How Overtone Brought an Existing Solution to a Market That Didn't Know About It (Yet)

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Maegan:In terms of how we communicate through influencers, really what we would do is, I would email them early on, and say, "Hey, we have this product. We love your hair. We'd love to give you some. We'd love to have you try it. Here's how to use it. Here's what it is."

Felix:Hey. My name is Felix. I'm the host of Shopify Masters. Each week we learn the keys to success from eCommerce experts and entrepreneurs like you. Hey, my name is Felix. I'm the host of Shopify Masters. Each week we learn the keys to success from eCommerce experts and entrepreneurs like you. In this episode you'll learn how to vet your vendors, how to determine if an employee will be a good fit within 30 days and how to overcome the education gap when your target customers don't know about your solution at all. Today I'm joined by Liora and Maegan overtone.co. That's O-V-E-R-T-O-N-E dot C-O. oVertone conditioners keep your fantasy colored hair looking as bright on day 60 as it did on day one. It was started in 2014 and has two headquarters in Tuscan and Denver. Welcome Liora and Maegan.

Maegan:Hey.

Liora:Thanks. Thanks for having us. Felix: Yeah, excited to have the both of you on. Tell us a bit more about these conditioners the products that you sell from the store. Maegan: Yeah. Our line of color depositing conditioners are our primary product right now. We have 22 different colors across two different conditioner types. Basically, the idea is if you have fantasy hair colors, anything pink, blue, green, something like that, it tends to fade out really fast. We made a conditioner just filled the need in the market so your hair doesn't fade. Basically, what you do is stop using your regular white conditioner. Instead, use one of our conditioners that matches the color of your hair and it replaces the pigment you washed down the drain.

Liora:Maegan and I are big have your cake and eat it too people. We were not satisfied with the lifestyle changes we needed to make when we dyed our hair.

Maegan:We're not down for cold showers or skipping the gym because you can't wash your hair.

Liora:No. Yeah.

Maegan:Things like that.

Felix:Was there no, I guess, alternative at the time? There was no other product that met the exact needs that you two needed?

Liora:Not really. There was like a homegrown DIY method that's really popular where you mix your dye in with your conditioner. Sometimes stylists will make that for their clients who have fantasy colored hair or high upkeep needs. Nothing was really direct to consumer available in the colors that we used. It was definitely a high education product for that reason. A lot of what we focus on is giving as best customer service as we can and really educating the fantasy hair color world about the fact that they don't have to take cold showers and that they can exercise and that their hair doesn't have to fade. They don't have to choose a dye brand based on whether or not it fades well or not. Yeah. There really wasn't much.

Maegan:是的。We also found based on personal experience that that standard DIY mix of dye and conditioner really messes with the emollients in the conditioner that you use. Basically ...

Liora:Just kind of continues to dry.

Maegan:Yeah, just kind of continues to dry out your hair. Chemically it kind of cancels out the good stuff in the conditioner. Then, your hair, which you've already, probably, if you have fantasy colored hair, bleach a lot at this point, is really not getting conditioned on a regular basis. We wanted something that's not only you don't have to let your hair fade, you don't have to take cold showers, but also you can have your hair be healthy and grow it out and have it just be normal. We don't want to have pink straw on our heads.

Felix:Do you both come from the hair and beauty industry? What's the background.

Maegan:No.

Liora:Negative. Neither of us do, actually.

Liora:I, before we started the company, I was a freelance photographer. I had done a couple stints in beauty. I worked locally with up and coming fashion and beauty people in our local scene. Heavy interest, but nothing professional on a production and retail level.

Maegan:Before this, I have a background in chemistry. I was working in healthcare and business. I had weird hair and wanted it to last longer. It came out of personal need more than anything.

Liora:Maegan was really a connoisseur. When we first started the company, I think she had like one more conference to go to. It was right after she dyed her hair blue. Which, like copper or orange you can have as like acceptable health are IT position.

Maegan:Not blue.

Liora:Not blue.

Maegan:我took wigs.

Felix:Nice. This seems, at least, a pretty daunting product to start with, right? You have to learn all about this new industry, about how to make a product like this. Before I get there, did you have other experiences starting businesses or launching products prior to oVertone?

Liora:I mean, with freelance photography, it's sort of a different business base. I had done a lot of work with small businesses in high school working as assistants and stuff like that. I think Maegan say this pretty frequently. If we knew what a challenge it would be, we would have stopped a lot sooner.

Maegan:I might not have started. We both had experience running small businesses, other people's businesses. We both also had experience here and there starting our own semi-successful companies that didn't really go much of anywhere, wasn't really big monetizatable efforts. We didn't come in with no experience. We definitely were not prepared for what was going to happen, that's for sure.

Liora:It was definitely a surprise to both of us. We really took it in stride, I think. It was just kind of like both of us are like people who when the work comes, we are ready for it. We're just kind of like, "All right. This is what we need to do for the next six months. Awesome. Let's just buckle down and do it." When the tide really turned, we didn't drown, but we definitely fell over a little bit.

Maegan:是的。我think like, honestly, the majority of what's helped us along the way is a lot of gut instinct and also the willingness to put in the sweat equity and stomach acid when push comes to shove and just like do it and work 100 hour weeks.

Liora:Blood.

Felix:其中一些惊喜是什么机器人h encountered that were much more difficult than expected? Or maybe you didn't expect it at all and they just kind of fell into your lap? What are some of these big surprises?

Liora:We definitely didn't expect labeling bottles to be so hard. We manufacture and fill all our products, but the way that it works in the industry is that you're supposed to manufacture your product, fill your containers and then label them. We really needed to just walk around the fill in the label part like collection or that part of it. We didn't realize that that's what the problem was, but we kept hitting these big roadblocks when we tried to get bottles labeled and sent to us. It was just like, "Oh, my god. Why can't we get this done?"

Maegan:We had a lot of labels that were horrible quality. For the first, for a long time, maybe even the first six months, we were labeling every single bottle by hand because it's just, we had one label provider we could count on, and they could only send us labels in like sheets that we had to tear off ourselves.

Liora:Yeah, that's where the blood came in. You label that many bottles and, I think my callouses has just started to go away from on your thumbs from pushing it on [crosstalk 00:07:58]. Yeah, if you ever bought oVertone in the first ...

Maegan:Six months.

Liora:... six months, you definitely got a hand labeled bottle.

Felix:Maybe with some blood stains on it too.

Maegan:That kind of stuff [inaudible 00:08:12] I think it's that kind of stuff that people don't realize behind the scenes, even when we got to the point where we were considered to be quite successful in terms of gross sales, we were still doing so much ourselves and we were just pushing so much. The process was still so manual and so customized and still so much of it we were doing, really so of the jobs ourselves.

Felix:Today, when you are looking at a provider to provide these labels and just kind of a lesson that you guys have learned that you can share with other folks that are in the stage that you were at, how do you identify what kind of provider can provide good labels for your products?

Maegan:We found over time that we have to really stop looking for vendors and start looking for partners. The way that we do that is we do a really serious vetting process with anyone that we intend to use. Especially anyone who is going to be kind of a potential stock up in our entire supply chain process. For labels, for example, we spent a really significant amount of time talking around, asking for recommendations, doing a lot of searching. When we got down to it we contacted a handful of companies and our first red flag is if you don't get back to us within 24 hours, 48 at the very least, you're out of the running.

Liora:是的。The second we have to chase you to give you money, it's a big red flag for us that it's going to cost us a lot of time down the road.

Maegan:We've had too many times where vendors are just nonresponsive. They're hard to communicate with. That's the easiest red flag for that. Then I think the other main thing that we try to do with any vendor partnerships is really call their other customers and get a feel for someone who is a peer to us, someone who is also eCommerce, if that's relevant, someone who does a similar bottle type, bottle shape, multiple skews, something like that, and get feedback from them on how the relationship works for them. That can be the most telling thing. We've had plenty of vendors that we've been totally gung ho for and then we've spoken to a client of theirs and they've been like, "Eh, they're fine, but ..."

Liora:是的。Then, once you select that partner, developing a relationship. With our current bottle and label provider, it took, we actually exchanged sales partners within their team. We spoke with upper management. When we found issues that weren't up to our QC standards, we really made sure they knew about it, not in an expected way. We expected them to hold our standards as their standards because they were representing us. When things didn't necessarily look as perfect as we needed them to or there was a slight miss or there was something going on, we made sure that they knew about so that we could correct it in the future. As a result, we have a really responsive communication with them. They know what information we need to know when we need to know it. We know how to explain processes to them that we need done.

Maegan:Yep. Because we had to go through so much finding labels and had that as such a hard piece of our supply chain, we now have a really excellent relationship with our label provider. I think it's just having to go through that. At some level, it definitely at the sea level, but at the executive team level in any company, for the most part, they care. They want to be successful. They want a partnership with you, even if you're a small fish and you feel like you don't have really any play here and you can't pull any strings because you're not big enough to matter to them. The people at an executive level, especially with start up companies, if they're the right partner for you, they see the growth potential and they really want a relationship that works and they'll work with you if you try to work with them.

Felix:是的。I definitely see the value in looking for a partner rather than just a vendor. Does that require, I guess, setting that expectation from the beginning? How do you establish that you're looking for a partnership?

Liora:我think one the biggest struggles for us young female millennial entrepreneurs, which, I mean, both of us are under 30. How old were we when we started? 24, 25?

Maegan:是的。

Liora:Our biggest struggle was Maegan and I are not necessarily lacking in confidence, but to approach a company that we considered as significantly more established and having bigger business and us, was a real confidence pull. We didn't necessarily feel like we could come to the table with as much. I think a lot of that struggle is basically walking into it and saying like, "Listen. I am doing things. I'm trying to work with you as a partner. I want to go in and talk to you that way as opposed to feeling at their mercy." It's really just a confidence game of saying, "My business is as important as the person's business next to me. My product is as important because it's as important to me."

Felix:Makes sense. Now, today, I think you were alluding to the fact that you're no longer doing this yourselves. Have you outsourced this process of labeling and bottling your products?

Liora:We tried to outsource a lot of our process. What we learned was we would outsource the labeling. We could not outsource the production or the filling. Our particular product fits in between two markets in such a way that there isn't necessarily a lot of structure that supports it yet. We'd talk to conditioner people about color and they'd get way overwhelmed. We'd talk to color people about conditioner and they'd get way overwhelmed just because they couldn't fit it into their existing systems. What we ended up doing was creating our own systems and ways and hiring employees to be able to scale as fast as possible. At that point we were falling behind. We were like, "We need to do this as fast as possible." Creating easy to step into systems where we could train people up and have them in a comfortable environment where they felt confident to make decisions on their own and just get at it. To this day, we still produce and fill every single one of our products. We are just no longer hand labeling them and we are no longer fulfilling them ourselves.

Maegan:是的。Liora and I haven't done it ourselves in some time. We definitely haven't been doing in my kitchen for a long time.

Felix:This is certainly a much more complex system than someone that would just outsource the entire process and have maybe even the wrong ingredients, go straight to the manufacturer, go straight to the people that are doing the fulfillment and not ever see their inventory. You have to see some of your inventory. You have to send it out to another, I guess, an outsourced partner that handles the rest of it. Walk us through the creation process of this system. It sounds complex. I think, especially your system is probably unique compared to others because there is that process of a lot it's done in house but also a lot of it's done outsourced. Tell us about that process to set it all up.

Liora:我想从外面看起来复杂。我think the only way to create a sustainable system, I think Maegan would agree, is to simplify it as much as possible. If you can private label your product and move straight to having no inventory in a place that you store, like, bully for you. Congratulations. I envy the shit out of you.

Maegan:We're especially not in favor of manufacturing your own product if you don't have to. If you can find a great partner who will do it for you, then great. We try to outsource ours and it just wouldn't happen.

Liora:它不会发生。我们已经建立了一个团队的背影e who are just absolutely incredible. We love working with them. One of the real benefits that we have of being able to see our product is that we get to really QC each batch. That close eye on our product really keeps our standards high, which is where we like them. As far as developing the processes, I mean, we went literally from making the one off bottles per sale, to mass production. We basically took the steps that we were already doing, tried to automate as much of them as possible by using available tools to us and not really worrying too much about, "In a professional lab they would use x." We simplified it down and said, "Okay, what is the end result that we need? What are the existing tool that exist for similar items across the industry? How can we leverage those items to our benefit?" So far, it's been working really well.

Felix:Now, once you have created this system and then outsourced parts of it, how much free time are we talking about? How much time was freed up on your end and what did you spend the time focusing on instead.

Maegan:That's a funny question to answer, largely because I think that ...

Liora:Hilarious.

Maegan:... we're just starting to ask ourselves for the first time ever what we want to do with some additional time we have. We have 16 employees now. For the most part, at the beginning, honestly, we didn't have a lot of free time. We didn't free up really much as anything so much as we displaced something we were working on with something else that desperately needed to be done. For definitely the first 18 months, maybe even two years of our business we were constantly out of stock. That was our biggest hardest thing. As a start up, we needed to make sure that our customer service was excellent, but we also needed to make sure that our manufacturing was up to par so that we could stock everything. We have a maintenance product. We have to have stuff ready all the time for people who need it. Really, when we got to the point where we had systems in place where we could hire employees and have them step into an existing system to work with our existing manufacturing but honestly there's always something else. There's always a problem employee over here or customer service is lacking and needs this thing. Or we have a fire with our fulfillment provider. We're just now, two and a half years in, really being able to, for the most part, step out and work on the business and strategize and see the moving pieces from a much higher level than we were before. Really, I don't know if that much was opened up so much as it just was displaced with something else at the time, the next biggest fire came in.

Liora:Like, let me give you an example. Maegan and I used to, well, for the first six months, Maegan was doing all of our production and fulfillment out of her house. I was doing everything else, which means that we literally had no time to think about where we were going. We were so locked into the day to day. By the time January 2015 rolled around, we were doing maybe once ever other month production runs where we would pull in part timers and temp workers, maybe one or two at a time. They would help us with the production process. While Maegan and I would be filling and bottling and packing up to ship off to our fulfillment company, on any break, I would be answering client services emails and Maegan would be dealing with vendors. Any time in between that, we were working on our marketing and social media. We were trying to take selfies. We were making sure that our hair personally looked good so that if we had any advertising at all, we had something to show that we were improving systems. Really, I would say we are still, there are still moments where we get sucked back into the day to day. Having an opportunity probably just in the past two months to step back and take a breath and go okay. Literally, where can we improve now that we can see it. That's been extraordinarily valuable.

Maegan:是的。There's never really been a time where there's been a lack of very obvious need for something in some place. Felix: 16 employees is a ton of new employees over just two and a half years. You scout a lot. What do you guys learn about the onboarding process for bringing on new employees. I think that's the most daunting part of hiring someone because a lot of times, especially when you're just one person working on the company, you're hiring your very first employee maybe part-time or temporary employee, you start to think, "Man, do I want to spend the time teaching this person or should I use my time just to do that thing and move onto the next thing?" It does require time invested. Tell us about process to onboard a new employee into your company.

Liora:Maegan和我是相当不错的上马。让克o of our Legos to go work on other stuff wasn't always as much of a challenge for us. We lucked out really early on by getting some amazing people who really just by luck and just gut instinct were you will be awesome. That wasn't always the case. Sometimes you have employees that they're great people, you love them, but it's just not the right fit. They would excel much better elsewhere.

Maegan:我think, too, you find what works within your organization over time. I don't know that it's really something that's really a one size fits all for anyone. I think that inevitably you have a guess and check system where you mess up and maybe if you mess up a couple times in the same way, you start to see like, "Oh, that's a serious problem." We found, personally, not only have we been working really hard. We have a really significant culture in our company that people either fit or they don't. We found that that's a huge factor in someone's success, even if they're great at their job, even if they are an excellent fit for someone else, if you don't fit into our culture, it really doesn't work. We have to all be rowing the same direction so to speak. Logistically we found some other little things like we've noticed that our employees, at least, in our business, tend to freak out if they receive an unsolicited raise. We had to change the way that we do raises with people and offer someone a promotion and give them 72 hours to think about it and say yes or no, as opposed to just saying, "Hey, you're doing great. We want to give you a promotion, here's your raise." We found that that doesn't work. Some of that's little stuff. I think that that comes over time with seeing how people in your environment behave.

Liora:是的。我think what Maegan and I did together really, we have, we come from very different places and we see things very, very differently in a complimentary way. The culture that we create together, it was hard for me at first to sit there and go, "Oh, this isn't a perfect environment for everybody." That was a little bit a blow to my self esteem. To be honest, it was definitely a short sighted thing on my part. I'm going to create this thing and we're going to do it and it's going to be great.

Maegan:Going to be nirvana for literally everyone.

Liora:It's going to be perfect. It's like realistic, that's not how the world works. There are different types of people who excel in different ways. One of the things we were hoping to do early on was to create a horizontal employee structure, because that was what we thought that we would prefer if we were working somewhere. What we learned was that our particular organization and the people in it, who we got in early on or something about the way that either Maegan and I are, or all of us, all of our whole team as a collective do is we do much better in the traditional structure, and we tend to get more done and we have better success that way.

Maegan:Which we hate and totally tried to resist.

Liora:We really resisted it.

Maegan:Like colorful hair millennials, we were like, "We will not have any structure. We don't need structure in this place." It turns out we were super traditional.

Liora:Yeah, we are super traditional. It makes one of our mentors laugh every time. I think when I told him we were doing that, he sat and laughed at me for a good 30 minutes. He's like, "You're so traditional." I'm like, "Shut up." Yes.

Felix:Let's talk about this, the horizontal work structure. What attracted you to this at first? Why didn't it work out?

Liora:我think Maegan and I were just used to doing everything in the company ourselves and we thought that we could just kind of keep everybody in the loop on everything and really just we're very transparent as it is. We talk about struggles and successes every week with all of our employees present. We don't hide things but we do structure how the information comes out. I think when we weren't doing that, when we were trying to have a horizontal employee structure, even on a small company scale, when we were maybe four or five people, we noticed that the reaction just wasn't good and it didn't build the sort of team moral in the way that we were hoping and anticipating.

Maegan:People, I think, had a lot of trouble staying within their job responsibilities when things were more horizontal. I think for some companies that can work. For us, because we have such specific segmented departments, it really doesn't. As we scaled, we saw that more and more. I mean, it was more so just came from our desire. As employees, what would we want? That's why we tried that. We thought that would work really well for us. Then, it's just one more pivot. I think business ownership is all about pivoting anyway.

Liora:我think what we learned, also is what we want is not what other people want. Not everybody, and I know I already said that. I actually mean it in a different way this time. Maegan and I are entrepreneurs. We think in a particular way. We work in a particular way. We are motivated by particular things. Obviously, not everybody's an entrepreneur. There are some people who want to be entrepreneurs who are not. There are some people who would like run as fast as possible in the opposite direction. There are people like that that want to work for entrepreneurs but aren't themselves. Creating a structure that works for entrepreneurs, I don't know if it necessarily bodes well across the board for people who work for entrepreneurs. Having a company [crosstalk 00:26:12] nothing gets done.

Maegan:We tried to hire people we saw ourselves in somewhat early on. In most cases, that didn't work. Hiring someone who is more entrepreneurial or wants to be an entrepreneur. We couldn't, I think, grasp the fact that a lot of people, really, are super happy being employees because we were never happy being employees. I think that to a certain extent, keeping your employees happy and keeping a team working, you have to be able to empathize with each person and know what makes sense for them. Eventually, over time, really see how each person's brain ticks and what kind of brain you need in each of these spots.

Liora:We actually just got some great advice for hiring, which was to really make a list of our company values and what we really see as important internally. Instead of focusing extraordinarily on the skill, to focus on those values. Will this person work here? Will they be motivated by the things that we're motivated by? For our company, that kind of follows the line of introspectional feminism, being direct and clear with your team, being able to take and give tough love, practicing good hustle as opposed to bad hustle, finding something out or not beating yourself up if you fail, putting your health first, just, what else was on there?

Maegan:Clarity, honesty.

Liora:Yeah, [inaudible 00:27:38].

Maegan:Basically, the gist of it is largely that we focus on equality, we work hard and we are brutally honest. Everybody has to give that and take that. Felix: Mm-hmm (affirmative). It sounds like one of the big skill sets that you both have built over time is that you're able to hire quickly and also seems to fire or let go quickly if it wasn't a good fit. Based on your experience, how do you determine if someone will fit with the company and match those values that you wrote down as quickly as possible?

Liora:Honestly, that's still a work in progress for us, to be brutally honest.

Maegan:We try to get people up or out within the first 30 days.

Liora:We do. That has been a definite focus of the past six months. We don't want to hold onto somebody, because we know that long term, if it's not a good relationship, it's not going to be good for anyone. It's not going to be good for them and it's not going to be good for us. Being first time employers, oh, god, it's so challenging. It's the fucking worst. I would not wish my first experience firing somebody on anybody. I would not wish the experience of being fired by me for the first time on anybody.

Maegan:No, it was awful for everyone involved.

Liora:It was just, it was not good.

Felix:Are people surprised, though when it happens? Or do you try to make it so that it's not necessarily mutual, I guess, but that they saw it coming? Is it always usually that way, or is it a surprise?

Liora:We started to implement a structure that is a probationary structure so that it would never come as a surprise again. That's the last thing that we want, no surprises in terms of employment. What Maegan and I have started to listen to more is our gut. We're encouraging our managers to think in that way as well. It's like you know if it's not working. When you can say it out loud, it's probably already too late. Start listening to your gut. Say it out loud sooner and see if it's repairable.

Maegan:是的。我think that, honestly, our biggest barrier to scale is keeping a good team and having the right people in the right places. It's a really big focus of ours, especially right now, but kind of always had been. Like Liora said, even when we have people who are maybe meeting all of their KPIs or they're doing their job correctly, but there's just kind of a feeling either by us or their direct supervisor that it's just not the right fit, as soon as we kind of imagine someone else in that position, if it kind of eases up your tension and makes the department feel smoother, then we kind of know. That's kind of our first gut instinct. A lot of times we make decisions based on that. Then as soon as you let yourself see that, you often will often suddenly see all the other places where that person isn't fitting that well and where that job isn't necessarily right for them.

Felix:Do you also move people from one role to another at the company?

Liora:之前我们尝试转变。我认为小孩ortant things that we've learned, that we really kind of hold hard and fast to, is don't square peg round hole somebody. If they're not working, and you have to invent a role for them and I know that you're talking about shifting between existing roles, but if you have to invent a role for somebody, they are not right.

Maegan:We call that a wedge. We tried that a couple times. It doesn't work.

Liora:It's a wedge. If you have to wedge someone in, it's not a good fit for anybody period. You should just take that in stride. They should either fix it and you should work with them to fix it, or it's time to cut ties.

Maegan:在大多数情况下,我会说为什么n someone doesn't work within the company, it is almost 100% of the time a culture and values problem more than it is a skills problem. We have started really realizing that we can't shift someone into another position and make that work. We also think that over time when we've tried to move someone in a different position, it's been really hairy. People feel like they've been demoted even if they haven't. It creates a lot of resentment. Then it [crosstalk 00:31:35] everyone from communicating openly and honestly which is we have to do that or else we're screwed. If people are lying to each other than I think that's one of the number one things that will sink the ship. Liora: Yeah, no lying, no being catty about other employees. Call out not tear down.

Maegan:Aside from promotions which is a different kind of movement, if someone is not working out, we figure out why and up until now it's always just been that they're not a good fit for the company more so than they're not a good fit for that particular role.

Felix:现在你有一个传统的interview process, too? What's that process? How can you try and pull out these details about their values, about I guess their cultural fit just from meeting them for the first time even before they step, I guess, into their role at the company?

Liora:Tricky question asking. Each of our departments has a unique interview process. For our production, there's definitely physical qualifications that you have to pass. Meet the team, see how they interact in space, see how they respond to colorful hair. I think the important thing to recognize is you are never going to have that surefire thing. One of my favorite good hire stories is our executive VP Lisa [Net 00:32:43]. She was our second hire ever. We needed somebody to take over emails because I was dying. We were dying. I was like, "I need someone to answer emails." When I was working as a freelance photographer, Lisa [Net 00:32:54] had been the maid of honor or bridesmaid at a wedding I was photographing. I saw her walk into an extraordinarily tense situation that was giving everyone the chills and just diffuse it like it was no problem at all. She just walked in and just made it better in under three seconds.

Maegan:I pretty much hired her based on that.

Liora:是的。That was why we hired her. When we had the interview with her, I basically texted her and I was like, "Hey, listen. I know you're employed, but I also know you're looking to shift. Can you meet for drinks tonight?" She said, "Yeah, absolutely. I'll meet you there." We met up for drinks. She was, when we thought about our ideal client services person and the trait that they would embody, she was there for it. She was upbeat. She was happy about it. She was excited by the product. She wanted to talk to people all day. She enjoys helping people. She gains satisfaction out of making sure that somebody has something correctly. She gains satisfaction out of making sure people are happy and also out of making sure that the company benefits because of it. Then, at the end of the day, especially when you have more than one employee, your loyalty is exclusively to the company. It can't be to an employee who might not be working out the right way. You can work with them. You can try and make it better, but at the end of the day, you have to preserve the company. If they're not working out, if they're going to drag down your ship, you've got everybody else to think about, and also you have your clients to think about. Is this person hurting or helping my clients?

Maegan:We really work on a cultural understanding of the fact that our clients are a big deal for us. They pay everyone's bills. You have to love them. You have to be super happy about them. Everyone has to prioritize them. In terms of like, we talk about gut feelings a lot. We've already talked about that several times. Honestly, I think we sort of go through a traditional interview process, but a lot of it is gut instinct. We see do they get along with everyone on their team? It's not in a high school can you guys be friendly sort of way, but in the sense do you kind of click with everyone? That just goes back to that same cultural fit of are you going to row in the same direction at the same pace as everybody? That's the most important thing. We can train people. One of our vice presidents right now started as Liora's assistant. She came in with significantly fewer skills than she has now. She came from [crosstalk 00:35:27], with absolutely no business experience and she has killed it. It's because she is driven and she's an excellent cultural fit. She's a kick ass human being. Sometimes you can tell. Then, also, if they don't fit in within the first 30 days, get them out soon.

Felix:Now, on the quantitative side, I think I heard someone mentioning KPIs. How's that set up for the different roles?

Maegan:It depends. For example, our color experts in the client services department have a certain number of emails that they're expected to get out per day. For the most part, we have had our managers in each department set what makes sense for them. For example, in manufacturing, we have how many units are getting out this week. To a certain extent, that can be a team effort. Then, for marketing, it can be based on videos, it can be based on sales or promotions, that sort of thing. We push all of our department managers to set weekly goals. Basically the meetings that Liora and I are really in with the team now are Monday morning one on one meetings that we have with each manager and then all of our executive team as well. Then we all, every one at a manager or executive level on Fridays comes together and talks about the goals that they had set on Monday, how they did. Then they also set goals for their team. We feed that down the pipeline on our traditional management structure. That is what works the best for us. Yeah. That's how we structure KPIs.

Liora:是的。Managers review goals with us. We help them set either more quantifiable or realistic ones or adjust it based on priorities that we're seeing for the company. Really, Maegan and I know that when we were doing each of those jobs, it was a very different company. We rely on them to be honest with us about their needs.

Felix:Nice. Now I want to talk a bit about the marketing side. When you mentioned earlier, I think one of you mentioned how it's a high education product because nothing like this exists yet. Maybe people don't even know a solution is available out there. Talk to us about how you overcome this education gap in the market.

Maegan:是的。

Liora:Repeating.

Maegan:Repeating. Yeah. When we started out, Liora was really handing client services and I was handling marketing. Those were our babies growing up. We split production as much as possible and gave that up first. On the marketing side, Instagram has been really crucial for us. It's our biggest platform. We use Instagram primarily as a way to communicate through influencers, out to their audiences and have them explain what it is. Then just repetition. Starting from the ground up we spent a lot of time getting influencers on our team. I think because our product is different and new and exciting for people we got a lot of in with some pretty big influencers which was awesome for us.

Liora:A big great relationships. They're so fun and sweet.

Maegan:We love everyone that we've worked with that the influencers we work with are so excellent. A lot of them have been models for us. Basically, we push heavily through word of mouth. Something like 93% of our sales come from direct traffic. Someone who is either clicking a link to come directly to our page from either our Instagram or someone who is typing us into our browser and heard about us from a friend or somebody. Very little comes from search engines. Very little comes from, we do almost no paid advertising. We find that influencers and word of mouth through just people who use our product, our regular clients, really helps spread the message. It's a lot easier to understand if your friend tells you, "Hey, I use this thing. It's a conditioner, it keeps my hair bright," as opposed to trying to learn from ground zero, I guess. We do also have our website set up in such a way that education is first. We offer free color advice through our client services team and really every single aspect of our company is surrounding that initial market gap of getting people to understand that our product isn't dye and what it can do for you and why you need it.

Felix:You work with these influencers. I think, for a lot of companies, a lot of products, lot of brands, it's probably a lot easier because all you ever do is just put your product in the face of your target customers and people get it right away. Not only do you have to do that, but you also have to explain about the problem, about why there's a solution, why your product is the right solution. Tell us about how you I guess, work with influencers to I guess do all of that.

Maegan:For the most part, if you have colorful hair, you know there's a problem.

Liora:It's not a mystery.

Maegan:We don't have to teach you that there's a problem. We have a number of people who use our products instead of dye to color their hair from the beginning, which is something we didn't initially intend. That's a slightly different market that we speak to a little bit differently. For the most part, for our core client audience, the type of people, who they go to a salon, they have their hair colored blue for example, and they want to keep it that way and not have it fade out to an ugly muddy mess. Liora: Purple [inaudible 00:41:02].

Maegan:That's true. Purple is our best seller.

Liora:Maybe [crosstalk 00:41:05] a purple for like a solid year.

Maegan:These people, if you've ever had any fantasy color in your hair, you know that there's a problem. In terms of how we communicate through influencers, really what we would do is I would email them early on and say, "Hey, we have this product. We love our hair. We'd love to give you some. We'd love to have you try it. Here's how to use it. Here's what it is." We just had a lot of people really gravitate to our product because there was such a need in the market. We used that to find people who were really interested and people want an easy way to maintain their hair color. People who have this lifestyle and have this aesthetic. They don't necessarily want to be spending every fifth day of their life in a freezing cold shower because they have to keep their hair looking nice. I think everyone was really open to a solution. We had a really great response from our influencers. Then we just kind of said like, "Hey, I'm going to educate you on how this works. I'm going to tell you how to use it and then go tell the world whatever you want to tell them." We really didn't push astringent. We didn't give people words to say. We didn't say, "We want you to point out this, that and the other." It also helps to educate us on people's response to it and what they thought it was and how they used it. It gave us an example of how people used it in ways that we didn't expect initially, like to change their color slightly. Basically we would say, "Go talk to your audience. Tell them whatever you want to say. If you love it, great." That's a lot of how we spread the word.

Liora:我think something else that Maegan did amazingly well while she was writing these emails was she went straight into personalization. She looked at their Instagram profile very thoroughly. She saw what they did. She saw what they liked. She made specific references to that in her email. She didn't say, "We'd love to send you some products." She would say, "We really want to send you Pastel Pink Daily because we think that that would [crosstalk 00:43:08] in your hair." She really made sure that those influencers knew that they were cared about deeply and that we had taken the time to invest in that relationship. I think that was so key in making sure that we got a positive response. There was no blast emailing. It's always direct. It's always personal. We want to be sure that, and to an extent, our influencers are also our clients. We want to make sure that they know that we care about them, and that we care about their decisions and we care about their aesthetic. Of course, we're going to send them something personalized.

Maegan:是的。It's the same thing as with our vendors. Everything we do is all about partnerships. We want relationships with people. Lots of people say that it's a big thing in business, but I think it just takes a lot of time and effort and a lot of people kind of want to skip that step. I think that that's a big part of why we were successful.

Felix:Nice. What has worked best in terms of I guess on Instagram when you are trying to educate your target customer about your products. Is it images? Is it video? Is it explaining the captions? What's worked best for explaining how your product works?

Liora:我think anybody on the internet knows that nobody reads the captions.

Maegan:No one reads the captions ever.

Liora:Nobody reads the captions.Maegan:Don't put anything you need, if you need to communicate it put it in the photo. Make a text photo if you have to. Don't put it in the captions.

Liora:Then repeat it in the caption. Know that most anybody is not going to do their own reading on an image based platform, especially. A lot of what Maegan and I found really useful early on and still now, and we've refined them so much, and they're so much more beautiful than they were originally, was that we showed our product on three different types of hair. We showed it on a platinum blonde, on a medium blonde and on a brown so that we have this library of photos to give examples to how people envision what it will look like on themselves. We also really, early on, we adopted a hashtag. We encouraged our clients to hashtag themselves. We started featuring them. Look, real life story. This person uses our stuff. They're not an influence. They're not anybody. They're our clients and they're important to us. We want to showcase how awesome they are. We want to make sure that you can envision if you have this color hair, you can get to here. Here's what they used, here's how they did it.

Maegan:Yep. To this day, 90% of what we have on our company's Instagram feed is a combination of those strand tests and reposts of clients who use our stuff. We love to show, especially people who like maybe they started with medium blonde and they put our teal on their hair and ended up with green, interesting color wheel stories or sometimes people who are just maintaining and have in their caption that says like, "Hey, I haven't dyed my hair three months. This feels great. My hair is super healthy now." We just really try to help tell other people's stories. That's the way we promote.

Liora:We want to celebrate the community's. We want to show of our client's creativity with our product, because honestly, they are the people who are going to do it the best. We're so excited. We're going to bring some people into a space soon where we can film them coloring their own hair with our product and really continue to build up that library of resources.

Maegan:是的。Early on [crosstalk 00:46:08] when we didn't have as many of those, we only showed ourselves a lot more. We took a lot of selfies and kind of put that on the Instagram to get it up and going. Then we just gave away product. Given that we're in the beauty industry, our profit margins are healthy enough that we can afford to do that as opposed to marketing. It's much cheaper option for us. When we needed people's experiences, people's audiences, whatever, we just threw free product at them.

Liora:Mm-hmm (affirmative). We were generous with it. Maegan: Yeah. [inaudible 00:46:37] many people loved.

Liora:是的。

Felix:是的。Even though the products are like you're saying high margins, so you can't afford to give them away, it still takes obviously a lot of time to reach out to these people to personalize the message, to start working with them. I'm assuming that you're still probably pretty selective, though, right, with identifying which influencers you want to work with. What's the process for that? How do you pick and choose which ones you should spend your time on to write these personal emails to them?

Maegan:I haven't been doing it myself in some time. We have a director of marketing who does it now. She's incredible. A lot of what we look for in an influencer that will be successful for us is someone who also fits our culture in the same way that we would want an employee who fits our culture, someone who has kind of an aesthetic that we think would be really useful to our Instagram feed. We work very hard on keeping a diverse Instagram feed and showing our product on all types of hair, because it works on all hair types. We also focus on people's engagement, which I think is a lot more important than necessarily how many followers they have. Someone with a really strong level of engagement, good interaction with their followers and someone who has followers who kind of have this aspirational tone. We want people with followers who look to them for suggestions. We don't want somebody who's like just pimping out everything that comes their way, because it's free or whatever. They have a feel on their Instagram of whatever's the flavor of the day. We want people with some authenticity and also followers that pay attention to them and are listening to them for advice.

Liora:我们做了两个和四个的我拍照nfluencers. We did, it was just so great. We did them about a year apart. You know somebody's a good fit in that way when you can just show up, meet them in person for the first time and you're like, "Hey, we're going to spend the next eight hours taking a picture of your face. How do you feel about that?" They're like, "I feel really good about it. Let's hang out." You order pizza and eat on set and you form real friendships with them. It's just so rewarding, honestly, to know that one, you created a product that you sent to them and it made their lives better, just like as a person because they don't have to live their lives around their hair, but also that you can then meet up and continue to collaborate across multiple threads. That is really nice.

Felix:Nice. One thing that was mentioned in the pre-interview questions that I definitely want to touch on was that you guys want to focus on, or you focused on pivoting quickly and not committing to a mistake just because time had been put into it. Talk to us a little bit more about this. What did you mean by that? Do you have any examples you can give?

Liora:Let's see. Not committing to a mistake. There are a lot of examples.

Maegan:Can you find that on Pinterest? On our Pinterest thing that you sent me?

Liora:I did. The first time I saw it it was on Pinterest. It resonated so deeply because Maegan and I are fast decision makers. We look at a situation and we have a backup feeling we're not happy with the way it's going. We're like, "You know what? We're going to change direction." We actually just had a major session like that this week where we've done a lot of reading and we've done a lot of looking at the market and what we've been doing, what's been working, what's not been working. We sat down and went, "Why hadn't this been working?" We had like four product ideas circulating for this year. We decided to literally backtrack on all of them, declutter, refine the vision and give it down to our team. Luckily our team is really used to us pivoting hard on a direction and saying, "Nope. We're making this change. This is what's happening. Here's a new direction. Here is why." They're really good at taking it on.

Maegan:是的。If I could narrow down, like if I had to pick one reason why we've been able to get to where we are, it's that we can pivot hard. We're really good at learning all the time, taking in new info. As soon as that new info brings a different decision or different path to light, we're like, "Yep, okay. That's the next thing. Move over that way."

Liora:For example, we purchased a custom, made for us, filling machine that was supposed to massively simplify our production process and ease up the workload on our production people. We spent an appropriate amount of money for what it was supposed to do on it, but a large amount for us in terms of what we had spent on machinery in the past.

Maegan:是的。It was six figures.

Liora:是的。The machine did not work. We spent time and money upgrading the electrical in our warehouse. We created a whole space for it. We designed a process around this machine. We tried endlessly with frustration and tears to get this thing to work. It is just like a giant metal monster right now and does not work. We sat down and our team is like, "This is not working." We're like, "Okay, we hear you. It's not working. We're going to pivot hard. We're going to instead increase production people. We're going to do semi-automated instead of fully automated. We're going to build up that way. Done. We're going to get rid of this thing."

Maegan:Yep. Just get rid of it. Take the loss. We actually specifically had a contract that we could get refunded for it if it did not work.

Felix:Nice.

Maegan:The company went out of business.

Felix:Not nice.

Liora:There was that.

Maegan:The point is, we're selling it. We're taking a loss. We're moving on to something else. The fact that it cost us a nice healthy chunk of money is not going to prevent us from moving to something that makes more sense.

Liora:Spending time being upset that we made the wrong decision cost us money.

Felix:I love that. I love that kind of attitude to be able to cut your losses and move on and not be so absorbed in doing things in a certain way just because you made that decision at the beginning. I think the difficult part that a lot of people have is how do they know that they're at a point where they should be making a pivot, versus maybe holding on a little bit longer and waiting for it to potentially, I guess, resolve itself or end up in a much more favorable spot by just staying the course. How do you make that decision?

Maegan:我think we're just coming right back around to the thing we've been saying a bunch already which just it's a lot of gut instinct, really. We can feel if something's wrong.

Liora:例如,使用标签。我们知道,推through with the labels was important for our business, that adjusting our entire manufacturing process wasn't going to work. We couldn't outsource it. We couldn't then shift our product to a filler to have them fill and then label it, just like the time was too much. We needed it done this way. That was a struggle that we put a lot of time into creating. We put the first six months of our company into getting out labels right. Something that didn't work for the long term was when we first started filling we were using 100 milliliter plastic syringes to fill every bottle, fill bottles that are 236 milliliters. We know that now. That in the short term was sustainable, in the long term not sustainable. We weren't going to invent a way to make a syringe work for us. We were going to completely pivot, try a different system that we didn't think was going to work, reach out to a new partner and say like, "Hey can you make this thing for us?" Like that's still how we fill right now. That really worked. If you feel like, I think the gut feeling kind of lends down to it. Do you feel like there's a light at the end of the tunnel? Can you adjust other processes around this? Yes/no. If you can't, even if you're really attached the idea, it's not worth chasing because it's going to be at the expense of your company. Like we said before, nothing comes before the company.

Maegan:Right. Really the lifestyle of what that looks like is like we will start feeling weird about something. We'll say like, "Wow, this is giving me a lot of headaches, more than it should. A lot of anxiety, whatever."

Liora:Like, "I can't eat for a week. I can't sleep."

Maegan:是的。有一些负能量it, then we would be like, "Okay. Why is this happening? Oh, it's because we're looking at this and there's going to be a dead end in six months and we can tell that this system is not going to work. We're going to out grow it or we've already outgrown it and it's causing a bottleneck and we can't get around it. What do we need to do instead?" Then we will go forward with some sort of learning push where we will try and figure out as much as possible, learn everything around that subject, figure out what we could possibly do and then come together and do some brainstorming, figure out the next way to go, decide on an effort and push that way.

Liora:The important thing is to recognize that you're never going to hit on the right decision. There is no right decision [crosstalk 00:55:13]. You're going to make the decision that's right for you at the time, whether or not you have to change it down the road. Okay, you've failed? No problem. Next idea. Go forth and fuck up.

Maegan:Practically no decision that we've ever made has been the right decision for more than six to twelve months. It's the right decision right now, but inevitably, you'll have to change it. It's just being comfortable looking at stuff that was right before, or maybe was never right and just saying like, "Nope, it's got to be different."

Felix:Awesome, awesome advice. Again, overtone.co is the store. What do you guys want to see the brand, the business be this time next year? What are the goals or the focuses this coming year?

Liora:We tripled last year. Maybe some pressure?

Maegan:No, quadrupedal.

Liora:Excellent. High five.

Felix:Awesome. Thanks so much for your time Liora and Maegan. Where else can listeners check out if they want to follow along with what you guys are up to?

Maegan:Our Instagram handle is @overtonecolor, O-V-E-R-T-O-N-E-C-O-L-O-R. That's also our handle on pretty much everything else you can find us on, Twitter, YouTube and Facebook as well.

Liora:If you want to see pictures of Maegan's face, you can see it at @maeganscarlett. If you want to see pictures of my face you can see it @k_liora.

Felix:Awesome. We'll link all that in the show notes. Thanks so much again.

Liora:Thanks for having us. Maegan: Thanks for having us.

Felix:Here's a sneak peak of what's in store for the next Shopify Masters episode.

Speaker 4:He actually said that they had fulfillment, sent us some tracking numbers. We passed them on to our customers. They said they were going to go active in like two days or something. Then we found out that those tracking numbers were not real.

Felix:Thanks for listening to Shopify Masters, the eCommerce marking podcast for ambitious entrepreneurs. To start your store today, visit shopify.com/masters to claim your extended 30 day free trial.