Susan is the founder of a company called EO, which stands for essential oils. They produce body, skin and hair products made from active botanicals that are scented with essential oils. They also have a sister company called Everyone, which is the more accessible line that’s affordable and for everyone.
Susan’s been in business for a very long time, 25 years to be precise. She launched EO as a 4 piece collection to Bloomingdales from her garage in 1995, all while being a a single mum and hustling every single day to pay the bills and keep the lights on, fast forward to today the business still remains independently owned by her alongside her co-founder Brad and pulls in around 50million dollars in revenue each year.
If you’ve been listening to my podcasts you’ll already be familiar with the kinds of topics I touch on; we talk about the origin story, the marketing, the challenges, the money… and all that good stuff is totally jam packed packed into this episode, but what I loved most about my conversation with Susan is the key pearls of wisdom dotted throughout. Like the importance of pursuing the journey and the actual day to day of building a business rather than the pot of money at the end, and the why it’s critical as we move forward in the world to have women in complete control of their lives and being at the forefront of leadership.
This was such an amazing conversation and I’m so excited for every ear that finds this episode. And please do share it with anyone you think will benefit from this story.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
I'd love to go back to the beginning, Susan, to hear about the origin story of EO and how it got started in the beginning.
Sure, I was. I worked for the late Tompkins who was at a spree, and he was an amazing conservationist. And in that time that was like a portal.
I was a clothing designer and I had the opportunity to meet just the best of the best designers, graphic designers and really thought leaders. You know, Anita Roddick came through and so did David Bauer and David Forman. And really it was the continuation of what Rachel Carson started in the 60s. And what Doug was particularly interested in was in how we were making clothing around the world and what really the portal for me was looking at how cotton was being grown and all the toxic pesticides and how workers were treated. And I just saw what the possibilities were to make that different, even though I could tell it was going to be a very long tunnel, you know. And so so that was just a really brilliant year that I spent there. And then his partner, Susie Tompkins, but the company, Doug, moved to Chile. And I wasn't sure how this initiative was going to continue because the structure was a little bit different. And I was sort of looking around for something that had a little bit more heart and meaning and connection. If I could sort of continue down the path of reparation and understanding how we were going to continue in the clothing business. And I was on a trend trip in London and I was running sort of back and forth between, you know, sort of Covent Garden, like Paul Smith and Muji, you know, and I stumbled into this little courtyard called Neal's Yard and read at 12 o'clock.
I walked into this little apothecary and I stopped. It was like the smell was so beautiful. It was honest, it was vital. It was like being outside and this little space. And there were dried herbs and tinctures and essential oils. And I picked up this bottle of lavender, lavender and gusta folia actually from France. And I inhaled and my life was changed. It was sort of like I looked around just to see if anyone was watching me because I felt like I was totally transported. And I thought, this is really what I want to do. I want to learn everything about this, and I want to work with these, you know, these essential oils. And so that's the short story and a very long story of how that came to be. But I would just urge everyone always to think about those moments when you receive information and you're absolutely it's not it's not really a thought process. It just goes sort of right to your heart and soul. And then it's very easy to dismiss afterwards because it's like, oh, that's crazy. And but those those are the moments, I think, that are the essence of what gives us courage and vision. And it's the beginning, you know, it was the beginning of how I got here. Now, when I look back, some other factors are my my son was four at that time and I could just see how.
Wearing it was going to be to travel the way that I've been traveling and this very disparate life and not be able to go to every basketball game and every parent teacher conference and just having to swap out so many things and not be aligned and integrated, you know. So that was another big motivation somewhere in there to think of. What else could I be doing that was a little more had a little more heart and meaning and eventually it came together.
Yeah. So I think it's just crazy how a moment can change the course of your life and in your case, it's gone on to be know. Twenty five years of building this incredible business. And yeah, it's it's just an interesting thing that in that moment you knew with your full heart and soul that that's what you wanted to do. And so what happened then?
So then I was I was trying to figure out a way to bring this whole experience that I had, you know, back home with me and sort of teased it apart and realized that someone I knew knew the woman from the CIA. And so I went there and I worked in the store for bit to learn everything and studied aroma therapy, took a crash course in cosmetic chemistry at UCLA. And I imported those products from the U.S. for a bit. And then we parted ways. And in 1995, we launched. Oh, and I had been tinkering really with essential oils and blending and learning, you know. So I'm pretty self-taught through trial and error. And we had a little cult following because of being in the clothing business. You know, things were kind of transferable to other groups and so forth. And in 1995, Bloomingdale's ordered some products for their exclusive product for essential oils, plans for their holiday catalog. And we didn't really have a name for the company yet. So I sat next to my friend who was a designer at Apple, and I liked everything minimalist, same type. So we picked the type and it was a team label. And instead of really talking about aromatherapy, I wanted to talk about the oils themselves.
We called the CEO, stood for essential oils that made sense and and developed for plants and kept going from there.
Wow. And so back then, you didn't obviously have the foresight to think, hey, I'm going to grow this amazing business over the next few decades.
What was it like in those early days? Was it a struggle?
Was it hustling to to get by or was it taking off quite quickly?
Oh, no, it was definitely, definitely hustling to get by because I started really without a particular plan. It was sort of I'm going to do this. And then and then the next thing would open up. And, you know, I was a single mom and I had, you know, some some support in terms of, you know, back and forth custody with my former husband. And so I was really had a little severance from a spring, a little savings. So I knew I had to build it in a way that was quick and sustainable. And it was like, what is the shortest way to cash flow? So I can keep it all going. And fortunately, we got a large order from Birkenstock, a little foot care kit. And the person I was dating at the time, who is now my husband and was also is still my business partner for all these years, was like, you know, he could do anything. So when he saw this order and he saw that we were thinking of pouring it, you know, from the deeper into the bottle, there were 10000 bottles. He was like, oh, no, no, no. You know, we have to figure out a way to gravity, gravity feed and fill this faster. And he kind of had me as gravity feed. So I was like, angels were singing it gravity feed. And we were like non-stop to fill this order. And then that was sort of the beginning of being able to see that manufacturing was really an essential part of what we were doing. So we had a little warehouse space and we we made the products that we could and everything was sort of called mixture. We had a little high feed from the farm and and just started to sell gift stores or anyone really who would who would buy from us.
Kind of like starting out with the mom and pop, kind of sharp, definitely, and then aiming to get into bigger retailers.
And, you know, borrowed money from family and friends, raised about raised a little money over those first few years, about 100000 bucks. And, you know, but, you know, the 10 gallon pot and then a 20 gallon tank and then just kept learning everything we could. And then, you know, we try to have contract manufacturers, but they didn't like working with essential oils, especially at that time, because they're a little finicky and each one is different. And so we just we're determined to not use synthetic fragrances. We just made it ourselves. You know, that's so amazing.
And in those early years, because you had, you know, your life circumstances, you're a single mom, you needed to provide for your child. Did you become profitable quite quickly because of the way that you were structuring the business?
No, but we were we were at break even. So, you know, I was very practical about this. Like, if I could take enough money to live as my salary and borrow enough and I could always maxed out my credit cards, you know, because I had a strong working life before this then. And I also made sure that if I could get second terms or, you know, at the time people would put orders on credit cards or anything I could get for people to pay up front, it was worth a couple of points of a discount because I really became the cash flow queen. And to this day, I would recommend that for everyone because it really is the lifeblood of the business. And you can't you could manage it even if you're very profitable. But without cash flow, it's no go. You don't have enough money for payroll. It doesn't matter how much how good the margin is. So so it was very organic and very, you know, all credit cards maxed out of cash from every direction. And we just kept going.
That bootstrap vibe for so many years, yeah, yeah, for sure.
And obviously you have twenty five years in the business, it's a really long time to cover. But I want to know from your point of view what the real inflection point was when things started to change and you were like, OK, I can just breathe a little bit more now and I don't have to hustle the same way that I was in those early years.
You know, it's I think it's not it's fits and starts. We would get to a place where it would be like, wow, I'm not sweating payroll. You know, things are humming along. We're getting new accounts. So about two years in, we started selling to Whole Foods and at that time they had about less than 50 stores. So we were able to really be part of the natural products market and grow with Whole Foods. And then that was a very natural place for us to be like minded, kind of tribal, lots of supportive, beautiful community. And so, you know, sort of for those those years, even when there was stress and struggle, I kind of knew who to call for what, you know, and that was a good run. That was a great run. So and, you know, it was OK. It wasn't like we were a huge business, but things were working. And by that time in, he bought this sort of rundown private label manufacturer. So we expanded from an 80 gallon tank, two thousand gallon tanks. They had the capacity to wow. And they taught us, you know, really how to scale up. And we inherited a chemist and some really good compounders. So we were able to do different things. And then, of course, along with that came increased overhead and equipment that had to be working a lot more time than we could ever imagine. So we would do some private label runs for people. And it was just always a matter of, OK, what is the next right thing that we could do to keep it all going in the best way.
And so, you know, we really started our home in the natural products industry. People were great. They loved what we were doing. We grew organically with the whole movement. We helped create the industry. We helped create organic standards, safety standards.
And so it was it was a relief because there was just this flow of collaboration and support.
And do you think that in in around that time, had you thought to yourself, OK, we're going to make the choice to not go down the route of getting venture capital funding or raising tons of money and grow really, really fast and instead grow sustainably and grow at our own pace and take a bit longer to get there, but essentially be around forever?
I think one of the questions is where was their.
Because I would ask people whether it was a number, whether it was the count, how to different times in the business. And I remember asking Roxann from Burt's Bees, like, was there like a really great time when you were doing two million or when you got to five or, you know, and she she was very honest about there. It's not in the numbers. You know, definitely those markers of I'm not sweating payroll were profitable, you know, but it was more, you know, you can coast for a little because, you know, overhead is basically less than if everything is going well. And and then you just hit another point and it's the market and what you're doing sort of beat up. Then there's this compulsion and there's momentum for growth. And you can have mench growth, which is definitely what we've done over the years.
But it's not it's not the unnatural push. So we just took it a very different path.
And then you guys seem to go from having the whole food stores and the mom and pop shops and and I think you had a company called Mervyn's and then you went to kind of like Target and Wal-Mart and TJ Max and all of these wholesalers. And you really kind of went to the next level. What was that time?
So in 2011, my son's band came home and I was picking up towels in the bathroom. And I was like, I did a quick inventory of products and they were all really bad. Like I had to call an immediate focus group. There were six of them. I was like, how have I taught you nothing near like Mama? You know, it was too expensive for us. The bottles are too small. We need, you know, and so so I took that back to work and sort of at the same time, we knew how to make we had done a project for Whole Foods and so we knew how to the costs of making something in bigger sizes was and we knew that if we could do the volume that we can make and folk margin and, you know, and and then keep working from there. And so but with the same product, Charger just was a little bit different. Choice of ingredients in terms of the essential oils can be six dollars a kilo or, you know, sixteen thousand dollars a kilo. So somewhere in there you have to just sort of, you know, design into what it is that you're doing. And so we made six products and it was everyone, everyone for everybody. And the idea was essential oils for everyone and making a product that was with our same charger, but really accessible. And so it started with six products, three thirty two ounce lotions, three thirty two ounce soaps, three and one soaps. And that just took off, you know, like we had the infrastructure and we had already been in business for quite some time. And so that's been a different, a different ride really, because dealing being outside of the natural market, of course, Whole Foods sold to Amazon. So the whole market was changing and growing and mainstream markets and mass markets were really interested in more natural products. So we sort of just had the good fortune with hard work of meeting the market where it was a little before it was actually there.
Wow, I'm so interested to know, you know, what we doing in those early days, like pre Internet for marketing and then how did that sort of shift when everyone started? And then the third layer of it is, and where is it now for you guys? Because you've obviously seen so much change in so many new platforms, new everything, and so interested to see that like the beginning to the middle to the to the now.
Yeah, it is really it's so interesting. I don't think we would have ever had a website, except my brother in law was a tinkerer and PR guy and said, you guys have to have a website. So that was like 95, like, OK, we'll have a website. So he built us a website where you could shop there.
Yes. And then just watching the Internet evolve and come alive in some ways and then sort of, you know, different. So for us, you know, we and we say this, you know, we were always makers, we were marketers. And for us, it was a matter of can you make a beautiful product inside? Make it simple. It'll stand out because, you know, basically we like type, we like type, we like simplicity. And everyone else had leaves and all sorts of botanicals. So just it was quieter really. And and so we had a little bit a little bit of a cult following in the room and sort of kept going. So the main thing that we did for marketing was we got our hands soaps in the bathrooms at home.
Since then, that was our that was our big marketing initiative spread. And it was genius. Right. And so that's really helped. And then people tried it and they were like, oh, my God, it smells so good, you know, where is it? And then we moved to we had the, you know, hand sanitizing wipes stand outside of every office. And so that was marketing. I love that.
Get it onto as many hands as possible. Yes.
And, you know, and and it and it worked. And we didn't really have to think that much about it because, you know, we were growing at a steady pace in our customers. And and so when we got into distribution, so instead of going to a Whole Foods, going to our customers that was, you know, palletize shipments and everything, couldn't really control where it was going, but it was in the natural foods market.
And we started really looking to see what else we could do for marketing. So, you know, it was more of doing demos and and sampling than anything else. And so then we started down the path and e-commerce became and never really thought about D.C. as such a drive, or even though when he looked at it like the margins are so much better. Why aren't we spending all of our energy? And, you know, we were at thirty eight people from a very long time and then you launched it. I mean, everyone marched and then it was sort of like, you know, it's been crazy since then. So we're at about a hundred and sixty people and that about three buildings and we still manufacture everything. And so we have a brand studio now that's a little bit more buttoned up, put together. It's digital and have invested in digital heavily in the past few years. But I really a few it's