Episode 37: What Would You Do With $200,000 Right Now?

And so, yes, Dana White was in fact the big winner at last week’s Detroit Demo Day, taking home the top prize of $200,000 for her hair salon business, Paralee Boyd, which specializes in serving women with thick and curly hair and which has an unusual walk-in-only business model. Of course, Dana now has some decisions to make: Does she want to take the money in the form of a zero-interest loan? Or does she want to take it in the form of a convertible note, which can convert to an equity stake in her company? And perhaps, more importantly, how exactly is she going to spend the money? As she tells Paul Downs and Jay Goltz in this conversation, she’s thinking about spending it on marketing, on opening another location, or on creating retail products for sale online or in her salons. What do you think Dana should do? Please email your thoughts to [email protected], and we’ll share them on the podcast and in the Morning Report.

Episode 37: What Would You Do With $200,000 Right Now?

Guests:

Dana White is founder and CEO of Paralee Boyd hair salons.

Paul Downs is founder of Paul Downs Cabinetmakers.

Jay Goltz is founder and CEO of Artists Frame Service and Jayson Home.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Dana White: “Unfortunately, several salons in the area have closed. So if I want to open up, or reopen my Southfield location, I have options to choose from that I don’t have to build out from the studs.”

Paul Downs: “Given the uncertainty of the time and the fact that you were making a major business and operational move anyway, have you considered accepting the check and doing nothing for six months?”

Paul Downs: “I think it’s always tempting to think about what new shiny thing I could be doing, but there’s often huge value in just getting better at what you’re doing now.”

Full Episode Transcript:

Loren Feldman:
I was really hoping one of you would have some big news to talk about this week, because I didn’t really plan anything else. Unfortunately, I guess nothing really happened. Jay, did you have any big news this week?

Jay Goltz:
Um, my cholesterol is looking good. I heard from the doctor.

Loren Feldman:
Well, that’s good. Paul, anything big happen to you this week?

Paul Downs:
Yeah, I ordered a new pair of socks.

Loren Feldman:
Wow.

Jay Goltz:
Wow.

Paul Downs:
Yeah.

Jay Goltz:
One or more than one?

Paul Downs:
No, you order them two at a time Jay.

Jay Goltz:
Oh, all right.

Loren Feldman:
Dana, I don’t suppose anything big happened to you this week?

Dana White:
Well, no, not much. I just won $200,000 and I’m deciding on what I’m going to do with that.

Loren Feldman:
Congratulations, Dana. That is big news. Of course, you knew it. You couldn’t tell us, although we could kind of hear it in your voice, I think.

Dana White:
Okay, I tried. I used all the appropriate adjectives and adverbs and tenses, so I tried.

Loren Feldman:
I watched your pitch. I suspect we all did. The pitch was fun and interesting—a little Shark Tank-like. What was it like for you doing that?

Dana White:
I was a nervous wreck. I could tell I was nervous. People who watched it have said, “Oh, I couldn’t tell you were nervous at all.” I was a mess. My knees were shaking and they did a very good job editing it because my clicker decided not to do anything. They edited one of the production assistant’s crawling on the floor behind the table to fix it.

Loren Feldman:
Is this something you prepared specifically for this? Or have you been using this basic pitch for some time?

Dana White:
No, I did prepare it specifically for this because other pitches I’ve done have been three to five minutes. This one was 90 seconds, so I worked with—

Loren Feldman:
That’s a lot of money for 90 seconds.

Dana White:
I know. Pressure! Pressure! Well, here’s the thing. Normally, you’re given six weeks to prepare for this. We were given two. We worked with the Quicken Loans team and their help with coaches and their pitching. I had done pitching before, once or twice before, but nothing to this scale.

I’m a note taker, and I have notebooks. I went into my old pitch notebooks, brought out my old pitch video, and just tried to pull from that to cover. And then based on the suggestions of the coaches, I was able to put something together in a couple of days.

Loren Feldman:
And why do you think you won?

Dana White:
I’ll be honest with you. After I pitched, knowing how I delivered the pitch versus how I practiced, I didn’t think I’d won. I genuinely didn’t think I’d won, because I knew how I’d practiced versus how I pitched. I think I won because I answered their questions very well. I spoke about how I was going to use the money. I think I had a validated business model with numbers behind it. I think my presentation, how I presented myself—I heard from the time I walked in. I said, “Boss!” People have said, “You looked like you were the head of a multimillion dollar company already.” So I said, “Oh, great!”

You know, you interview at Target, you wear a red shirt and khakis. I guess if you pitch for Demo Day, you wear a black dress and heels. I don’t know. But I think that’s why I won, and I was pleased to hear what the judges said after I had pitched. That was really shocking, because I had walked away, so I didn’t know.

Loren Feldman:
Did you just find that out when they posted the video?

Dana White:
What they said after? Yes. It was a huge space. I was all the way at the other end getting my mic taken off, collapsing.

Jay Goltz:
So this isn’t like “Dancing with the Stars” where they have all the judges tell you what they think and they hold up numbers and tell you how you did?

Dana White:
Not at all. You don’t know what they think until they walk you in the next day. The next day is when they told us. We had to do everything—physically, we had to look exactly the same as the day before—and they walk us in, and they put me right up front of all the people standing there. They had like three in back and two in front, and I was like, “No, please don’t put me up front. I really don’t think I have it and I don’t want the camera on me when they don’t say my name.” So that was what I was thinking. [Laughter]

Loren Feldman:
And when was this, Dana?

Dana White:
This was September 15th and 16th.

Loren Feldman:
So you’ve known this all this time?

Paul Downs:
Six weeks!

Dana White:
Yeah. If anybody ever wondered if Dana could keep a secret, she can.

Loren Feldman:
So it went public on Tuesday. What was Tuesday like for you?

Dana White:
Man, oh my goodness. Press, calls, emails, text messages. I was bombarded. I had my work planned out for me for the day. Yeah, right! “Dana, we need you down at your salon. Channel Four news is on its way. They’ll be there in an hour.” “Okay.” It was a lot of that. I’m still fielding calls from well-wishers for lunches and dinners and catch ups.

Jay Goltz:
Did anybody try to sell you anything?

Dana White:
Oh, of course. My LinkedIn is full of, “Dana, you know what I think you need? Do you know what I think you need, Dana?” “Okay, I had never thought of that!”

Jay Goltz:
I actually thought of getting off of LinkedIn, frankly, because I get these calls, or I get the emails every day. I think it’s all from LinkedIn. And like, I don’t know if it’s doing me any good. I’m not looking for a job. It does seem to be the source of all sales calls.

Dana White:
Well, it’s doing good for me. I noticed a spike in VCs.

Jay Goltz:
Yeah, for you, sure.

Dana White:
A spike in VCs, so that’s interesting. That was one of the things that has percolated up is this interest now. The money from Dan Gilbert, i.e. Quicken Loans, as I’ve said, is a huge validator. There are people who were like, “Okay, if you can secure $200,000 in capital, let’s see. Let’s talk about it.” I actually have someone coming into town November 4th, to, as she said, “sit down and let’s talk business.” And I can’t wait. I cannot wait to speak with her.

Loren Feldman:
All right, we’re going to talk some more about that. But first, you told us last week that, because of your new hire, your new operations manager who was helping you staff up, you were planning to actually close your salon. Did you go ahead and do that? Is your salon closed?

Dana White:
It’s closed right now.

Loren Feldman:
So it was closed when you won and got all this press as well.

Dana White:
Yep, we were there with an empty salon. The phones were ringing, but we were prepared for that. My customers want me to be walk-in only seven days a week. They are struggling with appointments. And so November 2nd, we’re going to reopen walk-in only, seven days a week, fully staffed. My operations manager and my new manager both—with a combined over 25 years experience in managing hair salons—have been recruiting. That’s their strong point: recruiting and revenue, driving sales for revenue. So right now, they’re just pedal-to-the-metal recruiting, and we are doing interviews October 30th.

Jay Goltz:
Can you explain—because that’s interesting to me that people don’t want to make appointments, which seems like it’s easier to me—why do you think people are struggling with making appointments and need it to be walk-in? I mean, why does someone wake up at three and go, “I gotta get my hair done right now,” versus the next day? Do you have any explanation for that?

Dana White:
Sure. One of the reasons is, I think it’s their schedules and their management of their time, and things happen. I think, with women, things happen. You get the call from school. You get the call from your husband. “What’s for dinner?” I think as women, we carry a lot—not saying men don’t—just saying that they need something that could be catered to them when they need it.

I had a lady who said, “Appointments just never work for me: dentist appointments, doctor’s appointments. The shifting I have to do in my life to get to a doctor’s appointment and keep it when so many things come up…” A crisis at work comes up, and now we’re on a call for two hours, and I’ve got to be on this call. I can’t get off the call and say, “Hey, I’ve got to go to a hair appointment.” The second reason is, our history with hair appointments for my market has been a drain on time. And the fact that you have a place now you can go to that isn’t a drain on your time.

Loren Feldman:
A drain on time in what sense?

Dana White:
Meaning traditionally, for my market—African-American women—it’s been: make your appointment two weeks out, get there at nine o’clock, and be there ‘til three o’clock, be there ‘til noon. And we don’t have that kind of time anymore. We have kids who have to get to soccer. We have book clubs. We have work we have to do. We have a conference call we have to be on.

When you look in the mirror and say, “What do I need right now?” You don’t want to say, “I need to make a hair appointment for two weeks from now.” You want to be able to look in the mirror and say, “I want to go get my hair done. Where can I go right now?”

Jay Goltz:
You’ve got to remember, all the customers that you’ve had for years came there because there were no appointments, so that you can’t draw too much of a conclusion that the entire market’s like that. Maybe there are people who like appointments. They just haven’t been going to you because you didn’t take appointments. So I’m not sure you can conclude that, obviously, everybody doesn’t like this model. It’s just interesting to feel out whether there could still be room for people who want to make appointments, is my point.

Paul Downs:
Could I make one other point? I’ve never made an appointment to go see a barber in my life. I just walk in, and there may be some people sitting there, or not. I don’t think that Dana’s model is all that unusual. It’s just not, I guess, what women are used to.

Jay Goltz:
No, no, I’m not saying it’s unusual. I’m just saying you’re a perfect example. I’ve never gone into a place without an appointment. So the point is, there are both types of people out there. Some people want to make an appointment, and some people don’t. I think it’d be worth keeping an option open for people who do want to make an appointment, because you’ve got a qualified customer base. The people who wanted to make appointments aren’t coming to you because you don’t take appointments. I think I’d leave that option open as you expand your customer base.

Dana White:
The people who want to come to us because they want an appointment have told me, “I haven’t quite grasped the concept of not having an appointment.” They have said that to me. I’m assuming that it’s an appointment, it’s my time, and I’m the only one there. And she said, “But I realize, even when I make an appointment, I walk into my stylist, and I’m not the only one there and I’m still waiting.” So it’s a transition. It’s a paradigm shift for them.

We are going to take appointments when we start opening in the Midtown location at 7 a.m. Once kids start going back to school, and we start getting to some version of normalcy, and women are reporting into work, we’re going to open at 7 a.m. and have women make an appointment between seven and 10 a.m. to come get their hair done.

Jay Goltz:
Good, I think that’s great. Paul, how much do you pay for a haircut? $2.50 $3? Tell us.

Paul Downs:
No! The guy who’s around the corner from me, Al Bonaventura, who took over the shop from his father, he charges 16 bucks. I get a crew cut. I just think that the idea of no appointment isn’t quite as radical as you think. I mean, almost every business sort of breaks down—like restaurants, there are some where you just walk in, you line up, you get the stuff. Some you make a reservation.

Dana White:
For Black women, it’s extremely radical. There’s never been a walk-in-only hair salon for Black women or women with thick and curly hair. Not at all.

Paul Downs:
That’s the experimentation in the market, and we’ll see what happens.

Loren Feldman:
Dana, I wanted to ask you, that was one of the points you made in your pitch. You emphasized that one of the things that you deliver to your customers is time. Because people—starting with your grandmother, who you referred to, and you—were in the habit of thinking you had to spend all day Saturday getting your hair done, and you’re making it possible for that not to be necessary. That’s an entirely different world for many of us, and I’m wondering how often you have to explain that. I’m sure your target market understands that completely, but when you’re pitching investors, is that a concept that you have to walk them through?

Dana White:
Yes, and not just investors, anybody who can’t relate. If you’ve never talked to, or you don’t know personally someone who’s a Black woman, or even a woman with thick and curly hair, and what she goes through to get her hair done—not that it’s traumatic—it’s just timely. It takes a long time. That’s the genius behind this revolutionary idea, is that the people who can give me access to capital, the people who can help me grow a company have no idea of the money that this market is spending and the pain point that I’m solving for. It’s not until you look at it, and you look around, and you go, “Oh my goodness!”

Jay Goltz:
I didn’t know until you told me. That was all very enlightening when you explained it to us months ago.

Paul Downs:
The world of thick and curly hair is foreign to me personally. My wife has thick and curly hair, and she just doesn’t get it cut very often.

Dana White:
In 2017 or 2015, Huffington Post reported that African-American women spend more than the gross domestic product of Greece on services alone on their hair.

Paul Downs:
Wow.

Dana White:
And I’m the only walk-in-only hair salon.

Paul Downs:
Give that woman some seed capital!

Loren Feldman:
So you have won $200,000. But you have to decide: Do you want to take it in a loan, which I believe is a 1 percent loan—

Dana White:
Interest-free.

Loren Feldman:
Interest-free, and do you know what the term is?

Dana White:
No.

Loren Feldman:
And the other alternative is a convertible note, meaning that it automatically converts to equity.

Dana White:
I believe so.

Loren Feldman:
But you’re not sure yet how much of the company they would end up owning?

Dana White:
Nope, I don’t know. They just said it’s a convertible note.

Jay Goltz:
This is totally out of my wheelhouse. I thought—and I could be wrong—isn’t it possible that you have a choice of a convertible note—like at a particular time, either you or the person who gave you the money, it converts on a certain date? Or do they have a choice to either get paid back or take… I mean, are there options?

Dana White:
I believe there are options and I think, from what I’ve heard—and this isn’t confirmed—but from what I’ve heard, it is a 24- to 36-month convertible note. From what I’m understanding, the convertible note is set up to attract another investor to take them out.

Loren Feldman:
What are you thinking?

Dana White:
Convertible note.

Loren Feldman:
Why?

Dana White:
Let’s go. Not fast growth. That’s what I’m thinking, let’s go. It’s not fast growth. It’s not, “I want to have a million locations tomorrow.” I want to communicate readiness, preparedness, access, and network to expand—maybe not expand to five locations. This is the time of COVID. But I want to communicate growth, and that’s why it’s very important what I choose to do with this money. I want to be attractive to, as I’ve mentioned before, a unicorn VC. If you are the type of VC who wants me to grow exponentially in six months, this is not the company for you.

Loren Feldman:
When people use the term “unicorn” with venture capital, they’re usually talking about a company that can grow to be a billion dollars. That’s clearly not what you’re talking about. You mean unicorn in the sense of a venture capitalist who is willing to give you time to grow and not put you on a set time schedule.

Jay Goltz:
On a treadmill.

Dana White:
And understanding—as the VC who has approached me, and other ones who have emailed me and messaged me—that they know the market and they know the pain point I solve for. She may not be a multimillion-dollar, potentially billion-dollar business today, but we already see what she’s doing, and we see that nobody else is out here doing it. And the one that has done it isn’t catering to the market. And she’s killing it, the one who did it. So you know what, let’s get the resources and the capital to her.

Loren Feldman:
Dana, have you heard from a venture capital firm that takes the approach you’re hoping for?

Dana White:
Absolutely. Their multilayered approach to business growth is all about time. It’s business development, professional development, brand development, marketing. It’s, “Okay, we want to grow with you because we’re uniquely positioned to understand what you need and what you don’t have.” And I’ll be honest with you, a lot of the VCs who have approached me are Black. And they know! They know what’s going on. They know.

Loren Feldman:
What do they know, Dana? Do they know your market? Or they understand your business? Or they know your mindset? What are you referring to?

Dana White:
All of that.

Jay Goltz:
And challenges. That’s the third piece.

Dana White:
Exactly. I was about to say, they know my market. They know my challenges. They can look at an idea, see what I’ve done, and understand why I have not been able to do more. They understand the value of the network, the network they’ve cultivated, and why they want to bring it to a business like Paralee Boyd to see if it’s a viable option to grow. They understand that if you’re just going to look at a revenue number, you’ll think that, “Oh, this business is nothing.” No, you have to look at what she’s doing and look at how she plans to do it.

If you approach it one way, when I sit across the table from three or four white men who have no connection to this at all, it’s a bad idea. I can’t tell you how many people—not in the VC world or an investment world—who I talked to, and they just dismissed me as another hair salon, because they don’t quite grasp it. Then on the other hand, I talked to several white men who’ve taken the time to understand the pain point and how it’s affected me.

Jay Goltz:
Are you talking about us?

Dana White:
Yeah, honestly.

Jay Goltz:
Okay, good.

Dana White:
When I first met Loren, I was excited. I never had to hear from Loren again, because I was so excited that someone who didn’t look like me sat down with me on a short bus ride, and by the time we got off—which was like, five, ten minutes later—he got it. And I was like, “Okay, so it’s not me,” right? And that’s what these minority-run VCs are saying, “No, no, no, sweetie, it’s not you.” Goldman Sachs just put out a study, and we’re all reading it. It’s a study about being Black in entrepreneurship. And here we are thinking, “It’s us.” Oh my gosh, like no, the hill is a little steeper for you. It’s not just you. It’s a little steeper for you.

Loren Feldman:
Dana, it’s not just a little steeper. I mean, we’ve all read the stories that relate the percentage of venture capital that goes to women and minority entrepreneurs. It’s incredibly tiny. Is your experience giving you any sense as to whether that’s changing?

Dana White:
I do think COVID has required people to look at things differently. There are pre-COVID businesses that were securing investments and killing it that had to close during COVID. I think it’s more about not just the idea, not just the revenue. I think that people are having to step out of their box, out of their comfort zone. I’ve said this before, “Get Dana out of the box you have her in and listen. Talk to her, find out what her eight years of experience running this business has done, and go from there.”

I think, post-COVID, it’s requiring people to say, “You know what? Revenue is one thing, but what else can we be looking at as a measure of likelihood of success? And maybe revenue isn’t high right now, but why not?” Ask those questions. I think that’s what’s happening. Again, I think people are looking for businesses that are non-traditional. There’s other ways to make money outside of being an app.

Loren Feldman:
You’re getting $200,000. That’s a lot of money. It’s not unlimited money. You’ve got to think carefully about what you’re gonna spend it on. Do you know what you want to do?

Dana White:
I do: marketing. I’ve never had a proper marketing campaign. I’d like to do marketing. My customers would like me to reopen my suburban location here in Michigan, so that’s an option.

Loren Feldman:
How are you thinking about that in terms of what it will cost and how you will do it?

Dana White:
I’m thinking, to start—because I’m hoping that marketing campaign will generate enough over time, generate enough revenue so I’m not pulling from the base anymore—I’m expecting maybe $20,000 to $40,000 on a good startup marketing campaign.

Loren Feldman:
And are you going to hire somebody to manage that?

Dana White:
Yep, and there’s market research we want to do. I’m looking to invest some money in a product line. I’ve already started that. They want me to come to them with Paralee Boyd’s vision on its best day, and that’s why I think the network access is so important. I’ve spoken with previous years’ winners who told me, “When they have that meeting with you, they’re going to set you up to succeed, so be prepared.”

I’m not in a rush to spend the money. I’m not in a rush to get the money. I had an idea—really clear—of what I wanted to use it for. But understanding who I’m about to sit across the table from and have the conversation with, I’d like to set up a solid plan, based on as much data as I can get, and go from there. Then let’s give out the money based on that.

Jay Goltz:
So Loren, to your point, $200,000—it isn’t that much money. You gotta be careful, because it’s certainly a good amount to do something with but like, poof.

Dana White:
Yeah, it’s gone.

Jay Goltz:
All the stuff you mentioned—30 grand, 50 grand, 20 grand, 80 grand—quick.

Loren Feldman:
Tell us about the products, Dana. You’ve talked about that a little bit previously, but we’ve never really walked through it. That seems like a bit of a departure to me. It’s not the basis of your idea. It’s not what you pitched, I don’t think. I guess it wasn’t in the video.

Dana White:
Towards the end. It said, “With this money, we’ll use it for the following,” and I listed four things, and then the product came up on the screen.

Loren Feldman:
But my point, larger point, is it’s a different skill set. You’re talking about mixing materials, creating something that people are going to use on their hair. You’re talking about distribution, supply chains, all kinds of different things that you don’t have to do running a hair salon. How are you thinking about that?

Dana White:
Just as you listed. Most hair salons have a retail space. Most hair salons get most of their money—most beauty businesses, if it’s a brick-and-mortar—from retail.

Loren Feldman:
Not necessarily stuff they’ve made themselves though.

Dana White:
Exactly, so for Paralee Boyd we’ve sold barely any retail, almost not even worth mentioning. I’ve decided to private label—to do our own formulations—based on years of experience, talking to customers, talking to my staff, seeing what works, what doesn’t work, what we have in there that could be better. I’m going to do that, and then a lot of the people want our tools. They want our blow dryers, they want our brushes, they want our combs.

In addition to that, I want to produce a set of videos. “Here’s the anti-itch and growth oil that we’re coming out with. This is how you apply it, and these are the results you should see over time. Here is our edge control. Here’s the info. This is how you apply it.” And have a video on our scalp-treatment kits, everything that we use in the salon. I’d like to be a lifestyle brand. I don’t just want to be a place. Paralee Boyd’s where you come to. I want to make sure you’re exercising haircare when you’re away from us as well.

Loren Feldman:
When you said that people want your brushes and your blow dryers, are those Paralee Boyd products that you’ve created for the salon? Or something that you bought from somebody that somebody else created?

Dana White:
It was something that we bought, but again we were using them differently. There’s a way we blow dry and using those tools. So the type of blow dryer, I brought with me from New York. But what I talked to them about is, “Here’s what I’d like to do to make it better.” The manufacturer, I talked to them: “This is what I’d like to do to make it better, and this is what I’d like to do to make it ours,” and so I’m gonna do that. Again, that’s why the conversation with Quicken Loans and the Detroit Demo Day people is so critical because it’s a matter of: What do you spend the money on that would yield a return that makes a convertible note viable? What are the things you want to do?

Jay Goltz:
I have to tell you, everything she’s talking about, from my perspective, makes perfect sense. We’re also talking about the internet. Just selling it at full price on the internet, all over the country, as well as getting into some stores, and then tribal association is huge. Look what Oakley sunglasses did 30 years ago. I mean, there are so many brands. People were putting stickers on their back window that said Oakley. People want to believe in something. People want to belong to something. If they like the product, I could totally see where they’d just as soon get a brush with your name on it. Why not? It all makes sense.

Dana White:
We’re [doing] CBD. There is no CBD haircare line towards women with thick and curly hair. So right now, we have a CBD hair growth oil, and I’m mailing out some product today. It’s been up for a couple of days, and they’re already buying it. So it’s a matter of getting that out there, and again, the marketing. I know, with the money, marketing is happening no matter what. Marketing, marketing, marketing. Marketing towards products, marketing towards butts in seats. And then it’s a matter of probably doing the products.

Unfortunately, several salons in the area have closed. So if I want to open up, or reopen, my Southfield location, I have options to choose from that I don’t have to build out from the studs. I can take over a former salon, spend money to make it my own, and then reopen. So that’s an option as well.

Loren Feldman:
Do you think the $200,000 is enough money for you to do all three: the marketing, the products, and another location?

Dana White:
I don’t know. I think the $200,000 is enough to get it started. But again, you have to choose something that is going to make money in order for it to be paid back or to convert.

Jay Goltz:
I can tell you, in her situation, that the quote-unquote marketing dollars—most of it’s going to be PR, because she’s got this story to tell now. To go start doing radio ads, TV ads, print, direct mail, it’s extremely expensive. That money will be gone in a heartbeat. Whereas your story can be told and that will be by far the most efficient way of getting out there, on top of—you are a retailer—having a great location is a huge part of quote unquote marketing, but it’s paid for in rent. You could spend $300,000 in marketing in a flash.

Dana White:
Yep, but that thing. When you start it, and it’s out there, it’s gonna start generating money for you. I’m actually going to meet with a publicist. She’s like, “You’re hot right now. It’s time. We can get you a ton of press, even some in the national press, right now.”

Paul Downs:
Has there ever been a PR person who didn’t say that?

Dana White:
Actually, yeah. I’ve had someone say to me, “Your story… it’s gonna be hard for me to market you. It’s going to be hard for me to pitch you to news agencies. You might get small local circulars, but getting you press…” I’ve had someone say that to me, yeah.

Loren Feldman:
But those small local circulars might be more effective for you than national press.

Dana White:
They weren’t.

Jay Goltz:
I’ve talked to many PR people, I’ve hired many PR people, and just like everything else—no, no, worse than everything else. Like if you hire a plumber, he’s probably gonna fix your sink. Whereas you can hire a PR person, and they can do absolutely nothing. So there are people who are extremely talented and gifted and connected who will do a great job. And there are people who will just suck $10,000 out of you over a few months and say, “This thing takes time,” and then you fire them and move on. I’ve been through all of them. And yeah, you can’t be too careful with that stuff, because like they all say—most of them—will tell you they can get you publicity. But the question is: Who are their accounts now and what are they doing for them?

Dana White:
And that’s what I’ve looked at. That’s why I’ve agreed to sit down with them, because I’ve seen what they’ve been able to do for other people and what they’re currently doing.

Loren Feldman:
That national press thing, I think, is something that you have to think about carefully. It might be fun, but is it gonna drive customers into your salons?

Jay Goltz:
Well, she’s selling things online, though. She’s selling products online. That could be great.

Dana White:
It depends on what the national press is. If the national press is Wall Street Journal, maybe not so much. If it’s Ebony Magazine, Black Enterprise, that’s something else, right? So I’m really focused on local. I’ve had national press. I’ve actually had more national press than I’ve had local press. So it’s time for us to really check the boxes on local press here and maybe some national things.

I would like my product to be on the Today Show. I would like my product to be in a magazine, in People Magazine: “Hey, have you guys tried this? It really works.” So those are things that we can talk about and the viability of it. It may not be viable right now. That’s fine. But for now, I’m sitting down with a PR person tonight, because I had a couple who I was meeting with, to talk about the local boxes I want to check off.

Jay Goltz:
Let me tell you the first thing I’d ask them, because like I said, I’ve been through this. This is what a lot of them do. They spend all their time pitching clients, and then they get them and they turn it over to the 23-year-old who’s making $15 an hour to do the mediocre work. I would ask them specifically, “Who is it? Or are you the person who will be working on my account?” Because I’ve just seen that too many times.

Dana White:
Yep.

Paul Downs:
I want to throw out a slightly different perspective. Given the uncertainty of the time and the fact that you were making a major business and operational move anyway, have you considered accepting the check and doing nothing for six months? Presumably you had a plan that was going to result in some success anyway, and now this money arrives, and all of a sudden you’re running around, “I could do this. I could do this. I could do this.” And a lot of times, just plain focus is the critical business skill.

Dana White:
Right. I don’t think they’re gonna cut the check and have me sit on it. I’d rather have the conversation and wait for the first disbursement. I can’t afford not to do anything. I have to do something.

Jay Goltz:
Well, the good news is, before this happened, you’ve been making major progress. Let’s just review, because this is critical. You fixed your pricing problem, which was a problem. That’s finance. You’re fixing your management, you hired a qualified manager. You’ve never had the luxury of that. And you’re figuring out about locations. So the good news is, you’ve been doing a lot of work in the last six months, getting ready for the future, so it’s good timing.

Dana White:
To Paul’s point, I think, if I’m hearing him correctly, it’s a matter of doing nothing, i.e. not spending, and that’s what I’m prepared to do. I’m prepared to not spend and plan. I don’t want to plan to death. I don’t want to plan, and a year from now, I’m still planning. When it’s time to have money dispersed, we’re ready with a pretty sound idea as to what the ROI would be for that investment.

Paul Downs:
Yeah, I guess the point I was making is that you’re in the middle of a bunch of stuff, and a lot of times, what makes or breaks something like that is just being able to do it long enough before you go broke so you really learn how to do it. A $200,000 cushion is just time to me. That’s the first thing I think of, “Now I have time.” It moves the doom day on the horizon back some number of months, and it takes the pressure off what you’re currently doing now. I think it’s always tempting to think about what new shiny thing I could be doing, but there’s often huge value in just getting better at what you’re doing now.

Loren Feldman:
I think you also have to think about the timeline for each of those elements that you’re considering. How long will it take you until you have products ready to sell online? How long would it take you to get another location open? Maybe you want to wait on the marketing until you’ve got both of those things ready.

Dana White:
Absolutely, so one of the products is here, so that’s ready to go. Like I said, I’m shipping some out today. The other two products won’t be available until November. You’re absolutely right: timing.

When you do marketing, expect 90 days before you get anything back. But again, even before you spend the money, you have to prepare the content. You’ve got to prepare the commercial. You’ve got to prepare the social media campaign. All of that has to be done before you can not only get a disbursement, but hit the button to expect an ROI. I understand what Paul is saying. He’s not saying, “Don’t do anything.” He’s saying, “Don’t spend anything until you’re prepared,” and that’s what I want to talk to them about this afternoon. I need to be prepared.

Loren Feldman:
Especially given the crisis that we’re still going through.

Dana White:
Absolutely.

Jay Goltz:
Wait, what crisis are we talking about?

Dana White:
COVID.

Jay Goltz:
Oh, that one. There are a couple.

Dana White:
COVID right now is the one directly affecting me.

Loren Feldman:
We are just about out of time. But we have one loose end to tie up before I let you go, and that is: Jay, you have to tell us what you spend on a haircut.

Jay Goltz:
I spend $36. Yeah, I get an appointment, she washes my hair, and then she pretends like she’s interested in my life, and I talk to her for a little while. I’ve been going to the same person for 20 years.

Loren Feldman:
Wow. We’re gonna have to have her on the podcast.

Jay Goltz:
Yeah, you should. She knows all my secrets.

Dana White:
You know what I’d like to hear back, Loren? I don’t know if your listeners can do this in their comments. I would love to hear what they think I should do with the money.

Loren Feldman:
I would love to hear that too. You know, in the new, reformulated 21 Hats, we’re gonna make it very easy for our listeners to participate in conversations like that. Unfortunately, that is not completely set up just yet. But I will say this: If anybody listening has thoughts about that, here’s my email address: [email protected] If you have thoughts for Dana, I would love to get them from you. And I will, of course, relay them to Dana, and we’ll talk about it on the podcast. My thanks to Paul Downs, Jay Goltz, and Dana White. Appreciate it guys.