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Where Are They Now? Episode 8

Where Are They Now? Episode 8

Episode 8: PrettyQuick

June 3, 2021

Coco Meers’ career has centered on helping women look and feel their best. When she caught the entrepreneurship bug and looked for a pain point to solve in that space, she kept remembering a long flight delay she had when traveling between Paris and New York and how she wished she could spend the time getting an eyebrow wax in town – if only she knew what salons were good, nearby, and available.

Her idea for PrettyQuick was to offer a marketplace for booking beauty services much like OpenTable does for restaurant reservations. She chose to attend Chicago Booth so she could take the idea through the New Venture Challenge, where in 2011 she tied for third place and received $10,000.

She recalls presenting to the panel of judges, which at the time was overwhelmingly male, and feeling that they couldn’t quite identify with the problem.

“With the emergency of eyebrow and bikini wax booking, I didn’t get a lot of confirmatory nods at the time,” Meers, MBA ’14, laughed.

Meers, who sold PrettyQuick to Groupon in 2015, has since committed to helping improve gender diversity among startup founders and investors. She launched Rebelle Collective, an angel fund that invests in women-owned companies, and through that platform cofounded Equilibria, a premium CBD company targeting women.

In conversation with Starr Marcello, deputy dean for MBA programs at Chicago Booth and former executive director of the Polsky Center, Meers discusses the times PrettyQuick nearly failed, why marketplaces are so difficult, and why she made the tough choice to sell to Groupon.

Listen now on Apple, Spotify, Overcast, or wherever you get your podcasts.

Transcript

Coco Meers:

We pivoted again and again and again and again. PrettyQuick is the story of relentless pursuit of a vision across our whole team to create the solution that we all had in our minds. The truth is, we were met with headwind after headwind, after headwind. But I thought about all of these women out there who wanted to get a service done, but didn’t have an easy way to access that service. I thought about the inefficiency in this giant, giant, giant $70 billion industry and I was haunted by the promise of finding out a better way and building a way that would actually work.

Colin Keeley:

Hello, and welcome to the Polsky Center’s, Where Are They Now podcast. I’m Colin Keeley, and we catch up with founders from Chicago Booth’s New Venture Challenge on the show. Join us as we dive into their entrepreneurial journeys and get a look at the stories and struggles behind their success. This week, we have Coco Meers interviewed by Starr Marcello. Coco is currently the CEO and cofounder of Equilibria, which designs CBD products specifically tailored to women.

Colin Keeley:

Before that, Coco was the CEO and cofounder of PrettyQuick, an on-demand salon scheduling app that was acquired by Groupon in 2015. Starr Marcello is the deputy dean for MBA programs at Chicago Booth. Before the dean’s office, Starr was the executive director of the Polsky Center. Without further ado, here’s Coco Meers and Starr Marcello.

Starr Marcello:

Okay.

Coco Meers:

Hi, Starr.

Starr Marcello:

Hi, Coco.

Coco Meers:

Hi.

Starr Marcello:

All right. Thank you for doing this. I’m so excited to talk to you and go back on the journey of your entrepreneurial career and all the wonderful things you’ve learned along the way. Let’s just start, Coco, by going really back to the beginning. Can you tell us just a little bit about yourself? Where did you grow up? How did you get exposed to entrepreneurship? Where does it all begin?

Coco Meers:

Well, really, it all begins in the office of one Starr Marcello, but I’ll back up just a little bit to provide some context before that fateful meeting. But that’s not a joke, I am coming back to that day in your office, way before I was even a full-time student at Booth and with a previous New Venture Challenge company that I’d had the great good fortune to work with.

Coco Meers:

My whole career has been about helping women look and feel their best. It’s a mission and a passion that I’m drawn to. I grew up in Birmingham, Alabama, and after college, moved to New York City where I worked for L’Oréal in their consumer products division, on the Maybelline brand starting out in New York. Then I moved to Paris, where I worked in global innovation on the Garnier Fructis brand. So always in that consumer division, but working on really different categories in health, beauty and wellness.

Coco Meers:

When I moved back to the States, I fell in love with entrepreneurship. This was in 2009. So before I had started at Booth, and I was lucky enough to work for a … I did a little stint in venture capital. This was 2009. It was early, the iPhone was only two years old. But Nick Rosa with Sandbox Industries was kind enough to bring me on and say, “Hey, Coco, you’re a marketer. Surely you can go and you can help these portfolio companies figure out go-to-market, figure out product-market fit, figure out their marketing plans. I’ve got these founders who are developing some really interesting technologies, but they’re not thinking enough about market model distribution, sales marketing.”

Coco Meers:

So I said, “Sure, I’ll see how I can help,” and I was completely blown away by just the passion and the risk taking and the creativity of those founders that I got to work with every single day. That was my first exposure to startups. So I said, right then in there and the fall of 2009, that I wanted to go to Booth for business school, and that I wanted to start a company while I was there, which meant my decision to go to Booth was really made because of the New Venture Challenge and all of the great companies that I had seen coming out of it.

Coco Meers:

This was when Bryan Johnson, who became an investor in PrettyQuick, was building Braintree. This was when Matt was just having explosive success with Grubhub. So there was enough social proof in the program that I felt it warranted all of that excitement and attention and was literally the number one reason that I wanted to go to Booth.

Starr Marcello:

So, I want to go back just a little bit because you’re talking about exposure to startups through working in venture, doing a stint with Nick Rosa and helping companies find product market fit and do market sizing and using your brand management experience. Were you a business major undergrad? How did you get exposure and knowledge to all of these really critical pieces of business that relate to getting to know your customer?

Coco Meers:

that was why Booth was such a critical next step for me. I was not a business major undergrad. I was an English major and I had a certificate or a minor in French. Which prepared me for communicating. It prepared me for structuring ideas and thoughts. It prepared me for connecting with that consumer, but very little else. I credit L’Oréal. L’Oréal had an exceptional … I participated in a general management rotational training program there that exposed otherwise non-business brains and talent to that whole lifecycle of general management from conception of an idea all the way through and all of the cross functional pieces that would be required to make it successful in market.

Coco Meers:

That is the role of a CPG brand manager. It’s really an exercise in general management, which when you think about it and put on that startup CEO hat, that’s what you’re doing. You’re making sure that in this case, not your product line, but your company can be successful on time, on brand, on budget.

Coco Meers:

So no, I was not a business major undergrad. Yes, I had been lucky to have this general management rotational training, and P&L ownership experience, and be that hub of the wheel for some really big billion-dollar multinational brands. But I didn’t want to question my own financials. I wanted to be able to put together that business model for my own entrepreneurial pursuits from soup to nuts.

Coco Meers:

I might not be the CFO, but as the CEO, I wanted to understand all of the cross functional work streams that it would take for us to be successful. So for me, that was why Booth was so important, and why this curriculum in entrepreneurial leadership from the beginning all the way through to exit was imperative.

Starr Marcello:

So let’s go back to the 2009 area. So you are leaving your brand management career with L’Oréal, you are deciding to go to business school at Booth with the explicit purpose of starting a company. Now, of course, in order to start a company, you have to have an idea for what you want to build. Where did your idea come from for PrettyQuick, the company that you would start and take through the New Venture Challenge?

Coco Meers:

So as I mentioned, throughout my career, I have been drawn to this mission of helping women look and feel their best, and I live that through bringing products to market for them at the L’Oréal level. But when I fell in love with entrepreneurship and decided that I would dedicate the next phase of my career — what will probably now be all of my career, I don’t think you can dive in and climb back out. I’m in. But to entrepreneurship, I just began racking my brain about consumer problems that I had experienced personally.

Coco Meers:

I kept coming back to this time when I was in … I hadn’t thought about the story in so long now, but I was in an airport and I was traveling internationally and I had a flight delay. It was the first time in a long time where I had this found time and I wish that I had not been stuck in an airport because I said, “Man, if I were out and about in Paris or New York where I was heading at that time, I would use this time to book an eyebrow wax.”

Coco Meers:

I remember pitching this in the New Venture Challenge and staring at a bunch of judges who I’m not sure could empathize. Hopefully we’re all doing our part to level the playing field and increase at least gender diversity on the venture side, but that was the moment, that was the pain point. The salon and spa services space was a $70 billion category that didn’t have a marketplace. Travel had a marketplace, dining had a marketplace, transportation has many, many marketplaces, but beauty didn’t.

Coco Meers:

Now I know why. Because it’s extremely fragmented and nearly impossible to connect supply and demand in the space. But the consumer pain point was real enough for me, that when you wanted to book an appointment, it was next to impossible to know who was available, who was recommended, and who was close by, and with that information, seamlessly book an appointment. So that was the very beginning of a truly formative educational journey, which was my first startup.

Starr Marcello:

I want to come back to your experience pitching a company like PrettyQuick, targeted largely to a female market, to investors who are by and large male investors who you said might not empathize with the problem statement that you felt and articulated.

Coco Meers:

With the emergency of eyebrow and bikini wax booking, I didn’t get a lot of confirmatory nods at the time.

Starr Marcello:

Well, I went back and looked at our judging lineup, our pool of judges for when you pitched in, this is now 2011, for PrettyQuick in the New Venture Challenge. It was 84% male. And you’re right, it has changed over the years. But it has been very difficult for female founders to pitch businesses targeted at the female market, when those that they are pitching to may not understand the problem, or it may not resonate. I’d love to hear any thoughts that you want to share about how you thought about that when you were giving your pitch. Or advice you would give to other female founders who might find themselves in a similar situation.

Starr Marcello:

I also, by the way, have looked up just the recent stats from the year 2020, in terms of how much VC funding went to female founders. Still only at 2.2% of all venture funding.

Coco Meers:

I was going to say three. I thought we’d made a little more progress than 2.2. Wow. Let’s go back to the PrettyQuick pitch. Then, again, for me, that experience has informed some of the decisions that I have made post exit, and up until this point, which I’m really proud of and I consider it my responsibility to do what I can to help increase gender diversity on the financial side, as well.

Coco Meers:

So, I can’t even describe the amount of times where I would pitch the pain point and the consumer pain point and those early stage investors, they have to identify with the problem and the market. It’s more alchemy, at the early stages. You don’t have all of the unit economics there to look like, you don’t have all of the financials there to de-risk your thesis.

Coco Meers:

So it is a lot of understanding and trusting that as an early stage investor partner, you can get in there and you can help. And what I heard when I was pitching PrettyQuick was, “Let me take this. I’m going to run it by my wife and then I’ll come back and I’ll let you know what she thinks about her pain point.” So it was really, really challenging. There were other challenges.

Coco Meers:

I was expecting my first child when we were raising. So just so much … I learned to navigate through this and to just be very proactive and forthcoming about my childcare plans and my intention to stay with the business and see it through to a successful exit. But I learned I had to have other advocates and allies come to me privately and tell me that investors were concerned and that they needed to hear me say that I had a plan.

Coco Meers:

I thought that was implicit. I’m the CEO of a company, it is my fiduciary responsibility to get this all the way through to a successful exit for all shareholders but apparently, I needed to be more outspoken about that. So that’s advice that I would have for women raising.

Starr Marcello:

Thank you.

Coco Meers:

But then, so we got there. We got some amazing investors around us. There were lots and lots of phases of learning and progress and we can talk about those, but ultimately, after we exited PrettyQuick, I began investing in women and in consumer companies. So in markets and founders and models where I felt I could help. So I do have an angel platform called Rebelle Collective. I have, at this point, just over 10 angel investments in that vehicle, and I’m really proud to be able to not just try to help but to write a check myself. There’s plenty of other things, but I think it’s just critical that we all take action here and write checks where we can.

Starr Marcello:

Thank you. So let’s go back to building PrettyQuick. You mentioned wanting to support women. That’s a key theme in your entire career, supporting women and consumer products. One of the other things I will note about you is that you have worked with cofounders, largely other women who have helped you launch this company, both of the companies, and we’ll get to your second company soon. PrettyQuick, how did you find your cofounder?

Coco Meers:

Shreena, my cofounder at PrettyQuick, was a friend at business school. And I, just so lucky to have met Shreena and to have gone on this journey with her. And again, I credit Booth and the New Venture Challenge for putting us together. Shreena and I knew one another socially, but it was in Waverly’s Building the New Venture Class, when we were putting together a team just before we would have applied to NVC.

Coco Meers:

She was listening, she was observing, and she was just … I could tell there was a spark in her eyes and she was interested, thankfully. So Shreena was with the team since the very beginning in building the new venture. We went on lots … We had lots of phases and evolution together as cofounders. From the beginning, I think there’s just this like, we call it now at Equilibria that “can’t not do” moment. Where you’re so taken by a problem and the impact that you can drive if you could help solve it, that you just are obsessed.

Coco Meers:

There’s just this founder obsession that just courses through you, and I had that founder obsession from the very beginning. Again, it drove my decision to go to Booth and it drove my passion for the NVC process and all of the curriculum that I participated in at Booth. So Shreena came at it from a really different place and I think ultimately my passion and just drive to get us to the finish line and Shreena’s objectivity, and her more measured approach were really great pair and a really great complement.

Coco Meers:

So, Shreena took some time away from the business into that second year of business school, and it was only after she had graduated — I had not yet, I had decelerated to the part time program — but that she came back and joined the team again, full time. I think again, that I credit Waverly for putting us together. But now I look at the career that she’s made in consumer products. She’s just left ShopRunner, San Yagan’s ShopRunner and gone on to just some really amazing new product adventures, one after another.

Coco Meers:

PrettyQuick gave her that start and PrettyQuick, certainly our mobile experience in our product operations were what defined us and set us apart and prepared us for our exit. And wouldn’t have gotten there without Shreena. So I love the Booth brought us together.

Starr Marcello:

So you are so passionate about what PrettyQuick is setting out to do, creating a marketplace for salons and spas, creating seamless booking as it happens in other industries, but applying it to the beauty space. You got a strong cofounder with complementary skills. You built a great business plan through the New Venture Challenge. How did you actually build your first version of the product? At Booth now, we actually teach application development and Python and all kinds of technical skills that some of our entrepreneurs use in order to get an MVP up and running. That didn’t exist when you were here.

Coco Meers:

Yeah. So we only had wireframes going through the New Venture Challenge. So our first real product development happened that summer, where we were using proceeds from the NVC and from some other very early friends-and-family funding to build that first version of the product. I would say this was the first point — and again, they were many, many, many hard moments in the building of PrettyQuick post NVC. This was one of them.

Coco Meers:

That summer, we hired a dev shop, not a CTO, not a partner, but a contracted agency to build the first version of PrettyQuick. When you are matching supply and demand in a services marketplace, logic tells you that you need to own supply in order to serve it up to the demand side. So the first version of that product that we contracted was a better mousetrap.

Coco Meers:

It was a B2B scheduling platform that would allow salons and spas to manage their calendar online, away from pen and paper, or away from some of these anachronistic, old school systems that were built … I joke that they were built on MS-DOS, but they were built a long time ago. So that’s what we built that summer. I’ve told the story before, but, Starr, do you remember how many customers use that first version of the product that we built? Three.

Coco Meers:

So we had so much tailwind and conviction in the ultimate marketplace coming out of the NVC, but our first at bat failed and it was really, really, really hard. We’d spent all of our money, the heart and soul and emotional bandwidth of the team was gone. One of our founding partners exited the business at that time, after that first failure to achieve adoption by our beta customers.

Coco Meers:

Why did we fail? We failed because we built the wrong thing. Why did we build the wrong thing? Because we weren’t listening to our customers, and because our talent strategy was wrong. We went out and hired a big fancy agency who we pai a fee, a flat fee, to build a static thing. Rather than recruiting an exceptional technical cofounder who could iterate with us and MVP-style, learn as we go.

Coco Meers:

What we should have done was spent much more time on customer development, and if we had really listened to what our salon and spa customers were telling us, they didn’t tell us that they needed a better scheduling system. They didn’t tell us that they needed a better mousetrap. Rather, they told us they needed butts in seats.

Coco Meers:

We thought that we needed a scheduling system to seamlessly deliver them butts in seats, but we didn’t. So like with many startups, the first minute we knew that PrettyQuick was on to its next phase, and that this next phase really did have more commercial promise and a better chance of success, was when we hired a CTO and built a very lean software agnostic demand generation tool versus a heavy, hig- switching-cost B2B calendaring tool.

Starr Marcello:

So I want to dig into this just a little bit more. You spent your resources on this development shop. Sounds expensive. You’ve built the first iteration of PrettyQuick. You’re not getting the adoption from customers that you were expecting. How did you know when it was time to pivot? How did you know when this experiment has failed, this version is not going to go forward and we need to do something different?

Coco Meers:

We had a clear set of success KPIs against which we were measuring ourselves, and we failed the checklist. We just failed the checklist. Without that early adoption … This is what’s so hard about marketplaces, and even when we solved this version of the problem, which is … We’re talking about product-market fit, and we just colossally failed. Everything about what we built was wrong. It wasn’t what our customers needed. We didn’t earn adoption, which meant all of our engagement KPIs were just way, way, way off.

Coco Meers:

If they were way, way, way off on the supply side, then we didn’t even have the supply to serve up to the demand side. So we couldn’t even get to the step where we were testing customer acquisition and then take rate and then unit economics, and it just wasn’t working. That first time there were other moments where … We pivoted again and again and again and again.

Coco Meers:

PrettyQuick is the story of relentless pursuit of a vision across our whole team to create the solution that we all had in our minds. But the truth is, we were met with headwind, after headwind, after headwind. This was just the first headwind, and it honestly was really obvious, Starr, it was obvious that we had to do something different, or pack up and go home. And we actually did pack up and go home.

Coco Meers:

Right after that first summer, Shreena went to go pursue other paths at Booth and I went to go work for a venture capital firm that summer in Paris. And it should have been a dream job. I’m a Francophile. I love Paris. I was back there working again. I was working for a consumer fund, Highland Capital. But it was a distraction for me. Every single morning, I woke up and went to my office in Paris, and I thought about PrettyQuick. And I thought about this $70 billion industry that didn’t have a marketplace.

Coco Meers:

I thought about all of these women out there who wanted to get a service done, but didn’t have an easy way to access that service. I thought about the inefficiency in this giant, giant, giant $70 billion industry and I was haunted by the promise of finding out a better way and building a way that would actually work. I was inspired, it was coming back to it and getting the band back together one more time because of this obsession that I had. Again, Booth to the rescue, because I sat down with Matt Maloney, and Matt told me all about the first … Once they’d gotten past just posting the restaurant menus, and they had actually generated demand already, but how are they going to connect supply and demand, and that first version of breaking through by sending a fax, and leaning into the existing customer behavior of those quick-serve restaurants, putting the fax up on the line, and that old school piece of paper actually working really well.

Coco Meers:

So their system, powering on anachronistic technology, as simple as the fax, led us to think about, well, could demand and appointment booking on our side power something as anachronistic as the phone. Because as old school as the phone is, it’s what salon and spa front desk staff are doing day in and day out. So that inspiration from the Booth network initiated the phase two of PrettyQuick, which set us on our way for real, through which we found real product market fit, which was: what if an appointment booking could set off a suite of real time alerts through the phone, through hardware that lights up in the salon, through SMS. Really whatever communication channel the salon or spa needs, let’s just bring them demand and finally, we were able to do that in take two.

Starr Marcello:

So you’re obsessed with this market opportunity. Having another job in VC doesn’t dissuade you from coming back, getting the band back together, taking another pass at PrettyQuick. Was it difficult to convince the team to come back together and dive back into PrettyQuick with a new model?

Coco Meers:

It was really difficult and in many cases, it was a different team. I had to earn Shreena’s trust again, and she needed to see the traction there herself. She needed to see that the engagement metrics were working and that finally we had created a solution that would allow us to bypass this supply side aggregation issue because we didn’t need the supply side.

Coco Meers:

We could just, in real time, check for availability, and we got better and better and better and better at that through all sorts of algorithmic and AI predictive capabilities. We were really creating availability that we didn’t necessarily know, but that it was high confidence enough that we could go ahead and book it. So it was really difficult to get the team back together, but also, sometimes you just need to start over with different teams.

Starr Marcello:

So you’re making positive progress, learning from earlier mistakes. Was there a moment that stood out as you were making this progress, that stood out to you as we might be on the path, or perhaps have achieved product-market fit?

Coco Meers:

Every single day, we would stare at our dashboard, just all day in, day out. Again, we’re just obsessed with the results of all of this hard work. Again, marketplaces are so challenging. You’ve got to get supply right. We had to be able to serve up… It doesn’t sound that that hard, to be able to just book an appointment. But to have real network effect and create a marketplace that demand would even be interested in, we had to first sell into supply. What does that mean?

Coco Meers:

That means going around and getting every single nail salon and every single hair salon above a certain quality threshold, and blow out bar and wax studio — not in a neighborhood, but in four blocks in a neighborhood, because density is so important in local. And if you don’t have the right salons and spas on board, you might as well not even try to connect supply and demand or pay for demand.

Coco Meers:

So, we’d work so hard to sell in to hyper local, dense, high-quality supply, who was contracted with us, who understood how to use our technology. That means all of their team was trained on our demand alert system, one. Two, we’d worked so hard to get the word out. We all know how hard customer acquisition is. Every single team thinks customer acquisition, if you build it, they will come. It never works out that way. It’s always more expensive to acquire a customer than you think.

Coco Meers:

So we finally figured out how to aggregate supply, how to get paid from supply, and then how to market in a real time way to demand and get women like Starr, like Coco, like Shreena. Oh, we’re PrettyQuick, having downloaded the app, opening it up and thinking of us when they were in that moment of need.

Coco Meers:

Then was the moment that the product had to take over. So we would look every single … We would stare at the dashboard to see OK, what requests were coming in? Was the salon going to respond on their own? Was the product working? And how can we close that gap, basically. So it was just staring at those metrics every single day, and seeing where the problems were.

Coco Meers:

Finally, we were seeing numbers that were really, really exciting. We were seeing that when customers were booking, the salons — on their own without us needing to step in — were responding. Then they started to respond more quickly, and then it felt like OpenTable because it was instant, because those salons trusted that this was real demand, understood how it worked and the customers had a really great experience.

Coco Meers:

So once the customer experience was delightful, there was no wait time, and it was always a confirmed, accurate appointment, then we could just focus on increasing throughput and getting more and more people through the funnel. But those first moments of, is this thing going to work, were just the most satisfying, and that was the massive, massive hurdle to jump over given how fragmented the salon and spa industry is.

Starr Marcello:

I am interested, before we get to the momentous time when PrettyQuick was acquired by another Chicago, big-name company that everyone will know. You mentioned before, there were many challenges. Aside from the first iteration, failing, having to rebuild your team, taking time away, coming back, figuring out what would delight your customer, are there other challenges or some other significant event that you had to overcome in the process of getting PrettyQuick to the point of its acquisition?

Coco Meers:

I’d offer two more, and the second one will lead naturally into the acquisition and a strategy behind it. The first one, once we had product-market fit, once we had the right team, all motivated around this vision, the next hardest lesson for all of us to learn, and me most especially— I take responsibility for not being focused enough — is just how important it is to really, really trim down, in some cases, even maybe sacrifice some of that grand vision, and focus, focus, focus.

Coco Meers:

Here I was, I had this vision in my mind of a truly OpenTable for the industry, for the entire industry. But there’s sub industries within the industry, there’s sub industries within the sub industries within the industry. There’s nail salons within these loyalty-driven categories like blowouts and nails and the commodity services. Then there’s much more loyalty-driven services like cut and color.

Coco Meers:

There’s other much more high-consideration categories as well when we consider med spa and some of the next-gen facials and things like that. So on the product side, I didn’t focus us soon enough. I could have done a better job at not boiling the ocean and being all things for all people, but really honing in on that segment of the salon and spa market that was most ripe for a software agnostic booking tool. Turns out that was really nail salons and other commodity-driven services like blowouts, in some cases, waxes. I could have gotten us to that point sooner.

Starr Marcello:

Well, Coco, why do you think that is? Why do you think it was hard for you to recognize that benefit of focusing and getting there sooner?

Coco Meers:

I think I was in love with the vision and I think, as a first time founder, the vision … Slowing down to speed up, it felt like I was departing from the vision. And PrettyQuick was more than just nails. How could it possibly be just nails? I’m only speaking in this instance about the category of services. There’s also just the platform area focus as well.

Coco Meers:

We had a web product. We were live on desktop, and we had a responsive web product, of course, for mobile. But then we also had an iOS app, and it was just to be really successful … We also had an Android app. To be really successful on four platforms all at once before your model is really working and certainly pre-scale, that was also too much.

Coco Meers:

Again, think about all that we were trying to do. Marketplaces are so hard. Founders really need to be honest with themselves about the capacity that they have, and the limited resources that they have and where can they start small, prove something small, and then add on over time, and realizing that that’s not failure, that’s not giving up on where you’re going. It’s just acknowledging that you’re going to get there sequentially and not do it all at once.

Starr Marcello:

Tell me about the second challenge.

Coco Meers:

The second challenge was model. And also being honest with yourselves, as founders and as builders and as creators, about whether or not the business model is working. There were some really tough times when Shreena and I looked at each other and we said, “This isn’t working.” As we’ve talked about, I feel like I’m a broken record, but marketplaces are really hard.

Coco Meers:

You’ve got to sell into the right supply. Not just some of it, but most of it. Not just in one neighborhood, but in a couple blocks and then again, and again, rinse and repeat. Then you’ve got to have the perfect product in the middle to connect supply and demand, then you’ve got to go and you’ve got to acquire demand. And turns out our customer acquisition cost at PrettyQuic, was $40. And our AOV was also about $40, and we had a 20% margin.

Coco Meers:

So we were making eight bucks a pop. So to break even on that customer acquisition cost, just really simple unit economics, we had to bring them back five times. Name the things that you do in your consumer life five times. If you don’t have the best, most addictive, totally pain pill for that issue that you had, delightful, incredible experience the first time, why would you go back a second? And why would you go back a third time? You’re definitely not going to go back five times.

Coco Meers:

So as we got more and more focused on delivering a truly delightful, best-in-class consumer mobile experience on iOS only, and only in commodity categories, very, very focused. Once we started to do that, we started to see that we were earning frequency. And they weren’t coming back one and done, thank God, and they weren’t coming back just two and three, but we were earning our way into these profitable cohorts who were coming back monthly and our lifetime value was really exciting.

Coco Meers:

But it was only after significant cost of sales, significant customer acquisition cost. So the cohorts started to work and they did work. Then we started to expand, we expanded to six cities nationwide, and the model did ultimately work. But it just took years and years and years of blood, sweat, tears and very little sleep and heart and soul poured in, from not just me but an incredible, incredible early team that we had to get us to the point where those cohorts were working.

Coco Meers:

They were working at the unit economic profitable level, not necessarily at the full P&L level. It’s not like we had EBITDA. So I just urge founders to really be honest with themselves and ask themselves, is this working? Is it too hard? Are there ways that you can make it easier, faster, like I should have, and focusing more myopically sooner.

Starr Marcello:

So in 2015 you get acquired. PrettyQuick gets acquired by Groupon. Tell us about that. How did that happen?

Coco Meers:

We were out raising because our cohorts were working. We had unit economic profitability. We had figured out a really smart way to circumvent that cost of sales that I was talking about. We were publishing salons and spas and sending them business before we were actually contracted with them, which meant we were able to shorten our sales cycle and increase our local footprint literally overnight. It was really, really exciting.

Coco Meers:

So we had figured out these fundamental marketplace dynamics that had held us back for years, and it was really great to finally be in a sweet spot and be growing and scaling. We did require follow-on funding in order to hit those next levels of growth. So while we were out there raising, Groupon Corp Dev came to talk. And at first there just wasn’t a fit.

Coco Meers:

We were pull, we were high quality, we were booking. They were push, they were discount, discount, discount. They were voucher booking only. So it was only after subsequent meetings with the team that I began to learn more about their focus and investment in the health, beauty and wellness space. What I learned was that Groupon had a billion-dollar P&L just in health, beauty and wellness, just in this very specific space where we played. And they had 55,000 customers already and they had something like 30,000 salons and spas already.

Coco Meers:

So at first I thought, this is not a match. But when I learned more about the corporate strategy behind their vision for their own health, beauty, and wellness, to evolve it beyond just vouchers and just discounts and to elevate it to convenience and booking, then I started to think, wow, there really could be a fascinating and really accretive strategy here.

Coco Meers:

So it began with just month-long conversations around brand strategy and product strategy that were very exciting to me, and ultimately we were presented with term sheets on the investment side, as well as on the M&A side. That was a hard choice to make, but ultimately, on the M&A side, it was a great outcome for everybody. And it felt like we were leapfrogging because we didn’t have to go out there and again, acquire the salons and spas and again, acquire the users. We had them, all we had to do was leverage those assets smartly through a product and brand strategy that made sense, and essentially, we could turn a billion-dollar business into a $2 billion business.

Starr Marcello:

So you had two exciting paths to take potentially. Raising more money from investors who wanted to back you, who gave you term sheets. Or being acquired by Groupon. How did you make that hard decision? Were there advisors who were particularly helpful in thinking through the options and choosing the one that would really be better for you and for PrettyQuick?

Coco Meers:

I’ve been really lucky to have incredible advisors and confidants along the way. And yes, I had hours and hours and hours of conversation with a range of mentors and advisors when facing this exciting but scary choice. But at the end of the day, honestly, everybody looks at a trade-off with their own perspective and bias. I had many advisors say, “This is working, Coco. It just started to work. Go for it. You can do it. You can take this all the way. Raise this money, then the next round, then the next round, then the next round. Look at all these marketplaces that are getting traction. You can do it.”

Coco Meers:

Then I had others who were a little more in the weeds and trenches with me, who saw just what I was seeing. Some of these realities, these cold, hard realities that I’m sharing here today, that were tough. The cost of sales … Still as much as we had perfected the product and the user experience to the best of our ability, there were plenty of merchants in whom booking wasn’t seamless.

Coco Meers:

That first experience after we’d worked so hard to get the salon and spa onboarding and acquire that customer, the first experience was not a good experience. The salon did not accurately capture the booking or something happened with payment or our predictive algorithms failed. So at the end of the day, Shreena and I had to make the calculus on our own based on the data that we had and what we knew about our chances of success, given the marketplace dynamics and all of the friction that existed there, as well as the imperative of lifetime value because of low margin.

Coco Meers:

So though we were so proud of all of the progress that we had made, and many of our competitors were out of business by this point, it felt like the right strategic move to us and just a total win to be able to take money off the table and go and build this billion dollar vision without having to acquire customers or users from scratch. It was a really fun first year post exit because we had worked very hard in the M&A process to ensure that PrettyQuick would be independent for the first year.

Coco Meers:

The Groupon executive team was very supportive of that and they were listening and learning and watching these convenience-based use cases that they had a real vested interest in as well. So I really credit the executive team with that patience. It’s not easy to turn a battleship. It’s not easy in a publicly traded company to take a risk on new technologies and new models. So it was a really exciting first year to be able to be entrepreneurial, but in a resource rich environment

Starr Marcello:

Coco, what happens after that first year, post exit?

Coco Meers:

So there’s always a honeymoon. That was the honeymoon. Post first year, we came there, we exited to Groupon because we believed that our technology and our brand could turn a category, a billion-dollar category, but with declining frequency, that we could turn it around. Because that declining frequency, if we were to achieve the frequency of PrettyQuick and generate that customer behavior at scale, we really are talking about billions of dollars of top line.

Coco Meers:

So it was a very, very, very exciting challenge and we were up for it and that was the whole strategy of the deal. So we knew going in that it would be really hard, but that success looked like reinvigorating this billion dollar business with our technology and our brand. So, we’re one year into it and the team is incredible.

Coco Meers:

Groupon has put in amazing resources behind this initiative. We had real cross-functional collaboration, which is hard in a big matrixed company to get back to those cross-functional org designs and P&L structures. It wasn’t easy and again, there was a lot of leadership that was really supportive of the experiments that we were making. So we had product, we had sales, we had marketing, we had design, we were all together trying to figure this out.

Coco Meers:

How are we going to put this technology on top of this giant monolithic tech stack and iterate in the way that we needed to? So it was after that first year, we were all really excited about the possibility of combining our technology and our brand and our customer promise and putting that on top of this monolithic tech stack.

Coco Meers:

We had a really awesome cross-functional team with tons of resources, all dedicated around this one mission and we all really believed in it. But it’s just so hard. So after year one, we learned the hard way that brand strategy and product strategy are really complex. And at the end of the day, was Groupon ready to stand for something other than discounts?

Coco Meers:

Discounts have really high margins associated with them and they had built a really big multi-billion-dollar publicly traded company with earnings to report to Wall Street. So, cross-functional collaboration, revenue model, brand strategy, these are all really, really, really hard challenges around innovation and innovation at scale, but ultimately we couldn’t move through. We couldn’t move through in a way that made it a huge success, the success that we had all dreamed of it. And it was really, really tough.

Coco Meers:

We did give it a great effort. PrettyQuick became BeautyNow. BeautyNow had a really great run in, I believe it was six markets nationwide. Some incredibly talented sales professionals selling it into luxury salons and spas across the nation. Really awesome engineering and product efforts to integrate the booking technology into some of these backends like Booker, like Mindbody online.

Coco Meers:

So we made a ton of progress, but a cross-functional bet like that just, it requires steadfast commitment from the highest level to really see it all the way through to completion. At the end of the day, was it cannibalistic? Sometimes innovation requires risk and true evolution. And that requires brand and product strategy that are a little more malleable than they were at the time.

Starr Marcello:

I wonder if you can think back to your frame of mind, how you felt at this point in your career. You’re now working for Groupon full-time. Groupon’s a huge company based here in Chicago. Did you know at that point that your entrepreneurial career was not over, that you would jump into startup life again at some point?

Coco Meers:

Yes. Again, I credit the New Venture Challenge and my experience at Booth and the resulting four years of just truly formative, foundational startup building and creativity with just this love that I have for it. It’s a lifestyle choice. It’s a frame of mind. For me, work and life are just totally integrated and we exited to Groupon to return value to shareholders and continue building. But once that building was over, I needed to get onto the next chapter of building.

Starr Marcello:

So tell us what that was. When you’re ready to leave Groupon, what do you do next?

Coco Meers:

I left Groupon in February of 2018. So at that point from the NVC in 2011 to finally leaving the acquired company in 2018, it had been seven years. Seven years of one market, one model, one team. It really was a very, very, very intense professional experience with so many cross-functional life lessons. I’ll just forever ever, ever be grateful for them. But what follows that? I had no idea.

Coco Meers:

All I knew was that I wanted to get back to my true love of building companies. For me, that is the ultimate act of creativity. It is so exciting every single day and I knew I wanted more of that in my life. So my first step towards building was to officially form an angel vehicle of my own, and as I mentioned, I’m an active angel investor in women and in consumer companies.

Coco Meers:

I thought at first that I would serve as a CMO or CEO for hire additionally and launch a studio model where in addition to equity and cash, founders would work with myself and my partner at the time and we would help build and construct the business alongside the founder to get it to that next level of readiness for follow-on funding.

Coco Meers:

Now looking back, Starr, what I can say about that model is that I was looking for my next startup. Because I love building companies from the ground up and I wasn’t ready to just be an investor. So I was looking for a hybrid approach of investing and advising. And it worked because a few months into that flow of meeting with founders, not just to passively write a check, but to write a check and to help, I met my now cofounder … We met.

Coco Meers:

We’ve worked together in the past. Marcy was actually … After that first product development agency, Marcy’s firm was the second one that we brought on with whom we worked in a really iterative, awesome way. Female engineer, totally understood the problem space of salon and spa booking. So we brought products to market together before, but it was through Rebelle that as an investor and as an operator, we were able to come together and concept what I’m now working on, which is a premium CBD company for women called Equilibria.

Starr Marcello:

So you’re going to start Equilibria with a cofounder who you’ve had a successful working relationship with in the past. What did you learn from PrettyQuick that you wanted to apply to Equilibria? What mistakes did you want to avoid? What did you do differently in those very early stages of starting a new venture?

Coco Meers:

The story of Equilibria to date is informed in almost every way by the lessons that I learned through PrettyQuick. I know we hear this all the time in the startup community, but it really is true that we learn the most when we mess up, when we make mistakes, when we fail, when it’s not going well. And PrettyQuick was a success, but it was a success built on the backs of years and years and years of failures. So with Equilibria, there was a clean slate.

Coco Meers:

The most important lesson that I applied from the very beginning was a very disciplined approach to unit economic thresholds, that if we did not pass, we would not proceed with the business. I learned the hard way with PrettyQuick, as we’ve talked about how incredibly hard it is to earn frequency and to earn lifetime value.

Coco Meers:

So I was looking only at either recurring revenue models or at models that had gross profit profitability at the first transaction. That obsession with unit economic health has served us very, very, very well at Equilibria. It’s allowed us to scale very rapidly with very little paid in capital because we don’t require outside funding.

Coco Meers:

We seek investor partner relationships opportunistically because of the strategy and the counsel and the help with scaling and all the rest of it, but it’s not a requirement. It’s opportunistic. So that’s the first thing, is just that discipline around the model, which has been revolutionary for our team. It’s allowed our team to live out our mission.

Coco Meers:

Our mission is to restore balance to the lives of women, similar to the mission at PrettyQuick, still in that same vein, but we have the freedom to control our destiny. Right now we do that through personalized premium cannabis routines, and we’ll continue to serve her and her needs to, again, earn her trust and make sure she’s coming back to us again and again and again in the way that is best for her, not necessarily best for our investors.

Starr Marcello:

I’m curious just about you as the CEO now for Equilibria and all that you’ve learned from your entrepreneurial journey to date. What kind of a leader are you? What does leadership mean to you at this point?

Coco Meers:

With PrettyQuick, as we’ve talked about today, I really had such drive to get to that end goal. In my mind, I could clearly see the vision, the destination, which was, enter analogue, but call it OpenTable for salon and spa booking. I think that served us well at PrettyQuick, probably because of all of the headwinds and the complexities and the nuances of dual-sided marketplaces that we’ve talked about today.

Coco Meers:

So having that vision as the North Star, I do think was essential and we all believed in it and we were all so passionate about it together and it’s what drove us through to ultimately the business working and then exiting. At Equilibria, I can be less prescriptive about where we’re going, because what we are doing is working now. So it’s really more about the journey and not the destination.

Coco Meers:

It’s about recruiting best-in-class subscription, direct-to-consumer tele-health cannabis talent, who I can empower to bring their experience to the table and entrust them to set strategy. Because we don’t have to push so hard all the time to get to this phantom place that we might never get to. We’re already there. It’s already working. We’re serving her. We have product-market fit. The unit economics are working.

Coco Meers:

We’re scaling really, really quickly, 11 X growth, 2020 over 2019. So having sat in a leadership seat where, I don’t want to say it’s easy now, but it is a lot easier. It is a lot easier because the market is ready and the model makes sense, and there’s just less friction and there’s less headwind. So it’s going to be interesting to see where we go with this because there’s no clear end point in mind.

Starr Marcello:

That’s wonderful. I want to just bring us back before we end to the New Venture Challenge. I was struck in listening to you describe your journey at the different players who helped you along the way, and the gratitude that you have for them. People who were affiliated with the New Venture Challenge and who appeared at different points to help you with your PrettyQuick journey and perhaps now with Equilibria.

Starr Marcello:

You mentioned Matt Maloney, the founder of Grubhub, helping you understand marketplace businesses and sellers and connecting sellers and buyers. You mentioned Bryan Johnson, who was one of your investors in PrettyQuick, the founder of Braintree. Reflecting on your New Venture Challenge experience, what stands out the most to you from those early days of building PrettyQuick at the concept stage to where you are now in your professional life?

Coco Meers:

Throughout the 10 years that I’ve been lucky enough to be affiliated with the New Venture Challenge, I just want to stress that it doesn’t end with the New Venture Challenge. There’s not a year that’s gone by where I haven’t reached out to one or dozens of my Booth and NVC and Polsky community members for help. For help with a business problem, for help with strategy, for help with funding, for help with recruiting.

Coco Meers:

Now I hope to be able to reciprocate that through judging, through advising, through investing in the companies that are coming through the New Venture Challenge. It truly is a community that keeps on living and serving its members. It’s not just about the competition and it’s not about the first company that comes out. It’s about creating founders and investors and facilitators of the startup ecosystem that can just continue helping its community members thrive.

Starr Marcello:

Coco, when you think back to our first meeting, before you were a Booth student, when you were working with Nine Naturals, another New Venture Challenge company that came out of the program, helping them out, what would you have told today’s Coco? Could you have imagined the path that you would have found yourself on? What advice should I have given you on that day?

Coco Meers:

I honestly don’t think I would have changed a thing, Starr. You gave me advice that day to apply to Booth and come and check out all that the New Venture Challenge had to offer. And my interest was so piqued in what Grace and her team had built and their boldness of vision and bravery around the entrepreneurial journey. I was in, hook, line and sinker, and that advice was the right advice. It truly changed my life.

Coco Meers:

Going through the New Venture Challenge gave me the confidence to pursue my entrepreneurial dreams. Even though I didn’t have an entrepreneurial background, I had a very traditional CPG general management background before this, but it gave me the confidence that I needed to just relentlessly follow that dream and prove to myself that I could do it. That I could motivate a team, that we could accomplish something that was bigger together than any of us could apart. And it’s working.

Coco Meers:

So I honestly wouldn’t have changed a thing there. There’ve been really, really hard moments. Moments when I didn’t think I could make payroll, moments when I thought the business should shut down, moments when I was concerned about our long-term viability. There’ve been dark days, but in those darkest days, I learned more about myself and more about strategy than I could have learned in another MBA program.

Coco Meers:

So I wouldn’t have changed a thing. I’m so grateful for the entire journey and all that NVC has given me, including this second company, as well as the investment opportunities that I now have to promote current participants.

Starr Marcello:

Thank you. So 10 years ago, this week would have been your first week of the spring quarter, going through the New Venture Challenge, week one of the NVC class. That was 10 years ago. What are you excited about for 10 years from now?

Coco Meers:

I just want to keep creating and keep building. I am confident that Equilibria will continue to grow and ultimately likely sell. Then I’ll have it another opportunity to advise and invest and listen and learn and I just want to keep helping the community. Then when the time is right, jump back in and keep on riding this train. It’s so rewarding. It’s so fun. So I hope 10 years from now, there’s just another cycle of creating and giving back.

Starr Marcello:

My last question. Is there anything that you think we can do at the University of Chicago or within the city of Chicago to support more entrepreneurs like yourself?

Coco Meers:

Another Boothy, Brian Luerssen has, with some other awesome operators in town, recently started LongJump. I do think that just the vision around writing the first check and around curating the deal pipeline to find those founders who might not have the network that I had, or might not be positioned to share their story in exactly the pitch perfect way, it is essential that we as a community go out there and find some of those underserved and overlooked founders with racial diversity, gender diversity, sexual orientation diversity. I just think that we all have a responsibility to increase the diversity profile among the founders who are getting attention.

Starr Marcello:

Wonderful. So I said, last question, but I lied. My last question for you is, are there any questions that you wish I would have asked?

Coco Meers:

I don’t think so, Starr. I don’t think so. It’s so fun sitting down with you and just reflecting on how meaningful the New Venture Challenge was to me, and I know is to hundreds of would-be participants and participants and their teammates and their investors and just this whole ecosystem that you touch every single year. It’s so impressive. Thank you so much for all your leadership here. It’s really exciting to see all the fruits of your labor. I hope that you’re so proud looking at what 10 years has done.

Starr Marcello:

Well, I am so grateful to you for being a role model. And you won’t even realize it, but when I meet with teams of female founders now to give them support and advice, I think of how well you did pitching to that audience of mostly male investors and building a real business for a female consumer and continuing to do it again and again through your angel investing and through your focus. So you’ve been truly a role model for our community. And for that, I’m very grateful.

Coco Meers:

Thank you so much, Starr. Thank you.

Colin Keeley:

All right. That is it for this episode. If you could do me a huge favor really quick, please go to your favorite podcasting app, often Apple podcasts, and rate and review our show. This gets the show recommended to more folks, and it also helps us get bigger and better guests for you to listen to. Take care.

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