GARY: Next on Start Up, we head to Los Angeles, California to meet up with Brian Hollowaty, the founder of Los Angeles Brands, an innovative company that designs and manufactures a portfolio of locally- produced products.

All of this and more is next on Start Up.

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It is a portal.

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♪ GARY: My name is Gary Bredow.

I'm a documentary filmmaker and an entrepreneur.

As the country faces significant challenges, small business owners are navigating their way through a changing global marketplace with strength and perseverance, while continuing to push the economy forward.

We've set out for a 13th consecutive season talking to a wide range of diverse business owners to better understand how they learn to adapt, innovate, and even completely reinvent themselves.

This is Start Up.

♪ The journey of hair products began thousands of years ago, with early civilizations using simple oils and concoctions to maintain their hair's health.

Fast forward to today and we see an expansive market filled with specialized formulas designed to cater to just about every hair type and style.

♪ Today I'm heading to Los Angeles, California to meet up with Brian Hollowaty, founder of Los Angeles Brands, a company that designs and manufactures a portfolio of locally- produced products.

From what I know, Brian is making some serious waves in the highly competitive hair care industry.

So I can't wait to meet up with Brian and learn more about how he started this company.

♪ What is Los Angeles Brands?

BRIAN: Los Angeles Brands is a portfolio of health and beauty brands.

So we cover hair care, skin care, men's grooming, bath and body, and pet.

GARY: Okay, a lot to unpack here.

So let's go back to the beginning.

I want to learn a bit about yourself.

BRIAN: I grew up, I was the son of an entrepreneur.

Grew up in the automotive industry.

So my father owned a robotics and automation company that was a supported manufacturing and automotive industry.

So my dad was, I would say, a problem solver at heart.

Everything is figureoutable was kind of what- what he taught me.

GARY: And that was- that was a huge impact, I would assume, on you.

BRIAN: It was, and it still is to this day.

I mean, the biggest constant is change, so you're always addressing new challenges.

GARY: When did the idea for Los Angeles Brands come up?

BRIAN: I ended up leading a distribution division of a magnetics company, and we did a full retail program as opposed to just, let's say, the magnet.

We did the full retail program, and it was a wonderful program that ended up going to Walmart.

And it was at that point when I was like, "This is what's possible.

Someday I want to have my products on shelves."

And it was that.

GRAY: You were getting paid to learn, essentially, at that point.

BRIAN: I learned so much.

Oh my God.

I realized someday to have my own products, I need manufacturing, sourcing, you need marketing.

GARY: Of course.

BRIAN: But then I'm like, "I need retail experience.

How can I ever get that retail experience?"

GARY: Yeah.

BRIAN: Well, lo and behold, I got a call from a friend of mine and he's like, "Brian, would you "ever be interested in, you know, in doing sales and "learning retail?

Because I know you want to learn retail someday."

GARY: Yeah.

BRIAN: And it was one of these opportunities.

I'm like, "Yes, I am."

So I call it my retail MBA.

I spent about four years and I was calling on major accounts in the beauty industry.

GARY: Wow.

BRIAN: You know, the drug stores, the regional grocery stores, Target, Walmart, all stores like this, all the way down to dollar stores and department stores.

I would go in and meet with the buyer, who I knew from a previous life, and every meeting she's like, "Brian, these are doing great, great job."

She's like, "Would you ever be interested "in doing consumables, haircare, skincare, men's grooming?"

And I was like, "It's just beyond what my company does, liability and it just, no."

And then a month and a half later, she asked me the same question.

And then the last meeting, it was right before I was- my wife was about to have the baby.

And she said, "You really need to, "and furthermore, I'll help and I'll give you data and I'll help you develop this."

GARY: So did it finally click with you?

BRIAN: Yes.

GARY: I need to fill this demand.

BRIAN: Yes, and mind you, this buyer had a checkbook of $100 million.

GARY: Oh, is that all?

BRIAN: She manages a category, you know, and so she had data, intel from the buyer, and a big checkbook, and the willingness to help.

She said, "You should figure it out.

It would be in your best interest."

And I was like, "Okay."

♪ ♪ ♪ GARY: How did you come up with the concept for Los Angeles Brands?

BRIAN: The first part of the process was really going out and meeting with all these contract manufacturers.

I knew there were dozens and dozens of them in this area, but I didn't know who, how, what.

My vision was for speed to market, for flexibility, and for consumer confidence and trust.

I wanted to do it all here in Los Angeles.

GARY: You probably could have manufactured the products cheaper overseas.

BRIAN: Very, very much cheaper and easier in some ways because they would do it in a turnkey, you know, you just place a purchase order and they do the bottling, the filling.

As opposed to here, you have to buy the labels, you have to buy the bottle, the pump, the box, etc.

So it was much more complex.

But I knew it was figureoutable.

I thought it was.

And then I went and tested that assumption over the next eight weeks.

And it was very humbling.

I got a lot of pats on the head that said, bless your heart.

You know, come back to us when you're bigger.

GARY: Wow.

BRIAN: You know, come back to us when you can do a 25,000 piece run or a 50,000 piece run.

GARY: Yeah.

BRIAN: And I wanted to eek out like 3,000 or 4,000, 5,000, you know, that type of thing.

GARY: For a lot of U.S.- based manufacturers, they don't want to do short runs.

And 3,000 can be a very short run.

BRIAN: Very short, very short.

And the setup alone is, you know, it eats all the profit for one of those manufacturers.

GARY: Gotcha.

BRIAN: And so they politely, they were very nice about it, but politely said no.

GARY: When did you finally find somebody locally who was willing to take on your smaller quantity run?

BRIAN: It took a few months, but I did find someone and I was able to kind of piggyback on all of the biggest brands.

So this company who's VP of sales for a big contract manufacturing, he said, he's like, come with me.

I'll let you piggyback on some of the quantities that they're running, the big brands are running.

GARY: Got it.

BRIAN: And you could modify your formulas accordingly.

And we got it green-lit by the buyer.

And she said, let's do this.

GARY: Wow.

What was that first order?

BRIAN: It was, I think, four SKUs of a men's brand.

Hair care was six SKUs.

And skincare was, I think, seven SKUs.

So it was pretty wide and shallow, I say, with her.

And I said, "I'm so grateful to have "this opportunity.

"Is it okay to help me meet the MOQs?

Can I sell it to some of your competitors as well?"

Which was like, I'm like, "Oh, she's never gonna allow it."

And she's like, "Yes, no problem, no problem."

GARY: Wow, so not even an exclusivity agreement?

BRIAN: No, no.

GARY: Amazing.

BRIAN: And so we ended up, I stacked up five orders from five different retailers.

GARY: Wow.

Can you tell me who those retailers were in the beginning?

BRIAN: Yes.

So it was Ross, Ross Stores, Burlington, Macy's, Bealls Outlets, and T.J.

So we queued up all the orders and I was like green-lit manufacturing.

I'm like, this is great.

Everything's all set.

This is end of 2019.

And by February of 2020, we're ready to ship.

We ship everything.

And I was like, yes, this is going to be incredible.

Then, yeah, then COVID happened.

GARY: Wow.

BRIAN: And, you know, we're running pretty lean as a company, self-funding and all.

GARY: Yeah.

BRIAN: And like, this is how it's going to end.

I'm going to lose my house.

Like, it was literally one of those moments.

I would call my retail buyers say, "You know when and if I'm going to get paid?"

You know, everything is out there.

All the goods are out there.

Well, lo and behold, it was the craziest six weeks in the world for all of us, right?

GARY: Yeah.

BRIAN: And then things opened back up and demand was insane.

They're like, hey, take your last order and double it.

We even got one point, triple your last order.

GARY: During the pandemic?

BRIAN: Yes, because these are essential products, right?

Beauty, health, wellness.

And we, it ended up working out beautifully well for us.

GARY: So you ended up kind of blowing up during the pandemic with these models.

BRIAN: We grew very quickly during that time.

And then the fun part of it was these buyers would introduce me to their counterpart.

Hey, this is the kid's buyer.

Can you do a kid's haircare line?

Yes.

GARY: What?

That is another unheard of thing.

BRIAN: Can you do a pet line?

We would love a pet grooming line.

And then we need a bath and body line.

Can you do that?

So I added, that year alone, I added three new brands and about another 20 products during that year.

And then the demand for the existing ones.

So it was an amazing year, just quite a roller coaster.

GARY: And that was all under the Los Angeles Brands umbrella.

BRIAN: Correct, correct.

And so still to this day, people ask me, like, why do you have so many brands?

How can you manage it?

And it was really driven by those retailers.

♪ GARY: You had to have a, you know, a pretty decent margin selling in a, dare I say, discounted type of store like a Burlington.

How were you able to not only fill that margin, but create that instant demand with the customers that were in there shopping?

BRIAN: A key part of that strategy for us was creating the brand online while we were selling in stores or at simultaneously as we're selling in stores so we would sell on e-commerce at double the price if that makes.

GARY: That is a very courageous move my friend, to double so somebody's in the store and they look it up and they see it for double.

BRIAN: Yeah, they'll see it online and they'll see really, first of all, really good reviews, so social proof.

GARY: Sure.

BRIAN: And then they'll see a price that's double what they- what they see it in store so- GARY: This is a deal!

BRIAN: This is a deal.

So I'm gonna buy it today because it might not be here next week and then I'm gonna get a good value, and what happens is over time consumers, next time they go in store, it might not be there so they go back online and buy it online they might subscribe and buy it on a recurring basis.

GARY: And now you're getting double because they're paying twice the price.

BRIAN: Correct and brand awareness.

So- so that was- that's been a key part of the strategy.

GARY: Outside of selling online or e-commerce are you guys nationwide in retailers all across the country?

BRIAN: We are, we are.

Yeah.

we're in at one point we were in about 10,000 retail doors.

GARY: Wow!

♪ GARY: Talk about your team.

BRIAN: I have Kelly who manages VP of Operations and Finance and she is the glue behind everything we do.

It's amazing.

Deals with retailers, deals with accounting and finance and inventory management.

I have Ari who you'll meet who manages marketing, so across e-commerce and all of our channels on digital channels.

And then I have I do have an assistant as well, yeah, who does a lot of outreach to my retailers and a lot of the management there.

We launched- yeah, like I said about a hundred- a hundred and thirty products across seven brands and a team of three people.

♪ ♪ GARY: How did you meet Brian and start working with Los Angeles Brands?

ARI: We met through an industry friend and quickly after we met he explained to me what he'd been trying to accomplish on his e-commerce platforms and he was making good progress and I basically went back, went in the lab and started looking at how we could improve it.

I went back to my team and I mentioned I met this really cool guy named Brian I think we can work with him and we got started working together maybe a couple weeks later.

GARY: What were some of the blind spots that he had at that time?

ARI: Yeah, I think maybe with, maybe with retail it's a little bit different which is in my expertise but when it comes to e-commerce a lot of- a lot of what you see is just data.

So it's just numbers it's- it's numbers that seem to tell you if you're making money or not making money.

But you have to use your imagination a little bit to understand what's actually happening behind those numbers.

So if I'm paying for traffic to come look at my product online, and that traffic isn't converting, why?

Maybe I put myself in a consumer seat, look at my page and think what about my page turned them off or did I target the wrong person when- with that- with that ad and did they come in and they really weren't a buyer for my product?

So I think what the- the stages that are missing is that there was a lot of meat on the bone, there was a lot of traffic that was out there that wanted to buy Los Angeles Brands products but they hadn't seen it yet.

And that's where we kind of came in.

GARY: In such a- uh- a short form fly by night fads come and go by the by the hour practically in that world that we live in how do you create a lasting brand?

ARI: The lasting brand comes from a good product.

We can do whatever we want to do with the marketing, we can drive as much traffic and conversion as we want.

If the product is good people will come back and it will grow no matter what we do.

GARY: Or if it's- if it's bad they buy once and they're gone.

ARI: You know the if it's bad all marketing is going to do is tell more people.

We're just going to tell more people how bad we are.

GARY: About a bad product ARI: Yeah about a bad product.

♪ GARY: Talk about how your company is really utilizing and capitalizing on social media right now.

BRIAN: It's never enough.

We're not- we're not doing enough and that's the biggest challenge that we have as a company- it's- it takes resources we're continually reinvesting profits in marketing, uh, TikTok Shop is one that we're- we realize we're all in on and so our strategy there is we have a agency partner that we work very closely with and then we are doing loads and loads of sampling with the right creators.

GARY: Yeah.

BRIAN: And we're getting content back and then we're advertising on that content.

GARY: Wow.

BRIAN: And it's very dynamic but it it can be absolutely massive and we're seeing that.

It levels the playing field, you don't need to be a venture-backed VC-backed, huge beauty brand to do very well in that- on that platform and that's what's beautiful about it.

GARY: What would you say would be the biggest challenge that you've encountered from the- the creation and implementation of Los Angeles Brands to the present.

BRIAN: Managing inventory.

It's, you know, very intense on cash flow right?

Product, you know, retailers always want what you don't have or they want something new, so you try to manage inventory levels and, you know, at any given time we have a half million dollars six hundred thousand in inventory for- for a small, you know, company.

That's that's substantial.

GARY: Yeah.

BRIAN: And then you might not have what they exactly want.

They might want 10,000 of something you only have 8,000.

So then you have to produce another 10,000 just to- GARY: Because of minimum runs?

BRIAN: Yeah.

And so it's just managing managing that and that's- makes you want to pull your hair out sometimes but that's- that's how it's done.

GARY: Are you still using the same manufacturing folks and facility that you started with?

BRIAN: I've actually migrated many of the products over to another manufacturer.

At some point in the next couple years, I want to acquire a manufacturer.

GARY: So then it'll all be in-house, but your overhead and staff will significantly go up.

BRIAN: It would.

GARY: But maybe your cost of manufacturing will go down.

BRIAN: It absolutely would.

And the flexibility.

You can truly incubate brands and incubate ideas.

And, you know, the trend right now is seeing what's happening on TikTok.

Hopping on these trends and going from concept to consumer very, very quickly.

We've already been able to do it quickly, but if we owned the manufacturing, we could do it in half the time.

♪ GARY: We are heading to your manufacturing facility, correct?

BRIAN: Yes.

I was recommended by another vendor of mine to connect with Joe, who we're going to go meet.

And Joe runs a smaller, small to mid-size manufacturer, and he's been in the business 30 years.

And he, from the minute I met him, approached our business as extremely important.

And he had ideas for innovation, he had ideas for warehousing and distribution, all of these things that, you know, I would never hear, I would never have conversations like that with my other manufacturer because I was simply too small.

Over the past, like, couple years, I've added, I think, 25 different products that he's now manufacturing for me.

GARY: Incredible.

BRIAN: So it's been a really good partnership.

And what's nice is, like, he'll call me and he's like, "Have you ever thought about "adding this ingredient?

Have you ever thought about doing this?"

GARY: So he's actually kind of adding to the product, making it better.

BRIAN: Yeah.

Yeah.

And that's the part that, you know, we're a small team, so we need partners that understand where we're going.

GARY: Not just order takers.

BRIAN: Yeah.

GARY: Have you ever had a product that you thought would would do well, a brand that you just had to pull off because it wasn't working?

BRIAN: 100%.

GARY: Really?

When do you know to pull the plug?

BRIAN: We'll give it like a year and then I'm looking at data constantly.

We're always evaluating and they call it like SKU rationalization.

We're always doing that at all times because if you're, and I've learned this the hard way, if you're too in love with your own brand or your own product.

GARY: I was just about to say that.

Yeah, there's an emotional aspect to it too.

BRIAN: And that's knowing to fold them, right?

♪ ♪ ♪ ♪ ♪ ♪ GARY: What do you guys do here?

JOE: We do contract manufacturing, contract labelings.

Means that we formulate, we do R&D's, and we also do bottling, we do batching, we do labelings and packaging, fulfillments.

GARY: And when did you first meet Brian with Los Angeles Brands?

JOE: Partnered with him over, a little over two years ago.

Over the years, it just got better and better.

And now we're really close, working together.

It's like partnered.

GARY: Excellent.

Do you think it's really good to have a really good rapport and a good relationship with the brands that are coming in here that you're working with?

JOE: Well, I think most important is the regular communication.

Forecasting is a big factor when it comes to manufacturing because you have to order the raw materials, and nowadays the raw materials are different when it comes to imported materials.

♪ GARY: Could anybody that has an idea for a product essentially do this?

BRIAN: I think the answer is yes, but I think you need to just be very adaptable and flexible.

I'm constantly told no from, you know, a bottle manufacturer, a retailer, etc.

So it's like asking a question, the question behind the question, know why, like, how can we?

I would say that's the biggest skill.

And then using technology like automation, AI, and really running lean.

You know, you don't need 50 people to run a company like this.

We've proven it.

So if you can do it small, but you need to be really tech focused, I think, to manage all of the processes behind the scenes.

GARY: Talk about the ways that you're utilizing AI in a positive way.

And are there any fears around AI for you?

BRIAN: You know, I understand why there's so many fears.

I do.

It's going to displace many people.

I think if you're well positioned, it can be the golden age.

I mean, God, anything from content creation to managing processes, legal documents, strategy.

I mean, there's so many things.

So I use it every day.

GARY: Where are you at currently in the company right now?

BRIAN: We have a lot of retail expansion to continue to do.

We have a lot of growth on e-commerce as well ahead of us.

So we're, I mean, we're continuing to double down on marketing.

Just over the past couple months, I started formally advising a lot of brands now.

And so we help brands go from a couple channels to full omni-channel.

GARY: Incredible.

BRIAN: And so I started a little, it's called Los Angeles Growth Partners.

And it's basically a complimentary division that helps other brands.

And that, to me, as an entrepreneur, the fun part is building.

And that's where I'm like, I light up when I can help connect the dots.

GARY: Yeah.

BRIAN: And that part juices me.

GARY: Advice for folks out there that have an idea.

BRIAN: The time is now.

I mean, more now than ever.

There's, I would say, just lean in on that feeling that you have in your gut.

And if you think you can, don't talk yourself out of it by thinking of all the reasons why you can't.

And everything is figureoutable.

I keep coming back to that.

It's more figureoutable now than it ever has been.

I would encourage everyone to dig deep and go for it.

♪ GARY: There is so much to love about this story, especially for anyone considering launching their own retail brand.

For starters, Brian chose to keep things lean.

What might look like a large company from the outside is actually just three dedicated individuals who know their roles well and make full use of technology.

And by manufacturing locally, he maintains control over his supply chain and sidesteps tariffs, which is a very smart move in today's market.

And Brian understands that data is crucial, especially when it comes to understanding your customers and their buying habits.

But what impressed me most is Brian's knack for spotting opportunities in unexpected places, like his innovative approach to in-store versus online pricing.

Pure genius.

Los Angeles Brands proves that all you really need to get started is passion, focus, a willingness to learn, and the ability to adapt quickly to a changing marketplace.

I cannot wait to see what the future holds for Brian and this company.

To learn more, visit our website and search episodes for Los Angeles Brands.

♪ Next time on Start Up, we head to Seattle, Washington to meet up with Aaron Lindstrom, the chocolatier and musician behind Cocoa Legato, a one-of-a-kind chocolate factory and cafe that mixes sweet treats with live music.

Be sure to join us next time on Start Up.

♪ Do you want to learn more about the show?

Or maybe nominate a business?

Visit us at StartUp-usa.com and connect with us on social media.

♪ ♪ We've got a long road ahead of us ♪ ♪ A long road ahead of us ♪ Got a long road ahead of us ♪ ♪ Before we pay our dues ♪ We've got a long GARY: You're not my father.

CAMERAMAN: He's not your father.

♪ (Gary screams) ♪ (clapping) ♪ (cheering) ANNOUNCER: Running a business isn't easy.

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NANCEY: I would love to leave the legacy of a household name worldwide.

Better fitting stylish eyewear for everyone.

More than 60% of sales in Amazon's store come from independent sellers like Nancey at Vontélle.

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