Lessons - Passion, Failure and People | Zahir Dossa, CEO of Function of Beauty

Welcome to the lessons episodes of Success Story. These lessons episodes will be shorter clips from past guests, accomplished value community members, and myself. In each short episode, we'll feature concise and insightful, actionable conversations and tactics, providing you with real-world strategies and tips to help you achieve your personal and professional goals. If you're seeking a no-nonsense approach to growth and progress, you've come to the right spot. Settle in, take notes, and enjoy. So you've had an incredible amount of success in beauty and hair, but I know there's lessons that you've learned over your career that are industry-agnostic, that are going to help entrepreneurs that are building in any category, any industry. So let's go into those. What are some of the most valuable things that you've learned disrupting an entire industry that would be useful for somebody that's just starting from scratch, or they're well on their way to building right now? Yeah, sure. So I think the first is actually something I learned. Bill Gates at some point came to speak at MIT, and there was a few students that were seeing the scholarship, and I was one of them, and so we actually got to talk to Bill Gates separately in a side room before everything had started. And I remember someone asked him the question, you know, yeah, you did Microsoft and all of that. But what's the biggest lesson you would give to any of us, of course, in a company end? And he had an interesting insight. It was basically that if you look at success rates, it's almost of entrepreneurs or of companies it's almost independent of the size of the problem. And so, you know, whether you're going to start a mom and pop restaurant or a huge software company, you're going to have actually similar rates of success and failure. And so, you know, the first big lesson I learned from that was just all the biggest problem in the industry, if you're likely to have success or failure is the same, no matter what size of the problem, just make sure that you're solving a problem that's big enough to keep you motivated. And then obviously have a huge tailwind of impacts that you're able to double down on. So, that's the very first lesson I would give, you know, when it came to function of beauty, I thought personalized beauty was the biggest problem in this industry. All you had seen in the last 30 years was either here's a new cool ingredient or here's a new pretty person that's going to support and evangelize a product. But, you know, no one's beauty last forever and those role models change and similar as always going to be a new and latest ingredient, but there wasn't any real innovation. So, I thought, you know, in a world where there was no innovation in the sector, what is the very biggest problem that consumers are facing? So, I think that's the first lesson I would give or at least the first lesson I learned that seems reproducible is focused on the biggest problem in the industry that you're really interested in because all other things are going to be equal and it's, you know, I've been doing this for five and a half years if I had focused too small and originally a high, the archantry, what it was cool, but again, it was some slight disruption, nothing too crazy. In fact, I don't think it would be disruptive at all. And so, it wasn't a big enough problem for me to actually rally people around and really focus on and then make them big. And so, I think that's the first lesson that I learned with function of beauty. The second thing, thank you. The second big lesson that I'd like to share and I guess have done so repeatedly is just do it with the best team in the world. I think it's become an insanely competitive world and the more globalized we make it, the more entrance there are going to be in any single industry. So, even if you come up with the best solution, if you don't have the very best team working on it, then there is going to be someone else that does it better, does it bigger, etc. And thinking that's what, you know, we didn't really, really well. I think if you looked at me, Josh and me and the three co-founders and then all the supporting tasks we built around us, I think we are the very best people in the world to start an online personalized beauty company or even an online beauty company, even if it wasn't personalized. And, you know, it's a testament today, we are the biggest online haircare company in North America, probably the world, depending on how you measure it. And that's personalized or not. And even within our own sector, there's a lot of small copycats and competitors that come around, but I can honestly say we have the very best team and I'm not worried at all about them. And so as a result of that, they're able to help build this vision of personalized beauty or whatnot, but we're always able to stay at the forefront and remain the pioneer and remain the biggest by far just because we have the very best team working on the problem. And so I think that's the second piece of the puzzle is make sure you solve the biggest problem, but with the very best team. One of the things that you said, which I thought was very interesting, was that when you got into hair, when you started building this company, you didn't necessarily have a passion for this particular thing. So speak about that, I want to speak about passion, I want to speak about should entrepreneurs follow their passion, should they follow the most lucrative opportunity regardless of whether or not they're passionate about it. So how does passion play into success? Yeah, so I think, you know, some people are drawn to industries, others are drawn to the actual solution that comes from it. And so I think you can be one of two people, right? So I could have easily been very passionate about care care and probably had a very, very similar success path I would actually argue. So I think that's one and I think those people end up really focusing on industry. So all their ideas will happen within this one industry that they're super passionate about. I think the other side of people are people who are very, very passionate about problem solving and then very passionate about very specific things that could apply to any industries. I am extremely passionate about e-commerce, I'm extremely passionate about direct consumer, I'm extremely passionate about brand and product, something you feel, something you touch. And so, you know, I think, I think you do need to have a passion in whatever you do. And I see that just because you are going to go through so many adversities, you're going to go through so many failures, the only thing that keeps you going at night and keeping the hustle alive, going through all of that is if you do have a passion for what you're doing. So I think maybe that's the nuance there is you don't necessarily need to be passionate about industry, but you will always end up doing something you were passionate about. In some way, shape or form, just because I think it's too hard to go through all those tough times without being passionate at all, but I do think that there is a strong segment of society that feels that they are not passionate about a specific industry or whatnot. And to those people, I would say, well, what are you passionate about? Because there is going to be something you're passionate about that then ends up becoming applicable to a whole host of different industries and then you're going to have to figure out, okay, how do I choose where to apply my passion here? And in that was the case for me, where, you know, looking at all the industries that there were, I was really passionate about how do you optimize and build a sustainable and strong value chain. And I looked at a very simple metric, I was like, what's the final sale price of a good? And then how much did it actually cost to produce that good? And whatever had a high multiple was what I was really passionate about solving it. How can I make this a lot more efficient? You know, one was coffee. If you look at how much a roasted bag of beans, the cells were even crazier. If you look at what the actual cost behind the stuff that goes into your Starbucks, whatever macchiato, you'll see a crazy high multiple. But you'll also see that crazy high multiple and beauty as well. And being just seemed like something I just ended up becoming a lot more crunchy. And I think that's because I was pasture about brand products online. And all the things that I thought I could better impact in the, in the BD industry. I love that. And the other thing that I thought was great was you really highlighted the importance of teams. So speak to me about your team. Why did you choose to start with a team as opposed to on your own? What role did they play in the success of the company? Yeah, sure. And that comes with that second lesson where it's make sure you solve the biggest problem with the very best team. So me on my own could not do everything at the end, even the core principles that we are trying to achieve. I just, I am not that good, right? Like I'm really good at web design, web programming, business strategy, marketing, you know, that side of the house. When it comes to automatically putting things in models, that's not my, my forte operations and figuring out how do you create, you know, various lines to be able to actually automatically fill bottles, package them, et cetera, that's not my forte. But I knew that the automatic fulfillment of this promise was necessary. Otherwise, we'd never achieve this scale to make, you know, any, any news headlines or any big splash in the industry. And that's where I chose Josh, where Josh was one of my best friends on my team, but he is phenomenal at that. When it comes to this intersection between, you know, automation, engineering, and then operations, there's no one better in the world than Josh, you know, and so he was essentially like told my plan, he laughed about it for the first bit and then thought about it and, you know, was like, okay, it sounds like actually a really good idea. Let's, let's do it. And then the other person was here at the end of the day, you know, I could sell a product, Josh could automatically fill up about how the heck do we know what to fill each product with? How do we think about the questions to ask customers on this hair quiz? And that's where he encountered it. And she is a best-in-class formulation chemist and someone who instantaneously got the idea and value proposition. So now if I interview formulation chemists may get it, they've seen function of beauty, they understand how it all works. When we first started, there was no personalized beauty, anything, no personalized skincare, no personalized hair care, you know, whatever it may be. And so to have a co-founder who truly understood, here's the value proposition, and here's, I'm actually going to achieve a firm, a form of relation standpoint was critical. And so I don't think we could have started function of beauty lift, two of us, much less, one of us. And I think that's the first big thing is making sure you really do have the very best team. I do think that there's a third lesson that I learned along the way. And I learned this the hard way, which was, it's in a book called Scaling Up. And one of the interesting things they say is for the first, you know, few years, I don't know, say two to three years in a company, the company focuses a lot more on growth than it should, and a lot less on people than it should. And so basically, you're really focusing on growth for the first two to three years. When in fact, you should really be focused on people. And I realized the second I started focusing on people suddenly, you had this exponential increase in the growth of function. And so I think the early lesson is investing people and growth will follow versus the other way around. I think the second half of that lesson, though, is you flip it after, you know, this initial two to three year mark, where you end up focusing a lot more on people for the second half of what you'd call a startup, when what you should be focusing on is growth. And that, I think I learned a little bit quicker. And it's really easy to get caught up because you'll end up having cultural issues at your company. You really want to build a strong culture. Any little thing gets you, but you'll be so focused on hiring the right people, or even just getting the best people, or the people within your company to mobilize and whatnot, when you really do need to be focused on, how do you grow the heck out of this thing? And you know, I have to end up having to make some personal changes just because it was like people were just not able to grow this company the way it should in the last couple of years. And as a result, we've been able, like, triple every year since then, which is especially hard when you reach a certain size. I mean, you're talking about the biggest online haircare company that's doubling or tripling in size every single year. That's not an easy feat, but that is where the focus area has to be. And it's interesting. The second you start focusing on growth, the people just come. People internally get better and better because they get more and more excited about the company, their building. But then you just have so many people who are applying for various positions and you just get such a high caliber of applicants. And so I think that's the third lesson is focus on people when you should and focus on growth when you should.