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How to y'all. I'm Elizabeth Gore. Welcome to the Big Idea from Yahoo Finance, the show that navigates the world of small business and entrepreneurship. All businesses start with one light bulb moment, and each week, I'm going to take you on a journey with America's entrepreneurs. We're going to get between the spreadsheets.With these operators to flow from their smallest failures to their biggest successes. As the co-founder of the small business funding platform, Hello Alice, it has always been my mission to help entrepreneurs have the tools they need to live the American dream. So, let's cowboy up.Today, our big idea question is how do you pick your product to sell? Our industry focus is beauty. Joining us today is someone I have admired and learned from for over a decade.Lisa Price is the founder and CEO of Carol's Daughter, which she began in her Brooklyn kitchen and now has grown to a multi-million dollar empire. With a career in TV production, she was mixing up fragrances and creams just for herself. Then in 1993, Price, with a little gentle nudge from her mother.Carol began to sell her products. With $100 in cash and a cramped kitchen, she crafted a collection that would become the foundation of a beauty empire. There is no one better to answer this big idea question of how do you pick a product to sell? Let's talk to Lisa Price.Ms. Lisa, you're my inspiration. I've known you over a decade, and every time I talk to you, I learned so much. So thank you for being here.

Oh, thank you for having me.

Even when you walk through the building, people are excited to see you. You know, one of the reasons that you're loved, not just because you have some of the world's greatest products, but I mean, you started.If I remember correctly, selling in a flea market with about 100 bucks to your name. So Lisa, what was the big idea to start Carol's Daughter? You know, what, what, what inspired you to give this a shot because you were, I think you were in television and media at the time. And so what was your bigidea?

I honestly didn't even really have a big idea. I was working in television and film production and this thing that I was doing with making butters and oils was my hobby, my relaxation, my fun.And my mother said, St. Mary's is having a flea market in 2 weeks. You should sell your stuff. And I said, Mommy, do you think people would pay for it? And she said, Yeah, you make really nice moisturizers. I think you should do that. And I did.And that was that initial $100 investment in that first flea market. I sold out. I came home with one jar, and that one jar had fallen on the ground and broke. So that was the one jar I brought home. And I did another craft fair and then another, you know, and slowly built clientele and built a business. So initially, it just seemed like a fun thing to do when I was off from work, away.To earn extra income. I refer to myself a lot of times as the accidental entrepreneur. I didn't set out with that as a goal, but I got there and then understood this is what I'm supposed to do. It's one of the things that I'm most grateful for being in business that it brought out skills and traits in me that I didn't even know were there.

So Ms. Lisa, one of the things that I love the story of, you know, you're in your kitchen, you're making these products, and thenPeople start showing up your house. You have folks like Jada and Will Smith wanting to get your products. I mean, how do you go from, I'm in my kitchen to, I'm gonna scale, this is gonna go big.

I would love to say that you know it was this process that took a couple of weeks, a couple of months, a year, but it was a slow build and I'm grateful for that because in the long term, I think it's made me who I am today that I got to do it slowly and step by step. But I started out with my husband and I living in a small one bedroom apartment and then we had in Brooklyn, and then we had a largerA 2 bedroom apartment and a room that should have been a bedroom became office, workshop, shipping department, etc.And then we moved into a home and we lived in part of our home and the other part of our home was work. And so we got to build it over time and just keep growing with it.

Wait, success doesn't happen overnight, Lisa?

No, no, it does not. It really does not. And when you're not in a financial position where you can just go borrow tons of money, you have to do things as you can afford them. And when it got to the point whereIt's not just Lisa making it by hand. There's multiple people making things by hand, and then you get you get an order from a place like Sephora. You can't make everything by hand safely, correctly, properly.And you have to go to contract manufacturing. In my mind, that was the big scale, and that decision was made because that's how you protect the integrity of the company. You can't take, you know when you're going from making 300 pieces of something to 10,000 pieces of something, you can't mess with integrity and safety and all of that. And it was it was hard to do that, toGo from stirring the pot literally yourself to having to trust someone else to stir the pot with your recipe.

That's a lot of trust. Yeah. Not only do you cook things up in your kitchen back in the day, but you picked the right products andToday's big idea question is, how do you pick that product that you know is going to scale? I mean, you have products in the Smithsonian at this point. So, so how did you pick those initial products and then and then what advice would you give to others thinking that through?

Well, the way that we pick products today is completely different. So I'm speaking about the past, when I didn't have market data, when we didn't have social media, I listened to my customer.And I also paid attention to what do I keep making all the time. That was another clue. Um, it's important to listen to your customer and then it's also important to understand your customer because sometimes you can anticipate what they may need before they do. A lot of it was gut. There was a lot of trial and error, and I rememberA finance person was helping me with inventory and different things, and he just asked me a question one day and he said, this particular product, why is there only one? And I said, What do you mean? And he was talking about our black vanilla leave-in conditioner, something we still sell today. This was over 20 years ago. And I said, Well, you know, it's this spray for your hair. It helps to detangle it. It freshens your hair, it perfumes it a little bit. Um and he said, butDo you realize that you make 5 times as much of this item than these other 5 things that are in your top sell? And I didn't. And I was like, but yeah, I do make that a lot. We do cook those pots a lot. And so it taught me that you can build on that one thing. I didn't study marketing, so I didn't think about building a franchise under something popular. So a lot of whatI do today as common practice were things that I learned along the way. It's hard.

I mean, whether you're making a product, a recipe, a service, um.obviously the entrepreneurial gut is powerful, but then there's also things shift, things change, right? If you were to say, OK, here are my here are my 3 pieces of advice to a small business owner who's trying to choose that one. What would be your pieces ofadvice?

Really looking at the competitive set that's out there and um almost do like role playing with maybe someone on your team or in your family to debate.Why yours is needed because sometimes the thing that we're excited about with ours is something that the consumer just doesn't care about, even though it's important. You can't break that down to something that that the consumer can understand, they're not going to care when I used to make shampoos and conditioners.I'm a fragrance person, so I wanted to be on a fragrance journey. So I wanted my shampoo to start out with rose and jasmine, but then my conditioner moves into lavender and vanilla, and then my leave-in moves over here to Pachtchouli and then the whole thing is a journey. The consumer is just.Kind of like, Wait, what is it doing for my hair? Why does this have rose? Why does that have? So you have to simplify it so that she understands step 1, step 2, step 3. That extra layer is a Lisa thing, but it's not the consumer.

So hold thatthought. We have to do a quick break and we'll be right back.Welcome back to The Big Idea. I'm Elizabeth Gore here with Lisa Price, the founder of Carol's Daughter. You said something earlier that I want to pick back up on because I think it's important. You said, um, sometimes youYou have to tell folks what they need before they need it. And and I think that's really interesting in a time where we get about 30 seconds of people's attention. And, and you, Lisa, are saying, you know, you really are going to want this product and you're the most sincere person I swear I've ever met. And so I know that, but they don't know you. You know, how do you portray that message quickly?

For me, it's hard and I'm grateful that I have a team that will take. I just looked at an edit last night of an interview that took 1 hour and 45 minutes and miraculously it's edited down to 1.5 minutes. Like how? So I love that art of editing that it helps pull the salient points out of the conversation.I also think a layered message is important. You know there's going to be a message that is delivered by user generated content, your UGC. Then there's going to be the message that comes from the founder, and then there's the bullet point messages that are the hard hitting commercial type thing, and you have to look at all of them so that they layer up to that 5 minute message that you don't have 5 minutes to deliver.

And does that translate to the package too?

It does in some ways. You can't have too much information on a package because then it becomes overwhelming. So what you put on the front, a lot of times is legally what you can put on the front, but also help the consumer want to read more. You want to spark them to turn it around and read more because you can't put everything on the front.

Interesting. SoI think you and I over the years have talked about mistakes, successes, failures, you know, cried, laughed, and here we try to be really transparent how much we learn from our mistakes. We call them our dirty unicorns because not everyone's going to be a unicorn, right? Right. So, so what, what is a mistake that you've, you've learned from that you can share with our listeners?

Oh my goodness. The thing about being in business for nearly 32 years, you make a lot of mistakes. Nobody does anything for 32 years, perfectly. No one.

I think Imade a few before breakfast this morning, yeah.

So, oh gosh.Oh, I'm trying to think of something. Well, thinking of something specific is hard because there's so many of them, but some mistakes are mistakes according to the consumer. Oh, but it actually wasn't a mistake. Oh, tell me for the business owner. Oh, this is interesting. So there there was a period of time when Carol's daughter had retail stores. I believe at the time we had.9. And of the 95 did not perform well, and we needed to exit those leases and we took the proper precautions and listened to lawyers and did what we were supposed to do to appropriately exit those leases.And unfortunately, it ended up in a clickbait type headline with a photo of me from when I did a talk somewhere and I was telling a funny story and telling the talk, and I did something like this.During the talk.

For those of you listening, she just did the cutest smile and shrug of her shoulder.

So that image is the image on the article. Like, I don't know. Um and it was, you know Carol's daughter declares bankruptcy.

Oh Lord Jesus.

Now, if you were a business person and you actually read past the headline, it makes sense. Downsizing too many stores, not profitable, strategically closed, 5, left 4 open, blah, blah blah.If you just read the headline and ran with it and put it on Twitter and dragged me and you know it was awful. So here I am in a situation where I look foolish, I look like I've made a mistake.I look like I don't know what I'm doing in business, and the truth is the exact opposite. But I can't talk about that because the more you talk about, no, no, that's not it. No, no, you're wrong. No, no, you keep it alive. That's so true. So you grin and bear it and you wait and you let it die and you keep moving and eventually people don't talk about it.

You know,I really appreciate this story because IThat is going to happen to every entrepreneur, you know, and particularly with the 24 hour news cycle right now and to have the wisdom and you have a lot of wisdom and the guts to just let something go is hard.

It is hard, and I'm grateful that I've always had supportive people around me because they talk you in off the ledge. They remind you who you are.You know, and and when you know that you can trust them, you believe what they say. When when Carol's daughter was acquired by L'Oreal, that was another moment of people not understanding what I was doing and being very upset with me.

Well, let's pause real quick because I see that as an unbelievable triumph that, you know, for for every entrepreneur listening right now would be like, oh my gosh, I built something from a flea market toA, a huge acquisition by L'Oreal. So first, let's celebrate that and say, oh my gosh, that's just the best. Um, but what, what was the downside?

The the part that was hard for people, and I totally understand where this emotion comes from within within the black community, we have not hadThe benefit of ownership, legacy, generational wealth, passing things down more of our history unfortunately is having things taken from us. So there was a feeling of this is ours, this was made for us, this is a business that we helped to build and support, and now she sold it to this big company and she's probably not going to be involved anymore and it's not going to be ours anymore. So there was this sense of betrayal.And on the business side of things, on the entrepreneurial side of things, like you said, this was amazing for me. It was amazing for my family. It was amazing for my team. I was so proud of myself and I knew that there would be concern, but I didn't anticipate the level of the anger. And so there were some comments that were made on Twitter.And I did respond to one of those comments and because someone brought my children into the conversation. And so,

as I sing children,

as I responded to that, I get a message from the social media person at the time who said, Put your phone down. We've got you.And then followed up with, Put it down. I can tell it's still in your hand. Well,

put it down. Let's just talk about Mama Bear for a minute because if anyone messes with my kids, I mean, yeah, I'd have put more than the phone down. Let's be honest. But

thecomment was, what is it that you are teaching your children if you're teaching them that it's OK to sell out if there's enough zeros on the check? And I was like, All right,

here we go. Let'sgo.Since filming the episode, L'Oreal sold Carol's daughter back to Lisa and an independent beauty entrepreneur. Lisa announced the newson social media.

10 years ago, I made a decision to take Carol's daughter, my brand, my vision, my passion to heights I had once only dreamed of.But my dreams are not finished. Today I begin a new chapter and reclaim the indie spirit of my brand as its forever founder and newly appointed president.

So I always love your advice, but what is the best advice you've ever gotten in your entrepreneurial journey?

I have to say that I'm blessed that I could probably tell several stories here, but this one sticks out and is resonating right now for me. I was at a dinner party with Jay-Z, Shawn Carter, and he was having a conversation with me about the importance of what I do within the company. And at the time he was an investor in the company and he saidThat the truth is within the roots of a tree. That if you if you think of the truth within a brand as its roots, the way you think of the roots of a tree.You focus on that truth, and you can't ever replace that truth, no matter what happens to the tree. The roots are always what keeps it grounded and keeps it in place. And if your focus moves from the roots and you get caught.And the fruit that it bears, the flowers that bloom, and you just focus on the beauty that the tree can give you, but you don't feed its roots. Eventually it stops creating the beauty. So just remember that as the founder, you are the roots of the tree.

Well, you're my roots.All I want to do is celebrate you. And, you know, I wanted to ask you, what, what would your mommy say about you at this point?God bless her, by the way, her soul.

I know that she would be so, so proud.I I know that because I saw so much pride before she left. So my mom passed away in 2003, so she passed away before I had investors like Will and Jada and Jay-Z. She passed away before L'Oreal, before all of that. AndShe, my mother.was the person who reminded me that my glass was always half full. And when I was complaining or grousing about orders and I can't keep up and I'm so tired and my mother was not a business person, so it amazes me that she gave me this advice. She said and she said, you know, I'm not a business person, but I think it's probably harder to get the order.Than it is to figure out how to fill it. And just saying that today, like I get goosebumps all over because she's so right. She was so spot on and I remember saying to her, What do you mean? And she said, Well,You have the order, so you have the money, you have their credit card information. You just have to figure out the timing to get it filled so that you can process the order.I think she's like, I think it's a lot harder to get the money.

Yeah, yeah.

And then I was like, Yeah, mommy, you're right. Well,

Lisa, you are loved, and I know your mommy's proud of you. I'm grateful to you and I just thank you for coming on the big idea

today. Oh thank you for having me, sweetie.

At the end of each episode, I'd like to give a shout out to a small business who's doing amazing work in the world. Lisa Price would like us to highlight the Life Wellness Center in Brooklyn.It's a black-owned center that provides acupuncture, massages, and wellness services. They also sell candles, incense, soaps, and other decor from independent sellers and artisans. You can find them at life Wellnesscenter.life. Thank you, Lisa, for coming on the show and thanks to all of you for joining us. I hope you learned a lot. This has been the big idea from Yahoo Finance. Watch us every week.On your favorite streaming service and find our videos at yahoofinance.com and listen wherever you get your podcasts. And if you follow on Amazon Music, just ask Alexa to play the big idea. You can also come say howdy to me on any of my social channels at Elizabeth Gore USA. I'm Elizabeth Gore, and as my grandmother always said, hold your head up high and give them hell. See you next time.

This content was not intended to be financial advice and should not be used as a substitute for professional financial services.