CEO finds another niche,
Entrepreneur uses specialists to deliver accessories to clients
President-elect Donald Trump’s economic plan is expected to give a boost to business, which has been pressured by what some consider a tight regulatory environment and high corporate taxes. The potential for a rollback in regulation and a corporate tax rate of 15% are reasons the stock market has reacted so positively to Trump’s plans.
But what about entrepreneurs and emerging businesses? Will this area still be the growth story it has been? And where will the jobs and growth come from in coming years?
I caught up with serial entrepreneur Jessica Herrin, CEO and founder of Stella & Dot (and before that weddingchannel.com in the 1990s). Herrin has created what she calls a modern-day Mary Kay, where she relies on specialists or stylists to get her accessories to customers.
Our interview follows, edited for clarity and length.
Q: STELLA & DOT IS THE SECOND COMPANY YOU’VE CREATED. HOW TOUGH WAS IT?
A: I first started my career in technology and quickly realized you could create professional success without really creating impact and happiness. And I became motivated to start another business that would really make a difference on something I was passionate about, and that was creating more flexible work for women. I began in my living room while I had another fulltime job, and I was pregnant and wanted to reinvent what the onthe-go business opportunity could be for the modern woman that would be about great product, use of technology and really putting profits in your pocket by reinventing the model.
Q: TELL US ABOUT STELLA & DOT AND HOW IT WORKS.
A: Stella & Dot is a family of brands that has grown into two accessories brands, Stella & Dot and KEEP Collective. And we’re also a platform that launched a skincare brand. With Stella & Dot, we’ve taken a couture design process and applied that to affordable luxury. So half of our product line is under $50, and it really is style made simple. Our stylists are really a personal shopper that help girlfriends who get together and try it on at home, or shop online ... for that busy woman who wants to look pulled together but needs a little help.
KEEP is a more memory-based line which makes the ultimate personalized gift and is a keepsake. Our skincare brand is creating a good-for-you product that gives results.
Q: YOU STARTED THE WEDDING CHANNEL BACK IN THE ’90S.
A:
Wedding Channel had a very non-sexy start. I was working at a tech company that was bringing together price and availability information to help make assembling computers easier. I applied that basic thought to bring together the information of where people were registered for wedding gifts and make it easy for people to shop for that online. This was during the birth of ecommerce. So instead of having consumers go into a store, they could easily check out in minutes by searching a couple’s name, finding the different stores they were registered in and purchase a wedding gift. So it was really about taking technology and creating a very simple solution to a large-market customer problem.
Q: A LOT OF PEOPLE HAVE GREAT IDEAS, BUT THEY DON’T KNOW HOW TO EXECUTE THEM.
A: I just wrote a book, Find
Your Extraordinary, that chronicles my entrepreneurial journey. And it really talks about the entrepreneurial spirit. Because for most people, having an idea, or even access to capital, isn’t enough. It’s about the motivation and will to be tenacious enough to actually get an idea off the ground and turn it into a viable business.
Every overnight success story takes seven to 10 years. It’s harder than you think. For me, I had to drop out of business school and raise venture capital, and that’s how I started Wedding Channel. I was very convinced that I wanted to do Stella & Dot differently so that I could keep control of the mission and run the business for impact instead of profits. That meant that I had to bootstrap. I had another full-time job, and I didn’t take a (Stella & Dot) pay- check for six years.
You have to stick with it. It’s about finding the right people that can partner with you, who are experts in the area that you need to know about. And then it’s about being productive and getting the right things done.
Q: WHAT ABOUT THE MONEY END OF IT?
A: I went back to the people that had been on my board at Wedding Channel. That was productive because we had a working relationship, so they invested seed capital into this business. It’s definitely a Silicon Valley anomaly that we spent $2 million to get to profitability. And that’s compared to the hundreds of millions other companies of our size have raised, and they’re not necessarily even at profitability yet.
I wanted to fund the business off of sales growth and not be in the business of turning a dollar into a dime but really doing something sustainable. And that took bootstrapping. It took a lot of sacrifice. But it was worth it because now our business isn’t about who needs a liquidity event and who’s trying to post profits for the quarter for Wall Street. It’s truly about serving our business owners and making an impact on the workplace for women.
Q: WHAT WAS THE INITIAL INVESTMENT YOU RECEIVED FROM OUTSIDE INVESTORS?
A: I had invested myself and was funding the business until I brought in partners. I think our seed round of capital was about $250,000. And that was maybe a year or so into the busi- ness when we already were generating about that much in revenue. As we went to grow and hire people, then we needed to raise another couple of million dollars.
Q: WAS IT HARD FOR YOU TO ACCEPT THAT YOU AREN’T GOING TO BE THE ONLY SHERIFF IN TOWN?
A:
Bringing in people and partners is essential for success. And I needed other people to care and have skin in the game. So I didn’t think about it as giving up ownership. I thought about it as gaining another person who cared as much as I did about driving the business to succeed in order to serve the mission. And if you pick the right partners, you’re gonna feel that way too. So to escalate my own commitment, I paced getting that investment around the birth of my two daughters and knowing that I was ready to commit to other people around the trajectory of the business.
I’ve always looked at my partners as welcome seats at the table who care as much as I do and are equally responsible for creating the success. Blythe Harris, who’s the chief creative officer, joined a couple years into the business and became a partner. She also invested in the business. And that was essential for our success.
Q: TELL US WHERE THE BUSINESS IS GOING.
A: Each of our three brands is only at the beginning stages of its market potential. We’re very focused on broadening our impact on how many people we help earn flexible income, often on top of another full-time job. So our focus is using our three brands in the six countries that we’re in to capture all the untapped demand that’s out there for the $30 billion accessory market in North America and the multibillion-dollar skincare market, where we feel we really have disruptive products people love.
Q: AND THE WAY YOU DO IT IS DIFFERENT, SORT OF LIKE A MARY KAY OR AN AVON LADY, RIGHT?
A: We have a very modern approach to our business. Our sellers drive their business through social media and mobile technologies as much as they do person-to-person contact. And we have a very pro-profit model for them in which there are no quotas; they’re not carrying inventory.
We ship direct to the customer. We offer free returns and guarantee quality. So we really make this business something that works when they work it, and they can do that at their own pace.
Q: YOU ARE UP TO 500 EMPLOYEES AT YOUR HOME OFFICE
A: Yes, and just over 50,000 independent business owners that work across one of our family of brands. And we produce our goods in the U.S. and in Asia.
And it really depends on what type of artistry we’re using. So you’ll do embroidery in India. Our skincare products are made and billed in the United States. And some of our jewelry is made in Vietnam, China and Thailand, based on skill.
As an entrepreneur, you’re not an expert in everything. But if you’re a creator, you’ve got to be a connector of experts to your mission.
So it’s about going out and meeting as many people as you can and finding the best people that are experts in marketing or production or technology or whatever balance of skill you need as an entrepreneur.
I really understood technology and company building and marketing and sales, but I needed someone to help with product design and production processes and (working with) individual business owners.
So I went out and sought that expertise in partners. And then they had a network of people that were experts.
Q: DO YOU EXPECT THE TRUMP ADMINISTRATION’S ECONOMIC PLAN TO HAVE AN IMPACT ON YOUR BUSINESS? LOWER TAXES AND LOWER REGULATIONS?
A: Well, we’re also potentially expecting tariffs to go up. So we’re in a “let’s see what actually comes to fruition and gets put into law versus what might have been part of a campaign rhetoric” mode.
I believe in what we do and why we do it. I believe people need flexible income. So from our perspective, I’m optimistic about continued growth because we make great products and we do it for a great reason.
From a general economy perspective, I believe when you lower corporate taxes you give businesses the ability to invest. So if businesses are operating responsibly and they’re focused on job creation in the U.S., that will be good for the economy.
“Bringing in people and partners is essential for success. And I needed other people to care and have skin in the game. So I didn’t think about it as giving up ownership.”