Super startup, scalable startup, PE backed business. But the thing that was probably the most transformative for the team was really getting very specific about our core values and putting them down on paper. We were sort of obsessed with core values at winkylux and we do things like we wear bracelets that have the core values on them. We represent each one with a stone. We're kind of, we're kind of culty and nerdy about it and. But it's, it's a big deal and it helps us when we're making fast decisions or making a lot of decisions at once. It helps us give us a North Star to, to constantly move towards, like a bigger, better company.

When you say write them down, was that like day one before you hired anyone or did that, did you do that later?

It was later. We had, we had these kind of cheesy we believe statements on the wall when we first started. And that was really just my core, my co founder and I talking about what we wanted the type of employee to be and what kind of business we wanted to build. We'd both built businesses before this, and we were pretty specific about how we wanted to build this one.

But we really didn't hone it down until there was a moment when the business was growing a lot faster and we felt like we were getting out of control there. There were new people coming in. It was getting to a point where we didn't have as much.

Intimate knowledge of, sorry, my dog is in the background, just, just walking around. He just jumped on the bed there. We didn't know people as well. Like, there were people who we might not really. We definitely didn't know their last name by heart. You know, that type of thing where you go from like a tiny startup where you, you spend a ton of time with everyone to a scaling startup where you start to hire people. You may not even, you may not have even met everyone that you've hired or maybe you've met them over a zoom call for five minutes. And so that was when we really decided to get like hyper specific about it. And that I think has helped us, you know, with a pretty small team, really grow the business.

When you, how many values did you, did you have?

We have five.

Five.

Five. Yeah.

When you talk about like the bracelets, I'm curious. Like, I love those. These examples are what I actually love because I think it gives people ideas of the level that you can take it to, you know, so you talk about like the bracelets how. Or the stones. Like is that you give that to every employee. Was it like for a special occasion? How did you do that?

We gave them at an off site and then we give them to new employees. So we gave them all to employees at an off site. They're just little, little stone bracelets that have the different. So we have pink tourmaline, we have a diamond, which is our, you know, our most precious, which is crown the customer. We have internal entrepreneurship.

Which is like aquamarine stone. It's just a really, it's really cheesy when I say it out loud. It sounds crazy, but it really means something to people, you know, that they, that were thinking about this all the time and, and, and people wear them all the time to, to events and things. Like, you don't have to wear them. There's no like rule. But they're pretty and people do enjoy them.

And you know, we, we have some guy employees.

And even they like, they'll say like, oh, you know, my wife or my girlfriend or you know, has been wearing it all the time and you know I keep it on my desk. So we've, we've. We give it out little actual stones like little paperweights. We with the stones before too. So.

I love it. I, I love it. Honestly. I, I think for me, you know we had a bunch of. And all the companies I've been a part of, we've had values and at BetterCloud we had values and it actually like a real turning point was for us was we did imagery for each value. You know, we had humble yet hungry and the val. The. The image was like a apple pie, you know, kind of like. And then we had another one that you know, it's like strive to delight. And it was a really cool smiley face. And once imagery we started doing stickers with it. We started putting on the wall and I think to the same thing. It's just it. I don't know, it manifests, you know, kind of embodies the, the values in a different way than just the words. And you know, I think that I do, I do think it makes it more memorable.

Totally. And we talk through what would, what does this actually mean specifically? What would we, you know, what, what is this? How does this truly.

How does this manifest in a day to day business operations like fire a top performer for not embodying one of these values? You know, like we, and we talk to the team about that. Like what would. What would be something.

You know, that we, we wouldn't tolerate. So I think, I think it really does bring it to life.

You know, do you, do you bring those values into the interview process somehow?

Yeah, we, we always put them on our job descriptions when we're looking for people. And then we talk through and there are a lot of really smart people who wouldn't be the right fit for the company. You know, there are a lot of really smart people who first and foremost we're remote. First company, we have a small office but we're. Most of our team is remote. And so we have. Internal entrepreneurship is a really important one for us because we have to hire people. You could be an incredible person, but really need the structure of the office to make your. To get the most out of your performance and you wouldn't be the right fit for that business. So creating that sense of understanding of like how we operate, how we do things, lead with beauty is a big one. Even our debt. We're a branded company. So everything we do is about brand beauty companies in general. At their core, marketing companies and even Our internal decks are really pretty, so. But it really, it bleeds out into what the customer sees. And if the customer isn't buying into a specific feeling, she can go to one of five bazillion beauty companies out there to get a similar type of product. So there. There has to be something really special about what it means to be part of our community and what, what is unique about the brand. And making sure that everything has, like, an aesthetic bench to it is important to us. So even our, Even our, you know, like our welcome packages and our. Our internal. Even our. We joke because our spreadsheets are pink and purple instead of blue and green.

Seriously? Oh, my. Yeah, you really take it all the way through. I love that it's such an easy.

Swap, you know, and. But it's. It's like, it just makes a difference, you know, you're putting it into a big deck and it really feels like it's part of the culture of the brand.

So in the interview process, like, is there. You're looking for the values? Is there for you? Specifically when you're interviewing, like, is there an attribute that you're looking for and trying to get at?

Yeah.

We can identify, usually through references or through work projects, we can identify someone's tactical skill set. Typically, you never hit a thousand, you never hit 100%. Right. But you can get pretty close to the tactical skill set. The part that I find a little harder to train on is an innate sense of empathy and humility and a kindness that isn't always prevalent in some company cultures, particularly in beauty. Some of the larger companies are known for having sort of a, like, a mean culture. The startup community is actually known for being super collaborative and really.

Really very.

Kind and empathetic. That part I think we. We have to sort of flesh out by just getting to know the person a little bit. Like, understanding what kind of, you know, how they would look at their coworkers, Would they sort of assume positive intent? Would they. Would they. Would they come with curiosity as opposed to.

Everyone knows that person who, like, needs to always say they're too.

In a remote first company and you're on zoom. I mean, that person can really be a downer in a meeting. You know, they've got to put their, like, little nugget in every time you're like, we're trying to get to a goal, like, let's work together. We don't need to hear how smart you are. So that's a. That's a. Something we try to flesh out.

So I want to I want to pivot a little bit to just the business itself. I mean, you. The company has gone through a number of iterations to get to where it is today. Can you give me maybe that history so we have context? Because I have a bunch of questions from what I've read and. But I'd love to kind of get the context of the journey of the. Of the company.

Totally. So we started 10 years ago. I'm sorry, my dog is trying to jump up on me. Put it in my lap for a second. So I hope this. Hope this is okay.

It's good. It's good. Oh, my God, I love it.

He's a good boy. He's a needy guy. He's the neediest guy in my life.

The. So we started as an. Originally, I had been in. I had been in finance, and then I'd been in a consulting practice that helped, like, high. What we called high equity brands leverage their brand equity. Sounds crazy. Sounds so like, corporate speak. We helped really cool brands create more profitable streams of business, if that makes sense. So we help them do things like ipod case or iPad cases and things like that. IPhone cases. And we did a couple of beauty deals, and I got really interested in the beauty industry. And so when I left that business, I consulted for about a year as I was figuring out my next thing and my business partner, my current business partner, who I've known for, oh, my God, it might be 20 years now.

We decided we were going to go into the beauty industry. And at the time, marketplaces were a huge deal. And everybody was talking about marketplaces. It was inventory light. It was really hot. So we decided to create a marketplace where we had a proprietary quiz that would tell you what beauty products to buy. And we worked with big beauty brands to be an affiliate. During that time, we saw a lot of white space in the market, particularly in the space of products that looked very luxurious but had a more affordable price point. And we were looking at search traffic that looked like this was sort of pre dupe culture. Right now in beauty, there's a huge sort of subset of beauty which is called dupe culture, which is like a dupe for a really expensive, great product. But this was before that.

Like a copy.

Like a copy copy of it. Yeah. So you might have, like, the Charlotte tilbury has a $60 flawless filter foundation product, and then elf will come out with a. Basically a replica of that for $14. And it's like sort of known dupes, and that's okay. And people. And dupe culture is a really big thing. And it's just sort of known in the beauty industry, so.

And then it's like, you know, you're looking surprise, but it's like that's just. That's how that that industry works. And. But this was before that sort of became such a big deal. And we were seeing a lot of search traffic and we were talking to a lot of our customers and they kept saying, I really want this product, but I can't afford it. I really want this look and feel, but I can't afford it. And we did a qualitative, like, focus group where we just had people and it was so sloppy. I mean, this was like we were just throwing stuff on the wall to see what would stick. And we had these girls dump out their makeup bags and they would say things. There were a couple of tells that they said, which were, oh, I just got this because I ran out of my good stuff, or that's really cheap, but it's actually really good. Well, in the beauty industry, there's also sort of like a. An open secret that there are a few. A lot of products are made by the same people. They're made at the same factories. So they're. The quality level at mass is actually quite good. Yeah. Look, and it's not. It's all. It's not all, you know, exact for exact. There are ingredient differences, but price does not necessarily. It's. It's not a linear correlation with quality. So brand is really important and packaging is really important. And where the mass market was really messing up is. I mean, the best example is like you can get a $2 eyeliner or a $30 eyeliner that come from the exact same factory that are the exact same. Eyeliners are more extreme example, but they're. They really only a few companies that make them and they're basically the same thing. So.

You know, but one will usually be packaged really beautifully, look really beautiful, and make you feel really good when you open up your makeup bag. So we saw this white space in products that had better packaging that looked really pretty. And they also needed to have clean ingredients, which was becoming table stakes across the industry at that point in time. It was sort of new ten years ago, but it was coming fast. Like, people talk about it like it, you know, it, It. It's more recent, but it was, you know, it. It was happening 10 years ago.

So you needed to have a really strong blacklist. You needed to have really beautiful packaging, and it needed to be in this like, accessible price point which can be done so we ended up doing this little brand called Winky Lux. And it was like an art project. I was a frustrated artist. Had I been a trust fund baby, I would have been an artist, but I wasn't, so I had to work. Unfortunately for me. Um, and they. So we created it. We had. The brand was like a holding name. It was named after a dog from a movie. It was almost like a little side hustle thing that we were going to put into the marketplace to help fill these holes. And what we started to learn, the more and more that we got into it was people weren't really solving a problem with shopping for beauty online. To this day, online beauty is still like a very small percentage of the industry. And our quiz was giving them some guidance, but it really wasn't solving a major friction point in the way that it does in safe fashion. Where in fashion you have to go take your clothes off, you have to go to a store. There are sizing issues, fit issues, like fabric issues. There are all kinds of problems. There's no consistency across platforms. And people really hate shopping for clothes. A lot of people really hate shopping for clothes. Not everybody, but a lot of people with beauty, people find it, sorry, my dog is literally like tapping me on the shoulder to hold.

Buddy, we got to get a stop.

In beauty, people actually love it. They love the shopping experience and it's a pleasure for them. So the discovery is fun. People talk about, you know, going to Sephora is their therapy. We just weren't solving a big problem. It was just kind of like, it was cool. And it was like a very, you know, cool thing to talk about at the time, like these marketplace ideas. But the reality was it wasn't that exciting. It wasn't long term exciting. And I think that was a good lesson for me because at the time, you saw so much funding going into marketplaces and you, you're familiar with the VC community, there's like a real herd mentality that, you know, this is the hottest thing. Everyone's got to do this, this is the future, this is the future. Until like two years later and they're like, oh, forget that. We, we never liked that. We like this new thing. You know, we never even said that. So there's like a kind of funny.

You know, bright, shiny object like herd mentality, like they all run the same direction. And at the time, marketplaces were massive. Everyone was talking about it and our advisors said, like, whatever you do, just don't go and start a brand. But the customer was telling us that this is what they wanted. They actually really liked Winky Lux. They were really interested in it. They thought it was really cool. They were sort of gasping when they would see the product. And it was a very fearless brand when it was greened up because it wasn't our, we didn't have so much writing on it and it looked really different. It was very differentiated from an aesthetic perspective. And so we kind of pit, we just pivoted. We shuttered the marketplace and went full blown boat into, into the brand. And then we got a taste of like the most competitive industry in the world. Oh, but. Which has been fun, but also like, you know, I don't know, we, you and I talked about this. Like the things you do when you don't know. When you're like more naive.

Yeah. Yeah.

Well, it's, what's, what's interesting to me when you talk about this that I really.

I really like is the time you spent with the customer. You know, like when you, when you talk about like what is it that they really enjoy? They enjoy. They wanted to go to the store. So marketplace sounds good and that's like a generic theoretical thing. But then when you get to the actual customer, that, that's not what they actually wanted. They wanted to go, they wanted to experience it, they wanted to do all of that. And I love that just of the focus group people dumping out the, the, I, I can imagine it, you know, and I, I, I love that, you know, I, I talk a lot about, a lot about like I think founders have to spend time with their customers, but not just like actually this raw time with the customer is where you get the most insights. You know, I had a guest on here who said he's got a software firm, Property Managers. And he said he, he went and followed around Property Managers using his iPad app and he's like the guy, he literally said, he's like the guy had huge fat saus and he couldn't press the little buttons we had in, in the app. And like he's like, a lot of these maintenance guys had big fat sausage fingers and we made the buttons really, you know, but, but there's something about like being there and seeing it and feeling that's very, you know. So I, I really, I think that's a really.

It'S a really good call out.

Thank you. Yeah. The best things that we've ever done in the business have come from deep consumer.

Like just paying attention to the customer, you know, like just listening to what majority of our customers wrote. So I always refer to them as she. But we have, we have lots of wiki customers, girls, boys, they's. We have all, all the, all the different types. But even when we launched in retail in 2020, we launched a Target and.

We built out this like bizarre, crazy display stand. And it was like my greatest art project. We won all these awards for it. It was like really wild looking. And we put it in every Target store. And then I went and sat at the, at the, the Atlantic Station, Brooklyn Target, which is a really high volume Target. And the beauty section is across from the.

From the clothing section. And I like hung out, like found a little place to sit. I almost got kicked out. I was there all day, just like creeping on, people interacting with the display. And it became really clear to me over that sort of three or four hours that I sat there just watching humans interact with the display.

I hope someone's listening to this. That was there that day and was like, weirdo. He probably thought I was like deranged, just, just sitting there watching people. But really what was interesting is people kept walking, they would get, they would stop. We had these neon lights on it. They would stop, they would get really interested in it. They'd walk over and they would look so confused. Like it was a really confusing display. You couldn't understand what we were selling. It looked really pretty. It was like, wow, what is this place? What is this thing? And then they would like pick up a product, be like also confused, put it back down or like walk away with maybe with it, but not quite. You know, I saw a lot of like picking things up and kind of being perplexed and putting it back down. And that like changed the way we merchandise that display to make it a lot more shoppable, to make it a lot more clear. Because, you know, and I think too, you have to like, just put a little bit of ego aside. Like even sometimes things that look really cool, like an industry thing. We were written up in all kinds of industry magazines having this like super innovative display. But like the thing didn't work, you know, like it didn't actually serve the customer in the way that she needed to be served.

It's a great story. That's a great story. I think that's, that actually that embodies everything. I'm talking like, that's, that's the thing, right? So you got to go out there, whatever out there means in your particular field and be there and be in the field and be with the customer and watch the customer and observe. So I, I like that a lot. So so you, your business has been through pretty much every stage, from bootstrapping to venture back to pe owned. I mean, literally everything you can do.

Did you. Let's start with the bootstrapping. Did you start out purposely not raising? Like, did you, did you want to run the business that way? Or, or was that because you couldn't raise money?

No. I love it when people are always like, I loved bootstrapping. It was so great. I'm like, who are you? Bootstrapping is hard. It's hard. You're. We're living in New York City. You know, even, even living in like a one bedroom in Manhattan is outrageous. And watching my savings go, you know, from like here, like, just. It was crippling. And we were in it and we were really starting to grow and it took us a long time to raise money. I mean, the reality is I don't know any founder. I have huge founder community. I don't. I know a few founders who are in very, very.

Topical industries for their moment. And they had, they, you know, had preempted rounds and things like that. We did have that with our Series A because we were growing so fast. But our, our like initial seed round was so hard. We were out there like hitting the pavement for a long time, really meeting with lots and lots of funds. It's also not, you know, I, I avoid leaning too far into this because I think it distracts sometimes, but the numbers just don't lie. Like, female founded companies raise about, you know, every. For every hundred dollars invested in venture, two of those dollars are invested in a female led company. So that's not really self selection. I mean anyone who understands statistics would say, like, that is systemic bias. We got through it and we were able to raise a lot of venture capital, but was always, we always met with. I, I felt like I was meeting with 10x the found the funds that, that my, you know, and then that my competitors were. But the reality is like, the more and more I know, you know, I'm in a YPO chapter, I have a big beauty. I lead like an independent beauty group in New York.

The more and more, I mean it, the more and more I feel like some of those stories are like more. They're more lore than they are reality. Like, it's.

More fantasy than reality. Like, everyone I know has had challenges in fundraising. If they'd gone this sort of traditional fundraising route of like, I'm gonna go out and, and you know, it now it might be different if like your dad runs a massive bank or if you're, you know, if your co founder, you know, had a, you know, billion dollar exit, you know, there are lots of, of special situations and then there are businesses from time to time, they're just so topical. You know, a few years ago that was really like the AI space. Right now we still see a lot in health tech, although I feel like everything softened. But you know, there, there's like a, the market dynamics affect fundraising a lot. I think more so than people ever want to talk about.

I, I've talked to a couple of women founders who have had, you know, the same discussion actually about fundraising and the challenges, you know, around that. Did you, was there anything specific you felt in the process or.

You know, because I've heard some interesting stories. I'm curious if there was something specific you felt or seen.

There were a lot of, I think that this, the rumors are true.

Female founders are generally over advised and under invested in.

Over advice, over advised and under invested in.

So a lot of people who wanted to be helpful, a lot of people who are very kind and nice and you know, we didn't have like horrible experiences, but we, there were, there was. The one that always just like grates me is like, I've got to ask my wife and it's like, well, buddy, do you fucking run a fund or do you not fund? Like, I'm sorry, but like, can you imagine a woman saying like, I got to go ask my husband if he's ever used this product? It's like, are you investing in this category as you are? Did you raise money from institutional LPs to invest in this thing? And, and you're relying on the, on like the whims of a very wealthy woman who lives in, you know, Palo Alto to tell you whether or not this is like the, and I'm no insult to their wives. I mean, their wives, amazing stages for customer demand. But the odds of like to rely on one person to get a sense of like market demand is just as bizarre. And I, I think that there's, there's a little bit of like, I, if I could say one thing to like mail run funds. It's like, just don't say that. Just, just be like, we need to do worse, even if you should go ask your wife too. But like, like, just we need to do more research is, you know, on market demand is just a better way than just like, let me see if my wife uses this product.

It's like, okay.

So, so each round, you know, so going from bootstrap to, to venture to private Equity is, is obviously very different.

For you as a CEO.

Is there a way to kind of describe the differences for you kind of at each of those stages? You know, how did your role evolve? How did, how did. Yeah, because I think not a lot of people actually go through all those stages, to be, to be honest. So it's actually.

I think it's very interesting to see what, what is it that they, you know, that, that, that kind of. How, how does the job change?

Yeah, totally. It changes a lot is the short answer.

We. In the beginning, my job was to do everything to be the leader and the janitor and the graphic designer and, and the copywriter and the pathfinder and the fundraiser and everything. So really Swiss Army Knife.

And then as we started to scale and then, then we got a couple of like generalists in the company and we started to get very, we started to get more efficient. And then as we started to scale my role, and particularly when we started to raise venture capital.

My role really shifted into, I'd say 30% of my time was fundraising. And most of the founders I know who are on the venture. I mean, venture has a really specific.

Curriculum. That's probably, that's probably not the right word, but I, I find that to be the only word I can think of. There's, there's a curriculum that you're on if you're raising venture capital. There's a timeline that the fund is on where they have to return that money. And you need to be in the phase of, you know, raising and then raising again. And the bigger the business is getting, the more we're in an inventory heavy business. So there's a working capital need always. If I spend a dollar for a piece of inventory and I sell it for $2, but I don't get paid for six months, and then in the meantime I've sold two pieces of inventory. Now I'm out $2 before I even see that first one come back.

So that working capital cycle is really complex and you need, and even if the business is profitable, it continues to eat cash as it gets bigger and bigger. So you need to have either. We were lucky to have like good credit lines that we could lean against and we had backable customers like Target and Ulta. But you need to kind of understand that and you need to be fundraising pretty much all the time. So if you're on that venture cycle, and that's why I don't think ventures for every business, I really question whether or not it's the right.

Financial investment tool for A lot of businesses, I think debt is a better tool in some and.

Self funding is a better tool than others. Partnerships with manufacturers, suppliers can be better. There's, there's a lot of different ways to like, skin the proverbial cat.

I actually think that's a super important point because that, that feels like something right now that a lot of people are talking about actually is exactly that like is venture for everyone. You know, when you look at a lot of the companies that took tens of millions or even hundreds of millions, you, you, there's only really one outcome that works. You know, like when you take that much money at the valuations, at the speed that you take the money, at the speed you burn the money, there's only really one outcome. And when you actually go and look at how many people reach that outcome, I mean, how many companies get bought for. I don't know the statistics, but I'm sure there are not that many that actually get bought for over $500 million a year. Like there can't be that many. How many get funded every year with valuations that end up surpassing $500 million is probably 100x that, you know, and if, and just by the math, you know, the, the outcome is not going to be that. And when you're a founder.

You know, the money becomes a little bit like a drug. I think when you, once you start raising it, the whole business is built around that mechanism, you know, curriculum, you know, it's like that, that's what it's built around.

You took a ride, you bought the ticket, you're on the bus now. Like, this is what you're doing and the fund's going to need its money back and you're going to need to keep growing to get that next round. And if you don't get that extra, your competitors will surpass you. Especially like the tech world where timing is so important and, and market leadership is so important. It's a really interesting. I, I think there's, I think the financial markets are becoming like more. And I think entrepreneurs are becoming a little bit more aware of alternative funding sources. I mean, obviously the, the interesting thing today is that it costs so much less to green up companies than it did, you know, when you and I were first starting businesses, right? Like, it was so much more expensive back then because you needed more humans. And now with the advent of like AI, it was like everyone's favorite topic, but it's really disruptive.

It's real. It's real.

Yeah. And outsourcing the ability to, to be to talk in real time to teams overseas that are, you know, where you can have, you know, one developer equals two developers. You know, overseas. It is a really interesting time.

Particularly in my industry where, you know, consumer. Consumer still requires. It's still cash intensive because of the inventory or consumer products are. I should say cpg. When I say consumer, I really mean like consumer packaged goods. But in the, you know, the rest of it as far as like support staff and operational expense really been reduced. And so it. I'll be. This is going to be an interesting time to see like some really great scrappy entrepreneurs come out of the woodwork and not need as much venture funding as they did in the past.

You mentioned before ypo.

Yeah.

You said you're. And actually that's how we got introduced. Was someone.

Yeah.

Yeah. How long have you been. I've never been in ypo, but I've had a number of guests mention it. How. How long have you been in YPO?

4 years. 4ish. For year.

What. What is. Can you just maybe briefly describe the structure of. Of ypo?

Sure, sure. No, I'm trying to recruit. I want to recruit great entrepreneurs into my chapter. We're the Manhattan chapter. We're really great.

I'm actually the membership engagement chair. I'm on the board this year.

Oh, really?

First of all, there are lots of different chapters of ypo. You have to hit a global threshold for revenue and employee count.

And you as the CEO, like your company.

As the CEO. Yeah. Your company has to hit a certain threshold. And then outside of that, there are different chapters that sort of have different values. And I can't speak for every chapter. Our chapter is like a very. Is a very entrepreneurial chapter. We have like, I think it's 60% entrepreneurs, which is unheard of. And.

Yeah. And we also have 30% women, which I think is like, it's. We get some sort of award. I don't want to misspeak, but I think we're like the highest percent. I think we're like number three in the world, if you can imagine, in the world for female members. And it really just comes down to like that same thing we were talking about. Like women have a harder time accessing capital. So. And that's changing, but it's harder to get to that, you know, that stage. And so New York is just a great place to be a female entrepreneur in general. I think the numbers bear that out. And so there's like a lot of really great female CEOs in my chapter as well.

So. That's.

That's my pitch.

How often do you meet?

We meet every. Well, with forums. And forums are like. I always think my. My greatest asset as an entrepreneur has been.

My friends. My friends have really taught me so much. I've had these. I've had these friendships with. I've always been drawn to sort of maverick type of people. I've always been drawn to other entrepreneurs. And even when I worked at finance, I remember meeting the entrepreneurs that we were investing in and thinking, like, how do I spend all my time with these people? Like, I don't really. I mean, my boss is cool, he's smart, and he's a good investor. And there's, you know, this is cool, but, like, this sucks compared to what these people are actually building companies. Like, they're building products, they're imagining something and then making it real, whether it's a tech product or a physical product or, you know, a solution for something. And that was just so much more interesting to me. So somehow, just because I liked entrepreneurs, I ended up collecting a lot of them as my. My friends. And then I've been lucky because those people I've been able to lean on. And then YPO is just like an acceleration of that. It's like an entrepreneur group. And then there's a. There's a very intentional meeting every month where, you know, you get together and. And really talk through different, you know, challenges in the business.

What, what is. Speaking of challenge, what is the biggest challenge you ever faced at Winky Lux, and how did you overcome that?

I mean, we had a lot of challenge.

It depends on the day. I look back, the one that gave me real PTSD is we had a. We had a lender. You know, I'm a fan of using debt for working capital because I think using equity, you really need that to build brand.

So. But we had a lender that, you know, there was a time when you could really borrow against your purchase orders and your receivables and you could get close to 100% when it was, you get like 95% of your receivables from companies that were very unlikely to go out of business, like Target and Ulta, our two biggest customer. And we had a lender who right around the time that Silicon Valley bank went under.

Very, very quickly, they went out of business. They had a lockbox. We had a north of $10 million line with them, and they were able to, like, basically say, we're going to sweep your capital, so we're going to potentially put you out of business. And, you know, a month. And so we had to refi that in a terrible credit market.

Terrible, terrible.

And it was, and that was, it was crazy. The business was growing. We were, you know, we had great customers, and all of a sudden, you know, we lost an extraordinary amount of capital overnight. And it had nothing to do with us. It wasn't, we had been a good customer of theirs. Lots of their customers had been good customers, but they had, they, it's a long story, but they had sort of been mismanaged. And it was, there was a, this actually happened to a lot of companies during that time. A lot of them didn't survive. So, so grateful that we were able to fix that. But that was a tough, tough time like that. And even just the workout afterwards, you know, the market changed. We went from being able to really fund those receivables at a high rate to being, you know, getting like 60% for a while on those receivables. Which it just means that, like, all of a sudden you have this open budget where you're like, all right, I'm going to use my profit to really build the business, and then I'm going to fund all my inventory through these credit lines. And beauty has good margin. So it's actually like a really good type of business to utilize that type of credit to. All of a sudden, like, wait, I, I, I can't even, like, really purchase order financing. Like, I don't want to say it went away overnight, but it just became like a, it became like a Persona non grata. Like, a lot of funds didn't do it anymore. They sort of stepped away from it. And.

So that was a massive learning experience, both from like a financial structuring and also.

Also from a, like a risk mitigation. It's just not something that a CEO prepares themselves for. Right? You don't wake up in the morning, you go, like, I hope, I hope like four major banks don't go out and pitch the snips, you know, like, that won't happen.

That was a crazy. That was a crazy. That was, that, that was, I mean, to layer onto everything else that had occurred in the world to then just put that in the mix of it. I, I was on a plane. I, I was flying somewhere and I got a, I got a email or a slack from our cfo, and I'm on the plane. He's like, we need a new bank account and we need to move all of our money immediately. And I'm like, what? And, you know, you can't open Up a commercial banking, you know, they need to know your customer and all that. And I was like, oh, my. I, I. But, and we, luckily we were able to do it and we already had another bank, but I mean we had, I was in a WhatsApp group with a bunch of founders. People were like going to the banks to get cashiers checks of like $50 million, like literally their entire balance to move in. They're like walking around San Francisco with like a cashier's check with their entire company. One person started routing everything to his personal bank account and it was like a crypto something. So then the SEC started to investigate him immediately.

Oh my God. Yeah, of course. Yeah. And he's probably sitting there going, what do I do? Do I like save the company and potentially go to jail?

I mean, crazy, Crazy.

Wow, that's bananas. Yeah, that, those were wild times, man.

That was wild.

One of those things where I, I think it just. You really, you can never learn that in a business school class. Like I guess you could now, but we want, you can't be prepared for the next time some like, show is gonna happen. Like that, like, that was a circus and there is no way to prep for it. You just have to like, be really resilient and wake up the next day and go, nope, gotta figure it out, gotta figure it out. So I think that's the stuff. I mean, it's probably why I like entrepreneurs so much because they're just nutty enough to be like, sure.

What. Where do you think WikiLeaks is gonna be in three years from today?

Oh, I think the brand has so much growth potential right now. And there's, we're, we're on like a really cool aesthetic trend. We've always had this really, what we call, like rococo coquette. Like, we're kind of like the love shack fancier. The best thing I ever heard was an editor at Aure said if Bridgerton was a brand, it would be winky. So we have this very romantic sort of aesthetic and it is really kind of coming into the cultural zeitgeist right now, which is so cool and it's so fun to be part of that. So.

I think we're going to, I think we're going to see a lot of growth. There's a lot of challenges too. I mean, there's a lot of new beauty businesses out there. The barrier of entry has really gone down, so there's a lot of new competition.

Also, there's sort of been a shift in the market for the last Five years. We've really been in kind of a skincare world where everything's been about skincare and we're a color brand, our heritage is in color. So it's exciting to start to see color come back.

So I'm excited to ride these like tailwinds and I'm sure there'll be new challenges. I'm really excited to lean, personally. I'm excited to lean more into.

What I really like doing and what is kind of my zone of genius, which is like cultural trends, sort of the intersection of commerce and culture.

Social media and, and like I really, I think there's a big shift in how people are consuming products. So I am going to kind of be a big part of that in the business. You know, when we think more about like live streaming and, and direct buy apps and things like that that are big and again we're just looking at the customer. There's a lot of noise in the market where people are like, this is huge in China. This is what's going to be the next thing. It's all about this that you're like, is it though? Like the customer will tell us what she wants, but she is finally starting to kind of adapt to live stream buying. That's super exciting.

Live stream?

Yeah. So buying products via live stream, which has been a thing in Asia for five years, maybe more and that has really grown with like the advent of TikTok. There's a couple of new native apps that are really big in the beauty industry. So I'm really excited to kind of lean into that. That's really where I thrive. And now that we, you know, I just hired a new CEO, Lauren, who's amazing and she is really going to be running a lot more of like the day to day and really working on like the investor relations and the, the like organizational structure and optimization, which I wouldn't say I can't do. Obviously I've done it for a decade, but I really don't like it. I really don't. I really want to be doing the pathfinding so I'm, I am hopeful that that will really be of like where I spend most of my time.

Did you, I mean you started in finance.

And.

So like did you always know you were going to be an entrepreneur? I mean, I know you said you were attracted to those people when you were in your finance job, but like.

Give me a little bit more of the background. Like how did you end up in finance?

I just needed to make money.

Okay.

I'm from a small town I needed to make money. I wanted to move to New York City. That's not really a thing that you, you know, you could do without, you know, like just I guess you can. People move to Bushwick as artists and they do stuff, but I, I wanted to do something that would give me some autonomy. I mean, I started my first business when I was like 16. I had like a little ride sharing business. So I went to a really big public high school where if you took the bus, you had to. It took a really, really long time to get to school on the bus. So I bought a car when I was 16 and right after my 16th birthday, I'd saved up. I bought this car, this like old Ford, but it could seat a solid, you know, six people. And so I charge people to take them to school.

School.

And my bro, I have twin, a brother and sister who are twins and they're two years younger than me. So they were freshmen and I was a junior and they were, they were like in my marketing and they had to because the other, they needed to ride to school and I was making them marketers. Otherwise they, that's how they got paid. So they had me like a little sheet, a sign up sheet, and I don't charge. It was like Uber. So I took two rounds in the morning and two rounds at night or in the afternoon and just pick people up, take them to school because otherwise they had to ride the bus. So.

So yeah, that was my first business. So I think I've always been sort of a scrappy entrepreneur, but. And I've done like a lot of other random stuff. I did a lot of real estate investing and things like that throughout my career. But I, I think I just, I always wanted to kind of, I was, wanted to build and I really. The greatest gift of entrepreneurship, the greatest, greatest thing I think. And I, I think I've taken it for granted for the past 16 years. You get to pick who you work with. Like every day. I get to pick people that I think are really smart and they're like genius people. They're way smarter than me. And they come and work with me and then we do cool stuff together. Like, what could be better than that? Like, I'll take the risk for the benefit of getting to choose these like, inspiring people that, that teach me stuff every day.

When you. One of the things that I see, I actually have friends who started in finance and had the entrepreneurial bug, but at some point in finance specifically, you're making so much money.

Oh, I know. I never got there I was like an analyst. You know, I used to always call it my brief, the brilliant finance career. I left. I've left after four years. So I've been an entrepreneur for almost 16 years now, which is bananas.

Wow. Did you. As you've been through this entrepreneurial part of your career, did you have a mentor? I mean, you mentioned your friend groups and your. Your circles and. But, like, did you have some kind of a role model or someone who was like the. You know, that you can think about that. Like, they really helped you through this journey?

There's. There's a few that come to mind.

One of my best friends, who's also my. One of my daughter's godmothers, is a woman named Mariah Chase, who's just incredible. And we've been friends. She. She was kind of one of my first sort of like, fashiony friends, because what I. When I left finance, I got into this, you know, this consulting group, and I was a partner there. We kind of started it. Not. Not me and her, but me and two other people. And she was one of my friends who had, like, left. She had a different career path. She left fashion and it started a company, and then she sold the company. She actually sold it to qvc. And then. And I was kind of watching her do some of that, and really, I was really inspired because we were pretty young.

And. And I think I. She's just always been like a great sounding board.

So she just comes to mind, like, immediately because we were friends for so long.

But there's. There have been a lot of people. I. I like. I have tried to.

Be as helpful as I possibly can to.

As many founders as possible. And, like, it's been amazing. Some of those founders have, like, become so wildly successful, and they. And they're really. I find that the. I don't know if it's different in other cities, but in New York, I find that the.

The community of founders is really tight, and people are just incredibly helpful. So it just has depended on what we were going through at the time.

Yeah, it's amazing. I think, when you say that, you know, I. I think about all these conversations where I would go to people for help and people would come to me for help, but then those conversations almost always ended up going both direct without even kind of doing it on purpose. You know, it was like, I go to someone for help, they're giving me a bunch of advice, and I'm like, oh, well, I'm dealing with, you know, I did this and this and this, and I'm like, oh, that's really helpful. I'm dealing. You know, in those conversations, I, I believe that it was actually during COVID I felt it was the biggest thing that I missed was the time that I spent in person with other founders through whatever channels or events or those moments. I, I can think back to actual meetings that I had one on, ones very intimate type of conversations that shaped big decisions. Like big, big things that I did in the business back to those people. And so I, I, I just think, I think it's important because when you've been doing it this long, you know, it's like, it's just important as a reminder of, like, for founders to get out there and spend that time. And, and I tell people, not just that, but be super open about the problems you're facing. Don't just go tell everyone you're crushing it. Which is kind of, I think, early in your career, at least for me, you feel the need to tell everyone you're crushing it. You know, I, I always ex, like use Instagram as the example. I feel like you're posting to Instagram, you' going the perfect life. When in reality it is not. And when you start not being perfect, people are like, oh, I'm also not doing well. You know, it's like you start having these other conversations.

Yeah, totally. And you're so right. Those, those conversations do usually end up going both ways. Like, I'm sure I've learned a ton from people who've, like, needed mentorship.

Exactly. Yeah.

I didn't even know you could do that on TikTok. Like, that's really awesome. So.

Yeah, it's, it is a, it's a pretty, it's pretty cool. It's definitely like a, a sort of a strange.

Sorority slash fraternity that you join when you sign up to like, risk your whole life savings and your family's future on doing some crazy illiquid scheme.

Yeah, it's a, it's, it's crazy.

Do you think that this is probably a stupid question, but I'll ask it anyway? Do you think that you'll start another company?

I mean, I, I'm, I have invested in a few funds. I haven't really done a lot of, like, direct company investment because I don't have the time or the amount of capital I would need to, like, probably, you know, properly risk.

Properly, like, do enough of it to make it.

Yeah, of course.

Risk appropriate. So I've invested in some funds and those funds have been amazing because they always want operators to come in and look at businesses and, and that's been really fun. That's been like. I remember that vibe in the beginning where, you know, things are, you're starting to hit that product market fit things feel really exciting and electric because I get to talk to some of those entrepreneurs that they're either vetting or that, you know, have asked to talk for help.

So I didn't really answer your question. I really am enjoying that is my answer. I do, I'm sure. Like, you know, I have these like, kind of side things in, in real estate, you know, like with short term rentals and just invested in like a campground type of thing, which I think is kind of interesting.

So there's, there's these things that I find interesting and.

I have a, someone close to me that's doing like a roll up of like boring businesses, which is very topical thing right now.

I love that. Right now. Yeah. Yeah, I love that.

Very cool. And I find that like almost equally interesting. So I, I find that there's just like a lot of opportunities. So I never say never right now. I, I'm, I'm really interested in making sure that, you know, winky hits its, takes advantage of this big opportunity that it has and it finally has cash. Like we were always kind of behind the cash eight ball. We never. That was a big learning for me. Like I, I should have raised more during times when the raisin was really. Yeah, I always had this mentality of like, raise as little as possible if it just doesn't work that way. Spend as little as possible is a great one. That one is, you know, rings true forever. But, you know, raising, you know, I never wanted to give up as much equity and things like that. But I think it, in hindsight it would have, I would have raised more just to give the company a cushion during times like refinancing debt and things like that.

And also to make sure that you, your investors are really aligned with the business. Right. Like they have enough skid in the game that you're all in it to win it together. So now the company, long story short, I'm ranting but now or I'm going all over the place, but the company now has real cash under its belt or you know, it has like a war chest to go out and take market share. And so, you know, I'm very focused on making sure that we, that we do that and then we'll see what else happens. I don't know. David, you want to start something like.

Yeah, yeah, maybe. Like I told you, I'm doing Too much probably now, but. But. All right, last question. Last question. For you, knowing everything you know today, all your experiences, everything, what is the one piece of advice you would go back and give yourself before you started your first job in finance?

I would say the only times that I've really been. That I've made mistakes that were more emotional mistakes were when I was worried about what the optics would be for the company. And that's just such a dumb thing to do. It's such a dumb thing to, to your point about, like, that silicon that sort of like, everyone's crushing it. Everyone's crushing it vibe. It's really not that important. Like, the optics really aren't as big of a deal as people make them out to be.

They're. Most businesses are, have, like, real struggles. And I, I think that it was. It's really important to, like, stay focused on first principles. Right? Like, focused on, you know, and, and the other thing I would say is a bias towards action. Like, every regret, I, I've made some, like, random investments and things that were stupid, and I never wake up regretting it. Like, I never wake up one morning and I'm like, oh, I wish I hadn't done that thing. Like, never. But there are a few things that I saw and I didn't do, and that is like, those are things I, I'm, I'm much more. I, I. The things that bother me are the misses more so than the swings. Like, I don't mind swinging and striking out, but I really, really, really hate not having swung. So that's my. Then maybe that. Maybe that's more of a personal thing. Maybe I'm too addicted to risk.

But no, no, I like that. I like that. Natalie, thank you very much for doing this. I'm happy we had a chance to talk and just, I always appreciate people being open like this and transparent, and I think it helps the next generation, which is why, why we're doing this. So thank you very much, David.

So good to chat with you. See you soon.

Awesome. Awesome. Well, thank you, everyone. Hope you enjoyed. If you did, please share this with your networks and we'll see you for the next episode of Not Another CEO Podcast. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week.

Sam.