#177: Lip Bar – All Natural Happy Place

The Empire Builders Podcast

This is how you go from not wanting to be unhappy to working your passion to Shark Tank to Lipstick Empire. Way to go, Melissa Butler.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom-and-pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is … well, it’s us. But we’re highlighting ads we’ve written and produced for our clients. So here’s one of those.

[No Bull RV Ad]

Dave Young:

Welcome to the Empire Builders Podcast. Dave Young here along with Stephen Semple. And today you may say, gosh, they sound a little different. And maybe I hear birds or-

Stephen Semple:

We have no idea what these mics are picking up.

Dave Young:

We don’t know what you’re going to hear, but we’re sitting outdoors. We’re sitting on the north patio of the dining hall in the tower at Wizard Academy in Austin, Texas. And for the first time in, I don’t know if we’ve done this before or we’ve recorded a podcast face-to-face in the same room.

Stephen Semple:

I don’t think we have.

Dave Young:

We’re always on some either Zoom or Riverside FM or some magical internet based thing.

Stephen Semple:

Yeah, no, I don’t think we’ve done in person. I don’t think so.

Dave Young:

Well, welcome to my world here. We’re at Wizard Academy. I’m the vice chancellor, by the way, and also one of Stephen’s business partners with Wizard of Ads. And you’re here to teach a class this week.

Stephen Semple:

Yes.

Dave Young:

Which is exciting.

Stephen Semple:

Very exciting.

Dave Young:

I don’t know if people are going to hear this long after the fact.

Stephen Semple:

Yes. But we’re going to do it again.

Dave Young:

We’re glad that you’re here and excited about the class.

Stephen Semple:

Yes, yes. It’s going to be very exciting. How to market professional services, so it’s going to be awesome.

Dave Young:

It’s going to be fun. I didn’t even ask you as I started the countdown, what the topic is.

Stephen Semple:

I know. Because we’re used to the countdown thing being on the screen.

Dave Young:

My countdown was, I’m just going to hit the go button and see if this is sticking to the tape. I think it is.

Stephen Semple:

We’re going to lean into a category you know really well. Lipstick.

Dave Young:

Lipstick? Is there a particular brand?

Stephen Semple:

Yes. Lip Bar.

Dave Young:

Lip Bar? I’m a total blank.

Stephen Semple:

Well, they’ve done pretty well. Lipstick’s a huge market. Lipstick itself is a $9 billion business.

Dave Young:

Trust me, we wash a lot of it off of wine glasses here.

Stephen Semple:

But Lip Bar was founded by Melissa Butler, and today they’re in like 500 stores, Target and things along that line. They’re a private company, so I had a really hard time finding actual sales figures for them. But when you’re in 500 stores and growing, you’re making things happen.

Dave Young:

Mm-hmm.

Stephen Semple:

Yeah.

Dave Young:

500 stores.

Stephen Semple:

But what was really cool about learning this story is Melissa Butler started making her own lipstick in her apartment.

Dave Young:

Really?

Stephen Semple:

That’s how this all started.

Dave Young:

I’m trying to think of how, if I set out … First of all, I’m not going to, but if I set out to make lipstick, what would I even …. like what’s on my shopping list?

Stephen Semple:

Oh, you’re melting waxes and you’re getting color agents and you’re pouring it into tins and you’re having to cure the tins and then you’re having to get it out of the tins and into the packaging. It’s quite a process.

Dave Young:

Do I have to go kill a whale?

Stephen Semple:

I don’t believe so.

Dave Young:

Okay.

Stephen Semple:

I don’t believe so.

Dave Young:

Because that’d be awkward.

Stephen Semple:

So what started Melissa on this is she’s a woman of color, and what she noticed was it was hard to find lipsticks in these really bold colors that would work well for women in color.

Dave Young:

With a darker complexion?

Stephen Semple:

Yeah.

Dave Young:

Yeah.

Stephen Semple:

And so this is what-

Dave Young:

Some contrast.

Stephen Semple:

That’s right.

Dave Young:

Yeah, I like that.

Stephen Semple:

Yeah.

Dave Young:

Okay.

Stephen Semple:

So this is kind of the path that she went down and when you take a look at the stuff from Lip Bar, the colors are wild and crazy and lots of fun.

Dave Young:

Oh, awesome.

Stephen Semple:

Now, when Melissa was growing up, she grew up in her single mom household. Her mom was a crane operator and worked at a steel factory. So it’s not like they had this big fashion background. And her mom worked a lot and she grew up in a really rough neighborhood in Detroit, but she managed to get into a competitive high school. One of those university prep schools, Cass Tech, especially at the time, this really amazing school in the middle of this blight is almost how it’s described.

And she knew she wanted to go to a black university. So she went to Alabama State for a little while, and then Florida AM and she did a business program, because business had interested her. Because while in high school she worked in a cousin’s clothing shop. She basically learned business from him. And really what she learned was a higher education is about getting into business and getting into business is about making money. That’s kind of the path she was on.

Dave Young:

Sure. We can talk about that for a minute.

Stephen Semple:

Yeah. She does business finance and her dream is to work on Wall Street. But one of the things that she did that was interesting before hitting Wall Street is she had a chance to go to China for a little bit.

Dave Young:

Okay.

Stephen Semple:

So here’s this young lady who grew up in a rough black neighborhood, only attended black universities, suddenly in China. And she was like, “It was this unbelievable culture shock.”

Dave Young:

It’s a whole new world. Yeah.

Stephen Semple:

A whole new world. She’s fairly tall. She’s this tall black woman in China. People are literally coming up to her and touching her face.

Dave Young:

Oh yeah.

Stephen Semple:

Right?

Dave Young:

I believe it.

Stephen Semple:

Life-changing experience. She returns and she’s working at Barclays Bank on Wall Street as an analyst. And here’s the thing she noticed. No one was happy. All of her co-workers were unhappy. And she said, “If I stay in this environment where nobody’s happy, I’m going to be unhappy.”

Dave Young:

Isn’t that the truth?

Stephen Semple:

And frankly, the pit was not that great and it was exhausting. And so she wanted to find other things to keep herself busy. And she had this soap that she really liked at Whole Foods that she would buy, and it was a $6 soap. And she’s talking to her mom about the soap, and mom’s just busting her chops over $6 for a bar of soap. Are you nuts? Are you crazy? So she decided to start making her own soap, and it became a hobby. And natural soap has this curing process [inaudible 00:07:03] either takes time or putting in the oven.

Dave Young:

And I’ve heard a lot of people making soap.

Stephen Semple:

Making soap. Yeah.

Dave Young:

Yeah. That’s a thing. But lipstick?

Stephen Semple:

Right. And of course it was all natural ingredients. And what she started doing was putting all sorts of things into the soap. She was inspired by Lush. She wanted to get into the soap business. So she started with the soap bar and all the soaps would be named after a drink. And one day she’s speaking to a supplier. … Here’s the crazy part in this story. One day she’s speaking to a supplier about pigments. And the supplier says to her, “Do you want lipstick pigments or soap pigments?”

Dave Young:

Oh … Well.

Stephen Semple:

And she literally went, “Wait.”

Dave Young:

You have lipstick pigments?

Stephen Semple:

She never thought about lipstick. And in that moment she instantly pivoted. Done with soap. I’m doing lipstick. All simply because the supplier said, “What type of pigments do you want?”

Dave Young:

Wow. Okay.

Stephen Semple:

Yeah. Isn’t that crazy? Because lipstick was one of the few things that she wore. And again, she found she loved purple and it was super hard to find. She decided, I’m going to do this lipstick stuff. But the first thing she needed to do is find lipstick molds.

And I guess they’re really, really hard to find or tied up by all the big companies, but she was able to find a couple of used ones from the laboratory that was going out of business.

Dave Young:

Oh, nice.

Stephen Semple:

But they were still like $1,500 bucks a piece for these molds. So here she is working 60-hours a week at Barclays. She comes home, she works till like 3:30 in the morning on the lipstick business. Gets up at 7:00 heads off to work. But she wants to create these wild and crazy colors, and she wants them to feel good. So she starts also experimenting with doing things like shea butter. Because there was a particular feel that she wanted them to have. She wanted them to be all natural. There’s this delicate balance of ingredients to get the feel right, the color right, getting it to stay on. So she does a lot of experimentation.

And she would give it to people at work. And she suddenly knew it was working well when people started asking for more. Right?

Dave Young:

Yeah.

Stephen Semple:

And that’s when she decided to start to sell it. Once she got to the stage where people would ask for it. So she would make the lipstick at home, and she got the packaging from China and it was all hand poured and all hand packed. And she knew that the packaging had to be interesting. And so she did same thing as what she did with the soap. The lipsticks were all named after a drink and called the company, Lip Bar.

Dave Young:

Lip Bar. Oh, like a bar? Yeah. Okay.

Stephen Semple:

Yeah, like a bar. And you would get a little card with the recipe drink with each one of the lipsticks that you got.

Dave Young:

Oh, nice.

Stephen Semple:

So if you got pina colada, there’d be a little recipe for pina colada with it. And the packaging was inspired by old Victorian cages. She really loved the look of old Victorian.

Dave Young:

Like those old bird cages things?

Stephen Semple:

Yes.

Dave Young:

Look like mansions and castles.

Stephen Semple:

Yeah. If you take a look on the website, her design, the cap that goes on the top has this really intricate pattern, and that’s what inspired it. To get started, the minimum order for packaging is like 12,000 units.

Dave Young:

Oh, gosh. Yeah.

Stephen Semple:

So she’s got boxes of … Fortunately, lipstick is small.

Dave Young:

Yeah.

Stephen Semple:

But still her living room is full of this stuff. And her plan is to sell it on the web. And again, it’s all hand packed, all hand poured. Starts off with 12 shades of color. And her plan is she wants to sell it all in the first year. So she does this big launch party. Literally spends $30,000 on this launch party.

Dave Young:

Wow. Okay.

Stephen Semple:

And a beauty editor from Teen Vogue is one of the first people to land at the party. So they get lots of attention from that. And it gets exciting enough for her that in 2013, she decides to quit her job and do this full time. And her mom thinks she’s nuts.

Dave Young:

Well, that’s classic. Any entrepreneur that sets out to do something different and go out on their own, your family just starts thinking you’re out of your flippin’ mind.

Stephen Semple:

Your unholy mind. Yeah. And one of the reasons why she does it, is she feels she’s far more comfortable with failure than regret. She’d rather fail than regret not doing something. And the other thing is, she figures her superpower at this point is being naive.

Dave Young:

Okay.

Stephen Semple:

It’s one of those ones, this is going to work out somehow. And she feels like … I heard her in interviews talk about if she really knew everything that was happening, maybe she might not have done it type of idea.

Dave Young:

Right. Yeah. That’s so American too.

Stephen Semple:

Yes, it is.

Dave Young:

It’s not a mental disorder, but it’s a-

Stephen Semple:

Are you sure?

Dave Young:

Well, not really. It’s a form of optimism that is just, “Oh my God, we’re going to go out and do …” Like the settlers of-

Stephen Semple:

Yes, we’re just going to make this happen.

Dave Young:

… who went across the country on the Oregon Trail were like, “I don’t know what we’re going to find, but it’s going to be great.” It might’ve been an arrow in the chest.

Stephen Semple:

Yeah, exactly. Here she is. Naively quits her job. First year she sells $26,000 of product.

Dave Young:

Okay.

Stephen Semple:

She’s doing this with a friend of hers. They’re dead broke. They rent out a room in their apartment on Airbnb to make money.

Dave Young:

Just to make some money back. Yeah.

Stephen Semple:

Year two, $56,000 in the products, still making this stuff in the kitchen. The first group of people … She had a bunch of friends who joined her to help her out on this, kind of fizzles out. And in 2014, she decides to move back to Detroit. Because 2014 is interesting time in Detroit.

Detroit is starting to revive at that time. There’s cool things going on. Shinola, the watch company is opened in Detroit, and she wants to be part of that renaissance. And she knows, just she senses, that she wants to be part of this. And she also knows that ultimately she eventually wants to be in retail, but she’s not ready. But here’s what she knows. When women try this product, they love it. Wants to try to bring the lip counter to people. Here’s what she does. She builds a Lip Bar truck.

Dave Young:

A Lip Bar truck.

Stephen Semple:

Yes.

Dave Young:

Like a food truck kind of thing.

Stephen Semple:

Food truck. But inside there’s mirrors and lipstick and all this stuff.

Dave Young:

Oh, wow.

Stephen Semple:

Isn’t that cool?

Dave Young:

That is cool.

Stephen Semple:

And takes it on tour.

Dave Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

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Dave Young:

Let’s pick up our story where we left off. And trust me, you haven’t missed a thing. A Lip Bar truck?

Stephen Semple:

Yes.

Dave Young:

Like a food truck kind of thing?

Stephen Semple:

Food truck. But inside there’s mirrors and lipstick and all this stuff.

Dave Young:

Oh, wow.

Stephen Semple:

Isn’t that cool?

Dave Young:

That is cool.

Stephen Semple:

And takes it on tour.

Dave Young:

Just in Detroit or?

Stephen Semple:

No.

Dave Young:

Or everywhere?

Stephen Semple:

No, she travels around. But here’s the thing she discovers when she first goes to do it. She goes, “Oh, I’m just going to take this truck and park it on city streets and it’ll be all great.” You need a permit.

Dave Young:

Oh, yeah. I suppose you do. That’s another angle on that naivete.

Stephen Semple:

Right. Well, she doesn’t let that defeat her. Here’s what she figures out. If she can find a store that she can park in front, it’s all good.

Dave Young:

They have the permit.

Stephen Semple:

Right. So she basically goes around and finds stores where she sets up this deal that she’ll park this in front of their store. And one of the best ones that she did was Urban Outfitters in DC.

Dave Young:

Okay.

Stephen Semple:

That one worked unbelievably great. And people get intrigued, because here’s this thing that looks like a food truck, but it’s a-

Dave Young:

Lipstick truck.

Stephen Semple:

Yeah. And it’s all mirrors. And inevitably what she found is people will go inside and they would buy something.

Dave Young:

I hope she had a sound system like an ice cream truck.

Stephen Semple:

I don’t know about that. I don’t know about that. She did two tours in six weeks, and she made enough sales that she paid for the tour and paid for the truck and everything. It was so good that they created a second tour. And the second tour they went to black colleges and it did super well. But then here’s the problem. Truck started to break down.

Dave Young:

Oh no.

Stephen Semple:

Because it was this old beater.

Dave Young:

Yeah.

Stephen Semple:

And then the other thing that she did is she applied to be on Shark Tank.

Dave Young:

Oh. Okay.

Stephen Semple:

She was on Shark Tank and she submitted this video that was talking about the product while hula-hooping. And she had a terrible Shark Tank experience. They ripped her apart. But she did get two big benefits from it. One was from Mark Cuban. Mark Cuban said, “Your story is cool. You need to step into the front.” And Melissa did the thing that a lot of entrepreneurs … “Well I don’t want it to be about me.”

Dave Young:

Well, no, it is about you.

Stephen Semple:

But it is about you. Mark convinced her that that’s what she needed to do. Needed to make it her in the forefront, tell her story. Mark did her a great service, because I don’t believe it would be as successful today without that. But the other thing is, when it aired, of course drove tons of traffic.

Dave Young:

Oh, absolutely. Yeah. You can’t lose on Shark Tank.

Stephen Semple:

And they started getting so many orders that she needed to find somewhere else to make the lipstick. She needed to bring in people to help pack it. But now it was time to find a retailer and Target was her goal. She started to reach out to Target buyers. She searched them on LinkedIn. She did this eight month process. And when she finally did connect with a buyer, here’s what she did that I thought was really brilliant with Target.

Now, Target, first of all, turned her down at first saying that she was too small. But what they did was, she convinced them that the Target customer is not buying cosmetics at Target. So you have all these Target customers shopping in your store and they don’t buy lipstick there. So this is net new sales for you.

Dave Young:

Oh, there you go. So that’s her pitch to Target?

Stephen Semple:

That was her pitch to Target. And it worked. And initially Target turned down for the stores, but said they would sell it on the website. So it was enough that opened the door. And then here’s the other thing that she did. She did a PR campaign and she drove every set, every sale to Target. In other words, even people who would buy directly from her, she encouraged them to buy from Target. Now, most people go, “Well, you make less money.” Yes. But blow it up there. And all of a sudden they go, “Huh, maybe what we need to do is sell it in the store.”

Dave Young:

Yeah. You deepen a relationship. That’s the price of-

Stephen Semple:

Yes. They became the number one selling lipstick that month.

Dave Young:

Nice for her.

Stephen Semple:

It’s now in 500 stores. They’ve since … in 2018 they had to bring in outside investment because they needed money for inventory and things along that lines. 2019, they opened their own brick-and-mortar store in Detroit. And COVID initially, was really tough on them, but come back because again, what happens in [inaudible 00:18:25] lipstick is actually one of the things people see.

Dave Young:

Oh, yeah. Sure.

Stephen Semple:

And there’s this lipstick effect. It’s this small novelty feel-good item.

Dave Young:

Mm-hmm.

Stephen Semple:

That is one of those things that we know does well in tougher times. Now they do more than lipstick. They also do some mainstream colors, of course. But I just love this whole her going, “I’m more comfortable with failure than regret.” And this whole idea of just naively diving in. I love the pivot where all of a sudden, “Wait. Lipstick?”

Dave Young:

Yeah, well, you get a vision and then … Naivete is an interesting one because you know there are going to be hurdles.

Stephen Semple:

Yes.

Dave Young:

You just don’t know what they are yet.

Stephen Semple:

And sometimes you’re never going to know until you get to it.

Dave Young:

And you’ll never know until you run right up into the face of one.

Stephen Semple:

Yeah, absolutely.

Dave Young:

And then you either figure out how to go over it or around it or through it.

Stephen Semple:

But there’s four brilliant things that I think we can learn from that she did. Number one is the Mark Cuban lesson. People bond with people and people bond with movements and people bond with ideas. They don’t bond with products. They bond with what that product represents. And we’ve seen this often. “I don’t want it to be about me.” Really, it needs to be about you.

Dave Young:

Well, and people bond with an experience as well. And this is a product, as you said in Zoom meeting, soap … I can’t look at you on a Zoom meeting and see what soap you used.

Stephen Semple:

Yes.

Dave Young:

Right? I can’t see what the antiperspirant you did or didn’t use.

Stephen Semple:

Right.

Dave Young:

But I could see your lipstick.

Stephen Semple:

Yes.

Dave Young:

And so I think that’s brilliant.

Stephen Semple:

Yeah.

Dave Young:

And great timing.

Stephen Semple:

Yes. I love this creative idea of making the truck and taking it on the road. Because again, to that experience, what she knew is when people tried it, they liked it. Well, how do I take it to people when I don’t have a retail shop? Park in front of a retail shop. And then even that insight into the Target product, because your customers are not buying lipstick in your store.

Dave Young:

So she saw that truck for what it was, which was another step up. And I guarantee you there were dozens and dozens of business experts that said, “Well, that’s just not scalable. That’s not scalable. You can’t buy trucks all over the … “

Stephen Semple:

Right.

Dave Young:

Right? But that’s not what it was about.

Stephen Semple:

No, it was she always knew she wanted to be in retail. It was that step forward. And again, every time she parked in front of a place, if it did well, that’s further to the story.

Dave Young:

Yeah. Yeah.

Stephen Semple:

And getting the product in people’s hands and all that other stuff. Yes, her goal was always to be in retail, but yes, it was a step up.

Dave Young:

It makes me think of the Saturn V rockets of the Apollo system. Right? It’s like the goal is to get these guys to the moon. And if you look at that giant rocket ship, the part that’s going to the moon is at the very, very tippy-top.

Stephen Semple:

Right.

Dave Young:

Right?

Stephen Semple:

Exactly.

Dave Young:

The great big giant bottom piece that’s just to get them part of the way out of the earth’s gravity. That’s what that truck was. That’s what the friends … all of that. You’ve got to look at the stages of building an entrepreneurship based business.

Stephen Semple:

And the last thing, and this is I think probably the biggest one that I was going to say to people to take away, because I meet with people all the time who will be all excited that they’ve gotten into Target or Costco or whatnot. And I’m like, “Okay, great. Your job has only just started.” They go, “Well, what do you mean?”

You got to stay there. It’s not going to automatically sell. You actually need to have a strategy for how to drive sales. And so when she got on to target.com, she was immediately like, “I’m going to create this PR campaign. I’m going to drive sales to there so it becomes top-selling, which will then get me into the store.” And then we have things that they also did to make sure it sold in the store. It’s like you can’t just sort of go, “Ah, my job has done. I’m in Target.”

Dave Young:

Yeah. Here we are. Made it.

Stephen Semple:

Here we are. No, you’ve really only just started.

Dave Young:

Yeah. Great story. Lip Bar.

Stephen Semple:

Lip Bar.

Dave Young:

What’s her name?

Stephen Semple:

Melissa Butler.

Dave Young:

Melissa. Well done Melissa. Stephen, thank you for sharing the Lip Bar story.

Stephen Semple:

Yeah. Cool story, right?

Dave Young:

Yeah. Yeah.

Stephen Semple:

Go to the website. The colors are fun. They are really, really fun.

Dave Young:

Maybe next time we do a video … we’ll have to be … maybe not.

Stephen Semple:

Well, you’d look good in purple.

Dave Young:

Surprisingly, blue is mine.

Stephen Semple:

Well, there you go. Okay.

Dave Young:

Thanks Stephen.

Stephen Semple:

All right, thanks David.

Dave Young: Thanks for listening to the podcast. Please share us, subscribe on your favorite podcast app, and leave us a big fat juicy five-star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute Empire Building session, you can do it at empirebuildingprogram.com.