Kim and Tim Lewis are truly an inspiring success story. They’re happily married with 3 kids. They run a business that just raised $4 Million in crowd-funded equity. They’ve been on Shark Tank and they were featured as one of Oprah’s Favorite Things. They have huge goals for the future. So what is their brand Curl Mix? It’s a line of hair care products formulated for curly hair…and it has a raving fan base.
In this merchant success episode we unpack some key lessons including:
- How Curl Mix got started and how doing FB lives from the shower helped their products go viral
- How they got on shark tank and tips for doing the same
- The definition and explanation crowdfunded equity
- 3 tips for raising $4.5 million + of crowdfunded equity
- How CurlMix plans to become a black-owned P&G
- How to increase recurring revenue
- Plus more!
Mentioned in this Episode:
Kim Lewis
Tim Lewis
Kim & Tim Lewis Instagram
CurlMix
- Website
- Wefunder
“Influence” by Robert Cialdini
“Trust Me, I’m Lying: Confessions of a Media Manipulator” by Ryan Holiday
Ring
Transcript:
Brett:
Well, hello and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today, we have a merchant success story, and it's one that I'm just super excited to dive into this. I think I'm going to have as much or more fun recording this than you will listening to it. This is an amazing power couple in the eCommerce space that I had the privilege of meeting in Denver several months ago at Ezra Firestone's Blue Ribbon Mastermind. We met, I was like, "Man, you guys are awesome. What you're doing is amazing. And so, let's get on the podcast and talk about it."
Brett:
This episode of the eCommerce Evolution podcast is brought to you by OMG Commerce Resources. That's right. Here at OMG Commerce, we want to help make sure you're educated and in the know, to capitalize on the latest tips, tricks, and strategies to help you grow your eCommerce business. So if you go to omgcommerce.com and under resources, click on guides, we have some cutting edge free information for you on things like how to dominate with Amazon DSP ads, or how to use Amazon sponsor brand video ads, and how to craft the perfect ad.
Brett:
We have several guides on how to capitalize on YouTube ads. From creating the perfect ad, to knowing when you're ready to scale. Plus there's the newly updated Google shopping guide. Plus more. Check it all out at omgcommerce.com and click on guides under resources. And now, back to the show.
Brett:
So I have with me today the husband and wife team, Kim Lewis and Tim Lewis, Kim is CEO, Tim is COO. They're co-founders of CurlMix, and they've been on Shark Tank, been on Oprah's Favorite Things. They're ruling the world. Tim even went to college in my home state of Missouri. And so, just thrilled to have you guys on the show. So Kim, Tim, welcome, and how's it going?
Kim:
We're doing well. Thank you for having us, Brett. We're excited to be here.
Tim:
Oh yes.
Brett:
... just look fantastic. You guys just look cute. You look like you know what you're doing? And you all look snuggled in there...
Tim:
That's half the battle
Brett:
It is.
Kim:
That's so kind, but thank you so much. I appreciate it.
Brett:
So lots, lots we want to unpack here. And then I love doing these types of interviews because I think we all learn from success stories, and we learn from failures along the way as well. But you guys have just done some amazing things. I love your site. I love your brand. I love how you guys have been able to grow.
Brett:
So, talk a little bit... And also, side note. So you guys are married, but you met in high school. So you guys have known each other since high school, got married after college, running a successful business together. What is it like? And how did this come to be? Because you guys look like you still like each other.
Tim:
I actually do. Kim is my person. She's my best friend. So I'm an introvert. And so all this entrepreneurship stuff
Brett:
You're an introvert?
Tim:
Yeah. I play a really good extrovert on TV, but honestly I'm an introvert. And Kim is my one person, and we're best friends. She likes me still so far, so I haven't messed that up. But I met Kim first period... No. Freshman year, second period gym class.
Brett:
Nice. Met in gym class.
Tim:
Oh yeah. Yeah, you know what? It took me a little while...
Brett:
So who was interested first? And sorry if I cut you off, but who was interested first?
Tim:
Yeah. It was actually-
Kim:
It was Tim.
Tim:
It was me. She caught my eye. We were sitting in the same line in gym, and I was like, "Man, she's super cute."
Kim:
He barely made the class. I wasn't checking for him. I was like, "I'm going to date somebody who's going to class."
Tim:
That's true. But it took me a couple weeks to build up my confidence and go talk to her. And I talked to her after school, we were chit chatting at her locker. And then out of nowhere, she introduces me to her boyfriend who walks behind me... Ugh, whatever.
Brett:
Take that, Tim. Yeah.
Tim:
Until junior year until she was available again, and we started talking. And we finally made it official our junior year.
Brett:
Junior year. I admire that persistence, Tim. And Kim, I'm just curious, and this is relationship or a dating podcast, but this is super fun and interesting. What won you over? What was it? Because Tim's a good looking guy, but what finally convinced you?
Kim:
It wasn't his looks. He's cute, but it was... Tim was the nicest guy I've ever met, and today is still the nicest guy I've ever met. And so, every time I think about... I go to a lot of conferences. I meet attractive men who make a lot of money, but I'm like, "This guy's not going to do all the things that Tim has done for me or treat me the way that Tim has treated me." And I'm reminded of that ...
Tim:
Trying to get points over here.
Kim:
Stop ...
Brett:
You guys a recording of this, just anytime you need it
Tim:
Need a clip. We're going to run it on a loop.
Brett:
That's awesome, guys. Well, really excited to be chatting with you. So let's talk about CurlMix because like I mentioned, I love your brand, and you guys have done some amazing things from Shark Tank appearance to Oprah's Favorite Things, to now you got a VIP membership and all kinds of crazy stuff that we'll dive into several things, but what's the origin story? Where did the idea for this business come from? And how'd you guys launch?
Kim:
CurlMix, I like to say that it's my... This is CurlMix 3.0 right now, because initially we started a social network for natural hair. So niche social network, though, don't work. And that's what you learn the tech industry.
Tim:
Yeah. We were fresh out of college when we started that business.
Kim:
Yes.
Tim:
We had just read 4-Hour Workweek, and we were oh, we'll be internet entrepreneurs.
Kim:
And didn't actually have a business model. We didn't have a way to make money. So I was like, "The next time I start a business, on day one we're going to make money." And at the time, I was making all my haircare products at home. And I was like, "Man, if somebody would just send this to me in a box, this would save me so much time." And so, Tim convinced me to launch it.
Brett:
Now, why were you making stuff from home? You just couldn't find anything that actually worked for you?
Kim:
Yeah. So a lot of women who have curly, kinky hair, we don't... Early in the early 2000s, there was nothing on the shelf for us. And if it was, you didn't know if it was any good, you didn't know if you could trust it. And many of us, we had straight hair our entire lives. So we didn't know even how to use the products sometimes. So many of us spent hours and hours on YouTube, learning how to do our hair and learning what products to use. And in that journey, some of us end up making things at home because we can't find what we want on the shelves.
Tim:
And not just making stuff at home, but she would go to Whole Foods, spend hundreds of dollars, come back, destroy the kitchen and leave me with the dishes, and may or may not even like what she made. so it wasn't all roses and rainbows.
Kim:
Yeah. I'm sorry. I did. I skipped a bunch. And then, I was watching an episode of Shark Tank one day, and this lady was doing it with organic cookies. She was having everything prepackaged and put it in a box, and then you go home and you make the organic cookies. You didn't have to shop for anything, and you knew it was organic. And I was like, "I wonder if anyone's doing this for hair?" And Tim was like, "You should do it." And we did it. Sold one box to my cousin, I was like, "This is a failure." He's like, "No, Kim, if Airbnb can relaunch seven times, surely CurlMix can relaunch twice."
Brett:
Nice. I Love that. Yeah.
Tim:
Yeah. We just didn't know what we were doing. So we read a bunch of books, things like Influence by Robert Cialdini.
Brett:
Classic.
Tim:
I think Confessions of a Media Manipulator by Ryan Holiday. It was just anything to learn how to pitch journalists, how to get press. And so we ended up relaunching a month later. We were able to line up not only press appearances, but a partnership with a large influencer in the space. And we ended up selling 100 boxes on that first day, including another box to my cousin.
Brett:
Repeat customer. Your cousin is a big part of this story.
Tim:
She's now our chief of operations too.
Brett:
Nice.
Tim:
So she's the CurlMix ... diehard.
Kim:
Yeah. And so we did that, and we did that for two years, the DIY box. I think our best year, we made close to 200K, but it wasn't enough for me to work working in tech full time. And so, our best customers started to unsubscribe because they basically were like, "I can't do a lot with all these boxes. Every time I go to do my hair, I still have to make my products." And they were still buying ready made products.
Kim:
And at that time, our flaxseed gel was our number one selling box. It was the one thing everybody was buying over and over and over again. And the reason they were doing that is because it wasn't on the shelves. No manufacturer would make flaxseed gel because you literally boil raw flaxseeds and extract the gel, and it helps give you this hairstyle.
Tim:
Yeah. And we know... They wouldn't make it because we asked them.` I think we got turned down four times when we tried to ... and they just said, "It's too variable. It's too hard to preserve." No one had figured that out yet. And we got the ...
Brett:
Challenge accepted and opportunity ...
Kim:
Yes.
Tim:
We got the advice from our advisors. You never just stop selling your best selling product. Just find a way to make this work. Because if you do, you have something great. So Kim being the entrepreneur and hero that she is, she spent a month in our kitchen, whipping up 50, 60 different batches, seven months pregnant, mind you.
Kim:
Look at that.
Tim:
Until we finally got something that worked and was preserved. And we decided we've done the entrepreneurship stuff for a while now. We know what we're doing. Let's make sure people actually want this, so let's pre-sell it. So we don't make anything yet. Let's just see if people actually want it. We opened up, I think, 60 spots at the time, because that's how much we could make in a pot on our stove. And we were like, "Let's just sell those 60 and see if people want it."
Kim:
And we sold at the same price we were selling the box for. But the margins on the bottle were 70%, and the margins on the box for 30%.
Brett:
That's amazing.
Kim:
And we sold out twice, basically hundreds in amount of hours. And after that we were like, "This is it." So we pivot the entire business. We threw out six months of box content and-
Tim:
Yeah, we had worked with influencers, we'd done photo shoots, we had ingredients. And we just had to...
Brett:
Man, this is it. Yeah. Because people don't want to mix their own hair products. It was easier, way easier than what you were doing back in the Whole Foods days, but still people want it in a bottle, and so-
Kim:
Exactly. So we pivot the business, and ...
Tim:
Yeah, that was January 2018. Mind you, our first baby boy was born December 2nd, 2018.
Kim:
2017.
Tim:
2017.
Kim:
Yeah.
Tim:
It's his birthday today, by the way.
Brett:
Hey, happy birthday, little man. All right.
Kim:
Happy birthday,...And so we did a million that year in revenue after we pivoted. And so, it was like, oh this is... So Tim quit his job, came to work for the business. And then the next year, we were on Shark Tank, and then we helped propel us to about five million in revenue. ... completely last two years really a lot of success, but the first four to five years, we were struggling.
Brett:
Yeah. But so you were an overnight success story that was five years in the making, like mostovernight success stories. So let's talk a little bit about Shark Tank. I know some people want to get on, and other people were just interested by it. So what was that process like, and how did you get on Shark Tank?
Tim:
Sure. So ...
Brett:
You guys were fans of the show, right? You were fans of the show for ... Yeah.
Tim:
We watched all the episodes and even more, once we found out we were going to be on the show, but I'll jump into that.
Kim:
You know what's funny, though, after you go on the show, the people who go on the show stop watching.
Tim:
That's true.
Brett:
Have you guys stopped watching?
Tim:
Sort of.
Kim:
Yes
Tim:
Yeah.
Kim:
I've met a ton of founders who no longer watch ... who were on the show.
Brett:
Is it because the mystique is gone and because maybe it wasn't... Or maybe your perspective on the sharks change a little bit or something like that?
Kim:
I think it's the mystique. I think it's not knowing what goes into it makes it alluring or just interesting, like, "Oh my god. If I could just get in front of the sharks." Yeah. But when you really peel back the layers, it's six months of a part-time, sometimes full-time job, getting ready for the show ...Just to get ready.
Kim:
Yeah. So it's intense. But go ahead on the show, yeah.
Tim:
So January 2018, we got rid of all of our boxes. We basically had no sales. I think we had our lowest month in sales ever. Kim cried. And she was like, "This is stupid. We made a mistake." But I was like, "You know what? Let's just keep going." And then she said, "If we can just double, we'll be okay." So we ended up doing more than double, 8,000 that month. And then if we can double next month, we'll be even better. We ended up tripling to over $30,000.
Brett:
What were you guys doing for traffic at that point? Just curious, how were you driving traffic...
Kim:
We were not spending money on Facebook ads yet. So we were working with micro influencers ...revenue sharing.
Tim:
Email list.
Brett:
Yeah.
Tim:
we didn't have any SMS then, either.
Kim:
No, SMS wasn't even a thing.
Brett:
You were just hustling.
Kim:
Yes. We hustled our way to 30K a month. And then we started investing in Facebook ads right around... Because we knew who we were talking to then, and we knew what they were buying, who our competitor was. So we did that. And then we got to the million in... Oh no, right around March. That was March when we got 30K revenue. And then ...
Tim:
We were like, "We need help," at that point.
Kim:
Yeah.
Tim:
So that's when I quit my job. I told Kim, "I got three months of savings. If I quit my job, we got to be able to pay ourselves in three months."
Kim:
But the Shark Tank, I want to get back to the question, because he basically said... So Tim's aunt called us. And she was like, "Yeah, I know you guys are doing your little business." I said, "Yeah, a little business." And she's like, "Well, they're doing a casting for Shark Tank at UIUC. And I think you guys should go." And we were like, "Oh, we didn't know that." And at the time, our baby was coming everywhere with us because we didn't... he's five months, six months. And he goes to the casting with us.
Tim:
Yeah. It's literally the next day. We have to throw together a pitch. She called us Wednesday ...threw together a pitch overnight, took him to the pitch with us because we couldn't find a babysitter. He sleeps. He sleeps the whole way through the ...
Brett:
That away.
Tim:
And then when we get up to pitch, he wakes up and starts crying.
Brett:
Okay. ...pitch, okay. He was resting up. He was resting those lungs, so the pitch... because he wanted to be part of the pitch too, guys. You can't just... he wanted to be part of the business, like I got something to say here.
Kim:
Man, and we were pitching, he starts crying, we grab one of the boxes and give it to him. And we're Kim and Tim. It was literally hilarious.
Tim:
We thought we bombed. We thought they were like, "This is the worst pitch we'd ever done" But they loved it. They loved us. They liked our story, and they were like, "You know what? You guys made it to the next round."
Kim:
Well, they called us back in two weeks. So, I had been scrolling through my email like a hawk, looking through all the spam for two weeks. And then one day, Tim heard me scream really loud in the house. And he's like, "We got our shark thing." And I was like, "We did." He knew because I was acting crazy.
Tim:
I think I was in the basement. I heard her from two floors.
Brett:
That's awesome. That's awesome. So then it sounds like that really blew up the business, right?
Kim:
We had made a million dollars before we even-
Tim:
Before we aired the show.
Kim:
Yes. And then the year that we aired, that month we were spending heavy, I would say, on Facebook ads.
Brett:
Got it.
Kim:
So we probably...
Brett:
You had a lot of momentum anyway.
Kim:
Yes. Yes, yes, yes.
Tim:
And that took it just way off... I think we were doing maybe 300K per month at that point. And then the month of Shark Tank, we did almost a million in just that month.
Brett:
That's awesome.
Tim:
Which we weren't quite prepared for either.
Kim:
No way.
Brett:
That's the way it goes so many times. You're not ready for that bump from... And then you guys did it again, probably, with Oprah. It's just this massive influx of traffic.
Kim:
But what I would say though, too. I've had a few friends go on Shark Tank after, and what I have learned, it really matters the order in which you go up. If you go up first, second, third, or fourth on the show, that determines how big your revenue is. Because we did do 900,000 that month, but we probably spent two something on ads that month. So it was a proper 3X ROAS and everything. And if we weren't spending it on ads, maybe we would've done 500 or 600 or something like that, I would probably think. But we went up, I think, third in that episode, didn't we?
Brett:
Gotcha.
Kim:
And I had a friend who sells lashes, and she went up first. And she did, I don't know, maybe a million in two days or something crazy.
Brett:
Wow. Wow.
Kim:
And she's a product that everybody can use, all women can use. And so it really does matter if it's consumer friendly, if you go up first, and if it's something that everybody can use.
Brett:
Makes sense.
Kim:
And if it's more drama in your episode. If you cry or if you do a big production ...
Brett:
Sharks get in a fight or something, or you get a fight with them or something. Yeah. Yeah. Because it's TV, man. They want good. They want action on TV, and it is about drama. That totally makes sense. So any tips or suggestions would you give? Who would you advise, "Hey yeah, it's worth trying to get on Shark Tank," or who would you advise, "No, don't bother."... Do you have any thoughts there?
Kim:
Yeah. If you have a demonstrable product, like the Scrub Daddy guy, he got on there and it was totally HSN. He was like, "You can clean this, you can clean that. You can clean it all over. Look at this, brand new."
Tim:
"Wait, there's more." You can really get into the presentation and wow people, you've got it. The other thing is just having a really great story as well. So we have the benefit of being high school sweethearts from the South Side of Chicago, making a product in a space that is underserved.
Brett:
Yes.
Tim:
So, and then on top of that, Kim decided to turn down almost a half a million dollars. And so it played really, really well.
Brett:
So can you talk about that? Was there fighting at this point? Was Tim like, "What are you doing?" Or were you guys in agreement, like, "No, this is not the right deal. We got to turn this down." And also, what Shark offered you the deal?
Tim:
What were you thinking?
Kim:
So Robert Herjavec offered us $400,000 for equity stake in the business. Now-
Tim:
20%, at that point.
Kim:
20%. But I'll back up. When we were on the show, we were already going to make a million that year. We were already on track to do a million. And this is September, so you know your numbers are pretty solid.We could have gotten angel deals from other, or syndicate deals for a six to seven million dollar valuation. When I looked back, actually compared it to Ring. You know the founder of Ring...his name? He came on the show, asking for a seven million dollar valuation, and he got crushed by the sharks. They're like, "Absolutely not. Why do you think you're worth that? Get out of our face." That was literally the... And I think they brought it down to four or something, or he tried to bring it down to four, and they wouldn't.
Kim:
So that was the... I'm like, "Dang, okay. Well, that's what we're worth, but that's too high for the sharks. So we'll cut it in half, we'll offer a four million dollar valuation for 10% equity in the company." And then Robert cut that in half and was like, "No, you're only worth two million dollars."
Brett:
Right. Right.
Kim:
And I was like, I have to go home with this business and feed my family. And then he also said he didn't know anything about the business and the industry ...
Brett:
He's a white dude. He doesn't know the market ...
Tim:
Curly hair, right. And so, we had a whole demo set up where we show before and after. And he was like, "I can't tell the difference." And we were like, "Well, you're definitely dumb money." This is not the partner that we need to actually make it be successful. We were really hoping to do a deal with Alli, who was the guest shark at the time. She's the co-founder of Drybar, or... Who else would you...
Kim:
Lori or Damon.
Tim:
Or yeah, Damon.
Brett:
Yeah. Yeah, yeah. no offers from Lori or Damon?
Tim:
Damon wasn't there. Alli was subbing in for him.
Brett:
Got it.
Tim:
But Damon wasn't there .
Kim:
And Alli made the comment, like "I'm in the business of making curly hair straight." And I was like, "Oh, that was the wrong comment."
Tim:
All about straightening curly hair. And so, it just didn't work out that way.
Kim:
And Lori has other curly hair investments. So she's invested in someone else was on the show before.
Brett:
Yeah. But I think, so one cool thing there is you walked in though knowing what you were worth, and you had success and you had momentum. You went in wanting a deal, but not needing a deal. Right? And so, you were able to say, "No, it's not the right deal." So kudos to you guys for saying no.
Kim:
Thank you.
Brett:
Yeah.
Tim:
There are some sharky deals on that show. So you have to know your numbers like the back of your hand. And we just spent six months drilling, like it was finals week for six months. We would be in the car, and I'd be like, "Kim, what's your cockroach?" We were really going in heavy on the training for Shark Tank.
Kim:
Yeah.
Brett:
That's awesome. Very cool. So I want to talk about Oprah, and then I want to get into some things around crowdfund and community building and some of the amazing things that you guys do so well, but how did you become one of Oprah's Favorite Things? Was that something you tried for, or did it just happen?
Kim:
It honestly just happened.
Brett:
Yeah. Nice.
Kim:
What I have found out, though, that if you want to be on Oprah's Favorite Things, the selection happens in June or July. It's in the summer ...
Brett:
It's just once a year?
Kim:
Huh?
Brett:
Just once a year, typically, for that?
Kim:
They probably spend the middle of of June, all of June and July, figuring out who the companies are going to be.
Brett:
Yep.
Kim:
And so, if you want to be on Oprah's Favorite Things, if you figure out where their office is, you can send them to your products, and have them test it or figure it out. Her team will try it as well.
Tim:
And they also use secret shoppers. So you may not know this, but someone from their team might have already purchased your product. We found out later that there were a few people who were in that sphere who actually did purchase and really liked the product and recommended us to them. And so it helps to, one, just always be good and prepared for those kind of opportunities.
Brett:
Never know who those shoppers are, man. Maybe an investor, maybe a partner, maybe Oprah's people. So you got to be ready.
Tim:
I will say, I was always looking on the orders, like is Oprah... Is this going to be this going to be. If there was ever a celebrity, I hope I caught them, but not always.
Brett:
Yeah. And I know you probably can't say, but have you had some celebrities order from the site?
Kim:
Absolutely.
Brett:
Nice. That's got to be fun. And you're like, "Hey, is this the real so-and-so?"
Kim:
Exactly.
Brett:
Do you ever reach out
Tim:
A couple times I've Googled some addresses and street viewed some place. I'm not ashamed to admit it. I was like, is this...oh my goodness.
Kim:
Do you know TLC Or don't go chasing waterfalls. That TLC
Brett:
Yeah. I was thinking the TV TLC yeah, man.
Kim:
Okay.
Brett:
I'm a child of the '90s. Of course.
Kim:
So Chilli from TLC ordered our products before.
Brett:
No way.
Kim:
So that was cool.
Tim:
She had really long curly hair, and so it was great.
Brett:
That's awesome.
Kim:
And Naz's ex-wife, she ordered Calise
Brett:
Crazy.
Tim:
And a few others.
Kim:
Yes.
Tim:
We'll have to go back through and look
Brett:
Yeah, sure. No, that's amazing. I love that. Love that. So what lifted then that crate being on Oprah's Favorite Things? Was that a really noticeable lift, or how would you describe that?
Kim:
I would say it was more credence. It was definitely a lift, but it's not quite like Shark Tank. Because Shark Tank, you're getting three to four million active viewers when it launches
Brett:
All at one time.
Kim:
Exactly. So you notice it, whereas Oprah, everything is promoted throughout the whole month. And there's different segments here. So you have spikes, peaks all throughout the month, but they're maybe a little bit lower peak. For altogether, there was definitely a lift.
Tim:
Yeah. And then they structured it in a very interesting way. So instead of people coming to your website, they partner with Amazon. So that anything that you wanted to offer for Oprah's Favorite Things had to be shipped into Amazon. And so it was very, very different. So Shark Tank, we were getting all that customer data, all those people that we could tag and remarket to email list. But these folks went to ...
Brett:
Oprah had to be through Amazon. Interesting. Okay, cool. But both of those things are now appearances, and that's media mentions that you can talk about forever and that build credibility and build your brand. And so, you can leverage that for forever.
Kim:
Exactly.
Brett:
Which is awesome. So let's talk about, I want to talk about now crowdfunding because we met at Ezra Firestone's event in Denver, Blue Ribbon, and you guys talked about building community and then how that allowed you to do some crowdfunding and stuff. So just walk us through that. And we were joking around, if you don't have a community, you can't crowdfund. You can't crowdfund without a crowd. So, how did you build a crowd, and how do you use crowdfunding? Walk us through that.
Kim:
Yeah. So we built the crowd through a combination of... I used to go live every Wednesday. I did it for almost two or three years.
Brett:
What?
Kim:
I would go live on Facebook to do my hair, to show our customers how they use the products in my shower.
Tim:
And I would be filming her
Brett:
Live in the shower? This is awesome.
Tim:
We turn it into a whole TV show.
Kim:
Yes.
Tim:
And I would record Kim, and we would do trivia. We would make jokes. We would talk to the customers. We would answer questions, live Q&A. And it was just a really great learning opportunity because our product is one where people have to learn how to use it, how to get the specific style. And so that was two parts, community and education, and people loved it.
Kim:
So that was one of our ways of getting new customers but also helping our current ones. We also have a quiz that most people need to take first to figure out what products they should use from our collection because we have lots of .... And from that quiz, we collect your email and phone number, but it leads into a custom result that has a custom email flow based on whatever issues that you had. So if you say your issue was breakage, you're going to get 10 emails about breakage over the next two or three months after you've taken that quiz. And once you make a purchase, you're also going to get an email from us that says you're in our Facebook group. And that's where the real magic is because we have about 13,000 customers.
Brett:
Wow.
Kim:
In that Facebook group with 90% engagement. So-
Brett:
Wow.
Kim:
We're getting 20 posts a day. People are posting pictures of using the products or asking questions or showing up. One of ...
Brett:
People are asking questions and answering their own questions, probably...
Kim:
They go live for each other, and it's crazy. And so it's a really strong community. So when we dropped the link for our crowdfund in there, they went bananas. They helped us raise a million dollars in about hours. It was pretty cool.
Brett:
So are you still doing Facebook lives, or is that something that's not really that important anymore, now the community's already got traction and it's building and growing?
Tim:
We're still doing them. But we've changed
Brett:
From the shower.
Tim:
We're not doing every one ourself in our shower. For a time, we moved into a studio space that we had at the office where we were bringing in customers and guests and influencers. Then when the pandemic hit, we went back to the shower, but then now we've expanded it, so that now our customers and influencers will go live in their showers at home
Brett:
Oh, that's hilarious.
Tim:
So we've definitely evolved it over time.
Kim:
And it's funny because we tell people to get in the shower to use our products. The reason you have to get in the shower is because the water helps the product spread across your hair better than if you were just sitting outside the shower doing it. So you really need that steam.
Tim:
And the hair gets more moisturized. Right?
Kim:
Yeah. And so we tell them that. We're like, "Well, we can't show them us doing it in a salon. They're not going to be to go to a salon." So ...
Brett:
Exactly. Exactly. So ...
Kim:
How to do it.
Brett:
So interesting about that is it's an immediate pattern interrupt as well. I'm not expecting you to go live from the shower, and I'm not expecting an influencer to go live from the shower. So it's instantly intriguing and engaging, and it's just a pattern interrupt. But then yeah, it just reinforces this is how you use it. This is how you get the best results. So, I think that's brilliant. Kudos to you guys for doing that.
Kim:
Thank you.
Brett:
That's awesome. So still going live, but now you got influencers and your community going live for you, which is super, super cool.
Kim:
And I think what we're going to do is pivot more to YouTube though. YouTube lives... Facebook live, we used to get hundreds of visitors live. I think that our best one had 2000 visitors live. But typically, we would sit around anywhere from 300 to 500 visitors live. Now, I always update, we'll be lucky if we have 150 the whole time. And so now, I'm just like, we either need to switch it up or do it on YouTube and make it more of an event because YouTube is just getting better results from our lives organically than Facebook. So that might be something you see from us in the future.
Brett:
Yeah. I love it. And I'm a big YouTube fan. I'm a YouTube ads guy, though. So I understand the organic side, but that's not my area of expertise. I would recommend, though, for you guys or for anybody watching or listening, episode 112 of this show with my buddy, Liz , she is a master at YouTube, organic YouTube. And actually, it's funny, I got invited to speak at the YouTube LA offices right before COVID, and so I was speaking and she was there in the audience, and she was like, "Hey," asked a question, then we connected afterwards. But she talks about really how to build a channel and leverage it.
Brett:
And the beauty of creating content on YouTube is that it can get better and stronger over time. So you start answering questions... And you guys are going to be great at creating content, but you start structuring the right content, it's going to gain viewership and gain momentum over time rather than just being a flash in the pan potentially. So yeah, I think that's huge. So yeah, I would highly, highly recommend that. How many subscribers does she have?
Brett:
So she mainly teaches people now what to do, but she and her sister started a channel called... I think it's Super Sister Fitness, if I remember correctly. It's been a little while since we recorded, but they just recorded fitness videos, just the two of them. And they exploded for a while, and then they haven't created videos in four years, but they still get a ton of views. They've stopped creating, but they still get a ton of benefit from that channel. I think she's helped launch several other channels too, but yeah. Keeps on giving.
Brett:
Yeah. Yeah, yeah, yeah. So love that idea for sure. Cool. And so then you used crowdfunding then to launch new products? Or what was the strategy? So you used the quiz, use your lives to build that community, that Facebook group, then you launched the crowdfunding. What were you using crowdfunding for?
Tim:
Well, one of the great things about how the landscape of crowdfunding has changed now is that crowdfunding is a lot of different things. So the beginnings of crowdfunding was a kick starter, where if you were hoping to launch a new product, you can get a lot of people to help you finance that, and then you bring it in to the world.
Tim:
But now you can do equity crowd funding, where instead of going to some rich venture capitalists, regular everyday people who aren't accredited investors can now invest in early stage companies and reap those same returns and benefits of those big rich investors now. And that's all thanks to, what was it, the JOBS Act signed by Obama. And now, the limit went from one million in crowdfunding for equity to five million in crowd funding for equity, the month before we decided to launch our crowdfunding. So it was a perfect storm cause we heard about it. We were like, "This could be very interesting," because we are very much a community driven brand, and our goal is to continue to serve underserved parts of the market. But in the same vein, we're going to be building up our community along the way.
Kim:
And we've raised about 3.5 million, and we have about 5,000 investors. And we're going to close out December 23rd, hoping to raise the other 1.5 million and close out our round, which would be phenomenal.
Brett:
That's amazing. And so what's the goal... Now I'm super interested. When you first mentioned crowdfunding, I was just thinking kick starter to launch a new products, which that's a super cool strategy too, but you're doing crowdfunding for equity. So the idea there is, and obviously, as someone buys stock in a certain company, they're not going to buy from a competitive company. I buy stock in Tesla, I'm buying a Tesla and not some other EV. So I'm sure there's that component, these 5,000 investors, and hopefully it'll be six or seven or whatever by the time you close, they're going to be committed to your brand, most likely. What's the strategy behind this, and why are you doing it? Would love to hear that perspective.
Kim:
Oh man. Okay. So there's a couple things. So one, for people who are like, "This sounds bonkers,"...
Tim:
Why would you do this?
Kim:
Robinhood 20 years ago, online training was not a thing. Now it's all the rage. So I think crowdfund in the future is a new way of investing because the gatekeepers will be gone. It's not only the rich get access to something like this,
Brett:
How many accredited investors are out there, right? Most people can't participate in a deal like this in the old days, because you had to make a certain amount of money and meet all these criteria and accredited investor. Yeah. .
Tim:
I think it's something like two million in assets or something like that.
Brett:
Yeah. Or combined 300,000 a year in income between if you're married and stuff like that. So, it's not totally unattainable, but it's not a huge part of the population. Yeah.
Kim:
Exactly. But what was the question?
Tim:
Well, I can start from the beginning. We...
Brett:
Strategy behind why you're doing
Tim:
We wanted to be a venture-backed company because we have plans to eventually IPO one day and be the next black-owned, Proctor & Gamble. So we don't just want to stay with hair.
Brett:
Love it, love it, love it.
Tim:
We want to be a global force in the personal care and beauty space and have lots of brands because that's what we see as the future. There are a lot of places in the market that not only are not being served right now, but they're being actively ignored because people think the money is not there, and we're going to solve that.
Kim:
And I ...
Brett:
Money's not there, or they're like Robert and they're like, "Well, I don't know. I can't tell I don't understand it.
Brett:
They don't get it. And so, even if they tried to do something, they'd probably screw it up. And so, yeah.
Kim:
Yeah. And I've wanted to crowdfund for a while, but the limit was a million dollars and I was like, it's too much work for a million dollars. It's a lot of work. You open up your accounting to everyone, you open up your business secrets, your revenue
Tim:
Like go in public.
Brett:
for sure. Yeah.
Kim:
...
Brett:
Which is painful.
Kim:
Which is one of the reasons I wanted to crowdfund, even when we couldn't benefit from the money necessarily, was because in our industry... Typically black-owned businesses in hair care have really leaned on black people for revenue and support and growth. And then they sell to a private equity company or PE or something else. And while that's great, and that is typically how business works, and that's what you're supposed to, that's how you should do it, a lot of times we didn't see the benefit of those things. So that one family got rich, and the rest of us helped support and build up this brand and we got nothing. And I was like, "Man, what if they could own a piece of the company, and they could come up with us?"
Brett:
Yep.
Kim:
But a million dollars was just not enough money to do all of this. And when it launched to five, I was like, "Oh, now's the time. This is perfect. We should definitely go ahead and do it."
Tim:
And I don't know if Kim is super comfortable with this, but Kim is one of the first 50 black women to have ever raised more than a million dollars in venture capital. And before the crowd fund. This is actually our seed plus round. So our first seed round, we were able to raise over a million from Jeff Weiner, the then CEO of LinkedIn, and a few other business partners that helped propel us to over five million in sales. And then, as we were trying to raise another round of funding to keep that growth going, Kim would go into these rooms, try to pitch basically older white men who didn't understand what she was doing. Even though ...
Brett:
That had to be super frustrating.
Kim:
It is. Black women get less than 1% of venture capital. And every time I've tried to traditionally fundraise, it was just a waste of time.
Brett:
I'm sure. I'm sure. And because it's a waste of time, most people don't even try. So kudos to you for sticking with it and making it happen.
Tim:
Yeah. We literally made the Inc. 5,000 list, one of the top fastest hundred growing companies in the country and ...
Kim:
We're number 93.
Tim:
Yeah. We're still getting nos. I was like, "Wait, what do you mean they need to see more? What do you mean they said no?" If you want to invest in minority-owned businesses ... invest in black businesses, and you say that as part of your investment philosophy, how do you turn Kim down?
Brett:
Right. Right. Exactly.
Kim:
It's funny, Brett.
Tim:
And so we're like, you know what, bump that. We will do it ourselves.
Brett:
Yeah. And really, but the momentum you'll gain there, that community, and you guys are all about community, which is amazing. But yeah, getting that 5,000 to 7,000, whatever it ends up being, that's going to be a really powerful asset as well.
Kim:
You're right. And I'm working on how to figure out how to rally those investors. And the next... Does that mean we all get together for a special event? Does that mean there's some NFT stuff going on? Does that mean ...
Brett:
NFT stuff. Yeah, yeah, yeah.
Tim:
I'll say just ...
Kim:
Crypto, I don't know. I don't know.
Tim:
Just from the start of the crop until now, it's been huge for just our profile too.
Kim:
Our personal brand.
Tim:
We literally get stopped on the street now. I was like, "Oh my God, I'm an investor." I was like, "Hey, owner. How you doing? I invested in y'all. Great job." And it's a really been just a movement because it shows people that there's another way to get VC money. There's another way to grow your business. There's another way to enhance the community outside of the traditional gate keepers. And that's what we are all about.
Brett:
Love it. Love it. So couple of quick questions there, and then I have one other topic before we wrap up here. So what platform would you recommend if someone is saying, "Hey, I should explore this a little bit and think about equity, crowdfunded equity?" What platform do you recommend then? Any quick tips, dos and don'ts for how do you approach this?
Kim:
There are three. There is Wefunder, which is what we used. There's more. There's tons of platforms. These are three. Wefunder, StartEngine, and Republic. And they all have different terms. I think Wefunder's fee is 7% of whatever you raise, but if you're going to be a really, really big raise, you might be able to negotiate. And then StartEngine... but then Wefunder only does preferred shares for its customers or its investors, retail investors.
Kim:
Now, StartEngine only does common shares for its retail investors, which is different. It doesn't give them as much control, which can be advantageous for the founder. But then you can get a lot of hate from the retail investors because they're like, "Why would you treat us this way? We're still giving you good money. Why don't we get those rights?"
Kim:
And then you have Republic, and I forget... I don't know about preferred or common for Republic, but I do know that Republic takes equity in that round. I think you kept to give them a piece, so just double check. But I will say I've heard wonderful things about Republic, and people have always recommended them to me when I went to go fundraise. But Wefunder gave me the best deal, and I really like their team. And I also love their mission. I think they're really...
Tim:
They're investor focused, but I think the other ones are founder focused. And that fits with our philosophy, really.
Kim:
they're just a hard sell. They're really intense. So if you tell them you're interested in crowdfunding, they will not stop messaging you.
Brett:
But yeah. Being investor focused is like being customer focused, right? Because they are customers. And so yeah, love that ethos, and that makes a lot of sense. So any tips, dos or don'ts, things that you wish you had known before you started? Anything like that?
Tim:
Lots of those.
Kim:
Number one, and small businesses like to ignore this part of their business, and you probably know what I'm going to say, Brett. Accounting. If you do not have good books, you are going to spend... We had to have audited gap financials for the last two years of our business, and we manufacture our products, Brett.We manufacture half a million units over the last two years, and we didn't have NetSuite or anything like that to get that data. So we had ... we
Tim:
We were still on cash accounting.
Brett:
... can't be on cash accounting. Cash accounting is good, but not for retail business.
Tim:
Yeah. We went from one million to five million in less than a year. So we couldn't even switch to accrual accounting at any point. We didn't see it coming. So we had to do all that back accounting to get our books up to ...
Brett:
That doesn't sound fun
Kim:
No, that was hard. And then you need a SCC attorney. Do not just trying to go to your general counsel or whoever you're using, paying 500 bucks a month to. It is special law
Brett:
You need a specialist here. Yeah.
Tim:
Yes.
Kim:
And you need the person that you normally work with. So they're going to talk to each other, and those two lawyers are going to talk
Brett:
It's like your primary care physician and the specialist, right? You need both.
Tim:
Exactly.
Kim:
Yes. So imagine I'm paying two lawyers and two sets of accountants to do all of this, to help me crowdfund. And my bills were up there before I got the money.
Brett:
Before. Exactly, before you got any of the funding.
Tim:
Yeah. And it's much better to have done it earlier and spread it out than trying to get it done in a few months because it ran our team ragged for a little bit. There was some late nights, early mornings, and lots and lots of counting.
Kim:
And you can't file the form C until that accounting is done, if you're raising up five million. If you're raising one, you don't need an audit. You need a review. Yeah. Which only takes two weeks. But if you need an audit, it took us three months to do that. And then we had to wait 21 days after we filed the form C to collect the money. So it was arduous and difficult. I would do it again, but I would have my... Now my accounting is as clean as a fiddle. Is that the saying?
Tim:
Clean as a whistle.
Brett:
Clean as a whistle
Kim:
I mess it up every time.
Brett:
I think you could coin something new there. You may onto something
Tim:
This is one of Kim's superpowers. She always blends these old things. So it's a game for me to figure out which ones she's blending you guys got let in on the ...
Brett:
That is so funny.
Tim:
That's the game.
Brett:
Clean as a fiddle. I like it so that's beautiful. So love it. Now I'm geeking out. I'm going to go and invest in your business. I just get pulled it up. I'm going to take a look at this.
Tim:
Thank you so much.
Brett:
So I got to check that out
Tim:
That's the biggest compliment anyone can give, is I believe in what you're doing, and I ...a part of it.
Brett:
Exactly.
Tim:
Here's my money.
Brett:
Exactly. Yeah. Putting dollars behind it, putting money where your mouth is, that's what really counts. So I want to talk about a couple things, and we're coming up against time here pretty quick, but there's more than I want to talk about. And so I know you guys are always about... And now I know you want to be like P&G, which is amazing, but you're trying to create repeat purchases and getting people to order more and stuff. So can you talk about what the journey has been like there for you guys, in terms of things you've tested? And then, I know it's super early at the time of this recording, but I think people can go to your site and they're going to see your VIP membership, which looks amazing. Can you talk about the early stages of that as well?
Tim:
Yeah. That thing is less than a week old, but it was five or six years in the making. We started as a subscription box company, and we're basically a subscription box company again. So I'll let Kim tell the story, but that was just tickled us so much.
Kim:
So right around the time we were doing... My lesson in getting to a million dollars, is that it's easier to sell old customers new things, than new customers, anything. Right?
Brett:
Yep.
Kim:
So we started launching some of our other boxes, but making them ready-made products and different flavors and things like that. And then what I realized is that our average order value was too low. People were buying one or two items. AOV is 30 bucks, 50, 40 bucks. And I was like ...
Brett:
Hard to acquire customers with that AOV.
Kim:
Yeah, exactly. So can we get this to 60, 65? And we're like, "If we sell it to them in a kit with four products, we can charge $65 for that kit." Because shipping is expensive, and you're going to pay it regardless. And it's going to be, for us, at least three to five dollars, or up to seven or eight. So it's how can we get more value in that first order? So we launched a shampoo, conditioner, moisturizer, and gel all together.
Tim:
In the system to give you the wash and go of your dreams.
Kim:
Yeah. Because before, we didn't have a shampoo and conditioner. We only made the moisturizer and gel. And then after we did that, people kept asking us for other unique stuff
Tim:
Basically treatment kits, right?
Kim:
Yeah. And we had months where we were slower than others, and my production team was chilling. And I was like, "Dang, we have a whole manufacturing team, and they can make anything. And so if we are ever slow, we could just make something with a new flavor and launch it, and that would optimize their time." So that we're not having months where they're done with work two hours early and chilling.
Brett:
Right. Right.
Kim:
And so, we were like, "Okay, well, let's see if our audience wants something." So we went to the Facebook group. We've been building this Facebook group for years, by the way. We've had it ever since we started the business, and we were going to the group and let them vote. And they started voting on different collections and products, and we would produce it the next month or whatever. And then they'd be like, "Oh my God, I love it." And it would sell out immediately because they were so excited
Tim:
And that program ...
Brett:
Because now they're invested. They've said, "That's what I want." And now you've said, "Well, here it is." And so, they're going to buy it. Yeah.
Kim:
Exactly.
Tim:
We call that one CurlMix Fresh. And oddly enough, we launched it the few days after the birth of our second baby.
Kim:
Oh, that's funny.
Tim:
Kim was in the hospital the day after she gave birth naturally, taking promo shots and pictures from in the hospital room. We set up a whole little backdrop and photo studio
Brett:
That's hilarious. I'm sure the staff at the hospital was like, "Who are these people? They're amazing."
Tim:
I have to go to the store and buy props, and they're like, "What is this in the hallway?"
Kim:
I hate that story. Because I'm just still in the hospital bed. I ain't doing nothing.
Tim:
The baby is sleeping, so we're like, "Sh... sh."
Kim:
And so we launched CurlMix Fresh, and then we ended up making it... our customers loved it so much, we were like, "Well, we could have our own Birchbox or our own Ipsy or whatever." And it was a good way to test products. And so people signed up for that, and they started subscribing to that monthly for 65 bucks because we wanted the same AOV.
Kim:
But then after out a year and a half of doing that or two years of doing that, our customers loved us and they have no problem buying from us, but they would have literally 20, 30 products and be like, "Hey, I need to cancel my subscription right now. I have way too much stuff."
Tim:
It became a thing in the group to get your own personalized mini fridge to just store CurlMix
Brett:
That's hilarious.
Kim:
And I'm not even kidding, Brett, there's people-
Tim:
They decorate it.
Kim:
One lady spray-painted hers teal she spray-painted hers our brand color, out in her backyard.
Brett:
The CurlMix mini fridge. There you go.
Kim:
Yes. Literally, yes. I was shocked. She even hand drew the logo on her fridge. I was like, "Oh my gosh, it's intense." But then I was like, "Man, how can we allow these people to have the flexibility to stay with us and still provide us the recurring revenue that we need, but also give them the flexibility that they need, so they're not having the same 20 bottles of one thing in the house?"
Kim:
And one of my coaches had me look at Fabletics. Fabletics basically has you buy one credit a month on a $50 month subscription. And when I dug deeper, I think his name is Adam Goldenberg, I think is the founder. I found out that he owned Savage Fenty, which is ...
Tim:
49%f Savage X Fenty, right?
Kim:
Yep. So he runs ...Kate Hudson, Adam Goldenberg, Don Ressler. Just looked that up.
Kim:
Oh, thank you for clarifying. But so Kate Hudson's the face, just like Rihanna's the face for Savage Fenty.
Brett:
Yeah, yeah, yeah, yeah, yeah, yeah.
Kim:
And then they have Fabletics, and they've been using different celebrities. I think Kevin Hart and was the last set of celebrities to do their campaign. And they also own JustFab Kids and ShoeDazzle. And all five of these brands have the same model. And I was like, "Oh my gosh." And then I remember reading on ... he has two million subscribers. I'm like, "Two million people are paying you monthly $50 for points that they're going to come back and use?" And I was like, "It makes sense." Because once you save those points up, like Audible, like you were saying, you can either come back for shopping spree or you can get what you want, whatever you log in.
Tim:
Yeah. But you don't cancel. There's almost no turn.
Kim:
Right. Exactly.
Brett:
Crazy. Yeah, super smart.
Kim:
So we ... for about a week, and we're hoping that it kills it and it keeps going. We launched it for Black Friday and it did better than our actual sale, which is crazy.
Brett:
Wow. That's crazy
Tim:
For Small Business Saturday. And it did better than all... We did a week of Black Friday, and it did better
Kim:
It was our highest day.
Brett:
Whoa. So check it out. It's all over the website, so I think you need to look at it. And I do love that model. Yeah. You and I, we were talking before we hit record. I'm an Audible subscriber, love it. And yeah, I don't mind if I go three or four months without buying anything and letting those credits accrue, and then I'll go buy four books or whatever. So I think it's a great model. I think more people should look at it, and I think they should definitely check out your site and see what you guys are up to.
Brett:
So guys, this has been fantastic. I have more questions I want to ask you, but we're up against time, so I'll have to wrap.
Tim:
We can come back for part two.
Brett:
Yeah. Part two, man. We have got to do it. I will commit to it. I think that'll be super, super fun. We can hear how things go after you finish the raise and get an update there. So if people want to learn more, where should they check you guys out?
Kim:
If you want to learn more about CurlMix, go to curlmix.com. If you want to follow me and Tim and see our kids, you can follow us on Instagram at Kim and Tim Lewis. And if you want to invest in our crowdfund, go to wefunder.com/curlmix.
Brett:
Awesome. Kim, Tim, you guys nailed it. You guys are super fun. I always have fun recording the podcasts because I enjoy it, but this has been one of the most fun in a really long time. So thank you guys for
Kim:
Thank you, Brett. I appreciate it.
Brett:
Yep. Yep. All right. Awesome. Until next time.
Brett:
And so, with that, guys, thank you so much for tuning in. As always, we'd love to hear from you, our listeners, what would you like to hear more of? What are some ideas for the show. And hey, if you haven't left that five star review on iTunes, what are you waiting for? That would make my day and help other people find a show as well. And so until next time, thank you for listening.
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