Odd Lots - Drybar Founder Alli Webb on the High Cost of Fast Growth

Episode Date: December 11, 2023

One of the defining brands of the 2010s was Drybar. The popular chain of blow dry salons helped define the so-called experience economy, leading to numerous competitors and copycats. But of course, to go from a single location to a national chain is difficult in all kinds of ways, both personally and operationally. On this episode, we speak with Drybar founder Alli Webb on the experience, which she talks about in her new book titled 'The Messy Truth: How I Sold My Business for Millions but Almost Lost Myself'. We also discuss the truth about raising money, her new chain of massage studios, how to select the perfect retail location, and how operating a business is different in 2023 than it was 10 years ago. See omnystudio.com/listener for privacy information.

Thanks for listening to Oddlots. Follow the show on Amazon Music for more future episodes or just ask Alexa, play the podcast, Oddlots on Amazon music. Hello, Oddlots listeners. It is that time of year again. Joe and I will be doing an Ask Me Anything episode and we need your questions. Yep. If you want to ask me and Tracy a question about anything or careers, the podcasting industry, economics, finance, markets, business, whatever it is. Labor market monopsony, if you just want to hear your voice on the Odd Lots podcast, you can send us in a question. That's right. The deadline for sending us questions is December 13th. All you need to do is record a short voice memo and then email it to us at oddlots at Bloomberg.net. Please include your name and your location. Oh, and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway.

Tracy, have you ever been to a dry bar? I just thought I'd start this conversation as simply as possible. You don't mean a bar that isn't serving alcohol. No, but if there were, I would like that. I think those are called coffee shops, Joe. No, I have in fact been to a dry bar. I remember when dry bars first became a thing. And it was the sort of novel concept that you could go someplace

and have your hair blow-dried by a professional, sometimes while having a drink or like watching silly movies on TV. And it was it was different to how it had worked historically because normally you would, you know, maybe you would go to your local hair salon to get a blow dry or often you would just have a blow dry after getting your hair cut or something like that. But it became this really big thing. Yeah, absolutely. And I remember, okay, so I will say I have never been to. You've never been.

I assume. I have never gotten, I think, a proper blowout. But, you know, I've gotten my hair done for a day. TV. And so I guess that's the closest I've gotten. But also, I just sort of remember when they started popping up and it felt like one of those businesses and business models that sort of defined the 2010s maybe or defined a certain era and this sort of idea of the fusion of brick and mortar with booking on an app and the proliferation of new times of stores. Like that felt like a big part of the 2010s economy. Stores, which were providing a service.

and also an experience. Because I remember the experiential portion of it was a big part of the offering. So again, you could go get your hair blow dried for 40 or 60 minutes or however long it takes, and you could have a cocktail while you did it. And a lot of these stores... Oh, they did? Do it? You could have a cocktail? Yes. Oh, my gosh. Yes. That was a big part of it. And a lot of the stores, well, I'm thinking of one in particular because it is going to be the topic of this podcast,

the original dry bar. offered, you know, they would have movie screens, like TVs built in and you could watch like rom-coms from the early 2000s. It was great. The experience economy, you're right. That was like such a big part of the story or that was such a big part of what people talked about, people wanting to have high quality experiences, something above maybe some of the old dingy physical retail, physical service locations of the past. I do think that it really sort of redefined a category. And I'm interested, you know, like obviously that. exploded during a specific era in time, the rise of smartphones, low interest rates. So VCs investing in fast-growing concepts of various sorts, digital and physical, loose labor markets and the ability to hire lots of people fast. And so like thinking about those business conditions, modern business conditions, how they've changed lessons learned from that period, of course,

sort of a go-go era for fundraising and so forth. I think there's still more to learn. Absolutely. I mean, things have changed, as you just mentioned, but I think the desire for services slash experiences is something that we still hear about today. Well, I'm excited. We really do have literally the perfect guest to talk about all of these things. We are going to be speaking with Ali Webb. She is the founder of Drybar, also author of the New York Times bestselling book, The Messy Truth, How I Sold My Business for Millions, but Almost Lost Myself, Amazing Title. And she's also gone on to found more businesses. including a franchise chain of massage therapy locations. So it sort of sounds like Drybar for massages. So, Allie, thank you so much for coming on Oddlots. Thrilled to have you here. Well, thanks for having me.

And I love your conversation about Drybar. You guys really nailed it. The title of your book is so good. How did you almost lose yourself? Well, I mean, the book really goes into a lot of it. But it's a long story. But more or less, you know, building a business over the last 10 years. which was an incredible journey.

And we definitely captured lightning in a bottle and it was intoxicating and exhilarating and amazing. But a lot of my personal life in the background kind of fell apart. There was divorce and rehab and depression and you name it. And so it was a lot of navigating real life stuff alongside growing this massive amazing business.

And it's kind of like if like a business book met a memoir and had a baby. That's kind of what this book feels like, to me anyways, because it's really the coming together of the stories of all the things that I learned and lessons and takeaways from building a business as someone who didn't go to college and doesn't have a fancy business degree.

But then also like, you know, the underpinnings of it all and how you lose yourself. And if you ask any entrepreneur, they will tell you the same thing. It's like, you know, you get so invested in this thing that's like a baby to you. and you kind of easily lose sight of a lot of other things personally in your life and yourself. And the response to it has been overwhelmingly positive and just how so many women and people

are just relating to it. And like, oh, my God, that's me. And I felt like I was reading about me. And that's my story. And which is fascinating to me that to put out stuff that I don't think people talk about enough in such a public content. And then for people to relate so heavily to it has been, I mean, such a joy and privilege for me. I should say, first of all, thank you for coming up with this idea, because it has been enormously

helpful in my own life as someone who has, like, fairly untamable, very thick hair that gets super poofy in the summer especially. And nowadays, we take the concept of dry bars. I mean, it's gone beyond the brand, right? You think about dry bar. You think about a hair salon that is exclusively operating, like, drop in blow drys, basically. So, we're going to be a dry bar. So, we think about it's it really became a thing. But back when you founded the company, this was obviously a new and novel concept, maybe just to begin with, could you talk about the business opportunity as you saw it back then? Like, what was the gap in the market that you were able to identify? Yeah, I mean, you know, I shouldn't say that I wasn't, you know, a business person looking for a

hole in the marketplace, you know, although, you know, that's great if you are. I just wasn't. I just felt like there was not a place to go get a good blowout at an affordable price. And I think I had felt that my entire life, you know, just as somebody who also has hair that's curly and frizzy and hard to manage, I was always kind of frustrated. And as a kid, I would go to the hair salon and beg my mom to blow out my hair. I mean, I was always on the hunt, you know, and I was always into my hair as a kid. And, you know, so I think on some level subconsciously, I wanted something like dry bar my whole life, you know, and fast forward to becoming a professional hairstylist in my early 20s.

and then spending my life, you know, so much of my life doing hair and working in salons, I think I intuitively, instinctively knew that there had to be a better way to get a blowout, you know, and there was two pretty bad choices out in the market, which was like the discount chains, which I'm sure you've been to, or, you know, your fancy hair salon where they're charging you so much money and upselling you on other things. And, you know, there just wasn't anything like it. But what ultimately led me to Drybar was that I started a mobile blowout business when I was, I had been a stay-at-home mom for a couple years. My boys were two and four. And I started running

around L.A. and my niece on Xera blow drying my mommy friends, really, because that was the world I was very much in at the time. And, you know, I posted an ad that said, I'll come over and blow out your hair while your baby's sleeping. And I would charge 40 bucks. And again, it was, for me, it was like, if I don't charge that much money, more people will call me. You know, it wasn't a very, like, sophisticated business plan. But that's, you know, what I hope for. And sure enough, they did. And I realized during that, because I got so busy while I was operating my mobile business, because I was really, you know, it was pretty good at what I was doing. And because I was only charging 40 bucks, like I was so crazy busy, you know, that's when like the kind of light bulb went off for me and was like, wow, you know, at the right price point, women will do this a lot, you know.

And I, because I got so busy and I was, you know, came to a crossroads of, am I going to expand this thing mobily or do I. open a brick and mortar instead of me going to them, have them come to me, which is obviously ultimately what I decided to do. And I went to my brother and asked him to help me with all of this. But I just, it was such a great learning, even though I didn't make any money at my mobile business, but who cares? Because it, you know, informed what would become dry bar, you know, because I realized during that time, it all really crystallized for me that like at the right price point in a beautiful space, a great blowout can be something an affordable luxury that women do, you know, once a week, twice a week, whatever it is. And we have plenty of clients who

don't even wash their own hair anymore. I mean, because the price point was right. The experience was great. And I realized nobody else was doing anything like this. And so it was like a prime opportunity that I really felt like I kind of stumbled into. Can you talk about growth? And when I think about 2010's business culture, I think of magazine covers like, this founder just raised X million dollars. This founder just had a huge exit. This 28-year-old is now a billionaire. Or total addressable market. A total addressable market. This just sort of like money growth culture. And, you know, obviously as you talked about, there's a sort of presumably you are not the only one that there was like a real dark side to this and a personal cost, et cetera. But can you talk a little bit more

about the sort of decision to take your idea and make it of, you know, you raised money and you expanded, it became a national, maybe international brand. Can you talk about that sort of like choice to like, okay, we have to go for this and we have to grow big and we have to deliver results? Yeah, and it's certainly a choice. And not everybody wants to do that. I mean, you know, but you get like a little taste of that and it's hard to walk away from it, you know. And I think we all knew that we were on to something really special. And it was, we did to have to make some hard decisions like, you know, obviously this is going to change our lives significantly. Do we really want to go for this? And, you know, there was so much demand. There was so much request, you know,

to open more stores and more markets. And, you know, and it was going to be a whole thing, you know, to really go for this and to really grow this thing. And we had to really lock arms and decide that that's what we wanted to do because it was going to really change our lives, which it did. every conceivable way. And, you know, and I think I see lots of businesses that decide not to do that, you know, to grow at a more organic, slower pace. I mean, obviously for, maybe not obviously, but for us to grow, we were going to have to raise capital because even though Drybar was successful, our first few stores were successful, they didn't throw off enough money to grow the way we wanted to or the pace in which, not only I shouldn't say wanted to. I should say like the pace that we

needed to because we knew a lot of people were on our tail and they were. You know, there were so many copycats like popping up left and right who humbly were just not nearly as good as we were and didn't totally understand what we were doing, but saw, you know, an opportunity. It's like you open up a salon and throw some chairs in. It's like it's just so not that simple. And so, you know, I think we felt a little bit of pressure. Like if we're going to like really go for this, we got to like move fast. And in order to move fast, we need to raise money. And so then we raise like our first two or three million with friends and family because they were, and this is also like not super common, but, you know, friends and family were like practically throwing money

at us because they saw the writing on the wall that like this was a great opportunity, you know. And so, yeah, I mean, we, you know, ultimately came together to make this decision that we're going to really go for this and grow this thing. And that meant so many other things that I, at the time, I knew nothing about, you know, about like how you grow in skill and hiring and and all the complexities that go into that. But there was a lot of pressure because if we were going to do, we had to do it now, you know, otherwise we were going to fall behind. My brother found an investment banker.

We went out and did like a formal process in probably year like two maybe and, you know, decided to, you know, to really like, no pun intended, blow this thing up. Could you, sorry, I'm a fan of puns. Oh, I have a lot of them. Oh, good. Excellent. Can you talk a little bit more about the business model itself? Because, you know, I mentioned in the intro, like, going to a dry bar was a nice experience. It wasn't like you're going to a budget hair salon and just getting this thing done for the cheapest price. But at the same time, the price you were charging for blowouts was very reasonable, especially when compared to a more higher end salon. So how did you actually contain those costs? Like, where did the savings actually come from? Well, I mean, it wasn't easy. And our margins were razor thin to your point because the amount of money we spent on the build out, you know, to make it look the way it looked and to make it feel high end, we just not have the high end price tag. The name of the game for us was volume. Like, see, there's another pun.

You know, we all of these are flying right over Joe's head. No, no, I got, I got that one. You know, women like volume, big hair. So anyway, we need to. You know. Clare closer to God, right? Isn't that what they said? That's right. And it is a true statement. Don't anybody tell you different. So we knew that we needed to do a ton of blowouts a day.

And like, just to give you an example of what I mean by a ton, like, we thought in our Brentwood location, which was our first location that had eight chairs, we thought, you know, if we do 30 to 40 blowouts a day, like that's a good business and whatever, we completely underestimated the demand. And we were doing more like 80-ish blowout today, which very quickly turned to 100 blowouts today once we were fully staffed. You know, so we were open from 7 a.m. to like 9 p.m. So, you know, you could theoretically do that.

So once we realized that, you know, we could do so many blowouts, we were open seven days a week, you know, 12 hours a day that we could, we could theoretically do it. It really was about volume. We had to get those numbers in in order to make the business work, which, by the way, didn't always work because, as you might imagine, like, you know, supply and demand was a real thing. And for us, the supply was hairstylist. And it was hard to get extremely hard to get great hairstylists in.

And it's just an interesting market. And having been, I'm a hairstylist myself. It's like our strengths are our weaknesses. Like, I'm a little flaky. I'm not the most, you know, I'm usually late to most things. And so are most hairstylists. Not all. But, you know, and just getting hairstylists who were okay, just doing blowouts all day long.

You know, understandably, so many stylists wanted to grow their business and do cuts in color and dry bar was more like a stop for them, not like a destination. And so that part of it was really hard getting and training stylists, you know, to the level of which we wanted them to be, you know, all of that. So it was a tough business model in terms of like getting that to all work. And, you know, we in some stores and sometimes we did it better than others. We had a gazillion different strategies on recruiting and staffing and all of that. But the business model, you know, only worked if we did X amount of blowouts per day per store, you know, which we were, for the most part, able to really pull off. The news doesn't stop on the weekends. Context changes constantly.

And now Bloomberg is the place to stay on top of it all. Hi, I'm David Gurra. Join us every Saturday and Sunday for the new Bloomberg this weekend. I'm Christina Ruffini. We'll bring you the latest headlines, in-depth analysis, and big interviews, all the stories that hit home on your days off. And I'm Lisa Mateo. Watch and listen. to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people, and culture. On Saturday mornings, we put the past week's events into context, examining what happened in the markets and the world. That on Sundays, we speak with journalists, columnists, and key political figures to prepare you for the week ahead. Join us as soon as you wake up and bring us with you wherever your weekend plans take you.

Watch us on Bloomberg Television. Listen on Bloomberg Radio, stream the show live on the Bloomberg business app, or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg television, radio, and wherever you get your podcasts. I'm glad you mentioned recruitment and training because I got the sense that this was kind of important for the business model as well. So talk to us a little bit more about how you identified the right hair stylist for the business. As you mentioned, it might not be that every stylist wants to spend their entire day

just blow drying hair. And then secondly, how much of the labor force was flexible? Was everyone working full time or were people coming in and doing it for like three or four hours to sort of add on to their main job? Yeah, exactly. You know, we tried to be as nimble and flexible as possible with stylists because of that reason. Like, you know, it is very labor intensive. And I really always understood that like, you know, some stylists really loved it and could do like a six, seven, eight hours shifts. Other stylists were like, you know, I can't do this for more than a few hours.

Like, I get it. No problem. You know, especially in the early days. I was like, I will take whatever you can get. If you can only come in and do four blowouts, fine, you know? Like it was that die. The dire is not the right word, but it was that like crazy and busy that. And of course, I was doing tons of blowouts in those early days to accommodate people.

I would sit or stand at the first chair and blow out hair and be able to like manage the front desk. I mean, that was those were crazy times. But, you know, so we were really flexified. in terms of what stylists, what they wanted to do and how many days a week they wanted to work, because we knew we had to be in order to get people to like, it was like a hodgepodge of stylists getting them in. And then, you know, and then the other big challenge, as you might imagine, is like making sure that those stylists are, you know, are really great. And that was the other thing. It's like, you know, there was, there was like a subset of stylists who'd, you know, been doing this for a long time.

And they just, you know, they were great and we didn't need to do a lot of training. And then there were stylists who were newer at a beauty school and they didn't have a lot of training. And so we needed to spend a lot of time with them, but we didn't have that time. You know, we weren't doing much training, which was getting us in trouble, you know, because for me, it was obviously really important that the blowouts were top notch, amazing. We do one thing and we better do it really well. So, you know, it was really stressful to get a stylist in there who wasn't at the top of their game, you know, so that piece of it was challenging. And I would eventually build out a very robust training program, but that wouldn't be, you know, for years or would take years. Or would take years.

and we were always tweaking that. But I felt really strongly about the certain, like, culture that I wanted to have in the shops. And so it was like there was stylists that were just not the right fit for drybar. They didn't want to just do blowouts. They didn't want to be washing their client's hair. They wanted to take a break in between every client. And, you know, for better or worse, it was like you would do, you know, a handful of blowouts that then take a break or take your lunch or whatever.

But you were working the whole time. I mean, you were on dry bar. And so that, you know, and that wasn't something that every stylist wanted. and not the typical culture of hair salons, even as I grew up in hair salons, it was like, you know, people would take smoke breaks all the time, and there was like a more casual nature about it.

Not always, you know, the really, really busy salons weren't like that, but, you know, we were a really, really busy shop. So we, you know, we needed that kind of work ethic and not, and that just wasn't for everybody, which was totally okay. And that was something that I always would preface with stylists when we were like, you know, opening a new store

because, you know, we have 150 locations. I would say the first, like, 50 or so, I went to every single opening until I just, like, physically couldn't anymore. But I used to say to the stylist, I would do this, like, kind of raw, raw, like what we called the new hire, you know, orientation where I would sit and, like, you know, basically in a group setting and talk to the stylist about who I was, why this idea came to be, what our core values were, and all of that. And I would also say, every one of you sitting here may not end up

staying here because this may not be the job for you. You may not like this. This is a like very fast-paced hustle-bustle. You've got to like thrive in chaos, enjoy this, that part of it, or it might not be the best job for you and that's okay. You know, it doesn't have to be for everybody. You know, and so that was like, you know, the mentality of the shop and we didn't have access to like every single hairstylist that there was out there. You know, we were pretty picky from both a, you know, a technical styling point and like we want you to be a really nice person who, you know, has over the top customer service because that's a huge part of the business model. And it was the most challenging part of the whole thing.

So, I mean, what I imagine the challenges that you faced early on with hiring and recruiting and retaining talent were like this precursor to probably what like thousands, hundreds of thousands of entrepreneurs across the country these days, particularly in the COVID era of higher labor turnover, like tearing their hairs out. And I have to imagine, you know, as you said, you couldn't eventually you couldn't go to every opening. Not every new stylist got to hear a pep talk from Ali Webb. What are the broader lessons that you imparted to hiring managers at locations at dry bars or some of your newer ventures, including squeeze? I know you're not the CEO, but the co-founder of the massage. What do people need to know about identifying talent who will be committed to the operation? Like what did you learn about how to scale that sort of identification? Yeah, I mean, we always did these like pre-hires before anybody even walked in the door.

You know, we had a team of people who would talk to potential employees, you know, just to get what we would call the cultural interview piece of it, which was like a pretty candid conversation just trying to get to know somebody. And that was even like in the early, early days before we opened the first location. I used to have hairstylists come over to my house to blow out my hair. that was like the job interview, which was awesome and not always awesome. But anyways, and part of that process just for me in that very, very small scale was, you know, getting to know their personality. And it kind of goes back to what I was talking about, that this job isn't for everybody. So as we scaled and grew, those culture interviews became essential because you could tell very quickly the conversation was like, you know, why do you want to do this and like what do you love about

this. And for me and for our team, what we always like would listen for is for somebody who really enjoys being in the service industry, you know, like enjoys like making people feel good and that and like giving and sharing this amazing talent they have as a hairstylist with others, you know? And and just like the way people would show up on calls, like prepared and ready and, you know, answer and questions with a lot of excitement and enthusiasm about the brand, you know, On the contrary, as you would imagine, you know, the stylists who were, you know, really quiet, really soft-spoken, didn't get the sense that this was like something they were really excited about or loved. And it might sound, it feels like it sounds simple coming out of my mouth, but it is that like basic like I really want to do this and be a part of this brand and I love this company and I love hair and I love styling and making women feel great. Like that's like the first barrier to entry for us is like making sure that that at least that piece is there and you're going to show up.

and be kind and nice. You know, that is an, you know, an intangible that you, that you must simply have in order to be successful. So if you don't even have that, there's no point going any further. You know, and like I said, as we grew, there was a team that was instructed to really listen for this kind of stuff and make sure that we were bringing in the right personalities as well as great hairstylists. So you talked a little bit about the grind and how intensive this whole process of building a business actually was. And of course, you know, that's a big portion of what your book is actually about this idea of losing yourself in your business, your baby. I'm curious though, like, it sounds tough. And you're sort of like working and working until you get presumably to like

the big payoff of some sort. And I always wonder with new startups, like how much money are you able to take off the table in the beginning? Like how do you balance building the business and investing in it versus rewarding yourself for the hard work that you're actually doing. Well, I love this question because I think it's such an important thing to point out that people, you know, it's a tricky one because I know that there's obviously, you know, people want to ultimately make money and they want to be successful. And that largely looks like making money. I get that and I feel that to you. I mean, just like anybody else. I really like making money and I like money and nice things. But money wasn't the big driver for me.

me in this business. And I feel like it feels to me like a mistake that a lot of entrepreneurs make is like they're only looking at the money and the opportunity to make money, sell a company, whatever, versus doing something that they just really love. And I feel so strongly about this. And if you look at some of the most successful companies in the last couple decades, It's like, you know, and you hear the founder's story. It has always started from some sort of personal necessity, something that they felt like in their heart of hearts that they could make better and do better. And the reward is it working and the success of the company being, you know, being felt and growing this thing and the excitement and the adrenaline that you get from building something that people love, you know, and then, and then, you know, providing all these jobs and all this opportunity and all of that.

You know, I mean, for me, that was really what I loved a lot more than like, oh, we're going to build this thing to sell it. It was never, ever that conversation for us, you know, I think I started to realize after a couple of years in this thing, like, you know, having never had any experience in like M&A and going public and all of that stuff that I, you know, didn't even know that that happened in the world. Like, you know, I was so naive back then. And as I started to like pay more attention to that and I was, you know, starting to become friends with more family. and I was starting to be in these rooms where people were talking about buying and selling companies. I was like, oh, my God, that might be us one day, you know, and that was like an exciting, like, part of it. I mean, obviously, we sold it 10 years after we built it. And, you know, I would say in a year, like, after we had raised a bunch of money, obviously everything changed. And, you know,

ultimately we raised 75 million and that, now you have investors. Now you have, that's, that is what they're thinking about and that, you know, is, is good for them to be thinking about and moving the business in the right direction. But all of that was so new to me when I started. I mean, this whole thing was really just started out of like a passion to like find my purpose in my life and to do something that I really love to do. And I loved it. I mean, I loved building that business and I loved every second of it. I was in that shop seven days a week. I mean, I couldn't get enough of it. And that is so, I mean, so much more valuable than any dollar amount to have that like, I love what I'm doing and what I get to do every day, you know?

So, you know, again, once I realize, like, oh, we might actually be able to sell this thing, like, oh, we're going to actually be able to make a lot of money. Like, that was really awesome, but just not, you know, what I went into this thing thinking. I want to ask you a question about fundraising. I have heard that VCs or investors don't still necessarily have a great grasp of the business model of rapid growth physical locations. And so there's sort of like investors who sort of like understand physical operation.

And then there's VCs who probably often think in the idiom of software and five people in a room growing to something that a billion people can use. And that a lot of these sort of like modern concepts of physical growth locations, whether it's like a dry bar or a kava or something like that,

sort of exist in this middle space and investors don't have a great understanding of it. Was that the case for you when you first went out trying to explain to them your vision? And do you think investors these days feel like they have a better handle on these types of startups? Well, I mean, it's such a, it feels like the Wild West right now, you know? I mean, I think retail is so like tough right now that I, you know, I don't blame and, you know, VCs and all these guys. It's like, it's like you just don't know.

It's so hard to predict what's going to happen right now. So it's such a funky time. I mean, I actually had this thought not long ago. Like, I wonder, you know, I mean, part of the success of Drybar, I think, was when we started it. We only wanted to raise like 10 or 15 million that first round. And, you know, we ended up raising 25 million because we went with private equity. We never went down the venture capital. And they wanted to put in more as they do.

And I think it was, again, a very different time. And retail was very sleepy at that time, you know, in 2009, when we first started Drybar and then Drybar, you know, resonated and took off. And we raised the first like three million with friends and family, which got us like to a couple of stores. But the buzz was there and the PR was there and women were like telling other friends. And so we had that in our corner. And so by the time we were in these rooms with these private equity guys, granted, you can picture

the scene. It's like me and my big personality. and then these guys in suits. And they're like, what are you doing? You're blowing women's hair? And talk about puns and the ridiculous jokes. It's so annoying. But they didn't quite get it yet.

But they're like, you know, my wife's been talking about this thing. Or my daughter's, but, you know, there was that kind of general, like in the air. We've heard about this. And it seems to be getting a lot of attention. And, you know, and then there, of course, there were the conversations of like, are you going to do nails and makeup, too, because you can. and you're doing 100 women a day and why don't you do this? Which, of course, and I had to say, no, we do one thing, we do it really well.

And that that turned off a lot of investors who didn't want to get involved in dry bar, which was like, no problem, but not the right fit, you know. So there was a lot of trepidation of how do you scale this thing when they didn't really understand it to begin with, you know? And again, back to our initial projections of doing like 30 to 40 blowouts a day when obviously we far outseated that. But that was like we were in L.A. And our second location, which is a franchise, was in Dallas, which obviously makes a lot of sense.

But there was still a lot of like, you know, have we proved the concept? You know, is this something that really works far and wide across the country? And then there was still kind of a question mark for a lot of people. My brother included, you know, who was always like, we got to prove the concept. We got to prove the concept. And I was like, I just think it works where women have hair. Like if there's where there's hair, this will work. And that, you know, was my very bullish and maybe naive.

idea, but we kept going and we knew we had something really special and magical. And so we kept going until we found the right partner. And they really understood our vision and didn't want to change it and wanted to like, you know, really lock arms with us and partner with us, which was Castanaya, which is now known as Stride. And so yeah, that's not all went down. I'm Francie Laqua, an award-winning journalist. And I've got a new podcast, leaders with Francine Laqua from Bloomberg podcasts. I've interviewed everyone from Heads of State to fashion icons. about the news of the moment. But I've always been curious, who are these people as leaders?

I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow leaders with Francine Lacroix wherever you get your podcasts. So I want to move on and talk about your new business squeeze, which I've seen described as sort of the dry bar for massages. And so I guess my first question is listening to you describe, again, like the grind of starting another business.

Why are you putting yourself through all of this again? And then secondly, how much overlap is there in terms of the business model between, you know, squeeze offering massages and the dry bar offering blowouts? Well, first of all, I am not in the grind. Thank you very much. I'm very happy to not be in time. Smart. Fair enough. Because, yeah, it's a great question.

And like, no thanks. And it's funny when my brother, this is really my brother's idea. And when he, as a bald dude who never got blowouts, his frustration in the marketplace was around massage because as someone who went to, you know, the local chain, which you know who I'm talking about, you know, and had a pretty bad experience from having to call every location to book. And the decor was like, eh. And the massage is very hit or miss.

And the whole process was just so clunky, you know, that he was so frustrated. that there wasn't a great place for him to go for massage as someone who liked to get like a weekly massage, even though the price point was good at, you know, at a local chain. And then, of course, if you went to a spa, you know, it was the same conundrum that you had a dry bar. The spa would be really expensive, just like a high-end hair salon was really expensive for a blowout. So the similarities and the problem was pretty much the same. And so when we were like, in the last for a couple years of dry bar, Michael really wanted to start this. Obviously, we didn't have the bandwidth for it. I, to your question, did not want to go back into like the early stages of building a business.

So I was like, nope, not doing that. But, you know, then we went to Brittany Driscoll, who's the CEO and our co-founder and who ran marketing at Dry Bar for several years. And she was on her way out of Drybar, was like going to explore new opportunities. And we said, hey, you know, we have this idea for a massage concept because for the reasons I just mentioned, you know, we wanted something different and better that didn't exist, you know, which is always my advice to entrepreneurs is like, you do not have to reinvent the wheel. Like, obviously, we did not invent blowouts or massages. We've just created a much better experience at price point and a million other details around them that nobody's paying close attention to. And the big differentiator of squeeze, though, is that there's an app that

even though it's a brick and mortar and you go in for a physical massage, there's an app that you book all your preferences on from like, if you like, oh, you're a little bit. and the type of music you like. And there's a very like intuitive body that you, you know, press on. Like I like a lot of, you know, pressure here, but not here. And so by the time you walk in to squeeze, the therapist already knows all of this stuff because you've had to have, you know, gone through the app and really filled out all your information.

And that was a big undertaking. It took us over a year to build out this app that, you know, had all these bells and whistles that was super intuitive. And nobody else has this. And it is the biggest differentiator of squeeze, not to mention. it's the same founding team as Dry Bar. My ex-husband, Cam, did all the creative, the same architect who built Dry Bar's.

Everything is the same team. And it is the Dry Bar of Massage because it's exactly the same thinking as Dry Bar. It's like, this is not being done well. We're going to go do it much better, you know. And if you read the reviews on Squeeze, they're all like, they're literally all five stars. I mean, we've had such great experience. And so much of that comes from the learning from Drybar,

you know, especially Brittany having, you know, lived this world with us for many years. And we knew what was working, what wasn't working. And to date, I think we're doing a completely franchise model where Dry Bar was a little of both. But we've sold over 80 locations across the country. So you'll start seeing them popping up all over the place in the next year or so. Speaking of those locations, that actually fits right into what I was going to ask next. You mentioned sort of generally Drybar you saw as being successful anywhere that women have hair, which is everywhere. but you must have thought, you know, specific about the types of locations, whether they're in high-end malls or busy areas that are really optimal for opening a location. These days,

obviously, there's all kinds of questions about what is even the future of offices and where and how are people going to work. What have you, like, seen in terms of, or where is your thinking in terms of selecting locations in the year 2023 where you feel confident that it'll work at a time in which I think it's still very up in the ear, even where people are going to be working. Yeah, it's such a good question. And I, you know, I think we're trying to figure that out right now too. I mean, you know, to go back in time a little bit, I mean, with Drybar, which I still kind of feel. And I do just for the record, far be it for me to predict the future. But I really believe the pendulum is going to swing back to experiences. You know, I think people are desperately hungry

for being out in the world with other people again and having experience. experiences, you know, I think it's just taking a minute to get back to it. That said, with dry bar, it was like, we, we realized very quickly that being like in, you know, a woman's, like, daily routine, you know, like being near a grocery store, being near, you know, her workout, or where she liked to shop and where she liked to have lunch or, you know, we knew the importance of being in that mix of, like, your daily use. And that was always the guiding light of where we put a dry bar, like near, you know, in the right area. which by the way, can be really tricky.

I mean, we certainly experienced this the hard way that you could open a store in the right, like, mile radius. But if you were in the wrong shopping center on the wrong side of the street that you would never know, unless you were, unless you tapped local knowledge to know that like it's really hard to park there. And nobody likes to go there because of the way this, the shopping center, who knows? You know, it's like from an out, you know, when an outside big corporate company comes in and it looks really pretty. and the other stores are good, you're like, yeah, this looks great. You know, but unless you get that local knowledge, which again, we have been burned on that before, you don't really understand the neighborhood and how it functions, you know, and how women really use it.

So it's an important but small and often overlooked nuance when you're looking at real estate to make sure that you really understand, like, where do people park? Is parking a total pain, you know, is it easy to park? Is the location easy to access if you're in a mall, which, you know, malls are such a dying dinosaur anyways as well. But, you know, all those factors. Like, we opened in Fashion Island Mall in Orange County. Oh, I've been to that one. Yeah. But you know then that we are strategically placed near the parking lot, you know, it would not make sense for us to be like deep in the mall for like you if you're like, oh, I'm popping in, I have to go over to Fashion Island, which is already could be a pain, which is how busy that place is, you know, but like at least

we're at the very tip, you know, we're near the Barnes & Noble. I don't know if that's still there where you're like, oh, I can just park and run into Dry Bar, you know, and there's an oldso right there and there's a whole foods. And, you know, so all of that was very strategic and how we always thought about our locations, making it as easy as possible for women to access us, you know, and then for her to be able to do two or three other things. So Dry Bar seamlessly fits into her day, which, you know, is similar, it's similar thinking of her squeeze, you know, in any location, in any kind of business that we open. And it's tricky, like, when you're going into like New York City because it's obviously a different animal than like the suburbs. But

even still, are we near a subway? Can like a bunch of women walk to us? Are we near where they're going for other stuff? And sometimes it's like we always said we didn't, we couldn't afford to be on Maine and Maine, but we could be on the little side street off Main Street so we could afford the rent, but still be close enough where she can easily pop over. What's been the biggest, I guess noticeable difference between doing squeeze in the current environment versus drive? dry bar, you know, 10 or 20 years ago. Like, what has most markedly changed for you? I think the biggest thing is like is costs and like getting stuff, you know, for lack of a better word to our stores. You know, real estate deals seem harder. Construction prices are

so much higher than we were than they were when we started dry bar. Not always, but we could often go into a shopping center that had a hair, a full service hair salon because we would explain to them, listen, we're coming in and we're not going to take your lunch. Like, we're not doing cotton color. We're just doing blowouts. And if you're really smart, you'll leverage us, you know, and we'll send you clients and they'll send us clients. And a lot did and really got it. But, you know, some landlords and some, you know, tenants, if there was already a hair salon, which there usually was in most shopping centers, could easily block us from coming. And the same, you know, is true of squeeze. There's a lot of massage concepts in a lot of places, albeit some of them are

and great, you know, but they're there. So that impedes us from coming there as well. So that is, you know, just a challenge that, you know, anybody deals with you if you're going into any kind of business that already exists, which it did for dry bar as well as squeeze. But, you know, so you just have to get a little more creative with where you're going. I was going to wrap it right there, but just real quickly. So do tenants of shopping centers and malls, do they have stipulations frequently about the types of competitors or adjacent companies that can move in? I don't. I didn't, I'd never thought about that before. Yeah, yeah, they totally do.

I mean, and it definitely is not like one rule that it changes, in my experience, it changes from center to center. And, but yeah, I mean, especially when you think of like less probably in a mall, but, and we, I don't have a ton of experience with malls, but in like a strip center shopping mall, they, they will have in their, a lot of those tenants in their leases will have something that says you cannot, another air salon cannot open in here. Makes a lot of sense. Ali Webb, the author of the new book, The Messy Truth, How I Sold My Business for Millions,

but Almost Lost Myself. Thank you so much for coming on Odd Loss. That was great. Thanks for having me. It was a fun conversation. I haven't talked about this stuff in a long time. Awesome. Thank you. That was really fun, Tracy. That was great. That was really fun, Tracy. First of all, I mean, it's obvious when she says it, but like, for example, at the end, it hadn't occurred to me that such things would be in leases, that, okay, if you're going to open up a nail salon or a sneaker store, a sneaker store. Should you say a sneaker snores? Sneaker snores.

Or a karate studio or whatever you see in strip malls that you have some stipulation. Like you can't just open another one next door. But it makes a ton of sense. Yeah, it does. I think also for shopping malls, I think like the owner of the shopping mall wants differentiation and like variety. Right. So they try to build that into a lot of their leases. No, that was really interesting.

So it seems like Allie really kind of hit a store. sweet spot at that time period where like she was offering a service rather than a good. And at a time when, you know, brick and mortar retail was experiencing a downturn. We had that episode recently on dead malls and commercial real estate. And in 2009, that was really the era of the dead mall and competition from online shopping and things like that. So she was able to identify something that people would still pay for and have to go to receive in person.

And then secondly, I think one of the things that I found really interesting was the idea of having that flexible workforce. Yeah. And, you know, offering a stylist the chance to come in for two or four hours versus a full-time position. So it feels like she also tapped into that sort of upswell of, I guess, gig work, which was also just beginning at that time. Yeah.

No, like I said, you know, it really felt like they sort of nailed a huge aspect of what I think of is that even though I have never been in a dry bar, my intuition sense of it, I guess it's strong enough that I associate it as one of those defining brands of the 2010's economy. So many interesting details. I mean, just in, you mentioned that aspect of the labor force. And I feel like what Ali was dealing with early on, it's probably so many people are dealing with in the last few years of like, how do you hire people that are going to maintain the quality that you expect for your outward facing quality that are going to stick around, that are going to maintain the brand. It felt like she had to deal

with a lot of those things like from the beginning in a way in which many business operators probably never really struggled with that up until maybe the year 2020 or 2021. Absolutely. And it'll be interesting to see her sort of replicate it in the massage market as well. Like where do you get all the assuces from? I also really like that point. And maybe Maybe we should do an episode on this at some point, like the art of location selection for a brand. You know, and the idea of like, yeah, when she said it makes ten of sense. Like if the idea is you're going to be a convenient stop for women to get a blowout, then you want to be on the perimeter of the mall, not the inside of the mall.

If you're at the inside of the mall, it obviates the whole thing. But, you know, the idea of like proximity to parking. I think our friend who we've had on it, Patrick McKenzie has talked about this a couple of time with banks that, like, that is a big thing in terms of you can have two locations that look very similar, but if one is not on the right corner in the right way, it's going to fail. And so maybe we should do an episode on how it would talk to a commercial real estate broker about finding good locations for things. Oh, that would be so interesting.

Yeah, let's do that. And then we should go to strip malls and like observe in real life. Totally. I would do that. Okay. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast.

I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Wisenthall. You can follow me at The Stallwart. Follow our guest, Ellie Webb on Instagram. She's at Ellie Webb and check out her new book, The Messy Truth, How I Sold My Business for millions, but almost lost myself. Follow our producers, Carmen Rodriguez, at Carmen Armin, Dashel Bennett at Dashbot, and Kail Brooks at Kail Brooks. And thank you to our producer, Moses Ondom. And for more Oddlots content, go to Bloomberg.com slash oddlots, where we have a blog, transcripts, a newsletter, and you can chat about this topic 24-7 with fellow listeners in the Discord.

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