Madison Reed: building a hair color brand from scratch at 56

Executive overview

Most hair color products offer a poor consumer experience — harsh chemicals, limited shade matching, and no premium at-home option. Amy Errett spotted this gap and launched Madison Reed in 2013, building a multi-channel brand combining an e-commerce subscription model, physical color bars, and retail distribution.

The company grew by pairing better-ingredient formulations with a data-driven color-matching algorithm, then expanded into salons and retail only when pulled there by demand.

Waiting for the right moment, category, and accumulated experience can matter more than starting young.

From finance to founder

• Sold her M&A consulting firm, Spectrum, after ~six years; used the proceeds as a financial base
• Fired as CEO of Olivia (LGBTQ travel company) after five years — described as the hardest and best thing that happened to her
• Joined Maveron (Howard Schultz's VC firm); grew frustrated watching founders and wanting to be one
• Passed on investing in Dollar Shave Club — later used that model as a blueprint for Madison Reed
• Motivation was partly ego-driven: being around high-outcome Silicon Valley peers created a drive for a bigger outcome

The founding insight

• An analyst scan of women's beauty categories with repetitive use surfaced hair color as the top opportunity
• 90 million US women colored their hair every six weeks — a $10 billion global category
• Wife's frustration with existing at-home products confirmed the gap: harsh chemicals, poor ingredients, inferior UX
• Competitive framing: disrupting consumer products via direct-to-consumer internet, bypassing retail shelves
• Target customer: women 38+, starting to go gray, wanting a prestige product with better ingredients

Building the product

• Visited 13 Italian manufacturers; first 10 refused — said removing ammonia and harsh chemicals wasn't viable
• Manufacturer 11 agreed; required 100% upfront payment in euros (~$160K USD)
• Three-month stability testing per shade; recruited models to validate color accuracy pre and post application
• Launched with 19 shades; now close to 100
• Formula is "eight free" — removes PPD, resorcinol, phthalates, gluten, and others; adds ginseng, argan oil
• Marketing positioned as "better for you" and "ingredients you can feel good about" — avoids the word "clean"

Color matching as a competitive moat

• Built an 18-question color-matching quiz (hair color now, gray percentage, texture, desired result)
• Quiz output is a machine-learned algorithm — measured accuracy via NPS from day one
• Customers who use the in-app camera try-on tool convert 30% more than those who don't
• All 95 color bar locations use the same stylist app and customer data, enabling consistent outcomes across visits

Go-to-market and growth

• Launched July 2014 with a PR and influencer event in New York; drove early press and blog coverage
• Groupon trial campaign: gave away ~7,000 free boxes; very few customers returned — identified as deal seekers, not the target market
• Lesson: paid acquisition converted to high-retention customers; free trial did not
• Transitioned to Facebook ads targeting 38+ professional women at specific household income levels
• Series A: $4M (April 2013, including Maveron); Series C: $16M (~2015); $32M raised by that point
• Fundraising was harder than it appeared — male investors unfamiliar with the category didn't believe in venture-scale returns

Expanding to color bars and retail

• Stylists began contacting Madison Reed to buy product at wholesale — hundreds of inbound requests
• Opened a $75K pop-up in Flatiron, NY; spent $25K on out-of-home ads; fully booked within five weeks
• First permanent color bar opened in Flatiron in 2017; expanded to 95 locations
• Ulta Beauty contacted Madison Reed after a senior executive kept hearing podcast ads; Madison Reed initially resisted retail
• Eventually accepted Ulta, then Target, Walmart, and others — pivoted to omni-channel
• Same product sold in-store and in the color bars; not a separate formulation

Co-founder departures

• Started with four co-founders; all three others eventually left — described as among the most painful experiences
• Series A investor flagged four co-founders as too many; Amy disagreed at the time
• Root cause: hiring for cultural fit and personal relationships rather than verified technical expertise at scale
• Supply chain and CMO roles both failed as the company scaled; the business moves at the pace of the slowest senior person
• Key learning: separate "I like you" from "this isn't working"; be direct about specific, tangible performance gaps
• Every departure was handled with dignity; several relationships were eventually repaired

Pandemic and current position

• Pre-pandemic: ~$100M revenue, 130% YoY growth, nine color bar locations
• Pandemic shut locations but online demand surged — 16,000 inbound inquiries per day
• Retrained ~300 color bar stylists as remote customer service colorists using Chromebooks shipped in two days
• Used pandemic-era low commercial real estate prices to sign favorable leases and expand locations
• Online growth normalized post-pandemic; company never declined year over year
• Crossed profitability in 2024; still growing significantly
• Current challenge: consumer brands need both 20%+ growth and profitability to attract acquirers or IPO — IPO window for consumer brands is currently closed
• Raised at a time when growth alone mattered; now both growth and profit are required