Pando

Amy Errett on Empowering Women &Finding Your Genius

By Sarah Lacy , written on March 10, 2017

From The Lessons from the Trenches Desk

Amy Errett wasn’t the likely candidate to reinvent women’s haircare. For one thing, she doesn’t color her hair. For another, she’d never built a company shipping physical goods before.

And this wasn’t lost on her high-powered Silicon Valley network, who couldn’t quite understand why someone so “smart” was wasting her time on such a frivolous category. One they (Usually men whose wives could easily afford $400 salon treatments) just didn’t “get.”

Instead of listening to the Valley elite, Errett listened to her nine-year-old daughter who’d heard her ask countless family friends about their hair routine, whether they colored it, what they used, if they were concerned about the toxins in those treatments, the ammonia that could burn a hole in a tiled floor. She was aghast at how the traditional consumer packaged goods industry had convinced women that searing chemicals was how you knew a hair treatment was “working.”

One day her daughter– Madison– asked her, “So are you going to do it? Are you going to save women’s lives?” Errett not only took her daughter’s advice, she named the company after her.

Madison, and the company Madison Reed, have both grown up a lot since then. While early on, Errett insisted they’d be online-only, the company has just opened its first Drybar-like, pop-up “root touch up” shop in New York, is selling its product in Sephora, on QVC, and soon Ulta.

In her typical no-holds-barred style, Errett tells the story of her unlikely journey from VC to hair color pioneer, how motherhood made her better at building a company this time around, and why she may build a company that can go public, but she’ll never be a public company CEO.


 

Sarah Lacy:  I don’t think I’ve ever heard the origin story of the company.

Amy Errett:  This is company number four. Between three and four, I was in DC. I opened and ran Maveron’s office here, which is a Seattle‑based consumer-only firm. It’s Howard Schultz’s fund.

It really became clear to me maybe four years into that that my wiring was not to fund other people and watch them have all the fun, as I thought, but it was really about like I needed to dig into something else and start something from scratch.

I had been looking at a lot of consumer packaged goods.

SL:  Had you done anything like that in your previous companies?

AE:  Never a physical product, but company number one was a precursor to SurveyMonkey. I sold it IPG. I sold it to a public company. Company number two was E*Trade, where I was senior early person there and ran everything, non‑brokerage. Company number three was the largest gay travel company in the world online, so never physical stuff.

I had been looking at a lot of things, and we actually passed on Dollar Shave Club. I had gotten to know Mike. I became obsessed with the fact that consumers were willing to go directly, and you could build a Warby Parker brand or a Zappos brand or a Dollar Shave Club brand in categories like that. Who would buy a pair of glasses without walking in somewhere and trying them?

I got obsessed with that. I started to think about what were the women’s analogues of this.

When you’re a VC, you look for three things. [The first is] you look for size and price. How big is something? 108 million women color their hair in the US alone, repetitively.

Two is: Is there a uniqueness in a product? Can you innovate? I became really obsessed with the fact that of all the toxicity in hair color and that the trend towards better‑for‑you everything.

Hair color just popped up as a huge market with inferior products. No one has used technology or said to the consumer, “I can help you do the two things that you’re most afraid of,” which is first of all to pick your color. We solve that, and the friction point of “Can you actually apply it yourself, and it will work?”

I looked at the size, kept running these numbers like, “It can’t be true that nobody did this. I can’t understand that.” I started to think about the economics about repetitive sales. As you know, the worst part of e‑commerce is the cost of acquisition, and if you can’t get anyone back.

I became really excited about the fact, “Well, if you buy it from us, you’ve got to keep coloring your hair.” There’s an embedded consumption pattern, and it’s not a “one and done.” You get the box, you use it, need another one. Could we build that customer loyalty?

SL:  I’m not a big hair colorer, but it would seem to me, hair color wasn’t “unsolved.” You go to an aisle of the drug store and there is a billion options for hair color. What were those companies not doing?

AE:  A couple things. Number one, the experience of the box itself, the componentry that’s in it, is horrible. Non‑recyclable plastic. Mostly oil based, so very drippy. It trashed your bathroom.

We’re like: “We give you two pairs of beautiful gloves.” They don’t give you a cap. No cleansing wipe. No instructions. The user experience is horrible. I always felt like, “You go buy this thing for $10,” it tortures you, but you’re supposed to feel beautiful at the end.

Also, every single color line that you see on the shelf there has eight choices. They are all single tonal, so like shoe polish. What I figured out really quickly was we could emulate salon quality. We have 42 shades, so 8 versus 42.

Our box is gorgeous. There was this difference of how easy our instructions were. They formula is cream based, and it’s so easy that you don’t drip it anywhere. We give you all this accoutrement that it’s perfect. Our customers talk about it like they’re opening a Christmas gift.

The other part is the ingredients. Traditional hair color’s toxicity is off the charts. It’s not FDA regulated, which is horrifying. What’s the first thing that you’re pregnant, what do they tell you to do?

SL:  Stop coloring your hair.

AE:  I kept saying, “So when you have the kid, it’s OK to kill yourself… but it’s not OK when you are pregnant? Help me understand why that would be OK…”

I started to do all this research on the ingredients. What I started to realize super quickly, is that ammonia is in hair color and if you dropped it on a tile in front of us, it would burn a hole in it. It goes on your head. Why? It is super cheap, and has about 10 years of shelf life. Every other ingredient, the color molecules, all this stuff, is super cheap with a huge shelf life.

There had been no innovation in the products. It wasn’t even just the experience. It was like the actual ingredients. Nobody had said: “Maybe we could make something that worked that was actually better for you.”

Once I went through the screen of huge prize, repetitive sales model, could we innovate on the product usage and just the fact that I could make it beautiful for people, we asked could we formulate it and take all that stuff out, put better stuff in? Could we make all these different shades?

I went to Italy. This one’s a bizarre story. I had figured out through somebody at L’Oreal that Italy has a huge private label business that manufactures hair color for some of the largest companies.

As you know in the economy today, the great equalizer for all of our businesses now is the fact that we can contract manufacturing. Michael [Preysman] can make, at Everlane, leather goods that are as beautiful as Hermes because he can contract many. That craft is no longer the thing you can hang your hat on, pretty much any of us can find it.

I found a family that had made hair color. They made it all over the world, but nothing in North America, so that was great.

More than that, the EU is easily 10 years ahead in ingredients in terms of what they will say needs to get out of products. On a personal care basis, if you go to Paris and you go to buy a personal care product, 99.9 percent of the time it’s already been through a screen of taking out aluminum, all that stuff.

I also knew that, from a regulatory standpoint, I was working in an environment that they didn’t think that we were crazy saying, “Can you formulate this in a better way?” They had already on a private label basis probably taken out 70 percent of the stuff that we wanted out.

We spent about four months figuring out if we could take the other 30 percent out. Then we put in some keratin, ginseng root extract, argan oil. We put a lot of things in that makes people’s hair feel like soft 20 years younger, very vibrant, almost revitalizing.

Once we figured out we could do that, I spent months back and forth in Italy. We started out with 26 colors, testing on thousands of models to figure out that a single color would show up on five different hair types exactly the same. That’s hair color protocol.

SL: Tell me about fundraising.

AE: I didn’t take any money from anybody in the beginning. It was kind of stealth. [True Ventures partner] Jon Callaghan was our series A investor. We had known each other as being VCs together. There was a lot of long-standing trust.

We were at The Lobby. [An invite only industry conference.] This was like four years ago. We were having a drink one night at the Lobby, at the end of the night. He’s like, “What’s going on? Is are you guys going to raise another fund?” I’m like, “Yeah, probably, but I’m going to tell them I’m not staying.”

He’s like, “We need a woman to come on board…”

I said, “No, no, no. I don’t want to be a VC.”

He’s like, “What do you mean?”

I’m like, “My wiring is just to do shit. I love building teams. I like consumers. I like making stuff. I’m just going to go do something.”

He’s like, “What are you going to do?”

I’m like, “I got this crazy idea.”

He says, “Let’s have breakfast tomorrow morning.” We had breakfast. I’m telling him this. He’s looking at me. He’s looking at me. He says, “How big is the market?” After breakfast, we take a walk. We take this walk. We both have plans. But we’re walking, and we’re walking, for like an hour and a half.

He goes, “How much money do you need?”

I’m like, “I have no idea. Go home and ask Christy.” That’s his wife. I said, “The first thing you need to do is ask a woman who colors her hair if this is a good idea or a bad idea.”

He called me at home the next day and said, “Christy thinks that I’m an idiot if I don’t invest in this. How much money do you want?” I told Maveron. I gave them nine months of off ramp, found somebody else to replace myself, and then they invested as well in the A and Madison Reed was born.

SL: And it’s named after your daughter?

AE: Yes, I named it after Madison. My wife started to go gray at 25. She cares about what’s in everything and was going to the highest end salon in San Francisco.

She’s having to go every two to three weeks, spending $300 and trying to ask, “What’s in the ingredients?” You never know if you go to a salon what they use on you. She was complaining all the time.

I’m in Whole Foods on 24th Street one day. She texts me. She’s like, “Here’s the list and get me some hair color.” I’m like, “What? What aisle is it on?” It’s in the personal care, blow the dust off of a bunch of boxes. I start looking at it. I’m like, “This is no better than the stuff that’s in Walgreens.”

I’m like, “What color?” She goes, “The darkest brown.” I’m like, Ok, there’s $300 at a salon and then this is $18 herbal experience.

I go to Walgreens on the way home, and buy 60 boxes of crap, bring it home, put it on the table. I’m just like, “This is bizarre.”

During the time John and I started talking, I started asking friends, usually after a couple glasses of wine at the dinner table, “Do you color your hair?” As a friend of mine said, “Half of us lied, the other half told the truth.”

The people that told me the truth were like, “Yeah.” “How often do you color your hair? Do you know what’s in the ingredients?”

“No.”

“Would you have if it was a better product? Would you do it at home?”

I kept researching. One day, I was getting ready to go to work. Madison’s eating breakfast. She says, “Mommy, are you going to do it?”

I’m like, “Do what?”

She goes, “Save women’s lives.”

If one of your kids said, “Mommy, are you going to do it?” I was standing there. It was like light bulbs go off. I’m like, “Yeah.”

SL: How old was she?

AE:  At the time, she was just nine and a half. She’s like, “You need to do this. I’m hearing you all the time asking people. Momma has to color her hair all the time. It’s not right that it has this stuff in it. You’re smart, Mommy. You told me, I could anything that I ever wanted to do. You’ve got to go do this.”

I’m like, “OK.”

I say this not to brag: I had absolutely no problem raising capital. I didn’t have a deck. I didn’t even have hair color, I had the idea, went and formulated it. It took us a year to get it to market.

After about eight months, we had a beta of a thousand women. We started then to play with the business model. Should it be subscription only? Should it subscription or one time box? We started to realize what was in the box that they loved, what didn’t they love. Basically from January of ’14 till July or June of ’14, we just had this beta.

We launched in July of ’14. That’s the first time that we started to even spend any money on marketing.

It’s better to be lucky than smart.

Eight months later, Norwest did they’re B round. We hadn’t even really been in the market. Jeff Crowe, who I’ve known for years, who’s fantastic, came to me and said, “We think this is a really cool idea. We like this category.”

I’m like, “I still have money in the bank.”

He’s like, “Look, we want to get in now,” so we did a B. We did a C last year. We’ve had the good fortune of not really having to go shop it to people.

SL:  Do you think that’s been your relationships? Being a VC, did that help?

AE:  I was an entrepreneur that people knew, but I think that being a VC doing deals with people, sitting on boards, they knew I was a seasoned entrepreneur. They also knew I understood “the rules of engagement.”

This is what I try to tell young entrepreneurs all the time. This is the part that you can’t know until you’re in it. When somebody raises money from a venture fund, there are rules of engagement. There’re plenty of businesses in the world that should never take venture money. They do and then they wonder why unnatural acts happen.

SL:  You have to know the game you’re signing up for.

AE:  You’ve to know the game you sign up for. People knew I knew the game. I knew that my job was to try to give them shareholder value. They knew that I cared about the customers and the brand, and I wanted to create something that was better and different.

They also knew that I’m not in this to flip it. I’m in it to build. I actually have a dream, which is I’m going to disrupt those fuckers at CPG. [Consumer packaged goods] Don’t use the word fuckers. Or maybe do.

This is the thing that we don’t understand. They don’t really care. At the end of the day, they put shitty stuff on the shelf. This company lives to basically disrupt the hell out of that.

When Dollar Shave Club sold, all of a sudden everybody kept visiting us, like, “Oh, your company grew. You’re disrupting this.”

Our call centers are all certified licensed colorists. That’s another big mission for me. Cosmetology school costs $25,000. It’s mostly women that go through. They come out with huge amounts of debt. The only way that they can pay that debt off is to stand in a salon for X number of years. Most salons have gone to 1099s because the industry got decimated in ’08. There’s 300,000 salons in the US, so it’s a very fragmented business.

Most of the owners are artists. You get somebody who’s got debt who’s now in there who’s renting a chair who needs to create their own business. They’re making 35 bucks an hour standing on their feet, inhaling crappy stuff all day long, and basically being a personal psychologist.

When I thought of this business, I thought, “OK, the product can be great, the continuity with the customer, but what would happen if we gave the advice of a salon and access to customers?”

The thing that I love more than anything is I’ve taken 23 people and changed their lives. I have 23 women that would never believe that they’d own stock in a tech company, who are making more than they probably thought that they were going to make, who have learned technology skills that they would never learned before. We let them work from home and come in one day a week just to keep into the culture. I have three or four that started from the beginning.

I run this place, because I think that we can actually build a better product, serve our customers, and create jobs and opportunities.

Like right after the election, one of the things that we’ve been chewing on is we’re going to have to open another call center. The head of customer service here came to me and said, “Let’s go to a red state. Let’s go to a place where women don’t have jobs, where there’s beauty school, and let’s teach them that the ‘elitists’ actually care.”

We’re looking into a place in Pennsylvania right now. We’re hell-bent on trying to find where are those regions where we can actually go and teach technology. Here’s the problem in this whole election: Coal jobs aren’t coming back. It’s on us to teach people new skills.

I think it’s consistent with the value story of the company. Things have gone really well. I sleep, probably like you do, with one eye open.

As you know, these things are hard. We’re in a business where you can’t put the wrong tube in a box. She’s counting on that Wednesday. You can’t show up there Saturday. You can’t fuck up her color. She’ll hate you forever.

There is no prestige hair color. This is what I try to tell people. If I said to you name prestige color cosmetics, you could spew them off. Name prestige skincare, name prestige hair color.

You don’t even know the name. When somebody goes to Walgreens, they’re just like, “I don’t even remember what box I buy.” You go to a salon, you don’t what they use.

The big prize here, we’re now in Sephora with one of our products. We’ll be going into Ulta in April. We haven’t announced that yet, but we’ll be going into thousands of stores. We’re on QVC now and that’s ramping up. The most interesting part is the number of salons that are contacting us, that want to use our product in the salon on their customers.

SL:  Why? Because it’s better?

AE:  Because it doesn’t smell, there’s no ammonia. It’s gentle on your hair. It’s incredibly effective. It looks great. It’s reparative on hair.

About 15 percent of all women have some irritation to hair color.

SL:  To me, the convenience story is as important as the price story. I don’t have time to sit in a chair for an hour.

AE:  It’s huge. The other side of the friction point in the business. It’s really different if you’re a salon goer or you’re DIY.

If you’re a DIYer, you know how to do it. You’re not worried. But you’re wondering: “Why are you two times more expensive than anything I’ve ever bought? Will it work? Can you get the color right?” That’s something that we have to work on.

If you go on our site, whether it’s mobile or desktop, you’re asked both questions in a color quiz. Why we do that? Number one, I have 1.5 million hair profiles where I know 12 things about each of those. I know how long your hair is, how much gray you are, what color is your hair, how often do you color. That is just personalization gold.

We’re able to use an algorithm behind that. There’s a lot of technology that’s been built. We know through NPS scores and customer feedback that if I told you bartlette brown and you filled out MPS and you came back and you said, “Yes, I give you a 10 out of 10,” the algorithm’s getting smarter. If there’s a miss there, the algorithm’s like, “What’s going on here?”

There’s this rich algorithm that we’ve built around technology. We’ve tried to get it to a place where she looks at that swatch and she’s like, “Yeah, that’s me. I’ll buy it.” We converted about four percent, which is pretty high for e‑commerce.

On the other side of the table, there’s the salon goer, who is like, “I’m petrified. Somebody else does this for me because I’m scared. Can you get the color right, but what can I do to make me believe I won’t screw it up?”

Now, we’re working really hard on that part which is like, “How do we put content and videos and how‑tos. How do we pop up the Color Crew with live video chat so that we can look at you and say, “You’re really this color. Let us help you, walk you through how to do this process.”

Now, we’ll be moving into text, which is what I think is the biggest thing. Once you send me a photo, and you say I can contact you through your phone like Walgreens or anything else, and you told me you color of your hair every six weeks. On week four and a half, I just say, “Would you like refill?” and you text, “Yes.”

The company is really moving quickly. We had to get this baseline. Nothing matters here if the color is bad. The end of the day, the biggest thing was could we get the product right.

Now, it’s can we break down these friction points that CPG has done an amazing job of putting up? You either need an artist at a salon or you get a shitty experience, your choice.

For women, vanity trumps all. That’s just really the truth. I have educated women, people that I swear that I would put my life on, who I’ve asked the question, “Do you care what’s in your hair color?”

“Absolutely.”

[But] they’re like, “Well, you know, if it doesn’t have the chemicals, it won’t work.”

I’m like, “What do you mean?”

They’re like, “It’s got to really blast open your hair. When it smells really bad, that’s when you know it’s working.”

I’m like, “OK.” I think, “Bravo, CPG.” They trained you to torture yourself. Shave your legs, cut the crap out of your legs, it’s OK. It’s all in the name of beauty.

The industry has created this way for women to feel so degraded by a process that they can’t even believe that they deserve better. There’s a very interesting psychology.

We run TV ads. All of our branding and advertising is about the empowerment of what you deserve. It’s all about, “Spend more time with your kids,” and, “You actually deserve your hair to look like a rock star.”

For Claire, my wife, this is her world now. I’m the greatest thing in the world. I get to bring home hair color. She’s like, “Grab me two tubes.” I’m like, “No problem.” She and her best friend, they color their hair every third week, Tuesday night together.

They have a bottle of wine. They color their hair. They’re yakking away. They’re having a good time. They didn’t go anywhere. They spent $25. Their hair looks great. They had a good time together. Wednesday morning, they’re ready to go, and they did it on their time.

These things are just hard. They just are. We have our first physical store opening in two weeks. It’s opening in New York in two weeks.

It’s basically $45, 45 minutes. Get in and out, and get your roots done. If you want to keep coming back, that’s great, but it’s really about teaching and showing what your color is.

It’s like, “Here’s your box. You’re good to go.” It takes down the friction point of somebody looking at you, that’s an expert, and also you’re watching someone apply it.

It opens in two weeks. That’ll be really interesting to see if the brand immersion will translate into physical activation.

SL:  What are you looking for in that location? What makes you know that’s a success?

AE:  Three things. One is we’ve set our sights on anything greater than 25 percent of the customers that come in that subscribe. If we can get one out of four people to subscribe, it’s a home run for us from an investment standpoint.

Second is we’d like to be able to break even. If we get that 25 percent, and we break even, then our cost of acquisition is basically positive.

The third thing is just brand awareness.

We’re just getting sophisticated enough in the company to start to do brand tracker stuff, which we had never done. We have always been looking to have precise attribution of every distribution channel, which is a cluster.

You start running TV, or I’m on satellite radio, or QVC, you have no idea really where she saw you. All your acquisition dollars add up. You divide them by your customers, and you’re like, “Somebody’s lying here.”

Facebook told me it was $50. If I add all that up, I’m out $200 grand. Who didn’t tell me the truth? The truth is that multi‑channels create a lot of attribution problems.

Like Bonobos, Warby Parker, all of us that are playing online and offline now have this funny dilemma, because all the things we said that we were going to disrupt, we’ve become. We’re realizing, I know at least for us, you don’t live just online.

If you saw a Madison Reed color bar, where you knew it was like Dry Bar for your hair color, you’d be like, “Oh, shit. That’s a real company.” There’s something about when it’s real. When we went into Sephora, it was like we got brand lift.

When we did the series A, and I did my first set of interviews, I am quoted saying, “We’re an online company. We’re never going to be in Sephora.” Swear to God. Now I know, “Amy, just don’t say anything.” The truth of it is that, for these things to flip they can’t just be online.

[Dollar Shave Club’s] Mike Dubin is a rock star. I really love him as a human being. He’s been so sweet to us and helpful when I started this. But the relationship that a man has to shaving is not the same as the relationship to your hair color. For one of these things to get to that size that quickly is an anomaly. Look, you know dudes: It’s just a razor.

SL:  There’s not that much at stake.

AE:  No. One of the biggest things that our customers tell us, they buy, and here’s what they say: “The box has been staring at me.”

For us, the big things in ’17 are the pop‑ups, and does that work?

If it does, do we have full‑time physical stores, and some tertiary cities where we’re popping up? There’s some cities, like you could roll into Memphis for three months and then you create a buzz.

It’s like, “They’re going away. I need to subscribe.” That’s a strategy. We’re talking about a strategy of a big bus, tricking out an RV, and driving it across the country to industrial parks, where real women live, and teaching them how to color their hair.

The Hispanic market has turned into a very significant business for us. Disproportionate amount of spend on prestige beauty, and a lot of a referral base, just based on family and relationships.

We just launched Spanish‑speaking call center folks, stylists, and our site in Spanish. We’re driving a lot of media there. That’s a big thing for us in ’17, is to really cater to the Hispanic market.

It’ll be the first time that we’ll sell color in retail stores. We’ve only sold our other products in QVC, and Sephora, and salons. For the first time, we’ll sell our permanent color in Ulta.

Ulta is all about hair. Every Ulta has a salon. They came to us last year, and asked whether, if they gave us an end‑cap, would we be open to being prestige color with better ingredients?

It was a hard decision, because I don’t want to give up the direct relationship. But Ulta has a thousand stores.

SL: I recently did an interview with Tristan Walker of Walker & Co. and he argued that the Valley still doesn’t get his business, in part because it’s designed for people of color and the Valley is dominated by white men. Do they get your business?

AE: Here’s the thing that I’d say. The truth is I’m almost embarrassed about it, but I haven’t had a problem raising the money and having great investors. But the truth is, the first couple of years that I started this, I had a lot of my Valley VC friends who are like, “You’re really smart. Who gives a shit about hair color? What are you doing? What a weird category.”

I’d start spewing off, “You know how many people…”

They’re like, “Whatever.”

I’ve had VCs say to me ‑‑ more than 10 of them‑‑ “Women color their hair at home?”

SL:  That’s ridiculous.

AE:  My point is, “Welcome to a red state. Welcome to the rest of the world, other than the one where your wives can afford $400 a pop.”

Anyway, I think these personal care categories ‑‑ and it’s true if you are not a white, straight guy ‑‑ it is harder.

SL:  You have really clear differentiation. It’s just a matter of getting past the friction points.

AE:  Can we execute? How do we grow fast enough? The company’s done really well, but for these things to really fly you need to have millions.

SL:  Does that worry you?

AE:  I’ve learned my numbers. At 300,000 subscribers, what’s different about us and Mike [of Dollar Shave Club] is they’re paying nine bucks a month, and our folks are paying $30. At 325,000 subscribers we have the juice to probably be a public company, if that’s what we wanted to do. I would be a terrible public company CEO. That’s absolutely true.

SL:  Why do you think that?

AE:  I’m not good at having to do things because people tell me to. I suck at that. That is my danger zone. When I was at E*TRADE and I had to be on every stock analyst call, I’d sit there. They’d have to put the phone on mute because I’d be like, “Fucking idiots.”

Doing unnatural acts, for me, like when somebody says to me, “You just have to manage those numbers. You’ve just got to make it look like that.”

I’d be like, “You’re asking me to lie. I’m not going to lie.”

I have this part of me that’s unmovable. That’s the great part, but there’s a certain part that I’m not so good, like when you need org charts. I’m not so good when it’s all form over function.

SL:  Let me ask you this before you go. You talked about the role of your daughter and motherhood played in you doing this. Since I’m writing a book about motherhood and entrepreneurship, I want to talk a little bit more about that journey. Do you feel like you’re different as an entrepreneur by being a mother?

AE:  Absolutely.

SL:  How so?

AE:  I have a basic philosophy that actually managing a group of people is very analogous to parenting. I didn’t understand that at a cellular level until I had a kid. It’s like what I’ve learned by having Madison is my job is to meet Madison where she’s at. Her job is to not meet me where I’m at.

What is the greatest strength that you give your kids? In my opinion, it’s validating the goodness in them and putting up guardrails.

I’ll share this story. Madison went to a private school. We found out she had…I wouldn’t say severe but a learning difference. It resulted in her feeling not smart and resulted in some bullying. It resulted in socially her being behind other kids and all sorts of stuff. She got tested. We recognized it. We moved her to another school.

In the process of moving her to another school, one of the parents in the old school which was very like the prestigious school in San Francisco for the kids that were going to track their way to an Ivy League college. I tell her that we’re changing schools.

There’s a reason I’ll tell you this story because it’s similar to the Valley.

She says, “You’re what? You realize you’re taking her off the Ivy League track.”

I said, “What do you mean?”

She said, “She could go here and then she goes here. You’ve set her up for life.”

My response was, “No, what Claire and I do to set her up for life is let her be her.” It’s what I tell people all the time. Her job in life is for us to help her figure out her genius, as I call it.

What is her genius? Where is that effortless part of the zone of her life where it’s just joy, where she can operate from this place? Our job is to let them be loved and be happy and be good people and find that zone and then let them run. That’s our job.

It’s the same job I have here.It’s actually my job to understand that the CTO is motivated by different things. I need to go and create the space for his genius to come out, which is good for him and the company.

I’m a better entrepreneur really for I think three reasons. One, somebody said to me, “It’s good that you’re mature.” That meant “old,” so I’ll take that one. I’ll own that one. You just go through it enough times.

The second thing is that being a parent, there’s a way that you start to re-prioritize everything in your life. All the things that you thought were important aren’t important anymore. In a certain way, it’s a lot like you’re of service. You’re trying to find this place in yourself that is unconditional.

The third thing is I really actually believe being a VC has made me a better entrepreneur. There’s no question.

SL:  Just because you understand the other side of it?

AE:  Yeah, and I understand now what were the characteristics of the people that had an outside chance to win were. Did I have that in myself?

People ask me, “Give me the one characteristic that you look for in people.” It’s resilience.

Whether I’m over the mountain, through the mountain, or around the mountain, you’re not moving me. It’s like, “I know in my soul we are going to win. It’s just how long will it take, how many things will we have to deal with to get there, but there’s no way I’m letting this fucking thing fail. It’s just not going to happen.”

That means that you have to face into a whole bunch of things that you may think are unthinkable. It’s that resilience and persistence and this ability to be unmovable in a way that’s not cutthroat.

The similarities between parenting and entrepreneurship are startling. It’s why I think from a gender standpoint, we make really good CEOs. I think women by nature see the world in a very different way. We just do.

We tend to not see the world not only as a function of what we want. The key about managing people from love, not fear.  That’s evolved thinking. It’s really easy to fucking scare the shit out of people. It’s easier to bully people rather than invest.