In 2010 Alli Webb founded one of the defining brands of the decade: Drybar. The chain of blowdry salons was a major part of the so-called experience economy, leading to numerous competitors and copycats. Of course that was a time of cheap money, abundant labor, and a widespread growth-at-all-costs mindset.
Since then, Webb has co-founded other companies including Brightside, Becket + Quill, and a chain of massage centers called Squeeze. She’s also authored two books, including the latest one titled The Messy Truth: How I Sold My Business for Millions but Almost Lost Myself.
In a new episode of the Odd Lots podcast about the challenges of rapid growth, Webb talked what it all cost her personally, and how operating a business in the ZIRP era differs from now.
Over the last several year, business of all types have felt the impact of inflation, tighter labor markets, and a changing real estate landscape. Webb’s businesses are in the same boat. Squeeze, for example, is having to build out locations at time of much higher inflation. "I think the biggest thing is costs," says Webb, shedding light on the financial intricacies and the logistical challenges in procuring supplies for their stores. She highlights how construction costs are now significantly higher than the first time she built out a national chain.
The new business also faces distinct complexities in real estate deals. With Drybar, Webb could enter a shopping complex or mall that already had a hair salon because Drybar only offers blowouts, not cuts or color. In other words Drybar wasn’t necessarily a threat to the legacy players in the area. She could make a deal with existing salons to boost business mutually by saying, “We'll send you clients” and in return “they'll send us clients." However, with Squeeze it’s a bit harder because "There's a lot of massage concepts in many places," making entry more challenging so "you just have to get a little more creative with where you're going," says Webb.
Setting up a national business is a feat in itself but keeping those establishments staffed is yet another challenge. While hiring has been a challenge for all kinds of companies since the pandemic, Drybar had distinct labor challenges since its inception because it was different from the other salons that did more than just blowouts. Other salons offered cut, color, treatments, etc. so trying to recruit a hair stylist that went to beauty school to learn all those skills and asking them to just perform blowouts was a challenge.
“It is very labor intensive and I really always understood that some stylists really loved it and could do a six, seven, eight hour shift,” while she recognized, “Other stylists were like, I can't do this for more than a few hours.
Webb recognized that for many of her stylists who wanted to grow their personal businesses that Drybar “was more like a stop for them, not a destination.” As Drybar scaled and with how exponentially it was growing, she needed stylists to be able to fulfill the demand. At first she would call in stylists for an interview where she would get to know their personality and then have them come to her house to do a blowout on her to test them.
A strategic part of the business plan that Webb took into account was the placement of her Drybar locations. Their goal was to ensure that locations were placed in a way that could seamlessly weave into a woman’s daily routine. Webb explained that “being near a grocery store, being near her workout or where she liked to shop and where she liked to have lunch” was a necessity and she “knew the importance of being in that mix of your daily use and that has always the guiding light of where [she] put a Drybar.”
She has experienced this the hard way as they have opened Drybar locations in parts of a shopping complex or mall that may not be as easily accessible and those haven’t performed as well as the locations that are conveniently located. While it seems like a small and a nuanced aspect to consider, Webb says the functionality of a parking lot, which entrances are easiest to come through, traffic patterns, etc. are important but knowledge that you can only really get from surveying the locals. “Unless you get that local knowledge… you don't really understand the neighborhood and how it functions, and how women really use it,” Webb says.
While the future of commercial real estate and work are arguably still in flux, Webb anticipates more demand yet to come for experiential interactions again. And so they’re using the same model with her massage company Squeeze. Squeeze allows people to easily book massages, voice preferences and tip all online so that once you arrive at the location it’s a seamless experience. Using the same method of strategic location, Webb has a “similar thinking for Squeeze, in any location, in any kind of business that [she] opens, if [she] wants that same level” of traction.
Beyond just the specific macro conditions of the 2010s, that was an era of valorizing the founder. Executives at startups routinely graced magazine covers, and were valorized for going pedal-to-the-medal on growth. "It's a choice, not everyone wants to go big, but once you get a taste of it, it's hard to walk away,” says Webb.
“There was so much demand, there was so much request to open more stores and more markets,” she says. They knew they would have to raise capital because although Drybar was successful, their margins were thin at the beginning and not generating enough to grow at the rate that the demand was expecting. They saw copycat salons open up, trying to mimic the same concept but it wasn’t quite the same. “At the time, I knew nothing about how you grow and scale and hiring and all the complexities that go into that,” however Webb explains that “there was a lot of pressure because if we were going to do it, we had to do it now, otherwise we were going to fall behind.”