Alanna York shows how success in business can be as much about luck — on the level of winning the $1 billion Powerball — as it is skill. She and her partner Erica Gray had invested more than $400,000 in their curly hair products company, Controlled Chaos, and launched in 2012 at the International Beauty Show (IBS) in Chicago. Having generated only $300,000 in total sales, debt ran deep. Sales flatlined because they couldn’t invest any more money in inventory. The startup was a hair away from death when Shark Tank auditions happened to take place right next door to her salon.
Having been rejected twice, York auditioned for the third time with little expectations. The third time proved to be a charm. She made it through casting and filmed her pitch in September 2015. QVC queen Lori Greiner cut a $60,000 deal for 50% of the business. It was a steep discount from the original ask of $50,000 for 20%.
After York’s January 8, 2016 Shark Tank appearance, sales skyrocketed to $300,000. Sales the first four months of the year eclipsed that of the company’s lifetime. The Portland, Maine firm generated $100,000 in sales in 2014. But the following year, sales nosedived by more than 50% to $40,000. Although Controlled Chaos made $20,000 in gross profits that year, much of it was eaten away by IOUs.
Orders keep pouring in. Products sold out quickly and were backed ordered through March. The flagship product, Controlled Chaos Curl Crème, retails for $39. It’s sold in about 100 salons and high-end beauty retailers nationwide in addition to controlledchaoshair.com. A cult following of curly Q fans rave how it eliminates frizz without leaving their locks feeling crispy or oily.
York expects a flood of re-orders soon from customers who ordered in January as an eight-ounce tube typically lasts four to 12 weeks. Greiner is working on getting it on QVC, which takes its time in testing products. York is thinking about getting into Amazon.com and trying to establish domestic and international distribution partnerships.
York shares the comedy of errors in developing her business, what she learned after auditioning for Shark Tank three times and what keeps her motivated in the face of adversity.
Ho: Tell us about your background. What were you doing before you started your business?
York: I have been self-employed for my entire adult life. Like many entrepreneurs, I was a terrible employee at the only two jobs I held outside of self-employment: one was at a frame shop and the other, a shady telemarketing company. I became a hairstylist and started my first business at 19. I also “fixed and flipped” houses and dabbled in real estate through my early 20s. I purchased a few apartment buildings and opened my own salon at 26.
Combing for Curly Hair Solutions
Ho: How did you come up with the idea for your business?
York: I became frustrated with the lack of quality products available to my guests at my salon, so I created my own line. Every other product made curls crispy, greasy for left them feeling frizzy. Being a veteran curly-haired stylist and salon owner, I knew there was a market for professional products designed specifically for curly hair.
Ho: What made you think it could be a successful product and/or service (especially when there are so many competing products)?
York: That’s the thing—there’s nothing like it. If there was, I would have led a simpler life and used an existing product on my clients’ curls. In the beginning stages, I was convinced there had to be something better out there. I researched and tested hundreds of other products, to no avail. I knew I was onto something when clients with curls started coming to Portland, Maine from NYC for a haircut. Thank you internet, circa 2001.
Ho: What makes it so special?
York: The product is highly concentrated and actually performs as promised. And our new formula is gluten-free. All of our other products (along with Controlled Chaos Curl Crème) have always been sulfate and paraben free, packaged in BPA-free bottles, and our organic ingredients are sourced here in the United States.
Our socially conscious company is also a 1% for the Planet member, so 1% of our sales (not profit, so there’s no cheating) goes to this incredible organization that funds environmental causes all over the world.
We believe in a “look good, feel good, do good” philosophy and apply this to our products and business practices. As for quality assurance, we request our customers use the product for 21 days. This is how long it takes for the hair and scalp to “reset” and acclimate to a new hair product or treatment. If they are less than dazzled, they can return the unused portion for a full refund. Currently, 0.006% of customers have requested a refund, which shows how well it works.
Ho: How did you go about making a prototype, sourcing the materials and finding a manufacturer?
York: Word of mouth. Many of my friends are entrepreneurs and I made connections through them and through friends of friends. I always value this type of networking because it fosters trust in professional relationships.
Hair-Raising Business Mistakes
Ho: What hardships did you encounter in developing and launching it?
York: This list is too long. In 2007, I lost my initial distribution deal after I had spent my life savings (and then some) developing the product. The products were amazing. But they no longer had the stability of a financial backing.
In 2012, I received an investment from my current business partner Erica. I hired staff and applied a “go big or go home” philosophy to the business. We launched the line at IBS with a very expensive booth (in hindsight, probably too expensive).
In the years following our beauty show debut, we couldn’t sell through inventory fast enough: I had created too many individual products instead of focusing on one hero product. I had invested too much in inventory. It was a mess.
In 2015, I “pulled the plug.” Then Shark Tank auditions came to Maine. I had nothing to lose. It was my third time auditioning so I thought I’d give it one last try. Looks like third time was the charm.
A Good Hair Day on Shark Tank
Ho: How did you prepare for your appearance?
York: For past auditions (in 2012 and 2013), we had over prepared with snazzy videos and concepts. The third time, I had given up on the business and did not expect to make it. So it was mostly “off the cuff.” I didn’t prepare nearly as much.
Ho: What made it a success?
York: Narrowing my business vision from 12 products to one. In hindsight, my previous auditions may have been confusing and unfocused.
Ho: How did you value your company when you appeared on Shark Tank?
York: I was about to close up shop, so not a lot of value at that point. I wanted to offer a large enough share in the business, for a fairly low investment so that it would be attractive to the Sharks. I was really hoping Lori and/or Barbara would bite—they both have curly hair.
Ho: What about being in the Tank (or whatever happened before or after) surprised you the most?
York: Mr. Wonderful (O’Leary Ventures founder Kevin O’Leary) was a sweetheart, as you could see in our pitch. Maybe we got lucky and he was in a good mood that day. Or maybe he had just made a great deal just before us. We will never know. But he really was very nice when we were prepared to be eaten alive by that particular Shark.
Ho: If you could do the show over, what would you do differently?
York: I would sell the product more. I should have been pitching the product to the viewers and the Sharks instead of focusing on the previous shortcomings of my business.
Ho: How much did your sales and profits to increase after the Shark Tank appearance?
York: We sold more in three months than in three years. Now that the product is receiving great reviews and results from our customers, sales are increasing and look like they will continue to grow. It’s exciting to see!
Grooming the Business for Growth
Ho: What are you doing now to move your business forward and expand?
York: We are selling more product direct to consumer than we had planned, as a result of Shark Tank. We may re-launch more of our now sold-out products but with a more efficient plan this time. To gauge interest and demand, we will crowdfund: our customer orders will back the initial purchase order with pre-orders, rather than funding the upfront cost ourselves. This will create a manageable inventory, which I expect will sell fast enough to sustain sales in the long term.
Ho: What are your goals for your business over the next year and five years?
York: I would like to appear on QVC and other home shopping / direct to consumer opportunities. Controlled Chaos is a visual product and needs to be seen in action to show how well it works. Being socially conscious and “eco-luxe” has always been at the forefront of my business priorities.
Simplifying the brand has been wonderful. But I’m afraid this message will take a back seat, so there will be more focus on philanthropy and doing good in the coming years. We hope to repackage our other products under the new name and re-launch more of the products from our original line. We are testing the stability of corn- or sugarcane-based packaging and hope to replace plastic altogether within a year.
Ho: What was the most effective thing you did to get more exposure for your business before going on Shark Tank?
York: Prior to airing, we did nothing. We were not sure if we would air at all. I chose not to make any moves until we officially aired. Since the national debut, we have upped our social media presence and designed a new website. These things have been very effective with gaining inexpensive exposure.
Ho: How do you acquire new customers and what are your customer acquisition costs?
York: Referrals, social media, contests for fans of the product, video tutorials, networking with industry professionals like Modern Salon, NaturallyCurly.com and Texture Media.
Ho: What other products do you have in the works? When are they set to launch?
York: We currently have some remaining inventory of our original packaging. Our Volume Myst makes fine hair feel incredibly full, with no sticky feeling and it won’t dry hair out like many commercial volume products. We also still have a cleanser for the scalp (shampoo) and Moisturizer for Fine Hair (conditioner) in stock, which is a popular product and selling very quickly.
We have sold out of our fan-favorite Sea Salt Matte Paste, which an angry mob of cult followers is growing even angrier over. We hope to bring this product back first. Following that, the Moisturizer for Dry & Coarse Hair. It’s the most incredible conditioner ever, hence why it quickly sold out after our Shark Tank airing.
Ho: What business books do you recommend people read and why?
York: I read the when I was 18 and it’s stayed with me ever since. I gravitate toward the spiritual side of things.has helped me a lot with being positive and trusting that everything would work out as it should, even when times were really tough.
Ho: What are your favorite business websites, tools or resources that you love and why?
York: I wish I had the time to research anything…ever. In the past, I’ve found Marie Forleo’s methods extremely relatable and helpful, especially being a female entrepreneur.
Ho: What’s the worst mistake you’ve ever made in business and how can others learn from it?
York: “Go big or go home” is a bad idea. Start small and build from there. From the beginning, I should have launched one amazing product, built a following, and grown the business and the product line from there.
Ho: What is the best advice you’ve ever received?
York: I still need to hear it over and over: keep it simple. I tend to get too detailed and over complicate things because the creative side of my brain takes over. It turns out, simplifying is often the solution to a lot of my problems.
Ho: What keeps you motivated in the face of adversity in business?
York: I wake up every day (even Mondays) with a million ideas and ways to grow both of my companies and make them even more successful. I have so much fun doing this. It’s a dream come true to have so much fun and to be able to call it work.
My industry is filled with creative and pretty things and it’s my job to make people feel great about themselves. This makes it really easy to stay motivated, even when things aren’t going as planned financially. At a young age I did the math and discovered that I’d spend 80% of my life working so I made it my mission to find something I enjoy and make a career out of it.
Ho: Is there anything else I should have asked?
York: I know the “stick with it” statement is a cliché but I really think tenacity is the key. You’ll be successful at some point if you never give up, which I almost did. I was in a place where I could not handle one more disappointment. I almost couldn’t bring myself to audition for Shark Tank a third time. It was a last-minute decision and I had to scrape every bit of energy I had left to even bother going. I decided to go for it because I was also finally “over it.” I was able to let go enough that I had no attachment to the outcome. My spiritual side believes the universe takes over when you let it.