YouSaid · the spoken record

Marla Beck

lines on the record: 101
first: 2022-10-24
most recent: 2022-10-24
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“And the bank probably had to think long and hard of that, and I actually had them double down on their investment. I backstopped it with a personal guarantee. Plus the money I had already put up for the business. They reinvested in the business, stabilized the inventory, and we built the business out from there.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, we realized they were in default of their bank debt. Every week I was writing more checks to the company twenty thousand, thirty thousand, fifty thousand. We were just writing checks to pay the company's bills in what was like a seemingly endless sort of reservoir of needs of cash. And so we went down to see BB&T Bank who essentially really owned the business that she was in debt to them and the business was essentially insolvent. And we went down to see BBT Bank and the vice president of bank, John Ryder in Alexandria of Virginia. And I remember walking into the... Lost all your money We said to him, Your only hope of getting a return on your money would be to double down.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“And as we spent more time with her, she kept coming to us saying I can't pay my bills, I can't pay my bills. And the answer is that she's like every entrepreneur. On the surface, she seems like a swan cruising across the water, but underneath she was paddling like hell.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, not only that, I had been going without a salary since the inception of Blue Mercury, the internet business, but I was able to do that. And so we talked to this person who ran this business and we said that we would consider making an investment in their business. We would help them. They were having problems too. They couldn't even pay their bills and they were late paying their bills. And so we struck up a management and purchase agreement which said that, hey, We'd like to take a look under the hood. But if we like what we see we have the right to buy the business.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“And what we did was we formed a company called twenty nine street partners. Marla lived on twenty ninth Street. And we caused that company to acquire the store”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“No, the investors say There's a rule of corporate opportunity, which is if we decide to buy the store, we have to present it to them, they would have to reject it because we couldn't. Couldn't take that opportunity on our own because we were supposed to be giving our full time and attention to the internet business. And so we presented it to them. They rejected it. And in fact, what they said was if you want to buy the store, Barry and Marla, buy it with your own money.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think it was an iterative process. So let's get to that moment. We were down to our last $150,000. And then we make a decision to actually enter into this management and purchase option. And we present that to our investors.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“That's correct. And the physical world store to these young independent brands was sort of a trust that they had a place where they could see their products and they built a relationship. These were small little independent brands working out of a room in New York. And so we would be able to tap the vein of these incredible niche beauty brands who were on the rise.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Right. I think it was owned by a woman who ran the business. It was a store called EFX. And what seems clear to me is that at the time, in order to have access to even a small variety of cosmetics, you really had to have a physical store, right? That was sort of non-negotiable for a lot of these brands. And you knew that.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“What happened was that in order to get access to the The brands to sell online. We found a solution right around the corner from Marla's house on M Street in Georgetown. He was an independent beauty stores more like a gift shop.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, at that point in time, all of our sort of e-commerce techie investors only want a pure play internet businesses. That was a thing. There was no value in retail. Retail was out of favor. It was e-commerce and the internet was where it was at. When we went to them, they said, no way. This is a pure play internet business. You will destroy the value. And Baron and I are thinking, what's the value in having $150,000 in the bank?”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. So there was a model or a philosophy, and you may say that it's going on today, this model, you know, the sort of the Harvard Business School model, GBF, get big fast. At any cost. When you run out of money, there's always more right there. But at that point, in this sort of adversity I realized that we could find opportunity. And so, but we had to make bold moves, moves which might and might not, or actually were not popular with our investors. When we told them that we needed to pivot, which was a word we didn't use at that time, they were not happy.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“No, I mean, of course, you know, I was concerned. We were down to our last 150,000. I mean, this is very, many, many entrepreneurs came out of Harvard Business School at that time with big ideas and big thinking. There's a lot of big thinking going on. But when you're down to your last $150,000 in the bank and you look around the room and you have 20 employees, And you realize you have 60 days of cash left, but you have to make some tough calls.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I certainly had Days where I just couldn't get out of bed, every entrepreneur has those days. They don't usually talk about them, but I had all these degrees. gone out on a limb to start this business and I saw a failure ahead of me and it was like you know what what do I do”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Not a dime. And the market was starting to cool, right? Everybody was starting to look at sort of, okay, what had I invested in was this going to give me a return? And so the market was starting to cool at that time.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah actually devastating because I knew we didn't have enough money to survive very long. There was no chance that someone was going to fund the player that had already raised the least funding. And so, you know, Barry and I were in trouble. We had to figure out what our move was because there's no question we were going to run out of money We had to pivot, but we joke that back then the word pivot didn't exist, right, as a strategy for entrepreneurial companies. It was literally you're about to go bankrupt, what do you do?”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“We needed more money, we knew we needed more money, and so I went out to Silicon Valley in the fall of'99, you know, went to a bunch of firms where I had friends from business school, pitched them. And they told me that there were four or five other competitors that were trying to do the same thing as us. Eve dot com gloss dot com all of these other companies had raised ten to twenty million dollars each. And so. We were way behind.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“But not all. And maybe some other sort of more esoteric type brands, Yeshua Moore, which wasn't a big, it was a cool brand, but it wasn't really a major brand.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think that what we realize that sometimes being too early is really just being wrong. And I think that not only, so I think there was a confluence Of several challenges, and so number one is that there's no traffic coming to our website. So that's problem one. And I think number two is that we also were unable to get material supply to the major brands that we needed to attract customers to our website. So maybe we were in discussions with NARS to sell some of their items.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Very, very little sales that we were still on dial up. I think the day we turned on, by the second day that we had the website turned on. We looked around the room at all the people in our team, and we saw the writing on the wall.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think that we had a philosophy that if you build it, they will come. And I think when we turned on the website and had no sales.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“You say that, but 90% of your listeners probably don't know who Starbuck was. He was the navigator on the ship of Herbin Melville. Oh, that's back. And so I'm just saying, like, what does a name mean? In other words, right? And that's people don't realize that's why there's a mermaid on your coffee cup.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And I was filming through an atlas and we envisioned ourselves as becoming and ultimately did become a source for information for, you know, we thought about building not just an e-commerce site, but a community for information and a place for learning. And so Mercury was the god of information. And so it was blue. Mercury, I called her up, and we settled on that. I do remember that when we told the investors we were going to name the company Blue Mercury, they hated the name. And they thought that we should call it Marla's Beauty Shop, Barry's Beauty Shop, have beauty in the name. And we said to them, what's in the name? What does Starbuck mean? And what's in the name would take on the attributes. Take on the meaning of the attributes assigned by our customers”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“We would go up to New York City and pitch these independent brands. So we went up to the Norris office. Which was probably a 20 by 20 room. And we would pitch them on Blue Mercury and how we were bringing beauty products to the internet. And, you know, they would, they took a chance. And then we'd go pitch another company. And so we had NARAs. I think we had Keels. We had Shuamura. There were a bunch of brands that took a flyer fresh. They were all independent brands”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think our first one of our first checks we went down to the Carlisle group and Dick Darman and Ed Matthias. Wrote the first checks and I sort of remember just to underscore the point is that Ed signed a blank check and then called out to his assistant and had her fill out the details. And I think on the way out of the office, I said, Don't you want the paperwork? And he said, Nah, we trust you. And I looked at Marla because she went to Harvard Business School and I said, What's P-O-M? And she said, I don't know. And we looked at him with a blank care and he said, I want piles of money.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it was too early, too risky. Right. And there was so much money to be around, and the money was seemingly free anyway.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and as we had some challenges throughout time with our investors, but the truth is this was a shoot the moon business. We had no idea how much money it would take. I think it probably to build out at that time would probably cost probably nearly $600,000 to build an e-commerce site. And today you can build it on Wix for free. Sure.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Alright, here's a question for you. You had some money, Barry, from the sale of your business. Why didn't you I mean why didn't you just finance it and then you own the whole thing Why did you even bother with investors? Because a lot of people we've had on the show, you know, they've had mixed experiences with investors.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Correct. And by the way, if you want to report, they were, you know, tens of thousands of dollars at that point. Yeah. So, I think we just went for it and we started pitching. Now we did, our first pitch, we knew we had to expand it beyond cosmetics because people wanted to fund businesses that had huge potential. So our first pitch was we were going to do this marketplace for professional women. Which also included cosmetics. We were going to start with beauty.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“You know, it's an interesting question because I don't think we overthought it. I think at a certain point, we knew we had hidden the idea and we developed like a 10-page PowerPoint and we were going to go try to raise money. We didn't do enough research. And by the way, it was hard to do research at that point. You had to call people, right? It's not like they weren't internet.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Alright, so I'm curious you did a lot of research before you said, let's do this, let's pursue cosmetics. What did you have to know? You knew that this wasn't out there and available on the internet, and you knew that there might be an opportunity. What else did you need to know before you were really convinced that this was the direction that you guys should head in?”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Day. Yeah, I mean, Bobby Brown's a great example. Here you have a fabulous, amazing makeup artist that says, I don't like exactly the textures of these lipsticks. And by the way, these are the really the seven colors you need. And she starts by launching with seven colors with the best packaging, the best texture, and people went crazy for her lipsticks. Same with Francois Nomers, which is they were all makeup artists. They knew better than anyone else. What the customer needed.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, because, I mean, I think what started to happen was a lot of these entrepreneurs realized that you could go to these manufacturing facilities that were essentially making the same stuff for everyone else as white labeled, but you could pick your ingredients and you could formulate your product and you could start to sell it small and then maybe big one day.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“There was one other factor going on at the time, which was it was the rise of the independent brands, which is for the first time in a very long time you had founders that were breaking into the industry. So you had Bobby Brown, you had Marcia Kilgorplis, you had Lena Glassman at Fresh, you had Francois Nars at Nars. And so there was a whole new Category of independent brands that in retrospect created another opportunity to break into the industry.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Think that we at some point had a hypothesis that the department stores were really created for sort of two reasons, right? Convenience and breadth of selection. Yes. And that we saw a possibility that they could no longer be convenient because of just travel times and distance and more urbanization and densification. And the breadth of selection could be possibly solved through the internet. And so we thought that this could be a disruptive way to attack the beauty business.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“It was not like you could go to anywhere and just get I like to get cosmetics, you'd go to Macy's or Bloomingdale's or whatever, right? I mean, or your drugstore. Like you'd go to Write Aid or something.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I should mention this is 1999, so this is really before, I mean, Sephora existed, but it didn't come to the US really until the 2000s. Alta was not what it is today. It was a very small company at that point.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so I became hooked on those products. Mac in the early days was sold at one place in the San Francisco area. It was sold at Nordstrom in San Francisco. So I got to know Mac when it was a really young company. And so it was just a hobby. It was a category I liked. There were shops in Berkeley that handled So I just knew everything about beauty products, and in fact, when I moved to Boston for graduate school, I could not find germologica anywhere. I had to call the 800 number and they would ship it to me. And then Mac was sold at one location about 45 minutes from school. And so, you know, in the back of my mind, this was not at the front of my mind. I knew that these products were hard to get. And so we started thinking about okay, what about beauty products not on the internet yet? Why not that”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I do not beat a product. So it was just a hobby growing up in California. California has always been Know an innovator in the beauty sector. So when I was in high school, there was a brand called Dermalogica that was a couple of years old.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Marla's one of the smartest women I've ever met, and my father looked at me right away and he said, I think she's the smartest person you ever met.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think during that process of spending time with Marla, I realized, you know, I spent, you know, I remember early on one of Marla's cohorts from Harvard Business School told, she said, how did you make XYZ decision? And I said, it's instinct. And she said to me, in business, there's no such thing as instinct. And I carried that with me for a long time until I was talking to a Harvard Business School professor, Linda Applegain. She says, of course there's instinct. It's pattern recognition. And so for whatever instinct I had, And Marla was young. I thought that I felt like, you know, and I think time has proven me correct that she was a genius. In fact, later on when I said to my father I was going to start a business with Marla. My father had met Marla, I said to my father.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so Barry would nudge me and say, what are you going to do work for this firm your whole life? You know, why don't you go out on your own? They're never going to put you in charge of your own business, right? Because one of the reasons I joined there was to get closer to being an entrepreneur, closer to running a business. So I was dissatisfied and I had someone in front of me saying, hey, you should go out on your own. You know, I think Being at consolidation capital and working in private equity, what I saw when I saw these entrepreneurs, many, many entrepreneurs of companies that we had acquired, they weren't superhuman. They were just regular people that had struck out on their own. And so I started to feel like I could do that too. And there he was nudging me. We were both dissatisfied in the industry we were in.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I was doing my job. I was trying to learn sort of how we. Transform all of these companies that we had purchased to be sort of a bigger company at scale. That was profitable. So, you know, they had figured it out.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I don't know exactly what I was thinking, what I wanted to do was have more time with her. That's what was important to me. What happened? And then maybe say I'm a bad business guy was I began to, rather than think about selling the business to her, teaching her what we were doing in our business. We had all kinds of different profit centers that we were forced to figure out because we were bootstrapping entrepreneurs using technology to make a difference in the industry. And Marl and I had successive meetings over time and we were working together”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“You know, I remember going back to Philadelphia after the meeting. I actually mentioned to one of our company lawyers, I think I met the girl I'm going to marry. I think his quote was. What kind of schmuck goes to an investment banking meeting and meets a girl? I said, I guess me. Actually, waited three days and I called Marla, and I thought to myself If she liked me, she would call me back. And the next morning, you know, she'd call me very early that next morning and left a message for me.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Okay, I have to assume at the end of this meeting you were not thinking this guy's gonna call me up and ask me out. You were just thinking, okay, that was an interesting person that would be maddened. Or were you? Yeah, it's interesting.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Most of the companies we bought were from people that were at a point where they were looking at taking care of their families and succession. So first of all, he's young. Barry is incredibly dynamic and energetic and sort of jumping out of his chair all the time. It's hard in this environment because he has to sit still and talk to the microphone. But he's super high energy. And talked nonstop the whole meeting, right? Part of the reason there was no conversation was because he was so excited about his company and presenting. So I never actually seen an entrepreneur or anyone like him.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“I think it was just a quick introduction. But I think at that time we were really. Polar opposites. So you have to think I'm a Hard scrabble entrepreneur, building businesses by myself. So I saw a person.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“We call that unconscious bias I mean, props to you for admitting that because that's right, because you were working in an environment probably where that's what you saw a lot. So, all right, so did you have any other interaction with Marl at that time, or was it just kind of introduced each other, and that was it?”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT
“Yeah. And so at the end of the meeting, we went around the room. So typically what would happen in investment banking meeting like this or a meeting like this, everybody would introduce themselves up front. What do you do? Where are you from? What's your background? What's your role at the company? So I think when we went around the room and they got to Marla and she said, well, hey, you know, Marla, I'm vice president of strategy. I really am in charge of deciding which businesses we buy and which ones we don't. But she was just there taking notes.”
2022-10-24 · How I Built This with Guy Raz · Bluemercury: Marla and Barry Beck · IDENTIFIED FROM THE TRANSCRIPT