The shortcut always costs more 🧼 Kate Assaraf

There's no shortcuts. The shortcuts are actually very expensive. Building a scaffolding as strong as you can with real customers, real enthusiasm, real reviews— that is hard, but it is so much better. You can spend a lot of time trying to balance things that are empty. I'm not really that interested. I spend a lot of time building things that are real. And so I maybe, maybe I move less fast, but I actually know that my scaffolding is so strong for my company that I don't have any regrets about the speed at which I built it. Or the way in which I built it. I think actually the measure of an entrepreneur is, is how much they impact the people around them positively. And for me personally, it's how much time I can spend still with my family and my children and my employees. It's a new way of thinking that is actually quite old. We lost the plot in entrepreneurship for, I think, maybe a decade. It's time to return back to the things that genuinely make people happy and make the sun feel like it's actually shining. It's very easy to fall apart when you're first go at something. Everything collapses. And then when you start it up again, and it starts to work, and you see how excited customers are about the problems you solve, it gives you a new meaning of purpose. And it gets me to spring out of my bed in the morning and run my company every day.

This week's Millennial Master is Kate Asraf, founder of DIP, a haircare company built around better products and customers who actually come back. Kate had to start again after the first version of the business fell apart, including a painful co-founder split. What's interesting is how she rebuilt it. She stayed away from the usual growth shortcuts and put the business around trust, relationships, and products she could genuinely stand behind. In this episode, we talk about why the shortcut becomes the most expensive route, what founders get wrong about partners, marketplaces, and growth, and how trust is becoming harder to earn and easier to lose. Kate, welcome to Millennial Masters. Where are you joining in from today?

Hello, I'm here from Sparta, New Jersey.

Wonderful. So we're back across the pond this week. Well, Kate, you've now built Dipp, your current business, into something real. But before that, there was a first version, the failed version, the co-founder split, and having to start all over again. And many people tuning in will have a good idea how that feels, but I wanted to know at what point did you know you still wanted another go?

So for anyone who's been through a business partner split, it's, it's a very painful thing. I can only equate it to probably what it feels like if a marriage splits. And so I knew that I still wanted to, to bring a product to life that solved the problems I was very passionate about. And so I, it was I talk about shampoo and conditioner specifically, like solving that problem where they, the ones on the market seem to be made for people that really cared about being plastic-free, but didn't really seem to care that much about hair. And I just found that so frustrating as a beauty industry veteran and that unscratchable itch to really solve. For me, it was the conditioner bar problem that was out there. I just, I couldn't let it go. I couldn't, sleep until I really solved this, this issue with, you know, people were so excited about sustainability in 2020 to 2022. And I think the more people purchase sustainable products that were sold to them at a premium and only disappointed them, I think they started to completely go the other way. And I mean, that is very rational behavior. So that was something that I really—

which is strange for consumers, right?

Yeah. I mean, it's I don't, I don't know how it was in the UK, but it was like this golden era of sustainability. Like, you know, I'd even say 2019 to 2022, and then it just kind of came to an abrupt stop in my opinions. Other people might argue otherwise, but we just saw that Everlane, which was a huge brand here in the United States, sold to Shein. That news broke yesterday, and that was one of those things that really shook the sustainable community and not just the business owners, but also the consumers here in the United States. We people, it's all anyone's talking about in sustainability right now.

We'll get to that one in a second. I want to go right back and ask you, Kate, before DIP, what were nearly 20 years in the beauty industry taught you that you now reject and think, okay, this is, this is wrong?

So mostly, mostly I'd say the umbrella thing that I'm rejecting is dishonest marketing. So when I was in my early 20s, I worked for a beauty brand that sold products on TV. So it was like people would call in or order direct response.

And so those were the days.

Those were the days, like the QVC, HSN days. And now, and so when I was backstage, I was instructed to draw with a very light colored eyeliner, brow pencil, wrinkles on someone's face. And then the host would go on and magically wipe them away on air. So it looked real, like, look at this. Before and after. And then there was other instances where they would show the effective effectiveness of makeup remover, but first they'd have like a light coat of Vaseline on someone's cheek before they applied the makeup. So it would wipe away whether you used the makeup remover or not. That's just one of the— I could probably rattle off 50 different examples of what I saw behind the scenes. And I thought when I started my own brand, what if I could sell products without doing any of those tactics and turn that into my marketing story. And so that's what I did.

So you wanted to also build a product that works, not just the marketing that made it look like it worked.

Right. Well, I think selling something to someone once is not a triumph. Selling something to someone twice is the triumph.

So building a sustainable customer base and people coming back to buy your product more and more and raving about it. If you get a bad review, they might influence other first-time buyers, right? Right.

Yeah.

So let's go back then to the first business and the first venture. What did you think you were building back then?

So I had a different approach. I thought I was building shampoo and conditioner bars, like this plastic-free beauty brand, but I thought the mass market was where I wanted to put it, right? I want— I thought I wanted to, you know, use the connections I already had with Sephora and Ulta and Target and all these big box retailers. I thought I would kind of leverage what I, the relationships I already had in the beauty industry to build it. None of that came to light only because I discovered very quickly that I found these zero waste stores, uh, these refilleries in the United States, and they were the first to embrace my product line in the, in the very beginning. And the more I got to meet more of these refill store owners, the more I realized like, oh my gosh, like this is the type of business This is the type of business owner I want to support. This is the type— this is the channel that is perfect because I was already like motivated to shop there myself. And I felt that that was, I don't know, you, if you kind of, this sounds a weird thing to say, but you've kind of fallen in love with that type of person who is championing small business and who is really making the change at the grassroots level. And that's what happened to me. It changed me. Like learning to refill and learning to use less waste in my life changed me and changed the whole trajectory of how I wanted to run this business.

So how much was it then timing? How much was it product? And now that you mentioned as well, the partner fit with the independent refill eco stores across the country, because you, you've built a network of those.

Yeah. So probably around 400 or 500 of those around the country, which is predominantly where we sell, and hair salons because DIP is great enough to be in hair salons, and surf shops. So those are the 3 places I go. You know, it, it took me around, I don't know, it took me a lot of time and money and energy to get into those channels because you have, it's not like a big, it's not like big box where you sell to one, you sell to all, or, you know, several doors. These I had to sell one by one and convince each of them to carry DIP. And so that was a challenge, but it was also a really fun challenge because what I think was a lot— I didn't realize what was lost in beauty and what was lost in commerce was like this humanization of sales. You know, we became so— in the pandemic especially, DIP was started in 2021. So it was like in the middle of the pandemic, we lost so much human connection. And when I started to go like almost like a door-to-door salesperson to these stores, I realized that the human connection was actually the most important piece of the whole business.

So now that you look back at it, I'm wondering, is there any particular, let's call it tip or trick that you use to get them to not only talk to you, but also to stock your products? Having a great story helps, but even being a good salesperson also has a few tricks up its sleeve, right?

Yes. I think, first of all, I think when, when everyone else was going digital, I went analog. That was step one. So you have to stand out in which whichever way you can, whether it's calling on the phone or showing up at someone's door. Second, I was, I was so confident in my product being the best of the best that I was happy to give a full-size set of samples to a business owner. Like, that's really the only place we give full-size sets to. Um, I've had many instances where someone has called me from their towel after their first shower. It's like, I need this for my store. And so that's how it started and that's how the reputation kind of grew because one, you know, I chose specifically a channel where everyone's networked. So you, you get it in one refill store, then you get it in 10, and then you get it in 20, and then 50, 100, and, and so on. So the reputation was built within the community that I really wanted to serve.

So how did you manage to keep track of all those contacts? I'm, you're gonna tell me a spreadsheet, but there were a lot of personal relationships that you You built over 400 individual stockists. So what was the tip there?

I did everything I could to go visit these stores, and when I couldn't visit, I would create opportunities for them to come to Mace. I invested instead of advertising, I invested in, we did, I did a, this is like before it became cool to do brand trips without influencers. I invited stores to Morocco. I did two. Weeks in Morocco with some of our top retailers. We also did like a big retailer event in the Catskills where it was like a summer camp and we just had a good time. And I don't know, I took my top 10 stores to Dominican Republic on a surf trip. So I engaged with them in a way that I never saw other brands engage with them because the small store owner is not celebrated, right? Not the way the influencer is. But I could argue that a small store owner that has DIP on their shelves could sell way more products than an influencer who's gonna sell the next shampoo bar the next day, you know? So I invested in the people that I saw as the most influential in my business. And that's how I've kept the relationship and that's how I've, how I've scaled it. And I offer different opportunities in different markets whenever I can. And I think that that level of white glove service and reinvestment is what gets my stores to trust me better than, you know, another competitor that also undercuts them on Amazon or on their D2C sales.

Ooh, you touched on something there, and we're going to get to that one in a bit as well, Kate. But before we, we move into the lessons you've brought into Dipp, I'm wondering whether you can reflect on what went wrong with the first version of the business.

Yeah, I can. I mean, I have a narrow legal space where I'm allowed to say. I can say.

We'll stick within that.

Say that I brought to the table my idea and my 4 years of research and, and all of these things. And I think there's something about starting a business the first time that is very terrifying. So you convince yourself that you can't do it on your own and you bring in a partner to fill in those shortcomings or, you know, deficits in your own knowledge base. Right. And so I was confident in my marketing and my sales, but what I didn't know was like, the, the accounting and the sales tax and all these other pieces. The lesson I really learned is that you cannot transfer your passion for something to someone else. You shouldn't share. If you have a business idea, it's mostly, it's yours, you know, you are hurting yourself by bringing someone on as a partner. You can hire, like for me, then when I started again, all I did was hire a bookkeeper and that solved a lot of my issues. But it's a lesson that's very hard earned, like hard learned because you, you convince yourself that it's too scary to do on your own and you want a partner. Everything's more fun with a partner except when it's not, right? And so—

And it was your first time as well. So that's a reflection for the first-time founders or for somebody thinking of starting their first business is, do you actually need a co-founder who will fill a skills gap or could you afford to hire somebody?

Absolutely. And it was really the most expensive lesson I ever learned. And when I started again, um, I had to, you know, completely start from scratch. And I learned, I, I really learned to bank on myself. I think a lot of founders don't realize how capable they are until you're kind of like thrown into it. Then you realize, oh my gosh, I can totally do this.

And you can learn.

I can learn. And you know what? I still haven't had to learn bookkeeping because I have hired someone to do it. I don't wanna do it, you know?

There are some things you just don't wanna touch.

My brain just doesn't want to do that, you know, but my bookkeeper is really amazing and she loves it. So I think, I think it's, it's really important to not share your dream if you think you can do it on your own.

Sharing your dream, but also the responsibility sometimes.

Yeah. Well, I don't think you can share responsibility 50/50 in any way. And I think, I think that that will eat at a partnership, it will eat at a marriage, it'll eat at a friendship. It's any relationship where it feels imbalanced will deteriorate over time.

And that imbalance can also hinder decisions, big decisions on big moves, is something that I've heard from other guests on Millennial Masters.

Absolutely. Absolutely. And so, you know, it was very scary to start up on my own, but I also, because I had learned a lot that first time around, I knew that I could, you know, I could do it. And it's still scary. Like, it is scary to start any business, but now we're 4 and a half years in and, um, I just, I love this little company that I, that I started.

And you had a model and all that experience because one of the things in your story that I find really interesting is that you're not trying to steal customers from other shampoo bars. You're, you're chipping at the big labels. The first time it was the right thing and it proving that the second time round is also the right thing.

Yeah. I mean, it brings me no joy to take someone away from a competitor that's— someone's already on a sustainable journey. But really where DIP makes a big difference is if you're using luxury hair care, that's fast. It's designed to be fast to consume. It's designed to be 3 to 5 weeks consumed and the bottle is done. Like luxury conditioner is, is the biggest culprit here. For me, I used to spend— I hate even say it's my one guilty pleasure— was I would spend, you know, $50 to $70 a month on just conditioner alone for my long hair. And the DIP conditioner bar is $32 and it will replace over a year's worth of conditioner for me. So that's 12 plastic tubes gone. And that is where I really feel like I make the difference, right? Like DIP makes the difference in that category. And I don't really, you know, I'm friends actually with two of my major competitors, the founders, and I just actually did an event with them. I recruited them to come do an event with me and talk to our retailers about how important it is for sustainability to still stay alive and to keep the enthusiasm for it alive. And, um, and that, you know, that's a very, very uncommon thing. It's not common to recruit your competitors to to join forces, but we— I strongly believe that Hybar is one of my favorite, that the founder Nora is one of my favorite people to talk to. She is— she has— Hybar is very, very successful. It's in a different channel than mine. And I really respect the way she runs her business. And I think it's cool that we can be friends and talk to the same group of people and have our two products coexist on a shelf.

Because in the grand scheme of things, you are competing against much, much bigger giants in the beauty industry. So it's easy to forget about that when, when you're just focused on who's right next to you on the, on the shelf, but you are, you're actually comparing yourselves to the big producers.

Right. I think, and I think I would like lose my mind if I compared Diip to other bar brands because we just don't have the same customer. It's a very, very different customer for us.

So how do you convince then these premium beauty buyers to take a bar seriously without turning it into, um, an eco-guilt pitch, let's call it.

Well, I make the branding and the marketing really fun. I barely mentioned plastic in the first place, and I've let, I've let it be a word-of-mouth brand. So we've never actually advertised yet. We might advertise in the future, but so far we have never run, you know, a meta ad like Facebook, Instagram, or TikTok. All, everything out there has been organic and it has been really, really amazing for people. Cause I think, I think that the emotion I've tapped into is people are again, like so tired of buying sustainable stuff that they felt underwhelmed them. So when, by the time they get to Dipp, they're so excited that it works and it feels great and it saves them a ton of money that they just tell everyone about it on their own. And that has been really like, it's reinvigorated my enthusiasm for making a product in the first place. It's very easy to fall apart when your first go at something collapses, right? And then when you, when you started up again and it starts to work and you see how excited customers are about the problems you solve, that, that gives, it gives you a new meaning of purpose and it gets me to spring out of my bed in the morning and run my company every day.

So Kate, you already explained your delivery built around independent retailers, salon, refill stores. Uh, I've seen also surf shops on your list, but there is one big marketplace where you are deliberately not selling your products at dip, and that's Amazon.

Yes.

Why?

Because I've developed this relationship with these small store owners around the country. In every state, I know someone who's working so hard to keep their doors open in their store. And I know the moment I put my stuff on Amazon, that store owner is going to have to compete with that kind of convenience. And it might not sound like a big deal, but dip, a dip bar lasting someone, you know, sometimes a shampoo can last 4 to 8 months and the conditioner bar 1 to 2 years. So if a customer leaves buying it from their store and like, you know, gets seduced by convenience and buys it, that customer doesn't have to go back to that store maybe for 2 years. That, that, that's the exact opposite of what I'm trying to do. What I want is to get people excited to shop in their town and make their money work for them back. You know, the, the, it just, it actually breaks my heart to know that so many high streets and main streets here in the United States are going to be decimated even further than they already are. Like already the economy is a little dicey and then you have people who wanna save money, rightly so. That's very fair for someone to wanna save money. And where they go last is the small store in their town. And I want to encourage people to go there first if they can.

They have a few hoops to run through. The independent retailers are not always open at, uh, later in the evening. At least that's my gripe a lot of the times, or on certain days of the week. It's understandably, they have to have a life as well running the business themselves, but it's very hard to compete with the convenience that you mentioned on the big, especially with Amazon, next day delivery, or sometimes even same day. But do you not feel that you left like a major kind of like player on the, off the table there that you could maybe have more sales if you would be on Amazon?

Absolutely. I could probably 10x my business if I put it on Amazon. And I've been told that many times, but it's not a carrot that I want dangled in front of me. It's not the reason I started my business. My, I didn't start my business to be some kind of like shampoo, I don't know, bigwig. I just, I wanted to start my company to, to restart my company because I had, what I learned in my first business was how important these refill stores are to sustainability. And now I've used my company to get people into those stores. And in fact, we've redirected $5 million, more than $5 million back into the refill, their, their refill network. That is a lot of money and a lot of rent that can be paid for their stores and a lot of money that can go to paying their employees fairly. None of which the Amazon doesn't contribute to any of that. In fact, there's so many reports during Prime Week where their employees are completely mistreated. And so, I still shop on Amazon. I'm not Amazon-free. It doesn't mean I don't think that there's like a moral litmus test, right, of shopping on Amazon. Everyone I know does it. It's not the point. The point is, is I want sustainability to survive and thrive. And what I can do as an individual is get people into those stores where if they go to buy Dipp, then they might also see other solutions that are vetted and, and tried and true by the sustainable store owner to get someone to do more sustainable swaps than what I can offer. That's my goal. And Amazon would totally ruin that. And I, it's not, it's really not about the money. Dipp brings in enough money to, for me to live comfortably, for my team to live comfortably and get bonuses like that, and my stores can live comfortably. Messing up that ecosystem would be a nightmare. And you don't even know whether you're going to succeed on Amazon, right? Like you could put it on there and your margins can get squeezed so small that you're almost on a hamster wheel.

I have read many stories about that, and that was on my list of questions for you, because as many people tuning in would know, once you put a price on Amazon, you can't sell it any cheaper. Elsewhere, so that is tying you down. And similarly, you have— your margin can get squeezed. Other people can come up with similar products and promote them more on Amazon, and they would pick that top spot. Or, as has been documented in several books and reports, Amazon can come up with a product of their own that imitates yours if they see that the sales are doing very well.

They data farm. And so why wouldn't they? I mean, they have access to all the manufacturing out there. Why wouldn't they use— they use well-meaning entrepreneurs as their own market research. And I find that a little despicable, but it is what it is. I understand it. I studied economics. I understand that, you know, the human condition doesn't really matter in business. It does for me. And I'm okay with rehumanizing my company in the days of AI, the same way I was comfortable picking up the phone in the days of of, you know, just being digital. I don't care about what is happening somewhere else. I care about what makes me sleep at night as an entrepreneur, and I care about the actual human beings that I know, like face-to-face, that are making the changes that I wanna see in the world. And so that's, I mean, it, to me it seems so simple, but to everyone else, the way I run my business is confusing.

Yes, because you're basically telling people to buy better and buy less, which is contrary to all the other business advice that you would get when you run a repeatable purchase product. So how does it compare price-wise? Because you explained price-wise is also half the price of a product that lasts maybe 5 times less. Are you in a way limiting yourself?

Maybe. I probably am, but I don't care. I think that's really what it comes down to. What, what is the limit? What does that even, like, really, what does it mean if my company allows me to live comfortably, my employees are paid well, and I'm able to do things like I have, whatever profits I have, I put, I redirect into places that really matter. For example, Surf Rider, like Surf Rider, Um, it's a surf-based organization, but what they do is they protect the oceans. But beyond that, they send people to Congress to change the laws about plastic. And so, me as an individual, I could never hand over $50,000 to Surfrider, but as the company, yeah, I can, I can take that and write a big check to them. And that is exciting. We also have a program with the Great Lakes, like in the United States, the Great Lakes are often overlooked. I don't want to say they're not— people love sexy ocean content. They don't talk about the Great Lakes. The Great Lakes are freshwater that supply 40 million people, um, drinking water from, from Canada to the United States. So we have a thing right now, a partnership with them right now to, um, to fund stewardship of the Great Lakes. And that's what I do with my money as a business owner. And it's like really fun. I, I don't know whether the idea of having just more money is as exciting as redirecting the money that I have into ways that make me feel good.

Now let's talk about advertising, because you told me that you've built the business up to 7 figures now without Meta, TikTok ads, Instagram. What would have to be true for you to even consider going paid?

So, I would have to be convinced that it works really well and that I'm not just sending money to Google and Meta, which is the horror story I read about every day. And so, it's very, I have, and I think 2020 to 2022, I think those channels were very effective. I've just tested, I've just tested a little bit of Google Ads, This very weekend I tested them. Google charged me $2,200. I got 3 sales from it. And I think my gut was always right. The emotional reasons that people buy DIP are not translatable to this fast-to-click, you know, I don't know, mentality. It's just not, it's not a sandbox that I want to play in. What, what really, really moves the needle for me is people knowing how we spend our money as a company. That's not in a Google ad. You know, it's like just not there.

There's not enough space in 60 characters.

Yeah, they don't, they don't, no one cares. Like the, the customer that is shopping that way doesn't care about that. And there's plenty of my competitors. I have 200 competitors. There's plenty out there that the, they're fast to click folks, like go for it. It's just not who my customer is and it's not, and, and I actually, I, I am actually pretty proud of that. I'm proud of my customers being the type of people that read the whole website. You know, I get told very often by D2C marketers, there's like, there's too many pages on your website, there's too much to read. And I'm like, but okay, marketer, fine, great point for someone else. But for my customers who tend to be very smart and very kind of silly and sarcastic, they read our website and they'll write to me about it. They're like, I read this page and I can't believe a company is saying this. Like, this is Like I sat at my computer and realized I had lost an hour and a half reading all the pages on your website. That is my customer. And I'm happy and proud that that's who is buying my stuff. It's kind of like unbelievable, right? In this, in this modern day age of commerce that you're having people read anything. I don't know.

Especially at length. Yes, I know. There is a subset of people. There's a subset of people who have enough patience and curiosity to listen to longer form conversations. Ours, although there will be clips of it on other places. So Kate, you have used the phrase in some of your posts about trust recession. And this year, from what I've scanned, you're way more aggressive on trust, fake reviews, digital pollution, all of that. Stripping the slogans away for a minute. What are you actually seeing that worries you?

I'm seeing, I mean, the second I set up Google Ads, I'll just give you an example. Someone ripped off everything from my site. My website is dipalready.com. Within days of starting Google Ads, there was a dipalready.shop that was taking, that was a phishing website. Like just being on Google then opened up the door for bad actors to come and fish for our customers. That is horrible. And even their customer— I have human customer service. You can get someone on the phone at DIP. You can get someone to give you white glove service if anything goes wrong. With that, they put up a fake customer service email, you know, and that happens just within moments. Those kind of— and that's everywhere. Like you see, like I had a competitor write 5 blogs about DIP. They're not disparagement blogs. They're just blogs with gobbledygook information about dip that isn't really factually true. They have them on their blog hidden from customers, but readable by AI. So, the robots take all of this information and take it as like authority and put it into AI responses on ChatGPT. That company deliberately, that competitor of mine deliberately is misleading and feeding AI about dip that's not—

So that it recommends them instead of recommending you.

No, it recommends, it says things about DIP that aren't factually true. But if you look at that tiny, tiny icon, it's like from, I'll say it, viory.com. Like, so a competitor of mine has pretty much tried to, because our stuff is all organic, like they're trying to hijack organic traffic through the LLMs. You're gonna see this everywhere. You're gonna not be able to trust the, the AI machines. And that, it's forced me to have to play in that lane too. Like, 'cause I have to combat that. I can't have, everyone looking for dip, suddenly reading bad information about it. Like, you know, I mean, they had a whole— it's kind of ridiculous that this is the kind of new war. But you know where you can just put down your sword and shield is you just go into a store and talk to an actual person about dip, and they will tell you what we do as a company. They will tell you that it's great. They can tell you that people come back for it. They can tell you it's their top seller. Some— in many stores, we're the number 1, 2, 3 and like 5 top sellers, just across the product line in your store.

So first you had the search engine optimization games, which is an entire industry across the web, which is dedicated to gaming search results to a certain extent. And now this war, like you explained, is moving on to AI because a lot of people are using AI chatbots. To instead of Google or in addition to Google. In my experience, I was able to find the actual cheapest tumble dryer via AI search after carrying extensive searches in Google, and it would just send me waywards on dozens of sponsored results or other websites. So you're saying that it's mega important now to make sure that this accurate information about you across the web, but not just on your website. Where else are you making sure that there is proper information about Dipp?

Well, I'm kind of, I mean, I can't do anything digitally. It's impossible, but I can give you accurate information about Dipp through our network of actual human store owners, of which there are so many. And so that's really the only way I can combat it now because the, the amount of money being spent to attract people through the LLMs or the AI search engines, it's, it's unbelievable. And I don't think that it makes the world better. I actually think it makes the world more frustrating for people. And I think people will start to crave that human-to-human shopping experience again. I'm banking on it, kind of. I could be totally wrong, you know, but I'm so tired myself as a consumer of trying to sift through all the nonsense to get a real review. To get like a non-incentivized review to find out, like, I, I think it's crazy that there are so many reviews out there from people who are getting free samples of products. And then just because they then become an affiliate on TikTok, right? Like all those reviews are people that want to make money on TikTok Shop. And so you don't even get like trustworthy reviews there. And, and that TikTok used to be before, I think before TikTok Shop and they had the affiliate moments blew up. It used to be more, feel like a more truth-telling platform, but now that has been gamed as well.

Feel is the right word there.

Right, right. Well, it's, you know, it is a very, very frustrating thing, I think, to be a consumer. It's also very frustrating to be a business owner. And I know a lot of business owners, my, some of my peers are ready to give up because it's, it's not fun. You know, like, but I've gamed the fun part myself by making it more human and for having retreats where I get to spend time with like-minded people and for having— it's fun 'cause my customers have like a deep tie to the brand and an understanding of what we're about. So, in that way, it's really, really fun. And that's the only way I think you can survive as a business owner because if you don't create your own fun, it is a very miserable endeavor.

That's the reason why you start your own business in a way, to make sure that you have a certain amount of freedom and fun and enjoyment from what you're doing. And if you have to do the accounts and the bookkeeping and the HR, it can zap it out of you, right? Yeah.

Well, I think just struggling in a bad economy is, you know, everything's not rosy. It's struggling in a bad economy. It makes, you know, entrepreneurship extra miserable, right? It's already not that fun to begin with. You have to really have that unscratchable itch that you like drives you. And luckily I chose hair. I can talk about hair all day. I just love it. And you know, even when I see someone with a cool haircut, it like brightens my day. It just doesn't need, I don't even need to talk to that person.

Like mine.

Cool. Yeah.

I mean, I see a cool beard, which is like, yeah, it's just the other way around. Absolutely. It still needs shampooing and taken care of. Absolutely.

I mean, even in our marketing, in our, on our website, I had two men with beards that were bald because I know that that is all, you know, that's still part of the group. I didn't want anyone to feel left out of the conversation because sustainability tends to be more focused on women, I think. Men very much so can be part of the party and invited there.

And consumers as well. So with that in mind, Kate, what would you say is the biggest lie in beauty marketing?

Oh, I think the biggest lie is that when you see someone say that they like a product, that they, they actually spent their hard-earned money on it. That's the biggest lie. Like you can see all these people saying that they like something. It's very rare that that person made the emotional, um, like the emotional choice to look at the whole spectrum of products and choose that product and part with their own money to then tell you about it. That's why we don't use fake customers in our marketing, because I think you can tell.

And you also have a bone to pick with what you called clean beauty language.

Yeah.

So when did, when did you realize this clean beauty wasn't a term you wanted working for you?

It just doesn't really mean anything unless you tether it to a standard. So you can say clean beauty and it doesn't, there's no one to police it. You know, you can say like, my biggest beef right now is everyone talking about reef-safe hair care. It's not a thing. It's, I use on our website, it's like calling a potato gluten-free. It's like, Who cares? Doesn't mean anything. And so you can just put these things on package and they don't— they literally mean nothing. And reef safe does mean something in sun care. It does not mean anything in hair care. So, you know, I often get hammered by people that are like, this brand is reef safe and you're— you don't have reef safe. And I'm like, because it doesn't apply. It's not— it was actually very misleading to do that. And, you know, the ingredients tested on hair care are not tested for reef safety. So you can say that because there's no testing and That is very, very annoying to me to see how customers like, and it's not the customer's fault, it's the brand's fault for doing this irresponsible marketing and doing whatever they can to get away with something just because they know it'll move the needle on sales.

So what language then do you ban from your own copy now?

Like try and ban clean. I think nontoxic is also very, very misleading. I know I have a list of them, but those, I think, I think green is another one I think is kind of silly. Yeah. I mean, eco-friendly, we try and not say that either. You know, those are things that just, they really are kind of, they're, they're nothing burgers. I don't know how else to say it.

So Kate, you, a lot of your story sounds values-led and the business only works if the economics hold up. Which you appear to be doing. So what decision have you made that look noble from the outside, but was mainly about protecting the business?

Yeah, the number one answer to that is starting my own factory. That was like a very, that was a very scary thing. And that was, and so people don't, if you're not in the beauty industry, you don't really know how the genesis of a product often works. So I was in beauty for a long time. What happens is someone takes something that's trending, they bring it to a contract manufacturer, That contract manufacturer dupes it or makes something close to it. And then that brand gets to put their own marketing ingredients in it and callouts and name or whatever. They dress it up, a base formula. That's basically how it is. That's why you'll see like if one thing will, like, you know, lip stains are trending one year, you'll see every brand come out with their version of lip stain because they wanna capitalize on that momentum. For Dip, I had custom-made formulas and they were made by one chemist who retired after after he made them, he had 40 years of experience and we did many iterations before Dipp came to life. And we had a deal with that contract manufacturer that we worked with that they would be the only ones that we would be the only ones to get bars from them, like the entire category. And so that only comes with being in the industry. It's not, it does, that doesn't come from like being a rookie trying to enter the space. And so that was really, really important to me. And then I knew—

So you started it with a contract manufacturer as well. I heard from both the sauces industry and the drinks industry, that it's also the more affordable entryway into it, because otherwise you would have to come up with pretty significant amounts of money to open your own facility. So then what was the tipping point, or at what point do you move into opening your own facility in order to, well, obviously make cost savings or improve your margin?

Well, it was a sink or swim. My, my contract manufacturer filed for bankruptcy.

I see.

And I had to decide, am I gonna go to another contract manufacturer or am I going to where my formulas would be exposed, right?

Mm-hmm.

Then probably farmed out, you know, with a 5% difference to anyone else that wanted something exactly like dip. Or do I keep my trade secrets? Do I keep everything tight? And so I, had to, it would've been much cheaper for me to go to a contract manufacturer, but instead I started my own facility. And when I say me, it's my, I have grew a team. I, you know, I, but my team in, in where the factory is, is like the most incredible team. They did that actual work to build, and we did the equipment and we got it up and running very quickly. My last production run with the contract manufacturer was able to like, it was like an hourglass, like time ticking as the inventory went away to like have my own thing up and running. And we did it. It was crazy.

So what did bringing more of the production under your control actually fix? Because also it must have created new headaches for you.

So many headaches. I didn't know anything. Same thing was like, I didn't know anything about bookkeeping.

I don't think I knew anything about being in But you were willing to take on the manufacturing. Yes.

Like, I mean, it's a whole new set of regulations. It's a whole new set of eyes watching what you're doing. Like, it's a whole new set of employment. I used to, I was a one-woman show for a long, for 18 months, and then I had to do this, and then I had a team. I had to learn how to employ people. I never actually employed anyone. I had only operated as an employee or like a solopreneur. And then suddenly you have to know all the employment regulations and all that stuff. It was exciting. I'm not someone who's scared of learning, like, so I'm, I was excited to learn. But when you see sometimes, like, I remember when I, I studied economics and math, and I remember when I got my first calc book, it, it had the, the textbook. It was like Calc 1 through Calc 4. And I remember looking at the back of the book first and being like, whoa, what is this? Like, and I remember my dad's an engineer and my dad said to me, he was, he was like, You have to chip away one page at a time, and if someone can write a textbook about something, you can certainly learn it. And so, I bring that energy into everything that I do. If someone else— I'm not the first person to have a factory. Like, if someone else can do it, I can certainly learn it. Kind of little nugget of knowledge. I'll never forget when he said that to me. That little nugget of knowledge has kept me moving forward, even when things seem impossible and the hill turns into a mountain.

So what would you say, Kate, that founders nowadays, especially maybe in your industry, because I'm sure you see plenty of newcomers every time, what do they still get wrong about these authentic brands like yours who care about the environment, who not only do that but support causes, who support independent retailers? What do they get wrong about when they start their own business?

I think many founders in the sustainable space are frugal, and I don't think you can start any business with frugality at the forefront. I run my business with generosity, and it is part of the pillar, and that comes back to me in ways I can't even express. Like, it comes back to me from my retailers, it comes back to me from my customers, it comes back to me from— I get a little woo-woo with the universe. Like, it gets— it comes back to me that, that I think frugality in business is ugly and I see it all the time with founders. I understand, right? Like spending money you don't have is scary. I think spending money you don't have is necessary in order to bring money in. And I think that that is, I think generosity just attracts more. I don't know how else to say it.

So if somebody listening is tempted by the easy channel, The obvious marketplace, the quick growth shortcut, what should they get honest about first?

I think that there's no shortcuts. I think the shortcuts are actually very expensive. I think building a scaffolding as strong as you can with real customers, real enthusiasm, real reviews, like that is hard, but it is so much better because it is very, very hard to build a business on flimsy, on, on flimsy But that takes time.

Time is money, and here lies the conundrum.

I don't know if you think time is money in a sense where it's not— time is best spent creating a house of cards. That's great. You can spend a lot of time trying to balance things that are empty. I'm not really that interested. I spend a lot of time building things that are real. And so I maybe, maybe I move less fast, but I actually know that my scaffolding is so strong. For my company that I don't have any regrets about the speed at which I built it or the way in which I built it. And I don't have regrets about really, really any of it. I, I'm not worried if someone's gonna find out something because the company is built with so much integrity, not just for me. Like, I can't take credit for all of it. My team is, is incredible. Like, the team is the reason DIP survives. It's not just me. Like, so it, you know, and I think that having a team that's so motivated and so They, my team really trusts me to make the right decisions, even when they seem financially, I don't want to say not irresponsible, but like, yeah, the time is money. Even when the, the, it's a slower roll to, to get the money back, they, they have seen it work over time. Like, and, and they, I think they're really proud to work at this company. And I think that's something that a lot of entrepreneurs don't like. I, I, they, they take it, they take for granted that someone is spending their lives with them working for them. And I don't ever take that for granted. I think it's really important.

So the brand that you built obviously attracts a certain kind of person working with you. How many employees do you currently have, and do you think they come for the mission, for the cause, for the business itself?

There's 7 of us. One of them is my husband. I now employ my husband full-time. They come for, they come for the, yeah, the mission is one thing, but they come for the laughs. We have a really good time. We have a great, like, I don't know where everyone has very defined roles and everyone's really good at them. I mean, the crew in my, I don't want to call them a crew, the people in my warehouse, they're not like regular warehouse workers. There are people that have decades of industry experience, you know, in raw materials and purchasing and production. They're not, it's not like when you, when you think of someone like packing a box, they, these these are really specialized individuals that all of them make more money than me. You know, I pay them better than myself because they are so important to the, to the business. And one of, one of my employees, she used to own the most successful, one of the most successful refill shops in the country. Everyone knew her. When she had to, she had to just geographically move away from her shop. So she closed it. And because she had done so well with dip, I, as soon as I found out, I was like, come work with us. Like, I could totally have you on our team. And she's been one of the best things that's happened to the company. So, I mean, I'm, I got very, very lucky. I hit the jackpot with my employees. And I like to think that they, that they trust me to be a good leader for them also.

Tell me the story about employing your husband, because that could be a recipe for disaster, either in business or marriage or both.

Yeah, it could be. We, we don't have any overlapping skills, so I'm really good at sales and marketing. He is a designer. He's been in the beauty industry also. And so he, he's actually designed some of the most beautiful stuff you've seen at Sephora or in, in, you know, some big box retailers. So he has a lot of beauty experience doing well-known brands. You know, there was a time where he had another job and I had DIP and I was like, I'm so excited to bring you, like, recruit you on. So in our household, we have two children. We can spend time together and we can, you know, we're not in two separate universes. And we're also, we don't have to fight over decisions because, you know, he is a true artist and he's an industrial designer and I have to deal with the other things, all the other pieces. So it's, it's actually worked out really great. And we've also known each other.

You talk about work at home as well?

Yeah, we work at home. Um, but we've also known each other since I'm, I'm 42. I met him when I was 20, 20. So I've known him for a long time. Yeah, he's a great, he's great.

So let's go a bit introspective now as we're looking to wrap up our chat, Kate. Is there a belief that you hold now about growth that you probably would have argued with a younger version of yourself?

Yeah, I used to think growth was the measure of an entrepreneur. I used to think that, I used to think that, that It was about kind of the glitz and the glamor and the getting interviewed and whatever, like, and people knowing who you are. The older I get, the more I realize how small I want my world to be and how private I'd like my world to be. And I don't think the measure of an entrepreneur is growth. I think you can see that with what's happening in many, many— I mean, I would, I can use Allbirds and Everlane as that, as those 2 examples. I think actually the measure of an entrepreneur is how much they impact the people around them positively, right? And for me personally, like it's how much time I can spend still with my family and my children and my employees. I want them to spend time with their families. So, I mean, that's, I think it's a new way of thinking that is actually quite old. I think we lost it, that we lost the plot in entrepreneurship. I think for, I think, maybe a decade. And I think it's time to return back to, you know, the things that genuinely make people happy and make the sun feel like it's actually shining.

Speaking of sun shining, it seems to be shining for you now, Kate, because you have built a sustainable business over 7 figures. You have a happy family life, but you also work with your husband. You support great causes. But I'm curious to know, what were the sacrifices you had to make to be where you are today? Sleep.

I lost a lot of sleep and all sorts of—

Can't tell.

I've lost so many. I mean, I am now in the habit of waking up at 4:30 in the morning and I do most of my work as soon as I can wake up. And building the bit, building that first 18 months, I put in, I don't know, sometimes 20 hours a day. There's a lot, a lot to do in the beginning. And once you kind of build your systems and you build, I don't wanna say the clout, you build the respect and you build the reputation. All of those things take a long time, but they're so, so valuable. Then you can slow a little bit. But I think the things, yeah, the, I've lost more sleep than I think anyone I know. And also making decisions, like the decision to open my factory. Like I talk about it flippantly now, but there I was so sick over it. That I was like, you know, coughing blood. I mean, I was really sick. Like I'm, it's easy to talk in these interviews as like that, but it's like very condensed. But in those moments where you're making decisions, there've been, there've been bad decisions I've made that have cost me a ton of money. It's horrible. It's really bad.

Tell me a couple of those bad decisions, which cost you a lot of money just so that we can help others avoid them.

Yeah, one, one in particular, Jonathan, my husband, he had this, he wanted to elevate the packaging, right? He wanted the paper box. He wanted an embossed logo on it to just kind of elevate it and make it look a little bit nicer. It's totally unnecessary. He went to a vendor who said that they were, they made boxes in the United States. They offered to give a tour of their facility, like all of these things. It turns out it's not what they were. They took— we ordered 100,000 boxes from them. They took a $12,500 deposit and then never delivered any goods. And because they were actually overseas, there's really not much we can do about it. That was a very bad decision that was fueled by both of us. I'm not trying to blame him for it. We were both like, "Yeah, you know, that sounds great." Like the pricing needs— everything made sense for— and we were like, "USA manufacturing, like, okay." And you know, that little thing of just wanting to elevate the, the packaging just a little bit cost us so much money. And the only thing I could do was write them a bad review. I had to eat that, that money.

So if it sounds too good to be true, it is too good to be true.

Probably, you know, it is, it is one of those things where you're just like, uh, like, and I, that's what I mean about real life interaction and real life commerce. I mean, that's the only protection we have left. Like, had I Had we flown to Arkansas to triple check that they were USA, we maybe would've, would've been able to save our money. But as it was, and we fought for a long time to try and get it back, but it's really, it's really hard when you're dealing with an overseas company to get anything back. It's, there's little things like that all the time. Like I paid an SEO agent or agency, I paid them a lot of money. They kept telling me, you just gotta wait. You gotta wait another month for it to come. You gotta wait another month for the results to come, another month. And it got to be, I think, like $20,000 in spend. And I was like, I do not, I will not pay you guys another dime. I can't do this, you know? And we just, you know, those are things where you're like, you're told you need to invest in this stuff and it turns out you didn't, you know? That's the, those are big losses, but those are—

But not to do something else. You've done also something else rather than just not invest in that. You found alternative channels. So I think this is the main lesson from our chat today, that even if you go against the grain of the tech giants, of the big retailers, you have to find an alternative that fits your brand and your business.

Right, right. And because I'm not so technologically inclined, right, I know a lot about beauty. I don't know a lot about, you know, I don't even know what they're called, the little inner workings of SEO. Like, I don't know about them. It was easy for someone to sell me something that sounded great, you know? It was really, I mean, that's, it's, and it's happening more and more. I, I discover like I'm not the only one kind of getting duped by these companies, um, that overpromise and severely underdeliver. You know, the only thing I could do is protect my team from, because from those things. 'Cause if I had to choose between $20,000 on SEO that didn't do anything, and I did that in the wake of that company, a competitor, writing all those blogs about us, I was like, oh my God, how do I combat this? Like, I got caught at a very vulnerable time where I was like, didn't know how to combat a brand stealing all of our organic traffic. Like, you know, it's very easy to lose your way., and so I would've much rather given my employees a $20,000 bonus than pay for that. And so I now am extremely, extremely cautious, even more so than I ever was about someone promising me something. And, and yeah, it's just, I recommend that to any, to any entrepreneur, like, please be extra skeptical.

And on a final note, if they're gonna be skeptical, what should they check and what should they do not to be, not to fall prey to this sort of tactics?

I think that they should go into every conversation realizing that this other party is trying to make money off of you. It's not you like approaching them. So I think first you have to like think about like in economics, we learn about game theory. You have to like look at the players, look at how everyone's behaving and who wins from the connection most. And when I reset and I just go back to my old my old school brain, like, I'm like, man, I mean, I totally got hosed just because I didn't, I didn't use my normal toolkit to assess the situation. But yeah, I would just, I would just realize like, oh, does this person need me more than I need them? And if the answer is yes, then run.

So that's the basic principle that you have to come around to. Economics 101, but still works, still applies. In the digital and AI era. Love that, Kate. We're going to use that one as a wrap-up for this episode. So thank you so much for sharing your story and your learnings and your words of warning for anybody navigating this industry.

Well, thank you so much for having me. And I hope someone made it this far and that they enjoyed the lessons that I have and the warnings.

I'm sure they certainly will. Thanks for tuning in all the way to the end of this episode. If you enjoyed it, please share it with someone you think would get value from it. And don't forget to subscribe on YouTube, Spotify, or Apple Podcasts so you never miss an episode. For the best way to stay in the loop, head to millennialmasters.net. That's where you'll get all the latest features and new episodes straight to your inbox every week. Catch you next week!