Subscribe
Share
Share
Embed
Build a Business Worth Buying brings you candid conversations with industry leaders, M&A experts, and successful founders. Learn advanced strategies to scale, optimize, and prepare your business for an acquisition—because building a business worth buying starts with smart decisions today.
Aaron Alpeter (00:35)
Today's episode is intentionally a little bit different. My guest, Kate Assaraf, isn't someone who stumbled into entrepreneurship from the outside. She's actually an industry insider. She spent years inside the beauty world as a designer, a consultant, and expert. She knows the general playbook everybody looks at, and she's helped other brands implement that playbook successfully. And that's what really makes her story interesting. When Kate decided to launch her own company, she didn't default to the same path that she'd seen over and over again.
She didn't chase Amazon, she didn't optimize for big box shelf space, she didn't build around the assumptions most founders inherit on how you're supposed to do things in order to scale a beauty brand. Instead, she stepped back and asked a harder question. What if the standard playbook is optimized for speed and extraction, not for building something durable, controllable, and worth owning long-term? Kate is the founder of DIP.
a sustainability forward hair care company built around independent refill stores, local partnerships, and a model that intentionally resists a lot of the forces most brands accept as inevitable. It's an ascending business built without the usual growth levers, and it forces a real conversation about trade-offs, control, and what we mean when we're saying we're building a business worth buying. This episode isn't about sustainability as a trend, it's about informed dissent, and about knowing the rules well enough to know when to break them.
If you've ever followed a default path because it felt like the only responsible thing to do, this conversation is meant to challenge that assumption.
Aaron Alpeter (01:56)
I've really been looking forward to this conversation. Thank you for being on. ⁓ I want to kind of just start with your background and why you did what you did, because you weren't naive about how beauty brands get built. You really grew up in it. You were trained in it. ⁓ How did you understand the standard playbook before you launched Dip?
Kate Assaraf (02:17)
So I had worked for two decades in the beauty industry before DIP even became anything. And so I had worked in every different piece of it from formulation to just sitting in a lab with chemists to being on the marketing side or being just on the positioning or pricing, retail distribution. I'd really worn a lot of different hats over that time. And for me, the thing that frustrated me the most about the beauty industry was
really the messaging and the marketing. I really felt like a lot of the times, especially in sustainability, that they were talking to a customer or an avatar that was a marketing avatar, but not someone that actually existed. so, yeah, like, so when they talk about the sustainable customer and they have kind of this avatar of a woman in linen overalls, like farming her own food, like that's all well and good, but that is not.
Aaron Alpeter (03:01)
You never met them before.
Kate Assaraf (03:15)
that's not the type of person that I know. And also being from New Jersey, like the women I know are very sarcastic and real and ridiculous. And I thought, you know, I want to create something that is marketed in such a real way that the women receiving the marketing appreciated that I was treating them with some kind of respect and treating them intelligently.
Aaron Alpeter (03:36)
Gotcha. As you were thinking about DIP and building the business plan and thinking about wanting to get into it, was there a specific moment in that journey where you said, I can do things the normal way, but I don't want to? what triggered that idea of, I don't want to do it the way that I've been teaching other people to do it for 20 years?
Kate Assaraf (03:58)
Yeah, so traditional beauty wants to scale and go huge and be in Sephora, be in Ulta, be in Target. That was the traditional brand playbook when I started and also now Amazon. ⁓ For me though, because I am someone who considers myself sustainable and I am deep rooted in making those changes to go plastic free or to reduce plastics, plastic free is kind of not really attainable. ⁓
I went to the stores, the type of distribution channel that I knew my kind of customer would already be at. And so that is the refill movement. ⁓ People that own zero waste stores, it's an emerging market and they're in every state and also in Canada. And these stores are really the antidote to all the deceptive marketing that's out there. Like for me, it's a store owner that owns a refill store.
or like a zero waste store, they have already done all the homework about whether something's good or bad or worth using. And that was the filter I wanted in order to get things on shelf. And the reason I did that is just because, did it that way instead of going big, was because I think we're in a trust recession right now. And I think we've been in a trust recession for a very long time and people are tired of trying to do the right thing for the earth and buying products that...
they think are better for the planet, only to be burned by a bad experience with those products.
Aaron Alpeter (05:31)
I love that phrase trust recession, because I think that perfectly describes everything we're saying around adoption of AI or politics or sustainability. yeah, I think that this whole curation thing is definitely something that's growing and it's going to become more more popular. When you were looking at this and saying, OK, I'm going to lean into these refill stores, were you?
inherently making a choice that your business was going to be really small? Or did you see this as a way that, yeah, maybe you'll start slower, but you still think you can build a really interesting and large business.
Kate Assaraf (06:04)
when I started, I was one person. So the first 18 months of my company, I was one person. And because I had a history of working with big box retailers and, know, I knew that...
Those, products that go in that type of channel need full teams. They need, and most of the time they need investment. Most of the time they need more, there's just, you need more human capital to make that happen and make that channel run successfully. So I knew at the time, like, okay, I'm one person. I can do a lot. I can wear lot of hats in the, you know, as it starts, you know? And I knew that that...
that zero waste channel and also ⁓ surf shops and salons, those were the three channels that I could handle and scale as a company of one. I now I'm no longer a company of one, but in the beginning that was very, very intentional because I knew the limitations of just being one person.
Aaron Alpeter (06:58)
But you didn't think of it as like, if I want to build the company the way I want to, I have to compromise and assume that this is going to be a hobby or a small thing.
Kate Assaraf (07:05)
Yeah.
No, well, the compromise isn't in the revenue. I still have very strong revenue from the beginning. The compromise that I would have made had I gone bigger would have been my own sanity. Do you know what I mean? That was the cost benefit I was going between ⁓ because that experience that I had had in that 20 years.
it didn't keep it glittery about Sephora and Ulta, because as many founders will tell you, or many people that have failed in business is they went into those channels too soon. And what happened to me, which I'm actually very happy about, the more refill store owners and small business owners I got to meet person to person, the more it fueled my plan to keep it there.
and to support those people and engineer the brand so that it created a very solid sales velocity for them.
Aaron Alpeter (08:06)
That's really interesting. You talked about people being anxious and getting into say Sephora too quickly and that ended up being a net negative for the business. What is it that you think?
would help a brand understand if they're the right size for Sephora? Is it really just about revenue diversification or being used to work at those sorts of volumes? What is it that really makes somebody too early or too young to getting into Sephora versus, this is your shot and this is how you're actually gonna grow and expand?
Kate Assaraf (08:39)
You know, the answer to that question changes month by month. And as we are heading more into people, you know, totally abandoning shopping in big box, you kind of see it a lot. The last few times I've been into an Ulta or Sephora, they've been completely empty. They've been like picked through and empty. So I don't know whether TikTok Shop is really destroyed that those channels as being really, what they used to be even five years ago or three years ago. So...
I don't even know how to answer that anymore because what's happening right now is brands that are on shelves in real life, right? We'll just say even big box stores, they're also putting their products on Amazon and TikTok Shop. And TikTok Shop runs promotions and undercuts the price that you see on shelves. So what you see right now is brands are competing against themselves and creating an ecosystem where they can't even
get people to go into a Sephora anymore. So I don't even know whether this downward pricing spiral is gonna help any brands in the long run. I don't know what you think about that. Do you have an opinion on that?
Aaron Alpeter (09:46)
You know, it's interesting. think you bring up some good points. know, Sephora used to be where people went to discover new products and they were really known for their curation and this was the new up and coming brands and those sorts of things. But I think as Sephora has grown and matured, they're now trying to maximize their profit per square foot. And so you see relatively fewer brands. It's much more competitive. There's bigger placements and things like that. And so
Kate Assaraf (09:53)
Yeah.
Aaron Alpeter (10:14)
You know, I I don't know to the extent that people are going there to discover versus picking up something that they're already looking for and I think you're right like I think tik-tok is where a lot of that beauty discovery is happening right now and when you've got in incumbent or when you've got a challenger that is interested in You know resetting the status quo and is willing to lose money and you know will subsidize absolutely everything and the economics don't apply and you've got somebody else who Needs to run a profitable business. Yeah, that can create some pretty bad
Kate Assaraf (10:27)
Mm-hmm.
Aaron Alpeter (10:44)
feedback loops in terms of where things are. I don't know, it's just interesting. I guess that's how I would look at it.
Kate Assaraf (10:50)
Yeah, well, I know one brand They put their products in Whole Foods. if you're in Whole Foods, it's a requirement that you're on Amazon. Then what happened was people saw the brand on Amazon and then started just buying it from Amazon and no longer buying it at Whole Foods. Whole Foods eventually delisted the brand, first put it on clearance, so it destroyed their reputation and then delisted the brand and then...
now they're stuck with only Amazon as the viable channel, which they never wanted to be on in the first place. And so you see this happening all the time. And for me as a brand owner, I'm like, you know what, like maybe it's not the right sandbox for me. Like maybe it's better to keep, you know, the integrity of our pricing and keep the stores that rely on dip sales to keep their doors open. Cause we do a lot to take people off of our website and into physical stores. ⁓ Maybe that's...
just a different way that is also just as ⁓ beneficial and profitable. And so far it's proven itself.
Aaron Alpeter (11:53)
Yeah, that's a fascinating thing that you just started in there too is most brands are all about, me grow my DTC, let me grow that consumer connection. And you said that you're intentionally saying, you know, we'll make it, maybe we'll ship to them, but it'll be more expensive or more difficult, or maybe not as quickly. Better for you just to go down the road and go to this refill store. Talk to me about that decision and why did you decide to architect it that way? And is there ever an instance where you think about taking something back and doing it more traditionally?
Kate Assaraf (12:21)
So I love a little bit of friction because when you're shopping that instant buyer's remorse that you get from buying something that an ad got you to that place and you've clicked in something and the buyer's remorse with but even before you've received the product it negatively impacts the shopping experience I think. And I know it's very, this is like very lofty but like I know that if someone is able to stop
like go to that store locator, maybe be like, okay, you know what, maybe I'll go check out this place tomorrow. Like if they're able to get into that place and then ask actual questions from someone that has used the product before that they trust more than our website, I think that that is something that is really cool. And I think that it strengthens us as a sustainable company. It sends that message that like, hey, we don't want you to add to cart real fast. We want you to really kind of slow down and think about this consumption.
And it's so kind of out there and it's so ⁓ creating friction is like, everyone wants frictionless transactions, but like maybe if you throw a little friction error, it might, you know, add to your fire.
Aaron Alpeter (13:33)
I mean, you bring up a really interesting point here because if there's something about the Conquest, right, like being able to actually say, hey, I wanted this, I researched it, I physically got in my car and went to a store to pick this up, that I can definitely see how that converts people over and maybe gives them a different level of loyalty to the brand.
Kate Assaraf (13:53)
It does.
Aaron Alpeter (13:53)
Do you
find that it puts a lot of pressure on your marketing at the beginning? Because it has to, it can't just be good enough ad and say, yeah, let me add it, it's 20 bucks or something. But it has to be like really, really good. And do you find that it puts more pressure on your marketing team because you have to do more of that conversion or that selling versus just, hey, here's our value prop, here's, you you don't have to type in your credit card, it'll be there tomorrow sort of transaction.
Kate Assaraf (14:17)
I
actually haven't done any paid Instagram, Facebook or TikTok ads throughout the time. So all of our transactions have been basically word of mouth. And I worked really, really hard. A lot of people rushed to market for their products. I went above and beyond and spent a lot of time on the product development to make sure that, because in marketing it's very easy to sell someone something once.
Aaron Alpeter (14:22)
Wow, okay.
Kate Assaraf (14:44)
but I wanted to be so good and last so long that someone would be totally blown away by it and tell other people about it. And so that was my marketing plan. Like for me, used to spend or I used to buy 12 tubes of very expensive conditioner every year. I would go through a tube a year. It was about $50 to $70 depending on where I purchased it. The one dip conditioner bar replaces a full year of conditioner for me. So even if someone doesn't care about
plastic, they care about their wallet. I, yeah, it's well over $500 in savings. And that is something someone, a woman will talk to another woman about. And so Dip has grown intentionally in person, in real life. And that's like been a really fun part of the brand. I studied how people bought shampoo and conditioner and I asked a lot of people how they made the choice. And most of them were like, I won't choose something unless my sister...
my mother or my best friend recommends it. And I was like, okay, well then I don't know how much marketing is gonna help in this situation.
Aaron Alpeter (15:49)
Did you find that you did a lot of sampling to get things going or was it really just ⁓ almost founder led sales and being at different shows or shops or farmers markets and just kind of saying, here's my story, right?
Kate Assaraf (16:02)
Yeah,
it was a lot of... So I did sampling with refill store owners. And I was... Who had already like, you know, they had kind of a few shampoo and conditioner bars on the shelves and I would send it to them. say, if this is not the best shampoo and conditioner you've ever used, bar or bottle, like you don't have to ever hear from me again. But if you think that this would do well in your store, then call me up. will set it up. And so there were many instances where people called me from their towel.
like they'd have a shower and they call me and be like, I cannot believe this conditioner does this. Cause I made sure it was like so slippery. It's like so beautiful what it does to the hair. so yeah, people call me from their towel. And then in that way, I had an influencer in a different city all around that was actually, know, where the people that were looking for bar shampoo and conditioner were. And so I would go around the country also ⁓ meeting these store owners in person.
meeting their customers, throwing like a little party. And it's very much Sarah Blakely's method of going around with her backpack to where people sold Spanx. But like, I think that in a digital world, it was really fun to go analog.
Aaron Alpeter (17:15)
Yeah, well, it kind of feels like in 2026, was old is now new. What's new is now old. And I talked to so many founders who, you know, want to exit. They want to build something that is productive and profitable. And it's just really exciting. it the playbook is raise a bunch of money, give it to Facebook and Google. And, you know, it will eventually work that way.
Google and Metta will take your money. They're still very good at that. But I think that there's this element here where people are saying, wow, going and talking to these people individually and having all these conversations, that's a lot of work. That's really hard. And oftentimes in entrepreneurship, it's the hard things that actually make the difference and move the needle. And I'm so fascinated by your philosophy here where you almost said, OK, I know what the easy, quote unquote, easy method looks like. What's the complete opposite of that look like? And how do I go do that?
Kate Assaraf (17:59)
Mm-hmm.
Yeah.
Yeah. Well, you know, that makes us have way, way worse than it was. I think I might be like a little bit contrarian in nature. And so I was like, okay, here I am. There's a, wasn't the first bar brand out there, right? So let's see what everyone else is doing and like, let's, you know, go against the grain a little bit. Let's go like, let's.
let's see what kind of impact we can make. I think in person is like so valuable. And so, had the the more people tried it, the more you could see like pockets of places, just the dip expansion, was just expanding on its own in different markets where you saw like the early adopters were. And then I would see, you know, also because I surf.
and not very well, like I surf, it doesn't matter whether you surf great or you surf terribly, like your hair still gets tangled. And part of the conditioner bar, I wanted people to be able to detangle after coming out of the ocean. So people started bringing dip to the beach and surf community. So I could tell if a group of women went surfing because I'd see like 12 or 15 orders from like Santa Cruz in one day. know, someone would try it, they'd pass the bar around and then everyone had it. And I would see that.
be repeated like all around the coastal properties too. Like it was very, very cool, but it is, it was very much, I think people feel very distance from products and companies. And I think they also sense like a big, there's very much this like huge founder ego movement happening. And I think people are kind of starting to scale back on, on that kind of support. think they want, I think they want small, I think they want meaningful, and I think they want.
you know, something that works also.
Aaron Alpeter (20:00)
Yeah, that's interesting. It's almost like a...
reminds me of like aged beef, like at a steakhouse, you know, and it's just like, takes time. It works for these things. When you were launching the business, did you say, all right, I'm going to be hyper local and just focus on New Jersey and where you lived and, kind of that was there. And then talk to me about how you, you maybe started and then expanded out because I imagine you probably weren't traveling all over the country, visiting, you know, different surf spots and passing stuff out. And so just curious how you go from that zero to one and one to 10.
Kate Assaraf (20:07)
Yeah.
No.
So I focus on the refill stores. they're in the beginning in 2021 when I launched there were probably the top 20 in the United States. And they were like, I would say there's a good bottle refill shop. She's in New Jersey. She was the very first store to bring us in. Then there was Sage Refill in Nashville. it was easy to go to Nashville and check it out and meet her customers. ⁓ There was...
⁓ in Columbus, Ohio, Rewash Refillery. Like they're all over the place and eco-inspired in Richmond, Virginia. So as it kind of went, as it kind of gained traction, ⁓ I just would go to those places and be like, let me meet your customers. Let me help you seed your own customers so that once they loved it, they can share it with others. And you know, another big market is Maine, ⁓ Portland, Maine, one of our top stores is there. I mean, it's just, it's so cool to see.
Because sustainability is not for everyone. So I didn't want to waste ad dollars serving ads to people that it was just not for, you know? Because the sustainable consumer in particular, I think what happens is a lot of brands don't really understand what it's like to be sustainable, like what their actual behavior is. They want to buy better stuff, they want to buy less of it, and they want to support individuals. So knowing that about the culture of sustainability, because I'm a member of that team,
helped me know where to where to put the money and the effort and the energy and absolutely where to not put it.
Aaron Alpeter (22:06)
Yeah, I want to kind of go a little bit deeper into these refill stores as a channel because honestly, it's the first time I'd heard of it is when we were talking here and I'm like, you know, this isn't one of the normal channels that people talk about. I guess help help our listeners understand a little bit of like, you know, is it really just those five stores? How big is it? Is it growing? You know, is this something that you think more brands should be paying attention to?
Kate Assaraf (22:12)
Thank
Yeah.
So there's hundreds of them. There's hundreds of refill stores around the country. And what they are exactly is they're either called refill stores or zero waste stores. So you walk in and you find a lot of items that are plastic free. It's it's curated eco-friendly products. And so, you you can show up with like your laundry detergent, big, ⁓ big plastic jug, and then you can bring it in and refill that with laundry detergent from bulk.
A lot of them have spices, some of them have like pasta, some of them have, you know, just hand soap and soap. There's a lot of different things that you can refill. And it just means that you're not buying your garbage every time you buy a new product. You're just buying what's on the inside, which we all know it's what's on the inside that counts. And that's what makes the refill movement so fun. It's also underground and it's very, very rock and roll and counter culture to open one of these stores, you know, it's really...
Like, this person who started this store really is someone who cares about the environment and really is it's the new way of sticking it to the man, right? Where everything is just packaged to oblivion. And this person is choosing the best of the best stuff in the eco movement to put out there for community and they're hosting events, they're doing all of the actual work. It's actually an incredible network of people to be in and
as a brand, I don't suggest everyone tries to get in the refill stores because they judge very, very harshly. They will not allow a lot of things on their shelves. And that's actually kind of like the street cred you need to, you know, in the sustainability movement, you have to be able to make it through that filter of refill stores to be considered like, you know, like real.
Aaron Alpeter (24:20)
Yeah, no, that's super interesting. I want to go back to your story you shared about Whole Foods and Amazon and stuff like that. How do you think a brand should approach that if they're into Whole Foods and they're looking to get into Amazon? Should they have separate SKUs or is it something where you're like, just don't do a deal with devil?
Kate Assaraf (24:41)
I don't know, it really depends on what kind of brand you want to be, right? And who your customers are. It's tricky for me to make past that judgment onto non-sustainable brands because if you're a non-sustainable brand, really sky's the limit. You can scale without any kind of customer pullback or customer ick. But in sustainability, if you start to go on those platforms, a lot of times you kind of get ousted from the movement, if that makes sense.
Aaron Alpeter (25:09)
Oh,
for sure. Yeah, I mean, it's one of those things where I look back and look at clean beauty, right in the mid 2010s. And that used to be a big separating feature. And people would say, Oh, what's different? We're clean, right? We're good. Well, as as they made more and more headway, more and more brands, bigger brands started to adopt a lot of those things. It feels like with
Kate Assaraf (25:15)
Mm-hmm. Yeah.
Okay.
Aaron Alpeter (25:32)
a brand that's going to lean into sustainability, they're going to lean into clean beauty, they have to consistently be pushing the envelope in order to resonate with the consumer base they have.
Kate Assaraf (25:39)
Mm-hmm.
Aaron Alpeter (25:42)
And it's difficult because on the one hand, pushing the envelope means that you're gonna alienate a lot of people. And you may not be as profitable as you could be. You may not be able to expand in the distribution channels that you look at. And so it always feels like there's this bit of attention with sustainable minded brands where that can be maybe how you get started, but eventually the product has to be good or the brand messaging has to matter and you kind of.
You don't shed those sustainability things, but you don't lean into it as your sole identifier. Do you see a similar sort of thing playing out in this space? And is that something that eventually could happen to dip?
Kate Assaraf (26:22)
So yeah, that's an interesting question. The sustainability part is the tertiary reason people buy Dip. The first one is that it's really good. It makes your hair look so good. And it doesn't matter whose hair it is. Like whether you have type four curls, which is like kinky, coily hair, or if you have like really flat, ⁓ straight hair, ⁓ Dip will work for every single person in the family. Say you have a mixed family, like, you know, mom with...
type four hair, a dad with type one hair, and then you have four children, every curl pattern in between, or wave pattern in between, DIP will work for every single person. So that one family can just, you know, have one set of bars in their shower and like they're set. it's, and that's like to me, really amazing and sustainable. Like if you divide people into different hair types, that's like consume, consume, consume. And then, and it's not part of the messaging. So, um.
So that was, that's the first reason people buy it. The second reason is it saves them a lot of money. So if you do have curly hair and you buy a dip conditioner bar, it will last you way outlast any bottle that you could buy, even a huge bottle. And it's because you only need very, very little on your hair at a time for it to give you that silky effect. And then the third reason, tertiary reason, sustainability. And I know that about people, like they...
Everyone wants to be sustainable and they just it's just not really the reason they buy it, you know, and and I really leaned into understanding that customer and like making sure that they're that's how it's I don't know how they're heard.
Aaron Alpeter (28:03)
That's fascinating because I think what you're saying is that the playbook for somebody who wants to have a clean brand or a sustainable brand is to actually have the best product possible. And by the way, you're sustainable. think if you're trying to get people to buy it because it's sustainable, you're always going to be.
competing and saying well you have to be completely the same from a price perspective and from a Capability perspective and then maybe that's the tiebreaker That's a really hard place to be because your competitors either gonna have better economics than you are or be able to lower their price or they're gonna have some other feature that you're now trying to chase and so it to me it sounds like the the framework that you're sharing is that if you want to lean into sustainability as a Core part of your brand you got to have the best product out there period
Kate Assaraf (28:49)
And it's all about, from what I said in beginning, treating the women who buy beauty products with some sort of respect. Like, I don't think it's cool to sell someone something that's garbage just because it's plastic free. That's not cool. That's not how you make change. That's how you move the needle. Like, the best thing you can do is make the best thing that you're so proud to sell that people talk about. And that is how Dip has grown. And, you know.
I did have like any other entrepreneur, had the jitters when I put it out there and when it first launched, like I was like, I hope people like this, but I'd spent so much time figuring out that whether it would actually work for someone with type four hair. it actually work? know, would men actually embrace this different format? you know, I went through it like crazy and I was still scared to launch, but it turned out, you know, the things that I really wanted people to care about, like people do care about.
Aaron Alpeter (29:43)
It makes a lot sense. ⁓ Kind of looping back on Amazon, most people will look at Amazon as a great distribution channel and something that they couldn't imagine building their business without. You view it very differently. You see Amazon as extraction. ⁓ What does Amazon take that founders don't realize they're giving up?
Kate Assaraf (30:02)
your customer, to take your customer. that, mean, your customer is the only thing that really matters in my opinion. Like Amazon turns your customer into a consumer. You lose the communication with your customer, which is very valuable, but you also then become a data point. Your product becomes a data point in which Amazon will feed all of your competitors right front and center to...
to the people that have already purchased your product. So why would you enter into that rank? Even if I could 10X dip sales, which has been promised to me by Amazon people, like dip is people are looking for it on Amazon. you could instantly 10X your sales. I was like, okay, but then I have to do 10X the work. And then I have get to lose my customers because we're more expensive than a lot of our competitors. Like what's gonna stop someone from buying dip once.
being excited about it, but then like, they're constantly getting fed ads to other brands that are cheaper. Like, what's to stop Amazon from being like, Dip is doing pretty well. Like, we should make our own version of this and then, you know, sponsor that post ourselves and steal their share. So I don't know if it's something that, it just seems like a deal with the devil, I guess.
to go on there. even if, so say in sustainability, even if I sold 10 times what I sell today, I have a team of seven people. Like I have my own factory. Like, am I going to put them through 10 times the work to get not, it's not guaranteed 10 times the profit. It's 10 times the revenue, which is not the same. I don't think I want to do that to my team. They're happy. They get to sleep at night. They get to work normal hours. I don't, there's a, there's something about growth.
for just growth sake that doesn't really resonate with me.
Aaron Alpeter (32:00)
Yeah, but then that's also to say that you're not against growth. I imagine you don't want to be flat or declining year over year. I guess talk to me about how do you make those decisions and figure out, yeah, we are going to have this partnership or we are going to expand further or yeah, it's going to require more for the team, but it's worth it because the growth that you want is actually there.
Kate Assaraf (32:24)
Yeah, well, it turns out that sometimes the things that I pour the most money into end up being the things that don't work at all. And so those, I learned a lot of hard lessons over these past five years of what works and what doesn't work. What really, really works is mobilizing our own customers that really love the brand and getting them into the events. And also our retailers is another tier of what we say customers of which there are many and they're well-networked with each other.
And I spend a lot getting those retailers connected and really embracing each other as people who sell dip and then they use each other as resources of how to succeed. So that's how I've been doing it.
Aaron Alpeter (33:10)
Can you share an example of what that looks like in practice?
Kate Assaraf (33:12)
think people don't play nice when there's someone down the street and they're competing for the same exact customer avatar, right? But for the most part, these retailers are spread out enough ⁓ that they want to see the entire movement succeed, you know? Because as many refill stores open, so many also close. So there's kind of a camaraderie.
among the different stores, but they never have an opportunity to get together and meet each other. So DIP creates that opportunity. So I've, you know, I've taken retailers to on a trip to Morocco where we could all spend two weeks together and get to know each other. It was really, and just have like real human experiences and talk about sustainability in very long form. ⁓ We've also taken them to Dominican Republic. I took my top 10 stores in Dominican Republic where some of them had never been on a surfboard before we got, we like.
surfed and did all, I mean, it was really fun. And we did a trip, a big trip to the Catskills where I got together, you know, I think it was around 25 of our top retailers and everyone got, it was like a summer camp thing and it was really silly. And we learned about, you know, each other and the challenges of being in sustainable movement and, you know, a lot of sustainable messaging doesn't work. And we all talked with each other about what does and how you see differences geographically of whether, you know,
stores in a red state or a blue state and how they manage what's changing in politics right now. And then we're taking, you know, I actually teamed up with two of my competitors, which is like the weirdest thing I've done. I'm teaming up with Highbar, who's one of my biggest competitors and
plain products, is another, it's a liquid format, but also sustainable and refillable. And I reached out to those two brand owners and I was like, you are two of my favorite, you know, brands out there. And we do so much talking behind the scenes. Why don't we get together our mutual retailers and talk about how the three of us exist on shelf together and how we each serve a different customer. And so that's happening in Nashville in like two weeks. and it's, and
I think, and it sounds very kumbaya, it's not really that. It's very, these are very smart business women, very smart store owners. Like it, everyone, it's not a bunch of altruists. It's people that are trying to do good for the planet, of course, but also, you know, improve their own livelihood. And I think that that is something that people feel when they see the brand and they see these activations in motion.
Aaron Alpeter (35:47)
It's interesting because when you talk about investing in these retail partnerships, it sounds like you're not bringing them out there to talk about how great DIP is and how they should sell more and things like that. It's really more like, yeah, hey, we're all connected because of DIP, but what we wanna do and what we wanna talk about is actually all the other stuff, right? And where we can be helpful to each other. And I think that's a really important lesson.
Kate Assaraf (35:55)
Yeah.
Mm-hmm.
It's, and you know what? I think my job would be very stale if it didn't have the people in it. You know, at a time where everyone's trying to like remove headcount and bring AI in, I like rehumanizing my business. I like the human element of my business. And anytime I can invite people to get together, it's just, I don't know if it's because I'm Persian and it's like part of our culture. I just like to get people together and having a good time. Might also be the New Jersey in me, I don't know.
Aaron Alpeter (36:37)
It
makes a lot of sense. a lot of contrarian views and just perspectives on how you've chosen to build the business to Say no to growth that may be you know, not advisable as you look back and where things are Do you feel like you've given anything up? By having these views over time or do you feel that that you are right where you want to be?
with it. Let me rephrase that. don't think I did.
Kate Assaraf (37:05)
I'm right where I wanna
be, but I did give a lot of things up. So it's both. very happy. Like I spring out of bed in the morning and I love to run my company and it brings me a lot of joy. And the scaffolding is very, very strong, right? So like, know, whereas a lot of other brands or companies in general, they have to kind of hemorrhage money to get customers. We actually don't have to spend a lot of money to get customers if any.
Aaron Alpeter (37:08)
Okay.
Kate Assaraf (37:34)
And that's a very, very special place to be. Like if the internet disappeared, would still survive. Like if social media disappeared. And that's like not something a lot of companies can say because I've spent so much time building the brand in real life. But on the other side, I don't, I think I've stunted the growth of the company ⁓ out of fear of more money, more problems. Do you know what I mean? Like the bigger you get, the...
Aaron Alpeter (37:57)
Yeah.
Kate Assaraf (38:03)
And when you, I mean like massive and I've seen it many times in the beauty industry. The bigger you get, the less cool you are. And so to stay in that lane of being something that is discovered, that feels treasured, that feels found versus, you know, really having like a mass brand that everyone wants, like I would just say like a liquid death that's like cool and big. But then like suddenly you start to see like your cool factor, it doesn't have a long lifeline.
And so I've given up this explosive growth in order to keep people excited. Does that make sense?
Aaron Alpeter (38:39)
Yeah, I follow it. mean, do you feel that you're inherently putting a cap on how big the business could be one day? Or is it something where eventually, you know, it may make sense to be as big as you're talking about, but you're just gonna get there differently from other people.
Kate Assaraf (38:56)
Sometimes I do feel that way and sometimes I think that that might be, you know, an issue that I personally have with when I, you know, I see so often and because I talk to other entrepreneurs a lot that they are like right now, like the meta ads aren't working. Like it's not working. Like, or sometimes they are, the ads are working, but they have to sell three times to the same customer to make any money back. That is like,
hamster wheel I don't want to get on. That is like when you're working to sell one thing to the same person three times before you make a single dollar. Like I don't know whether that's where I want to be even though on a if you look at revenue it looks great. know could be a 50 million dollar company but it costs me you know 40 million to get the 50 million. Do you know what I mean? And so there's nothing there's no juice left.
Aaron Alpeter (39:52)
Yeah, I mean, it almost sounds like there's a natural baseline demand or just plateau for a business. There's this steady state where you're just going to exist. And a lot of times the advertising, the marketing, all sorts of things can almost be propping it up. If you're always selling something on promotion, you no longer have a promotion, you just have a lower price and a lower margin.
Kate Assaraf (40:02)
Yeah.
Mm-hmm.
That's exactly what
Aaron Alpeter (40:17)
Yeah, so kind of what you're saying here is that you would much rather have a stronger core. You want to be profitable from first sale. You want to be profitable from day one. And if that means that it's smaller, slower, more manual to begin with, that's okay because the ultimate outcome, both in the short term and long term, is that you're able to provide for your family and your team and you have a work-life balance that is the right fit for whatever you're looking for at the time.
Kate Assaraf (40:42)
Totally. That's exactly right. Nailed it.
Aaron Alpeter (40:46)
Yeah, no, that's pretty interesting. mean, when you think about talking to founders who are running the traditional playbook, what are some things that you think they rarely get to experience or control by doing it the way everybody else is doing it?
Kate Assaraf (41:02)
I think they rarely get to experience peace, which is the most valuable asset you can have as a business owner. They are constantly kind of in this turbulence and churn of what's working, what's not working, KPIs, like all these things. And sometimes that can really, really affect your life, you know? And I don't know whether it sounds too like, like hippie dippy of me to be like, I don't want that life. I don't want that life of...
of growth at the expense of like mental health or you know your own nerves like what the the and it's it's a little ironic right because we are doing well as a brand we've been seven figures year after year we grow year after year but again i'll just use the word scaffolding the scaffolding is so strong that i don't have to do a lot of that extra kind of you know gymnastics to figure out what's working and what isn't ⁓ but i i see a lot of
of my entrepreneurial friends that have huge brands. I know some really big brand owners and you would be surprised how often they're like panicking about marketing that isn't working, especially since I'd say September of 2025, that since then marketing has gone haywire and consumer spending and trust has gotten even worse.
Aaron Alpeter (42:23)
Yeah, no, it's interesting because I'm sure there's some listeners who are like, wait a minute, I can enjoy what I do. I don't have to be burnt out as a founder. That's an option. And you know, I think what resonates with me is what you're talking about is so often as a founder, you are building something and you are working toward the eventual payday, right? It's like, I'm gonna...
Kate Assaraf (42:29)
Yeah.
Aaron Alpeter (42:49)
I'm going to run myself into the ground for the next eight years and hopefully I can sell this and then I can have a pile of money and then I can go and retire. It kind of reminds me of the story that I heard. It was probably true or probably made up the internet, but there was basically this consultant who was on a beach in Mexico and met this fisherman and was kind of bored because he's used to working. said, hey, you know what? You should buy
some more boats you know you should go out and do more and he's like well you today I have what I need for my family I spend time with my family and like I'm happy he's like well you don't understand if you if you buy more boats then you can get more fish and and then he's like well if I have more fish what do need to do it's like well then you could hire people to run the boats for you and then eventually you get to a point where it makes the story goes on where this this consultant convinces this fisherman guy to go and do all these things to build this big fishing empire so that one day
he can spend time with his family. And it was just this interesting kind of circuitous thing of the thing that people are looking for, that piece, as you mentioned, of why it is that they are interested and motivated in doing what they're doing. A lot of times that can be had in a different framework than what's there. Because let's be honest, I when you're in a VC backed company,
It's good for the investors, right? They want people to do a bunch of work and to have a big exit because they're the ones that are going to get the biggest benefit from it. And of course the founders, they have done well, they've got good liquidation purposes, but how many people do you know who have worked their tail off, have exited, and by the time they've paid everybody, they don't really have something that is enough to retire on and have that piece they're looking for.
Kate Assaraf (44:10)
yeah.
Yeah,
it's literally a one-way ticket to a hamster wheel city. I don't want it. And that's not to say I would never take investment. It's not to say, but if someone did want to buy dip or wanted to invest in it, I could go to them with full confidence being like, look at how strong the sales velocity is. Look at that genuine enthusiasm for the brand. Look at the amount people have, the return customer rate. Look at, these are the metrics that actually matter because
Those are key indicators that you've made something that people love.
Aaron Alpeter (45:03)
Yeah, when you look at the industry in totality, you go from this D to C to Amazon to big box store framework that we're in, where do you think the model is the most fragile?
Kate Assaraf (45:14)
I think once it hits Amazon, I think it gets the most fragile only because, only because you've lost your customer. Like D to C, you're still owning your customer. You're still owning the experience. You're owning the customer service. You're owning that relationship. But once, once that customer leaves and goes and adds your stuff to cart with a bunch of other junk, like then you've kind of lost them. Like why would they come back to your website ever?
Aaron Alpeter (45:46)
Good point. You got to ⁓ have some different offer or something else that encourages them. yeah. Yeah, well, again, it's more effort to your point of now I've got to have Amazon SKUs versus D2C SKUs versus retail SKUs. And I've got to manage that inventory so I can see how in the pursuit of growth, you can end up in a situation where you have a lot more work with not a whole lot more outcome.
Kate Assaraf (45:49)
I'm like, please come back. Please. You know, it doesn't work like that.
Yeah, I mean for me like so there's a single store in New Jersey for example. She's sold just under $200,000 worth of dip in her one store one building. There's a store in Maine that sold well over 140,000. There's one in Virginia that's you know just as much as those guys. Like there's one in California like their dot there's some real rock star stores. The second I put my stuff on Amazon what do you think happens to their sales? Like
That's what I think about. My sales would be great. But also, is it worth burning the relationships that I have with these stores? And it might be small thinking, and I don't care if it's small thinking, but I very genuinely love running the company, and I very much genuinely love ⁓ these people that are talking about real sustainability all over the country. There's a lot of them, and it's growing, and it's exciting. And you see people kind of...
starting to cancel their prime memberships. Like it's the thing I've hoped forever is like that people start to return to in-person shopping because they're fed up with like, you know, seeing a picture of something and then finding out it was a ripoff from a small brand or buying something that looks like it was made of cotton. It shows up and it feels like a plastic bag against your skin. People are fed up and there's no accountability with Amazon. Like you really...
There's really no accountability between buyer and seller there. And so I think people want to rehumanize commerce. That's my prediction, I think, for 2026.
Aaron Alpeter (47:50)
That makes a lot of sense. mean, it reminds me of a...
argument my wife and I had recently is I was a big fan of Temu. I'm like, this is great. It's so cheap and if they want to subsidize and give me away $500 for the stuff for 20 bucks, sure. But I think what turned me off was we need to get a glass measuring cup, a liquid measuring cup. And so ordered one and she's like, this doesn't look right. And the two cups was not two cups. It was something like 1.8 cups because we had the old one, we were measuring back and forth. I'm like, oh,
Kate Assaraf (48:18)
you
Aaron Alpeter (48:23)
this
isn't just cheap, this is bad, right? And so, you you buy those things and you're like, okay, well this is going straight into the recycling. And I'm like, that's probably not a sustainable habit, either fiscally or environmentally ⁓ for my shopping.
Kate Assaraf (48:37)
They're laughing at you over there in Temu. They're like, look, you got someone to buy the wrong size cup again. Like, I don't know. I find that when people don't think about purchasing off of sites like that, say you don't care about the environment. You probably care about your neighborhood, right? And you probably care about your salary and your hard earned money kind of just exiting your neighborhood and going overseas and never coming back. You know what I mean?
Aaron Alpeter (48:39)
Absolutely.
Kate Assaraf (49:02)
Like we're taking, if everyone's taking their salaries and just sending it overseas, like it's not, it doesn't really come back unless we're selling something back over there. so in order to kind of keep the community where you live alive and rich, it's better to shop where you live because your money stays circulating around and pays for, you know, your kids' teachers' salaries. Like those taxes are like really what makes your community cool. ⁓
In some cases, not so cool, but at the heart and soul of really shopping locally, it has to do with keeping the stores alive so that not everything becomes an urgent care or spirit Halloween where live.
Aaron Alpeter (49:46)
You got me thinking now. Yeah, there's a whole bunch of broader impacts that I think most consumers don't think about. you know, maybe you live in Bentonville and you're okay to shop at Walmart because that money is coming back to your community. yeah, I think that we're going to see hopefully a lot more smaller businesses out there. I think it's never been easier to start a business and it's never been easier to kind of. Well, I think people are to your point, craving that curation, that individual
Kate Assaraf (50:15)
Yeah.
Aaron Alpeter (50:16)
Connection and so hopefully there are a more businesses like like yours that pop up for the next couple of years
Kate Assaraf (50:22)
Yeah, thank you. I think the first thing I have to do is prove that it could work and prove that it could be profitable. And then now, hopefully, other people that may be listening to this might say, OK, you don't have to follow that playbook. You can do it a different way. And your company will absolutely be worth buying because it real customers, know? Repeat customers. That's going to be the new metric of someone purchasing a company. They're going to be like, well, how strong is the
Aaron Alpeter (50:41)
Yeah.
Kate Assaraf (50:51)
is the fan base, like how strong, how do you keep the connection to your customers? Like what's the email list? I think they're going to start to look at those metrics pretty strongly too.
Aaron Alpeter (51:00)
Yeah. Well, Kate, this has been a wonderful conversation. ⁓ Certainly different contrarian, all those sorts of things, which I think make it a good episode. We've got two questions that we always like to ask our guests on Build a Business for Buying, and I can't wait to hear your answers. I think they'll be very different. But the first one is what is the best example of a moat that you've seen a business build?
Kate Assaraf (51:16)
you
Ooh, the best example of a moat. So I think, I think dip has done a, done a good job of that, where I have, I have created this safeguard against a competitor coming after us online. For example, you know, one of our competitors has tried to fit, feed the LLMs with information about dip, but it doesn't work because the dip sales are done in person. So it doesn't matter. Like they could say whatever they want online. It's not that they could say whatever they want, but like,
the discoveries happening in real life and it's very hard to infiltrate that when that's not how the customer shops for this particular product.
Aaron Alpeter (52:02)
Essentially, the robot overlords can't take over things that are done in the physical world. So that's interesting. That's great. And then if you were to be advising a founder today who was starting from scratch, what would be one thing you would tell them they should focus on in order to build a business worth buying?
Kate Assaraf (52:10)
Yeah.
I would say, and this is, know, the hardest lesson I ever learned in my first business was taking a partner and sharing the dream. And I would say that the first thing I would tell someone is to, instead of trying to start a business and find a partner that would, you know, fill in the gaps where you think you fall short, I would say to hire freelancers and grow in that way. ⁓ Because I think the most expensive lesson I ever learned was, you know, not,
Not having like having a business partner that we didn't we didn't align on how we wanted to run the business and you really don't discover that until money starts coming in. So I would say the best thing you can do is really bank on yourself and make sure that you don't let your confidence slip because you don't know how to do everything. Someone else knows how to do what you don't know how to do and they don't need to be part of the company.
Aaron Alpeter (53:19)
Love it. Well, thank you so much for being on the episode and thank you all of our listeners for joining and for learning about DIP and all these contrarian things of how we should be building businesses differently.
Kate Assaraf (53:29)
Thank you so much.