My guest today is entrepreneur powerhouse Jessica Herrin, founder and CEO of Stella and Dot.
After working in the tech startup world for a couple of years after college, Jessica went to business school and decided to co-found her first company Wedding Channel at age 24. In 2004, she founded Stella and Dot, the multi-hundred-million dollar jewelry, bags, accessories, and clothing social selling company.
Jessica has been recognized on Oprah, The Wall Street Journal, New York Times and Forbes for her incredible work and success, and she has also been named by Ernst & Young and Inc. 500 as a Top Entrepreneur.
On today’s episode of Unstoppable, Jessica dives into how she decided to start Stella and Dot, her advice on fundraising, the best advice she has EVER been given, and much more.
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“You do not have expertise when you start. You get expertise over time with failure, with iteration, with tenacity.” – Jessica Herrin
- How to become an entrepreneur
- Why business is simple
- How to start a business
- How to build a successful business
- The story behind Stella and Dot
- Fundraising tips
- How to scale your business
“In the end you need to be driven by equity value, not ego.” – Jessica Herrin
- Connect with Jessica Herrin:
“People solve all problems and they create all problems. You need to always be thinking about ‘how do I attract the right people? How do I nurture them?’” – Jessica Herrin
Kara: Hi, everybody! It’s Kara at Unstoppable and we’re so excited this morning to have Jessica Herrin from Stella and Dot with us this morning. Just a little bit about Jessica, in case you guys aren’t familiar with her or the brand, although you must be living under a rock if you guys don’t know about Stella and Dot. It’s so, so great. Actually, a few people from the office said, “Oh my gosh! You’re interviewing the founder of Stella and Dot! That’s so exciting. I wear their stuff.” And they started showing me everything they had on of Stella and Dot and it was really cute, Jessica. So but anyway. Jessica, just a few quick bio things on her: so Jessica is the founder and basically started styling her life with lots of cool, smart, great, great things. But prior to actually starting Stella and Dot, she actually was the … were you actually the … ? Yeah, you were the founder of Wedding Channel. I remember Wedding Channel way back when. So, Jessica went to Stanford Business School and then at the age of 24, is that right Jessica?
Jessica: That’s right. I co-founded a business that merged with Wedding Channel. That’s always the story of a startup, right?
Jessica: Sum it up in one sentence because it’s always complex, and a windy road, but yes. I was 24 when we dropped out of business school to start it.
Kara: Oh my gosh. That’s wild. And then since then, went on to do Stella and Dot. She probably can add a few more things in there as well, and then just has been covered by the Wall Street Journal, the New York Times, Oprah, Forbes, all giving her lots of great honors, also Ernston Young, INC 500 as a top entrepreneur; she’s involved, as I am, in YPO in the Bay Area and is a parent, too, to a few … how many kids, Jessica?
Jessica: Two girls.
Kara: Two girls. Super, super awesome. Which I think I’d love to talk a little bit about that too, it’s really, really exciting. But I love also the saying, and we’ll get into this and sort of the explanation but, the nine to five just doesn’t flatter. I love that, when I did some research and saw that. I think that’s really fun. I’d love to hear a little bit more. But anyway. Welcome, Jessica. Really excite to have you here. So tell me a little about the journey. So, co-founded the company, jumped in at age 24 into … what was the name of that startup?
Jessica: It was originally Stella and James, and then we merged with another company called Wedding Channel and we named.
Kara: That’s awesome. And so you’re at Wedding Channel, you’re building out sort of wedding registries, sort of learning as you’re going, right? And what was some of the big takeaways that you learned in that startup?
Jessica: Well you know it was a fascinating first gig as an entrepreneur. And ever since I graduated college, I’d always been at startups. So it was my dream to start a company and I went at that first one very much with my head. I did everything you would learn to do in a textbook you’d read at business school by looking at adjustable market size and how change was gonna create opportunity with destructive technology or different consumer behavior. I found a space that needed a solution, when the Internet was being created and we could aggregate and move gift registries online for consumer ease and convenience, and I learned a lot about just creating a customer value proposition that was unique, that delivered how to finance a business, how to get it started. But I think my ultimate lesson from those days at Wedding Channel was that you can’t just start a business with your head to be successful? You’ve got to come in with head and heart and make use of both of them. And that’s what ultimately helped me evolve as an entrepreneur to start the mission driven company of the Stella and family brands.
Kara: That’s awesome. I mean, Wedding Channel was the largest wedding services company? You weren’t married at that point, right?
Jessica: It was kind of funny because I was always a bridesmaid, never a bride. And when I started working for this company, I started buying wedding magazines, and I had some in the back of my car and I remember, I was young. When I was doing the research I was probably 22, 23. And I was dating someone and I remember picking up him and his friends and they saw the wedding magazines in the back of my car and they were like, “Oh my god. You gotta get rid of this woman. She is trying to get you down the aisle.” Which ironically, I did get him down the aisle. He did turn out to be my husband. But at that time, I was definitely not even focused on knowledge of weddings or getting married. I came from an enterprise software background and so to me, I came from this business that was aggregating price and availability data for computer bars, and if you think about what Wedding Channel is, it’s aggregating price and availability data from different retail stores to put in one place.So my inspiration was very dry, very boring, and actually not wedding related.
Kara: That’s interesting. So going from more of a business services, software applications company, to more of a consumer facing company, was that a huge shift for you? I mean, did you feel like, obviously it probably taught you quite a bit about how to actually look at the analytics, deal with the customer, et cetera. But what do you think were the biggest things that you saw? I hear over and over again from tech firms and people that are really not doing consumer B to C brands, but instead B to B brands? What do you think are sort of the key differences from a executive or founder that you would share with us?
Jessica: I think the course of business, and the different businesses I have started, including my first business in high school selling personalized children’s books, and working at enterprise software companies, to going into something that’s a hybrid company, because for Wedding Channel, we had both. We were both business to consumer because we had wedding services, we had stores, and then we also sold in to retailers. So I think that what I would say is there’s frankly more in common than there is apart, and it’s really common sense. And I actually think when you think of an idea or when you think about how to win in business, you go through this complexity curve. Which is you have an idea, and it’s usually very simple. Where in your mind you’re saying, here’s a problem, I can create a solution. Then you gotta get kinda complex by saying, well, how do I do it, what does it cost, can I be profitable, what people do I need, what’s my point of difference and then you really start getting mired in the details of how do you do it?
Jessica: But at the end of the day, business is pretty simple. You have to serve and delight your customers and it’s not anything more complicated that that. And that’s true in both B to C and B to B. The differences, I would say, a class businesses is often when are you trying to create a business where you’re gonna win because you’re going one to many? Your customer is … in order to win, you’ve got a set of 10 giants that you’ve gotta lock and load into that deal and what’s gonna make them move. Versus, are you a real volume transaction business, where you’ve got to make a win by getting thousands and thousands and thousands or hundreds of thousands or millions of customer transactions. And with Wedding Channel, it was really interesting because it was a bit of a combination? You really were dependent on locking up retailers to create value there, and there were some giants in that industry and that really shapes how you market, what you focus on, how you structure the company. Where in my subsequent businesses, you’re really focused on a broader appeal in your solution.
Kara: Yeah, definitely. I hundred percent agree with you. So you ended up selling Wedding Channel, or you were part of the team that sold Wedding Channel, and then started Stella and Dot. What was kind of the thinking behind that? I mean how much time did you take off between; how did you really get passionate about the idea and think, oh gosh, I can go make a company out of this?
Jessica: Well it was a long and winding road, which is why I always want to share with aspiring entrepreneurs or people who are asking themselves, how do I get that … not just the lightning bold moment but a lightning bolt moment, where I feel this energy, that this is what I’m supposed to be doing and I’m so fully connected to this and I’ve got to go dedicate all my life, even though it’s crazy, to making this thing real? It is not usually a moment; it’s a journey, and one that is riddled with doubt and confusions and zigs and zags.
Jessica: For me, I had the idea for Stella and Dot or what would become Stella and Dot or really the underlying mission of modernizing flexible income for women and recreating a gig economy for women, when I was at Wedding Channel. So, the time between us selling that business to the [Nod 00:10:01] and, they all [inaudible 00:10:03] like fingers, grasped together. It is something like, I think I had the original idea in probably 2000? The company was incorporated, I was testing it in maybe 2004. We changed our name to Stella and Dot and it really started going off in 2007, and I had an entire other full time job for three years in between where I was doing this at nights and weekends. And I think that’s generally true of anybody, who has kind of a business idea that has to percolate and evolve and you find partners and you find the moments and the funds and the actually, the evolution of the idea that sparks.
Jessica: For me, I was in this place with Wedding Channel saying, okay. I created a success on paper. It looks good. We were on Oprah. Why do I not feel that successful? Why do I feel like I have a business that runs me versus me running it? Why am I … like this can’t be it! How can I work this hard, create commercial success, but not really feel right in my life? And I wanted to just step back and say what do I deeply care about that I would bounce of bed in the morning to do for free because I so deeply believe in the mission?
Jessica: And for me that was gonna be about learning and earning for women. Just financial empowerment to right imbalances in the world that I see for women. Helping them to level up their skills, increase their flexibility and financial power, and when I looked at that industry it looked so dated and didn’t use technology and didn’t really do a woman service with brand and product and I really felt beyond interested but totally obsessed with the idea of changing that and creating a new model and a social selling platform that women could thrive with and be proud of, that wasn’t iffy. And that was a really hard thing, figuring out how to do it, because I had no idea what I was doing in that space.
Kara: I remember when you guys launched and it was definitely … I mean, I feel like you guys were one of the first that just utilized this way of selling. I mean obviously there’s Avon and Mary Kay and some of the others, but much more makeup focused? I don’t know. Maybe I don’t recall other ones that have launched, but I remember when you guys launched and I thought it was brilliant and still think it’s brilliant today, that you’re able to really make these women like they’re part of your team, yet they’re working from home. The whole social selling I think is definitely something that is … I feel like other people have mimicked what you’ve done even outside of your category. But it was brilliant.
Kara: And I also want to … I believe this is correct? You were pregnant and the time when you were thinking this up?
Jessica: Well see, that sort of thing, when I was really deciding to be my own venture capitalist because that’s the other lesson I learned and intent, that was very different for me, and business number one versus business number two, was … And when I was in business school, people, which is so comical to me, people measure their successes, “Oh, I raised this number of venture dollars from this firm.” That’s not business success. That’s just a start. That’s not creating value. That’s just it being capital. You have to return and multiply it. So I did that in my first business. In my second business, I wanted to bootstrap it. If I was gonna be in control of the mission, I wanted to have control of the cap table.
Jessica: So that was a very different evolution start and so for me, it took years of figuring out how to do it and I wanted to be my own venture capitalist by saying, okay. I’m gonna put my money in, I’m gonna put my time in, and I’m gonna vet this thing to make sure it works. So I had the idea probably two years before I got pregnant when I was really actively testing the concept, where I was going out and making the jewelry, doing test trunk shows, really figuring out how to modernize this opportunity so that I deeply believed in it and walked a million miles in the shoes of the women that I wanted to help, I was pregnant with my first kid. In fact at my very first trunk show, my hostess looked at me and outed me for being pregnant. ‘Cause she was looking at me like, it just looked like I had been indulging in a lot of Twinkies lately but wasn’t out of the closet. “What’s going on over there? What are you not telling me?” And I was like, I’m pregnant.
Kara: That is so funny. I was pregnant with my son actually, my fourth, when I started HINT as well, so I laughed.
Jessica: Four. I had two and then Stella and Dot became my third baby and now I wish I had another. Can I have one of yours?
Kara: Yes. Actually, it’s depending on the day, yes. I have four teenagers so, it’s a lot of fun but it’s a very moody household depending on …
Jessica: So I feel ya.
Kara: Yeah, yeah. That definitely puts a little, what should I say, focus on what my day is gonna end up being, but that’s funny. I felt like my launch time was actually definitely, there was timing for the baby that I couldn’t do anything about and so I decided that I actually wanted to get the first bottle of HINT on the shelf prior to actually having my son Justin. And that did happen. I actually sold it in the morning that I was actually having a planned C section at two o’clock in the afternoon. But for me, I think if I wouldn’t have had the baby, I probably wouldn’t have been in such a rush? I wanted to take some time off after having him, so it was like … And of course I didn’t take any time off. I just jumped right in, which was insane.
Jessica: That is one of the things. I go back to Stanford Business School and they teach a case on formation and new venture on Stella and Dot and it’s really funny because people always ask about, when you think about starting a business, what’s the timeline? What’s the inflection point? And people ask the question as if you’re in a theoretical business exercise, but the reality is, you don’t start a company; you start a life. And there’re all these non market externalities like pregnancy, breastfeeding, health, that shape your timing decisions with business. And so for me, it was very much shaped out of when I was doing what with my babies. That really influenced me in terms of when I was gearing up, what I might commit to investors, all of those things.
Kara: Yeah. Absolutely. So you did raise funding though? Like you talked a little bit about sort of owning the cap table while you’re owning the mission. But you did raise money over the years, correct? I mean, what advice would you give to entrepreneurs who are thinking about raising money?
Jessica: The advice for fundraising is that you’re capital needs are driven by your business concept, the cost to start and prove value in your business and then if you’re doing venture rounds, you’ve got to raise capital with the right strategic partners that will help you with, if you need future rounds, that you’ll need to prove value and be clean to get a step up and get another round and the right to continue to prove out your business model. And so, there isn’t one piece of advice for, this is what you need to raise with this type of investor. You really have to ask yourself, what is the minimum amount of capital I need from myself, my savings, credit cards, small business loans, institutional investors, small seed grounds, friends and family, large investors, strategic partners, based on what I have to do to create value in the business?
Jessica: So I purposely sought, you know, my first business, it had to be venture backed. It was something where we needed a large amount of capital to get the right retail partners to believe in us. There was a lot of technology build out that had to happen. In the second business, I knew I could bootstrap that and I actually want to do it to a business that I could bootstrap. So there was intent there on both sides and they were very, very different paths. So I would say do not seek worry in the idea that raising capital is some kind of metrics of success or validity for proof of concept. Your goal should be to raise the least amount of capital and have the least amount of delusion and the least amount of differing drivers around the table, for the success of your business.
Jessica: So that is my thought. I mean a lot of people see that as a first milestone of success, and you have to think about, what’s your end game? You better know what you want as a liquidity strategy and a control strategy before you go raise capital.
Kara: Yeah, absolutely. I mean some of the best advice that I got early on is, especially as you’re building out who’s gonna fund your company, but also who’s gonna potentially be on your board, too, it’s like, I think that you just have to get everything out on the table, as hard as it might be, and shiny objects, they don’t last shiny forever, right? You go, just because you have somebody super interested and putting money into your business, the devil’s always in the details as to whether or not it’s actually gonna work for you or not. So I mean the number of people who I’ve talked to who have a year later sort of seen that they’ve gotten kicked out of the company as a founder or they’ve ended up really not understanding exactly what they ultimately signed, so I think having a good attorney too, that really can look through and clearly explain just so that you can make those decisions, where do you want this business to go. So I think that that’s such a key thing.
Jessica: Mm-hmm (affirmative). That’s right.
Kara: Yeah, absolutely. So best advice you’ve ever received? In business, I should say. In life, in business.
Jessica: I bring it back to my greatest mentor in life, which is my dad, who’s this incredible human and I’m so lucky that he was my parent. And he was a single dad that raised me, he came from this incredible background where his mother was a widow since he was three, she had a fourth grade education, they were very humble means, very poor, and he grew up not thinking that he’d ever be able to go to college? And he ultimately graduated with a masters degree in engineering and just is a real self made, hustler of a man. And I think his mindset has always been, if you wanna learn something, crack a book. Don’t think you need a pedigree or that somebody else is gonna come educate you, but if you want something, the library is open and it’s free. Now we have access to the internet. Go figure it out and never expect somebody else to show it for you if you are not showing up for yourself.
Jessica: So for me that really helped me as an entrepreneur because I never thought I was unqualified to go start a technology business or a fashion business or a skincare business or one of these other things. I just had to be willing to learn, even if I was not the expert. You do not have expertise when you start, you get expertise over time with failure, with error, with tenacity.
Kara: Right. And I think tenacity is the key thing, especially if you want to be an entrepreneur. I think just learning all aspects of the business, always have this need and desire to be learning, I think is such a key component that I see, especially in founders if they’ve grown the company. Do you feel like, I know I certainly do but different stages of the company really need different types of people inside of the company, and has different challenges? Where do you guys see yourself today, in terms of having those sort of challenges?
Jessica: We had a holiday party last night and when I gave the company toast, I was sitting there in this glorious moment of just looking around at amazing souls of people dedicated to our mission with the best talent and leadership we’ve ever had in place and culture, and I think that, really for us, was transitioning. We’re in that midst of that transition now, but being really this founder led, early startup culture to really a professionally run … not that we weren’t professional in the beginning, ’cause let me be very, very clear: if you are trying to get a business from zero to one, from scratch, if you start talking about empowerment and [inaudible 00:23:00], you are doomed, okay? There’s no such thing. You have to do everything and you have to do it right now, and you have to be a hero to be a crazy founder. But at some point you scale and you grow and you change, and the other thing around early stage startup, you are always resource poor. So in theory, you should hire this person and do that; in reality, you can’t.
Jessica: So, it’s not gonna happen or you’re not at a proof point yet where you’re gonna attract the level one talent you need. So I always like to make the people comparison as I do office space. You may plan on being a billion dollar business one day and when that happens you’re gonna need a skyscraper. But to start out, you’re in a garage. And you don’t want to pay for the skyscraper today. You’re just gonna have to keep moving and either you’re gonna move with people because they’re gonna grow with you, or you’re gonna move because people are gonna transition and you’re going to change. Other people’s roles, your own roles, and in the end you need to be driven by equity value, not ego, because it is a business and you did commit to customers and you did commit to investors and that’s what has to drive roles and growth and org structure, and recognize it’s an organic, growing being, and that people are everything. Right? People solve all problems and they create all problems.
Jessica: So you need to always be thinking about, how do I attract the right people, how do I nurture them, how do I not try to be the right organization for all people, ’cause that aint gonna happen. But how you know who you are and you continue to focus on people.
Kara: Absolutely. That is such great advice. Well Jessica, this is so, so great. Jessica Herrin, where do people find you?
Jessica: They find first of all, our mission, if they wanna support women in business and earning flexible income, is the Stella Dot family of brands and we have three brands that help power flexible earnings for women, actually over 500 million in commissions paid choices made, and that is Stella and Dot at Stella Dot dot com, Keep Collective at Keep Collective dot com, and Ever Skincare and Beauty, at Ever Skin dot com. And then I am on Instagram at Jessica Herrin, which is just J-E-S-S-I-C-A H-E-R-R-I-N, and Facebook, you know, all those places.
Kara: And you have such a great Instagram, too. I love yours and Stella and Dot, so it’s super great.
Jessica: Thank you.
Kara: Well hank so much for taking the time and I look forward to hopefully seeing you again soon, too.
Jessica: You too, Kara. Happy holidays.
Jessica: And so great to connect with you.
Kara: Thank you too.
Jessica: Thanks. Bye.