There’s a line Michael Preysman once gave to The New Yorker that captures the early Everlane perfectly: “You do not get laid in Everlane.” He meant it as a boast. The clothes were clean, unfussy, almost aggressively unpretentious, the fashion equivalent of showing your work on a math test. No markup mystery. Just a well-made T-shirt and a breakdown of exactly what it costs to produce.

That was the pitch. And for a remarkable window of time in the 2010s, it worked.

Now, in May 2026, Everlane is being sold to Shein, the Chinese ultra-fast-fashion platform that Yale researchers have labeled the biggest polluter in the fast fashion industry, a company that has faced credible accusations of forced labor in its supply chain, fines in Italy for misleading environmental claims, legal challenges in Germany, and a lawsuit from the Texas Attorney General. The deal values Everlane at approximately $100 million. Common stockholders will receive nothing. The $90 million in liabilities that majority owner L Catterton carried on the company’s behalf will be retired by the sale price, meaning the brand effectively traded for the cost of its own debt.

The irony of this acquisition is too obvious.

The Origin Story

Michael Preysman was 25 years old and working in private equity when he noticed something that struck him as a form of consumer fraud hiding in plain sight. Fashion brands were marking up garments five to ten times their production cost, and nobody was saying so. Shoppers paid $80 for a T-shirt that cost $8 to make, and the gap in between the labor, the fabric, the duties, the transport, and the profit margin was invisible by design.

Preysman’s response, in 2010, was Everlane. He and co-founder Jesse Farmer, a developer who built the technical backbone, launched the company from San Francisco with a single product: a $15 cotton T-shirt. But rather than just selling the shirt, Preysman did something fashion had long considered unthinkable. He published a full cost breakdown alongside it: the total cost to make the shirt was $6.70, covering cotton, cutting, sewing, dyeing, finishing, and transport against a retail price of $15, meaning Everlane’s markup was $8.30. There, it was not just the garment, but the logic behind the garment.

The company was launched by invitation only. With an inventory of just 1,500 T-shirts, it started a waitlist that gained 60,000 sign-ups in days. It felt less like a clothing brand than a correction. For a generation of millennial shoppers who had grown up watching corporations sell them stories while hiding the machinery behind the stories, Everlane offered something genuinely novel: trust with receipts.

Early funding came from Kleiner Perkins, Lerer Hippeau Ventures, SV Angel, and Maveron, among others. By 2015, annual sales had reached roughly $35 million. By 2016, they were approaching $100 million, and a Series D round led by Light Street Capital at a reported valuation of around $250 million signaled that investors were fully bought in. The company expanded beyond T-shirts into cashmere, denim, footwear, and outerwear, all presented with the same cost-breakdown transparency. In 2017, it opened its first physical retail store in New York’s SoHo. In 2018, San Francisco followed. The stores were beautiful, minimal, light-filled, very on-brand.

The brand was also genuinely cool. It fit in with the normcore aesthetic, the Kinfolk-magazine minimalism, the aspirational-but-understated lifestyle that defined a particular strain of millennial urban culture. It slid into fashion editorial and Instagram feeds without trying. It attracted loyalty that most fashion brands spend decades and hundreds of millions of dollars attempting to achieve.

And crucially, Everlane seemed to actually believe what it was saying. In 2019, a reporter visited the San Francisco headquarters and found a company kitchen stocked with food in minimal packaging, a team that regularly visited overseas factories and planted community gardens, and a sustainability director who walked through the specific challenges of moving garments through the supply chain without sealing each one in a separate plastic bag. The people running Everlane weren’t just marketing ethics; they appeared to be practicing them.

The Seeds of Drift

But even in the good years, something more complicated was developing beneath the surface.

The “radical transparency” that Everlane trademarked turned out to be selective by design. The company was meticulous about price transparency, showing you the production cost of a sweater but far less forthcoming about wages, working conditions, and raw material sourcing. Watchdogs and sustainability researchers began to notice the gap between what Everlane disclosed and what it didn’t. Disclosing a factory’s location tells you almost nothing about how the workers there are being paid. Showing a production cost breakdown tells you nothing about whether the people behind that cost are thriving or just surviving.

Nonprofit organizations that audit fashion brands began flagging Everlane for what they called greenwashing: the practice of marketing yourself as ethical and eco-friendly without fully living up to the claims. One organization placed Everlane among fashion’s worst greenwashers in December 2020, pointing to undisclosed factory conditions, absence of worker pay data, and limited third-party verification of the supply chain.

There was also the structural contradiction at the heart of the model: ethical supply chains are expensive to maintain. Organic cotton costs more than conventional cotton. Responsibly certified mills charge more than uncertified ones. Keeping those standards while also satisfying investors who paid escalating valuations for the company required either raising prices (which eroded the “honest value” positioning) or cutting corners on the standards (which eroded the ethical positioning). Neither option was good.

The Growth Trap

The more insidious problem was what growth itself did to the company’s identity.

Preysman had famously told reporters that he would rather shut Everlane down than open physical retail stores. The DTC model was the product, not just a distribution channel, but the whole premise of the brand. No middlemen or no markups and no fixed costs bleeding the margins that the company had positioned as honest and clean. When Everlane reversed course and opened stores in New York in 2017 and San Francisco in 2018, it wasn’t just a strategic pivot but a business repositioning.

The stores were signed as leases, staffed with employees, built out with capital, and maintained with fixed costs at exactly the moment when the economics of small-format physical retail were becoming difficult for brands without enormous wholesale distribution to support them. The company had adopted the overhead of a conventional retailer while retaining the margin structure of an ethical brand and the revenue base of a DTC startup. That combination was quietly ruinous.

The expansion of the product line compounded the problem. What began as a tight edit of high-quality essentials, the T-shirts, cashmere, and denim that had defined Everlane’s identity, grew into activewear, swimwear, shoes, bags, outerwear, celebrity collaborations, and limited capsule collections. Each new category required new supplier relationships to audit, new factories to vet, and new material certifications to maintain. The transparency promise that was entirely manageable for five products became increasingly unmanageable for fifty. The brand that had made its name by showing its work couldn’t show all of it anymore; there was simply too much of it.

Customers noticed it. The quality perception that had been central to Everlane’s value proposition, a product so well-made it justified the honest markup, started to erode. Longtime loyalists who had paid $15 for a T-shirt that lasted five years found themselves paying $35 for something that didn’t feel as carefully considered. The products were still good, often quite good. But the magic of the early years, the sense that each item had been chosen with exceptional care and presented with exceptional honesty, was harder to find in a catalog of hundreds of SKUs.

The Private Equity Ratchet

When L Catterton led an $85 million investment in 2020, announced at the time as a minority stake but one that would give the PE firm effective majority control, investing at a $550 million valuation, the structural pressures on the company shifted into a different register entirely.

Private equity operates on a simple logic: you acquire a company at a valuation, you grow it beyond that valuation, and you exit. The gap between entry and exit is the return. L Catterton had put in $85 million at $550 million, which meant Everlane now needed to become worth considerably more than $550 million within a defined window to make the investment worthwhile. That kind of expectation doesn’t coexist easily with the patient, careful approach that ethical sourcing demands. It creates pressure to pursue premium repositioning, expand margins, and grow faster than the supply chain can responsibly absorb.

At around the same time, Preysman stepped back from day-to-day leadership, transitioning to an executive chairman role focused on climate. Andrea O’Donnell, formerly of Deckers Brands, was brought in as CEO to run operations. Preysman would be the last of Everlane’s leaders to have the institutional knowledge of what the brand had been built to be. What followed was a succession of CEOs, O’Donnell, then Alfred Chang from streetwear brand Fear of God, each attempting to steady a company that kept losing altitude.

2020: The Year Everything Cracked Open

The pandemic arrived not as the cause of Everlane’s troubles but as the moment that made them impossible to ignore.

In December 2019, Everlane’s Customer Experience team announced its intention to unionize. The workers who answered customer emails and calls were classified as part-time contractors, with hours capped at 29 per week to keep them just below the threshold that would require the company to provide health benefits organized under the banner of a brand whose mission statement was built on doing right by people.

When the pandemic hit in March 2020 and Everlane’s retail stores closed overnight, the company laid off hundreds of those workers. The timing was catastrophic for the brand’s reputation. Senator Bernie Sanders publicly condemned the move. “Using this health and economic crisis to union-bust is morally unacceptable,” he wrote. Workers who said they had been told in the days beforehand that the company was “in this together” found themselves let go in a mass termination.

Everlane maintained that the layoffs were about survival, not union suppression. But the optics were devastating for a brand whose entire identity rested on the claim that it treated its workers differently from everyone else in fashion.

Months later, a group of former Black employees who called themselves the “Everlane Ex-Wives Club” published a public letter alleging a culture of systemic racism inside the company, accusing leadership of “convenient transparency,” a phrase that cut straight to the heart of what critics had been saying for years. The brand had built enormous goodwill among customers who associated ethical consumption with social justice broadly defined. The letter torched that credibility from the inside.

Following an apology and internal investigation, Everlane changed leadership and began publishing annual impact reports. But the damage to the brand’s foundational mythology, the sense that Everlane was genuinely different, that it wasn’t just marketing ethics but practicing them, proved very difficult to repair.

The Slow Bleed

What followed was a long, grinding slide that unfolded in stages over the next five years.

Gross margins improved when O’Donnell and Preysman nudged up prices and worked on sourcing efficiencies, rising from 60 to 70 percent. But revenue flatlined. Online sales accounted for roughly 80 percent of the business, and they were volatile month to month. Physical retail provided some growth, but not enough to offset the fixed costs it introduced. The company cut 17 percent of its corporate workforce in January 2023, citing inflation and recession fears.

By late 2022, Everlane had taken on $90 million in new debt financing: a $65 million revolving credit facility from CIT Northbridge and a $25 million loan from Gordon Brothers. That debt would become the defining fact of the company’s final years, a number that appeared in every conversation about the brand’s future and eventually determined the terms of its sale.

The company tried pivots. It shifted its messaging from “radical transparency” to “clean luxury,” an attempt to reposition toward premium consumers and rebuild trust after the scandals. It partnered with Nordstrom in 2024 for shop-in-shop arrangements, taking the brand into wholesale channels it had once rejected on principle. It brought in Alfred Chang and began experimenting with designer collaborations and celebrity partnerships to generate cultural heat.

None of it worked well enough, or quickly enough. By early 2026, Everlane was being sued to vacate its San Francisco headquarters after failing to pay $51,000 in overdue rent. In March, L Catterton began shopping the brand. They were looking for a new co-investor to help retire the debt load, or a buyer willing to take the whole thing off their hands. Along came Shein.

The Sale

The board approved the deal on Saturday, May 16, 2026. The price was $100 million. With $90 million in debt to retire, the equity value was essentially zero for common stockholders, who were told Sunday morning that they would receive no payout.

Everlane had been valued at $550 million in 2020. It had once floated projections of $550 million in annual revenue. Instead, it sold for less than half a year’s sales, at a multiple of roughly 0.5x revenue.

Why did Shein want it? The logic is strategic rather than sentimental. Shein has spent years navigating serious regulatory and political headwinds in Western markets. It has been fined in Italy, challenged in Germany, sued in Texas, and scrutinized by the UK Parliament over its supply chain’s links to forced labor and toxic chemicals. Its IPO ambitions have been complicated at every turn by the ethical questions its core business model generates. Acquiring an American brand with a loyal customer base, a domestic DTC infrastructure, and a decade-long history of ethical positioning gives Shein something it cannot produce in-house: a story about its portfolio that is more palatable than the one its core business tells.

“Ultimately, the deal likely saves Everlane,” said Neil Saunders of GlobalData. “But that salvation comes at a price.”

What It All Means

The reaction has been swift and sharp. Former CTO Nan Yu posted on X: “I haven’t worked at Everlane in almost 10 years, but it’s a pretty sad day for the people that built it.” Customers who had shopped the brand for a decade described the association with Shein as a betrayal.

But the Everlane story is not, at its core, a simple story about hypocrisy. The early team genuinely believed in what they were building. The transparency was real, even if imperfect. The factory relationships, the plastic commitments, the kitchen without packaging, these were not fabrications. Everlane was trying to do something harder than most fashion companies attempt.

It made the same mistakes as every other growth-stage company, just with more public commitments to not making those mistakes.

The same period brought the collapse of nearly every peer in the “millennial DTC” cohort. Allbirds sold its footwear business for $39 million and pivoted to AI infrastructure. Casper, Outdoor Voices, SmileDirectClub, and Winc are all gone or radically diminished.

Even the survivors, like Warby Parker and Glossier, have had to confront the gap between the DTC premium that investors once paid and the margins the businesses can actually generate.

The Everlane sale is the settlement notice for that entire era. It turns out that “sustainable” is not a strategy unless the business itself is built to sustain.

And the company that trademarked “radical transparency” will now be owned by one that has been fined for concealing it.

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A Craving No Store Could Satisfy

Every great product begins somewhere unexpected. For Sarah Hamouda, it began in a Dubai kitchen in 2021, during her pregnancy, with a craving she simply could not shake. The British-Egyptian entrepreneur, who had been living in Dubai since around 2015, wanted something that did not exist: a chocolate bar that tasted of home, of the warm, layered, syrup-soaked Middle Eastern desserts she had grown up loving.

What she craved, specifically, was knafeh, the beloved Levantine sweet of shredded phyllo dough, soft cheese, and rosewater syrup. What was available to her was, frankly, not that. So she did what any resourceful person with deep food nostalgia and nowhere else to turn would do: she invented it herself.

Working with her husband, Yezen Alani, in their living room, Hamouda began experimenting. She combined pistachio cream and toasted kataifi, fine shredded phyllo pastry, the key ingredient in knafeh, with a touch of tahini, then encased the whole thing in a thick shell of premium Belgian chocolate. The result was extraordinary: a bar that cracked with the authority of fine chocolate, then gave way to a lush, crunchy, nutty, and deeply aromatic interior unlike anything the confectionery world had produced before. She called it “Can’t Get Knafeh of It.”

FIX Dessert Chocolatier, with FIX standing for Freaking Incredible Experience, was born.

The Quiet Years

When FIX officially launched in 2022, selling handmade bars online and through a small Dubai shop, the response was modest. Each bar was priced at £16 (roughly $19.72 USD). At first, the couple was barely selling one bar a week. The bars were extraordinary, the packaging beautiful, the concept genuinely novel. And yet, the world was not listening.

This is the part of the story that is rarely unseen: every founder goes through a phase of anonymity. A product that its founders believed in completely, sitting largely unseen. For most people, this period ends the dream. They conclude the market has spoken. They move on.

Hamouda and Alani did not move on. They kept perfecting. They kept making bars by hand, kept tuning the pistachio cream-to-kataifi ratio, kept insisting that every bar was worth the price they charged. The product remained exactly what it was: exceptional.

What they could not manufacture was the moment that would change everything.

The Video That Broke the Internet

In late 2023, TikTok food influencer Maria Vehera filmed herself doing something simple: biting into a FIX bar. The video was shot in an ASMR-style, unhurried, close-up, and exquisitely attentive to sound. The camera lingered on the crack of the chocolate shell. On the audible crunch of kataifi. On the slow, molten pull of pistachio cream catching the light as the bar split open.

The comments filled almost immediately with a single word: want.

The video surpassed 127 million views. Food journalists picked up the story. Travel content creators began flying to Dubai specifically for the bar. Overnight, orders at FIX skyrocketed from single digits to thousands. Hamouda and Alani had to scale their tiny, handmade operation at emergency speed, eventually growing to a team of around 50 people. The $30 artisanal bars began selling out in minutes.

By 2024, “Can’t Get Knafeh of It” had become Deliveroo’s most ordered item worldwide. The global appetite for pistachios surged so sharply that wholesale prices in Turkey, the world’s third-largest pistachio producer, nearly doubled. A chocolate bar had triggered a supply-chain crisis across an entire agricultural sector.

Why It Actually Worked

It would be easy to credit TikTok and stop there. But viral moments do not come from mediocre products. Maria Vehera’s video worked because the bar was genuinely worth filming. The visual drama that split-second crack, that green ribbon of cream existed because FIX had engineered it precisely. The cream was made to a consistency that stays luscious and pulls dramatically on camera. The kataifi was toasted for texture. The tahini, as one food writer noted, is the “secret weapon that most people don’t notice consciously but would immediately miss.”

FIX was also culturally authentic in a way that resonated globally. This was not a multinational food company applying a “Middle Eastern trend” as a seasonal flavour. This was a British-Egyptian woman, rooted in Dubai, drawing on a dessert she had loved her whole life, and making it better than it had ever been made in chocolate form. The product carried a story that felt real because it was real.

And critically, FIX never chased scale before quality. Every bar is still made in Dubai. The recipe has not been diluted. The experience Hamouda promised in 2021 is the same one a customer receives today, shipped directly from the original kitchen. That integrity is what turned buyers into believers, and believers into the unpaid marketing army that sustains the brand.

After the Flood

Going viral is not a finish line. For FIX, it was the beginning of a gauntlet. The bar’s production capacity at the time of the viral explosion was just 500 bars per day, each one handcrafted, the interiors piped by a team working six to eight hours a shift. Now the world wanted millions. Rather than abandon the handmade process and chase volume, FIX made a choice that would define its future: it would protect the product, even if that meant refusing to meet demand.

The bars continued to drop exclusively on Deliveroo in Dubai, twice a day at 2 pm and 5 pm, routinely selling out in minutes. The scarcity was not manufactured; it was real, but it had the effect of manufactured scarcity: it made every bar feel like an event. Resellers began importing bars and marking them up sharply on third-party sites. People flew to Dubai, some specifically to bring bars home. Hamouda watched this happen and, by most accounts, chose not to exploit it.

Then the corporate giants moved in. Lindt launched a limited-edition Dubai-style bar in December 2024. It became the Swiss company’s top-selling travel retail product, shifting over 2.2 million tablets and expanding to more than 100 airports worldwide. Trader Joe’s launched a $3.99 version, made in Turkey, that created its own social media wave. Walmart, Shake Shack, Crumbl, Starbucks, Baskin-Robbins, and Dunkin’ all released Dubai chocolate-inspired products. The hashtag #dubaichocolate accumulated 13.8 billion TikTok views by early 2025. Chocolate-pistachio flavour combinations on restaurant menus rose 22% year-over-year. FIX had not just made a bar; it had invented a category.

Where FIX Stands Today

By late 2025, FIX was no longer just a Dubai delivery phenomenon. The brand expanded into Dubai International Airport, the world’s busiest international airport, first with a single pop-up that proved so popular it had to extend its stay multiple times, then growing to permanent stands in both Terminal 1 Concourse D and Terminal 3 Concourse B. Dubai Duty Free reported that over 1.2 million FIX bars were sold in a single month, generating $22 million in sales.

In October 2025, FIX made its first territorial expansion beyond Dubai, landing in Abu Dhabi exclusively through Deliveroo, a milestone Hamouda described as a major step in the brand’s journey. The bar also began shipping to over 100 countries worldwide, delivering directly from the Dubai kitchen to international customers. FIX had grown from a team of two in a living room to a staff of around 50, building what has become one of the standout small-brand success stories in modern travel retail.

In September 2024, Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed Al Maktoum, publicly endorsed the bar, a moment of cultural legitimacy that few artisan food brands ever receive. FIX created an exclusive flavour for him in response. The bar had become, in the words of one commentator, a form of gastrodiplomacy, an accidental ambassador for Middle Eastern culture, one crack of chocolate at a time.

As for the market FIX created, the brand’s own analysis places “Dubai chocolate” in a transition from viral trend to permanent category somewhere between the croissant (eternally beloved) and the cronut (fondly remembered). New flavours have joined the lineup, from “Catch Me If You Pecan” to “Baklawa 2 The Future” and “Pick Up a Pretzel,” each a witty, punny extension of the FIX universe. The recipe is still secret. Every bar is still made by hand. And the bars still sell out in minutes.

A pregnancy craving that began in a Dubai living room in 2021 had, within four years, reshaped global chocolate consumption, triggered a worldwide pistachio shortage, sparked legal battles across three countries, and placed a boutique confectioner from the UAE at the centre of one of the most genuinely interesting business stories of the decade.

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In 1990, a young makeup artist in New York City walked into a drugstore chemist with a single, stubborn idea: she wanted a lipstick the color of her own lips. Not the waxy reds of the decade before. Not the frosted pinks that still clung to the shelves. Just a natural, flattering nude, a lip color that looked like you, only better. That conversation with a chemist changed the beauty industry forever.

Her name, of course, was Bobbi Brown. And what began as a personal frustration became a philosophy, then a product line, then a global brand, then a $74.5 million acquisition, and eventually, the most remarkable second act in modern beauty history.

Chicago Roots, New York Dreams

Born in Chicago on April 14, 1957, Barbara “Bobbi” Brown grew up drawn to the transformative power of cosmetics from an early age. As a self-described insecure teenager, “the teeniest of all my friends,” she once recalled, makeup gave her a sense of agency over how she presented herself to the world. The style she gravitated toward was instinctively her own: soft, natural, the opposite of her mother’s Twiggy-era glamour.

After stints at the University of Wisconsin and the University of Arizona, she told her mother she wanted to drop out. Her mother’s advice was characteristically wise: pretend it’s your birthday and do whatever you want. Brown went straight to Marshall Field’s to play with makeup. She enrolled at Emerson College in Boston, graduating with a degree in theatrical makeup and photography. “When I found Emerson, I found myself,” she has said.

In 1980, she moved to New York with an amateur portfolio and no contacts, just a phone book and what she describes as blissful naïveté. She looked up “makeup” and “models” in the Yellow Pages and started making calls. It is a detail that says everything about who she is: relentlessly curious, unafraid to ask, and constitutionally incapable of waiting to be discovered.

Ten Lipsticks That Changed Everything

Through the 1980s, Brown built a reputation as a magazine makeup artist celebrated for her naturalistic touch, a radical stance in a decade defined by Studio 54 drama, Liza Minnelli glamour, and the kind of look-at-me colors that seemed to shout from every cosmetics counter. Brown kept her palette quiet. She emphasized skin. She made women look like themselves.

“I want to make a lipstick that isn’t greasy, isn’t dry, doesn’t smell like my mother’s lipstick, and actually looks like the color of my lips.”

— Bobbi Brown

In 1990, she brought that idea to a drugstore chemist who agreed to develop ten natural-toned shades — and to become her business partner. He would make the lipsticks; they’d split the $15 price point fifty-fifty. Brown told a friend about her new project. That friend happened to be an editor at Glamour magazine. She offered to write about it. Brown, not yet understanding what public relations was, said: “Why would you want to do that?”

The Glamour article ran with Brown’s home phone number. Orders flooded in. The “no makeup makeup” revolution had begun.

Bergdorf Goodman and an Empire in a Day

In 1991, Brown and her husband, Steven Plofker, partnered with another couple to formally launch Bobbi Brown Essentials. The debut took place at Bergdorf Goodman, the iconic New York luxury department store. Brown set a humble goal: sell 100 lipsticks in a month. She sold 100 in a single day.

The debut in numbers: Ten shades of lipstick. One department store. A goal of 100 units in a month. Sold out in a day. By 1995, the brand was beating Estée Lauder in every store where they competed side by side.

Word spread quickly. Brown’s instinct that women wanted to enhance rather than mask their natural features turned out to be a cultural hunger that the industry had entirely missed. The following year, she expanded into yellow-toned foundation sticks, tackling the other great frustration of the era: foundations that turned ashy or orange on real skin. The brand grew into a full cosmetics line, then into department stores across the country.

Selling to Estée Lauder — On Her Own Terms

By the mid-1990s, Bobbi Brown Cosmetics was beating Estée Lauder in department stores across the board. Leonard Lauder, the company’s then-CEO, noticed. He invited Brown and her husband to dinner at his apartment overlooking Central Park. She told him the brand wasn’t for sale.

He kept asking. Eventually, he made an argument that broke through. “What if I can promise you that we can grow your business and you could do what you love,” he told her, “and you keep doing all of the creative, we do everything else — and you can be a really good mom and have your family and not spend your life traveling?” Brown said yes.

In 1995, Estée Lauder acquired Bobbi Brown Cosmetics for a reported $74.5 million. Brown stayed on as Chief Creative Officer, retaining creative control of the brand. Under the Lauder umbrella, the company expanded globally. By 2006, the brand was reportedly generating half a billion dollars in annual revenue. A freestanding retail store with a makeup artistry school opened in Auckland in 2011.

Brown became more than a brand; she became a public figure. She appeared for fourteen years as a regular beauty contributor on NBC’s Today show. She wrote nine bestselling books on beauty and wellness. She served as Editor-in-Chief of Yahoo Beauty. Presidents noticed: Barack Obama appointed her to the Advisory Committee for Trade Policy and Negotiation.

The Exit She Didn’t Expect to Regret

When she sold the company, Brown had signed a non-compete agreement that would prevent her from launching a competing beauty brand for 25 years. At the time, it seemed like a formality. She had no plans to leave.

But the nature of the brand gradually shifted under corporate ownership. By the end of her tenure, she found herself being asked to approve products she hadn’t developed and didn’t believe in. “I’ve always only put my name on things I believe in,” she said later. “At the end of my tenure, I was forced into approving things that I never had a chance to approve. I refused.” In December 2016, she stepped down from the company that bore her name.

“I never put my name on something that I don’t believe in.”

— Bobbi Brown, on leaving her namesake brand

There were still four years remaining on the non-compete. For the first time in her adult life, Brown had time to think. She went back to school simply because it was the first time she could. She became a certified health coach through the Institute for Integrative Nutrition. She explored wellness products, fragrances, and an eyewear collection. She co-designed a boutique hotel, The George, in her hometown of Montclair, New Jersey. She waited.

Jones Road: The Brand She Actually Wanted to Build

On October 26, 2020, the precise day her non-compete agreement expired, Bobbi Brown launched Jones Road Beauty. The timing was not subtle, and it was entirely intentional.

The name came from Jones Road in Montclair, a street near her home. The philosophy was an evolution of everything she’d believed since those first ten lipsticks: the world doesn’t need more beauty products. It needs better ones. Jones Road launched as a “clean beauty” brand, formulated without parabens, phthalates, sulfates, and other potentially harmful ingredients. The original lineup included balms, moisturizing cream colors, mascaras, glosses, washes, and eye pencils, many designed to be multifunctional, used on cheeks, lips, and lids alike.

Jones Road’s founding principle:

“The world doesn’t need more beauty products, it just needs better beauty products.” Clean formulations. Multifunctional products. A curated range that doesn’t overwhelm. Launched during the pandemic, the day Brown’s non-compete ran out.

The launch coincided with Brown joining TikTok, where she began posting straightforward, no-nonsense tutorials aimed at women over 50. It was an unconventional move. TikTok had been largely understood as a Gen Z platform, but Brown’s videos found a hungry audience that had rarely been spoken to directly by the beauty industry. In one characteristic video, she challenged contouring trends directly: “Why would you want to contour your nose?” she asked, explaining how she’d learned to embrace her own features instead.

What Her Story Means

Bobbi Brown’s career is, at its core, a story about conviction. The conviction that women deserve makeup that makes them look like themselves. The conviction that a product is only worth putting your name on if you believe in it. The conviction that starting over, even at 63, during a global pandemic, in a saturated market, is always possible if you have something genuine to say.

She has become, as Allure magazine once put it, the world’s patron saint of natural makeup. But the more instructive part of her story isn’t the first brand, the lipsticks, the acquisition, the empire. It’s what came after.

It’s the woman who walked away from a $500-million business because they asked her to approve things she didn’t believe in. It’s the woman who spent four years in the wilderness, took health coaching classes, renovated a hotel, and then launched a cleaner, leaner, more honest brand on the exact day she was legally allowed to.

The world, she has always believed, doesn’t need more beauty products. It just needs better ones. And Bobbi Brown has spent her entire career proving, twice over, that she knows exactly what better looks like.

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Walk through a Saks Fifth Avenue today, and everything looks the same. The marble floors. The perfume counters. The quiet hum of luxury. But beneath the surface, something has broken. On January 13, 2026, Saks Global, the entity created from the $2.7 billion merger of Saks Fifth Avenue and Neiman Marcus, filed for Chapter 11 bankruptcy. The company that was supposed to define the future of American luxury couldn’t pay its vendors.

And it wasn’t alone.

Francesca’s filed in February. Pat McGrath Labs filed in January. Forever 21 liquidated entirely in March 2025. The LYCRA Company, the supplier that put the stretch in your workout gear, filed for bankruptcy in March 2026. In the span of a few months, names that shaped how Americans shop, dress, and see themselves began appearing in bankruptcy court.

The easy story is that retail is dying. The more interesting story is what happens after the filing, because that’s where you find out which brands actually had something worth saving.

What’s Driving the Wave

Three forces are converging to create this moment, and none of them is new. What’s new is that they’ve stopped being manageable.

1. The Debt Reckoning

When interest rates were near zero, retailers could carry significant debt loads cheaply. Private equity-backed buyouts loaded companies with leverage on the assumption that cheap refinancing would always be available. That assumption died in 2022. Retailers who could refinance did so in 2025, often at painful terms. Those who couldn’t are now in bankruptcy court.

The Saks-Neiman deal is the most visible example. To fund the $2.7 billion acquisition of Neiman Marcus, Saks raised $2.2 billion in high-yield bonds. Between the two legacy businesses, the combined company entered 2026 with roughly $4.7 billion in total debt. When it missed a $100 million interest payment in December 2025, the spiral began: vendors stopped shipping, shelves thinned, sales dropped, and the debt became unserviceable.

This is not a retail story. It is a capital structure crisis.

2. The Consumer Has Moved On — Permanently

E-commerce didn’t just add a channel. It restructured consumer expectations entirely. The average shopper now begins their purchase journey online, even if they complete it in a store. Brands that couldn’t build a compelling digital presence lost relevance before they lost revenue.

Meanwhile, the rise of ultra-fast fashion, with Shein turning a trend into a $7 garment in days, has compressed the timeline in which any physical retailer can respond. Forever 21, which was once a fast fashion brand, filed for bankruptcy in March 2025 because it couldn’t move fast enough. The traditional retail calendar, with its seasonal buys and six-month lead times, is a competitive liability in this environment.

3. The Luxury Slowdown Hit Harder Than Expected

The luxury sector is experiencing what analysts are calling a “spending hangover.” After years of post-pandemic splurging, high-income consumers are pulling back. The irony for Saks Global is sharp: the merger was designed to create a fortress against exactly this kind of pressure. Instead, the deal itself became the pressure.

Moody’s currently holds a negative outlook on the retail sector for 2026 as a whole. As one S&P analyst put it plainly: consumers can spend as long as they have a job. With consumer confidence at historic lows and employment the key variable to watch, the wave isn’t done.

The Part Nobody Is Talking About

Here’s what gets lost in the bankruptcy headlines: Chapter 11 is not a death sentence. It is a legal tool specifically designed to let a company separate its financial problems from its operational ones. The court freezes the debt, gives the business room to breathe, and creates a structured process for figuring out what’s worth keeping.

For the right kind of brand, that’s not an ending. It’s a reset.

The brands coming out of this wave in better shape than they entered are the ones that used Chapter 11 for exactly what it was designed for: isolating a capital structure problem without destroying the underlying asset. The brands that didn’t make it out are the ones that discovered, under court supervision, that the underlying asset wasn’t there. That distinction is key.

This Isn’t New

The idea that bankruptcy can be a beginning rather than an ending is well-supported by history, and the numbers are more encouraging than most people realize.

A Wharton study analyzing Chapter 11 filings between 2019 and 2021 found that 88% of companies that went through the process successfully emerged from bankruptcy.

The most dramatic proof of this is Marvel Entertainment. In December 1996, Marvel filed for Chapter 11 after declining comic book sales and a collapsing trading card market left it financially unviable. The company used the restructuring to pivot, acquiring toy maker Toy Biz, licensing its characters aggressively, and laying the groundwork for what would become the Marvel Cinematic Universe. Today, Marvel is the most valuable entertainment franchise on earth. The characters were always the asset. Bankruptcy just gave the company the chance to reorganize around them.

General Motors filed for bankruptcy in June 2009 at the height of the financial crisis, one of the largest bankruptcies in American history. With government backing and a complete leadership overhaul, it shed decades of legacy costs, closed underperforming brands, and emerged leaner. It went public again just 18 months later. The brand equity, the idea of American-made cars, was never in question; it was the cost structure.

In fashion specifically, Betsey Johnson filed for Chapter 11 in 2012 after profits fell sharply from their mid-2000s peak. Nearly all retail stores closed. Rather than disappear, Johnson used the reset to introduce a new lower-priced line, pivot to e-commerce, and rebuild distribution through wholesale partners like Macy’s. The brand survived because the creative identity, her signature whimsical aesthetic, was something customers recognized and wanted. That didn’t go away when the stores closed.

The pattern across all three is the same one playing out in retail right now: the companies that came back knew exactly what they were, and used the bankruptcy process to shed everything that wasn’t that.

The Identity Test

Think of every bankruptcy filing as a question the market is asking: Is there something real here?

Pat McGrath Labs filed on January 22, 2026, not because customers stopped loving the brand, but because a lender dispute triggered an asset auction the founder didn’t consent to. The filing paused the auction, gave the brand court protection, and created the space to find better capital. Within three months, Pat McGrath Labs had secured $30 million in new financing, restructured under new ownership with GDA Luma, and emerged from Chapter 11 with its creative identity intact. Dame Pat McGrath remained as Chief Creative Officer.

The LYCRA Company filed on March 17, 2026, with a prepackaged restructuring already agreed to by the overwhelming majority of its creditors. The plan was designed to eliminate over $1.2 billion in debt while keeping its 2,000 employees, eight manufacturing facilities, and customer relationships completely intact. It is expected to emerge within 45 days. The filing wasn’t a crisis; it was a tool. The underlying business, the fiber technology, the brand recognition, the supply relationships, none of that was broken.

Saks Global is a harder case. The filing stripped away most of its off-price business, installed a new CEO, and secured $1.75 billion in financing to fund the restructuring. It may yet emerge. But the question hanging over it is whether a luxury department store model built on physical flagships, expensive real estate, and a consumer who increasingly shops differently can be restructured into relevance, or whether the capital structure problem was always layered on top of a model problem. Something to think about.

Francesca’s and Forever 21 answered the question differently. Francesca’s, filing for the second time in six years, ended in full liquidation of all ~450 stores. A capital infusion fell through, suppliers lost their own financing, and lenders issued a notice of default. There was no going-concern buyer. Forever 21, which had once defined affordable trend-chasing for a generation, couldn’t find a path back, either losing $400 million over its final three fiscal years before liquidating 354 U.S. stores entirely. When the court looked for something to reorganize around, it wasn’t there.

Bankruptcy doesn’t kill brands. It reveals them.

What This Means Beyond Retail

For anyone building something, a brand, a company, a career, the 2026 retail wave is worth studying not as a cautionary tale about debt or disruption, but as a case study in what holds when everything else gives way.

The brands that are coming out the other side have a few things in common. They stood for something specific enough that customers, creditors, and new investors could see the value beneath the financial wreckage. Their identity was the asset. The capital structure was the problem. And those two things, it turns out, can be separated.

The deeper question, the one worth sitting with, isn’t whether your business could survive a bankruptcy filing. It’s whether, if you stripped away everything except what you actually stand for, there would be enough left to rebuild around.

That question doesn’t require a bankruptcy court to answer. But the 2026 wave is a good reminder that at some point, the market will ask it for you.

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From Flint to the Fortune 500

There is a particular kind of ambition that is forged in awareness and understanding, that the world does not automatically open its doors for you. For Anjali Sud, that awareness was shaped in Flint, Michigan, a city that would become as much a part of her story as any boardroom or business school she later attended.

Born in Detroit to Punjabi immigrants from India, Sud grew up in Flint in a family that believed in the power of business to create a positive impact. Her parents were physicians, but their ambitions extended beyond medicine. From the time Sud can remember as a child, her father’s passion was entrepreneurship. Even though he was a physician, he also started a plastics recycling plant in Flint that still operates today. He held the philosophy that if you really want to influence people’s lives at scale, business is a powerful vehicle to do so.

Her father would place clips from Wall Street Journal articles about CEOs on her pillow for her to find when she went to sleep, sending the message: “I grew up with parents who believed I could be the person in that clip.” It was a quiet, persistent form of encouragement, a daily act of belief from a family that had sacrificed everything to plant their roots in American soil.

Growing up in Flint also gave Sud a ground-level education in what business failure looks like in real communities, a lesson that would later shape her conviction that leadership must serve people, not just shareholders.

Building the Foundation: Amazon, Time Warner, and the Art of Learning

At age 14, Sud left Flint for Phillips Academy Andover, an elite boarding school in Massachusetts. After Phillips, she earned a Bachelor of Science in Finance and Management from the University of Pennsylvania’s Wharton School, then an MBA from Harvard Business School in 2011. By any conventional measure, the credentials were impeccable. Yet when she began applying to investment banks, every major firm turned her down. The rejection that would have derailed many simply redirected her.

Rather than mourn the closed doors of finance, Sud took a deliberately winding path through media and technology, starting as an M&A analyst at Sagent Advisors, then moving into mergers and acquisitions at Time Warner, and eventually landing at Amazon in a marketing and category lead role. At Amazon, she absorbed the company’s relentless customer obsession, its culture of bold experimentation, and its willingness to play a long game.

Each role was chosen not for prestige, but for what it could teach her. As she later put it:

“I thought, ‘No one’s going to create a career path for me. I need to create my own.’ I went from being a toy buyer to being a marketer to selling diapers online to running a global video platform.” - Anjali Sud

That nonlinear trajectory was not a detour — it was her education.

The Vimeo Bet: Seeing Opportunity Where Others Saw Defeat

In 2014, Sud joined Vimeo as Head of Global Marketing. At the time, the company was trying and failing to compete with streaming giants like Netflix. Most people would have written it off. Anjali saw a different kind of opportunity.

What she saw, and what others missed, was that Vimeo’s true value had nothing to do with out-entertaining Netflix. Its value was in the tools it provided to the creators, the professional videographers, small business owners, and storytellers, who needed a reliable, high-quality platform. The audience wars were already lost. But the creator economy was just beginning.

Sud joined Vimeo, an IAC subsidiary, in July 2014 as Head of Global Marketing. She was promoted to General Manager of Vimeo’s core creator business and then became CEO in July 2017 at age 33.

Becoming CEO at 33 was not a moment Sud had anticipated. “People often ask me about what I did to become the CEO of Vimeo. The truth is, until the minute that the job was offered to me, it never even occurred to me that it was a possibility.”

But the groundwork had been quietly laid through a leadership strategy that she practiced from day one: obsessive customer listening.“When I got to Vimeo, I was in a VP of marketing role, very middle management — so my first task was to understand our customers. I spent a lot of time talking to the humans that we served and listening. Every year at Vimeo, I knew job number one was to keep talking to customers and to have a pulse on what mattered to them.”

This was not performative stakeholder engagement. It was strategic intelligence-gathering that informed every major decision she would make as CEO.

The Great Pivot: From Entertainment Platform to Video SaaS

Once in the CEO seat, Sud made one of the most audacious strategic pivots in modern media history. She walked away from the content arms race entirely.

She was appointed CEO of Vimeo in July 2017, as the company announced its plans to refocus its strategy from investing in original content to offering software and tools for video creators.

As Sud explained, “We pivoted away from being a viewing destination or media platform, like Facebook or YouTube or Netflix, and really into a video SaaS or software company for businesses.”

The move was counterintuitive. The industry was pouring billions into original programming. Sud was doing the opposite, stripping Vimeo down to its functional essence and rebuilding it as infrastructure for creators. Critics were skeptical. But the numbers told a different story.

In September 2017, she oversaw the acquisition of Livestream. In April 2019, she oversaw the acquisition of video editing app Magisto. In November 2021, she oversaw the acquisitions of video software startups WIREWAX and Wibbitz. Each acquisition was a deliberate expansion of Vimeo’s toolkit, not its content library.

The pivot worked. Under her leadership, Vimeo expanded rapidly and went public in 2021 with a $6 billion valuation. During her six-year tenure, she took the company public and established Vimeo as the home for video creators and professionals worldwide, building a community of over 300 million users.

This was leadership through strategic conviction, the willingness to be wrong in the short term to be right in the long term.

The End of One Chapter, the Beginning of Another

After nearly a decade at Vimeo, six years as CEO, Sud had accomplished something rare: she had taken a struggling, directionless company, reimagined its entire reason for being, and guided it to a public market debut worth billions. By any measure, it was a complete story.

But by 2023, the chapter was closing on its own terms. After nine years at Vimeo and six years as CEO, Sud announced on July 5, 2023, that she would be departing the company in September 2023 to pursue another opportunity. The SaaS transformation she had pioneered was maturing, and the company’s next phase was one of operational consolidation rather than strategic reinvention, no longer aligned with what Sud does best.

She is, at her core, a builder. And the most honest builders know when the building is done.

What she was looking for next was a new problem worthy of her particular skill set. The question she was asking, she later said, was not what’s the safest next move? But where is the biggest opportunity hiding in plain sight?

The answer was Tubi, a free, ad-supported streaming service owned by Fox Corporation that offers over 300,000 movies and TV shows with no subscription fees required.

“We are witnessing a seismic shift in where and how content will be consumed, and I believe Tubi can become the destination for the next generation of audiences,” said Sud. “The future of streaming TV is free, and I am excited to join the Tubi team to help shape the next wave of entertainment, giving all people access to all the world’s stories. Tubi is doing things differently in a space that is being imminently disrupted, and that is my kind of opportunity.”

That last phrase — “that is my kind of opportunity “— is the key to understanding her decision. Tubi wasn’t the obvious, prestigious, or safe choice. It wasn’t a household name in the way Netflix or Disney+ were. But it had something more valuable to Sud than brand recognition: a structural advantage the rest of the industry was too committed to its existing models to see.

Most leaders in her position would have taken time off or waited for the perfect next move. She didn’t. That same year, she joined Tubi as CEO. The speed of the transition was itself a statement. She was following the logic of her own convictions directly to the next place they led.

Tubi and the Billion-Dollar Proof

The results at Tubi have vindicated Sud’s instincts with remarkable speed. While user growth exploded from 64 million in February 2023 to 97 million by the end of 2024, profitability has arrived earlier than expected. Tubi generated $1.1 billion in fiscal year 2025 revenue and closed its second consecutive EBITDA-profitable quarter at the end of last year, powered by 19% year-over-year revenue growth and a 27% surge in user engagement.

In June 2025, Tubi announced that it had crossed 100 million monthly active users, over $1 billion in annual revenue, and an all-time high share of television viewing in the U.S.

The platform’s audience demographics are also telling. Tubi’s audience, 77% of which doesn’t have cable TV, skews toward millennials, Gen Z, and females, with more than 34% between the ages of 18 and 34. These are precisely the viewers the traditional Hollywood model has struggled to reach — and they are exactly who Sud built Tubi for.

The Boardrooms, the Honors, and the Bigger Platform

As her operational record has grown, so has her platform for influence.

Sud sits on the board of Sirius XM and Dolby Laboratories and is chair of the board of Change.org. She is a designated Young Global Leader of the World Economic Forum and a Henry Crown Fellow at the Aspen Institute. In May 2025, Sud was elected to serve on Harvard University’s Board of Overseers, filling a vacancy left by Canadian Prime Minister Mark Carney.

She uses these platforms not to collect titles, but to advocate for the ideas that animate her career: that entertainment should be accessible to everyone, that diverse storytelling reflects the diversity of the world, and that the next generation of leaders need not fit a preexisting mold.

At Pace University’s 2025 commencement, Sud urged graduates to pursue impact, embrace authenticity, and lead with boldness in a rapidly changing world.

The Architecture of a Career

What makes Anjali Sud’s story worth studying is not simply that she became a CEO twice before 45, or that she built a billion-dollar company, or that she navigated the chaos of modern media with apparent ease. It’s the architecture of how she did it.

She chose learning over prestige in her early career. She listened to customers before she formed opinions. She made bold strategic pivots and held them through skepticism. She built teams that looked like the audiences they served. She led with transparency when opacity would have been safer. And she bet on herself, repeatedly and unapologetically, in a world that did not always bet on her first.

As she put it:

“The thing I’ve learned is that you can create your own opportunities, and we can all reinvent ourselves at any stage in our careers.”

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In February 2020, Ty Haney said goodbye to the company she founded on Slack. She was 31. She had built Outdoor Voices from a concept sketched out at Parsons School of Design into a $110 million activewear brand, raised over $64 million in venture capital, opened stores across the country, landed magazine covers, and built a community of genuinely devoted customers around the radical idea that movement should be joyful, not performative. “Doing Things” wasn’t just a tagline. It was a cultural posture that resonated with a generation tired of fitness culture’s punishment-and-discipline aesthetic.

She typed out her goodbye message and hit send.

She still owned 10% of the company she had created.

How do you go from founder to owning 10%

Outdoor Voices didn’t fail because of bad press or a difficult founder personality, though both became part of the story. It failed structurally, and the structure was set years before anyone wrote an unflattering article about Haney or before the board decided she needed to go.

Here’s what actually happened, round by round.

When Haney launched Outdoor Voices, she needed capital to turn her vision into a real company, including inventory, manufacturing, branding, and a team. She raised seed funding, then a Series A, then more. Each round felt like validation. Each new investor felt like a partner who believed in what she was building. In legal terms, each round was a transaction: cash in exchange for a piece of the company. Do that enough times, and the pieces add up. Your 100% drops to 80%, then 60%, and so on. This is dilution, and it’s not inherently bad.

Dilution is the cost of capital, and capital builds real things.

But dilution does something beyond shrinking your ownership percentage. It shifts voting power. It fills a board with people who backed the company financially but didn’t build it, people whose job is to protect their investment, not to steward a creative vision. By the time Haney’s conflict with her board came to a head in early 2020, her investor group, led by General Catalyst and Forerunner Ventures, with retail legend Mickey Drexler installed as chairman, controlled the board entirely. Haney owned 10%. When they decided she needed to leave, there was no mechanism for her to resist. She didn’t have the votes. She didn’t have the leverage. She had the vision, the community, the taste, the relationships that made the brand what it was, and none of that appears anywhere on a cap table.

What the board saw versus what the brand was

This is where the story gets complicated in a way that doesn’t fit into villain-and-victim framing.

Mickey Drexler was not a bad bet. He was one of the most accomplished retail executives in American history, the man who transformed Gap and rebuilt J.Crew. His instincts about retail operations, unit economics, and scaling a consumer brand were genuinely world-class. When he looked at Outdoor Voices, he saw real problems: the company was spending heavily, profitability was distant, and some of Haney’s leadership decisions were creating organizational friction. From a conventional retail-building perspective, his concerns weren’t wrong.

But Outdoor Voices was not a conventional retail company. It was a community-first brand that had grown precisely because it wasn’t optimizing for the metrics that traditional retail optimizes for. Its customers weren’t just buying leggings, they were buying membership in a movement, an identity, a sensibility. That’s harder to measure and much harder to hand off. The brand’s value lived inside Haney: in her aesthetic instincts, her relationship with the community she’d built, and her ability to make people feel that Outdoor Voices understood how they wanted to live. Strip that out, and you don’t have a $110 million company anymore. You have inventory and leases.

The board saw a founder who was difficult to manage and a business with financial problems. They made a decision that made sense within their framework. What they miscalculated was that in a founder-identity brand, removing the founder doesn’t solve the problem; it becomes the problem.

What happened after she left

Outdoor Voices did not recover under new leadership. The brand that had built its entire identity around an authentic, anti-performance-culture voice struggled to sustain that voice without the person who had originated it. The community Haney had cultivated started to dissipate. The business continued to deteriorate, losing reported estimates of up to $2 million a month at its worst. By March 2024, the company closed all 16 of its retail stores and went online-only.

That same month, former employees confirmed the company was preparing a Chapter 11 filing. Instead, in June 2024, private equity firm Consortium Brand Partners stepped in and acquired the brand for an undisclosed sum, effectively a distressed sale of an asset that had once been valued at $110 million.

The brand that had defined a moment in DTC retail had changed hands at what was almost certainly a fraction of its peak value.

The return

In 2025, Haney came back not as an employee, not as a figurehead, but as founder, partner, and co-owner, with a negotiated stake that gave her real governance rights alongside a new ownership structure. The terms of her return reflected everything she had learned the hard way the first time.

She was direct about the lesson: “I learned the hard way that ownership really matters. The first goal put me in a position where I was diluted to the point that I lost control, so that is something I prioritized in my companies since.”

And on fundraising specifically: “I’ve become a lot more sophisticated, or precise, in terms of who I raise money from, how much money I raise, and ultimately considerate of ownership and as little dilution as possible.”

She also said something about the new version of the business that contains more wisdom than it first appears: “The way that we’ve funded and structured OV doesn’t require that it needs to be massive overnight. The model has changed, and the model today requires being more mindful of profitability.”

Read that sentence carefully. “Doesn’t require that it needs to be massive overnight”. It’s a recognition that the growth-at-all-costs imperative raises more, spends more, scales faster, and is itself a control mechanism. When your business model requires constant outside capital to survive, you are always at the mercy of the people providing that capital. Reduce that dependency, and you get something back: the ability to make decisions based on what’s right for the brand instead of what satisfies the next round’s narrative.

The structural lesson

The Outdoor Voices story is often told as a human drama, a difficult founder, a frustrated board, and bad press at the wrong moment. That framing is more compelling and less useful than the actual lesson.

The actual lesson is that Haney was operating without structural protection from the moment she diluted past a threshold that gave her board control. Everything else happened downstream of that. The outcome was determined not in February 2020 when she sent the Slack message, but years earlier, in the accumulation of funding rounds she didn’t fully understand the governance implications of, like many founders.

Some tools could have changed this. Dual-class share structures, where founders hold shares with 10 votes each versus 1 vote per investor share, allow founders to retain voting control even as their economic ownership is diluted. Protective provisions, contractual clauses that require founder consent for specific decisions like replacing the CEO, can be built into investor agreements

And foundational to all of it: you need to know your cap table with precision at every moment, not approximately. Who owns what? Who has board seats? Who has the votes when a decision gets forced? Not your lawyer’s job to track and tell you. Yours.

Ty Haney was not oblivious. She was just a founder, like most founders, who learned from experience.

Related Content:

1. Ty Haney Built a $100M Brand... Then Walked Away | SOCIAL CURRENCY PODCAST 001

2. The Brutal Fall of a $100M Brand & the Woman Behind It | Ty Haney of Outdoor Voices

3. 5 Years After Being Pushed Out of Outdoor Voices, Ty Haney Is Doing Things Again

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In July 2015, Moiz Ali bought a domain name on GoDaddy. It was his birthday.

He had $1,000 of his own money and one idea: a natural deodorant people might actually buy online. Twelve days later, he launched a website. There was no product in hand, just 3D-rendered images of a deodorant stick he hadn’t manufactured yet. He planned to take orders first, then figure out the supply.

Day one: one sale.

He nearly shut the whole thing down.

The Setup: A CVS Aisle and an Unreadable Label

Moiz Ali was 30 years old and had already sold his first company, Caskers, a craft spirits e-commerce business he’d started with a law school friend. That exit was seven figures. Comfortable money, not retire-forever money. He was looking for his next move.

He found it reading the back of a deodorant can while standing in a CVS aisle. Aluminum Zirconium Tetrachlorohydrex. Isopropyl Palmitate. Cyclopentasiloxane. He couldn’t pronounce a single ingredient. His sister was pregnant at the time and asking questions about the chemicals in her Dove deodorant. And he’d noticed something else: natural deodorant was the number one product on Etsy in 2015. A real market, mostly being served by small artisan makers out of their home kitchens.

The mainstream natural options that existed felt clinical or ineffective. There was a gap: a natural deodorant that worked, looked premium, and didn’t require you to identify as a health food person to buy it.

In Ali’s own words, his goal was to do what Whole Foods did to food, but to the deodorant category. Not something “very hipster or grungy, but something mainstream.”

He went on Etsy, found the best natural deodorant makers, and asked if any of them would white-label their product for him. It took dozens of rejections before one person agreed to a woman making deodorant in her hobby room in Southern California. He placed his first small order.

Then he launched.

The Launch: No Product, No Photos, No Guarantee

He launched the website with zero deodorants in hand and no photos of the physical product. Instead, he found someone to 3D render the product to use as images on his site. He wasn’t sure people would shop for deodorant online, so he treated the launch as a test; he would order the deodorant once he made sales.

He decided on the price of $12 a stick by working backwards from his costs. Six dollars to manufacture, three dollars to ship, one-fifty in packaging. The math pointed to $12, two to three times the price of drugstore deodorant. He didn’t discount his way in. He set the price that made the business work and bet that the product would justify it.

Day one: one customer. Ali was deflated. Then a connection helped get Native bumped onto Product Hunt’s front page. Day two: dozens of orders. He called his manufacturer and placed his first real production order. He packed and shipped those early sticks himself.

His reaction to a friend asking what he knew about deodorant captures everything about his approach:

“I know nothing, and in six months, I’m going to become one of the world’s leading experts on deodorant. I’m just going to spend my time learning, and I’m going to figure it out.”

The First Year: One Employee, Thousands of Emails

For the first year, Ali was the only employee, handling everything himself.

The product, by his own admission, wasn’t very good. It was powdery, hard to apply, and occasionally had a consistency problem in the summer heat in May 2016. As temperatures rose, the deodorant started melting to the consistency of lotion. Rather than quietly recall it, he stopped production, rushed an improved formula that had only been tested on a dozen people, and got it to market as fast as he could.

What saved him wasn’t the formula. It was his relationship with customers.

Ali emailed every single customer for the first two years of the business with the same message:

“You just got a stick of Native deodorant. Love to know what you think about it. If you love the product, please leave a review on our site. If you don’t, reply to this email and tell us what you don’t like, and we’ll try to fix it.”

The complaints came in consistently for the first year: too powdery, too hard to apply, too many oils. He listened. He iterated. The repeat purchase rate, which tells you whether people are actually satisfied, started at around 20%. It climbed steadily to 50% as the product improved. He bought deodorant from every competitor and noted every detail that made them better. The formula changed dozens of times.

Native went from a couple of hundred dollars in revenue per month in July 2015 to $75,000 in revenue per month by January 2016, and it was still just Moiz. By May 2016, they were doing $100,000 a month.

“I wish Silicon Valley didn’t glorify massive fundraising rounds as much as they do,” he later said. “People don’t respect how much one person can do.”

The Growth Engine: Discipline Over Flash

As revenue grew, Ali built each piece of the business the same way he built the product: methodically, based on what the data actually said.

Pricing held firm. He never discounted. The $12 stick gave him a real gross margin enough to invest in customer acquisition while building toward profitability. He understood early that the economics of DTC only work if you know your customer’s lifetime value and never spend more than that to acquire them.

Subscriptions compounded. He built a subscription option offering customers 15% savings with multiple delivery interval choices. This turned episodic buyers into predictable recurring revenue, compressed his payback period on customer acquisition spend, and gave the business a foundation that looked genuinely attractive from the outside.

Advertising was measured, not sprayed. He tracked every Facebook and Instagram dollar against long-term customer value, not just first purchase. When he found a channel that worked, he doubled down. When a conference in San Diego introduced him to better Facebook advertising techniques, he came back and grew 400% in 60 days.

Retail was ignored — intentionally. Costco called. Whole Foods called. Every major retailer you can imagine called. He turned them all away. He had a just-in-time inventory system for DTC that could barely keep up with demand; he never had excess product to ship to brick-and-mortar retailers. He stayed focused on what was working.

The revenue progression tells the story clearly: January 2016, $50,000 in monthly revenue. June, $250,000. November was the first $1 million month. The following November, $5 million.

Within 18 months of launch, Native had $13 million in cash in the bank. By the time P&G came calling, it was generating close to $1 million in EBITDA per month.

The Exit: $100 Million, 2.5 Years In

In November 2017, Procter & Gamble acquired Native for $100 million in cash. It was P&G’s first acquisition in nearly a decade, and until the deal closed, Native hadn’t sold a single stick of deodorant outside its own DTC website.

Ali hadn’t set out to sell. But the business was at an inflection point; every major retailer in America wanted in, and scaling into retail would have required a different kind of company: more capital, more inventory, more infrastructure. P&G could provide all of it.

For P&G, the acquisition made strategic sense on multiple levels. They were under pressure from activist investor Nelson Peltz to acquire on-trend brands rather than just cut costs. Native offered a beachhead in the growing natural personal care segment, a proven DTC playbook, and something P&G couldn’t manufacture internally: authentic customer trust built on a genuinely better product.

Ali stayed through early 2020. By the time he left, Native was doing $60 million a year in Target alone and had become the third best-selling deodorant brand in the store behind Secret and Dove. P&G extended the brand into body wash, hair care, and lotion. The $1,000 birthday bet had become one of the most successful consumer brand exits of its decade.

What It Actually Teaches

The Native story gets told as a fairy tale, a guy with a great idea who got lucky with timing and cheap Facebook ads. That’s comfortable, so you can get off the hook.

What Ali actually did was execute a set of principles with unusual consistency and discipline.

He launched before he was ready and used reality to course-correct, rather than spending months perfecting something in private before exposing it to customers. He priced for margin from day one and never flinched, because he understood that discounting is how you build a business that can never become profitable. He treated every customer email as product research. He ignored every shiny retail opportunity until the core business was undeniably working. He built a subscription model not as a marketing gimmick but as a genuine retention mechanism that made his unit economics legible to anyone looking at the company.

And he did almost all of it alone, for longer than most founders would tolerate.

The lesson isn’t that you had to launch in 2015 to build Native. The lesson is that there is another Native launching today, and the founders building it are probably being told they should raise more money, open more channels, and move faster. Most of them won’t need to do any of those things.

They’ll need to do what Moiz did: make something people actually want, listen until they’re sure of it, and have the discipline not to complicate what’s working.

If this was useful, please share it with anyone who needs to hear it.

New Article drops every Tuesday.

Be Bold. Be Real. Be Anomalous.

Walk into any Costco, and you’ll find it almost immediately: the Kirkland Signature label, displayed across everything from coffee to cashmere. At first glance, it looks like a house brand something to grab when you’re watching your wallet. Look closer, and you’ll find it’s made by Starbucks, Duracell, or Jelly Belly, sold at a fraction of the national brand price, and generating an estimated $60 billion in annual sales. That’s more than Nike.

The store brand, also called private label, is no longer a value proposition. It’s a profit engine, a loyalty machine, and increasingly, an existential threat to the brands that helped build the retail industry in the first place.

Store brands now account for roughly one in five consumer packaged goods sold in the United States, a share that has grown every year for the past decade. Understanding how they work and what they do to everyone else on the shelf has become essential for anyone tracking the modern retail landscape.

The Economics of the Shelf

To understand why store brands are so powerful, you need to understand where the money goes in a typical consumer goods transaction.

When a national brand sells a product, the manufacturer covers production costs, then adds significant marketing and advertising spend, often 15 to 25 percent of revenue, to build brand awareness that justifies a premium price. On top of that, the manufacturer pays the retailer slotting fees: essentially, rent to occupy shelf space, particularly prime eye-level real estate. By the time the product reaches the consumer, the retailer’s margin is typically 15 to 20 percent.

A store brand changes every one of those variables.

The retailer contracts directly with a manufacturer, often the same manufacturer making the national brand, which removes the marketing spend and slotting fees, and keeps the price lower for the consumer while capturing dramatically higher margins for itself. Where a national brand yields a 15 to 20 percent margin, the equivalent store brand often yields 35 to 55 percent. The retailer owns the shelf, so there is no auction for placement. The product goes where the retailer wants it.

The consumer wins too on price. Store brand products typically come in 20 to 30 percent cheaper than their national brand equivalents. For a household buying groceries every week, that gap compounds into meaningful savings. Retailers have learned to use this positioning deliberately: lower prices on store brand staples can be what gets a shopper through the door, and then through the rest of the store.

How the Major Players Execute

Not every retailer approaches private label the same way. The most sophisticated operators have developed distinct strategies that reflect their customer base, category mix, and competitive positioning.

Costco: The Membership Multiplier

Kirkland Signature is probably the most studied private label program in the world, and for good reason. Costco has built a brand so trusted that shoppers actively seek it out, the inverse of the traditional private label dynamic, where house brands compete on price because they lack brand pull.

The formula is deliberate. Costco caps its markup on any item at 15 percent, a policy that forces it to source with exceptional efficiency. It also contracts with best-in-class manufacturers. The Kirkland Signature batteries are made by Duracell; the coffee was long roasted by Starbucks, which means the quality is genuine. The result is a membership that renews at over 90 percent annually, driven in significant part by the value Kirkland provides.

The store brand doesn’t just generate margin; it is the reason people come back.

Target: When Private Label Becomes a Brand

Target’s approach is philosophically different. Where Costco uses Kirkland to deliver value, Target uses its owned brands to deliver aspiration.

The retailer has built more than ten owned brands, several of which exceed $1 billion in annual sales. Cat & Jack, its children’s apparel line, generates more than $3 billion a year. Threshold is the home care brand. Good & Gather has quietly become a credible grocery label. They are positioned and marketed as brands in their own right, with their own aesthetic and identity.

The implication is significant: Target’s owned brands can command comparable prices to national brands while still delivering higher margins, because the retailer controls the full value chain.

Safeway and Kroger: The Tiered Approach

Traditional grocery retailers have taken a more systematic route. Rather than building one signature brand, they run multiple tiers simultaneously: a value label for price-conscious buyers, a mid-tier for everyday quality, and a premium or organic label (O Organics, Simple Truth) for shoppers willing to pay up. Each tier competes with a different national brand segment, meaning the retailer captures margin at every price point rather than just one.

Store brands now account for 25 to 30 percent of grocery units sold at these chains, and the margin differential versus national brands has been a meaningful driver of profitability even as food inflation has complicated the broader business.

What This Does to National Brands

For the brands sharing shelf space with a private label competitor, the consequences range from uncomfortable to existential, depending on the category.

The most immediate pressure is positional. Retailers control shelf placement, and as their own brands grow, the incentive to give national brands prime real estate diminishes. Products slide from eye level to ankle level. SKU counts get trimmed. In some categories, national brands that fail to maintain volume get delisted entirely.

The second pressure is financial. To retain prime placement, national brands pay slotting fees, and as store brands expand, the negotiating leverage shifts. The retailer now has an alternative to offer shoppers. The national brand needs the shelf more than the shelf needs the brand.

The third, and subtlest, pressure is perceptual. When Kirkland Signature batteries sit next to Duracell, made by the same factory, the brand premium becomes harder to justify. Consumers who experience the equivalence firsthand rarely forget it.

The threat varies sharply by category. Commodity goods, such as paper towels, dish soap, canned goods, and pantry basics, are the most vulnerable. The functional difference between a national brand and a store brand equivalent is often minimal, and price sensitivity is high. Premium, identity-driven categories are more resilient. Nobody buys private-label perfume as a status signal. Dyson doesn’t lose much sleep over a Costco competing vacuum. Stanley and Starbucks have built communities where the brand itself is part of the product’s value.

The Rebalancing of Retail Power

For most of the 20th century, retail power flowed toward the brands. The companies that built consumer desire: Procter & Gamble, Nestlé, Colgate, and Unilever effectively dictated shelf terms to retailers who needed their products. The late 20th century began shifting that balance as Walmart and then Amazon demonstrated what scale could do to supplier leverage.

Store brands represent the latest, and perhaps most structurally significant, shift in that balance. They give retailers not just scale leverage but category independence. The retailer no longer just sells brands; it competes with them. It has learned, often from the brands themselves, how to manufacture, market, and distribute, and it has done so while capturing the margin that previously went elsewhere.

The national brands that will survive this era are the ones that stand for something a retailer cannot replicate: a genuine innovation, a community, an identity, a service. Everything that is merely functional is, eventually, a cost to be optimized away.

New article every Tuesday.

Be Bold. Be Real. Be Anomalous.

One of the biggest ways to access customers from two different worlds is through brand colloboration and it is the age-old marketing technique used by business owners of any size. While I was recently reading an article about Glow Recipe's collaboration with Beautyblender, it got me thinking which collabs work and which don’t. What are some of the principles to follow?

How a collab actually works

Think of it like a strategic friendship with a purpose.

When two brands collaborate, they’re essentially saying: you have something I don’t, and I have something you don’t, so let’s combine them, and both come out ahead. That something could be an audience, a distribution network, a technology, a reputation, or simply a cultural moment.

At its most basic level, a brand collab is a value exchange.

What makes it different from just buying what you need is that a collab keeps both brands intact and independent. You’re borrowing each other’s strengths for a defined period, for a defined purpose, and then you each walk away having grown.

The business mechanics that sit underneath that simple idea are contracts, IP ownership, revenue splits, exclusivity terms, and exit clauses. But the instinct that drives the best collabs is much simpler: find a partner whose strengths fill your gaps, make sure your strengths fill theirs, and build something neither of you could have built alone.

6 Types of Brand Collaborations

1. Co-created products: Brands design and launch something new together.

2. Joint marketing campaigns: Brands team up on shared promotions to reach a wider audience.

3. Sponsorships: One brand supports another’s event or initiative for visibility.

4. Content collaborations: Brands create content together to engage their audiences.

5. Licensing agreements: One brand allows another to use its IP for co-branded products.

6. Influencer partnerships: Brands work with influencers to build trust and reach.

Two that got it right

Nike + Apple: when hardware meets movement

In 2006, Nike and Apple released Nike+, a sensor embedded in a shoe that synced with an iPod to track your run. It sounds obvious in retrospect, but at the time it was genuinely new: a sports brand and a tech company creating an entirely new product category together.

The partnership worked because the audience overlap was precise, athletes who were already buying both brands, and because each company contributed something the other couldn’t replicate on its own. Nike knew runners. Apple knew software and hardware miniaturization. The result wasn’t a logo slapped on a limited-edition sneaker; it was a product that changed how millions of people exercise. It eventually evolved into the Apple Watch’s core fitness identity.

The lesson: the best collabs create something that genuinely wouldn’t exist without both parties.

Doritos + Taco Bell: a billion tacos

When Taco Bell and Frito-Lay launched the Doritos Locos Taco in 2012, it became one of the fastest-selling items in fast-food history, with over 1 billion units sold in the first year. The premise was almost comically simple: replace the taco shell with a Doritos chip. And internally, it was met with plenty of skepticism. Executives questioned whether the idea was too gimmicky, too niche, too weird for mainstream America.

Development was a grind; it reportedly took three years just to get the shell right, with engineers struggling to transfer the Doritos’ signature dust coating onto a taco shell without it crumbling or flaking off.

But it beat every odd stacked against it. It worked because the brands occupied the same moment in a person’s life. Taco Bell and Doritos are both late-night, casual, unapologetically flavor-forward. The product also created a new reason to visit Taco Bell at all, meaning both brands drove traffic to each other without cannibalizing anything. What looked like a stunt turned out to be one of the most successful food collaborations in history.

The lesson: the most unlikely-sounding collabs can outperform the safe, polished ones because when the fit is instinctively right, customers don't need to be convinced. They just get it.

Two that fell apart

Starbucks + Kraft: the billion-dollar breakup

In 1998, Starbucks partnered with Kraft to distribute its packaged coffee into grocery stores across America. By most measures, it worked. Kraft was good at distribution, sales grew, and Starbucks coffee found its way into millions of homes. But by 2010, Starbucks had outgrown the arrangement and wanted to control its own consumer packaged goods future. So it walked away from the contract early. Kraft refused to go quietly and sued. In 2013, an arbitrator sided with Kraft and ordered Starbucks to pay $2.76 billion, one of the largest contract dispute payouts in consumer goods history.

The lesson: a collab that works commercially can still end in disaster if the exit isn’t handled right. Always know how you’re getting out before you sign on how you’re getting in.

Gap + Kanye West: the deal without guardrails

In 2020, Gap and Kanye West (now legally Ye) announced Yeezy Gap, a high-profile partnership meant to reinvent Gap’s relevance and bring Ye’s design vision to a mass audience. It collapsed in 2022 amid public disputes, missed timelines, and a breakdown in the relationship, culminating in Ye making increasingly erratic and harmful public statements.

The failure had multiple dimensions. Structurally, the deal gave enormous creative control to a single individual with no formal accountability mechanisms for reputational risk, no morals clause with real teeth, and no contingency plan. When Ye’s public conduct became brand-toxic, Gap was stuck. There was also a fundamental tension between Ye’s instinct to create scarcity and chaos (products dropped in garbage bags, delayed releases) and Gap’s need to run a predictable retail operation.

The lesson: always include an exit. Any deal involving a single personality needs contractual protection against the possibility that the person becomes a liability.

Conclusion

Successful collaborations are the ones that truly understand how customers think and shop—and make that experience easier. But for that to happen, the partnership has to be intentional and well thought out, especially in a time when technology and consumer behavior are constantly evolving.

For more in-depth analysis, stay tuned.

New Article drops every Tuesday.

Be Bold. Be Real. Be Anomalous.

Act I: The pitch that started everything

Emma Grede didn’t have the birth lottery. Raised by a single mother in East London, she saved wages from a paper route to buy fashion magazines, glossy, airbrushed worlds that felt a million miles from her own life. But instead of being bitter about that gap, she became obsessed with it.

At 26, she founded ITB Worldwide, her own entertainment marketing agency in London. Over the next decade, she built relationships with some of the biggest names in fashion and entertainment and eventually relocated to Los Angeles, where an opportunity of a lifetime awaited.

In 2015, at Paris Fashion Week, she was introduced to Kris Jenner. She fixed a meeting, and Emma walked in with a single, focused idea.

“I wanted to take a pain product something women genuinely struggled with and solve it. Denim was that product.”

She pitched the idea to Khloé Kardashian, and something clicked immediately. “I pitched her that idea and a light bulb went off in her head, and she literally finished my sentences,” Emma recalled. “I knew in that moment that Khloé was the person I wanted to work with.”

Two women from very different worlds found themselves finishing each other’s sentences over a shared frustration. That alignment was the seed of everything that followed.

Act II: The launch that broke records

Before Good American officially launched in October 2016, Emma and Khloé hosted a casting call at Milk Studios in New York. They hoped maybe 10 women would show up. Around 5,000 came.

That wasn’t a fluke. It was a signal and proof that the market they were targeting was enormous, underserved, and hungry.

On launch day, Good American went live online and at select Nordstrom locations. In the first hour, they recorded $1 million in sales. By the end of the day, another million. It was the largest denim launch in history.

$1 million in the first hour. The largest denim launch in history.

This was a well-thought-out strategy. It was a brand that had identified a real problem, built a genuine message around it, and showed up with the receipts to prove they meant it. Good American launched with sizes 00 through 24, the widest range in the industry at the time.

Act III: The order they said no to

Within weeks of launch, a major retailer came calling with a significant wholesale deal. It could have accelerated the brand’s growth overnight.

There was one condition: they would only carry sizes 0 through 8.

Emma and Khloé said no.

Before working with any retail partner, they had established a non-negotiable rule: any store that carried Good American had to stock its full-size range and display it in one place, with no separate “plus-size” floor.

“We’re going to have a company based on a set of principles, because we don’t want to negotiate every step of the way.”

For a brand that was just weeks old, turning down a major retailer was a genuinely scary decision. But it told the world and its customers exactly who Good American was. When they said they were inclusive, they were backing it up with actual business decisions that cost them real money.

Act IV: From jeans to a movement

After launch, the founders studied their data obsessively. In 2018, they noticed that 50% of their returns were coming from customers in sizes 14 and 16. The fashion industry had historically jumped from 14 to 16, leaving a gap.

Good American created a size 15.

That decision illustrates something profound about how they operated: they listened to what customers were telling them through their behavior, not just their words. They responded with a product solution.

That same year, they expanded beyond denim into activewear and ready-to-wear. The brand expanded its retail footprint to include Nordstrom, Saks, Bloomingdale’s, Anthropologie, and H&M. In 2023, it opened its first physical store at Westfield Century City in Los Angeles.

Today, Good American employs 120 people and generates over $200 million in annual revenue.

The real lesson from Good American

Here’s what most people get wrong when they study a brand like Good American: they look at the outcome and reverse-engineer a fairy tale.

Had a celebrity co-founder, a perfect launch, which would lead to a multi-million dollar business. But that’s not what happened. What actually happened was messier, slower, and far more instructive. A retailer said no to the full-size range, and they walked. Khloe Kardashian gradually stepped back from promotion, and they built anyway. A category expansion didn’t land the way they expected, and they went deeper into their product instead of wider into hype. And when the business hit walls, Emma Grede did what she had always done: got closer to the customer and let the data show her what to do next.

“I didn’t know what could go wrong and so I just got on with things that right now would seem scary or stupid.” -Emma Grede

You will make the wrong bets. You will expand too fast into a category your customers aren’t ready for. You will rely on something, a platform, a person, a moment of trend, that eventually shifts. Every brand makes these mistakes. The ones that survive aren’t the ones that avoided those mistakes. They’re the ones that built something real enough underneath to outlast them.

You need to be like Emma Grede, the one who knows the customer, holds the line, and keeps building long after the glamour of day one has faded.

Four brands. Two paths. One question worth answering.

There’s a war of narratives in the startup world.

On one side: “Bootstrapping is freedom. VCs will ruin your vision. Build slow, build real.”

On the other: “You need capital to win. Without funding, you’re bringing a knife to a gunfight.”

Both camps have followers for their own reasons. Both camps have horror stories. And both camps, it turns out, have genuinely iconic success stories.

So instead of picking a side, let’s look at the evidence: four brands that built something remarkable, and what their funding path actually meant for how they got there.

The Bootstrapped Brands

1. Mailchimp — The $12 Billion “Failure” to Take VC Money

In 2021, Intuit acquired Mailchimp for approximately $12 billion. The founders, Ben Chestnut and Dan Kurzius, owned the entire company. They had never taken a dollar of outside investment.

Let that sink in.

Mailchimp started in 2001 as a side project. A web design agency needed an email tool for small-business clients, so they developed one. It stayed a side project for years. They were profitable almost immediately because they had to be. There was no runway to burn.

The turning point came in 2009, when they introduced a freemium model, offering up to 500 subscribers for free. Signups exploded. By 2012, they were sending 10 billion emails per month. By 2019, they hit $700 million in annual revenue.

What bootstrapping forced them to do:

• Focus obsessively on the customer, not the pitch deck

• Stay profitable at every stage, making them resilient during downturns

• Own their product decisions completely, no board telling them to “move upmarket” or chase enterprise

• Build at a pace that lets culture develop organically

Chestnut has said that not taking VC money meant they could serve small businesses, the “little guys”, without pressure to abandon them for higher-margin enterprise clients. That customer loyalty became a moat.

The irony? Many VC-backed competitors with greater resources (Campaign Monitor, Constant Contact) never caught up to them.

The lesson: Constraints create clarity. When you can’t outspend, you have to out-think.

2. Spanx — From $5,000 to a Billion-Dollar Brand, Alone

Sara Blakely started Spanx in 2000 with $5,000 in personal savings, a patent she filed herself after reading a book on patents, and a cold-calling hustle that would make most salespeople quit.

She was selling fax machines door-to-door when she had the idea. She couldn’t afford to hire a lawyer, so she wrote the patent herself. She couldn’t afford a PR firm, so she drove to Neiman Marcus, asked for 10 minutes, and convinced a buyer to stock the product in the room.

For the first two years, she ran the company entirely alone, taking orders, packing boxes, handling returns, and doing her own PR.

By 2012, she was on the cover of Forbes as the world’s youngest self-made female billionaire. Spanx was valued at over $1 billion. She still owned 100% of the company.

She finally received outside investment in 2021, a private equity deal with Blackstone that valued Spanx at $1.2 billion, only after two decades of building entirely on her own terms.

What bootstrapping forced her to do:

• Get creative with marketing (she mailed her product to Oprah’s team with a handwritten note, Oprah featured it as a “Favorite Thing”)

• Stay deeply close to the product and customer because she was the only one working on it

• Make every hire count, every dollar matters

• Prove the concept with real revenue before scaling

Blakely didn’t raise money because no one would give it to her at first. She has said investors didn’t take her seriously. So she just... kept going.

The lesson: Sometimes the “no” is a gift. Rejection from capital markets forces you to find validation where it actually matters, from customers.

The VC-Backed Brands

3. Airbnb — How $600K Saved a Company That Sold Cereal to Survive

Before Airbnb became a $75 billion company, the founders were selling novelty cereal boxes to pay rent.

Brian Chesky and Joe Gebbia were so financially constrained that they created “Obama O’s” and “Cap’n McCain’s” limited-edition cereal boxes tied to the 2008 presidential election and sold them for $40 per box to fund the company. They raised approximately $30,000 from cereal sales. That money kept Airbnb alive long enough to get into Y Combinator.

Y Combinator invested $20,000 in early 2009. Sequoia and others followed. But the most important capital came from Andreessen Horowitz, which led a $7.2 million Series A in 2010, the round that enabled Airbnb to move from “interesting experiment” to “real company.”

The funding didn’t just buy them time. It bought them:

• The ability to fight Wimdu, a Rocket Internet clone in Europe that was trying to outspend and out-hustle them internationally

• Introductions to key operators, legal resources, and industry contacts

• The credibility to attract world-class engineers when competing with Google and Facebook for talent

• Speed in a marketplace business, getting to liquidity (enough hosts AND guests) is an existential race

Here’s what’s critical to understand about Airbnb and VC: the business model required scale to work. A marketplace with 200 listings is nearly worthless. With 4 million listings, it’s irreplaceable. The network effects required capital to reach escape velocity — bootstrapping would have meant building too slowly in a market where speed was survival.

Airbnb IPO’d in December 2020 at a valuation of $47 billion, closing its first trading day at over $100 billion. Total VC invested: roughly $6 billion over the company’s life.

The lesson: In marketplace and network-effect businesses, capital isn’t optional; it’s the driver.

4. Glossier — Building a Beauty Empire on Community and Capital

Emily Weiss launched Into The Gloss, a beauty blog, in 2010. It became a cult hit. In 2014, she raised $2 million in seed funding to launch Glossier — a direct-to-consumer beauty brand built on one radical idea: let customers co-create the products.

This wasn’t just marketing. Weiss and her team would post the question, “What do you want in a moisturizer?” to their community and then compile the responses. Product development driven by comment sections.

But here’s where the VC money mattered:

• An $8.4 million Series A in 2015 let them invest in product development and build a real supply chain

• A $24 million Series B in 2016 funded the kind of experiential retail and content that felt organic but cost real money to execute

• By their Series D in 2019, Glossier was valued at $1.2 billion, and the capital allowed them to launch in new markets and categories

Glossier’s product is inseparable from its community, but the community required content, channels, and physical experiences to remain viable—that cost money. The brand could not have been bootstrapped to the same scale because its identity was the scale. Being everywhere, being cultural that takes capital.

The company experienced a rough patch in 2022 (layoffs, a leadership reset), which is worth noting: VC-backed companies can grow faster, but they can also overcorrect, overhire, and face pressure to justify their valuations in ways bootstrapped companies never do.

Still, Glossier redefined what a beauty brand could be, built a genuine community of millions, and created a template that every DTC brand since has tried to copy.

The lesson: When your brand is the community, and community requires content and presence at scale, capital accelerates the flywheel.

So: Bootstrap or Raise?

Here’s the honest synthesis:

Bootstrap when:

• Your business can be profitable quickly (SaaS, services, CPG at a small scale)

• You’re solving a problem that doesn’t require network effects

• Optionality and ownership matter more to you than speed

• You want to serve a customer segment that VCs might pressure you to abandon

• You’d rather build a $100M business you own than chase a billion-dollar outcome you might not

Raise when:

• You’re building a marketplace, platform, or network — where scale IS the product

• You’re in a winner-take-most market where being second means being irrelevant

• The window of opportunity is genuinely time-limited (regulatory, technological, cultural)

• The capital will buy you asymmetric leverage, not just runway

The brands above didn’t succeed because of their funding path. They succeeded because their funding model aligned with their business model and ambitions.

Mailchimp didn’t need VC money because it could grow sustainably with customer revenue. Airbnb absolutely needed it because it was in an existential race with copycats who had unlimited capital.

The worst outcome isn’t choosing wrong between bootstrap and VC. It’s taking VC money for a business that didn’t need it (and losing ownership and control for no reason), or refusing capital for a business that did (and losing to a well-funded competitor while being philosophically pure).

Know your business. Know your market. Then choose accordingly.

If this was useful, share it with one founder who’s wrestling with this decision right now. It might be the most important choice they make.

New Article every Tuesday.

Be Bold. Be Real. Be Anomalous.

The money you take and how you take it shape everything from your daily decisions to your eventual exit. Here’s how to think clearly about the options.

The Question Nobody Tells You to Ask First

Most first-time founders frame the fundraising question as:

“How do I raise money?”

The better question is:

“What kind of company am I building and what kind of money fits that?”

Funding is not a prize. It’s a tool. And like any tool, the wrong one for the job causes damage. A venture-backed founder building a lifestyle business will feel the walls closing in. A bootstrapped founder competing in a winner-take-all market may lose before they get a chance to compete. Understanding the landscape clearly, without hype, is the first real job of a new entrepreneur.

The Funding Spectrum

Think of startup funding not as two camps (VC vs. bootstrapping) but as a spectrum of trade-offs along three axes:

• Control — How much say do you keep over decisions?

• Speed — How fast can you grow and hire?

• Obligation — Who do you owe, and what happens if things go sideways?

Here’s a breakdown of the main paths, from most autonomous to most capital-intensive.

1. Bootstrapping — Building on Your Own Terms

What it is: You fund the company from your own savings, early revenue, or a combination of the two. No outside investors. No board telling you what to do.

The upside:

• Full ownership. Every dollar of value you create stays yours.

• Decisions are yours alone. You can pivot, pause, or change direction without a board vote.

• Forces discipline. Constraints breed creativity. Bootstrapped founders tend to become excellent at unit economics early.

The downside:

• Slow by design. You can only grow as fast as revenue allows.

• Personal financial risk. If you’re funding from savings, a failed year hits your household.

• Some markets simply require capital to compete. You can’t bootstrap your way into semiconductor manufacturing.

Real example: Basecamp (formerly 37signals) is the canonical bootstrapping success story. Jason Fried and David Heinemeier Hansson built a profitable, product-focused company without ever taking VC money and have been vocal about why. Their software business generates tens of millions in revenue with a small team and no pressure to exit or grow beyond what feels right.

Contrast that with a founder who bootstrapped an e-commerce brand, grew it to $2M in revenue, but couldn’t afford the inventory to fulfill a major retail partnership. The opportunity expired. A small outside investment could have changed the outcome.

Best for: Service businesses, SaaS with modest acquisition costs, niche products with loyal customers, founders who prize autonomy and sustainable growth over speed.

2. Friends, Family & Angels — The First Outside Capital

What it is: Money from people who believe in you as much as they believe in the idea. Angels are typically high-net-worth individuals who invest their own money in early-stage companies.

The upside:

• Faster and less formal than institutional fundraising.

• Angels often bring mentorship, introductions, and operational experience.

• Terms can be founder-friendly (especially at pre-seed, using instruments like SAFEs or convertible notes that delay valuation negotiations).

The downside:

• Friends and family money carries emotional weight. A bad quarter isn’t just a business problem; it’s Thanksgiving dinner.

• Angels vary wildly. A great angel adds real value. A bad one calls you every week asking for updates.

• Amounts are typically modest ($25K–$500K), which may not be enough for capital-intensive models.

Real example: When Jeff Bezos left his Wall Street job to start Amazon in 1995, his parents, Mike and Jackie Bezos, wrote him a check for roughly $250,000, money they'd saved over a lifetime. They knew they might lose it all. That's the defining feature of friends and family capital: it's backed by belief in the person, not a financial model. Amazon went on to become one of the most valuable companies in history, but for every Bezos, there are founders whose parents lost that money quietly. The stakes are personal in a way no term sheet can capture.

Best for: Very early validation, pre-product founders, businesses where $100K–$500K is enough to reach meaningful milestones.

3. Revenue-Based Financing (Borrowing Against Your Future Revenue)

What it is: A lender gives you capital today; you repay it as a percentage of monthly revenue until you’ve paid back a fixed multiple (typically 1.2x–2x the loan). No equity given up.

The upside:

• No dilution. You keep full ownership.

• Repayment flexes with your business's slow month, smaller payment.

• Faster than traditional bank loans, no collateral required (usually).

The downside:

• Only works if you have predictable, recurring revenue already.

• The effective interest rate can be high if you repay quickly.

• Not for pre-revenue or early-stage companies.

Real example: Wing, a marketplace for virtual assistant services, took $500K in revenue-based financing from Efficient Capital Labs in 2023 and put it directly into marketing. The result: 210% annualized growth in the months that followed without giving up a single share of equity. It's a quiet success story, which is fitting. RBF tends to work best for exactly this kind of company: real revenue, a clear growth lever, and no need to hand a board seat to someone to pull it.

Best for: E-commerce, SaaS, media, and any business with recurring or predictable revenue that needs fuel for growth, not for product development.

4. Venture Capital — Rocket Fuel With a Clock Attached

What it is: Institutional funds (managing money from university endowments, pension funds, wealthy families) invest in exchange for equity in your company. They expect one or more companies in their portfolio to return the entire fund, which means they need outcomes of 50x–100x.

The upside:

• Large checks ($500K to $50M+) that allow aggressive hiring, marketing, and expansion.

• The best VCs are genuinely helpful, pattern-matched on hundreds of companies, with networks that open doors.

• A strong VC brand (a16z, Sequoia, Benchmark) can attract talent and customers who take signals from investor reputation.

The downside:

• You are now on the VC’s timeline, not your own. They have 10-year fund cycles and need exits.

• Dilution is real and compounds. After a seed round, Series A, and Series B, founders often own 15–30% of their own company.

• VC is optimized for one outcome: a very large exit (IPO or acquisition). A $20M profitable business is often considered a failure by a VC fund — not by you, but by the structure of the deal.

• Board dynamics change. Disagreements over strategy, hiring, or pace can become existential.

Real example: WeWork is the cautionary tale. Masayoshi Son’s SoftBank poured billions into Adam Neumann’s vision of “physical social networks.” The money allowed WeWork to expand recklessly, subsidizing growth that masked terrible unit economics. When the IPO window opened, the scrutiny revealed a business that couldn’t survive without continuous capital infusion. Neumann walked away with hundreds of millions; thousands of employees lost jobs.

On the other side: Stripe. The Collison brothers took venture money but were disciplined in how they deployed it. They built real infrastructure, prioritized developer experience, and grew into genuine dominance. VC accelerated something that was already working.

Best for: Companies in large, winner-take-all markets where speed is a competitive moat — fintech, marketplaces, enterprise software, biotech.

5. Small Business Loans & SBA Financing

What it is: Traditional bank lending, often backed by the U.S. Small Business Administration (SBA), which reduces lender risk and enables better terms for borrowers.

The upside:

• No equity given up. This is debt, not dilution.

• SBA loans can offer low interest rates and long repayment terms.

• Works for businesses that don’t fit the VC mold — restaurants, retail, trades, professional services.

The downside:

• Requires personal guarantee in many cases. Your house may be collateral.

• Slow process; weeks to months.

• Requires some operating history; hard to access at the idea stage.

Real example: Thousands of Main Street businesses, bakeries, plumbing companies, and dental practices are built with SBA loans. This is the backbone of small business America, and it works well for businesses that generate consistent cash flow and don’t need to scale to $100M to be meaningful and profitable.

Best for: Established small businesses, franchise expansion, asset-heavy businesses, and professional service firms.

The Mental Framework: Three Questions Before You Decide

Before choosing a funding path, every first-time founder should sit with these three questions:

1. What does “winning” look like for me? A $5M lifestyle business that funds a great life is a completely legitimate goal. So is building the next Stripe. But they require different capital strategies. VC optimizes for the latter. Bootstrapping preserves the former.

2. How big is the market, and how fast does it move? In markets where speed creates a defensible moat, where the first mover captures most of the value, slow capital is a liability. In stable, fragmented markets, patience is a competitive advantage.

3. What happens if I’m wrong? VC money has expectations baked in. If you take $5M and the company doesn’t grow into a $50M+ outcome, you’ll face pressure to sell at an uncomfortable time, or worse, watch the company shut down because it’s too small for a VC exit but too leveraged to survive as a small business. Bootstrapping’s failure mode is slower and more recoverable.

A Note on the Hybrid Path

Many successful companies don’t pick one lane and stay in it. They bootstrap to product-market fit, then raise a small angel or seed round to accelerate distribution, then raise a Series A only when the model is proven, and the capital will compound.

This sequencing validates before you scale, protects founders from the most common funding mistake: using other people’s money to determine whether the idea works.

The Bottom Line

There is no universally correct answer. The best funding path is the one that matches your market, your goals, your personal risk tolerance, and the stage your business is actually in, not the stage you hope it’s in.

Venture capital is not a status symbol. Bootstrapping is not a consolation prize. Revenue-based financing is not a crutch. Each is a tool, shaped for a specific job.

The founders who navigate this well are the ones who understood what they were building before they decided how to pay for it.

New Article every Tuesday.

Be Bold. Be Real. Be Anomalous.

Briogeo and Ami Colé both made it to Sephora’s shelves. Both were Black-founded. Both were beloved. What happened next could not have been more different, and every entrepreneur building a consumer brand needs to understand why.

Getting into Sephora is supposed to be the moment. It’s the validation that your brand is real. It’s the distribution that opens you up to millions of new customers. It’s the press pitch that writes itself. “Now available at Sephora.”

Two brands — Briogeo and Ami Colé got that moment. Both were clean beauty brands. Both were Black-founded. Both built genuine communities of devoted customers. Sephora believed in both of them enough to put them on the shelf.

Briogeo was acquired by Wella in 2022 in a deal that made Nancy Twine one of the most celebrated exits in indie beauty. Ami Colé announced it was shutting down in July 2025, with its founder writing in an essay for The Cut that she couldn’t compete with brands that had deeper pockets and that “prime shelf space comes at a price” she could no longer afford.

Same retailer. Same category. Same cultural moment. Completely different outcomes.

The question worth sitting with: why?

Briogeo: The Goldman Sachs VP Who Made Hair Care Her Life’s Work

Nancy Twine didn’t set out to build a beauty company. She set out to build a life with more meaning in it.

She’d been at Goldman Sachs for nearly a decade, working her way to VP. She was successful, but she was unfulfilled. Then her mother died suddenly, and the loss opened something up. Twine kept returning to memories of her childhood kitchen, where her mother, a physician, would concoct homemade hair and skin treatments from natural oils, butters, and extracts picked up from health food stores.

She started doing what most people do when they’re considering a pivot but still paying rent: she researched obsessively at night. She wrote a business plan on weekends. She contacted manufacturers, talked to chemists, ordered samples, and sent boxes to friends. For a year, she did this while still drawing a Goldman salary.

What she saw in the market was a gap between natural and performance. Most clean hair care felt earnest but ineffective. Most high-performance hair care was full of silicones, sulfates, and parabens that Twine didn’t want on her hair. She wanted both, and she believed other women did too.

She built Briogeo around a simple framework she called “6-free”: no sulfates, silicones, parabens, phthalates, DEA, or artificial dyes. Products that were 93 to 100 percent naturally derived, but that actually worked. The name combined brio, an Italian word for vibrancy, with geo, a nod to the earth. She developed four products. She packed them in sample boxes in her tiny East Village studio apartment.

In 2013, she took those samples to a beauty trade show in Las Vegas. Six months later, she got an email from Sephora. They wanted to carry her line.

Two weeks later, she quit Goldman Sachs.

The Sephora Relationship That Changed Everything

Twine has been direct about what Sephora meant to her: “I’m forever indebted to Sephora because they took a bet on me before anyone else really did. Because of that, we were able to really grow our brand and bring in so many incredible customers from around the world.”

But Twine didn’t just take Sephora’s bet and coast. She understood what it actually required of her to land on that shelf.

She had spent nearly a decade watching Goldman’s clients, some of the most sophisticated businesses in the world, manage financial complexity, capital allocation, and operational risk. She brought those instincts to Briogeo. She didn’t hire fast. She didn’t raise VC money. For six years, Briogeo never took any outside VC or PE investment. Twine funded the business by dipping into her personal savings until the brand became profitable.

She treated Sephora not as a finish line but as a growth channel with its own demands, and she learned those demands intimately. She sampled aggressively because she understood that in prestige retail, trial converts skeptics. She developed hero products that could anchor the line and become reliable repeat purchases. Her Deep Conditioning Mask became one of the most awarded products in Sephora’s hair category, winning the Allure Best of Beauty Award every year from 2018 onward.

She also understood what Sephora couldn’t do for her. It could put her product in front of millions of customers. It couldn’t build her brand. That was her job. She used digital, editorial, and community to pull customers into the brand so that when they walked into Sephora, they were already looking for Briogeo, not just stumbling across it.

The business grew steadily. By 2020, Briogeo had an estimated gross revenue of $40 million. It was one of the top-selling hair care brands on Sephora.com. It had expanded to Nordstrom, Urban Outfitters, and international markets. And then, in 2022, nine years after launching, Briogeo was acquired by Wella Company. At 29, Twine had become the youngest Black woman to launch a product line at Sephora. By her early thirties, she had built and sold one of the most successful indie hair care companies in the country.

Ami Colé: The Right Brand at the Wrong Time

Diarrha N’Diaye-Mbaye’s story starts in a Harlem hair salon. Her mother, Aminata — Ami, for short, ran a salon that was the social and cultural heart of their Senegalese community in New York. Growing up inside it, N’Diaye-Mbaye absorbed something that would shape everything she built: the idea that beauty isn’t just a product, it’s community, culture, identity, and belonging.

She spent a decade working in the beauty industry, at Temptu, L’Oréal, and Glossier, before she tried to build something of her own. She had the idea for years, but the doors kept closing. Investors told her Fenty Beauty already existed, implying the market for Black beauty was somehow complete. She couldn’t get traction.

Then George Floyd was murdered in May 2020. Corporate America responded with a wave of pledges, capital commitments, and public declarations about equity. The Fifteen Percent Pledge launched, pressuring retailers to dedicate shelf space to Black-owned brands. Sephora signed. Investors became, in N’Diaye-Mbaye’s words, “a little bit more sensitive and sensitized to where they sit on the spectrum of equity.”

Within weeks of the uprisings, she received an influx of requests to bring her “deserving brand” to life. She raised over $1 million in pre-seed funding and launched Ami Colé in May 2021 with three products: a skin tint, a lip oil, and a highlighter, all formulated specifically for melanin-rich skin.

The brand was an immediate cultural hit. Within months of launching, Ami Colé sold out its first run of products, created a viral lip oil that became a staple in makeup bags from Harlem to Accra, and became a favorite among celebrities like Kelly Rowland, Mindy Kaling, and Martha Stewart. It went on to win more than 80 product awards and earned a spot on Oprah’s Favorite Things list.

In December 2022, Ami Colé launched in 277 U.S. Sephora doors, a full-circle moment for N’Diaye-Mbaye, who had worked as a Sephora sales associate during her undergraduate years at Syracuse. By 2024, the brand had expanded to 600 Sephora locations across North America. L’Oréal’s BOLD venture fund made a minority investment.

By every visible measure, Ami Colé had made it.

The Hidden Cost of the Shelf

Here is what the press releases don’t tell you about getting into Sephora at scale: the shelf is not the reward. The shelf is where the real battle begins.

Sephora is not a charity. It is a retailer with aggressive sell-through targets. If a brand doesn’t move product at the pace Sephora needs, it gets moved or removed. To move product at that pace, a brand needs marketing. Not the organic kind, the paid kind. Premium shelf placement, the eye-level spots, and the front-of-store displays are literally purchased. When you walk into Sephora and see stacks of Sol de Janeiro body mists off the bat, that’s their $200 million marketing budget at work.

N’Diaye-Mbaye wrote about this directly in her essay for The Cut: “I couldn’t compete with the deep pockets of corporate brands; at retail stores, prime shelf space comes at a price, and we couldn’t afford it.”

Ami Colé’s roughly $3 million in total funding is a lot for a layperson, but a drop in the bucket for achieving success at Sephora. The cost of the inventory alone, scaled to 600 stores, with the kind of shade range an inclusive makeup brand is expected to carry, is enormous. Add the marketing spend needed to drive traffic to those stores, the PR, the influencer seeding, and the operational infrastructure to manage it all, and you’re looking at a capital requirement that most indie brands simply cannot meet.

N’Diaye-Mbaye also described how her attempts to grow hurt her: “We made operational decisions that felt necessary at the time, like scaling up production to meet potential demand, without truly knowing how the market would respond.” Stock levels became difficult to predict, as viral peaks caused products to sell out and then be overstocked.

This is the Sephora paradox for undercapitalized brands: you need scale to afford the shelf, and you need the shelf to get the scale. The math only works if you have enough capital to absorb the gap between the two. Ami Colé didn’t.

The Funding Cliff That Nobody Warned About

There’s a harder dimension to Ami Colé’s story that N’Diaye-Mbaye addressed with unusual candor.

In 2020, investors were talking a big game about equity and representation by pledging dollars, launching initiatives, and building buzz. Some of that capital was genuine. Some of it was performative “diversity investing” that was more about optics than the long-haul commitment that consumer brands require.

N’Diaye-Mbaye wrote that investor expectations had become “temperamental,” that some of the investors who had talked about “betting big on inclusivity” in 2020 changed their tune as years passed. The landscape changed considerably, with funding drying up for Black-owned brands and broader DEI rollbacks under the current political administration hindering institutional support.

Ami Colé raised $3 million total. Briogeo bootstrapped for six years before taking any outside capital and only did so after the business was profitable. The sequence matters. Briogeo earned its way to scale. Ami Colé was asked to grow before the business was fully ready, and then the capital environment that had encouraged that growth evaporated.

This isn’t a story about one brand failing and another succeeding. It’s a story about the conditions different founders inherited and how much those conditions shaped the options available to them.

What Every Founder Building for Retail Needs to Hear

Sephora is not the goal. Sephora is a channel. And like every channel, it has its own economics, its own margin requirements, its own marketing costs, its own expectations for velocity and growth. Going in underprepared or undercapitalized doesn’t just slow you down. In prestige retail, it can end you.

The question isn’t whether to pursue retail. It’s when, at what scale, with how much capital in reserve. Briogeo went in at the right time, with the right product, and enough personal commitment to survive the early years before the business could support itself. Ami Colé went in at a pace the business and its capital structure couldn’t sustain.

None of this is a criticism of Diarrha N’Diaye-Mbaye. She was handed a structural challenge, the expectation of rapid scale with insufficient long-term capital, that would have broken most founders. She turned $1 million into a brand that sold out its launch, went viral, won 80 awards, landed on Oprah’s list, and reached every Sephora in North America.

In her own words: “Don’t be afraid to fail out loud.”

The harder truth is systemic: the capital that rushed toward Black-owned brands in 2020 came with the same growth expectations as any other VC bet, without the same depth of patient support. And in a category as capital-intensive as prestige makeup, that mismatch was always going to be dangerous.

Both founders built something real. One had the runway to let it compound. The other was asked to run before she could walk, and when the runway ran out, there was no one to extend it.

The Lesson

If you’re building a consumer brand and thinking about retail, understand the true cost of the shelf before you say yes to it. Not just the margin economics. The marketing spend. The inventory commitment. The operational infrastructure. The capital you’ll need to compete for attention against brands with budgets that dwarf your entire raise.

Briogeo took nine years to get to an exit. Nine years of building, iterating, and earning its way to scale. That’s not a cautionary tale. That’s the whole point.

If this was useful, share it with a founder who’s about to sign a retail partnership without running the real numbers first.

New Article every Tuesday.

Be Bold. Be Real. Be Anomalous.

Cassandra Curtis started making baby food in her kitchen. Then came Ari Raz, John Foraker, Jennifer Garner, and $198 million from Wall Street. Here’s the full story—including who actually owns what.

On the morning of February 6, 2026, Cassandra Curtis stood on the floor of the New York Stock Exchange and rang the opening bell.

She was flanked by Jennifer Garner and John Foraker, her better-known co-founders. Cameras pointed mostly at Garner. But Curtis was the one who started this whole thing—alone in her kitchen in 2015, making baby food for her daughter because she couldn’t find anything in stores she actually trusted.

Eleven years later, that kitchen project was worth $845 million.

By the end of that first trading day, Once Upon a Farm had raised $198 million in its IPO, its stock had surged 17%, and what began as a San Diego mom’s frustration had become one of the most compelling food company stories in a generation.

This is how it actually happened.

The Real Origin Story

In 2015, Cassandra Curtis was a first-time mother in San Diego staring at the baby food aisle with the same thought most new parents have: Is this really the best we can do?

Every product was shelf-stable—jars and pouches heat-treated to survive months at room temperature. The process worked. It was safe. But the high heat destroyed nutrients and dulled flavor. Curtis knew it. She was feeding her daughter the nutritional equivalent of a microwaved vegetable.

So she did something about it.

Curtis started researching an alternative technology called High-Pressure Processing—HPP for short. Instead of using heat to kill bacteria, HPP uses intense water pressure. The food gets squeezed at 87,000 pounds per square inch—six times the pressure at the bottom of the ocean. Bacteria are eliminated. Nutrients and flavor are preserved. The product stays fresh.

It had been used in cold-pressed juice for years. Nobody had tried it for baby food.

Curtis launched the first cold-pressed, HPP baby food ever sold at retail. Ten products. She sold them at San Diego farmers’ markets, delivered them in a refrigerated van to parents’ doorsteps, and sold them through a direct-to-consumer website. It was small, scrappy, and completely new.

Meanwhile, on the East Coast, a guy named Ari Raz was doing almost the same thing. He’d started his own cold-processed baby food business, also delivering to homes, also convinced that fresh was the future.

When they found each other, it was the obvious move. Merge, rebrand, and build something bigger together.

They called it Once Upon a Farm.

Enter the Heavyweights

In 2017, a small, promising startup with a great product and almost no money met two people who changed everything.

The first was John Foraker. If you know the organic food industry, you know Foraker. He’d spent fifteen years as CEO of Annie’s, the beloved organic mac-and-cheese brand, taking it public in 2012 and selling it to General Mills for $820 million in 2014. He was, as Garner would later call him, “the Grand Poobah of organic.”

Foraker didn’t just see a baby food company. He saw a category that nobody had properly built yet and founders who’d already proven the product worked. He became an early investor, then joined as co-founder and CEO.

The second was Jennifer Garner.

Garner’s involvement gets complicated fast by the Hollywood angle, so let’s be precise about what she was and wasn’t involved in. She wasn’t a spokesperson paid to appear in ads. She wasn’t a passive celebrity investor collecting royalties. She was a mother of three who’d been searching for exactly this kind of product and couldn’t find it.

“I saw a tiny little company,” she said later, “that offered organic, fresh, refrigerated food that I struggled to find as a mom.” She met Foraker. They shook hands. She joined as a co-founder.

Her formal title: Farmer Jen. Her actual job: everything public-facing. Investor meetings, retail partner relationships, marketing, media, and the Wall Street roadshow. “I love that they see me as part of the sales team, marketing sees me as part of the marketing team, supply sees me as somebody they can send to a farm and chat with our growers,” she told Bloomberg. She was, by any honest measure, a working co-founder—not a brand ambassador with equity.

By the end of 2017, Once Upon a Farm had four co-founders: Curtis as Chief Innovation Officer, Raz as President, Foraker as CEO, and Garner as the brand’s public face and board member.

Now they needed money to actually build it.

The Funding Machine

Growing a fresh food company is expensive in ways shelf-stable companies never have to think about.

Every step of the supply chain has to stay cold. Refrigerated trucks. Refrigerated warehouses. Refrigerated retail space. Every week the product sits on a shelf is a week closer to expiration. And securing that refrigerated shelf space in the first place? That requires proving to skeptical retailers that parents will buy the product fast enough to justify giving up the real estate.

Once Upon a Farm’s funding came from investors who specialized in exactly this kind of challenge:

S2G Ventures focused on sustainable food systems and understood the supply chain complexity. Cambridge Companies SPG brought consumer brand expertise. CAVU Venture Partners, led by Brett Thomas, was the biggest believer. CAVU had made its name backing emerging food and beverage brands through their most dangerous phase—past the startup stage, not yet at a profitable scale.

The crescendo came in March 2022: CAVU led a $52 million Series D round. At that point, Once Upon a Farm had just crossed $100 million in retail sales. The money had one purpose—fund everything needed to reach an IPO. Bigger manufacturing, better systems, more marketing, more people.

Three years later, they were ready.

The Numbers That Got Wall Street’s Attention

From 2018 through 2025, the company grew at about 64% per year. The baby food industry as a whole grows at roughly 2-3% annually. Once Upon a Farm was growing twenty times faster than the category it competed in, had expanded from baby food into snacks, frozen meals, oat bars, and smoothies, and was selling in 22,000 stores—Whole Foods, Target, Walmart, Kroger, Costco, Sam’s Club.

There was, of course, the uncomfortable part: a $52 million annual loss.

Here’s the honest explanation. On each unit sold, the company was actually making money—gross margins improved from 41% in 2023 toward 44% by 2025. But building the infrastructure to sell $226 million worth of fresh food nationally—the cold-chain logistics, the manufacturing capacity, the marketing to maintain 60%+ growth, the team to run a business this size—costs more than the product profits could cover.

This is a deliberate strategy, not a failure. The bet: reach enough scale that infrastructure costs stop growing as fast as revenue, and losses flip to profits. Amazon did this for years. Netflix too. Whether it works for fresh baby food is still an open question.

What convinced investors was the trajectory: gross margins going up, revenue accelerating, brand awareness growing, category leadership established. The IPO was 12 times oversubscribed.

IPO Day

February 6, 2026. A Friday. Garner brought her son, Sam Affleck, to the NYSE. Curtis rang the opening bell. Foraker did press. Employees and their children celebrated on the trading floor.

Once Upon a Farm sold 7.6 million new shares to raise fresh capital for the company. Existing shareholders—including the VC firms and Garner—sold another 3.4 million shares for personal liquidity.

Total raised: $197.9 million at $18 per share, right in the middle of the $17-$19 range.

The stock immediately opened at $21—17% above the offer price. It touched $22 intraday. Closed at $21.05. Market cap: $847 million.

Goldman Sachs, JPMorgan, Bank of America, and William Blair ran the deal. The offering had been more than 12 times oversubscribed.

“The public markets allow us to do that on a bigger stage,” Foraker told Yahoo Finance. Garner called it a chance to “stay true to our values of trying to democratize great food for all kids.”

Once Upon a Farm was the IPO story of the week—proof that the consumer market, mostly shut since 2021’s euphoria, might be ready to reopen.

What Cassandra Built, and What It Means

Step back from the financials for a moment and recognize what actually happened.

In 2015, a mother in San Diego decided the baby food aisle wasn’t good enough. No venture capital. No famous co-founder. A recipe, a refrigerated van, and a conviction that parents would pay for something better.

She built a product that worked. Found a partner doing the same thing on the other coast. Attracted one of the most respected operators in organic food. Partnered with one of the most recognized faces in America. Convinced serious investors to fund the vision. Scaled to $226 million in revenue across 22,000 stores nationwide.

Then rang the opening bell at the New York Stock Exchange.

That’s not a celebrity brand story. That’s a founder story—one that happens to include a celebrity.

What comes next is harder. Once Upon a Farm is public, which means every quarter the numbers are public too. Can they keep growing as the revenue base gets bigger? Can the losses narrow toward eventual profitability? Can they defend their lead as larger food companies wake up to the fresh baby food category?

The skeptics point to the $52 million annual loss and note that Beyond Meat and Oatly ran this same playbook and are now trading at a fraction of their IPO valuations, still unprofitable. The believers point to improving gross margins, genuine brand equity, and a management team with a real track record.

Both are reasonable positions. The answer won’t come for two or three years.

*Once Upon a Farm trades on the NYSE under the ticker OFRM.

New article every Tuesday.

Be Bold. Be Real. Be Anomalous.

Inside Disney’s dramatic CEO succession saga — and the leadership lessons that changed everything

When Bob Iger walked into his first day as Disney CEO in October 2005, he inherited a mess. The company’s animation studio, the very soul of Disney, was producing flops. The board had just forced out his predecessor in a bitter proxy fight. And Steve Jobs, who controlled Pixar, wasn’t returning his calls.

Twenty years later, Iger would leave behind a company worth four times what he’d inherited, but not before watching his succession plan collapse, being forced out of retirement to fix it, and learning the hardest lesson in business: getting out is harder than getting in.

This is the story of how leadership principles built an empire, failed spectacularly, and ultimately shaped the future of the world’s most magical company.

Act I: The Empire Builder (2005-2020)

The Phone Call That Changed Everything

Iger’s first move as CEO surprised everyone. He didn’t reorganize divisions or cut costs. He picked up the phone and called Roy Disney — Walt’s nephew, who had publicly opposed Iger’s appointment and helped oust the previous CEO.

“What do you really want?” Iger asked him.

The answer was simple: Roy wanted to feel valued. He wanted Disney’s creative legacy to matter again.

Iger made Roy an honored consultant. The attacks stopped. The relationship healed.

The lesson: Relationships matter more than org charts.The belief that problems can be solved if you focus on what matters rather than operating from defensiveness.

But Roy Disney wasn’t Iger’s biggest relationship problem. That would be Steve Jobs.

The $7.4 Billion Bet

Michael Eisner, Iger’s predecessor, had feuded with Jobs for years. Their relationship was so toxic that Pixar, which had made Disney billions with Toy Story, Finding Nemo, and The Incredibles, was preparing to leave Disney and distribute its films elsewhere.

Iger had a radical idea: don’t just fix the relationship. Buy the entire company.

The board thought he was crazy. $7.4 billion for an animation studio? When did Disney already have an animation studio? Many executives worried Pixar’s edgier sensibility would damage Disney’s family-friendly brand.

But Iger saw what they didn’t: you can’t always fix a broken culture. Sometimes you need to acquire the culture you need.

He spent months rebuilding trust with Jobs. He promised Pixar could keep its culture, its team, its way of working. When the deal closed in January 2006, Jobs became Disney’s largest individual shareholder.

More importantly, other creative leaders watched how Disney treated Pixar. And they learned that Disney could be trusted.

The lesson: Great acquisitions buy talent and culture, not just assets. This embodied what Iger called the relentless pursuit of perfection — the Japanese concept of shokunin, taking immense pride in your work and instinctively pushing for greatness.

The Acquisition Playbook

The Pixar template became Iger’s formula:

August 2009: Acquired Marvel for $4 billion. Internal resistance: too edgy for Disney. Iger pushed through. By 2014, Marvel movies had grossed more than Disney paid for the entire company.

December 2012: Acquired Lucasfilm for $4.05 billion. George Lucas required delicate handling; he wanted legacy assurances and initially demanded creative control. Negotiations broke down twice. But Iger’s patient relationship-building won out. The Force Awakens made over $2 billion.

March 2019: Acquired Fox for $71.3 billion, bringing Avatar, The Simpsons, FX, and a controlling stake in Hulu. Iger’s largest and most complex bet.

Each acquisition followed the same pattern: build the relationship first, promise cultural autonomy, and integrate strategically.

Each franchise became a flywheel, box office, merchandise, theme parks, and eventually streaming.

By November 2019, when Disney+ launched, Iger had transformed Disney from a $56 billion company into a $231 billion entertainment colossus.

The lesson: Innovation requires curiosity — a deep awareness of the marketplace and its changing dynamics. Iger understood that Disney’s brand could stretch further than anyone thought possible.

The Retirement That Wasn’t

Iger had tried to retire four times. Each time, the board asked him to stay; one more acquisition, one more crisis, one more strategic priority.

By February 2020, he’d finally earned his exit. He handed the CEO title to Bob Chapek, chairman of Parks, Experiences, and Products. A solid operator. Someone who understood Disney’s most capital-intensive division.

Iger would stay on as Executive Chairman, overseeing creative strategy.

It seemed like a graceful transition. It was actually a ticking time bomb.

Three weeks later, the pandemic shut down every Disney theme park worldwide.

Act II: The Failure (2020-2022)

The Fatal Flaw

Here’s what nobody understood at the time: you cannot split authority from accountability.

Chapek had the CEO title. But Iger remained as Executive Chairman, responsible for “creative oversight.” In practice, this meant Iger still controlled strategy. Executives who’d been loyal to Iger for 15 years didn’t know who was really in charge.

As one corporate governance expert put it: “When you’re executive chair, the buck stops with you.”

Chapek bore the accountability without the authority. It poisoned everything.

The Reorganization

Chapek’s instinct was to bring order to chaos. He centralized control, overhauling the studio structure to shift power toward business distribution units rather than creative teams.

To Chapek, this was efficiency. To Disney’s creative executives, it was a betrayal.

Dana Walden and Alan Bergman — the entertainment co-chairs who’d built relationships with Hollywood’s top talent- found their authority diminished. The Imagineers, Disney’s creative engineers who designed theme park experiences, faced new restrictions and bureaucratic oversight.

The lesson: Culture eats strategy for breakfast. Chapek saw the Imagineers as a cost center to be optimized. Iger had seen them as Disney’s competitive advantage.

Where Iger had practiced — treating people with dignity and empathy, Chapek practiced reorganization.

Where Iger had championed shokunin and the relentless pursuit of perfection, Chapek championed efficiency.

The creative culture that Iger had spent 15 years nurturing began to wither.

The Walking Meetings

By fall 2022, senior executives were telling Iger the company was in trouble. Walden and Bergman felt the same. They’d voiced their concerns to the board, they said. Things couldn’t continue.

Box office returns were weak. Streaming was bleeding cash. The stock had fallen sharply from its 2021 highs.

On November 20, 2022, the Disney board fired Bob Chapek after fewer than three years as CEO.

That same evening, they called Bob Iger.

Act III: The Return (2022-2026)

The First Trading Day

Disney stock jumped 6% the morning after Iger’s return was announced. That’s how powerful the symbolic weight was — a signal to investors, talent, and the creative community that Disney was correcting course.

But symbols weren’t enough. Iger moved fast.

Within days, he dismissed Chapek’s closest advisors. He reversed the studio reorganization. He called the creative executives and asked: “What do you need?”

The lesson: Taking Responsibility means owning the mess, not explaining it away.

Iger set about rebuilding relationships with talent. In 2023, when Hollywood faced its first dual writers’ and actors’ strikes in decades, Iger negotiated patiently with both unions.

The deals cost money in the short term. They preserved relationships long-term.

The Measured Success

Under Iger’s second tenure, Disney’s streaming business turned profitable. Zootopia 2 grossed $1.7 billion globally. The parks thrived.

But the stock told a sobering story: up 22% during Iger’s return, compared to 68% for the S&P 500.

The hard lesson: Not every period produces transformational returns. Sometimes leadership means stabilization, not transformation. Iger’s first tenure produced extraordinary results partly because Disney had been undervalued. His second product produced solid results because it was already priced for success.

This is what mature leadership looks like.

And Iger knew the most important thing he could do wasn’t another acquisition. It was getting succession right.

The Process

The board, led by new chairman James Gorman (former Morgan Stanley CEO), wasn’t going to repeat the Chapek disaster. They ran succession like a major acquisition:

• 100+ candidates considered

• Multi-year formal process

• All four of Iger’s direct reports were formally interviewed

• External candidates vetted

The field narrowed to two: Josh D’Amaro (Experiences chairman) and Dana Walden (Entertainment co-chair).

On February 3, 2026, they announced the decision: D’Amaro would become CEO. Walden would become President and Chief Creative Officer.

The Ending (For Now)

On March 18, 2026, Josh D’Amaro will become Disney’s ninth CEO. Dana Walden will sit beside him as Chief Creative Officer. Bob Iger will finally walk out the door — this time, apparently, for good.

Whether D’Amaro succeeds remains to be seen. The company he inherits faces genuine challenges: streaming competition, AI disruption, global political tensions, and parks that need constant capital investment.

But for the first time in years, Disney’s fundamental question isn’t about internal leadership chaos. It’s about strategy, creativity, and execution — exactly what a healthy company should be debating.

The final lesson: The best leaders build systems that transcend themselves. The D’Amaro/Walden partnership isn’t about finding another Bob Iger. It’s about creating a structure that embeds Disney’s values institutionally, so success doesn’t depend on one charismatic leader.

Bob Iger spent two decades building something extraordinary, lost it briefly to circumstance and miscalculation, fought to get it back, and is now walking away — having learned that the hardest part of leadership isn’t building an empire.

It’s letting go.

How three college students built a billion-dollar brand—and why it’s struggling to survive

The story begins in 2006 with three Georgetown University students who were tired of eating terrible food. Jonathan Neman, Nicolas Jammet, and Nathaniel Ru looked around their campus and saw the same frustrating trade-off that millions of young Americans faced daily: you could eat fast and cheap, or you could eat healthy and expensive. There was nothing in between.

Three months after graduation, they opened a 560-square-foot salad shop in a Georgetown alley. They called it Sweetgreen.

Nearly two decades later, that tiny shop has become a cautionary tale about modern entrepreneurship. Sweetgreen is now a publicly traded company with 266 locations, over $677 million in annual revenue, and a brand so recognizable that Kendrick Lamar once had a signature salad. It’s also losing roughly $90 million per year, its stock has crashed over 80% from its highs, and same-store sales are falling at an accelerating rate.

The central paradox that every entrepreneur should study: How does a company with such a beloved brand, such loyal customers, and such strong revenue growth struggle to sell $16 salads profitably?

The answer reveals everything wrong with how we build companies in the age of venture capital, growth-at-all-costs, and unicorn fever.

Part I: The Magic Years

In the beginning, Sweetgreen did almost everything right.

The founders started with $375,000 raised from 50 investors—mostly friends, family, and a small business development center. By today’s standards, it was nothing. But it was enough. That first Georgetown location became profitable within months, validating the core insight: people would pay a premium for fresh, healthy, locally-sourced food if you made it convenient and approachable.

What made early Sweetgreen special wasn’t just the food. It was the authenticity of the mission. While other chains talked vaguely about “fresh ingredients,” Sweetgreen displayed the names of their local farmers on boards in every store. They rotated their menu five times per year based on what was actually in season. They refused to use seed oils when every competitor did. They meant it when they said they wanted to “connect people to real food.”

This authenticity attracted a fiercely loyal customer base. Sweetgreen’s Net Promoter Score hit 78 exceptional for any restaurant, let alone a fast-casual. Customers weren’t just buying salads; they were buying into a lifestyle, a set of values, a community.

The founders understood instinctively that their real competition wasn’t other salad chains. It was the fundamental disconnection between people and their food. So they invested in culture-building rather than traditional advertising. They collaborated with celebrity chefs like David Chang and Nancy Silverton. When Kendrick Lamar released his “Beets Don’t Kale My Vibe” salad, it generated over 100 articles and massive cultural buzz.

They were also early adopters of digital ordering, launching a mobile app in 2015 when many restaurant chains were still figuring out their websites. They had built nearly 2 million active app users—a direct relationship with customers that most restaurant chains could only dream about.

By 2018, Sweetgreen had achieved unicorn status with a valuation exceeding $1.6 billion. Three kids who started a salad shop in an alley were now running one of the hottest companies in America.

Everything seemed to be working.

Except for one small problem: the actual business.

Part II: When More Money Creates More Problems

Between 2013 and 2019, Sweetgreen raised over $515 million in venture capital. Investors included Revolution Growth (Steve Case), T. Rowe Price, Fidelity, and other heavyweight firms. Each round valued the company higher than the last, creating a powerful narrative: Sweetgreen wasn’t just a restaurant chain; it was a movement.

But every dollar raised came with strings attached. More capital meant more investors, more board seats, more pressure to justify ever-increasing valuations. And the only way to justify a billion-dollar valuation for a salad chain was aggressive growth.

So Sweetgreen grew. They opened 35 new locations in 2023 alone. They expanded into new markets. They experimented with new formats. They invested heavily in technology, acquiring a robotics startup, Spyce, to build automated salad-making systems. They launched French fries (then discontinued them less than a year later). They overhauled their loyalty program. They talked about reaching 1,000 locations.

They needed to become the next Chipotle, the next Starbucks, the dominant player in healthy fast-casual dining.

But here’s what the spreadsheets and pitch decks missed: the economics of selling $16 salads at scale are brutally difficult.

Start with the cost structure. Sweetgreen’s commitment to local, organic, and sustainable sourcing meant ingredient costs were significantly higher than those of competitors. Real estate costs were high because Sweetgreen targeted prime urban locations with high foot traffic. Seasonal menu rotations meant supply chain complexity that added overhead.

By the time you factored in corporate costs, technology investments, and expansion expenses, the math simply didn’t work. Restaurant-level margins might look decent—17.5% in 2024—but after corporate overhead, the company was losing money on every salad sold. Literally losing approximately $2.26 per $16 salad based on their 2024 financials.

This is the dirty secret of venture-backed retail: you can mask bad unit economics with growth. If revenue is climbing 30-40% per year, investors forgive the losses because they believe you’ll “grow into profitability.”

The assumption is that scale will drive efficiency, that technology will reduce costs, and that market dominance will allow pricing power.

The warning signs were there. In earnings calls, management admitted that only one-third of Sweetgreen locations were consistently operating at or above standard. Think about that: two-thirds of stores were underperforming baseline expectations for food quality, service speed, and operational consistency. Yet the company kept opening new stores, kept expanding into new markets, kept chasing growth.

Part III: The Public Market Reality Check

In November 2021, Sweetgreen went public. But going public when you’re unprofitable is extraordinarily risky. Private investors can be patient; public market investors demand results every 90 days.

By the third quarter of 2025, same-store sales had collapsed by 9.5%, and traffic fell 11.7%. The company lost $36 million in a single quarter. The stock, which had traded above $40 per share, plummeted to around $6.

What went wrong? Value perception. At $16-17 for a salad, Sweetgreen was roughly 40% more expensive than Chipotle and 25% more expensive than Cava. When inflation squeezed household budgets, that $16 salad went from staple to indulgence. Sweetgreen’s core demographic—urban professionals aged 25-35—pulled back first and hardest. When forced to choose between values and budget, most chose budget.

Management tried to respond with larger portions and discount promotions, but repositioning from premium to value is nearly impossible without damaging your brand. Meanwhile, operational missteps multiplied: the French fries launch and quick discontinuation, a loyalty program overhaul that alienated high-frequency customers, staff cuts, and the sale of Spyce—the robotics company they’d acquired to automate salad-making—for $186 million.

Part IV: Three Possible Futures

So what happens to Sweetgreen?

Scenario 1: The Turnaround (15% probability)

Sweetgreen figures it out. They fix value perception with sustainable pricing, achieve operational excellence across all stores, reach profitability with their existing footprint, and prove the model works. Same-store sales return to growth by late 2026, margins expand, and the stock recovers to $15-20.

This requires discipline to slow growth, wisdom to cut costs without cutting quality, and time for changes to take effect. It’s possible but unlikely.

Scenario 2: Muddle Through (60% probability)

Sales stabilize but don’t grow meaningfully. The company continues opening 15-20 stores annually, burns through cash while promising profitability “next year,” and eventually needs to raise dilutive capital. They settle into a smaller, regional footprint focused on their strongest markets. The stock remains depressed at $5-10. The company survives but doesn’t thrive.

This is the most likely outcome. They’re good enough to avoid collapse but not good enough to break through.

Scenario 3: Acquisition or Pivot (25% probability)

Sweetgreen is acquired by Starbucks (as a healthy food platform), Chipotle (as a premium complement), private equity (to restructure), or a food tech platform like Wonder. Alternatively, they dramatically reduce their footprint to 50-75 profitable stores and pivot to high-margin channels like catering, meal kits, and CPG products.

Sometimes survival means getting smaller, not bigger. Not every company needs to be a unicorn.

A Final Thought

If you’re an entrepreneur reading this, ask yourself: Are you building a business or are you building a brand?

Because here’s the truth—you need both. A great brand with terrible economics is a charity. Great economics with no brand is a commodity. The magic happens when you build something people love AND something that makes money sustainably.

Sweetgreen got halfway there. They built something people love. They created a movement around real food, sustainability, and community. They proved that fast-casual dining could be healthy, delicious, and culturally relevant.

But they forgot the most important part: the business has to work.

Fix the economics first. Build the brand second. Scale third.

That’s the lesson Sweetgreen is learning the hard way.

Because in the end, the graveyard of startups is filled with beautiful brands that couldn’t make the math work.

All financial data from public sources, including Sweetgreen earnings calls, SEC filings, and news reports through January 2026.

On December 31, 2025, Sprinkles Cupcakes abruptly closed all company-owned locations, ending a 20-year run that transformed American dessert culture. For founder Candace Nelson, who sold the company to private equity firm KarpReilly in 2012, the news was devastating. “This isn’t how I thought the story would go,” she said in an emotional Instagram video. “I thought Sprinkles would keep growing and be around forever. I thought it was going to be my legacy.”

The complete story of Sprinkles—from its explosive growth to its sudden demise—offers critical lessons for brand builders about scaling, selling, and what happens when you hand your creation to someone else.

The Beginning: Building from Passion and Reinvention (2005)

Candace Nelson’s entrepreneurial journey began with loss. After working as an investment banker at Merrill Lynch during the dot-com era, she found herself laid off and deeply unfulfilled. Rather than jumping back into finance, she made a radical pivot: she enrolled in Tante Marie’s pastry school in San Francisco to pursue her passion for baking.

In 2005, at age 31, Nelson and her husband Charles opened the first Sprinkles location in a tiny 600-square-foot storefront in Beverly Hills that had previously been a sandwich shop. The concept was audacious in its simplicity: a bakery devoted exclusively to cupcakes, made with premium ingredients like Madagascar Bourbon vanilla, Belgian chocolate, and sweet cream butter. Each cupcake would feature a signature modern dot on top, a detail the Nelsons trademarked early on.

The response was immediate, and the shop sold out within hours on opening day. Celebrities like Tom Cruise, Oprah Winfrey, and Blake Lively became regulars.

What Nelson had created wasn’t just a bakery; it was a cultural moment.

For brand builders, Nelson’s origin story illustrates a powerful truth: sometimes your greatest advantage comes from being an outsider. Her investment banking background taught her to think about national expansion from day one. She later told interviewers that from the beginning, they invested more than needed for a typical bakery because they wanted a foundation for growth and envisioned it becoming a national brand.

The Growth Years: Innovation Meets Expansion (2005-2012)

Between 2005 and 2012, Sprinkles expanded from one Beverly Hills storefront to approximately 11 locations nationwide. The second location opened in Newport Beach, California, followed strategically by Dallas in 2007, the first expansion outside California. Nelson later explained this move was “very strategic,” proving Sprinkles wasn’t just a Southern California phenomenon but could work anywhere.

The brand’s growth was fueled by relentless innovation. In 2012, Sprinkles introduced the Cupcake ATM—24-hour vending machines that dispensed fresh cupcakes with a mechanical arm while playing the now-iconic “I Love Sprinkles” jingle. The machines became social media phenomena before Instagram was mainstream. That same year, they launched Sprinkles Ice Cream and created the “Sprinklesmobile,” billed as the world’s first cupcake truck. The company also sold cupcake mixes through Williams-Sonoma stores across the US and Canada.

Nelson also became a judge on Food Network’s “Cupcake Wars,” further cementing the brand’s position as the leader of the cupcake movement. Her television presence helped create word-of-mouth demand before new locations opened.

The Sale: When Founders Exit (2012)

In 2012, seven years after opening the first location, Candace and Charles Nelson sold Sprinkles to private equity firm KarpReilly LLC for an undisclosed sum. At the time, the company had 11 locations and was positioned for aggressive growth.

Nelson later explained her reasoning for selling: she considered herself “more of a creator than a person who runs a business.” The operational complexity of managing multiple locations, supply chains, and hundreds of employees had become overwhelming. She and Charles wanted a partner with operational expertise and capital to take Sprinkles to the next level.

From a brand builder’s perspective, this is the critical inflection point and the moment that contains perhaps the most important lessons of the entire Sprinkles story.

When founders sell to private equity, they’re making a fundamental trade: they’re exchanging control and long-term ownership for immediate liquidity and (theoretically) professional management expertise. KarpReilly was no stranger to the restaurant industry, with investments in chains like Marie Callender’s, Mimi’s Café, Café Rio, The Habit Burger Grill, and later Salt & Straw, HomeState, and Pitfire Pizza.

The sale seemed logical on paper. Sprinkles was thriving, growing, innovating. The Nelsons had proven the concept worked. A private equity firm with restaurant experience could provide capital and systems to scale nationally and even internationally. What could go wrong?

The Private Equity Years: Growth and Strain (2012-2025)

Under KarpReilly’s ownership, Sprinkles continued to expand aggressively. By 2023, the company had roughly 70 locations, including franchised units that began launching in 2022. The company announced ambitious plans to sign 100 franchise locations domestically, plus 100 international locations. They opened their first international location in South Korea in 2024 with plans to open 18 more international units that year.

They expanded into new product categories, such as gourmet chocolates in 2021, partnerships with Target and Walmart, and sugar-free pudding and pie mixes in 2024. They diversified the menu beyond cupcakes to include cookies, brownies, and layer cakes.

On the surface, this looked like the growth story the Nelsons had envisioned when they sold. But beneath the expansion, cracks were forming.

The cupcake craze that Sprinkles had ignited was cooling. Consumer preferences were shifting toward healthier options. Competition intensified as chains like Nothing Bundt Cakes expanded to 600 locations (with plans for 1,000 by 2027) and Crumbl reached 1,000 units. The novelty factor that once drove Sprinkles’ success had faded.

More fundamentally, the brand may have lost something intangible when the founders left. Candace Nelson had built Sprinkles around joy, quality, and creativity. Under private equity ownership, the focus inevitably shifted toward metrics, efficiency, and returns. Former employees commenting on Nelson’s Instagram posts after the closure hinted at declining standards under new ownership.

By the end of 2024, despite reporting $44.5 million in sales (a 3% increase from the previous year), something was fundamentally wrong. The company had 24 total locations (18 company-owned, 6 franchised). With $44.5 million spread across these units, the average revenue per location was less than $1.9 million annually, or roughly $650,000 for company-owned locations if franchised units generated less revenue. For a premium bakery with fresh ingredients and labor-intensive production, those economics were likely unsustainable.

The company was still announcing ambitious expansion plans, even teasing a new Burlingame location in December 2025—right up until the sudden shutdown.

The End: Closure Without Warning (December 2025)

On December 31, 2025, Sprinkles closed all company-owned locations abruptly. Employees reported receiving only one day’s notice on December 30th and no severance packages. The company cited moving to “transition away from operating company-owned Sprinkles bakeries” as the reason for closing. It remains unclear whether franchise locations will continue operating.

Candace Nelson learned about the closure just a few days before it happened. She no longer had any ownership or operational role in the company she’d founded 20 years earlier, yet she was the one who announced the news to devastated fans on Instagram on December 31st.

“Even though I sold the company over a decade ago, I still have such a personal connection to it,” she said in her video. “This isn’t how I thought the story would go. I thought Sprinkles would keep growing and be around forever. I thought it was going to be my legacy.”

The response was swift and emotional. Fans mourned the loss of a brand that had been part of their celebrations, birthdays, and traditions for two decades. Employees expressed anger at the sudden layoffs. And many commenters directed their frustration at both the private equity firm and Nelson herself for selling in the first place.

“Selling to private equity was the beginning of the end,” wrote one commenter.

“What did you expect? Private equity has literally NEVER made things better for customers, only for board members’ and investors’ pockets,” wrote another.

KarpReilly has not issued a public statement about the closure or the reasons behind it.

What Candace Nelson Did Next

After selling Sprinkles in 2012, Nelson didn’t fade away. In 2015, she co-founded Pizzana, a Michelin Bib Gourmand-rated neo-Neapolitan pizzeria in Los Angeles, with pizzaiolo Daniele Uditi (and later partners Chris and Caroline O’Donnell). The restaurant now has eight locations, including Dallas and Houston. She became a guest shark on “Shark Tank,” a bestselling author of “Sweet Success,” an angel investor, and a sought-after keynote speaker on entrepreneurship.

She built a new identity beyond Sprinkles through her venture firm CN2 Ventures, which invests in “bold concepts and strong leaders,” helping other entrepreneurs avoid some of the pitfalls she experienced. She’s successfully reinvented herself as a serial entrepreneur rather than being defined solely by her first company.

In many ways, Nelson’s post-Sprinkles career validates her decision to sell. She’s created multiple ventures, influenced countless entrepreneurs, and built a diversified career in food and business. Had she remained tied to managing dozens of Sprinkles locations, she might never have had the time or energy for these other pursuits.

The Bottom Line for Brand Builders

The complete Sprinkles story from kitchen experiment to cultural phenomenon to sudden closure offers a master class in both the opportunities and risks of building, scaling, and selling a brand.

What Nelson got right: She identified a genuine market opportunity, built a category-defining brand with authentic founder passion, innovated constantly, and created something that brought joy to millions of customers over 20 years. She recognized when she’d reached her limits as an operator and made a rational decision to sell to experienced partners.

What went wrong (or at least differently than hoped): The brand outlived the trend it helped create, new ownership pursued growth that may have exceeded sustainable unit economics, the founder’s irreplaceable vision and standards were left with her, and private equity’s timeline and objectives didn’t align with building a multi-generational brand.

The hardest truth: There may have been no perfect path. Had Nelson kept the company, she might have faced the same market pressures and consumer preference shifts without the capital to adapt. The cupcake craze cooled regardless of ownership. But she would have controlled the ending and maintained her legacy intact.

For brand builders, the Sprinkles story is ultimately about understanding what you’re building and why. Are you building to sell? Then pick your buyer carefully, negotiate for commitments to quality and employees, and make peace with losing control of your creation’s fate. Are you building a legacy? Then prepare for the long, unglamorous work of managing a mature business through changing markets, and resist the siren call of acquisition offers.

There’s no wrong answer—only honest or dishonest ones.

For every entrepreneur building something they love, that may be the most important lesson of all: your brand is never fully yours once you sell it, no matter what the lawyers say or the contracts promise. Choose accordingly.

New article every Tuesday.

Be Bold. Be Real. Be Anomalous.

I’ll never forget the moment I realized Coach had changed. There I was, getting my nails done, when I spotted it across the salon—the Lana mini bag in all its structured, logo-adorned glory. And I wanted it. Me, someone who had once written off Coach entirely as something my mom’s generation carried.

What happened? How did a brand I’d actively avoided become something I was genuinely coveting?

The Wilderness Years

To understand Coach’s resurrection, you have to understand how far it had fallen. By the early 2010s, Coach had become ubiquitous to the point of invisibility. The brand had chased growth so aggressively that its signature “C” logo was everywhere in outlet malls, department stores, and on every other arm. The exclusivity had evaporated. The cachet was gone.

For younger consumers, especially, Coach felt dated, accessible in the worst way. It was the brand your aunt carried, not the one you saved up for. While luxury houses like Gucci and Saint Laurent cultivated mystique, Coach felt mass-market and middle-aged.

How Did We Get Here?

To understand the fall, you need to know the rise. Coach started in 1941 as a Manhattan leather workshop, building a reputation for quality American craftsmanship. Designer Bonnie Cashin joined in 1962, creating the iconic brass turnlock and establishing Coach’s DNA: beautiful, practical leather goods made for American women’s lives. The brand grew steadily, went public in 2000, and seemed unstoppable.

Then came 2001 and the Signature “C” pattern. It was supposed to be a way to make Coach accessible, and it worked too well. The logo proliferated everywhere. Sales exploded, but by 2012, Coach had a problem: they’d built a billion-dollar business on a brand that younger consumers dismissed entirely.

The Turnaround Begins

The transformation didn’t happen overnight. It started in 2013 when Coach brought in Stuart Vevers from Loewe as Creative Director. His mission was clear: reclaim Coach’s authentic American identity and make it feel contemporary again.

First, they pulled back from the logo saturation that had diluted the brand. Vevers dove into the archives, finding inspiration in 1970s Coach—before the logos, when it was just beautiful leather. They focused on quality, craftsmanship, and silhouettes that felt fresh rather than frumpy.

The Gen Z Discovery

But here’s where it gets interesting. While Coach was methodically rebuilding, something unexpected happened: Gen Z discovered vintage Coach.

On platforms like Depop, Poshmark, and vintage Instagram accounts, younger shoppers started finding Coach bags from the 1990s and early 2000s—the pre-logo-explosion era. These vintage pieces had patina, character, and none of the overexposure baggage. Suddenly, Coach had credibility with exactly the demographic that had rejected it.

The brand became a treasure hunt for thrift store enthusiasts, offering a sustainable way to access high-quality leather goods. And Coach was smart enough to lean into it rather than fight it.

The Modern Era: Strategic Moves That Worked

Coach’s comeback wasn’t luck; it was strategy. They introduced Instagram-ready bags, such as the Tabby and Pillow Tabby, which became social media sensations. They pursued collaborations with Selena Gomez, the Basquiat Estate, and Jennifer Lopez that brought cultural credibility. They launched Coach (Re)Loved to celebrate and authenticate vintage pieces.

And bags like the Lana mini, the one that caught my eye, combined Coach’s leather expertise with contemporary proportions that actually worked with how people dress now.

The brand also made smart choices about pricing. While true luxury marched toward four-figure handbags, Coach stayed in that accessible luxury sweet spot of $300-$500. You could actually save up for a Coach bag without it feeling impossible. In an era of economic uncertainty, that mattered.

The TikTok Effect and Cultural Timing

Social media accelerated everything. #CoachBag has billions of views on TikTok. Influencers showcase their vintage finds alongside new purchases. The brand engages authentically with online communities rather than talking down to them.

But Coach also benefited from perfect cultural timing. The Y2K revival made vintage Coach cool again. Rising luxury prices made Coach’s accessible pricing appealing. Sustainability trends aligned with Coach’s durability and lifetime repair culture. As “quiet luxury” became a buzzword, Coach’s heritage as an authentic American leather goods company suddenly felt relevant rather than dated.

What Really Changed?

So what transformed Coach from has-been to must-have? It wasn’t just one thing. It was patience, strategic creative direction, a willingness to let go of what wasn’t working, and the humility to let a new generation rediscover them on their own terms.

Coach didn’t try to become Supreme or Jacquemus. They leaned into being Coach but the best, most focused version of themselves. They remembered that they’d always made good bags; they just needed to make good bags that felt exciting again.

Modern Coach rests on core principles: optimistic luxury that brings joy rather than anxiety, inclusive American style that’s democratic rather than gatekept, craftsmanship that honors their workshop origins, and gradual evolution that maintains their values while adapting to contemporary tastes.

What makes them special? Eighty-plus years of authentic heritage, an accessible luxury price point, practical design philosophy, an extensive archive to draw from, a lifetime repair culture, and genuine New York creative roots.

Conclusion

The story of Coach is ultimately a story about authenticity, patience, and the courage to be yourself in a market that rewards imitation. It’s about a brand that lost its way, found it again, and emerged more confident and relevant than ever.

From a small Manhattan workshop in 1941 to a global icon in 2025, Coach has proven that the best journeys aren’t straight lines. Sometimes you have to get lost to find yourself. And sometimes the brand you dismissed years ago is exactly the one you’ll fall in love with when you’re ready to see it clearly.

What Is a Shop-in-Shop Partnership?

The concept is simple: a brand operates a dedicated space inside another retailer’s store. Known in the industry as “shop-in-shop,” “store-within-a-store,” or “concessions,” these arrangements allow brands like Starbucks, Ulta, and Sephora to expand their reach while host retailers like Target, Kohl’s, and Safeway transform their stores into multi-brand destinations.

But beneath this simple premise lie three distinct business models, each with different risk profiles, control structures, and financial arrangements.

The Three Business Models: Who Controls What and Who Gets Paid

Model 1: Licensed Operations (The Franchise Model)

Example: Starbucks at Target

Think of this like a McDonald’s franchise. Target pays Starbucks for the right to use the Starbucks name, recipes, and brand standards. Target employees work behind the counter, Target buys supplies from Starbucks at wholesale prices, and Target keeps most of the revenue from selling drinks, minus royalty fees paid to Starbucks.

Who controls what:

• Target employees staff the counter

• Target owns and manages inventory

• Starbucks sets quality standards and provides training materials

• Starbucks has minimal day-to-day operational control

How money flows:

• The customer pays Target $5 for a latte

• Target keeps most of the revenue (perhaps $4.50)

• Target pays Starbucks a royalty fee (maybe $0.50 or a percentage)

• Target also buys supplies from Starbucks at wholesale prices

Who takes the risk: Target bears all operational risk. If sales are poor, Target loses money. Starbucks earns royalties and wholesale revenue regardless.

Model 2: Joint Venture Partnership (The 50/50 Model)

Example: Sephora at Kohl’s

This is the most balanced arrangement where both companies share control, investment, and profits equally. It’s neither pure licensing nor pure leasing; it’s a true partnership.

Who controls what:

• Kohl’s employees staff the beauty counters (but Sephora trains them)

• Sephora owns and manages the inventory

• Sephora curates which brands and products are sold

• Sephora designs the shop layout and brand experience

• Kohl’s funds the physical buildout of the spaces

• Kohl’s processes the sales transactions

How money flows:

• The customer pays Kohl’s $50 for makeup

• Kohl’s recognizes the sale revenue

• After deducting ALL expenses (inventory costs, employee wages, operations, depreciation), both companies split the operating profit 50/50

Who takes the risk: Both companies share it equally. They both win when sales are strong, and both lose when they’re weak. This alignment of incentives is a key reason this model has been so successful.

Model 3: Leased Space (The Landlord Model)

Example: Burberry at Nordstrom

This works like renting a kiosk in a mall. The brand leases space from the host retailer but operates completely independently. This model is extremely common in luxury department stores and UK retail, though less visible in everyday American shopping.

How money flows (pure lease version):

• The customer pays the brand $30 for a product

• The brand keeps all $30 in revenue

• The brand pays the host fixed rent (perhaps $10,000/month)

• Rent is due regardless of sales performance

Who takes the risk: The brand takes most or all of the risk. In pure lease arrangements, they must pay rent even if sales are terrible. In revenue-sharing versions, the risk is slightly more balanced, but the brand still manages all operations and inventory.

Note: The dollar amounts in these examples are illustrative to show how money flows—actual figures vary by contract and aren’t publicly disclosed.

Why These Partnerships Exist: The Economics

These partnerships solve real problems for both parties while creating value for customers.

For the brand (Ulta, Sephora, Starbucks):

• Rapid expansion without crushing real estate costs

• Instant access to millions of new customers

• Shared operating expenses (heating, security, parking)

• Lower financial risk than opening standalone stores (especially in licensed and partnership models)

For the host retailer (Target, Kohl’s, Safeway):

• Increased foot traffic from customers seeking the partner brand

• Revenue from royalties, profit-sharing, or rent

• The ability to offer premium brands without developing expertise

• Enhanced reputation as a shopping destination

For customers:

• Convenience of one-stop shopping

• Often better quality than if the host managed that category themselves

The Billion-Dollar Success Stories

Sephora at Kohl’s: The Gold Standard

When Sephora ended its 15-year relationship with JCPenney in 2020 and partnered with Kohl’s instead, industry observers wondered if it would work. The answer came quickly and decisively.

By 2023, Sephora at Kohl’s was generating $1.4 billion in sales with projections to exceed $2 billion by 2025. The partnership showed more than 90% year-over-year sales growth and now represents over 10% of Kohl’s total net sales. When Kohl’s completed the nationwide rollout in early 2025, its stock surged 21% in premarket trading.

Why the joint venture model worked:

The 50/50 profit-sharing structure aligned both companies’ interests perfectly. Kohl’s had every incentive to drive traffic and provide excellent service because it earned half the profits. Sephora maintained enough control over inventory, brand selection, and training to ensure quality standards.

Geographically, the partnership was brilliant. Kohl’s operates primarily in suburban strip malls and standalone locations, while Sephora’s existing stores are concentrated in upscale malls and urban areas. The overlap was minimal, meaning Sephora reached genuinely new customers without cannibalizing its own sales.

For Kohl’s, the transformation was dramatic. The struggling retailer found new life as customers who might never have considered shopping there made special trips for Sephora, often buying Kohl’s merchandise while they were there.

Starbucks Licensed Stores: The Quiet Giant

Starbucks has built an empire on the licensing model, with approximately 19,500 licensed locations globally in airports, grocery stores, Target, universities, and bookstores. In 2023, these licensed stores collectively generated $4.5 billion, roughly 19% of Starbucks’ total revenue.

The economics work brilliantly for Starbucks. While company-operated stores generate more revenue per location, licensed stores require virtually zero operational costs or capital investment from Starbucks. The company receives royalty fees and sells products to licensees while the host handles staffing, rent, and daily operations.

The Target-Starbucks partnership exemplifies this model’s stability. The partnership has expanded over the years, adding features like curbside pickup for Starbucks orders at over 1,700 Target locations and exclusive collaborative products like the Frozen Hot Chocolate Peppermint Frappuccino.

Why the licensing model works for Starbucks:

Coffee is relatively simple to execute compared to complex beauty retail. Expectations are lower—customers don’t expect the full “third place” café experience inside a Target. A Starbucks inside Target serves a different purpose: grab-and-go convenience rather than a destination experience.

Cannibalization risk is minimal. Customers who stop for coffee while shopping at Target aren’t necessarily the same customers who’d spend an afternoon working at a standalone Starbucks. The use cases are different enough that both can thrive.

The Spectacular Failures

Sephora and JCPenney: A 15-Year Partnership Ends in Court

For 15 years, Sephora operated in about 600 of JCPenney’s 850 stores. The partnership, which began in 2006, once seemed perfect. But by 2020, it had deteriorated so badly that JCPenney filed a temporary restraining order to prevent Sephora from terminating their agreement, leading to a legal battle during the pandemic.

What went wrong:

The power dynamic had shifted dramatically. When the partnership began, Sephora had just 120 U.S. stores while JCPenney had 1,000, making JCPenney the obvious path for Sephora to achieve national reach. By the partnership’s end, Sephora had grown to 490+ standalone stores and no longer needed JCPenney’s distribution network.

Meanwhile, JCPenney’s overall financial struggles and declining store traffic made it a liability rather than an asset. Customer experiences deteriorated as JCPenney cut costs and store quality declined. Sephora’s brand suffered by association.

When Sephora found a healthier partner in Kohl’s with a better geographic fit and stronger operations, the decision to leave became obvious.

Ulta at Target: The Partnership That Looked Perfect But Wasn’t

When Ulta and Target announced their partnership, it seemed like a match made in retail heaven. Target’s massive foot traffic, combined with Ulta’s beauty expertise, appeared unstoppable. The reality proved more complicated.

The partnership generated approximately $451 million in revenue for Ulta in fiscal 2024, representing about 4% of Ulta’s total revenue. But Ulta’s CEO stated the royalty revenue was well below 1% of their net sales, under $113 million in actual profit to Ulta.

In May 2025, both companies announced the partnership would end in August 2026.

What went wrong:

Cannibalization killed the economics. Research showed that 14.5% of customers who shopped at Target locations with Ulta also visited standalone Ulta stores. The partnership was essentially moving sales around rather than creating new ones. Unlike Sephora at Kohl’s, where geographic separation created genuinely new customers, Ulta and Target had too much overlap.

The hybrid structure created problems. Ulta-Target used an unusual model where Target employees operated the spaces (like licensing), but Ulta received royalty fees rather than full sales revenue (losing control without eliminating risk). This created the worst of both worlds—Target took operational risk, but Ulta didn’t have full control over quality, and Ulta didn’t get the full revenue, but still got blamed for poor customer experiences.

Operational issues compounded the problem. Target locations with Ulta often suffered from understaffing, shoplifting problems, and limited product selection compared to standalone stores. The inconsistent experience failed to meet customer expectations.

When customers can easily visit a full Ulta store nearby and get a better experience, why settle for the Target version? The value proposition wasn’t strong enough.

Conclusion:

As e-commerce pressures traditional retailers, shop-in-shop models offer a way to maximize the value of physical space by transforming stores into multi-brand destinations.

The next time you grab a Starbucks at Target or browse Sephora at Kohl’s, you’re not just shopping conveniently, you’re participating in one of retail’s most sophisticated business models, where billions of dollars flow through carefully orchestrated partnerships designed to benefit everyone involved. When they work, that is.

The Cost Problem That Nearly Killed Them

Before understanding how Barnes & Noble survives, you need to understand what almost destroyed them. The traditional bookstore model had become financially unsustainable. Publishers were paying Barnes & Noble to display certain books prominently in stores—a “pay-to-play” system that seemed like free money. But there was a hidden cost: about 70% of those promoted books never sold and had to be shipped back to publishers. The company was bleeding money on shipping, handling, and wasted labor while cluttering stores with books customers didn’t want.

On top of that, Barnes & Noble was running stores like generic big-box retailers. Corporate headquarters micromanaged everything from inventory to displays, treating all 600+ stores identically. This required massive overhead—layers of corporate staff, standardized processes, and constant directives flowing from the top down. Meanwhile, stores were staffed primarily with part-time workers who received minimal training and had no career advancement opportunities, resulting in high turnover and poor customer service.

The Game-Changing Leadership

The turning point came when Elliott Management brought in James Daunt as CEO. Daunt, who had already orchestrated a successful turnaround at British bookstore chain Waterstones, brought an unconventional philosophy: run the massive chain like a collection of independent bookstores rather than a standardized big-box retailer.

When James Daunt took over in 2019, he made several radical changes that fundamentally altered the economics:

Eliminating the Pay-to-Play System: By ending publisher payments for prominent placement, return rates dropped from 70% to just 7% by 2024. This single change saved millions in shipping and labor costs while ensuring that shelf space was filled with books customers actually wanted to buy—increasing sales per square foot.

Cutting Corporate Overhead in Half: Daunt slashed headquarters staff by 50%, eliminating the expensive bureaucracy that had been micromanaging stores. This wasn’t just about saving salaries—it removed an entire layer of inefficiency. Fewer corporate mandates meant lower operational costs across the entire chain.

Empowering Local Stores: Instead of treating all stores the same, each location now operates with significant autonomy. Store managers curate their own selections based on their community’s preferences. This increases inventory turnover because books are more likely to sell, and it reduces the need for costly markdowns and returns. When stores sell what their customers want, profitability per location improves dramatically.

Putting Books Back at the Center

Daunt stripped away the clutter that had accumulated over the years. Out went the excessive gifts, toys, and tchotchkes that had little connection to books. The stores were redesigned to feel more like inviting literary spaces than generic retail boxes. Each location was encouraged to develop its own character, with some building strong children’s sections while others emphasized local history or specific genres.

The retailer became profitable after Daunt cut corporate staff in half and empowered local managers to make more decisions about their stores. Store employees were given greater autonomy, better training, and real career advancement opportunities. The company created ten levels of promotion at the local level, each with significant pay raises, helping to build a workforce of dedicated booksellers rather than transient retail workers.

The Revenue Streams That Make It Work

Barnes & Noble doesn’t make money the way people think. While book sales represent about 60% of revenue, the business model is more nuanced:

High-Margin Merchandise Mix: Beyond books, stores sell gifts, toys, games, and stationery—products that often carry better margins than books. These items draw different customer segments and increase average transaction values. A parent buying a children’s book often leaves with a toy or puzzle as well.

Café Revenue: The in-store cafés (typically Starbucks partnerships) serve two purposes. First, they generate direct revenue from food and beverage sales at restaurant-level margins, which are significantly higher than book margins. Second, they encourage customers to linger, increasing the likelihood of purchases. People staying 45 minutes in a store browse more sections and buy more items than those making quick visits.

Membership Program Revenue: Barnes & Noble’s membership program has grown from 1 million to 18 million members in recent years. Members pay an annual fee and receive discounts, but they spend significantly more than non-members and visit stores more frequently. The upfront membership revenue provides a predictable cash flow, while members’ increased spending more than compensates for the discounts they receive.

Online Sales: While the website generates roughly $349 million in annual revenue, online sales aren’t meant to compete with Amazon on price or speed. Instead, they extend the reach of the physical stores and capture sales from customers who discovered products in-store but prefer home delivery, or who want to order books that their local store doesn’t stock.

Looking Forward

The bookstore chain now has ambitious plans for continued growth. The company believes it can grow to well over 1,000 stores, up from just shy of 700 currently. While the company remains privately held and doesn’t disclose detailed financial results, the rapid expansion and strong sales figures suggest the turnaround is more than just a temporary reprieve.

Barnes & Noble’s survival story offers valuable lessons for retailers struggling with digital disruption. Rather than trying to out- Amazon by competing on price and convenience, the company leaned into what physical stores do best: creating experiences, fostering community, and offering curated discovery.

In an age of algorithms and instant gratification, Barnes & Noble proved that there’s still magic in wandering through shelves of books, stumbling upon unexpected discoveries, and being part of a community that shares your love of reading. The company’s resurgence demonstrates that even in the digital age, some experiences simply can’t be replicated online, and customers are willing to show up in person when those experiences are done right.

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