Founder's Story - ADHD, Adversity, and Ambition: How Tracy Holland Built a $450M Beauty Empire | S2 Ep. 154

Episode Date: November 30, 2024

In this episode, we revisit an inspiring throwback conversation with Tracy Holland, a trailblazing entrepreneur and beauty industry authority. Tracy, the co-founder of Hatch Beauty, shares her journey of creating and scaling some of the most successful beauty brands, including Orlando Pita Haircare, Salma Hayek's Nuance, and Bliss.Key Highlights:Entrepreneurial Beginnings: Tracy reflects on how her entrepreneurial spirit was shaped from a young age and the challenges of not fitting into traditional molds.Navigating ADHD: Tracy discusses how ADHD shaped her perspective, describing it as a "Ferrari engine with bicycle brakes," and shares valuable tips for managing ADHD in children and adults.Building Hatch Beauty: The genesis of Hatch Beauty as a brand incubator that brought prestige-inspired products to mass retail, working with giants like Target, Walgreens, and CVS.Lessons in Leadership: Tracy emphasizes the importance of clear agreements with business partners, personal alignment, and knowing when to step back and let others lead.Impact of Social Media: Insights from the documentary The Social Dilemma and its implications for kids, self-image, and societal behavior.Mentorship and Legacy: Tracy’s mission to mentor millions of women entrepreneurs and her passion for fostering independence and growth.Resources Mentioned:The 80/20 Rule and Unreasonable Success by Richard KochTools like EOS and the Cultural Index for leadership assessmentConnect with Tracy Holland:Website: Potential to Powerhousehttps://innerfifth.com/This episode is packed with actionable advice and inspiring stories for aspiring entrepreneurs and leaders looking to make an impact. Tune in to hear how Tracy continues to redefine success in business and life!Our Sponsors:* Check out Rosetta Stone and use my code TODAY for a great deal: https://www.rosettastone.com* Check out Vanta: https://vanta.com/FOUNDERSAdvertising Inquiries: https://redcircle.com/brandsPrivacy & Opt-Out: https://redcircle.com/privacy

Hi everyone. This is Kate Hancock. And today I have Tracy Holland. Hi Tracy. Hi there. Good morning. Good morning. I'm so excited for you to be here, Tracy.

Everyone Tracy is a founder, CEO, an entrepreneur who is an authority in beauty and wellness with a global track record of incubating and launching brands. global track record of incubating and launching brands. Now she's behind the Orlando PETA hair care, new ones by Salma Hayek, Bliss, and a lot of big brands. Also, she was the Ernst & Young entrepreneur of the year in 2017. Oh my God, Tracy, welcome. Thank you. So tell me, what was your journey like to get where you are, Tracy? Well, I mean, I think if entrepreneurs were out there and called to be an entrepreneur, it's a blessing and a curse. Right? So I think there are no accidents in life. And in my case, I was an entrepreneur from a young age. I'm the oldest of four girls. My parents are both PhD. My father's a nuclear

physicist. My mother's a child psychologist. Both of them prided themselves on strong academic careers and hard work. Both of them prized really the accreditation of a great school, but also getting a job and a 401k and a pension and working for a company and going from kind of the ranks and going up to manager and then director. And that just was never in my DNA. So I did not fit in with my family from the very beginning. I was literally the kid who now in hindsight, I think I probably had ADHD, but I didn't know that that was not something people talked about.

Yeah, for sure. So I was always, they were having a difficult time getting me to focus and to do well in school. And at some point my mom put me into a special ed class in sixth grade and said, you know, you have learning disabilities in math and you need a lot of support. And weirdly, math has one of my strongest areas. I couldn't be successful in business without having great math acumen, but I have a great math acumen around making money margin, forecasting, revved ash flow planning.

If you ask me algebra or if you ask me geometry, it'd be a complete F. But math is actually one of my strongest suits, but in school, they put me in special ed. I was the only kid in the class, not in a wheelchair actually at that time. And you put rubber things on my pencil so I could hold my pencil appropriately. And honestly, I just thought maybe I'm not that smart. And maybe I won't be successful in school. My parents seemed smart, but maybe I just didn't get blessed with that. And looked for ways to figure out how to make money. I mean, that was from 12.

I remember starting my first pie business. My father bought me a horse and so I would give horseback riding lessons for money. I would host community. I'd host things in my backyard and invite the neighbors and charge money to watch performances. I was just always very mindset oriented toward making money. And at 14, I went to my dad and asked him for $25 so I could take my GED because at the time I really wanted to just get out of high school and start my own business. And my father was so mortified.

He was like, no, you're not getting your GED and no, you're not dropping out of school and no, you're not going to go start your own business. And then they whisked me away about a week later to reform school. And they put my hand reform school for two years, um, where I couldn't leave. And I had to study and I had to do work crews. And I had to, we went to school Monday through Saturday and we cut down trees and wired electricity and did wilderness survival trips. And they kind of forced me to graduate from high school because I had no choice but to be there. And

so when I got out of high school, I decided I wasn't very smart. And so I didn't think I was going to end up going to college. And I ended up waiting tables for a year and making money through tips. And my poor parents, because they thought, oh my gosh, here she is. Now waiting tables, I refuse to think about college. And it was through that experience of waiting tables. And actually I got fired from my first job at Adele's because I wouldn't hike my skirt up high enough. The manager at the restaurant said, you know, we have a dress code and your skirts not,

your skirts to your knees and you need to hike it up. It needs to be mid thigh and if it's not mid thigh, if I don't see your skirt high enough next time you come in, we're going to have to terminate you and let you go." I thought, I was like, this isn't how I want to be treated. I know I'm smart enough to not have to hike my skirt up for tips, but I just didn't feel like maybe academically, I was going to be super successful.

And I applied to the Fashion Institute of Design at 18 or 19 and got into the Fashion Institute in San Francisco and started my academic career there and learned about retail and product and wholesale and production and distribution and margin and realized that that could be something I could probably figure out and be pretty good at. And as I went through the Fashion Institute and was getting straight A's and at the top of my class I thought maybe I am pretty smart. Maybe I could be successful academically. And so I rolled into a four-year program at San Francisco State under a foreign policy,

international relations and a marketing undergrad and was super, super wildly successful academically. And I think these little building blocks as human beings, when we get validation from the outside world about the fact that we're capable or we're smart or we can be competitive and we have a gift to bring to the world, it gives us the confidence and the momentum to continue to be willing to build. That's where I began my successful career in business was just these moments of feedback of finding from outsiders who I respected and institutions that I respected to say,

look, you're not only successful, but you're at the top of your class and you can compete. And so it's shaking the beliefs. Our beliefs are such a powerful impact as to whether or not we are successful. Yeah. The beliefs that we have, who we think we are and what we carry in terms of the things our parents told us, our teachers told us,

our influencers growing up told us that we're this or we're that, or we're not good at this or we're good at that, or we have possibility here, but this isn't an area that we're ever good at this or we're good at that or we have possibility here, but this isn't an area that we're ever going to be successful. Like unwinding that, pulling that apart, figuring out how to recalibrate those beliefs are the most important thing I think as people process we go through. Oh, now take me back to that time. If you remember when you're, you're in a special, um, class, my kids are both ADHD

and I have ADD. So while I was growing up, my, my mother, I mean, she would tease at me like I'm stupid or something, cause I could never remember, right? Like, do you think it has an impact on on you like doing more in life or tell me? So I think people with ADHD are Ferrari engines with bicycle brakes. So I think it's our superpower in some ways because I think it gives us the ability to look at the horizon and survey what's happening on multiple inputs and calibrate quickly whether or not things are working well or things are off calibration. calibration, right? So my ability to handle inbound inputs on business, I can smell issues

long before they actually become issues because I can kind of handle a lot of balls at once. The hypervigilance of ADHD also is a little bit of a drain on your humanness, right? Because there's a point of time in which your body needs to rest. Yeah, when I say a Ferrari engine with bicycle brakes, you know, if you think about that, you have to figure out how to slow your body down enough to enjoy the moment without thinking about the next moment and the next moment and the next moment. So there's this place of finding peace in the moment that allows you to just settle in and enjoy rather than be go, go, go, go, go, go. Right? Yeah.

So, I think all three of my kids have been diagnosed with ADHD. All three. All three. I thought, okay, this is like life coming full circle for me and having to deal with this challenge, which is teaching three little people how to figure out their own calibration. So my daughter interprets her own ADHD issues with always feeling that word enoughness. You know, am I enough? Are my grades enough? Am I doing enough? Is my homework enough?

Am I being successful enough? Do I have enough friends? Her enoughness, that's how it shows up for her. Whereas my boys in their ADHD, they have to finally kind of find their social balance with their friends because they're always the kids that are bouncing around and really in their physical body and getting them to settle so that they can have a relationship and be settled in the moment physically. I feel like with boys boys it shows up with their just like body moving all the time, whereas girls it shows up more internally. But they're figuring it out. Boys are actually both on medication and my

daughter is not. So that's an interesting, that's an interesting consideration, how it's interpreted differently for boys versus girls. So yeah, when my youngest one, he tends to bounce instrument from one to another and he would go board and like, I don't want to do homework because I know all these things already. I'm bored, right? He's not motivated enough, but he bounds into different sports or instrument, like he gets bored fast. Right.

Yes. They get, they just want to be stimulated all the time. All the time. You know, what's really interesting that helps that I would highly consider if you get a second, go to Amazon and buy some kinetic sand. consider if you get a second, go to Amazon and buy some kinetic sand. Kinetic sand is, has a magnetic aspect to it. So imagine the feeling of sand, the texture, but it doesn't go all over the floor. It sticks together.

And so when you roll it around, the sand stays either in a bowl or it can stay in a ball and not drop pieces of sand all over. And for my boys they both enjoy playing with kinetic sand while they watch television. And one thing I learned about ADHD especially in boys is that their learning happens when their movement takes place so that's why they need to move their leg, or they need to pull a rubber band, or use a squeezy toy that their brain actually absorbs and learns much more quickly and retains information if they have a chance to move while they're learning. So I got kinetic sand for them, and it's made such a difference. I can get them to sit and watch a movie and really enjoy the movie if they can play with

their sand or have one of those squishy balls. Well, that's a great tip. Now, before we started our live, we talked about the Netflix social dilemma. Can you tell me what their conversation like to your boys, to your kids? Oh, you know, I'm so challenged because as an entrepreneur, I love inventions, right? So this idea of learning and social media and what the world comes through your phone and you can learn so much. I was listening to a podcast this morning with Tim Ferriss and Richard Kosh, who wrote the 80-20 rule, which is one of the best-selling

books of all time. You know, 80-20 rule rules my world. Actually, as an entrepreneur, the best thing I think you can think of is getting, you know, doing your best and making the best decisions you can and never getting to completion. You have to make decisions and continue to move forward. So I think of social media as being such a gift to all of us, but this movie actually illuminated the issue that we don't talk about that faces us, which is the addiction of these tools, and how the developers of these tools have actually designed the tool to prey on or to

support the weakness as humans that we have, which actually goes back to Pavlov, right? When you think the Pavlov principle of ringing the bell, and every time you ring the bell, you get a treat, or a hit of cocaine, or whatever they would do to stimulate animals upon the bell ringing a stimulus. In essence, it's the really fundamentally the same principle. So every inbound ding, every inbound bing, bong, gong, notification is intended to continue hits of dopamine, which trigger a response in you of connection and excitement. taking that away causes stress, depression, loneliness. And to think about the fact that a device

is what brings joy or connection rather than a human being and connection through contact is a radical shift in who we are as human beings. Absolutely. And not even really yet determine what the impact of that's going to be for us in 10 years, 15 years, 20 years, right? We're seeing through our devices what we think of as news and we're reacting to it. We're getting feedback or input on social issues and disparity in income and political perspectives. And really there's no

one vetting whether it's true or not. So we're reacting and it's controlling how we think and how we act and how we purchase and what we look at and what we do. And it's kind of mind blowing. Mind blowing, yeah. It's scary. Mind blowing, yeah. Right?

Yeah, yeah. Yeah, and I shared to my kids, I was like, I'm kind of guilty of that, the algorithm, the vanity metrics for if he wants a brand that we look for it, right? But at the same time, so I communicate to them like you have to watch it because me, I'm okay, I'm strong enough person that my emotions are not tied to how many likes or comments I get, right? The younger with low scoping mechanism, that's scary.

Right. And my 12 year old, Kate, this actually happened a week ago, which was my biggest, I think, fundamentally my biggest shift in how I see I'm seeing this movie today is a week and a half ago, my daughter came to me, she's 12. She's in sixth grade, and said, sixth grade and said, for Christmas, I wanted to know if I could get a nose job. And I at first, I scoffed because I hadn't watched this movie yet. And I thought, you know, a nose job, first of all, she has this gorgeous Roman nose. Her nose is perfect. Even if she were 18 or 20, past the age of parental consent, do I think there's a surgeon who would really in good faith do a nose job on her? I don't. To do what? Right? I mean, her nose is perfect and it's perfect for her face. So it's not even

me as a mom saying your nose is perfect. I think it would be weird to change her nose for any face. So it's not even me as a mom saying your nose is perfect. I think it would be weird to change her nose for any reason. But she turned and said, look, I have this like slight, you know, bump here. And I looked at her and she was kind of smiling. And I said, are you serious right now? Are you just saying that to get me? And she said, no, I'm serious, mom. This is really, this thing really bothers me. And I would like to get it done. And I recognize that you may not give me the money to do it, but at some point I'm going to have it done.

And I said, what would give you even the indication that there's something here on your nose that you would need to remove? And she goes, well, my nose just isn't perfectly straight. And so I've really noticed it bothers me. I thought, God, that's so weird. I mean, it's just like, it's so kind of left field. I mean, if it's just the strangest like little micro nuance and the fact that she's even noticing it is odd. And then I watched that movie and I thought, oh my God, you know, there are these suicide rates and deformity, like the complex and the perspective that they have watching these TikTok videos and how they're seeing themselves. The whole thing

just gave me pause. So I don't find it a coincidence that that conversation took place a week and a half ago, and then I watched this movie. So now I'm on a mission. Got to fix this to the extent that we can. And by fixing it, I mean having the conversation, removing the shame, putting the conversation on the table and talking about it every single day openly as much as we can with our kids. Absolutely. Right?

Absolutely. Yeah. Because it's shocking to me that this little girl at age 12, in sixth grade, would even have an understanding of what a nose job is. Right? Yeah. I remember my eldest when he was, I think he was 15. I have a skincare business and he asked me, mom, how can a light in this spot or

something? It was like, wow, does it bother you? Cause he's more tan, he gets really dark. Like, does it bother you? he's more tan, he gets really dark, like does it matter you would bother you with your color? But I think that's over, but that's kind of like questioning myself. Like what are these kids watching and who is really their ideal person to look like? Yeah.

Right? Yeah. It is scary. It's crazy. So I feel like it sounds like there are some really smart folks out there who are working on this issue. And I think in the next decade, this is going to become one of the biggest topics that we're facing because I don't think yet we quite understand the implications of what all this means.

Yeah. You know? What can we do? Like, what is the conversation like? Like, more deeper into what we know now. Right. Well, and think about this, right? So how many people have you talked to in the last year who have said, I made a statement and then the next day I looked on my Instagram

and a feed came up for me of Bolly or red roses or whatever it may be that we discussed that I've never thought of or considered in my life. And now all of a sudden I see it in my Instagram. Social listening, it's the listening. So that's gonna become, I think, the next phase of conversation. Because as an everyday consumer, I have Alexa, I have my phone. I don't think you and I walk around considering that there's someone listening to what I'm

saying or you're saying as somewhat like as in a big brother sort of way and considering how to retarget that back to me and you. I don't think, but maybe more other people are more conscious of it. It doesn't even faze me. Right? Yeah, for sure. I know for sure, Alexa is listening,

so I tried not to like order through it. Yeah, it's scary. Especially with a smart home where your wall is listening to you. Right? Yeah. See, I always was under the guidance that Alexa is not listening unless you call her name.

Like Alexa's latent and sitting there like a piece of equipment until you say Alexa and then all of a sudden she's like, yes, but actually that's, I don't think that's how it works. Yeah. Or like you can, I mean, I, I know brands could manipulate Alexa. You can do what is the top pillowcase and you keep on mentioning Google voice. Right. Yeah, so it is scary. I mean, I just, you know, I feel really bad for the kids in the younger generations. I mean, like, what is their future gonna be? It's gonna be really interesting

to see what happens in the next 10 years. And today we have a president who uses Twitter as a conversation platform and has been for the last four years. And today we have a president who uses Twitter as a conversation platform and has been for the last four years. And so, you know, can you imagine, can you imagine five or six or seven years ago where we would have in a million years thought Obama would have some sort of one-way conversation with us through Twitter. Never. Like it would come through his press secretary, you would have his formal agenda, it would be discussed with the media. The media would then disseminate the information.

That's how it all worked, right? So in the last four years, we have as constituents had conversations with our president, which hasn't been vetted. He's not going through his press secretary. No one's reading his tweets before he sends them, obviously. So that's a whole new form of communication, right? Yeah. Are you kids on TikTok? All three of them? Oh yes. Okay.

Scrolling all the time. All the time. Although I did get this recent software program, I'll tell you what it's called. It's called Deco. D-E-C-O. Have you heard of it? No. And it comes into your home and it controls your children's access to all electronics.

So in essence, it's acting as a gatekeeper to all electronic communication. And I can set settings, child, preteen, teen, or adult. And so if that's in essence by child, what those children are allowed to see through that device. I think the only downside to this is it can't control obviously their cell phone Because their cell phone has its own Wi-Fi connection But I do think in that movie it did say that

You really shouldn't allow your kids to have phone until age 16 so I Give my child a phone when they are going to a friend's house or they're going somewhere and I need to access them. But I know now that I need to take the device away when they get home and then allow them to have it as I would hand it to them and say, okay, you can use this and then hand it back an hour later and scroll through what they've been looking at.

Yeah. It's a conversation that everyone, it's scary. It does scares me watching that movie. It's a huge, it's a huge aha because nobody has yet documented the actual with all of these tech thought leaders that there's this plan and discussion about how to re-engage people every hour of every day back on their device in the same addictive pattern as you would have the Babylonian theory, right, as to how to continue to engage users. And have you been off your phone? Have you literally gotten your phone and put it in to a box or taken it away for day two, five, seven days at a time?

When was the last time you did that? I did that. I was doing road trip. I turned off my phone for since this quarantine because I get like carpal tunnel syndrome from working to my phone. So I tried to turn it off and or I put like the heaviest case. So I know my, my, my hands can't handle it. So I ended up not using it. Like, yeah, I was able to do it April for like five days.

Wow. Yeah. How did you feel? It feels so good. My stress level drop. Yeah. How do you feel? It feels so good. My stress level dropped. Yeah. Because I don't have to watch and I don't have to, you know, I stop watching the news a lot. I kind of limit to watching political stuff because it's stressful and what's going

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It's like I have better clarity not relying and watching my phone all the time. Right. It's a big deal. It's a big deal. Big deal. Did you feel stressed and overwhelmed when you got back and you had a hundred texts and 500 phone calls?

I even try not to return calls and a lot of junk. Like I would just like, I was fine. I think I was doing a lot of road trip. You have to do it constantly to get used to it. Yeah. Yeah. So I'm fine not relying on my phone. And do you let people leave voicemails for you and do you return them? Yeah. Yeah. Yeah. I have a girlfriend who her voicemail is I don't do

voicemail. So if you leave me a voicemail, I'll never return your call. Did it work for her? It works, you know, for sure. She's a big beauty entrepreneur, Tony Koh. Do you know her from NYX? No. What was the brand? NYX Cosmetics. Oh, yeah.

NYX, right? Like they get acquired by L'Oreal. Yeah, yeah. Yeah, she has a message on her phone and it says, so thank you for calling. I don't do voicemail. So if you leave me a voicemail, I will not call you back. If you want to reach me, text me, but otherwise I'm out. I love it. I love it. Now, Tracy, let's talk about Hatch Beauty. What was the, what was, tell me how did it, how did you come up with the name, when it all started? Tell me the story. So my business partner, creative gentleman who's super creative, came up with the name

Hatch Beauty. We had Scout and Hatch Beauty, which in essence, the idea being hatching an egg or coming up with a new idea. So he had come up with the name back in 2009. And the idea actually came in the early 2000s, frankly, early to mid when I would see long before HatchBee formed as a company, I saw the need that retailers had to have incubated concepts that felt like third-party brands. So it felt like a L'Oreal brand or it felt like a Unilever brand, but they wanted to have exclusivity. So they really, at that time Walgreens and CVS were very concerned about each other in market share.

Target and Walmart, very concerned about market share. At that time, Sephora was kind of more concerned, frankly, about department store than they were about Ulta. Now, I would say it's a Sephora Ulta thing. But that was really the genesis, which was retailers were really looking for a unique point of difference. They wanted a unique proposition, something that felt exclusive, but they wanted it to have all the bells and whistles of a third-party brand. So they wanted, they're not interested in control brand, they weren't interested in

private label. They wanted a brand that had social media. At that time, social media was Facebook and website. In the beginning of this idea of incubating brands, it was really how do you have a website presence and then how do you drive allure and Cosmo and Vanity Fair and at that time, magazines, how do you drive awareness of the brand through traditional print media? And the big business idea that I had to form Hatch Beauty, which we were truly the first beauty incubator

in the United States. At that time, next to Mesa, which was one of our competitor, who was a French based company and their primary business was frankly in Europe. They had very little business in the US when we started. They're primarily a fragrance business. So they would do a lot of private label fragrances for Zara and companies like that. But the idea was really born from the needs of the retailer. And then when I was in Europe in 2004, 2005, I saw what Boots was doing at the time with number seven and with Botanics.

And then in 2005, I saw Boots bring number seven and Botanics to the US market and put it inside of it. Right? Is that Target? Yeah. And they had 18 linear feet inside a Target. And 18 linear feet of boots-based brands, including Soap and Glory, which was Marcia Kilgore's brand. After she left Bliss, she went to go develop Soap and Glory with the Boots team. And then as I dug into it more,

I realized that Boots had a fully vertical organization. So they had an incubation arm internally, they had an R&D arm, they had a marketing arm, they had a manufacturing arm. So they own contract manufacturing facilities. And I was so impressed as an organization as to how they thought. So as a retailer, their solve for how to find a point of difference from other competitors in their market was to create brands that they would own and they would drive the distribution and the strategy around marketing and promotion within their own stores.

But then what I found fascinating is that they successfully took that brand and put it into another potential competitor retail set, even though Target wasn't necessarily a competitor at the time because it was in the US market and Boots at that time, Boots and Walgreens had not merged to form a Nuke, you know, a US based entity. So I was fascinated at the idea that someone like Target would find a retailer owned brand, Compellent. And I thought, you know, there is an opportunity to incubate brands with exclusive retailers as a launch pad to get the brand into distribution and then look for

complementary retail partners to co-launch with after a certain exclusive period. And I wonder if we could do that and it would work. And it was really that simple. Like this seems pretty interesting and nobody else is doing this in the US market. I wonder, you know, at that time Target was probably the closest retailer to Boots. They had Sonia Kushek and so they were developing Sonia Kushek product through their procurement and development teams. And they were working with her as the influencer in the creative arm. And then they would go seek suppliers to, to fill those, those items for them. But really there was no other retailer in the U S market that was capable of doing that.

And so I thought there's a really big business here. And I wonder what it would take for us to launch this concept. And year one Trader Joe's and Overwaity were our first two retail clients. And year two CBS was our first big retailer client. And then Walgreens and then Walmart and Sam's Club and Costco and we just kind of continued to build our business momentum. And so from 2010, Jan 1 or Jan 2 when we opened our doors, by the end of 2016, we had generated over $450 million in revenue. Wow. Wow.

What was the first brand you launched in those retailers? Our first brand in year one, which is actually full circle come around this year in COVID, our first brand in year one in 2010 was a Trader Joe's hand sanitizing product because we had H1N1. Wow. So we did over a million units of plant-based hand sanitizer that year. So we had an aloe vera and just kind of plant-related product, but we did quite a bit of hand sanitizer in 2010.

And then we developed a Bath and Body range for Overweighty, which is a Western Canadian-based grocer, much like Kroger up in Western Canada. And we developed a line of Bath and Body related products, all fruit and fragrance and scent based. My business partner had been formerly with Bath and Body Works, so he kind of took the heritage of what we had done, what he had done at Bath and Body Works and brought it into our year one product with Overweighty. Wow.

It was fun. And that year, that year we did two million, year one of our business opening, we did 2 million in revenue, a million of it was consulting income, and then about a million of it was product sales. Love it. And then year two, we did almost 10 million in revenue. About 8 million was in product sales, or maybe almost 9 million in revenue, about 8 million was in product sales or maybe almost 9 million in product sales and almost a million in consulting.

And then you're 3, 13 and a half million. And then you're 4, 50 million. Wow. I love how you remember your figures. Yeah. Yeah. Now, how do you deal with that? Because I know for sure CVS, they have it a different look and then the packaging a

different one. Like they have this different... How do you handle with that as a brand? Because they like different things, right? Consumer does. Yes and no. I mean, at that time, we were working with Salma Hayek, and she had a real vision for what she wanted for her brand. So we developed skincare, haircare, body care, color, cosmetics, and nail for Salma, and CVS was the customer. What I think we realized as we,

each of our brand incubation projects requires the retailer to come with consumer data and consumer shopping habits and kind of what's happening on their extra care card because in CVS's case, there are more extra care card holders than visa holders in the United States. So you have to imagine they're coming with incredible data on what their consumer is buying, when she buys X, when she buys Y, where is she purchasing, is her price sensitivity around certain price thresholds and what are her considerations in terms of purchase and what incentives and sends her to purchase.

So that's hugely helpful. But one of the things we realized, and I think the aha for Hatch Beauty, which we stumbled upon, it wasn't actually thoughtfully a strategic decision, but we had an aesthetic for prestige. So imagine the type of product that we would buy or shop for was something that we would purchase at a Sephora Ulta, but we figured out the value chain of how to bring that aesthetic to a mainstream mass retailer and make it feel prestige. So I think we were truly the first company who interpreted the trends of what was happening in prestige and the trends of what was happening in terms of package, in terms of product, efficacy, performance, and then successfully brought that to a mainstream customer for a reasonable

price. So we certainly were not the cheapest brand in the store ever, nor was that ever our intention. Our intention was to deliver great value to a customer on trend with a product that they would be excited and love to use at a price that was maybe a third of what you'd find at a Sephora. Yeah, yeah, absolutely. Now, knowing what you know now, what would you do differently? I would have had a buy-sell clause in my operating agreement with my partner, which would have

allowed us a very easy transition on a buyout. And just like getting married, when you get married to someone, you're at a certain point of your evolution as a human, you know, and so you fall in love or you end up getting married and realizing that you see everything eye to eye. Because you know because you're at that stage of your path. And hopefully as you get married, you both are seeing the world the same way and you're excited. But as you know, how long have you been married?

Well, I got remarried. We've been married for two years now. My first one was 13 years. Okay, so you know what happens in 13 years. Yeah. You become a completely different person potentially, right? And so sometimes that works and you can grow together and find new connection and find new perspective.

And sometimes you get divorced and it doesn't work. grow together and find new connection and find new perspective. And sometimes you get divorced and it doesn't work. The same thing applies in a business relationship. And what I made the mistake of doing when I first established Hatch Beauty is we had had a mutual understanding of what we would expect from one another and what we wanted for each other in the business and our lifestyle. And so because we were short on funds, we actually hired a corporate attorney who represented the company in the operating agreement, not me and not my partner.

So we didn't have individual representation. And we were trying to save money and we both saw everything eye to eye and why would you need each of us to have our own attorney and haggle through any kind of operating agreement issues? And the reality is because everybody needs the right to shift at a time in their life where it may not be, it might not work for you to be full-time. It may be, there may be health issues, there may be family issues, there may be liquidity issues. And so each partner needs to have a very clearly defined expectation for what their performance is expected

and to show up because what also happens Because what also happens is two partners get together and we're both 60 hours a week or 70 hours a week. And then one of them falls madly in love with a guy who lives in the Caribbean. And then every two weeks they're off with their partner or they're dealing with other things and their time is not as focused. And so it causes resentment and it causes challenges.

And when those things happen, which is part of life and part of life path, it's actually a simple solve if you've discussed it upfront. That's right, yeah. Right? Yeah. All you have to do is have that hard conversation in the beginning that says, hey, if you and I are no longer a good fit, or if you and I no longer see eye to eye, or if you and

I no longer want the same thing, what's the mechanism for exit? I think there's a book for that one, Slicing Pie. Someone discuss it. Read, read the book. Right? Did you read that book? No. Yeah. Okay. So yeah, this is, you know, I think I have to go through that. He actually created a form to make sure like you guys are evenly split, the responsibilities, if this are changed, what would be your equity look like? I'm gonna write this down right now.

Like this is really, really, really key. Slice the pie. Yeah, something like that. I'll send you, I will send you a link or I'll look for that. Yeah, I think it should be mandatory that every entrepreneur before they start working with someone has to read the book. Yes. You have to read a book and make sure you have to hire your own

lawyer for operating agreement. Make sure you're protected. Totally. Yeah. It's just like, I just signed up, I just signed a lease a week ago, my husband and said, I told him, make sure you don't sign a personal guarantee because we learned that lesson. Right? Yes. Yes. Those are the things that we don't know in the beginning. So that's another great one, Kate. Never sign a PG. Yep.

You not sign personal guarantees. There's no, there's enough collateral to not have to sign a PG. Yep. You have to sign a PG. Don't sign it. Yes. How's that for her? Yeah.

Yeah. And it's actually like a simple ask to a broker like hey, I'm not willing to sign this Yeah, what are you willing to do? And so he said well you just come up with a higher down payment Which is not a big deal all day long Yeah, yeah There's little things that cost you a lot of money that you are not odd of doing yeah Wow now Tracy What was? of money that you're not thought of doing. Yeah. Wow. Now, Tracy, what have been the most challenging experiences while running a business that

you've had to overcome? What's the most challenging? I would say continuing to fall in love with the business you've chosen. As entrepreneurs, we become very excited about new ideas that you have to take care of the hand that feeds you. So knowing when it's time for you to leave and find a manager to run your business so you can go fall in love with something else is really important. And having a plan for that, knowing when it's your time to go.

When you wake up and you feel drained every day and you're not excited and it feels heavy, it's time to go. And then knowing that you're not trapped and finding someone who can run your business the way you would want them to and working with them as a collaboration partner is I think probably the biggest challenge, right? Because we only have a limited amount of time on this planet. And so I don't know about you, but I have like 15 more businesses that I want to develop. Yes.

Well, that's my ultimate goal. I try not to work in the business. I want to work above the business. I love it. Yeah. So, yeah. So, um, you just hire and hire the best team and you just look at strategy and you can create other things so I ran three businesses and I

Know someone that run 20 30 different businesses, which is amazing So that's my goal You use an assessment test to find your leadership or how are you? How do you find the right fit? For the person who's going to take over? Yeah, there's a lot of tests that you can do that they can take and see if that's the right fit. But again, you have to find the right person in the right bus, right? I do, I do the cultural index. Okay.

Which is called CI. It takes someone five to seven minutes, but I can really, really determine somebody's fundamental strength. And then I do a disc test, which has been very helpful. But yes, and then generally, I look for someone who's an integrator, who really doesn't necessarily have a vision, but they know what the integration process should look like. And they really like tracking cross-functional meetings and tasks and to-dos and are highly organized. Yeah, that's perfect. Sometimes they, number two, they're visionary, then you guys will clash because they want to create.

Yes. Yeah. It doesn't work. Yes. So I just met Vern Harnish, the scaling up guy, his wonderful guy. So I just started reading his book, Scaling Up. Yeah. Great book. I would also say there are a couple of really great tools. There's something called EOS that I've used. Yeah, I think he said that was one of his students.

Yeah, EOS. Yeah, I use EOS. Yeah, Traction has been huge. Every week we do an L10 with the exec team. I attend every L10 and it's in essence the various areas of the business that need an update and then we track 10 kind of flagging issues. The rocks, isn't it? Yeah, then we hand out rocks.

They have 90 days. They bring it into Pebbles for their team. And then we review every single week in our two-hour L10 the status of our rocks. Love it. US is the way to go. I know. Right? Highly recommend hiring a great EOS leader.

Yeah. I highly recommend hiring a great EOS leader. Now Tracy, what advice would you give to an aspiring female entrepreneur? Lean in and be okay with being afraid. That means you're alive. It's okay. Two is, I personally have always run my business on cashflow. I've never taken money to run a business. I've never taken on debt before I've generated income. So if I'm spending my own money, I'm okay with that, but I haven't taken other people's money upfront.

And I do that because I want proof of concept, but I also want to have the confidence that I can build it and scale it. And so I would say if that means you have to work full-time during the day and launch your business by night, for me, that's a better way to go than to lose equity up front and take someone else's money on an idea before you've proven it and start, in essence, tipping the scales to become an employee for somebody else who's providing the income. But then I would also say surround yourself with mentors. I mean, as a woman entrepreneur, the biggest, you know, I think acknowledgement that I received

was the 2017 for Los Angeles as Entrepreneur of the Year. For my category, I was the only female on stage. There were 14 men and I was the only woman on stage who had received an award. And then I was actually from the Los Angeles region, the single person that was promoted into the national region to compete on a national level, and I came in fourth nationally, wow, I'm a entrepreneur of the nation in my category for 2017. And I think it was the first time I ever realized that I actually was pretty good at what I was doing and that all the money I had made over the many, many years of building a business, generating almost a half billion dollars in revenue by year eight with no loan.

No, yeah. Right? No, I'm rich, uncle. That never made me feel successful. I never looked at that and said, wow, I'm pretty successful at this. It was the standing on stage and having someone else say, wow, I'm pretty successful at this. It was the standing on stage and having someone else say like, you're really good at this. And I thought, oh, thanks.

No, why you got it? Yeah. Love it. My God. That say, you know, like just be kind to yourself, your talk track and how you speak to yourself, the conversations you have, the way you communicate with yourself, the messaging that you give yourself is really, really important. And being kind in how you speak to yourself is really important.

Love it. Solid advice. Now, Tracy, how do you want to be remembered? Don't you feel this? Like, okay, now I've done the money thing and I've done the house thing and I did the kid thing, right? And so all of a sudden there's this turning point, at least in my own life journey that's been about what does it mean to be here. I'm reading the book Unreasonable Success by Richard Koch. Koch, incredible entrepreneur, incredible success, incredible story. I highly recommend if you have a minute to listen to Tim Ferriss' podcast with Richard and the interview with him. Brilliant, amazing. He wrote the 80-20 rule and then just recently wrote a book on

what's called Unreasonable Success. So he's looking at 20 of the most game-changing humans in our lifetime. He includes Lenin as one of the game changchanging humans in our lifetime. He includes Lennon as one of the game changers. And what he's saying is, it's not unreasonable success in the way you and I may see it, which is just a stock market number or something. He's saying like, these 20 people have actually changed the way human beings interact and face the world. Jeff Bezos is obviously on that list. So I guess

where do I want to be remembered? I want to start taking bigger risks. I want to help a lot of women, mentor a lot of women. I'm talking millions of women on independence and thinking independently to become their own entrepreneur if they choose. So I'm working on some projects there around that. I think if I do a good job with my kids and they become good humans and they treat people well, then I think I've done okay. Love it. No. Tracy, I enjoy their conversation a lot. Thank you so much. Tracy, I enjoyed our conversation a lot. Thank you so much. Thank you. I did too.

Yeah. Where can they find you? What's your handle to website if they want to hire a company for launching a beauty brand? So it's called From Potential to Powerhouse. And that's the new digital platform I'm launching. And the website address is potentialtothenumber2powerhouse.com. And then they'll be able to track Instagram. And we're going to have weekly conversations with women entrepreneurs. We're going to be tracking my docuseries on taking women entrepreneurs

from where they are and doubling the size of their business in the six months that I'm working with them. So that's exciting. Yeah, it's a bit of a roller coaster, fast tracking for young women or these incredible women entrepreneurs who want to grow their business. I'm working with them to do that That's so inspiring. We're recording it and we're bringing it to everyone who wants to watch it so that people can tune in and listen and You know figure out tips and figure out ways to think differently about how they're growing their own business. So I love it

Yeah, I appreciate it. It's so nice to meet you. Nice to meet you. Bet MGM is an official sports betting partner of the National Hockey League and has your back all season long. From puck drop to the final shot, you're always taken care of with the sports book Born in Vegas. That's a feeling you can only get with Bet MGM. And no matter your team, your favorite skater, or your style, there's something every NHL fan is going to love about BetMGM. Download the app today and discover why BetMGM is your hockey home for the season. Raise your game to the next level this year with BetMGM, a sportsbook worth a celly,

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