Maegan Scarlett is the CoFounder of Overtone, an innovative hair coloring solution that uses leave in conditioner as the primary mechanism for gently and naturally colored hair. Her story in starting the business is the true definition of entrepreneurship: solving a problem that you have yourself, and bootstrapping it into a massive global business. She is a true Ladyboss and eCommerce Rockstar.
After starting at the kitchen table, and through the ingenuity of creating a hair coloring system that didn’t exist, it has been growing for nearly 5 years at incredible rates and spans 3 locations and employs over 50 people. Maegan brought the science and marketing to said table and recruited a creative cofounder to help her bring the brand to life visually and they were off to the races.
Maegan (who also knows how to code) built out a website, and the two launched a pre-sale campaign after working out the product formulations and getting some samples and quotes from suppliers. They took early prototype photos and videos taken, filled the bottles in their kitchen, and launched with only $7,000 investment to a market that received the product even greater than they had anticipated.
To this day, they have bootstrapped the business the entire way, never taking any outside capital to grow the business, and didn’t even use direct response marketing tactics until just a couple of years ago. They built an incredible brand using fantastic images and videos on Instagram, and through the use of influencers on the platform
When you are growing based on cash flow alone without taking in any outside capital, you can run into some tough spots with inventory financing alone. Maegan said a key to their bootstrapping success was bringing in a fractional CFO to help them utilize their capital most effectively. Bringing on finance expertise is a really important lever for growth in eCommerce because it allows you to identify your best growth opportunities.
I think a lot of eCommerce entrepreneurs can relate to the difficulty in having enough cash on hand to invest in acquisition and growth, while also keeping enough inventory on hand to meet demand. This is where having financial guidance comes in VERY handy. When you can’t afford to hire a full-time CFO, consider hiring a fractional CFO who can work part-time with you. Maegan used the eCommerce Rockstars strategic partner AVL Growth Partners.
Maegan and the team manufacture their own product in-house, which is quite rare in eCommerce, but when you have a really innovative product, is sometimes necessary. Maegan also found that keeping the marketing and acquisition in-house was also crucial to holding the direction and integrity of the brand. This also allowed them to stay lean and mean on cash-flow as opposed to hiring an agency for marketing.
Maegan and her cofounder settled on Denver as the best place to build out their marketing team and for the two of them to “meet in the middle” of the country and finally live in the same city. Their team is spread across three locations in two cities:
- Marketing, Finance, and Tech live in Denver
- Customer service, operations, and manufacturing are out of their 2 Tuscon locations
Because their product is very unique, their best overall strategy for customer acquisition and growth has been to focus on educating customers first and selling second. When you have a product that everyone is familiar with and there is a lot of competition around then you need to excite people and give them reasons as to why your product is better. When you are unique, you have to really push educating people on what the product is, and how it’s different than the indirect competition.
Another important key in the Overtone bootstrapping success was ensuring that they are profitable on a customer’s first order, which allowed them to continue to accumulate cash for growth. On top of this, nearly half of all monthly revenue is from returning customers, which when you aren’t paying for acquisition costs, represents a significant bump to company profit.
Overtone has a very strong commitment to their brand and the culture that it has built, which is a massive driving force in not only brand equity but also in repeat customers and brand loyalty. They have even got very important feedback from customers that have lead to launching new products successfully.
Customer service has been a vital area of focus for Overtone because of how important education is to them. Because of this, they are constantly looking to optimize the way they deliver this education, and always need to make sure that their agents can be really good brand ambassadors. All agents get training to become expert level “colorists” to deliver value at every step to prospective and current customers. This process includes allowing prospective customers to send in photos of their hair to get professional opinions from Overtone without having to go into a salon.
The customer experience focus even extends to the way that Overtone communicates with its customers and audience on social media. For example, they don’t use gender-specific pronouns unless the user refers to themselves with one. These little details contribute to a larger and more cohesive brand voice and personality that compounds over time.
Maegan also believes that the first impression with the product and the packaging is really important to the customer experience. This is particularly important for most brands who sell solely through their website, as before a customer receives their order, they have never experienced the brand in the physical world, only seen it in photos and videos.
“Intentional Introspection” has been a key to maintaining a great lifestyle while also building a big and impactful business. This includes meditating regularly and caring for herself in ways that free up her mind to focus more on the bigger picture, and the things that really matter rather than getting caught up in the little things that we all get hung up on. This coupled with a great coach allows her to put these little annoying things in perspective, and push past them to what really matters: enjoying, and building a great company at the same time.