Drunk Elephant: Tiffany Masterson

Tiffany Masterson was a stay-at-home mom in her 40s when she launched her skin care brand, Drunk Elephant, in 2013. Six years later, she sold it for $845 million to the Japanese beauty giant Shiseido. Just six years! And she did it all with little to no experience in skin care, retail, or business. The professional branding and skin care world thought she was making huge mistakes: They panned her brand's name, product design, and strategy of focusing on only one high-end retailer. But Tiffany proved them wrong with great strategic instincts, incredible determination, and an unwavering belief in her products - and herself. This episode was produced by Alex Cheng with music by Ramtin Arablouei. Edited by Andrea Bruce, with research from Katherine Sypher. Our audio engineer was Josephine Nyounai. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

  Our presenting sponsor today is Anthropic, the team behind Claude. Every founder on this show started with a hard question. Not the marketing plan, the 2 a.m. kind. Is this idea any good? Am I the one to build it? Should I quit my job? Anthropic got built the same way. A public benefit corporation founded on one hard question. How do we make sure AI goes well for people? So they asked over 100,000 people their hopes and their fears and are publishing what they find, even the uncomfortable parts. Me? I've got my own hard question about AI. Here it is. If everyone has access to something that can help them write the business plan,

• 0:46Guy Raz?

  build the prototype, analyze the market, maybe even come up with the idea, what separates the people who actually build something from everyone else? I don't have a clean answer yet, so I've been sitting with it with Claude. There's hope in hard questions. Ask yours at claude.ai/hibt. We get support from U.S. Bank. A question I love asking founders. What's the one decision you almost didn't make? The one that changed everything? Because it's never the obvious stuff. It's never, I decided to start a company. It's the small, boring, Tuesday afternoon decision you barely remember making until you realize it's the reason everything after it either worked or didn't.

• 1:32Guy Raz?

  Say you're 18 months in. Business is growing. You've got expenses coming from six directions. Gas for the van, office supplies, your phone bill, team lunches that are actually client meetings, and you're putting it all on whatever card you grabbed in year one. You're not thinking about it. Why would you? You've got bigger problems. But here's the thing. Path A, you keep going like that. End of the year, you're sorting through statements, trying to figure out what went where. You've left hundreds, maybe thousands, on the table in rewards you never earned, money that could have gone back into the business. Path B, you pause and get the US Bank Triple Cash Rewards Visa Business Card. Now, you're earning 3% cash back

• 2:16Guy Raz?

  on gas and EV charging, office supply stores, cellphone service, and restaurants. You pick up an extra $750 cash back as a bonus. And you've got a low APR on purchases and balance transfers for 12 months while you're scaling. Same business, same expenses, two completely different outcomes based on one small decision. Visit usbank.com/business to learn more. The creditor and issuer of this card is US Bank National Association, pursuant to a license from Visa USA, Inc. Some restrictions apply. If you travel often, you'll want to hear about this unprecedented offer. For the first time ever,

• 3:00Guy Raz?

  new Delta SkyMiles Reserve American Express Card members can earn two Delta Comfort Round Trip flights for travel within the 48 contiguous US states, Puerto Rico, or the US Virgin Islands. Plus, you can earn 50,000 bonus miles towards your next getaway. And who doesn't appreciate an elevated airport experience? Delta SkyMiles Reserve Card members get access to the Delta Sky Club, your pre-flight oasis to recharge, with 15 visits and four one-time guest passes each medallion year when flying Delta together. That's up to $950 in annual value. Value estimate based on $50 per visit rate to purchase additional visits

• 3:45Guy Raz?

  or bring a guest to the Delta Sky Club. Make every trip feel more rewarding with the car that upgrades your travel. Apply today at delta.com/cardsocial. Offer ends November 4, 2026. Minimum spending requirements and terms apply. Flights are fulfilled as flight certificates valid for Delta Comfort or Delta Maine to select domestic destinations. Book 21-plus days in advance. Up to $80 per person and taxes and fees apply. Other restrictions apply. When I pull up to a gas pump to fill my car, I'm not thinking about chemistry or engineering. I'm thinking about getting in, filling up, and getting on with my day. And it reminds me a little bit of the founders I talked to on this show, because the best

• 4:27Guy Raz?

  ones obsess over things their customers will never see. Tiny details, invisible improvements, relentless iteration. And not because anyone's watching, but because it makes the product better. That's what the mobile brand does. It engineers fuel the same way great founders engineer their products. Mobile Supreme Plus Premium Gas helps keep engines three times cleaner, which can mean better performance and improved gas mileage. It's for people who care about what's under the hood, even if they never see it. Three times cleaner compared to mobile regular gas in port fuel-injected engines. Actual results may vary. Visit mobilefuels.com for details.

• 5:12Guy Raz?

  I mean, you could have been wrong at every turn, and this could have collapsed, and it could have really potentially damaged your relationship with your brother-in-law and maybe even your sister.

• 5:22Speaker 01

  It could have.

• 5:23Guy Raz?

  Like, that was risky.

• 5:24Speaker 01

  Right, it was. But that's all I had. I only had one shot. And I was tired of worrying about the future and tired of worrying about...I just didn't want to worry anymore.

• 5:35Guy Raz?

  How did you deal with the stress of the possibility of being wrong and all of it collapsing?

• 5:41Speaker 01

  I didn't consider it.

• 5:44Speaker 01

  I didn't let that get in my head.

• 5:53Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:04Guy Raz?

  I'm Guy Raz, and on the show today, how Tiffany Masterson started a second act as a 40-year-old stay-at-home mother of four by creating Drunk Elephant, a skincare brand she sold for over $800 million.

• 6:30Guy Raz?

  Okay, let me get right to the headline here. Drunk Elephant is a skincare brand that was launched in 2013 by a stay-at-home mom and her brother-in-law. Just six years later, the brand was acquired by the Japanese beauty brand Shiseido for a whopping $845 million. Six years. Drunk Elephant went from 0 to $845 million in six years. Now, you all know that at the end of this interview, I'm going to ask a version of the question I always ask. I know you know it, so I'm not going to paraphrase it. But what I will say is that while this is a story of luck, it's also a story of incredible determination and strategic thinking

• 7:14Guy Raz?

  and research and hard work. Because Tiffany Masterson was a nobody in the beauty industry. She knew almost no one. She had no substantive connections, and she had no money. But she did have an idea and a brother-in-law who was willing to give her the initial seed money. Tiffany founded Drunk Elephant in her mid-40s, and professional branding people were convinced she was making every mistake in the book. For starters, everyone hated the name. Drunk Elephant? What's that have to do with skincare? Most people she spoke to also hated the packaging and colors. And she was advised not to focus on higher-end retailers like Sephora. But Tiffany followed her instincts and figured out how to build a brand

• 7:59Guy Raz?

  that spoke to thousands of women. Even kids have gone crazy for Drunk Elephant. The brand recently saw an explosion of interest in its products among tween girls as young as eight and nine, much of it fueled by TikTok. Anyway, Tiffany grew up in Texas, in Houston, to be exact. Her dad was actually the quarterback for the Houston Oilers back in the late 1960s. His name's Pete Beathard. But her parents split when she was a kid. And even as a kid, her main ambition was to become a mom and start a family.

• 8:33Speaker 01

  I wasn't a good student. No, I didn't like school. I didn't even think of myself as very smart. I just kind of, I couldn't focus in school. And it was stressful and it was, it was kind of a sad, a little bit of a sad time for me. It came later. I did well in college, but I was a cheerleader and I, I always wanted to be like my mom and get married and have babies. And that's just super honest. Like I, it doesn't sound very admirable. I just wanted to get married and have kids. That's what I knew. That's what my mom did. And so that's what I thought was right for me.

• 9:06Guy Raz?

  Fair enough. I mean, no shame there. I mean, you knew what you wanted to do, which most 22-year-olds have no idea what they want to do.

• 9:13Speaker 01

  Right, right.

• 9:14Guy Raz?

  How did you meet your husband?

• 9:17Speaker 01

  I met my husband when I was 30 and I was set up on a blind date.

• 9:20Guy Raz?

  Yeah.

• 9:21Speaker 01

  And I knew it right when I saw him. I literally saw him walking towards me and it was a blind date. And I, I said to myself out loud, "The party's over. That's it."

• 9:30Guy Raz?

  Huh.

• 9:30Speaker 01

  Like I recognized him. It's weird. It was really weird.

• 9:33Guy Raz?

  What's your husband's name?

• 9:35Speaker 01

  Charles.

• 9:35Guy Raz?

  Charles. So this is the late 90s, right? You guys get married and pretty soon after you start a family.

• 9:42Speaker 01

  That's right. We, we got married in October of 1999 and our first child was born in December of 2000.

• 9:50Guy Raz?

  Yeah. And so you were going to focus on raising the kids. And what was Charles doing? What was his profession?

• 9:56Speaker 01

  So when we got married, Charles was at Enron.

• 9:59Guy Raz?

  The famous Enron.

• 10:00Speaker 01

  Right, right. And so that was, I thought, you know, this is good. We can have this little, we're comfortable and we could have our, I didn't know how many kids I'd have. I thought I could handle two. And he already had two kids from a previous marriage. But right when Chloe turned one, my daughter Chloe turned one, he, I found out that day that Charles had lost his job and Enron was going under.

• 10:23Guy Raz?

  The famous accounting scandal that... Basically collapsed that massive energy business overnight.

• 10:30Speaker 01

  Yes, yes, it was incredible.

• 10:32Guy Raz?

  Yeah.

• 10:33Speaker 01

  And he went on to work at a place called Texas Commercial Energy and worked there for two, three years and the same thing happened at Texas Commercial Energy.

• 10:42Guy Raz?

  It just collapsed.

• 10:43Speaker 01

  It did. He ended up having to sue them and.

• 10:46Guy Raz?

  And he was a sales, he was a sales rep.

• 10:48Speaker 01

  He was and maybe not even following his passion. So that was an issue, but he was doing it.

• 10:53Guy Raz?

  Yeah, he was making money to support the family.

• 10:56Speaker 01

  Right.

• 10:58Guy Raz?

  And you were happy being at home, looking after and raising the kids and handling that world. Did you feel fulfilled?

• 11:06Speaker 01

  I was so happy.

• 11:07Guy Raz?

  Yeah.

• 11:08Speaker 01

  Oh, I was so happy. I was so in heaven with my kids and I remember waking up and doing all the laundry and doing all the cleaning. And at one point I had four babies under four.

• 11:18Guy Raz?

  Wow.

• 11:19Speaker 01

  Like four, one and one and zero.

• 11:22Guy Raz?

  Cause you had Chloe and then you had twins and then you had another one?

• 11:25Speaker 01

  Right away. I had my fourth baby. I was told I couldn't get pregnant and I turned up pregnant nine months later. So.

• 11:30Guy Raz?

  Wow.

• 11:30Speaker 01

  Right away.

• 11:31Guy Raz?

  Four kids under four.

• 11:33Speaker 01

  Yeah.

• 11:34Guy Raz?

  That's a daycare.

• 11:35Speaker 01

  It was. It was a daycare and I was in heaven. I really was in heaven and I didn't want help.

• 11:39Guy Raz?

  Yeah, it's the best.

• 11:40Speaker 01

  Mm hmm. I wish I could go back. Sometimes I wish I could, just for a week though. I wish I could go back and come back when I wanted, yeah.

• 11:48Guy Raz?

  All right. So you are in the thick of it. And from what I gather, from what you're telling me, you were never sort of sitting around dreaming up ideas or just imagining a future where you would do something else, right? I mean, you were focused on being a mom.

• 12:04Speaker 01

  I was focused on being a mom and then something happened around 2008. That's around the time, so 2009, that I really was like, I'm, I wanted to be creative. I remember being on the computer all day.

• 12:18Guy Raz?

  Yeah.

• 12:18Speaker 01

  Like doing stuff that was mundane, like reading gossip websites. I was like, this is ridiculous, you know? But I also wanted to make extra money for the family and I just wanted to pitch in.

• 12:29Guy Raz?

  I've got some time.

• 12:30Speaker 01

  What can I do? I also remember creating invitations for their birthday parties. They were super, I would spend like hours creating these great invitations.

• 12:38Guy Raz?

  Like physical invitations that you would send out?

• 12:41Speaker 01

  Yeah. And I remember recognizing that part in myself, like, I love this creative stuff.

• 12:46Guy Raz?

  Yeah.

• 12:47Speaker 01

  And then, so I, it started with, I wanted to do a catering company.

• 12:52Guy Raz?

  Are you a good cook?

• 12:53Speaker 01

  I'm a good cook and I remember trying to do meatballs. Like I was gonna package up these meatballs that I made. I thought I can sell these things.

• 13:02Guy Raz?

  Like sell them frozen?

• 13:03Speaker 01

  Yes, I was gonna sell them frozen and my husband went out and bought this huge freezer from Costco and it never even got used.

• 13:10Guy Raz?

  Yeah.

• 13:10Speaker 01

  I don't know, he figured out, he was like Tiffany, the ingredients you wanna buy are so expensive.

• 13:15Guy Raz?

  Right, you have to go to scale.

• 13:17Speaker 01

  You do.

• 13:17Guy Raz?

  You have to sell each meatball for like five bucks.

• 13:19Speaker 01

  Exactly.

• 13:20Guy Raz?

  Five dollar meatball.

• 13:22Speaker 01

  Yeah.

• 13:22Guy Raz?

  Yeah.

• 13:23Speaker 01

  Then I went on to this whole pantry cleaning out business where I-

• 13:26Guy Raz?

  Tell me about, what's that business?

• 13:28Speaker 01

  So I was, one of the things I read about all the time were supplements and healthy food and how to be healthy and all that. And I, I thought I can go to people's pantries and get rid of all the bad stuff and replace it with great stuff and this would be a great job to have.

• 13:43Guy Raz?

  Oh, that's cool, like a consultant, like a home pantry consultant. You'd go in and be like-

• 13:47Speaker 01

  A pantry consultant.

• 13:47Guy Raz?

  This out, out, out, out, and then you could like, no, you want flax seeds, no, you don't want, you know. You don't want white pasta, you want brown rice pasta, stuff like that, okay.

• 13:56Speaker 01

  That's, yes, I called it, named it Holy Pantry. My mom said you can't use the Y. You have to use, change it to an I.

• 14:04Guy Raz?

  Holy pantry, like how, like H O L I?

• 14:07Speaker 01

  Yeah.

• 14:08Guy Raz?

  Why not H O L Y?

• 14:09Speaker 01

  Uh, my mom thought it was disrespectful.

• 14:12Guy Raz?

  Sacrilegious.

• 14:13Speaker 01

  Yes, that's what she thought. So she said, you gotta call it holy with an I, so.

• 14:16Guy Raz?

  You could like left a bible in the pantry too. Like that could have been part of the deal.

• 14:21Speaker 01

  Yeah.

• 14:21Guy Raz?

  I'll clean out your pantry and leave you a bible.

• 14:23Speaker 01

  Yes, yes, I'm gonna, you need to pray while you're at it, yes. Um, I got fired from my first job by my husband, my best friend's husband. Who came in and said, what the hell did you do to my pantry? Now you've cost me a bunch of money and I've gotta go replace everything you threw out.

• 14:39Guy Raz?

  Oh, you threw away all, you threw away the cheetos and like the ruffles and stuff, yeah. The Chips Ahoy.

• 14:44Speaker 01

  He was furious.

• 14:44Guy Raz?

  Yeah, you're like, no, no Chips Ahoy, you gotta have Dayton carob cookies.

• 14:50Speaker 01

  So that didn't go, it didn't go far. He goes, get out of my house and also I feel sorry for your kids. What the hell have you done? So that didn't go anywhere. And then I started selling Arbonne, which is a skincare line.

• 15:01Guy Raz?

  Yeah, tell me about this. So just to put this in context, I mean, you have some time and money's a little bit tight at home?

• 15:08Speaker 01

  Right, money was very tight.

• 15:10Guy Raz?

  What was your husband, after he left the energy business, what was he doing mainly to earn a living?

• 15:16Speaker 01

  He wanted to be a financial advisor for a while. And he did go work at Smith Barney and he didn't love it.

• 15:23Guy Raz?

  Yeah.

• 15:24Speaker 01

  And then he, he's 40 at this point, or 40, he's older than that at this point.

• 15:27Guy Raz?

  Yeah.

• 15:28Speaker 01

  He's seven years older than me. So he was frustrated and, and then we had a serious talk about, you know, what his passions were. And he, he's a very, very talented artist and he's, he comes from a long line of artists in his family. His mom is a jewelry designer here in Houston.

• 15:42Guy Raz?

  Wow, in his heart of hearts, the guy is an artist.

• 15:44Speaker 01

  Yes, in his heart of hearts, he's an artist. And so he started doing like prototypes of like metal lights. And he ended up partnering with this guy who did all the gates around town, all these gorgeous metal gates and fixtures and everything from lights, chandeliers, you know? And he was really the only guy in town doing this custom. But it wasn't, also wasn't a great business model.

• 16:06Guy Raz?

  Yeah.

• 16:06Speaker 01

  Not an easy way to, you know, support a family of six.

• 16:09Guy Raz?

  Yeah, okay, so that's a context and you're exploring all these different opportunities. And then you, you find out about this company called Arbonne, which is a, I think it's a multi-level.

• 16:20Speaker 01

  It is.

• 16:20Guy Raz?

  Like skincare or beauty company, like Mary Kay or any of these other brands?

• 16:24Speaker 01

  Exactly.

• 16:25Guy Raz?

  Yeah, and it's like a way to, you know, make some money and.

• 16:29Speaker 01

  It is.

• 16:29Guy Raz?

  Maybe get a pink Cadillac, that's a different company, but it's.

• 16:32Speaker 01

  Oh, this one, yeah, with Arbonne, you get like a Mercedes, I think.

• 16:35Guy Raz?

  Ooh, nice, if you, if you hit the insane.

• 16:38Speaker 01

  If you hit this completely impossible numbers, unattainable. But I, but I did that for, I don't know, three, four months.

• 16:45Guy Raz?

  And what, what kind of things were, were you selling?

• 16:48Speaker 01

  Skincare, so like a line of skincare.

• 16:51Guy Raz?

  Yeah.

• 16:51Speaker 01

  I didn't know a lot about skincare. I remember always being interested in skincare because I had kind of some skin issues. So I just kind of learned a little bit about the products and that didn't go very far either, though. I just, I didn't really have the ownership there. I just wasn't interested. You know, when it's not yours, it's very different. And that wasn't mine, so I don't think I was really, I hadn't bought into it. The conviction wasn't there.

• 17:16Guy Raz?

  So you only, you did it for a couple of months and you realized this wasn't, wasn't for you?

• 17:21Speaker 01

  Right, and I also got a call from my brother during that time.

• 17:24Guy Raz?

  Yep.

• 17:25Speaker 01

  And he said, uh, his wife and he had been at a wedding in California. And when they were there, somebody walked up to them who knew them because they owned a little store in Austin.

• 17:36Guy Raz?

  Your brother's store?

• 17:36Speaker 01

  Yes, my brother and his wife, yes. And it was in Austin, and it was a little store that sold baby blankets and sold candles and stuff like that.

• 17:45Guy Raz?

  Yeah.

• 17:45Speaker 01

  And, um, so he called and he said, you know, his wife thought that this bar that they'd been given at this wedding, like this woman walked up and said, "This bar's from Malaysia and I think it's the greatest, next best thing. Try it and maybe y'all can sell it in your store. Maybe you can sell this bar in your store and you could do really well with it." And so they agreed to, to sell the bar. And so they were buying it from her and she was buying it from a guy in San Francisco and he was buying it from a guy in Malaysia. And the guy in Malaysia was buying it from the manufacturer. And so it was, it was also a multi-level kind of thing.

• 18:16Guy Raz?

  What was so special about this bar of soap?

• 18:19Speaker 01

  It was called the Wonder Bar.

• 18:20Guy Raz?

  Okay, good name.

• 18:21Speaker 01

  And the claims around the bar were that it did everything. It reset your skin, like detoxified your skin and cleared up any, any issue you could possibly have. Uh, and they did it with this magic chlorineare, like this algae from France and this Austrian clay that was, you know, they basically said it could do everything, right? I mean, this bar, there's nothing this bar couldn't do. And the instructions were to use it with a very plain moisturizer. And, but I, I kind of jumped at the opportunity because the setup was going to be that I buy it from my brother and his wife and then I sell it for a profit. And the profit wasn't huge.

• 18:57Guy Raz?

  By the way, how much was each bar? How much did it cost?

• 19:00Speaker 01

  The big bar was a hundred and five dollars.

• 19:02Guy Raz?

  A hundred and five dollars?

• 19:04Speaker 01

  For, to sell, that's retail.

• 19:05Guy Raz?

  You could sell them for a hundred bucks?

• 19:07Speaker 01

  Yeah, I sold a lot of bars.

• 19:09Guy Raz?

  That's like popcorn in the movie theater, wow.

• 19:12Speaker 01

  And so selling that was not, not easy, but you had to really be a good salesperson, I guess. I had this bar like in carpool line and at events at school and stuff, selling it to my friends.

• 19:22Guy Raz?

  Yeah.

• 19:23Speaker 01

  I mean, I don't know how much I was making, maybe twenty-five hundred dollars a month profit. For me, that was a lot.

• 19:29Guy Raz?

  Yeah.

• 19:30Speaker 01

  But I was, I was really committed. I remember staying up late every night. I was emailing everyone I could. I had.

• 19:35Guy Raz?

  But I mean, what made this more, something you believed in more than the Arbon products?

• 19:41Speaker 01

  I think I understood. The Arbon products were just a bunch of, like, they were very fragranced products. And I guess, looking back, like, using the Arbon products, that didn't help me with my skin. I had really red, sort of inflamed skin.

• 19:53Guy Raz?

  Yeah.

• 19:54Speaker 01

  I had unpredictable skin. I broke out on occasion. I had, I had large pores. I thought I had rosacea. The Arbon products didn't do one thing for my skin. I mean, maybe they made them feel soft. But with the bar, I took the instructions very serious. I used the bar.

• 20:08Guy Raz?

  Yep.

• 20:09Speaker 01

  And I also used a really mild moisturizer that, that had no fragrance in it. And my skin, like, it just cleared up. It just cleared up. So I thought, oh, well, it's clearing up because of the algae and the clay and the this and the that and the bar. And so I sold it that way. And that's why I was convicted with the bar, because I thought, wow, these ingredients are amazing. So I was selling it and I was very engaged with people. Like, I was like, call me anytime, text me anytime, email me with your issues. And so they started doing that. Like, and they'd be like, I like the bar, but I'm breaking out like crazy. Like, what is going on? And I would say, what are you using? You know, what are you using? Oh, I'm using, you know, these three things. Well, send them to me. I'll look at the ingredients and maybe I can figure this out.

• 20:52Speaker 01

  So crazy. It's, it's, there's no reason for me to think I could figure it out. I mean, but I, I'm the type that if you call me, what's the best movie? What's the latest Netflix show? What's the best restaurant in Chicago? I'm gonna try to fi- figure it out.

• 21:04Guy Raz?

  Huh.

• 21:05Speaker 01

  Even though I don't know, I'm gonna be on, on Google, you know, and I love to help people so much that that's what I was trying to do with people's skin.

• 21:11Guy Raz?

  By the way, what's the best taco in Houston? Now that you're on, now that I've got you here.

• 21:15Speaker 01

  Oh, I think it's, I think it's little papasitos. Not everyone agrees with me, but I think their fajitas are so good.

• 21:20Guy Raz?

  Next time I'm in Houston, thank you. I'm calling you. I'm gonna get your top 10 list.

• 21:24Speaker 01

  Please. Yes.

• 21:25Guy Raz?

  Um, so you're in Houston and you're selling this bar. But was the idea to just sell it to friends in Houston, or was it to like, turn this into a national product?

• 21:36Speaker 01

  Well, I didn't get the memo on this, so this is. I really thought, so there was this woman in California who my brother and his wife were buying the bar from.

• 21:45Guy Raz?

  Yeah.

• 21:45Speaker 01

  There was a Wonderbar USA, and so my brother and his wife and this girl in California, they were managing the website. I had my own website in Houston that was just wonderbarhouston.com.

• 21:56Guy Raz?

  Right.

• 21:56Speaker 01

  And also, they told me upfront, like, this is just for you in Houston. This is not for you to go.

• 22:00Guy Raz?

  I see.

• 22:01Speaker 01

  I got over excited, and I was really loving like the marketing of the bar and talking about it and sharing it. So I thought, well, I'm gonna, I'm gonna start reaching out to national editors and I want to get it on every website and every blog and I want to, I just didn't fully understand. They didn't want me involved in that part of it. And they called me and basically said, back down, back off. Like, this is not for you. This is what we're doing.

• 22:25Guy Raz?

  You're just selling it to ladies in Houston. That's your job.

• 22:29Speaker 01

  That's my job, just be quiet and sell it to ladies in Houston, and that was it. So my brother-in-law in Denver, who's married to my sister, they called him, they called several family members who had money.

• 22:42Guy Raz?

  Yeah.

• 22:43Speaker 01

  And asked people to invest, and they wanted someone else in the family to buy the bulk of the bars so that we could own the distributorship. And I say we, but it wasn't we. It was they could own the distributorship in North America. And so they called my brother-in-law and they said, do you want to buy $300,000 worth of bars? So he ended up with $300,000 worth of bars to sell. He said, I see that you're selling these like crazy on Wonderbar Houston. Would you be willing to come to Wonderbar USA? I'll make you a partner, and then you could, then all your hard work that you're doing can benefit Wonderbar USA. I want my money back, is basically what he was saying.

• 23:20Guy Raz?

  Yeah.

• 23:21Speaker 01

  But cost of goods, to buy the bar, they were, they were buying the large bars for $18 a bar.

• 23:27Guy Raz?

  Wow.

• 23:28Speaker 01

  By the way, my brother and my brother-in-law knew nothing about the beauty industry.

• 23:33Guy Raz?

  Yeah.

• 23:33Speaker 01

  And so they didn't know that buying a bar, cost of goods, $18 a bar was outrageously stupid. They didn't know that.

• 23:41Guy Raz?

  I want to unravel this a little bit, because it's gonna get confusing, because there's, in this story will be your brother, your brother-in-law, and then your brother-in-law's brother.

• 23:51Speaker 01

  Yeah, that comes later. The brother-in-law's brother comes with drunk elephant.

• 23:54Guy Raz?

  So there's gonna be, there's gonna be some brothers, brother-in-laws, brother-in-law's brother, and we're gonna, we're gonna... Clear that up. But right now, it's your brother and your brother-in-law. And your brother-in-law's got the cash. He's the guy who's like, yeah, I'll put, I'll invest $300,000 to own the distribution of this clearly very profitable, like fancy cleanser bar. You are selling them in Houston like hotcakes. And he says, look, I own the national distribution. Just kind of fold your platform into ours and you'll be a partner here.

• 24:29Speaker 01

  Right.

• 24:30Guy Raz?

  And you had, I mean, you had no sort of cash equity in there. Was there sweat equity?

• 24:35Speaker 01

  That's right.

• 24:35Guy Raz?

  All right. So now that you've become a partner in this venture, what did that mean? I mean, were you still focused on Houston or did you start to travel and help build this brand up? This Wonder Bar brand up?

• 24:48Speaker 01

  There wasn't a lot of travel and they were pretty tight with the money. So it wasn't like I made a small salary to replace what I was making on my own when I was selling the bars. So they agreed to give me $2,500 a month and I did get the bar. Once I was made a partner, I was allowed to get it in national publications and

• 25:07Guy Raz?

  How did you do that?

• 25:08Speaker 01

  I would go on and try to contact blogs and emails and, I mean, magazine editors. I subscribed to this membership where I had access to the names of all the editors. And so I would email all day long. I would, yeah, I think I counted 3,000 emails I sent out over a period of time.

• 25:25Guy Raz?

  And you would say, I've got this amazing cleansing bar. And you would say, it's got Austrian clay and French, you know, algae and

• 25:34Speaker 01

  Chlorinari.

• 25:35Guy Raz?

  Yeah, seaweed. And can I send you one? And you would, basically that was it? That's how you started?

• 25:40Speaker 01

  Yes. And around this same time, so I had reached out to Guti Recker. They feature products on their television station.

• 25:48Guy Raz?

  Oh, okay. They're a direct marketing company. Yeah. They actually helped launch Proactive, which is that acne treatment and a bunch of other products. So, so they're behind a lot of infomercials. They started with Tony Robbins in the early days. But yeah, so they, they agreed in principle to sell Wonder Bars.

• 26:05Speaker 01

  Right. So they called and they said, we're interested and we want to buy X number of Wonder Bars. We will pay you $5 a bar. I went, what? Five dollars a bar? I think they paid nineteen dollars for the bar.

• 26:18Guy Raz?

  Oh, you, you, they were just saying, we'll pay you five bucks a bar. You were like, we're already paying nineteen dollars a bar.

• 26:23Speaker 01

  Yes.

• 26:23Guy Raz?

  They were saying, you guys are nuts. You could make this for a dollar.

• 26:26Speaker 01

  They did.

• 26:27Guy Raz?

  Okay.

• 26:27Speaker 01

  They said, you are nuts. And I think we both laughed at the same time. The consultant was like, that's the craziest thing I've ever heard. Who agreed to that? You know, you can make a bar for a dollar or less. Like, sorry to tell you, you just got completely screwed.

• 26:40Guy Raz?

  Yeah. So they, by the way, Guthie Rankers, like, there's no way we can work together. Your price is too high.

• 26:45Speaker 01

  No, I said, I said, I would have to pay you to do this. I'm like, we can't do this.

• 26:49Guy Raz?

  Yeah. And I've read that there are also some, some like quality issues with the bar, right?

• 26:54Speaker 01

  Yes. And there was this horrible thing they called the healing crisis. That people in Malaysia, that may, that people would turn bright red and break out and cystic. It was awful. And they called it the healing crisis like it was normal.

• 27:07Guy Raz?

  Sorry, I'm confused, but whoa, whoa, whoa, sorry. I'm, what is the, the people in Malaysia would break out after using this bar?

• 27:15Speaker 01

  Well, we have initially. So the, the whole directions of use were use the bar, leave it on your face for three to five minutes. And then rinse it off and then put a plain moisturizer on. That was the whole thing.

• 27:25Guy Raz?

  Yep.

• 27:26Speaker 01

  And if you get a terrible breakout and a horrible reaction, that's normal. That's all the toxins coming out of your skin.

• 27:33Guy Raz?

  I see.

• 27:34Speaker 01

  Which is not true, but I believed it.

• 27:36Guy Raz?

  And that happened to you too?

• 27:37Speaker 01

  No, it never happened to me strangely, but it happened to a lot of people I sold the bar to.

• 27:41Guy Raz?

  They would break out and basically the argument was, hey, this is totally normal.

• 27:45Speaker 01

  Right.

• 27:46Guy Raz?

  It's detox, your skin's pushing out all the bad stuff. You're gonna break out, but it'll get better in a couple of days.

• 27:51Speaker 01

  Yes.

• 27:52Guy Raz?

  That seems plausible to me.

• 27:54Speaker 01

  Well, I remember people having to go to the doctor. My sister in law, my other brother's wife had to go to the doctor with huge welts on her face.

• 28:02Guy Raz?

  Yeah.

• 28:03Speaker 01

  I somehow managed to get in with the beauty director from Harper's Bazaar, Alexandra.

• 28:08Guy Raz?

  Yeah.

• 28:09Speaker 01

  I put her on it. I remember her emailing me from the Ralph Lauren. Fashion show saying, what the hell? My face is like someone beat me up.

• 28:18Guy Raz?

  Wow.

• 28:19Speaker 01

  What is this?

• 28:19Guy Raz?

  And?

• 28:20Speaker 01

  I got on the phone with her. I talked her through it. She put it in the magazine.

• 28:24Guy Raz?

  She still put it in the magazine?

• 28:25Speaker 01

  She put it in the magazine. I went into her office.

• 28:27Guy Raz?

  Wow.

• 28:27Speaker 01

  Flew to New York and met her in person. And it was crazy.

• 28:30Guy Raz?

  So you believed this argument, which again, it might be true that it basically is extracting the toxins. It's like, that was basically what you were saying to people.

• 28:39Speaker 01

  That's what I believed until I got a scathing review from a website called Beautypedia.

• 28:45Guy Raz?

  Okay, what'd they say?

• 28:46Speaker 01

  They said, this is a bunch of BS and this is a scam and these ingredients are a joke. And there's no chance that any of the ingredients in this bar can be responsible for anything good that happens to skin. So all the claims are bogus. It gets a one out of five.

• 29:03Guy Raz?

  Wow.

• 29:03Speaker 01

  I was shocked. I was just like, wait, what?

• 29:07Guy Raz?

  This happens over a year, maybe a year and a half after you're selling the bar, I think, right?

• 29:12Speaker 01

  Right. This was like in 2010, 11, 10, 11.

• 29:16Guy Raz?

  But a year and a half of you really pushing this, selling it, believing in it, using it. When you saw that review in Beautypedia, I mean, my instinct would have been like, well, screw them. They're wrong and I don't care about this review. But you, you actually were really-

• 29:29Speaker 01

  That wasn't my instinct. I had two instincts immediately. One was, if it's not true, then why is my, why did my skin clear up?

• 29:36Guy Raz?

  Yeah.

• 29:37Speaker 01

  And two, I respected this website a lot. This is, I believed them. And so what my second instinct was, I don't believe the guys in Malaysia now. They must not be telling us the truth about this bar, what's in it. I wanted to know what was in it.

• 29:51Guy Raz?

  So what did you do? I mean, this review clearly freaks you out.

• 29:55Speaker 01

  Mm-hmm. A lot of things are happening right here and now. One is I've reached out to Sephora. They've told me, no, we would never carry a single SKU. Like in other words, if you don't have a group of products, we're not interested. I remember picking up the phone and calling my brother in Austin. He was kind of checked out at this point. Patrick and his wife still sold it in their store.

• 30:13Guy Raz?

  Yeah. Patrick's your brother. What's your brother-in-law's name?

• 30:16Speaker 01

  Charles, same as my husband.

• 30:18Guy Raz?

  Okay, this is confusing.

• 30:19Speaker 01

  I know.

• 30:20Guy Raz?

  Okay, we got it. Patrick's your brother. Charles, your husband. Charles, also your brother-in-law.

• 30:24Speaker 01

  Exactly, exactly. So, so I'm questioning, I remember getting on the phone with like a, some sort of a chemist who could do a reverse engineering on the bar. And trying to figure out what was exactly in the bar. And that kind of didn't go anywhere either. We talked to the actual creator of the bar who-

• 30:41Guy Raz?

  In Malaysia?

• 30:42Speaker 01

  In Malaysia, who wouldn't give us very much information. So, you know, I was getting more skittish by the day. Just, we're not going to be able to get into a retailer. We're not going to be able to make this what we thought we could.

• 30:52Guy Raz?

  But you still have a lot of product to sell.

• 30:54Speaker 01

  A ton. So I'm talking to Charles on a daily basis. And I also think of Charles as my boss, by the way, because somewhere along the way, it was stated like, look, you have this small salary. You will never make a penny until the investor is paid back in full. Just know that.

• 31:09Guy Raz?

  Yeah. All right, let me ask you a sort of a slightly uncomfortable question. You still had to sell the Wonder Bars, right?

• 31:17Speaker 01

  That's right.

• 31:18Guy Raz?

  So how were you personally feeling about selling something that you felt was not good?

• 31:26Speaker 01

  Well, I was conflicted because there were people who had bad reactions. There were a lot of people who called in tears, saying, this is guard my face. And now I'm like, what am I telling people to put on their face? That really upset me. So that was worrisome. But that being said, it was Charles's investment.

• 31:43Guy Raz?

  Yeah.

• 31:44Speaker 01

  And he wanted to sell the bars.

• 31:45Guy Raz?

  Yep.

• 31:46Speaker 01

  And so that was my job.

• 31:48Guy Raz?

  If I'm your brother, I'm thinking, well, we got to sell. What do we have? You know, offload this somehow. And then let's talk about next phase. Is that what he said?

• 31:56Speaker 01

  So Charles, my brother-in-law, said, listen, I think you're super passionate about this. And I feel like you really love what you're doing. I said, well, I have, I'm kind of coming up with an idea that maybe I should do, I should, maybe I should do a line. Maybe Sephora has a point.

• 32:13Guy Raz?

  They want a bunch of different products. They're not just going to sell bar soap.

• 32:16Speaker 01

  And that kind of got me thinking along these lines of solution, skin solution, like a total skin solution.

• 32:23Guy Raz?

  When we come back in just a moment, how Tiffany did exactly that, using her own skin and willing friends to develop her own skincare line. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

• 32:44Guy Raz?

  Does your team want a website that looks and feels handcrafted but is still fast to ship? Well, Framer is built exactly for that. With Framer, you design on a visual canvas with responsive layouts, hosting, and a CMS built in, so the work is production-ready from day one. And you can get it done with help from Framer's AI agents. Framer is the AI website builder that helps creators, teams, and businesses ship production-ready sites faster than ever while getting every detail right. Prompt, inspect, edit, and publish in one place at a whole new pace. AI agents and humans work together. The agents bring speed and scale,

• 33:28Guy Raz?

  and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 34:11Guy Raz?

  NetSuite Next surfaces insights exactly when you need them, puts agents to work on routine tasks and problems, and lets you ask complex questions in plain language, like talking to a knowledgeable colleague. But technology is only part of the story. AI is also reshaping how people and teams work together, and that shift is already underway. That's why NetSuite wants to put a new, expert-created business guide in your hands today. It's called "Aligning for the Agentic Era: How AI is Changing Everyday Work." And right now, it's yours, absolutely free. Inside, you'll discover how AI could reshape work across your entire organization, and how to position your business to prosper from it.

• 34:56Guy Raz?

  If your revenues are at least in the seven figures, get NetSuite's free business guide, Aligning for the Agentic Era: How AI is Changing Everyday Work, at netsuite.com/built. The guide is free to you at netsuite.com/built. netsuite.com/built.

• 35:15Speaker 02

  Confidence. It's listening to your gut. It's moving forward even when the path ahead is unclear. For nearly 160 years, Pacific Life has helped people keep their promises, building confidence for generations. Whether you're confident in your financial future or just beginning to envision it, we're here to help. Ask a financial professional how. Pacific Life, the power of a promise. Pacific Life Insurance Company, Omaha, Nebraska. And in New York, Pacific Life Annuity, Phoenix, Arizona.

• 35:48Speaker 03

  Hi, guys. This is Grace from Shanghai, China. I love all the personalities from every episode. My favorite one is with Herb Callahan from Southwest Airlines. I love how he never thought anything is impossible, and he doesn't take himself seriously. I can just imagine that he would approach everything with jokes and a big laugh. Going back to that episode, and every time, I ended up feeling sunshine and laughter going back to my life. Thank you so much for that. And RIP Herb. Hope you're still enjoying your cheese crackers and wild turkey vertebra in heaven. Cheers.

• 36:21Guy Raz?

  If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is, and why, a lot like the voice memo you just heard. And email it to us at [email protected], and we'll share your favorites right here in the ad breaks in future episodes. And thanks so much. We love you, guys. You're the best. And now, back to the show.

• 36:54Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2010 and Tiffany is still a full-time mom and a one-woman sales team for Wonderbar. But she also starts to research what goes into skincare products. And the deeper she goes, the more she starts to see connections between certain ingredients and why her customers might be having bad skin reactions.

• 37:20Speaker 01

  And I'm telling these customers that I have that maybe don't use this ingredient, maybe, maybe take that out of your routine.

• 37:27Guy Raz?

  Yeah.

• 37:27Speaker 01

  Maybe essential oils and fragrance aren't good for your skin. After all, maybe they're irritating you. Take, it was all instinct, but instinctively, it's the weird thing, and I'm almost embarrassed to say it, but like, I would put stuff on my skin and it would tingle a little bit, like in a bad way, like, I would feel like, oh, my gosh, this just isn't good for my skin. Like, this is causing me to react. It started out like that, just all kind of guesswork. But then I started really reading about the ingredients and I started kind of guiding people and kind of getting this idea in my head about ingredients that were in products that maybe weren't so good for skin after all.

• 37:59Guy Raz?

  All right. So you, I guess you were your own guinea pig. You were just testing on your own skin.

• 38:05Speaker 01

  I was, and my friends and everyone around me, you know, anyone I could talk to that would, that would try.

• 38:09Guy Raz?

  So what would you do? You would just buy a bunch of skincare products? Or you would buy individual ingredients, oils?

• 38:17Speaker 01

  Never ingredients. I never was the one, I'm not the one who made products in my kitchen.

• 38:20Guy Raz?

  Yeah.

• 38:21Speaker 01

  I wanted to read and understand, like, toxicity levels of ingredients.

• 38:26Guy Raz?

  Yeah.

• 38:26Speaker 01

  And I, yeah, I remember buying like this avocado oil. And I got it, I used it, I broke out exactly like 10 days later. And I looked at the ingredient deck and sure enough, there's essential oils in there. But I didn't recognize that to be essential. It's because they came under different names. So that would force me to then learn the, all the names of essential oils. They can, things go by different names. So, and I couldn't understand why everybody was using them.

• 38:49Guy Raz?

  So this is like a research phase, right? Basically, were you thinking, I'm going to come up with a, basically a new bar? Or I'm eventually going to come up with like a cream cleanser? Or did you not quite know yet at that point?

• 39:01Speaker 01

  I wanted a line that was formulated with ingredients that I chose.

• 39:04Guy Raz?

  Yeah.

• 39:04Speaker 01

  And that I could be in control of and that I would know what was in the product. And then, then I also wanted a solution, like I could say, look, you don't have to go out and buy a serum or a sunscreen or this or that. This is the whole thing right here. And you don't have to worry about ingredients affecting your skin from another product. Because I'm not going to use the ingredients that could potentially trigger a breakout in your skin. But then, Charles, my brother-in-law, wanted me to make a bar. Because he happened to love the bar. So that'll be the cleanser portion of the line. And then I'll make a vitamin C and I'll make a sunscreen and I'll make an acid and I'll make, you know, so I would go read dermatologist articles and I just read so much and tried to teach myself about what this line would need.

• 39:48Guy Raz?

  Yeah.

• 39:48Speaker 01

  And then a lot of what I would want as a consumer.

• 39:51Guy Raz?

  How would you keep track of all these things? Like, did you have like a journal that you would write things by hand? Or did you have a like a spreadsheet?

• 39:59Speaker 01

  I had a spreadsheet on a computer.

• 40:01Guy Raz?

  Were you intuitively, naturally, like a spreadsheet, P and L, kind of numbers organizational person? Or?

• 40:09Speaker 01

  I'm not, I hate it. I'll tell you, I don't, I don't think I have those skills so much even today. When you show me a spreadsheet, my brain kind of goes numb.

• 40:16Guy Raz?

  Yeah.

• 40:17Speaker 01

  But I'll tell you, when you're passionate about something and when it's all you think and care about at the time, in the moment. Yeah, I mean, I opened up an Excel spreadsheet. I may not have really known totally how to use it completely, but I knew how to fill in four squares. And I was excited to see this kind of come to life.

• 40:35Guy Raz?

  You know, you'd mentioned to me on the phone that you wouldn't have been able to do this in your twenties, that you actually had to do this in your forties. And that makes a lot of sense to me because as a mother or father, you know, to raise children requires a lot of organizational skills.

• 40:52Speaker 01

  Right.

• 40:53Guy Raz?

  It requires a lot of like, making sure the calendar, like the school events and the sports and getting this kid there and that kid there. And so I was thinking about your sort of methodical approach to ingredients, spreadsheets and writing things down and like, but I have to imagine that just raising four kids. Also gave you skills that enabled you to kind of think very methodically, like spreadsheets, calendars, like lists. Is that right?

• 41:19Speaker 01

  You don't have a choice. You don't have a choice. And I'm not like that. I was never like that. In fact, I didn't think of myself as anybody that would be able to raise or handle kids. I remember thinking I could probably could handle two, but I ended up just you do it. You just do it. You do what you gotta do.

• 41:33Guy Raz?

  Yeah. And what would you put on the spreadsheet? Like the name of the ingredient and?

• 41:37Speaker 01

  So I would take a product just to look at the ingredient deck and then I would list out all the ingredients. And then I would, I had three categories, you know, it's like the way I understood it as a consumer. Here's three categories. These, these ingredients are there for skin. It's a, this is a humectant or an oil or a cell communicating ingredient, you know? The second category were ingredients that were there for the formulation itself, that you have to have a preservative, a stabilizer, things that help the product do what it's supposed to do and keep, it keeps it safe.

• 42:09Guy Raz?

  Yep.

• 42:09Speaker 01

  And then the third bucket that were, I use the word suspicious. I'm a suspicious person. Like, why are these in there? Well, there's only one answer. They're in there that either make the product smell pretty, look pretty, feel pretty. There's dyes, there's fragrance, there's essential oils. There are silicones that create this silky feel.

• 42:27Guy Raz?

  Yeah.

• 42:28Speaker 01

  But a lot of ingredients can't get through silicones. So why are they there? And drying alcohol, why is that there? It damages your skin, straight up damages your skin. Chemical screens. Every time I used a chemical sunscreen, I broke out. So it's physical better, like mineral. So that's what I was thinking like at the time, like these are ingredients that don't need to be there. These are ingredients that do.

• 42:48Guy Raz?

  Yeah.

• 42:48Speaker 01

  I'd love to do something with ingredients, only ingredients that need to be there and let it, let the formulation come out like it will.

• 42:55Guy Raz?

  And so you would basically buy, basically buying brands, cleansers off the shelf and testing them? Is that how you were coming up with this spreadsheet, this list?

• 43:06Speaker 01

  No, I was, a lot of times it was somebody who would call me and say, I'm breaking out or I do, and my skin is like freaking out right now. And I would say, what are you using? They would screenshot, you know, take a picture

• 43:16Guy Raz?

  Yep.

• 43:16Speaker 01

  of the ingredient deck, whatever, and send it to me or read it to me. Then I would go from there. I remember going online and reading like what a product had in it, taking that list and then analyzing it.

• 43:29Guy Raz?

  But what I'm wondering is, how did you know that certain ingredients caused certain reactions?

• 43:35Speaker 01

  First of all, it was every ingredient on the list I would look up.

• 43:38Guy Raz?

  Yep.

• 43:39Speaker 01

  There were two or three websites that were helpful in the sense that they would rate the ingredient. EWG, for example, rates ingredients one to 10 for toxicity.

• 43:48Guy Raz?

  Yep.

• 43:49Speaker 01

  And so I can't say there was like one thing that I did that was like, oh, this light bulb, these six categories of ingredients are bad for your skin. It wasn't that. It was over probably two, two, three years of me reading about ingredients and kind of learning like, do they need to be there and what could they do?

• 44:04Guy Raz?

  I wonder though, how you, you know, how can you really say, hey, these are safe and these cause breakouts? Because like, for example, I found like the thing that has affected my skin more than anything is cutting sugar out of my diet entirely.

• 44:19Speaker 01

  Mm hmm.

• 44:19Guy Raz?

  All sugar. And some people are like, you're a freak. That has nothing to do. But in my case, I believe that to be the case. And please, anyone listening, I'm not a doctor, so please don't trust my advice. I'm an idiot. But I'm just saying that this...

• 44:33Speaker 01

  And I, I'm the same.

• 44:34Guy Raz?

  Yeah.

• 44:34Speaker 01

  I was a stay at home mom of four. I'm, I'm, that's why I called the ingredient suspicious six, because I, at the time, didn't know it for a fact. I am like, look, I've tried this. I don't know really why it works.

• 44:47Guy Raz?

  Yeah.

• 44:47Speaker 01

  But it's working for a lot of people, this philosophy.

• 44:50Guy Raz?

  And so you came up with six ingredients that you felt caused reactions in people? What were those ingredients?

• 44:57Speaker 01

  One is SLS, which is a harsh surfactant.

• 45:00Guy Raz?

  Sodium sulfate, right?

• 45:02Speaker 01

  Loral sulfate, yes. So it can strip your barrier, your skin barrier. One is essential oils. One is fragrance dyes. And I lumped them in the same category because they're just so, they're pointless.

• 45:15Guy Raz?

  Fragrances and dyes, okay, yep.

• 45:17Speaker 01

  One is drying alcohol.

• 45:18Guy Raz?

  Okay. So essential oils, fragrance, alcohol. Sodium laurel sulfate, what else?

• 45:23Speaker 01

  Silicons.

• 45:24Guy Raz?

  Okay.

• 45:25Speaker 01

  And then the last one is chemical sunscreen.

• 45:27Guy Raz?

  Yep.

• 45:27Speaker 01

  And, and also, just to clarify, it sounds so crazy, right? I mean.

• 45:31Guy Raz?

  Yeah.

• 45:32Speaker 01

  But.

• 45:32Guy Raz?

  It does, a little bit.

• 45:33Speaker 01

  It's like if your cable's broken.

• 45:34Guy Raz?

  I'm not calling you crazy, but yeah.

• 45:36Speaker 01

  Uh, I mean, you wouldn't be the first. I kind of think that about myself, too. If your, if your cable breaks and they, they give you a list, the first thing you do is go down the list of things you can try. This is like that. This is just sort of a troubleshooter for people with troubled skin. So if you have something going on with your skin, try removing these six ingredients.

• 45:57Guy Raz?

  Ah.

• 45:57Speaker 01

  And see what happens.

• 45:58Guy Raz?

  Okay, so it's like when you call tech support and they're like, okay, first turn off your computer and you're like, yes, I've done that.

• 46:04Speaker 01

  Right.

• 46:04Guy Raz?

  All right, now turn it on. Yeah, is it plugged in? Yes, it's plugged in. But here, here's the thing, right? I imagine that virtually every single cleanser had one or more of these ingredients in them.

• 46:17Speaker 01

  Every single product on the market I could find had one or more of these ingredients in them. Except for like a pure oil that you might buy at like a Whole Foods or something.

• 46:26Guy Raz?

  Yeah.

• 46:26Speaker 01

  People really rolled their eyes and thought I was just flat out stupid.

• 46:30Guy Raz?

  Yeah.

• 46:31Speaker 01

  And I was getting, at the same time, people try the philosophy. And when they took this break from these six ingredients, it changed everything for them. It can be really transformational and I believe that this was something that no one else had thought of. I remember walking around Rice University one day.

• 46:50Guy Raz?

  Yeah.

• 46:50Speaker 01

  And it hit me like a lightning bolt. It hit me for the first time, like it wasn't what was in the bar that was helping people's skin. It was what wasn't in the bar.

• 47:02Guy Raz?

  You know, part of me makes it, makes me think that like, maybe we should just use water on our skin.

• 47:07Speaker 01

  Yeah, well, that's, yes. The answer is that our skin has an acid mantle or a barrier that protects it. So if you're not stripping the barrier and you're not disrupting it.

• 47:17Guy Raz?

  Yeah.

• 47:17Speaker 01

  And you're not sensitizing and inflaming your skin, your skin will do what it's supposed to do.

• 47:22Guy Raz?

  Yeah.

• 47:22Speaker 01

  It's because you're not doing anything to it. Skin knows how, what to do if you let it. And there are obviously issues with people's skin that you can't just fix like that. Like, I'm not a doctor and I'm not saying, uh, we can fix eczema and rosacea. It's not that. It's more of this, there are a lot of issues with skin that we actually create by using certain ingredients. And so a lot of people walk around like, I just have acne prone skin.

• 47:47Guy Raz?

  Yeah.

• 47:47Speaker 01

  But maybe they don't. And maybe it's one of the ingredients they're using on a daily basis and they don't even realize it. And then once removed, their skin can reset and kind of do its thing.

• 47:57Guy Raz?

  Okay, so you are in Houston, trying to experiment with a bunch of different things. And you keep mentioning essential oils. And I'm like, God, I thought essential oils were good. Like, or is all of it a problem or suspicious?

• 48:11Speaker 01

  Well, they do have some good things about them, but the cons outweigh the pros.

• 48:16Guy Raz?

  Yeah.

• 48:16Speaker 01

  And the good things about essential oils, you can say those same good things about non-fragrant plant oils.

• 48:22Guy Raz?

  Right.

• 48:23Speaker 01

  Like marula oil or apricot oil.

• 48:25Guy Raz?

  Okay, so let's talk about one of those oils, marula oil.

• 48:28Speaker 01

  Yes, made from the seed of the pep of the marula fruit.

• 48:31Guy Raz?

  What is, is that an edible fruit?

• 48:33Speaker 01

  Yes, it is.

• 48:34Guy Raz?

  Okay.

• 48:35Speaker 01

  And there's a liqueur called Almarula, it's from South Africa.

• 48:38Guy Raz?

  Okay.

• 48:39Speaker 01

  And at the time, the kind of the it oil was argan oil.

• 48:42Guy Raz?

  Oh, yeah.

• 48:43Speaker 01

  And I remember thinking like, this could be a good moment to introduce a new oil out there. Not a lot of people had heard of marula. It was out there, but it wasn't like, very well known and very popular. I remember the people around me had never heard of it. Um, I felt, I love the way it felt. It absorbs really easily into my hand. One of the things that was important to me, for whatever reason, was absorbability and not sitting on top of the skin. So a lot of the products I'd used in the past sort of sat on top of my skin.

• 49:10Guy Raz?

  So, marula oil, you sort of land on this ingredient, because you're looking for something that could kind of be the anchor for at least one, maybe all the products in the line. And this to you felt like, it could be the one, marula oil.

• 49:27Speaker 01

  Right.

• 49:28Guy Raz?

  So, once you were ready to make like a test line of products.

• 49:35Guy Raz?

  Where did you go? I mean, at this point, you'd been selling Wonder Bar for a couple of years and you had some contacts in the media because you had promoted that bar. Did you have any contacts in like the, you know, in the cosmetics industry? Because a lot of these brands are made in the same places, right? Did you have contacts, you know, at some of these manufacturing facilities?

• 49:54Speaker 01

  I didn't. I had, the only contact I had that I reached out to and who actually was sort of her idea was this consultant from Get the Ranker.

• 50:03Guy Raz?

  Yeah.

• 50:04Speaker 01

  Who said, you know, with your, the way you market and the way you talk about with the passion that you talk about, you ought to consider doing your own thing.

• 50:10Guy Raz?

  Yeah.

• 50:11Speaker 01

  So we were kind of going to do it together. Ultimately, I called somebody who said, why don't you try to call this place called Benchmark Labs in Orange County. There's a chemist there who's great. So I called and I asked her to make my vitamin C, my sunscreen, and this glycolic acid, which is a nighttime exfoliating serum.

• 50:29Guy Raz?

  And you sent the list of ingredients that you wanted her to work with?

• 50:33Speaker 01

  Right.

• 50:34Guy Raz?

  Was this expensive to do? I mean, how did you pay for it?

• 50:38Speaker 01

  It was expensive. So I had to make sure because I was, I was only allowed to use Charles's proceeds from selling the bars.

• 50:46Guy Raz?

  Right. Do you remember how much it cost to get samples made? Like 10,000, 20,000?

• 50:51Speaker 01

  No, I think each product was like around 30.

• 50:53Guy Raz?

  Wow, that's really expensive.

• 50:56Speaker 01

  Yeah, it was expensive. It made it, it could have been less, it could have been 15. But so a lot of times, skincare brands will go ask for something to be made and they don't own it.

• 51:05Guy Raz?

  Right.

• 51:05Speaker 01

  They just can use it. We owned these formulations, which I don't know how I knew to do that, but I thought it was a good idea for us to own them.

• 51:12Guy Raz?

  And when you pay that amount, you're not getting like a bunch of product. You're just getting the formulation. Maybe they'll go back, then maybe they'll do five or six different iterations, right? Until you're happy?

• 51:21Speaker 01

  Yeah, you get a certain number of retries before you have to pay them again. And then you own the formulation. That money gets you that. Then you go find a manufacturer.

• 51:30Guy Raz?

  Yeah. All right. Let's talk about the name because. Obviously, marula oil is a key ingredient, was gonna be a key ingredient. That comes from a tree that with fruits, I think they're a little bit like loquats, maybe. Uh, they grow in Africa.

• 51:44Speaker 01

  Right.

• 51:45Guy Raz?

  And the name drunk elephant, where's that come from?

• 51:48Speaker 01

  So I'd been searching for a name and I'm pretty shy. I didn't really see myself calling it Tiffany Masterson. And at the time, I looked around at brands, it's like doctors and

• 52:00Guy Raz?

  Yeah.

• 52:00Speaker 01

  French names and I just felt like, what am I gonna call this? So, um, marula oil was what I wanted to use as the moisturizer. And so this oil felt great. I went home, I Googled it and a video came up of animals in South Africa eating marula fruit off the ground, fermented, and they were like stumbling around.

• 52:19Guy Raz?

  Huh.

• 52:19Speaker 01

  So the implication was they get, they eat the fermented fruit, they get tipsy. Probably not true. Probably impossible, but still it was

• 52:27Guy Raz?

  They're getting drunk off fermented marula fruit, basically.

• 52:30Speaker 01

  Exactly.

• 52:31Guy Raz?

  Drunk elephants.

• 52:32Speaker 01

  Yes, and so I remember thinking, well, this is kind of my personality.

• 52:36Guy Raz?

  Yeah.

• 52:37Speaker 01

  Should I call it drunk elephant?

• 52:38Guy Raz?

  When you went to friends and you're like drunk elephant, were most of them like, yeah, that's, that's cute? Or were they like, hmm, this is a little weird?

• 52:45Speaker 01

  My best friend said, no way. I, I, she took me out to get pizza and she was like, I gotta tell you, I hate it.

• 52:49Guy Raz?

  Yeah.

• 52:50Speaker 01

  I don't like it. Um, she changed her mind quickly, though. And my mom didn't like it. My grandmother said it was the most asinine thing she'd ever heard.

• 52:57Guy Raz?

  Yeah.

• 52:57Speaker 01

  A lot of people said, that sounds like a bar, a pub.

• 53:01Guy Raz?

  Yeah, I mean, were there any, I don't know, people who were like, look, the result is you're not gonna sell this product? Like, any, any professionals or people in the industry that you consulted with?

• 53:11Speaker 01

  Yes, I, I hired a, um, so in 2013, when I launched the line on my own website in Houston, actually August 15th, 2013.

• 53:20Guy Raz?

  Yeah.

• 53:20Speaker 01

  I hired this big fancy publicist in New York and I was super excited to work with them. And she actually asked me to put together a focus group. It was gonna cost me $30,000 to talk about the name.

• 53:31Guy Raz?

  Oh, shoot, they would convene a focus group, it would cost $30,000? And you would pay them to find out what people thought, okay?

• 53:39Speaker 01

  Right, right.

• 53:40Guy Raz?

  And?

• 53:41Speaker 01

  I knew what they would tell me. So I got a new publicist.

• 53:44Guy Raz?

  Oh, you decided not to spend the money? Cause you knew people were gonna say, I hate the name.

• 53:48Speaker 01

  I knew, I knew what they would say. Oh, and by the way, the consultant with Guthi Ranker, I told her.

• 53:52Guy Raz?

  Yeah.

• 53:53Speaker 01

  I've chosen the name now and she said, what is it? I said, drunk elephant. And she said, I'm out.

• 53:57Guy Raz?

  Wow. She's like, I'm not into the, I'm not gonna

• 54:00Speaker 01

  She's out. Never heard from her again.

• 54:02Guy Raz?

  Wow. I mean, it is a very unusual name. Now, you've been proved right in the end. Okay. The name worked and people and people noticed it. But I would have told you then, I'd have been like, listen, Tiffany, this is an awesome product. You're going, there's a lot of potential here.

• 54:21Speaker 01

  Yeah.

• 54:21Guy Raz?

  But let's just come up with a name that is gonna say, this is non-toxic, all natural, that, you know, conveys what it is. Drunk Elephant is a drunk elephant.

• 54:33Speaker 01

  Right.

• 54:33Guy Raz?

  It's nothing to do with what you're selling. I would have said that to you.

• 54:36Speaker 01

  Right, and that's what people said to me. But I didn't listen.

• 54:39Guy Raz?

  But I'm trying to figure out how you decided to stick with it, despite all these people saying, this is not a good name. Why? I mean, why didn't you say, you know?

• 54:49Speaker 01

  Because it was my, it was in my gut. Like, it was, that was my personality. That was, it was my taste, my style. And I knew that everything that touched this line, this brand was gonna be me.

• 54:59Guy Raz?

  Yeah.

• 54:59Speaker 01

  And so it had to be me fully. It's, I couldn't listen to other people, because then where do you go with that? Where do you go after someone tells you, change the name?

• 55:07Guy Raz?

  Yeah.

• 55:08Speaker 01

  Then you're like, wait a minute. Now I'm completely lost, because I was, then I wouldn't trust any choices I made.

• 55:12Guy Raz?

  Yeah.

• 55:13Speaker 01

  I remember kind of thinking, if I fail at this, I should fail all the way just being me. Like, I should fail spectacularly right away.

• 55:21Guy Raz?

  Yeah.

• 55:22Speaker 01

  If I follow my gut on all these little things. So, um, so I just went with it.

• 55:26Guy Raz?

  Fair enough. But even if, if someone's like, just make a slight alteration, like, call it Elephant, or?

• 55:31Speaker 01

  No, even you saying that right now, I can remember.

• 55:34Guy Raz?

  I'm triggering you, I'm sorry.

• 55:35Speaker 01

  No, no, no. I want to call it Drunk Elephant, I'm going to.

• 55:39Guy Raz?

  Are you just stubborn about things, certain things?

• 55:41Speaker 01

  No, I mean, I am stubborn. I know what I like. I know, I make decisions very quickly. So, no, I knew, I did. Who's gonna forget it?

• 55:49Guy Raz?

  Yeah.

• 55:49Speaker 01

  Who's gonna forget that name?

• 55:51Guy Raz?

  Nobody. Nobody's gonna forget that name.

• 55:53Speaker 01

  Right.

• 55:53Guy Raz?

  Yeah. And by the way, the logo, which is just a sort of a pencil drawing of an elephant, like a silhouette.

• 55:59Speaker 01

  Right.

• 55:59Guy Raz?

  You drew that, right? That was the logo you drew.

• 56:01Speaker 01

  Yeah, that was with a Mark's a lot, yeah.

• 56:03Guy Raz?

  Yeah, with a Mark's a lot.

• 56:04Speaker 01

  I don't know how, I'm not an artist. That was, I sat down with a stack of paper with my daughter. I remember Chloe was sitting with me and I said, okay, you're gonna sit here with me until I get this logo out. And it came out the first thing, first thing I drew, and it came out, and I was like, that's her, that's it. That's our logo.

• 56:20Guy Raz?

  Okay, so you picked this name, and now you've got to make. The product.

• 56:26Speaker 01

  Mm hmm.

• 56:27Guy Raz?

  I have to imagine you've got to put in a few hundred grand for a company to commit to making the products.

• 56:34Speaker 01

  Right, so Charles, I mean, he ended up having to start putting his own money in at some point. And we did not take on another investor until 2014, like-

• 56:45Guy Raz?

  Before you brought in any-

• 56:46Speaker 01

  March, April, 2014, before we brought in a second investor. And at that time, it was a second and a third.

• 56:52Guy Raz?

  Yeah.

• 56:52Speaker 01

  Not large investments, but something to kind of help.

• 56:56Guy Raz?

  Yeah. The idea was to launch with how many different, how many different SKUs?

• 57:01Speaker 01

  Six and 5,000 of each.

• 57:03Guy Raz?

  So six, six SKUs, five thousand of each, and it was going to be what? A vitamin C serum, sunscreen.

• 57:11Speaker 01

  Mm hmm.

• 57:11Guy Raz?

  What else?

• 57:12Speaker 01

  An exfoliating serum for night.

• 57:13Guy Raz?

  Okay, yep.

• 57:14Speaker 01

  Two bars, one plain, one exfoliating.

• 57:17Guy Raz?

  Okay.

• 57:17Speaker 01

  And then the marula oil.

• 57:18Guy Raz?

  Okay. Do you remember how much money that cost to get all that together?

• 57:21Speaker 01

  It must have cost 150?

• 57:24Guy Raz?

  Thousand, right, okay.

• 57:24Speaker 01

  Something like that, thousand?

• 57:26Guy Raz?

  Yeah.

• 57:26Speaker 01

  I mean, that's, that's actually a guess. I just know we were over 400.

• 57:30Guy Raz?

  In?

• 57:30Speaker 01

  In 2000, late 2013, 2014.

• 57:33Guy Raz?

  All right, you set up a website. You get the domain name. I'm assuming drunkelephant.com was available.

• 57:38Speaker 01

  It was in the summer of 2012, I got that done. Yeah.

• 57:41Guy Raz?

  Not too many people registering drunk elephant. But you still have to spend money on the website and the packaging and your brother-in-law is pouring now significant cash into this thing to make, to be able to make the product line. How was that relationship going? I mean, he's got the money on the line. You're in charge of this thing. Neither of you have any consumer product experience. You'd never worked for a corporate consumer brand, like you were at P and G. Again, not necessary, but still stressful, I imagine, for him because he had a lot of money on the line. How was your relationship?

• 58:20Speaker 01

  It was not, not good. So he had brought in his little brother to help with accounting.

• 58:25Guy Raz?

  Your brother-in-law's brother to be the accounting, okay, yep.

• 58:28Speaker 01

  Right. So what happened was- His little brother started getting really nervous for him and basically held the belief that you're going to lose all your money. Again, Charles is in over $400,000 at this point.

• 58:42Guy Raz?

  Yeah.

• 58:43Speaker 01

  And not happy about it. So he's kind of saying things like, um, you know, he was diluting me.

• 58:49Guy Raz?

  He was diluting your, your ownership.

• 58:51Speaker 01

  He felt like he had to.

• 58:52Guy Raz?

  Yeah.

• 58:52Speaker 01

  You know, I mean, he felt like he had no control and he was scared. And I don't blame them. There's no reason to think this would work. We had it online at that point. It was doing fine, but not great. It got a lot of coverage.

• 59:03Guy Raz?

  Yeah.

• 59:03Speaker 01

  And I think my sister probably was behind the scenes prodding him along too, because she really wanted this to work for me.

• 59:10Guy Raz?

  Yeah.

• 59:11Speaker 01

  But David, the little brother, he had his ear. So he, like, I could tell when Charles had been on the phone with David, because he would call and he would sound stressed and worried. And he was turning sour on the whole thing. And he, it was very upsetting because I, it was the relationship on the line with my brother-in-law more than anything else for me.

• 59:30Guy Raz?

  Yeah. How stressed were you?

• 59:34Speaker 01

  I was so stressed. I had, you know, we were struggling financially. I had a seventh grader who was, you know, Chloe at the time was, um, I don't know, she was going through one of her, you know, just a typical 14-year-old phase. So it was a hard age.

• 59:49Guy Raz?

  Yeah.

• 59:50Speaker 01

  And I worked, I did everything from home. And so I, I would sit at the table and, um, just trying to juggle all of this different stuff that was going on. And it was a scary time.

• 59:59Guy Raz?

  This is a super personal question and I almost hesitate to ask it, but I think it's relevant in the context of this because there's a lot of stress that goes into starting a business. How about with your partner, your husband? I mean, did it create also stress and tension?

• 1:00:16Speaker 01

  It, it was both. I think that he believed in me and he was, you know, of course I could not have done it without him.

• 1:00:22Guy Raz?

  Yeah.

• 1:00:22Speaker 01

  No way. Four kids, he had to give up a lot himself for me to go do this. And also, if I put myself in his shoes and I'm being honest, I don't know that I would have been like, yeah, let's go for it.

• 1:00:35Guy Raz?

  Yeah.

• 1:00:36Speaker 01

  I had to not be there with the kids a lot, you know?

• 1:00:39Guy Raz?

  Yeah.

• 1:00:39Speaker 01

  And also, at some point, I had to ask him to stop working.

• 1:00:42Guy Raz?

  Yeah.

• 1:00:43Speaker 01

  And say like, I can't focus when I'm traveling because I want the kids to be taken care of the way that I would take care of them. So would you be willing to stay at home with them until we can get through this period and I can get this off the ground?

• 1:00:57Guy Raz?

  Yeah. Okay, when you launched in 2013, when you like went live with a website, I know that your goal was to get this into Sephora. And your brother-in-law felt, I think understandably, that that was an unrealistic goal. Like, I think he was like, let's just try to get it into any shops we can. But you resisted that. Why?

• 1:01:19Speaker 01

  I did, because again, it was part of my vision. And I really felt strongly that you don't want to spread yourself too thin. You want to get into one place and really get your feet on the ground. Now, that's, he had David in his ear.

• 1:01:32Guy Raz?

  His brother, your accountant.

• 1:01:33Speaker 01

  Right, saying, I've dealt with this kind of thing before, and this is what you need to do. You're going to lose your money.

• 1:01:38Guy Raz?

  Yeah.

• 1:01:39Speaker 01

  If you're waiting for the golden egg to hatch, it's not going to hatch.

• 1:01:42Guy Raz?

  Right.

• 1:01:43Speaker 01

  I'm going to sit back and watch you lose your money again, and I don't want to do that.

• 1:01:46Guy Raz?

  But I'm wondering why you didn't think it would be a good strategy to try to get into small boutiques or smaller stores at the very least. Like, your whole plan was, we've got to get into Sephora, and then in the meantime, we'll just sell it through our website. Just because they're not here to defend themselves, I'm going to have to defend them. Charles and David, like, I do understand their perspective. Like, I do understand David saying, we've got to sell this stuff. Let's go, let's move product. Like, I don't think that was unreasonable. Your strategy proved to be right, but it proved to be right in part because you have good instincts. And also, you know, there's some luck there, too. I mean...

• 1:02:25Speaker 01

  I agree. I agree with you. I see why they did that and why they were scared. And I was just in my head at that point, really, really focused. And I just couldn't see another way. I think I read an article of a brand that got into Sephora, and this whole article was about the day she knew she made it. And I got that in my head, and I also shopped at Sephora myself. And so that was my dream. And I felt like putting in a lot of, you know, strip centers around the country would be incredibly time-consuming and difficult to manage. So I got probably defensive, and I got my feelings hurt, all of that. And then it made me dig my heels in even harder.

• 1:03:02Guy Raz?

  I mean, you could have been wrong at every turn about the name, about the Sephora thing. And this could have collapsed, and it could have really potentially damaged your relationship with your brother-in-law and maybe even your sister.

• 1:03:15Speaker 01

  It could have.

• 1:03:15Guy Raz?

  Like, that was risky.

• 1:03:16Speaker 01

  Right, it was. But that's all I had. I only had one shot. And I was... Tired of worrying about the future and tired of worrying about if, you know, I just didn't want to worry anymore.

• 1:03:29Guy Raz?

  How did you deal with the stress of the possibility of being wrong and all of it collapsing?

• 1:03:35Speaker 01

  I didn't consider it.

• 1:03:36Guy Raz?

  See, but you were.

• 1:03:37Speaker 01

  I didn't let that get in my head.

• 1:03:38Guy Raz?

  You had to have been stressed out.

• 1:03:40Speaker 01

  I was stressed about Charles's change of heart.

• 1:03:43Guy Raz?

  Yeah.

• 1:03:44Speaker 01

  I asked him at some point, do you want out? He said, yes.

• 1:03:48Guy Raz?

  When we come back in just a moment, Tiffany gives Charles an ultimatum and starts working to get Drunk Elephant into her dream national retailer. Stay with us. I'm Guy Raz and you're listening to How I Built This.

• 1:04:09Speaker 04

  Football is back and PrizePix is bringing out their best offer yet. New users who sign up will get $150 in lineups if you win your first $5 lineup. That's right. If you win your first $5 lineup, you'll get $150 in lineups. On PrizePix, you simply pick two to six players, pick more or less on their stat projections, and submit your lineup. Then sweat it out as you watch your picks play out live. It's the best way to get more locked in on game day. Make all the picks you want this football season, all in the same app. And now PrizePix is available nationwide. So what are you waiting for? Lock in for kickoff because everyone and everything is on PrizePix. What you want?

• 1:04:54Speaker 05

  Download the PrizePix app today and use code WONDERY. That's code WONDERY to get $150 instantly in lineups if you win your first $5 lineup. PrizePix, run your game. Must be present in certain states. Visit prizepix.com for restrictions and details.

• 1:05:15Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2013 and Tiffany's relationship with Charles, her business partner and brother-in-law, is on the rocks. They've just launched Drunk Elephant online, but Charles wants to leave and Tiffany doesn't have the money to buy him out.

• 1:05:34Speaker 01

  I couldn't buy him out, no. And I. I didn't know a lot of people who would potentially invest, but the two or three people I did know, I called and told my story to, not asking them to invest, asking for their advice, but hoping they'd say, oh, maybe I can invest. None of them did. But I called an investor friend and asked him to help guide me. Like, what do you do? You know, I'm being diluted and I've got no money in it. And, you know, how do I protect myself? And how do I? What should this be looking like? And he was like, well, you've got a $7 million accountant on your hands. Like, literally, like, David had 7% of the company at that point. And I did call Charles and say, listen, David's not working out. He doesn't believe in the vision.

• 1:06:16Speaker 01

  He's actually causing tension so much between you and me that it's hard to, you know, this is not going well.

• 1:06:23Guy Raz?

  Yeah.

• 1:06:23Speaker 01

  And eventually I came back to Charles. I said, look, let's kind of start over. Let's kind of say, like, look, we're equal partners and we'll bring in investors or else I'll leave and go. It was just high emotions, you know? He's a great guy and we still are very close. It wasn't like it broke up the relationship, but it was just this stressful time, right?

• 1:06:45Guy Raz?

  Yeah.

• 1:06:46Speaker 01

  So I called my brother and I said, do you know anybody that would want to invest? And I said, Charles is not being very fair.

• 1:06:51Guy Raz?

  Patrick's your brother?

• 1:06:52Speaker 01

  Yes.

• 1:06:53Guy Raz?

  Yep.

• 1:06:53Speaker 01

  But my brother was so close to Charles that he kind of ended up being the mediator between the two of us.

• 1:06:57Guy Raz?

  Right.

• 1:06:58Speaker 01

  You know, he did introduce me to the two people who came in.

• 1:07:02Guy Raz?

  Oh, the two investors who eventually came in.

• 1:07:04Speaker 01

  Which was great. And that really did help. And Charles was happy with that.

• 1:07:07Guy Raz?

  Yeah.

• 1:07:08Speaker 01

  And it took some strain off Charles.

• 1:07:10Guy Raz?

  This makes, yeah, this makes me just, it just reiterates the old saying, never do business with friends or family.

• 1:07:15Speaker 01

  But I'm glad I did.

• 1:07:17Guy Raz?

  All right, so you have, you launched at a very fortuitous time, unbeknownst to you, because this is the golden age of direct to consumer, right? This is like, really when you could put up a website, 2013, and you could actually buy ads and social media was really starting to blow up and you could attract attention to your website. So how did you, when you had drunkelephant.com, before you were in a single store, how did you get attention for it?

• 1:07:47Speaker 01

  So I decided not to advertise early on.

• 1:07:49Guy Raz?

  Yep.

• 1:07:50Speaker 01

  Never advertised till last year, actually. So I reached out to every beauty director of every major publication and sent them this gorgeous acrylic box with confetti and the whole line. The line was so photographable. It was so bright, the colors, which it got a lot of pushback on, by the way, too.

• 1:08:07Guy Raz?

  Yeah, you had like purples and yellows and right like.

• 1:08:10Speaker 01

  Yeah, every product had its own color.

• 1:08:12Guy Raz?

  It was like sort of a confetti colored product line.

• 1:08:15Speaker 01

  Yes.

• 1:08:16Guy Raz?

  Which, again.

• 1:08:16Speaker 01

  It was.

• 1:08:17Guy Raz?

  Counterintuitive because it doesn't look like, I'm thinking of like, you know, Clinique and like, you know, these very simple like.

• 1:08:25Speaker 01

  There was no color in skincare at the time.

• 1:08:27Guy Raz?

  No.

• 1:08:27Speaker 01

  There was no color and there was no fun.

• 1:08:29Guy Raz?

  They kind of looked like tops of markers, like highlighters.

• 1:08:32Speaker 01

  Right, and that was just my personal taste. That was just me. I wanted to decorate my house in all white with pops of color and I couldn't afford to do that. So I think I took that out on my line.

• 1:08:41Guy Raz?

  Yeah.

• 1:08:42Speaker 01

  It was the packaging people who pushed back and it was the, you know, it was just all along the way, everything I did was like, skincare brands don't do that.

• 1:08:49Guy Raz?

  Yeah.

• 1:08:49Speaker 01

  That's not gonna work, you know, kind of thing. And so I was just like, well, this is my, I wasn't trying to appeal to anybody. I was just trying to do what I thought looked great on the counter and.

• 1:08:58Guy Raz?

  Yeah.

• 1:08:58Speaker 01

  Thought was sophisticated.

• 1:09:00Guy Raz?

  So when you sent these out to beauty editors, just cold sent them out, did it work? Did any of them follow up?

• 1:09:07Speaker 01

  It worked. I sent this box out to 30 beauty directors and I, it's hard to get people's emails, right? So you, I had this system where I would create, like, put their name, dot their last name, at or their first initial, last name, or their first name, last initial. And I tried every way that an email could be until I got through to these editors. And I got through to all of them. The packaging wasn't even final yet, by the way. In 2013, when I launched on my line, and they published it. I mean, they, it didn't get into magazines, but it got into, it got online everywhere.

• 1:09:41Guy Raz?

  On websites.

• 1:09:42Speaker 01

  Yes, got attention.

• 1:09:43Guy Raz?

  But I read that a lot of people around you. Especially even in Houston, in your hometown, didn't take it seriously. Like, you actually had a hard time getting attention from local media in Houston, or?

• 1:09:56Speaker 01

  It was harder to get local attention than it was national. I got the attention of the New York editors really quickly. Houston, not so much.

• 1:10:04Guy Raz?

  Because why? Because you were sort of brushed aside as a housewife who, forgive the derogatory term, but I'm just wondering, is that how they would sort of look at it?

• 1:10:11Speaker 01

  Yes, I think so. It's a long shot to think that somebody in their 40s with four kids that just launches a skincare brand is going to make it. It's super hard. And I think like, even like, two years in, people would say, are you still repping that little brand that you were repping? Because I didn't talk about it much in Houston. I didn't try to sell it to my friends. I really just focused on the big picture, and that came later on.

• 1:10:35Guy Raz?

  So interesting how oftentimes you're not taken seriously in your immediate environment by the people who know you, but actually, you have to go be outside. It's happened to me in my life again and again. I think a lot of people can relate to that idea.

• 1:10:48Speaker 01

  Oh, it's just, that's exactly what happened. And so I didn't talk a lot about it. And I kept all the good news sort of under wraps. And I didn't, I just thought to myself, you know, one day they'll realize it's for real, and I don't need to try to tell them about it. They'll have to read about it if it works out.

• 1:11:03Guy Raz?

  Yeah. How did the, I mean, you launched in August of 2013, DrunkElephant.com. I mean, I can't imagine, all of a sudden, the cash register was just, was opening and closing nonstop. I mean, was it?

• 1:11:15Speaker 01

  No, because I remember I had a ding on my phone that sounded like a cash register.

• 1:11:20Guy Raz?

  Right.

• 1:11:20Speaker 01

  Yeah, it would go off on my phone every time we got a sale. And it was so exciting. I remember calling my mom, saying, we sold, you know, $1,400 today.

• 1:11:29Guy Raz?

  Yeah. But slow-going, I have to imagine, at the beginning.

• 1:11:32Speaker 01

  Yeah.

• 1:11:32Guy Raz?

  So, in that time, how were sales generally? I mean, do you remember what you guys did in year one?

• 1:11:38Speaker 01

  I think less than 100,000.

• 1:11:40Guy Raz?

  Yeah.

• 1:11:40Speaker 01

  And I remember, so- August 2013, we launch online.

• 1:11:45Guy Raz?

  Yeah.

• 1:11:45Speaker 01

  And then 2014, July, I've got the final packaging. And I've got the final formulations and I've tweaked things a little bit based on the feedback I've gotten during that first year.

• 1:11:56Guy Raz?

  Yep.

• 1:11:57Speaker 01

  And so I remember getting into this place called, uh, it was Cosmoprof, which is a huge convention in Las Vegas and

• 1:12:04Guy Raz?

  Right.

• 1:12:05Speaker 01

  You have a chance to sit with the retailers and pitch your brand. And it was the first time I was going to show the big retailers my brand and I, you get your list like the week before of the retailers that have chosen to meet you.

• 1:12:15Guy Raz?

  Oh, I see. They have to choose to meet you. Okay.

• 1:12:17Speaker 01

  They have to choose to meet you. And Sephora wasn't on it.

• 1:12:21Guy Raz?

  Hmm.

• 1:12:21Speaker 01

  So I'm thinking I'm not going to meet them at this conference. So I go.

• 1:12:25Guy Raz?

  By yourself or with somebody else or a couple of?

• 1:12:27Speaker 01

  With my sister.

• 1:12:27Guy Raz?

  Okay.

• 1:12:28Speaker 01

  With my sister.

• 1:12:28Guy Raz?

  Nice.

• 1:12:29Speaker 01

  And the day before the last day, this group of women came by and they had their badges turned around. I couldn't see who they were from. And they were intrigued and I had actually, I left this part of the story out, but I had actually six months prior to this, done the same thing with the head of Sephora merchandising where I jumbled up her name into every combination could possibly.

• 1:12:50Guy Raz?

  You just guessed an email.

• 1:12:52Speaker 01

  I did and I reached her.

• 1:12:53Guy Raz?

  Yep. So you found the name of this person, you emailed her at Sephora and did she respond?

• 1:12:58Speaker 01

  She did.

• 1:12:59Guy Raz?

  And were they interested?

• 1:13:01Speaker 01

  She said, I'm going to forward you to a girl, a merchandiser and, um, she responded, send me the products. And I said, well, I don't have final packaging yet. This was six months prior to Cosmoprof. And she said, well, just keep in touch.

• 1:13:14Guy Raz?

  Yep.

• 1:13:15Speaker 01

  So she starts seeing it in magazines or online app, not in magazines, but online. She starts seeing it and she, she reaches back out to me. I remember that I was downstairs cooking dinner one day and she, I go, I'm like, God, this is Cindy from Sephora.

• 1:13:28Guy Raz?

  Yeah.

• 1:13:28Speaker 01

  I ran upstairs, got on my computer and responded, I still don't have packaging, but I'm going to in July. She said, okay, well, keep us posted and send when you have it. So I go to, I'm at Cosmoprof. She comes by with five other women. I don't know who it is. I'm talking, talking, talking.

• 1:13:44Guy Raz?

  And you didn't know it was her?

• 1:13:46Speaker 01

  Didn't know it was her. My sister, on the other hand, my sister's like, that was Sephora. I saw one of their badges.

• 1:13:51Guy Raz?

  Oh, because they were hiding their badges.

• 1:13:53Speaker 01

  They're hiding their badges. And then she comes by again the next day. And she just sticks her hand out and says, I'm Cindy from Sephora. Love the line. Please keep in touch. We're unfortunately not going to pick anybody up for 2015. This was July of 2014. She says, we're not going to pick anybody up for 2015, so I'm really sorry.

• 1:14:11Guy Raz?

  They're not going to pick up anything new for the year. Okay. So you discover Sephora is not going to put you in the store next year.

• 1:14:17Speaker 01

  But keep in touch.

• 1:14:18Guy Raz?

  Yeah.

• 1:14:18Speaker 01

  And my heart sort of sunk, but I still didn't believe her. It was really weird. I just didn't believe her. I just gave her her bag and I said, great to meet you. Hopefully I'll talk to you soon. So I go home and a week later, I get an email from Cindy. And it actually chokes me up. I'm surprised right now.

• 1:14:36Guy Raz?

  Cindy from Sephora.

• 1:14:36Speaker 01

  Yes, and I've told this story so many times, it makes me cry.

• 1:14:41Speaker 01

  She said, oh, God, I can't say it. It's so strange. I think I'm really back in that time right now.

• 1:14:47Guy Raz?

  Yeah.

• 1:14:47Speaker 01

  And she said, I want to talk about being partners. I want to talk about partnering with you and launching your brand.

• 1:14:54Guy Raz?

  Wow. Next year? After they already told you they're not going to put anything in their store?

• 1:14:59Speaker 01

  January of 2015.

• 1:15:01Guy Raz?

  So in six months?

• 1:15:02Speaker 01

  Six months away.

• 1:15:04Guy Raz?

  How'd you, what was your response to get that email?

• 1:15:07Speaker 01

  She said, can we talk next week? And I was actually going to Jackson Hole with a friend and bringing my kids with me. And I remember being on the phone that trip a lot because I was so nervous about this call.

• 1:15:16Guy Raz?

  Yeah.

• 1:15:16Speaker 01

  And so it was there in Jackson Hole that she told me that, yes, we want to pick you up, all six products. She goes, if you don't sell a million in the first year, we won't kick you out. And, you know, I emailed my whole family. I told everybody that I'd gotten in. And at this point, my brother, who had just, he was excited for me. And so I called him and I said, I've gotten Sephora. And I don't know what I'm doing. I'm really, really nervous.

• 1:15:40Guy Raz?

  Yeah.

• 1:15:41Speaker 01

  Charles was a silent partner. He's a silent investor at this point.

• 1:15:44Guy Raz?

  But you needed operational help.

• 1:15:45Speaker 01

  I did. And I really respected my brother. And my brother had just gone through this bad divorce. And so I thought it would be really fun for him. To get involved in something and he was so excited.

• 1:15:56Guy Raz?

  You asked him to join the company.

• 1:15:57Speaker 01

  I did. I asked him to bring some money and join the company and help me manage what was about to happen.

• 1:16:03Guy Raz?

  And he had business, he had experience running a retail store.

• 1:16:06Speaker 01

  He did. He had done that with his wife, but he also had lots of experience with investments and just, he just, to me, he was my big brother who I trusted and he could probably help operate things and keep this thing organized. Cause I certainly couldn't and you don't want to get a checkbook near me. I mean, I can screw up a checkbook in a second. So I didn't, I knew what I didn't know.

• 1:16:25Guy Raz?

  Yeah.

• 1:16:25Speaker 01

  And so Charles was very happy for Patrick to come in and help run things. And so he came in, in late July, early August of 2014 and helped me like with my first conference call with Sephora in September. So we had lots to do, lots to get organized and to get kind of ramped up for this big launch.

• 1:16:46Guy Raz?

  How did you guys finance that? Cause now you're going to be in Sephora in six months.

• 1:16:51Speaker 01

  Right.

• 1:16:51Guy Raz?

  Did you have the capital to make enough product to fulfill that first order?

• 1:16:56Speaker 01

  We did. Patrick brought money in at that point and we had money from those two other investors. And so it was just, it was just kind of, everything sort of felt like magical timing, really.

• 1:17:05Guy Raz?

  When you finally, you launch in Sephora in January 2015, this is the, really the first major brick and mortar that you're in. Cause up until that point, you're direct to consumer. And do you have any recollection at all of what kind of sales you were doing before you hit Sephora? Like, had you hit half a million a year?

• 1:17:26Speaker 01

  No.

• 1:17:26Guy Raz?

  No.

• 1:17:27Speaker 01

  No, no, because that, we're only a year in. I mean, this is still 2014.

• 1:17:31Guy Raz?

  Yeah.

• 1:17:31Speaker 01

  So what I did have at that time was not as much sales numbers. We had two things. One, we had repeat customers.

• 1:17:38Guy Raz?

  Right.

• 1:17:39Speaker 01

  And I also had feedback from, I had, I did a whole focus group myself and I had like 50 people in that focus group. And I had incredible feedback on the philosophy and what it had done for people's skin. And so I just kept waiting for someone to pat me, tap me on the shoulder and say, you don't know what you're doing. You're wrong. Go back to being. Stay at home mom. And every time I had an opportunity to learn more about if my philosophy worked and if this was like, you know, if there's proof of concept, I would get like major proof of concept. I would, it would be like a confirmation would come and that would, yeah, you're on the right track.

• 1:18:15Guy Raz?

  And the philosophy was there are these six suspicious ingredients and we have eliminated them from our product line.

• 1:18:21Speaker 01

  Yes.

• 1:18:22Guy Raz?

  And there was nothing else on the market at all, even in like Whole Foods or organic brands that, that eliminated these ingredients?

• 1:18:31Speaker 01

  No, in fact, they doubled down on the, I mean, whole natural brands doubled down on essential oils.

• 1:18:36Guy Raz?

  Yeah. And presumably the margins on cosmetics are pretty good because it's not that expensive to make, even with high quality products. But you can sell it at a premium.

• 1:18:45Speaker 01

  Right. I mean, my, I think Charles would say that if you could make it expensive, like a high cost of goods, it would be me. I could do it myself because he's like, why is everything so expensive? I just was choosing the top of every, I would, I wanted everything to be the highest quality I could get.

• 1:19:00Guy Raz?

  Yeah.

• 1:19:00Speaker 01

  The very best formulations. I was choosing ingredients that were expensive. So cost of goods for us was probably more, a little more expensive.

• 1:19:07Guy Raz?

  How did you guys choose to, to price it? How did you land on, on the pricing strategy?

• 1:19:12Speaker 01

  I looked at dermatologist brands and how expensive they were. And then I looked at drugstore brands and I thought, you know, what would I want to pay for this as a

• 1:19:20Guy Raz?

  Yeah.

• 1:19:20Speaker 01

  40, 43 year old woman, what would I be willing to pay for this?

• 1:19:24Guy Raz?

  But if you priced it too low, you, you might be sending the signal that it was like a cheap product.

• 1:19:29Speaker 01

  Not serious. Right. That's right.

• 1:19:31Guy Raz?

  So you kind of had to price it, but at the same time, you yourself, you know, your financial situation was a little precarious. So would you have been willing to spend $80 on cleansers and stuff like that at the time?

• 1:19:42Speaker 01

  Don't know if I could have, but I would have probably done it anyway. And you know, Sephora never said anything about it. It's not like they said, these, these are priced very strangely. They, they, they seem to be in line with, with the competitors at the time.

• 1:19:53Guy Raz?

  Yeah. So, all right, you come in to Sephora, January of 2015. Still, you're not a national product. You don't have a national marketing engine behind you. So, you know, you walk into a Sephora, there are 1,000 products available for sale. How would people even know what your product was? Why would they buy Drunk Elephant at that point?

• 1:20:16Speaker 01

  I don't know. Well, but first of all, I was only online in 2015. I wasn't to go in stores until April, and that was only 21 stores. So I had to prove myself online pretty quickly.

• 1:20:27Guy Raz?

  Yeah.

• 1:20:27Speaker 01

  And thankfully, a publicist approached me who had seen the website in 2013. She was like a one-woman show, and she had a little boutique agency. And she really believed in the way the brand looked and the name. She loved everything about it. And so she did a lot to help me get like some of these exclusives with InStyle magazine and Lore magazine and some of these big publications that, you know, had a wide reach. And so like it was a combination. I mean, we were on social media and it's Instagrammable. The product line, everybody was taking pictures of it. So it was just word of mouth and editorial. That's how we built it.

• 1:21:07Guy Raz?

  This is 2015, so Instagram has really started to take off.

• 1:21:10Speaker 01

  It is.

• 1:21:11Guy Raz?

  How did you start to use Instagram?

• 1:21:13Speaker 01

  I just started taking pictures and posting with cute captions. I mean, it was just, again, it was, I didn't have a manager yet. That didn't come till later.

• 1:21:20Guy Raz?

  Yeah.

• 1:21:20Speaker 01

  I was doing it on my own and it started just gaining followers. And I do think, I mean, the CEO of Sephora came to Houston a year in and just said, "What are you doing? We don't know what you're doing. The traffic coming from your Instagram into Sephora is like, we haven't really seen this before." I can't explain it. I don't, I think it was word of mouth, combined with the products worked. These formulations were surprising. They were super sophisticated. I wanted all of them to be as good and effective, as clinically effective as anything on a dermatology shelf, because I wanted that for myself.

• 1:21:57Guy Raz?

  How did it do at Sephora when it launched?

• 1:22:00Speaker 01

  It sold out of a couple of products right away. So the glycolic acid sold out really quickly. So we knew a month in that it was it was being very well received. And so that happened quickly. And then the summer, so I launched in January. I go into some stores in March, April, 21 doors. I get a phone call. Gosh, it went so fast. I get a phone call probably in April, May.

• 1:22:24Guy Raz?

  Of 2015.

• 1:22:25Speaker 01

  2015. And I was driving down the street, going to pick up my kids at school. And it was Cindy and she said, Tiffany, there's a thing called the favorites wall at Sephora. And we want you on it. And it's every door.

• 1:22:38Guy Raz?

  Wow.

• 1:22:39Speaker 01

  By September of 2015.

• 1:22:41Guy Raz?

  Every Sephora?

• 1:22:42Speaker 01

  Every single Sephora. By September of 2015. I only had a few months.

• 1:22:47Guy Raz?

  It's so remarkable to me that Sephora and maybe Ulta too, Ulta, that they can really. I mean, I just think about Whole Foods, right? If you are only in Whole Foods as a food product, like if you're just a brand, you're selling ketchup. Like, you know, you could probably do seven to 12 million a year in revenue, maybe 15 million just through Whole Foods. But really to go big, you have to be in Walmart and Target and Kroger and Walgreens. You have to be everywhere if you're going to like sell potato chips. It seems to me that Sephora is different, that you can actually build a huge brand just in Sephora.

• 1:23:25Speaker 01

  Right, Sephora is known for building baby brands. They take indie brands and they blow them up if they if they like you. Like and also like if it doesn't work, then it's kind of hard to come back from that.

• 1:23:36Guy Raz?

  Yeah.

• 1:23:36Speaker 01

  What I did when they told me that we got in every store. I remember somebody telling me before that to go in every Sephora door will cost you $500,000. So when I got the call, we're going in for free because you don't pay for the favorites wall.

• 1:23:50Guy Raz?

  Yep.

• 1:23:50Speaker 01

  Which was unbelievable. That was a huge break, right? I called Patrick and Charles and I said, I think that we should put the money we just saved into sampling. And I think we should give every single employee at Sephora the Littles kit, which was the whole line, but little version.

• 1:24:08Guy Raz?

  That they could use on themselves.

• 1:24:09Speaker 01

  To take a drunk break.

• 1:24:10Guy Raz?

  So smart. That's you call them drunk breaks.

• 1:24:13Speaker 01

  Yeah, I call them drunk breaks. I called them clean breaks at the time, but now I call them drunk breaks. I called my kids the Littles. So I got little versions of the products. And I said, I want to give the Littles to every single person that works at Sephora so they can experience the philosophy and sell it, you know, knowing what they're talking about and really be personally invested in it. So we sampled the heck out of it.

• 1:24:33Guy Raz?

  Yeah, that's smart. So you, you basically took the money, invested in samples, gave it to employees of Sephora.

• 1:24:39Speaker 01

  Yeah. And also everyone who asked on social media, every person who DM'd me on social media, I sent product to.

• 1:24:44Guy Raz?

  Wow.

• 1:24:45Speaker 01

  And so instead of advertising, all of the dollars we were saving, I kept reminding everybody, like, we're saving a lot of money on advertising. So let's use that to give people some word of mouth, you know, and that's how you build word. It was painful a little bit because we were giving away a lot of products, but

• 1:24:59Guy Raz?

  Yeah.

• 1:25:00Speaker 01

  that's what it takes. So that wave of like awareness that the brand actually worked and the formulations were super sophisticated, that came later. And so that kind of helped in the second year sort of, because I started getting awards. And so once I started getting awards and you start getting credibility.

• 1:25:17Guy Raz?

  Yeah.

• 1:25:18Speaker 01

  I didn't tell this story, but it's a good one. Nathan is my head of product development, uh, SVP of product development at Drunk Elephant. He is the one that wrote the review for the Wonderbar.

• 1:25:28Guy Raz?

  Wow. He's the guy who wrote it on Beautypedia.

• 1:25:31Speaker 01

  He's the writer on that review. Yeah. And after I launched Drunk Elephant, I got a, a Google alert that said, Drunk Elephant was mentioned on Beautypedia and I, I almost died. I was like, I cannot take this again. Like if this is the blow that they delivered to Wonderbar, I don't know what I'm going to do. And he had reviewed four of the products, I think, maybe five, and they all got five stars.

• 1:25:54Guy Raz?

  Wow.

• 1:25:54Speaker 01

  It was like the biggest, best confirmation. And I had just won my first Allure Beauty Award in 2015, which was also this big confirmation for me. So. After he reviewed those, he emailed me and said, you know, I want to review the bars. I want to review this. I want to review that. Can you tell me more about how you formulated? So I responded and we kind of got this dialogue going and eventually he emailed me and he said, "Listen, the website's changing a bit. I don't want you to be nervous when you go on because I know you're a freak and you go on and look every day for new reviews of your products. But it's going to change a little bit because Paula's Choice is dividing from Beautypedia. So it's going to look a little different." And it made me think he may leave. And so I said, "If you ever are like leaving your job and you, I would love to talk to you."

• 1:26:38Guy Raz?

  Yeah.

• 1:26:38Speaker 01

  Like, "I learned a lot from you and it would be an unbelievable honor to have you on my team. I don't have a spot. I'll just create one." And he wrote, wrote right back. He said, you know, "Yes, let's talk." You know, he's a scientist. He said, he said, so we brought him on to help me and so, so I wasn't choosing all the ingredients myself anymore. I was still choosing them, but he was reviewing them. And we were doing it more of a collaboration and now to this day, he's

• 1:27:00Guy Raz?

  Wow.

• 1:27:01Speaker 01

  right by my side.

• 1:27:02Guy Raz?

  Wow. So the guy who totally rocked your world and made you kind of abandon that, that bar, now works for you?

• 1:27:09Speaker 01

  Yeah, yes, works with me.

• 1:27:11Guy Raz?

  All right. Imagine once you start to gain some traction, you start to get outside investors coming to your door saying, "Hey, we want in." And in 2017, you did take on some private equity. I guess I have to imagine at that point in your mind, you're thinking, "Okay, let's go to phase two because eventually we want to sell this thing." Is that how you were thinking about it?

• 1:27:31Speaker 01

  I was, but here, so something amazing happened before that, which was that, so in the summer of 2016, I went to a Sephora conference and by the time I got to the booth, there were two ladies standing in my booth and I didn't, had never seen them before. And one of them walked up and the other one stood on the other side and she said, "Hi, I'm Jane from Estee Lauder. Congratulations." And I said, "Hi, thank you. For, for what?" And she said, "For becoming the fastest growing brand in the history of Sephora, the fastest growing skincare brand in the history of Sephora."

• 1:28:07Guy Raz?

  Wow. Estee Lauder?

• 1:28:09Speaker 01

  Yes. I said, she said, "The president. I'm the president of Estee Lauder." And I said, "How do you know that?" And she said, "Well, they announced it this morning." And I was so blown away. She said, here's my number. Keep in touch. And then I turned around and the lady on the other side of my booth was the president of L'Oréal.

• 1:28:25Guy Raz?

  Wow.

• 1:28:26Speaker 01

  It wasn't a month before the people from Estee Lauder came out to visit me in Houston and

• 1:28:31Guy Raz?

  Just they want to get to know you because presumably they were interested in maybe talking deeper about a acquisition or something.

• 1:28:37Speaker 01

  They were. And I think it's public knowledge that Estee Lauder was in the running. We talked to L'Oréal. We talked to all of the brands, of course, but going back to this point in time, we didn't have private equity yet.

• 1:28:47Guy Raz?

  Yeah.

• 1:28:48Speaker 01

  And so there was some discussion at that point, do we entertain the idea of of selling? So that was very early. This is when Patrick says, look, I'm going to start responding to all the inquiries on LinkedIn.

• 1:29:00Guy Raz?

  Yeah.

• 1:29:01Speaker 01

  We're getting LinkedIn inquiries every day, all day from private equity. And we ended up going with a private equity company that was kind of focused on health and wellness. And I don't know, it was kind of bittersweet for me. It was just the idea of selling the brand at that point was so scary. The brand was still so young.

• 1:29:20Guy Raz?

  Yeah.

• 1:29:21Speaker 01

  I mean, I only launched it in 2013. I don't want to sell it right now because it's a middle schooler. I'm going to graduate from high school before I get rid of it.

• 1:29:30Guy Raz?

  Yeah. I mean, what I'm wondering about is if you were getting some potential interest in acquisition already, what was the point of bringing in private equity cash? Why did you do it?

• 1:29:39Speaker 01

  The idea was, listen, the next phase of this company is to get a C-suite and to start doing some due diligence.

• 1:29:48Guy Raz?

  To get like a real seasoned professional from the industry into your business.

• 1:29:53Speaker 01

  Which I had never done.

• 1:29:54Guy Raz?

  Yeah.

• 1:29:55Speaker 01

  We didn't have, my brother was the president.

• 1:29:57Guy Raz?

  And were you the CEO?

• 1:29:59Speaker 01

  No, never. I, yeah, never. No, I was never the CEO.

• 1:30:02Guy Raz?

  Was there a CEO?

• 1:30:03Speaker 01

  There was a CEO after we got private equity. We brought on a CEO.

• 1:30:07Guy Raz?

  Yep.

• 1:30:08Speaker 01

  The private equity, they put some money in and that allowed us to hire the executive team. And this, this is when I knew I wanted to go really with industry veterans who had been, who had made an impact in the industry, who

• 1:30:21Guy Raz?

  Yep.

• 1:30:22Speaker 01

  So the number one skincare brand at the Sephora at the time was Fresh Beauty and the number one makeup brand at the time was Urban Decay. So we got a CEO and a CMO from those companies to come over.

• 1:30:34Guy Raz?

  And by the way, at this point, I'm assuming you had an office in Houston.

• 1:30:37Speaker 01

  We did.

• 1:30:38Guy Raz?

  Okay. And roughly in 2017, how many people worked for? For Drunk Elephant, how many employees did you have?

• 1:30:45Speaker 01

  Maybe 20, maybe 20 by the time this is happening with private equity.

• 1:30:48Guy Raz?

  Right.

• 1:30:49Speaker 01

  You know, I met with the private equity team, trying to start to really discuss how we want things set up. And I decided I wanted to make everybody an owner of the company. Everybody in the company was going to have a piece of the company. I don't think of myself as a really strong leader because I don't like confrontation. And I really wanted to be on the same level as everybody in the company. I really wanted it to feel like a team and that we're all in there doing, you know, doing the hard work together. And I also thought, because I had worked at a company where it was sold and I didn't get anything when it was sold, I want everybody on the day we sell this company to feel it, to get a check in the mail and really feel it. And also, I was building

• 1:31:30Speaker 01

  a really good team and I wanted everybody to feel like they were invested in it and they had a reason to want to be there.

• 1:31:38Guy Raz?

  So this is kind of nuts, which is, I shouldn't say nuts, but you had already had some interest from a company like L'Oréal, potentially maybe one day acquiring you. But they actually sued you in 2018 for patent infringement.

• 1:31:52Speaker 01

  Right in the middle of us being on the market.

• 1:31:53Guy Raz?

  When you were actually on the market, open to potential acquirers. They sued you that your C. firma serum took their formulations for their vitamin C serum. Was that stressful? I mean, because that probably was a significant product for you.

• 1:32:10Speaker 01

  No, it wasn't stressful.

• 1:32:11Guy Raz?

  Wasn't.

• 1:32:11Speaker 01

  I'm not allowed to talk about the case at all. I'm not allowed. But I can tell you that C. firma is still on the shelf.

• 1:32:16Guy Raz?

  Yeah. Well, you guys both, I think the claims were all dismissed in the end.

• 1:32:20Speaker 01

  And I wasn't stressed out about it because I knew.

• 1:32:22Guy Raz?

  You knew it would be resolved.

• 1:32:23Speaker 01

  I knew what was going on.

• 1:32:24Guy Raz?

  But were they, so did that mean that they were out of the running and potentially making a bid for you guys?

• 1:32:29Speaker 01

  No.

• 1:32:30Guy Raz?

  No.

• 1:32:30Speaker 01

  They weren't out of the running.

• 1:32:31Guy Raz?

  It didn't create like weirdness, like, wait a minute, you guys are talking to us about acquiring us, but then you're suing us?

• 1:32:37Speaker 01

  I felt like it was a misunderstanding and it wasn't resolved until after we were acquired.

• 1:32:43Guy Raz?

  I see, okay.

• 1:32:44Speaker 01

  And here's the thing about that is that I wouldn't want to copy another brand. In fact, it's quite the opposite with me is that I didn't look around very much because I didn't want seeds of ideas to get in my head. And I wanted to be very different.

• 1:32:57Guy Raz?

  All right. Clearly, you know, you guys were ramping up for an acquisition and in 2018, you were already having conversations with.

• 1:33:06Guy Raz?

  Bunch of potential suitors and you were, it was announced in December 2019 that Shiseido, the Japanese, huge Japanese cosmetics brand was going to acquire Drunk Elephant for, it was reported at $845 million, which is a massive acquisition. I mean, this is six and a half years after you launched the website. In your mind, did you want this acquisition to happen because you were like, okay, now I can take a breather. I want to just make some money off of this thing. I haven't made any money yet. You know, I feel like I want to be rewarded?

• 1:33:41Speaker 01

  No. In my mind, it was like, it was no different than bringing in private equity and bringing in the C-suite. That was the next phase of building the team. Now it's time to build the brand around the world and spread awareness and help people. And I was so excited about the next phase. And that's how I looked at it. I wasn't planning to leave. I didn't leave. I'm still there, still doing the exact same thing that I was doing before. And I never thought of resting or anything like that.

• 1:34:06Guy Raz?

  Tiffany, how, I mean, look, your investors, the private equity people, your brother-in-law, your brother, they made a lot of money off of their investments.

• 1:34:15Speaker 01

  Right. And so did all the employees. The employees all made a bunch of money. Everybody made a lot of money.

• 1:34:20Guy Raz?

  And you made a lot of money, probably not the most by far, because that's just how it works. Investors always unfortunately make more than the person whose idea was. But still, you did very well out of that. And you had gone from being, you know, kind of careful budgeting with your cash and your family to, let's just be honest, to getting rich. Like,

• 1:34:41Speaker 01

  Right.

• 1:34:42Guy Raz?

  I mean, that must have been both satisfying, but was it also like, kind of jarring? Like, all of a sudden, you're like, you're not just like a millionaire, you're like a multimillionaire.

• 1:34:50Speaker 01

  Yeah. There's a little bit of a shock that happens and your mindset doesn't change, though, strangely. Like, if you have, I'm a worrier. And if I can't pay a bill, or if I, you know, I still have that mindset.

• 1:35:04Guy Raz?

  Yeah.

• 1:35:04Speaker 01

  I'm stuck in this broke mentality.

• 1:35:06Guy Raz?

  Totally. Get it. I get it. Yeah.

• 1:35:08Speaker 01

  It doesn't mean I didn't buy a big house. I did.

• 1:35:11Guy Raz?

  Good for you. You deserve.

• 1:35:13Speaker 01

  Bought a house that fit my children. And I got to decorate it white with pops of color like I always dreamt I would.

• 1:35:18Guy Raz?

  Nice.

• 1:35:19Speaker 01

  But I'm always worried about it. No matter what, I'm worried about it. It's a weird thing to be in. It's a weird place to be.

• 1:35:24Guy Raz?

  It's this feeling like you could all go to Mars, like, you know, the world could end. I wonder, because it's public, right? It's like, it's a public number that's out there. I don't know, do you kind of have to be a bit more cautious just because people know that you have money in, so there are philanthropies and there are, you know, charity events and there's, you know, and maybe even being careful about there are people who just kind of want to be around you because of this. I don't know, does it, has it changed the way you interact with the world around you? Has it kind of forced you to be more cautious?

• 1:35:58Speaker 01

  Yeah, I've had to learn a few pretty rough lessons, actually, because you do get, you get sucked in sometimes with people who don't have the best intentions, or maybe they're with you for the wrong reasons.

• 1:36:07Guy Raz?

  Yeah.

• 1:36:08Speaker 01

  But I have like my core group of friends that were with me when times were tough, and they're with me today. And so I know exactly who my friends are.

• 1:36:16Guy Raz?

  Yeah.

• 1:36:16Speaker 01

  And I actually made a list. This is so weird. But I do, I do have a list on my phone of my best friends. And I've just kind of gotten closer to the people who have been with me. And you live and learn.

• 1:36:29Guy Raz?

  Um, your kids are, I think you're close to being an empty nester, you and your husband.

• 1:36:33Speaker 01

  Yeah, that's coming.

• 1:36:34Guy Raz?

  You're only in your mid 50s. You're still so young for having this amazing career. You've got an important job at Drunk Elephant. So, you know, you'll be busy. You'll be really busy. But at some point, is there something else you'd want to do with your time?

• 1:36:51Speaker 01

  No, not that I can think of. Right now, I'm, I love what I do. I love my job. I love my brand. And I could do this for 20 more years if they'd have me. I may change my mind next year, but listen, I mean, I'm, I work there. I'm an employee. I get a paycheck. And it's also going to help. I'm, I dread my last child leaving.

• 1:37:12Guy Raz?

  Yeah.

• 1:37:12Speaker 01

  The house. I don't know what I'm going to do.

• 1:37:14Guy Raz?

  I feel you.

• 1:37:15Speaker 01

  I don't know what I'm going to do. But we actually did buy a house in Austin when my first daughter decided to move there.

• 1:37:21Guy Raz?

  Oh.

• 1:37:21Speaker 01

  So I have three girls who are in college at the same place, and then a son who's headed to hopefully the same college. So I can just, if he ends up going to UT also, which I hope he does.

• 1:37:32Guy Raz?

  Then you can be there, what, two hours?

• 1:37:34Speaker 01

  We can, I can just follow him when he leaves.

• 1:37:36Guy Raz?

  Yeah.

• 1:37:37Speaker 01

  You know? So if that works out, I consider myself the luckiest person in the world.

• 1:37:42Guy Raz?

  When you think about the journey you've been on, the story you've told, I mean, how much of where you are now do you attribute to the hard work you put in, in your, your skills? And how much do you think has to do with getting lucky?

• 1:37:56Speaker 01

  Uh, I worked really, really hard. And also, you have to have all of these stars aligned at the same time. You've got to have, you've got to hit it on so many different levels. You have to hit it on the name. You have to hit it on the packaging. You have to hit it on the formulations. You have to hit it on the timing. You have to hit it on the people. And I got really blessed and lucky on all of that, even the logo. But anybody who you ask will laugh and say, you didn't get lucky. You worked your ass off. It's all I saw you do. I mean, I would travel with a girlfriend and at 5:00 AM she'd see me under the covers, like secretly, like we would get two double beds and I'd be under my covers for emailing and working and she'd see the little light of the phone on, you know? I worked every waking moment I could that I wasn't with my kids.

• 1:38:41Speaker 01

  I sat and worked until they needed dinner or they needed to be picked up or they needed the laundry done or they need, you know, I was there on the computer all the time. And so I, I think that that's what it takes. It just doesn't feel like hard work when you're on the right path. It doesn't feel, I look back and I think, that was so fun. What a blast I had. I didn't even want to get up for lunch and I, I didn't want to fall asleep at night. And it worked out. Thank God.

• 1:39:07Guy Raz?

  That's Tiffany Masterson, founder and chief creative officer of Drunk Elephant. By the way, remember how Tiffany's dad, Pete Beathard, was a quarterback in the NFL? Well, he's part of a mini NFL dynasty. Pete's brother Bobby is in the Pro Football Hall of Fame. He won four Super Bowls as an executive in Miami and Washington DC. And Bobby's grandson, CJ Beathard, is currently a quarterback for the Jacksonville Jaguars. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. This episode was produced by Alex Cheng with music composed by Ramtin Arablouei.

• 1:39:51Guy Raz?

  It was edited by Andrea Bruce with research help from Katherine Seifer. Our audio engineer was Josephine Nyounai. Our production staff also includes J.C. Howard, Casey Herman, Sam Paulson, Kerry Thompson, John Isabella, Niva Grant, Chris Messini, Carla Estevez, and Malia Agudelo. I'm Guy Raz and you've been listening to How I Built This.