Founders - #136 Estée Lauder

Episode Date: July 18, 2020

What I learned from reading A Success Story by Estee Lauder.----Come see a live show with me and Patrick O'Shaughnessy from Invest Like The Best on October 19th in New York City. Get your tickets here! ----Subscribe to listen to Founders Premium — Subscribers can listen to Ask Me Anything (AMA) episodes and every bonus episode. ---You can probably reach out with comparative ease and touch a life of serenity and peace. You can wait for things to happen and not get too sad when they don’t. That’s fine for some but not for me. Serenity is pleasant, but it lacks the ecstasy of achievement. [0:10]I’ve always believed that if you stick to a thought and carefully avoid distraction along the way, you can fulfill a dream. I kept my eye on the target. I never allowed my eye to leave the target. I always believed that success comes from not letting your eyes stray from that target.  [1:10]Beauty is an ancient industry: Women have always enhanced their looks. It has always been so. It will always be so. [4:18] Lessons from here mother: The secret is to imagine yourself as the most important person in the room. Imagine it vividly enough and you will become that person. [6:01] You could make a thing wonderful by enhancing its outward appearance. Little did I know I’d be doing the same thing, multiplied by a billionfold. [8:45]Everything has to be sold aggressively. [9:05]I have never worked a day in my life without selling. If I believe in something, I sell it, and sell it hard. [9:39] My drive and persistence were always there, and those are the qualities for building a successful business. [10:38] The moment she realizes she could make beauty her life’s work: This is the story of bewitchment. Uncle John [a skin specialist] had worlds to teach me. Do you know what it means for a young girl to suddenly have someone take her dreams seriously? Teach her secrets? I could think of nothing else. [12:09]The humble beginning of the Estee Lauder empire: This was my first chance at a real business. I would have a small counter in a beauty salon. Whatever I sold would be mine to keep. No partners. I would risk the rent, but if it worked, I would start the business I always dreamed about. Risk taking is the cornerstone of empires. No one ever became a success without taking chances. [15:30]Sales technique of the century: Now the big secret. I would give the woman a sample of whatever she did not buy as a gift. I just knew, even though I had not yet named the technique, that gift with a purchase was very appealing. The idea was to convince a woman to try a product. She would be faithful forever.  [16:30]I didn’t need bread to eat but I worked as though I did, for the pure love of the venture. For me, teaching about beauty was an emotional experience. [18:52]I was single-minded in the pursuit of my dream. [21:01] Despite all the nay sayers, there was never a single moment when I considered giving up. That was simply not a viable alternative. [22:12]Word of mouth was what built the foundation of her business: Women were telling women. They were selling my cream before they even go to the salon. Tell-a-Woman was the word-of-mouth campaign that launched Estee Lauder Cosmetics. [22:41]Great packaging does not copy or study. It invents. [24:50]Sak’s Fifth Avenue placed an $800 order. This was her response: Breaking that first barrier was perhaps the single most exciting moment I have ever known. [26:16] “Missionaries make better products.” — Jeff Bezos:  I was a woman on a mission. I had to show as many women as I could reach how to stay beautiful. [28:07] The free sample sales technique she pioneered in the beauty industry: The gift to the customer —the free something that would sell everything else. You give people a product to try. If they like the quality, they buy it. They haven’t been lured in by an advertisement but convinced by the product itself. [29:10]We took the money we planned to use on advertising and invested it instead in enough material to give away large quantities of our products. [30:00] A great story about how Estee Lauder convinced more women to buy perfume. [32:59] A great story about how Estee Lauder expanded into Europe. [36:31] Be determined and sell!: It’s not enough to have the most wonderful product in the world. You must be able to sell it. One woman with definite ideas, pride in her product, and a hands-on approach could lay the foundation for a strong business. [40:57] Our unique style has come from years of trial and error. Truths have emerged that have worked for us. Let me share them with you. [41:24] Keep an eye on the competition. This doesn’t mean copying them, as I’ve made clear. Being interested in other people’s ideas for the purpose of saying, “We can do it better,” is not copying. Innovation doesn’t mean inventing the wheel each time; innovation can mean a whole new way of looking at old things. [42:10] —“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested, so my poor wallet suffers.”— GarethBe like Gareth. Buy a book. It's good for you. It's good for Founders. A list of all the books featured on Founders Podcast. ----Founders Notes gives you the ability to tap into the collective knowledge of history's greatest entrepreneurs on demand. Use it to supplement the decisions you make in your work.  Get access to Founders Notes here. ----“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested so my poor wallet suffers. ” — GarethBe like Gareth. 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First comes the wish. Then you must have the heart to have the dream. Then you work, and work, and work. From where you sit, you can probably reach out with comparative ease and touch a life of serenity and peace. You can wait for things to happen and not get too sad when they don't. That's fine for some, but not for me. Serenity is pleasant, but it lacks the ecstasy of achievement. I've insisted on the long stretch rather than the gentle reach. I celebrate this sweet country. America the beautiful has given me a life of infinite value and pleasure. Living the American dream has been intense, difficult work,

but I couldn't have hoped for a more satisfying life. I believe that potential is unlimited. Success depends on daring to act on your dreams. How far do you want to go? Go the distance. Within each person is the potential to build the empire of her wishes. and don't allow anyone to say you can't have it all. I have always believed that if you stick to a thought and carefully avoid distraction along the way, you can fulfill a dream. My whole life has been about fulfilling dreams. I kept my eye on the target, whatever that target was. I never allowed

my eye to leave that particular target. Whether your target is big or small, grand or simple, ambitious or personal, I've always believed that success comes from not letting your eyes stray from the target. Anyone who wants to achieve a dream must stay strong, focused, and steady. She must expect and demand perfection and never settle for mediocrity. If you push yourself beyond the furthest place you can go, you'll be able to achieve your heart's dream. So those words were written by Estee Lauder when she was almost 80 years old, and it's an excerpt from the book that I'm going to talk to you about today, which is her autobiography, and it's called A Success Story by Estee Lauder. Estee Lauder was one of the most

successful founders to ever live, and her autobiography is filled with a ton of personality and a ton of really great ideas. So let's go ahead and jump into it. I found it interesting that she starts the book talking about how one unpleasant interaction led to motivation. I remember the woman at the beauty salon where I had my first cosmetics concession. She was thoughtless and cruel and will always remain that way in my mind. Maybe she was a catalyst for good in the end. Maybe I wouldn't have become Estee Lauder if it hadn't been for her. At the moment she was cast in my memory to last there forever, I despised her. Simply thinking about that incident brings back a twinge of pain. She was having her hair combed and she was lovely. I was very young and vulnerable, and I loved beauty. I felt I wanted to make contact with her in some small way.

What a beautiful blouse you're wearing, I complimented her. It's just so elegant. Do you mind if I ask where you bought it? She smiled. What difference could it possibly make, she answered, looking straight into my eyes. You could never afford it. I walked away, heart pounding, face burning. Never, never, never will anyone say that to me again. I promise myself. Someday I will have whatever I want. So in the very beginning, she talks about how she's always been obsessed with beauty. And she points out the fact that this is not unique to her, that the industry that she helped in many ways pioneer is a very ancient industry. So she says, beauty secrets have been passed on from mother to daughter through the ages. Primitive women painted their faces with berry juice. Nero's Roman beauties painted their faces with berry juice nero's roman beauties painted their faces with chalk from cleopatra's famous milk bath to the ancient egyptians pot of black coal

from the root from the rouge flapper cheeks of the 1920s women have always enhanced their god-given looks it has always been so it will always always be so. And so when I read that part, it really made me think of one of my famous, or one of my favorite rather, quotes that I learned or ideas I learned from Jeff Bezos. And he says that you should build your business around things that will never change. So in the case of Amazon, he talks about, hey, are people, you know, people today and people 10 years from now, 10 years from now, they're not going to say, hey, I wish I got my packages slower. Hey, I wish you had less selection. And hey, I wish you had poor customer service.

So he would invest in things that are not likely to change because the benefits compound over a very long period of time. And so S.A. Lauder talks about there's something natural in us that we want to enhance our looks and my products help you do that. So the actual desire is a very ancient desire. I'm just fulfilling that ancient desire. So she continues to talk about beauty history. And this is where we see that she's definitely an extremely confident person. Like most of the founders that we cover, she's got a giant ego. And we see that here. It says beauty is a fine invention. There isn't a culture in the world that hasn't powdered, perfumed, and prettied its women. Love has been planted, wars won,

and empires built on beauty. I should know. I'm an authority on all three. Love, wars, and empires have been woven into my personal tapestry for decades. I've been selling beauty ever since I could recognize her. And so then she continues to talk about certain things that happened in her childhood that influenced her later on. And something her mother does that's extremely smart is her mother instills in her an abundance of confidence, an abundance of self-belief. And this is an example that she says, you're as beautiful as you think you are, she would tell me. The secret, she'd whisper, is to imagine yourself the most important person in the room, the person everyone else is waiting to see. If you imagine it vividly enough, you will become that person.

So her father was a merchant. He owned a hardware store, he owned a cemetery and a bunch of different things. They were actually, just like last week when we talked about Joseph Pulitzer, they were a Jewish family from Hungary. And so were the Lauders. And one thing that she got from her father, and you'll see how it influences her personality, something you know about S.A.uder is she sets extremely extremely high standards for herself her company and then her products um and she thinks she got that from her dad she says i also inherited his genes for high standards things must be perfect to be acceptable so she talks about even when she was a young child 10 12 13 years old she'd be constantly wanting to brush her mother's hair, her sister's hair, be constantly wanting to help them apply makeup.

And the way I would think about this paragraph is really she was born for the business. There was a perfect match between Estee Lauder, the person and Estee Lauder, the business and the products they make. So it says all all this annoyed my father considerably. Stop fiddling with other people's faces, he'd say. But that is what I like to do. Touch other people's faces, no matter who they were, touch them and make them pretty. Before I'm finished, I'm set. Before I'm finished, all set. I'm certain the world's record for face touching. And I'm nowhere near finished. Remember, she wrote these words. She's almost 80 years old. She survives for almost another 20 years. She dies at 97 years old. But the reason I wanted to bring that up to you is I want you to remember that for later because this idea of touching people's faces, it's very, there's actually a very important part to how she slowly built her business. And that's the product demonstration, which was the cornerstone of a lot of the early sales. But we're not there yet. I'll get there. So in the meantime, she's still a kid. She's working inside of her father's hardware store.

And this is where we see that she's learning a lot of early lessons in business. It says, my father's hardware store was my own first venture into merchandising i loved helping him arrange his wares i would gift wrap the hammer or a set of nails with extravagant bow bows and papers which really did seem to delight his customers packaging required special thought you can remember that thought for later too because we're going to get into how she does her product design and just the lengths that she does. There's just a lot of good information in this book.

You could make a thing wonderful by its outward appearance. Little did I think I'd be doing the same thing multiplied a billionfold in not too many years. There may be a big difference between lipstick and dry goods, between fragrance and doorknobs, but just about everything has to be sold aggressively. I whetted my appetite for the merry ring of a cash register. I learned early that being a perfectionist and providing quality was the only way to do business. Okay, so I just want to stop there and elaborate on that idea where she talks about it doesn't matter if it's a lipstick, if it's a hammer, everything that you're doing has to be sold aggressively. So one of my favorite quotes that she says, she says, I have never worked a day in my life without selling.

If I believe in something, I sell it and sell it hard. So I would say that the main point of this book is the value and persistence and determination. I'll give you a lot of examples where she had those traits in spades, right? But the second, if there was a secondary message that she wants to impart on us is that, yes, you need to have the best products, but that is not good enough. You must learn to sell and you must do it all the time. And the level of effort and care and time she put into selling is remarkable. Moving on, the way I would summarize this next section is her advice directly to you and I is that your craft should match you. So she says, I want to paint a picture of the young girl I was. A girl caught up

mesmerized by pretty things and pretty people. My drive and persistence, there's that word again, that word persistence appears over and over and over again in the book, explicitly and then implicitly through examples. My drive and persistence were always there. And those are qualities that are essential for building a successful business. Still, I sometimes wonder if I had set my heart on selling tassels, cars, furnitures, or anything else but beauty, would I have risen to the top of a profession? I doubt it. I believed in my product. I loved my product.

A person has to love her harvest if she's to expect others to love it. And beauty was such a bountiful harvest. So while she's working in her dad's hardware store, there's an experience that changes her life forever. And that's where her uncle is going to come to visit. And he's the one that shows her the path into the beauty industry. So it says, and we're also going to see her abundance of self-confidence and something that she says, I think is extremely smart. So it says my shining moment came in the form of a quiet, bespeckled man who also loved touching faces. My mother's brother came to visit us from Hungary. He was a skin specialist. What glories those words conjured up. He captured my imagination and interest as no one else ever had. I was smitten with Uncle John. He understood me. What's more,

he produced miracles. I recognized in my Uncle John my true path. He produced his glorious cream in our home, working happily over a gas stove. I watched, I learned, I was hypnotized. This is the story of a bewitchment. Listen to how she talks about her life's work. We should all be so lucky to find something like this. This is the story of a bewitchment. I was irrevocably bewitched by the power to create beauty. Uncle John had worlds to teach me. Do you know what it means for a young girl to suddenly have someone take her dreams quite seriously?

To teach her secrets? I could think of nothing else. I began to value myself so much more. Trust my instincts. Trust my uniqueness. Trusting oneself does not always come naturally. I learned when young, the practice sticks. This is where I think this is a really good idea. Today, there is no one who can intimidate me because of title or skill or fame. I do what's right for me. So she finds the path rather early, but there is a long time between realizing what she wants to do with her life

to actually founding and starting the business. She starts Estee Lauder when she's about 40 years old. In the meantime, she gets married extremely young, which was kind of common at the time, at the period of time we're in. And then she has a baby. So she becomes a mother, but she's still, the whole time that she's trying to raise a family, she's nurturing this obsession. So the note I left myself is, her dream is delayed, but her obsession continues to grow.

We were struggling so hard to be independent. She means her and her husband. And sometimes this was not easy. Times were lean. We had a beautiful son, and I spent my days mothering. And all the time, all the time, I was mothering my zeal for experimenting with my uncle's creams and proving on them, adding to them. I was forever experimenting on myself and on anyone else who came within range. Good was not good enough. You see that theme? She repeats it over and over again.

I could always make it better. I now know that obsession is the word for my zeal. During every possible spare moment, I cooked up little pots of cream for faces. I always felt most alive when I was dabbing in the cream. I felt as though I was conducting a secret absorbing experiment, a real adventure. Okay. Do you remember that story that I just told you where she's taking inspiration from, you know, a woman being really rude to her that's taking place in a beauty salon. Okay. So she recruits, she'd go to beauty salon every month, get her hair done, dye her hair, that kind of thing. Right. And she recruits her first customers right inside that beauty salon. And customer is a funny word there because she's giving away.

At the very beginning, she just gives away her product. Eventually, those people start paying for it as well. So this is the very humble beginnings of what becomes a massive, massive beauty empire. So it says, many of the young women who came into the florist morris beauty salon to get their hair done would come uh would come to my home for a quick beauty lesson i love sharing what i knew and creating excitement about skin so she's talking to all the people in there she's extremely outgoing and so the owner of the beauty salon uh sees all these women starting to use her cream. And so this is the

very beginning of what the business is going to turn into Estee Lauder, right? And think about this. Her empire starts with just a counter. That's it. She's selling it on a counter in a beauty salon. So the owner of the salon, they're having a conversation. She says, do you think you would be interested in running the beauty concession at my new salon? She asked. I did not hesitate a second. Up until that point, I had been giving away my products. This was the first chance at a real business. I would have a small counter in her store.

I would pay her rent. Whatever I sold would be mine to keep. No partners. I never have partners. I would risk the rent, but if it worked, I would start the business I always dreamed about. Risk-taking is the cornerstones of empires. No one ever became a success without taking chances. So this is right around the early 1940s. Estee Lauder starts out at a counter, a concession counter inside of a beauty salon.

Last year they did i think 11 billion dollars in sales so now she's going to tell us about what she calls the sales technique of the century uh this is something you'll see anytime you go into department store she's saying uh she was the one that pioneered this idea so she says now the big secret i would give the woman a sample of whatever she did not buy as a gift. It might be a few teaspoons of powder in a wax envelope. Perhaps I'd shave off a bit of some lipstick and tell her to apply it with her fingers. Perhaps, in still another envelope, I would give her a bit of glow.

The point was this. A woman would never leave empty-handed. I did not have an advertising department. I did not have a copywriter. But I had a woman's intuition. I just knew, even though I had not yet named this technique, that a gift with purchase was very appealing. In those days, I would even give a gift without a purchase. The idea was to convince a woman to try the product. Having tried it at her leisure in her own home and seeing how fresh and lovely it made her look she would be for faithful forever of of that i had not one single doubt okay so she starts out at one counter um in a beauty salon and then

expands to another counter and so she now has to start uh other salespeople. And this is a little bit how she worked at the very beginning of the early days of the company. It says, I hired other saleswomen in the same way. I made it my business to check with each of them each day to make certain she was selling as I would. A devoted clientele was developing. Not to my surprise, of course. My products were the finest. The beauty salonele was developing. Not to my surprise, of course. My products were the finest. The beauty salon atmosphere was perfect. Women were already in the self-improvement mood.

Why should they go home with beautifully coiffed hair and a tired, lifeless face? It made sense to sell a total beauty package. Word spread. Business moved gradually but steadily. That's another thing that she would counsel you and she repeats over and over in the book, that be patient. Things take time. Great things take time.

I worked every day from 9 when I arrived to polish my jars to 6 in the evening. I never lunched. I felt I had to be there for every woman or I would surely lose her. I cleansed, creamed, colored, talked, talked, talked, and talked. It worked like a charm. I didn't need bread to eat, but I worked as though I did for the pure love of the venture. For me, teaching about beauty, that's what she meant about talking, talking, talking. For me, teaching about beauty was and is an emotional experience. So before, this is actually a really good idea. So there's two, the way I've heard it in the past is you can either outspend your competition or out teach your competition.

And in the very early days of Estee Lauder, she didn't have any money for advertising. So she had to just teach everything she knew. And she had a passion. This is a multiple decade passion of her learning about beauty. And so as a result of her studying the subject for 10 plus years, she's going to acquire a lot of useful information, useful knowledge that then she can share with other people. And those people turn into customers, right? Now, listen to how she talks about this experience of teaching beauty, which is this product demonstrations I referenced earlier. For me, teaching about beauty was and is an emotional experience. I brought them charisma and knowledge about their possibilities. They gave me a sense of success.

I felt flushed with excitement after each session. Pure theater. In the end, that's what it was. This rendering of beauty. Pure theater for me. She's all fired up. She's loving what she's doing. And again, that's going to shine through.

People are going to pick up on that right away. And they're going to find what she has to say. And assuming that her product is actually beneficial, it's actually high quality, then of course they're going to turn it to customers. It's just a really smart move by her. In this section, we learn a little bit more about her personality. And I think she has a trait that I find very admirable in other people and one I want to cultivate in myself.

So it says, I'm a visceral, and I'll get there in a minute. I'm a visceral person by nature. I act on instinct quickly without pondering possible disaster and without indulging in deep introspection. This quality can work well in the business world where instinct counts and where one must be able to risk and take immediate action. But the same quality can be an irritant and personal relationships. Now, this is the trade I'm talking about. I was single minded in the pursuit of my dream. Also, let me back up there. She talks about going off instinct, acting quickly. The same quality can be an irritant personal relationships.

She's talking about any time there's an opportunity, she'd hop on a train and go try to seek that opportunity. But she's married at the time. I they have yeah they have one child at the time this actually leads to a very quick divorce um they stay separated for interesting enough they stay separated for a few years then they get remarried have another son and then stay married until uh until her husband dies a few years before uh she writes the book and they were the reason i bring that up is because they were partners. This was a family business. It was a private business at the time that this book ends. I'm not sure.

S.A. Lauder is now public, but at this time, it was still a private family business that she controlled 100% of. So now she's going to tell us about her secret weapon. And she says, nothing happened fast.

She talks about there's no magic formulas, there's no instant success. It does not happen that way. There was constant work, constant attention to detail, lost hours of sleep, worries and heartaches. Despite all the naysayers, there was never a single moment when I considered giving up. That was simply not a viable alternative. I had a secret weapon. In those days before television and high gloss advertising, only two key ways to communicate a message quickly. They were the telephone and the telegraph. But I had a third. This is her secret weapon. It was potent. Tell a woman. She's saying

essentially that the word of mouth was her base that built her company. Right. So says women were telling women they were selling my cream before they even got to my salon. Tell a woman was the word of mouth campaign that launched Estee Lauder cosmetics. So in the book, there's a story about how she makes how she made decisions for the actual look, the actual design of her product. Right. And I think this is an illustration of the level of effort and thoughtfulness that she put into her craft. So let me just read this part to you. She says the new jars would be a decision of detail that could affect the entire business. I knew I had to make the right decision. First of all, I reasoned, where would my jars sit? In every woman's bathroom, naturally. Second, I knew that I wanted every woman to remember whose cream it was that was making her look so fresh and lovely. The name would have to be embedded right on the jar.

Needless to say, the jar had to be beautiful. And this was the hard part. It couldn't clash with customers' bathroom decors. Having obtained sample jars, my research consisted of matching the few colors to which I had narrowed my choices to wallpaper in every guest bathroom I could manage to visit. Every time I went to a friend's home or an elegant restaurant,

I'd excuse myself from the company, visit the bathroom, and match my jar colors against a vast array of wallpapers. There were silver bathrooms, purple, black and white, brown, gold, pink, and even red bathrooms. Which color would look wonderful in any bathroom? I deliberated for weeks. I spent an inordinate amount of time, quote unquote, freshening up. People must have worried about my long absences from the company. I knew that women would not buy cosmetics in garish containers that offended their bathroom decor. I wanted them to be proud to display my products. The jars had to send a message of luxury and harmony. They had to be unique.

A great package does not copy or study. It invents. So she's having success with word of mouth. She's having success in these beauty salons, right? But her goal is to have her products. She wants to be the best product in the world. That's her ambition. And they have to be sold in the best stores in the world. So she eventually, she wants to make the jump into the best retailers in the world, right? And she's willing, once she accomplishes this, then she'll close down and she stops doing the beauty salon counters. And so this is how she breaks into Saks Fifth Avenue. And she does it from the ground up, which I found was very interesting. So it says my name was not exactly known unknown there. Oh, so let me back up the the also reason she wanted to do this because

charge cards were relatively new phenomenon at this time. And so she was losing some sales because they in the beauty salon, they had to pay for cash, right? They couldn't charge it. And so if they didn't have the cash, even if they wanted to buy the product, there's nothing she could do. Saks and other companies like that and other retailers like that gave the customer the option to charge it. So that allowed for a lot more impulse buying, right? So it says, my name was not exactly unknown there. The Tell-A-Woman campaign had already resulted in hundreds of phone calls from women asking for my products.

The store was beginning to wonder about me. The cosmetics buyer at Saks acceded to my millionth request. So you had not only from the bottom, you have organic requests from customers, Saks customers, already existing customers saying, hey, can I buy Estee Lauder creams here? And then you also, from the top, you have this just relentless Terminator-like determined founder. She was just absolutely relentless is the way I would, is a good description of her. So, you know, they kept telling her, no, okay, I'll come back two weeks. No, no. There's times where she'd go in and they're like, oh, they don't have an appointment. She's like, okay, I'll just sit here. She'd sit there all day, eight, nine hours. And then

eventually at the end of the day, the buyer that she's waiting to meet with would come out and be like, oh my God, you're still here. Okay. I'll give you a few minutes. So that's a good way to think about the early days. She really did not rest on her laurels she pushed this forward with all everything she had uh so says the cosmetics buyer at sax acceded to my millionth request he gave me a small order for approximately on eight hundred dollars worth of merchandise and what's interesting is you know eight hundred dollars that sounds like a small amount from somebody on the outside right but this But this is what she said about it. She says, breaking that first mammoth barrier was perhaps the single most exciting moment I have ever known. Fortunately, our confidence equaled our excitement because we had to have enough faith in our work to invest all of our savings. And what she needed the savings for, she rents her first,

think of it almost like a factory. It's where she's going to build or excuse me create her creams and then she needs to have enough uh money invested in inventory so sax never runs out and then she also does something really smart when it's time uh to have the the initial launch at sax she makes sure every single person she knows knows that they're now available at sax and this is the result and it really um the note i left myself on this section is, goes back to another Jeff Bezos quote, is that missionaries make better products. And Estee Lauder was very much a missionary. So it says, all the people to whom I had given samples, all the people who had been telling other people, all those people appeared on opening day at Saks Fifth Avenue. In two days, we were sold out. The fun was about to

start. And with that came the endless work, the endless traveling, the endless streams, rivers, tides, torrents, oceans of words I would utter in praise of the products. I knew my cream. I knew my products were the cream of the crop. was a woman i was a woman with a mission i had to show as many women as i could as i could reach not only how to be beautiful but how to stay beautiful on the way i hoped in my secret heart to find fame and fortune. It was 1946. And so right away, she doubles down on this free sample gift with purchase sales technique that she pioneered and that, you know, everybody in the beauty industry soon copied. So there's a little bit about that. She says, the reason to appear on my counter was the gift to the customer, the free something that would sell everything else. It sounds so simple, doesn't it?

I'd have to agree. It was simple. Most good ideas sparkle in simplicity so much that everyone wonders why no one ever did that before. You give people a product to try. If they like its quality, they buy it. They haven't been lured in by an advertisement, but we're convinced by the product itself. So she does something real smart here. She tries to hire an advertising agency. She has such a small ad budget. No one wants to take her seriously. So she's like, okay, I'm not going to advertise.

I'm going to take that money and I'm going to produce more product and give that product away. So it says, we took the money we had planned to use on advertising and invested it instead in enough material to give away large quantities of our products. It was so simple that our competitors sneered when they heard what we were doing. Today, even the banks are copying us. And the very next page, she talks about the most important trait, the most important trait on what makes a person successful. It's a word we've already seen her use over and over again at this point in the story, and it's persistence. And she says, business is not something to be lightly tried on, flippantly modeled. It's not

a distraction. It's not an affair. It's not a momentary fling. Business marries you. You sleep with it, eat with it, think about it much of your time. It is, in a very real sense, an act of love. If it isn't an act of love, it's merely work and not a business. What makes a successful businesswoman? Is it talent? Well, perhaps, although I've known many enormously successful people who were not gifted in any outstanding way, not blessed with particular talent. Is it then intelligence? Certainly intelligence helps, but it's not necessarily education

or the kind of intellectual reasoning needed to graduate from the Wharton School of Business that are essential. How many of your grandfathers came here from one or another old country and made a mark in America with the language, money, or contacts? What then is this mystical ingredient? It's persistence. It's that certain little spirit that compels you to stick it out when you're at your most tired. It's that quality that forces you to persevere. Find the root around the stone wall. It's the immovable stubbornness that will not allow you to cave in when everyone says give up. Our first year sales amounted to about $50,000. Expenses ate up just about every dime. No matter forward. So she starts out in one store and then another store. And then every time her products would be sold in another store in another city,

she would go and spend maybe the first week training everybody, overseeing every single minute. And along the way, she is talking to every single person she encounters about her products. And I'm just going to give you a quick summary because this goes on for several pages. I'll just read one paragraph to you. But really, the main point here is how many people are willing to put in this type of effort? She's recruiting customers one by one. She says, in the early days, I spent an endless amount of time riding the rails. The sound of train wheels became background music to my dreams. As I traveled around the country to be present at each Estee Lauder counter opening, I met the

women who would one day be my customers. At least I hope they would be. To that end, I never stopped talking to people. Not ever. Okay, so I'm moving ahead in the story. She starts off selling cosmetics, creams, things like that. And then she branches out into perfume or a new type of perfume. So her answer to this question of how can I get more women to buy perfume is genius. This part is amazing. And so a little background, according to her at this time, most women wouldn't buy their own perfume. They would, it's like something you give as a gift, right? And so she wanted to change that. She didn't think that you should just smell great on special occasions. She thought you should wear it, you know, smell great every day. And this is something you should apply multiple times a day, right? So she comes up with essentially a new product category. And wait till you hear the numbers that this product category does it's it's bananas so it says how can i get the american woman to buy her own perfume i would not call it a perfume

i would call it youth do a bath oil that doubled as a skin perfume that would be acceptable acceptable to buy because it was a it was a-American, very girl-next-door-to-take-baths. Now, why is that sudden, like, that seems to be a small distinction? Like, why would that matter? Well, think about how much bath oil you would use compared to how much perfume, and then that's going to result in an outstanding number of sales, an outstanding dollar amount of sales. So it says, we created a mini revolution and the whole world,

as I saw it, took on a fresher, more stimulating aspect. Instead of using their French perfumes by the drop behind each ear, women were using youth dew by the bottle in their bathwater. It doesn't take a graduate of business school to figure out what that meant. Sales. Beautiful sales. In 1953, so we're about nine years after she founded the company when she's adding this additional product line. In 1953, YouthDude did about $50,000 worth of business for us. In 1984, that figure had jumped to over $150 million.

So somebody she studied, somebody she looks up to, somebody she mentions multiple times in the book is Coco Chanel. If you remember, I did a podcast on her. I think it was Founders number 66, somewhere back there. But she says, I think the legendary Chanel put it best. she said is the unseen but unforgettable and ultimate fashion accessory it heralds a woman's arrival and prolongs her departure and so this youth do this this fragrance perfumes becomes a large part of her business and there's a big problem in the beauty industry there's a lot of spies so they they'll send in, people will come and try to work in your company just to steal secrets. And so the way that she, the solution she came to this problem is really unbelievable. So I'm just going to read the paragraph to you. I never give the whole formula. When the mixture is 95% or even 98% completed and the great vats

of perfume are ready to be bottled, one member of the Lauder family, so that could be her, her husband was her business partner and then her two sons also worked in the company, okay? It says one member of the Lauder family goes to the factory to supply the missing secret 5% or 2%, the ingredient without which the fragrance can never be complete. No one can ever copy us.

The final ingredient is never known to our factories or essence suppliers or anyone only a lauder knows it and so now i want to tell you how they eventually they're having a lot of success in america they're like okay it's time to expand internationally so this is how estee lauder expands into europe and again i never repeated myself on ever again just another smart thing that she does. She matches intelligence with persistence. Just really remarkable just the way she's able to follow her instincts and figure out solutions to the problem. So it says, if I could start with the finest store in London, which was Harrods, all the other great stores would follow. So

she does multiple attempts. This is a multiple attempt, multiple year problem that she's trying to tackle and and before i continue reading to you in the interim as she's trying to get into her harrods um she gets accepted into other like uh other european stores but she's like no no i'm i'm going i'm going to hit the best first and then i'll go down. Because once you're in Harrods, obviously every other retailer would accept her products in there. So she goes and she meets with the buyer, right? Simply not interested was the unmistakable message. So she gets rejected right off the front.

She's like, okay, well, what am I going to do? I'm going to go and I'm going to make my case in the media, like covertly. She says a little media attention was called for. I visited the beauty editors of various magazines. This is happening in London. OK, so she'd go there. She'd do her product demonstration. She would teach.

She'd give samples of the product. Right. And then the result is, OK, that person, that reporter, that journalist, that editorialist is going to write about that. Yes, she'd be happy to write a piece about my products. What store in London would be carrying them them my products are not available in london had to be my reply because that was the truth well she answered i'll write a piece saying that estee lauder's cosmetics will be coming soon so that's fantastic she starts getting all this press

coverage right and then she she waits a little bit and then she goes back to the buyer. Again, I went to Harrods. And again, the answer was no. There was no space at this time. There was no call for my products. This wasn't the right time of the year. Maybe another time. So these are all excuses that she's getting, right? I stayed in England for a month, visiting every beauty editor to make my name known.

I was getting write-ups, but no Harrods orders. So at the end of the month, she's getting out again. She's getting all these write-ups, but no Harrods orders. So at the end of the month, she's getting out again. She's getting all these write-ups again. So she goes back in again. And she says, before I left London, I visited with the buyer one more time. Can't you just take the smallest order? No, no, no, no, no, was the response. Harrods was looking very bleak. The next year I went back to London and Harrods. She was not quite as hostile, not quite as intractable. Let me tell you, I have no room here, as I've told you before, she said brusquely. But perhaps I could take a tiny order and put it in with the general toiletries. It won't be next to the good cosmetics.

That you'll have to understand, Mrs. Lauder. So before that, i left that apart uh the cosmetic buyer she says i think the next year before she was uh not quite as intractable she had been reading the beauty magazines um so the story continues it says estee lauder appeared almost invisibly at last but she doesn't stop there so okay well it's not on the it's not a prestigious counter it's in with the general toiletries i want to get i want it to be marquee i want it to be a center counter. It's in the general toiletries. I want it to be marquee. I want it to be a center of everybody's attention and the greatest store in London, right? So she goes back to the media people. Again, another smart move. It was not a victory yet. I visited every one of the beauty editors again to remind them of me. Another round of makeups, another

round of samples. Do you think you might be able to write another piece? I asked each one. Now that we're in London at Harrods, the articles appeared. Customers also appeared. I was on my way. Women began asking for Estee Lauder. The Harrods buyer was reluctant to notice, but she had no choice. In the flush of a good week's sales, I summoned up the courage to ask if she could move

me to a more important counter. Oh no, she said. Other counter space is definitely not available. So she's still hitting the wall again. About six months later, I made another trip to London. Well, we seem to have many London women asking for your products, she grudgingly admitted. I think I'll give you a small spot at a more prestigious counter. And that was how Estee Lauder came to Europe. She has an entire chapter dedicated to selling. Her main message, be determined and sell. And she says, it is not enough to have the most wonderful product in the world. You must be able to sell it. One woman with definitive ideas, pride in her product,

and a hands-on approach could lay the foundation for a strong business. And then she has an entire chapter about things that you have to learn to experience. She calls these insights that she picked up, lauderisms. So the beginning it says, our unique style has come from years of trial and error. Truths have emerged that work for us. Let me share them with you.

So I just pulled out, there's a bunch, but I'm just going to pull out, I think four. So it says, keep your own image straight in your mind. What does she mean by that? From the beginning, I knew I wanted to sell the top of the line, So it says, We do the best skin products available today. The best makeup and fragrance products. We are not a budget market and we know it.

Another lauderism. Keep an eye on the competition. This doesn't mean copying them, as I've made clear. Being interested in other people's ideas for the purpose of saying we can do it better is not copying. Innovation doesn't mean inventing the wheel each time. Innovation can mean a whole new way of looking at old things. That's an example of, you know, there's tons of people that made perfumes before she did. There's not anybody that made used to. Third one, it says, learn to say no. This is something I think you've picked up over because

she talks about over and over again, the importance of being focused, the point of being single-minded, the point of not giving, importance of not giving into distractions so it says uh learn to say no saying yes all the time stems from a childish desire to please and to be loved all the time you must say no to inferior products and ideas and the fourth one trust your instincts i discovered that pondering facts and other people's judgments usually leads me down the wrong path. Common sense. Instinct. Trust that part of yourself.

Whatever you call it. This is something we've seen over and over again. The fact that at some point in time, we're all going to have to be able to trust our own judgment. And to do so, we have to do the work necessary to get to the point where we can trust our own judgment. And Estee Lauder, her career and her life is definitely an example of that. And towards the end of the book, she's reflecting back on her life and career. And this is what she has to say. Sometimes I have to pinch myself to believe what hard work and prayer have brought me. They've taken me from carrying a tiny bottle of cream in

my purse on the off chance I'd meet a woman who needed a quick lift of glow to seeing a streamlined white streak as I drive along the Long Island Expressway. The streak is my factory. And as my car approaches, my name gets larger and larger. It is a thrill that will never diminish for me. My name, not in lights as the little girl from Queens dreamed of being an actress hoped to see, but my name on a working monument to beauty. And I'll leave it there to get the full story by the book using the link that's in the show notes are available at founderspodcast.com and you'll be supporting the podcast at the same time. That's 136 books down, 1,000 to go.

And I'll talk to you again soon.