Weekly Thoughts: Drybar
Here is one thing that caught our eye this week:
Those who know us well know that our daily haircare routine maximizes efficiency (potentially at the expense of style). Besides a quick shower and (potential) comb through the hair, we don’t do any fancy styling or use hair care products. In fact, we do not even own a hairdryer (to the shock of many houseguests). Drybar, the leading provider of “blowouts” in big cities across the country, then, is an unlikely candidate for a business story that would resonate with our team. For those unfamiliar, Drybar is a hair salon that only offers its clientele a blow dry and nothing else (its tagline is “no cuts, no color, just blowouts”), and that service is not cheap, charging $45 for a single blow dry. Despite having what — to us at least — seems like a ridiculous concept, Drybar has been incredibly successful, generating close to $100 million (!) in annual revenue across 70 locations.
The Chenmark team finds the Drybar story compelling not because of its services but because of the family dynamics behind its founding. The company was launched in 2008 by Alli Webb, her husband (Cameron) and brother (Michael). Although all immediate family, each partner brought different skills to the table: Alli as a trained stylist, Cameron a creative director at a branding agency, and Michael a real estate and technology entrepreneur. Fast Company gives some insight:
“After long days at the office, Michael would make spreadsheets to determine how many clients they would need to bring in to make the business sustainable. He worked on fundraising and negotiating deals on new locations. Cameron, for his part, thought about what the Drybar brand should represent and how to create an in-store experience that was about more than just getting your hair styled. And Alli had good instincts about what women would want from a salon experience and could train the stylists they hired. Michael says, ‘All of our skills are so complementary.'”
Having complementary skills allowed the Drybar team to iterate quickly and affordably without having to rely heavily on external subject matter service providers along the way. The same is true at Chenmark, where each partner leads work in specific areas of expertise, enabling us to lower transaction costs while also providing a broader range of resources to our portfolio companies. That said, having different skillsets is only one part of the team’s strength. The other is related to the special type of trust that can be built in family-backed business relationships. With this backdrop, the Drybar team credits their comfort voicing differences of opinion, as well as their ability to productively resolve those differences, as a key component of their success. Fast Company again:
“One benefit of the three founders being related is that they are all comfortable—and vocal—when they think things are going in the wrong direction. As family members, they have a lot of personal experience working through disagreements and have applied some of these conflict-management skills to their work. ‘At the end of the day, you’re still related,’ Alli says. ‘For Cameron and me, we still have to go home together and sleep in the same bed.’ Alli and Michael had previously launched other businesses with friends and have noticed that it is not as easy to be open when problems arise. ‘You hold back,’ Alli says. ‘There’s a lot of pent-up anxiety, frustration, and resentment that you can’t totally air. I don’t hold back anything with Michael and Cameron,’ she adds.”
As the company has grown, Alli, Cameron, and Michael have maintained their ability to productively critique each other, thereby maintaining checks and balances within the business. We are drawn to their story not only because it mirrors our own, but also because we view this type of founder dynamic as one of our greatest strengths. We may never be customers of Drybar, but we are fans of the business and believe it is a compelling demonstration of the impressive results that can come from having complementary skillsets, a forum for productive disagreements, and a willingness to chase your dreams alongside your loved ones.
Weekly Thoughts will return in two weeks.
Your Chenmark Capital Team