Earning

'You can't wait until you know everything' to start a business, says Winky Lux CEO Natalie Mackey

Courtesy Natalie Mackey

In 2015, Natalie Mackey left a stable career in financial consulting to pursue her dream of starting a cosmetics line, hoping that launching her own business would give her creative freedom. 

Mackey admits she was "really not very happy" in her finance job. "I kept my job through the recession, which was a miracle, but I really wasn't seeing anyone who looked like me at the managing director level," she says. "It's definitely not attractive seeing female colleagues being pushed into marketing or working in an environment that wasn't friendly towards them." 

In the summer of 2015, Winky Lux products were in their beta testing phase, and by late 2015, Mackey successfully launched her brand. 

Some of Winky Lux's products have gained traction on Instagram and Twitter, most notably the Flower Balm clear lip balm, which wears differently on each person depending on their pH levels. The products can be found at Sephora, Macy's, Ulta, Amazon, Nordstrom, and Target. 

Here are Mackey's top tips for launching your own business and thriving as a female founder. 

You have to 'be really scrappy' 

When Mackey first started her business in 2015, she moved into a small studio near her job in order to cut down on her costs and commute time. Once she'd developed her first product, she even used the studio as a makeshift showroom for potential buyers. 

"You have to be really scrappy," says Mackey. "For the first year or two, we were eating ramen noodles."

At the time, Mackey was about to turn 30, and she says that all of her friends were getting married, moving into nicer homes, and taking extravagant vacations. Mackey, however, was downsizing in order to build her a business from the ground up.   

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Around the time Mackey was watching other women in her field hit roadblocks when they tried to rise up the ranks, she took a trip to South Korea, where she stumbled across clear lipsticks with plastic flowers in them. Inspired, she set out to create her own version of the product — and launch her own cosmetics business.

"It took pretty much all of my savings," she says. "And [my savings] had already started to dwindle because I did some financial and branding consulting for a year while I was writing the business plan, which meant I was just making enough to pay my rent and food." 

Mackey describes making her first major inventory order as "nerve-wracking."  She shelled out a total of $70,000 on a few staple products she knew would sell. Ultimately, however, that investment, and all the scrimping and saving to get the business going, was worth it. 

"It was on the 'TODAY' show when we had our first viral moment, and our product blew up, we sold a hundred thousand dollars over one weekend," says Mackey. "We made some good moves and then we also had some really good luck with a few viral products."

Once she started to build momentum, it was time to sustain and grow her business. For that, Mackey knew she would need funding.

Surround yourself with founders who can guide you and help you raise money

To scale her business, Mackey was ready to raise venture capital, which, she says, "was sort of gut wrenching." 

"The fundraising world, especially for seed funding, can be very cutthroat and disheartening, because you really do need to meet with a lot of people," says Mackey. "The best thing you can do is surround yourself with other founders and ask them every single question you have to prepare for your fundraising meetings, and that way you can work on toughening your skin." 

The process required persistence and resilience: It took Mackey over 30 meetings before she finally got her first "yes."  Overall, she raised $6 million in seed and Series A funding in 2017-2018.

In doing so, Mackey beat the odds. Although venture capital funding has surged in recent years, there's a stark gender divide in who gets the money. Last year, companies founded solely by women received only 2.8% of the total capital invested in venture-backed start-ups in the U.S., according to PitchBook, a Seattle-based financial data and software company. 

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"As a woman, you kind of have to be ready for this [entrepreneurship] to be a tougher battlefield," says Mackey. "Raising capital is particularly hard for female founders, but there is a whole new generation of girls who are changing that." 

In addition to seeking advice from a network of founders, Mackey came to the table ready: "I prepared for meetings by doing as much research as I could about the fund and their investment style, asking friends to pepper me with really tough questions about my company, and listening to a really good upbeat playlist." 

'Cash is the air that the company breathes'

Once she raised the capital she needed, Mackey says there were some key strategies that helped her turn that money into a profit: "Cash is the air that the company breathes, so you'll need to think about it every day, especially as you grow."

Here are a few ways she saved and earned when launching her business: 

  • "Make sure you start with healthy unit economics," she says. That means you have to ask yourself, "Can I realistically sell this [product] for more than it cost me to make?"
  • Be aware of your fixed expenses and make sure they aren't eating up your budget. These can include office space, software, office supplies, and more. 
  • Invest your cash in building a stronger brand and hiring a great team.

'You don't have to be great to start'  

Mackey says that her confidence and drive to start a business stemmed from her love for creating beautiful products.

"My financial background taught me about the ins and outs of business, not only from a numbers perspective but also through a human perspective," she says. "It helped me understand what I really needed in order to sustain something great. But in the end I think I'm much better at being creative than I ever was at being an analyst." 

When it comes to starting a business, Mackey says it's important to remember that there will always be some level of risk involved, and that's OK. 

Nick Viall, a former "Bachelor" contestant turned entrepreneur, shared similar advice with Grow earlier this year. His "biggest piece of advice for anyone," he says, is to "be humble enough to admit when you don't know something, then find someone who does." That can mean reaching out to people in your network, or even just outside of it, to get the answer to your questions.

This can be as simple as reaching out to a potential connection on LinkedIn. Give them some background on who you are, what you're doing, what specific questions you have about your business, and why you think they'd be a great person to answer it. 

"You can't wait until you know everything, but I think it's about not being afraid of not being an expert," says Mackey. "Nobody knows everything. Even though whole industries have their own languages, when you scratch the surface it's not that complicated." 

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