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Recent Founder Deep Dives
Estée Lauder is an American icon.
Today, her namesake company is worth more than $50 billion.
She built her beauty empire face by face.
For today’s piece, I read the incredible book Estée: A Success Story, which Estée published in 1985. Read is an understatement. I devoured the book in a day and a half, drawn in by Estée’s amazing story and fascinating insights into how she built her company.
Born Josephine Esther Mentzer, on July 1, 1908, in New York, her nickname was “Esty” but by the time her father registered her for school, a teacher had written “Estée” instead, a name she would keep.
Estée’s interest in beauty came from her mother, who was ten years older than her father.
The age difference fueled her mother’s desire to invest in her beauty, something Estée not only took note of but became obsessed with:
My very first memory is of my mother's scent, her aura of freshness, the perfume of her presence. My first sensation of joy was being allowed to reach up and touch her fragrant and satiny skin. Her hair didn't escape my attention, either. As soon as I was old enough to hold a brush, l'd give her no peace.
This obsession went beyond her mother’s beauty too:
All of this annoyed my father considerably. "Stop fiddling with other people's faces," he'd say.
But that is what I liked to do touch other people's faces, no matter who they were, touch them and make them pretty.
Before I'm finished, I'll set, I'm certain, the world's record for face touching ... and I’m nowhere near finished, I might add.
Estée was “mesmerized by pretty things and pretty people” and “dreamed of being a skin specialist and making women beautiful.”
Remarkably, she found what would become her life’s work very early on and got her first taste of business from her father, whom she said she also “Inherited his genes for high standards.”
My father's hardware store was my own first venture into merchandising. I loved to help him arrange his wares. My special job was creating window displays that would attract customers. How I loved to make those windows appealing!
Through working at her father’s store, Estée also received an education in sales and business more broadly:
There may be a big difference between lipstick and dry goods, between fragrance and doorknobs, but just about everything has to be sold aggressively.
I honed my techniques as I played with the wares at my father's store and at Plafker and Rosenthal. I whetted my appetite for the merry ring of a cash register.
I learned early that being a perfectionist and providing quality was the only way to do business.
Just about everything has to be sold aggressively.
That stood out to me, is a great reminder for entrepreneurs, and it’s something Estée embodied throughout her life.
While Estée learned how to run a business by working for her father, what she learned from her uncle set her up to build a beauty empire.
Becoming Estée Lauder
Estée’s uncle, a skin specialist named John Schotz, came to visit when she was still in high school, and she was hooked immediately:
He captured my imagination and interest as no one else ever had. I was smitten with Uncle John. He understood me. What's more, he produced miracles.
I watched as he created a secret formula, a magic cream potion with which he filled vials and jars and flagons and any other handy container. It was a precious velvety cream, this potion, one that magically made you sweetly scented, made your face feel like spun silk, made any passing imperfection be gone by evening.
Estée’s uncle took her obsession to the next level:
We constructed a laboratory of sorts in the tiny stable behind the house. My parents installed gleaming linoleum on the floors and walls.
We set up a table, where I watched my uncle mix his magic.
Do you know what it means for a young girl to suddenly have someone take her dreams quite seriously? Teach her secrets?
I could think of nothing else. After school, l'd run home to practice being a scientist. I began to value myself so much more, trust my instincts, trust my uniqueness.
Of course, Estée needed people to test her products on so she enlisted the help of her friends and their friends.
She named her uncle’s cream Super-Rich All Purpose Creme and tested product variations throughout high school.
A few years later, Estée met, fell in love with, and married a man named Joseph Lauder.
The Estée Lauder name was born.
After getting married, Estée kept experimenting:
Times were lean. About two years after our marriage, we had a beautiful son, and I spent my days mothering Leonard. And all the time, all the time, I was also mothering my zeal for experimenting with my uncle's creams, improving on them, adding to them.
I was forever experimenting on myself and on anyone else who came within range.
Good was not good enough—I could always make it better. I know now that "obsession" is the word for my zeal. I was obsessed with clear glowing skin, shining eyes, beautiful mouths.
It was never quiet in the house. There was always a great audible sense of industry, especially in the kitchen, where I cooked for my family and during every possible spare moment, cooked up little pots of cream for faces. I always felt most alive when I was dabbling in the practice cream.
Obsessed is the perfect word to describe Estée.
I hope others can find that thing that makes them feel most alive, just like her.
Estée’s entrepreneurial break came at the House of Ash Blondes, a beauty salon owned by Mrs. Florence Morris.
After Mrs. Morris inquired about how Estée kept her skin so “fresh and lovely” Estée came back less than a month later, demonstrated her products on Mrs. Morris, and created an opportunity for herself:
I showed Mrs. Morris a mirror. She was a raving beauty.
Silence. She was thinking. "Do you think you would be interested in running the beauty concession at my new salon at 39 East Sixtieth Street?" she asked.
I did not hesitate a second. Up until that point, I had been giving away my products. This was my first chance at a real business.
I would have a small counter in her store. I would pay her rent; whatever I sold would be mine to keep. No partners (I never did have partners). I would risk the rent, but if it worked, I would start the business I always dreamed about.
Risk taking is the cornerstone of empires. No one ever became a success without taking chances. Yes, yes, yes, Mrs. Morris! I was interested.
I don’t want to gloss over that last part so let me mention it again: Risk taking is the cornerstone of empires. No one ever became a success without taking chances.
These product demonstrations became a key part of Estée’s sales strategy for years to come.
Estée, who at one point wanted to be an actress, got to work immediately packaging her products:
First things first. If I was going to be in business, I needed proper jars.
I rushed out to buy dozens of simple white opal-glass jars with black covers, which looked quite professional to me.
My uncle had marketed creams under his wife's name, Floranna, but now it was my turn, and my business.
I wanted to see my name in lights, but I was willing to settle for my name on a jar.
Early Estée Lauder Sales
At the beauty salon, Estée perfected her sales strategy.
While a woman was sitting under a hair dryer with nothing to do, Estée offered to try her special cream on her face free of charge, making her skin feel “pampered and soft,” which of course the woman would agree to.
After, the woman was delighted with the result, asked Estée a barrage of questions, and Estée gave her a list of products she used.
She also had one more brilliant sales technique:
Now, the big secret: I would give the woman a sample of whatever she did not buy as a gift.
This led to sales again and again.
Estée believed so strongly in her product that once a woman used them, she knew they’d be hooked.
As Estée’s clientele grew, she knew she had to expand beyond a one-woman operation, so she started to hire saleswomen.
Business growth was gradual at the time, but steady, and, because of the one-on-one sales method, she was developing a devoted clientele who even started calling department stores asking for Estée’s products.
Outside of the salons, Estée found another audience for her products at the hotels on Long Island where she’d work during vacations in the summers:
The hotel owners welcomed the diversion I provided. It cost them nothing, and my services were more enthusiastically received than an entertainer's.
Women wanted to learn, not laugh at silly jokes. One summer after another, I pushed myself, lauding creams, making up women, selling beauty.
In the winters, l'd visit these eager ladies at their homes, where, with a bridge game as a backdrop, l'd make up their friends and sell more creams. The mood at these sessions was as exhilarating for me as for them.
I didn't need bread to eat, but I worked as though I did… from pure love of the venture. For me, teaching about beauty was and is an emotional experience. I brought them charisma and knowledge about their possibilities. They gave me a sense of success. I felt flushed with excitement after each session. Pure theater—in the end that's what it was, this rendering of beauty. Pure theater for me!
If you haven’t already gathered it, Estée’s enthusiasm for her life’s work is infectious, which is what made reading this book about her such a joy.
But Estée’s relentlessness also drove her apart from her husband, Joe.
In 1939 they divorced, but they had a child together and still saw each other often.
Four years later, in 1943, realizing her mistake, Estée and Joe remarried, making several changes.
Instead of working on his business, Joe joined Estée’s.
They became equal partners, with Joe essentially handling operations and finances and Estée leading sales.
Even though the business was growing, it was a grind, but Estée didn’t consider giving up:
I cried more than I ate. There was constant work, constant attention to detail, lost hours of sleep, worries, heartaches. Friends and family didn't let a day go by without discouraging us.
"Estée, what do you need this for? Stay home with your darling family…" They meant well.
Despite all the naysayers, there was never a single moment when I considered giving up. That was simply not a viable alternative.
A key to that early growth and what encouraged Estée to not give up?
The women who were evangelizing her products:
I had a secret weapon. There were, in those days before television and high-gloss advertising, only two key ways to communicate a message quickly. They were: telephone and telegraph.
I had a third. It was potent: Tell-a-Woman.
Women were telling women. They were selling my cream before they even got to my salon. Tell-a-Woman was the word-of-mouth campaign that launched Estée Lauder Cosmetics.
Soon enough, Estée would take the next step in expanding her business.
Entering the Big Leagues
Estée Lauder isn’t exactly a woman who takes her foot off the gas and, after starting in salons, she wanted to expand:
I was beginning to feel restless with the success I was enjoying at the salons. It soon became apparent that I needed to have a larger marketplace the great department stores to be exact—partly because of the new phenomenon of charge accounts.
In 1947, Estée’s persistence with one of the buyers at Saks Fifth Avenue paid off with a small order for $800 worth of merchandise and she closed down her counters at Florence Morris and Albert and Carter to focus on Saks.
With the Saks Fifth Avenue account secured, Estée knew the business had to evolve:
Joe and I knew we had to start running a very different, much more serious operation; space became the operative word.
We set about finding our first "factory" to fill our new, terribly momentous Saks Fifth Avenue order. They were the first, the very first, to take us on and I would never forget it. Ever since, I've had a special place in my heart for this store: breaking that first, mammoth barrier was perhaps the single most exciting moment I have ever known.
Fortunately, our confidence equaled our excitement, because we had to have enough faith in our work to invest all our savings.
Estée’s first “factory” set them up for a monumental future:
Our first home base was a former restaurant on Central Park West—1 West Sixty-fourth Street. We had to pay six months' rent in advance.
Those were potent words—"in advance"—but we swallowed hard and signed. On the restaurant's gas burners we cooked our creams, mixed them, sterilized our pretty new jars with boiling water, poured and filled and planned and packaged. We did everything ourselves. I still have one of those gas burners, which I treasure as a memento of our beginnings. Every bit of work was done by hand, four hands, Joe's and mine.
We had my uncle's original cream and others l'd created by then. We stayed up all night for nights on end, snatching sleep in fits and starts.
The order for Saks had to be produced on time. As D-day (delivery day) loomed, we hired a man to help us, and deliver we did—on time. At last, we were in the big leagues of business.
They were indeed in the big leagues and all of Estée’s previous hard work was paying dividends as well:
All the people to whom I had given samples, all the people who had been telling other people, all those people appeared on opening day at Saks Fifth Avenue.
In two days, we were sold out. The fun was about to start. And with that came the endless work, the endless traveling, the endless streams, rivers, tides, torrents, oceans of words I would utter in praise of the products I knew were the creams of the crop.
I was a woman with a mission. I had to show as many women as I could reach not only how to be beautiful, but how to stay beautiful. On the way, I hoped in my secret heart to find fame and fortune.
Saks Fifth Avenue was just the start for Estée. She entered the big leagues, but now it was time to see just how far she could grow the brand.
From new department stores to new product lines to expanding internationally, the growth was fueled by ambition and unrelenting persistence. Not to mention a simple but brilliant sales strategy.
Let’s look at how she did it.
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