Bootstrapping a 6-location Hair Removal Salon with Shobha

Alan Li (00:01) Welcome to opening soon, a podcast where we interview retail founders about how they started and run their brick and mortar businesses. I'm your host, Alan Li, I run Signs and Mirrors where we make beautiful signs and furniture for retail stores. I also help run FotoLab a self-portrait studio with locations in New York city and Houston.

Alan Li (00:20) Today's guest Shoba Tamala is the founder of Shoba, a leading hair removal salon with six locations throughout New York City and Washington DC. We dive into how Shoba graduated from Harvard Business School and left a lucrative career in consulting and technology to open her first salon by renting space from her hairdresser. We'd also dive into why Shoba decided to bootstrap versus raise funding and how family played a role in that decision.

Alan Li (00:49) All right, welcome Shoba. We're super excited to have you on the opening soon podcast. Thank you for being here. So where I wanted to start was take me back to when you first decided to open Shoba. I know that you had a pretty illustrative corporate career or you're at Bain, you're at Procter & Gamble, you've worked at a high growth tech startup.

Shobha Tummala (00:53) you, Alan. I'm excited to being here.

Alan Li (01:09) What prompted you to say, I'm leaving all that and let's start a four wall business in hair removal.

Shobha Tummala (01:16) Yeah, yeah. So I had a few starts. Let's just say that first of all, because I think that when I first started, it wasn't as clear that it's a hair removal business. ⁓ I started Shoba because I feel like for a lot of the same reasons that other people start is that what I was craving in the market just didn't exist. I wanted a place where I could go get threading done in Manhattan.

Alan Li (01:27) Hmm.

Shobha Tummala (01:41) So this is 2001. Now I know you guys see a million places in Manhattan. They're on every corner. But in 2001, it didn't exist in Manhattan. So I had to get on a subway, go for 45 minutes to actually go get my eyebrows threaded. I had to go to the back of a nail salon to get hair removal, to get waxed for my body. Most times, I couldn't make appointments. So I was working long hours. It would be really hard to just go there and figure out whether I could

Alan Li (01:44) Haha.

Yep.

Wow.

Shobha Tummala (02:07) get the appointment or not, or have to wait in a long line. And so I was just really craving a place that prioritized hair removal. But it started as threading only. So I really just craved that I could go in Manhattan where it was clean. I could make an appointment. I could get threading done. And also that I didn't have to go to either the back of a nail salon or Elizabeth Arden. That was the other experience. You change into a robe, and it was like a very long, lengthy service.

Alan Li (02:10) Mm-hmm.

Yeah.

Shobha Tummala (02:32) And so that's how it started. It started because I was complaining about it to some people at work. I was working in a tech startup and they said, you should do it. Why are you? And these are serial entrepreneurs. were, know, this is their fourth company they had founded. This is their used to this. And so they just said, you should start this. And I said, what do I know about beauty and service and what I'm just going to, you know, pitch all this. And just to give you a little bit of background, you know, I come from, like you said, this kind of very structured environment of, you

Alan Li (02:46) Mm-hmm.

Shobha Tummala (03:01) get good grades, do these things. And so now I was going to go start a business. It seemed somewhat crazy. And so that's how I started. said, OK, I'm just going to I think I looked forward. And I said, when I'm 80 and I look back, will I regret not having done this? And so I said, I'm just going to jump in. I'm craving this. There's other people that are craving this. And every time I took folks that were non-South Asian to these places to get threaded, they loved the experience. And they said, but I would never come here without you.

Alan Li (03:22) Mm-hmm.

Mmm.

Shobha Tummala (03:28) because they didn't feel it wasn't comfortable, it didn't feel familiar to them. So I said, is something that I think could really work in Manhattan and I could create a place and environment that would work for a lot of other people. ⁓ And so that's how I said, okay, let's try it, let's see what happens.

Alan Li (03:39) Yeah.

I think many of our listeners and friends have these ideas in the back of their minds and they have, you know, very nice corporate careers working at top investment banks or consulting firms or other corporate firms. But taking that leap from actually thinking, there's a problem here to actually doing. How was that? Was that scary for you? Walk me through that thought process.

Shobha Tummala (04:04) Yeah, sure.

I think, first of all, Alan, I was not the first person to complain about this. I think every South Asian female that was a friend of mine complained about this. So I will say that. The idea existed. I think the thing that really, I wanted to start a business. I had started at a bigger company, kept going. I really fell in love with the startup environment. So I knew I wanted to stay in kind of that type of environment where I would really have an impact.

I really didn't want to regret not starting a business. here I was, was handed an idea is what it felt like. And so I wasn't going to let fear be the reason that I wasn't. Fear of failure, fear of whatever, not having an identity was going to be the reason that I was going to not do it. And so it was really just retroactively looking at myself and saying, don't, and I was 28 at the time. I didn't have a family. I said, if I'm going to do something this crazy, it's going to be right now.

And I also had people around me that were serial entrepreneurs, like I said, that were actually very, very encouraging. And I think that was really helpful for me to do it.

Alan Li (05:01) Yeah.

Gotcha. so now you decided to start and I know you didn't want to raise at least funding for the initial concept. And I think I read somewhere that you did it pretty scrappily ⁓ inside one of your, was it your hairdresser's salon and you rented some space.

Shobha Tummala (05:15) Yeah. ⁓

Yeah,

so let me take you back. So 2001, venture funding and in general would probably not have been as available for a beauty service on top of it. So beauty products, yes, but beauty services, probably not. And also I just really wanted to test the proof of concept, right? So I was bringing a service that nobody, it didn't exist. So I needed to try it out is how I felt. I had to educate the marketplace. So what happened was I was kind of testing the market and I wrote,

Alan Li (05:40) Mm-hmm.

Shobha Tummala (05:45) I hand wrote letters to editors. And back then I had to go to magazines, look it up. It wasn't online. I had to actually go do the work. I hand wrote letters, delivered it to the editors. And then while I was trying to figure out how I'm going to do it, who am I going to hire, all of that stuff, Vogue, an editor from Vogue called me and said, we want to interview you. We think threading is going to be the next big thing. You're ditching your career with all these companies and you're starting it. So obviously there's something here. So they wanted to interview me. I didn't have a place.

I didn't have someone to actually provide the service yet. And so we ended up meeting at a restaurant,

Alan Li (06:20) Vogue interview happened before you even opened your location? so you wrote the letter just telling editors, I'm thinking.

Shobha Tummala (06:23) Correct? Correct. Yes.

that this is what I'm going

to, this is what I'm going to, this is what I'm doing. This is what I'm doing. No, no, no. So this is, I'm doing this. And I had seen a small article in W Magazine saying threading, just something about threading. And I said, you know what? This is going, know, it was already in my mind, if you will. And so that put the, you know, that kind of, that gave me the idea. Let me, let me, you know, reach out to other editors and talk about that I'm doing this. And then when they reached out to me, I think,

Alan Li (06:31) wow.

Shobha Tummala (06:55) They gave me credibility. I gave them credibility. so I had to, you know, so we met, I showed her, I said, we're in the process of looking for space. I was very open about, you we're looking for space, we're looking for people, this is what I'm doing. And we did the interview. She said, it's most likely, you know, I'm going to finish it at this time. So I had a timeline already set up now that I had to find a place, I had to do this. And so I hit the streets and I said, how can I open a place within, you know, and so that's really,

Alan Li (07:08) Mm-hmm.

Wow.

much time did you

have between... Wow. Wow.

Shobha Tummala (07:24) Oh, a few weeks. This is nothing, like a few weeks, right?

So I was, and so I, that's where I was scrappy. And I said, what am I going to do? How am I going to figure this out? I'm not going to build out. I don't have any money to do this yet. What am I going to do? And so I was just walking the streets and I really wanted to be on specific areas. So I was all picky on top of it. I said, I want to be on Mercer street. I want to be like really close to Broadway, whatever it is in Soho. So I ended up just walking into salons and asking if they rent me a chair and I got really lucky.

Alan Li (07:46) Mm-hmm.

Shobha Tummala (07:51) with this gentleman. had a really big space and for whatever reason he was there alone and he said, sure, okay. And it was the perfect space, Alan. Like the timing could not have been better. and then I had to find somebody and I had no idea, right? So I learned how to do it, but I'm not gonna do this. This is not my expertise.

And so I was going to Indian restaurants. I was going to, you know, talking to everybody about trying to find somebody. I was putting ads in like local newspapers because there was no, you know, kind of way to reach out. There's no indeed back then. Right. So was trying. No, no, no, no, there was no Instagram. It was MySpace. I don't even think, know, it MySpace. That's right. Right. Right. So and so I had somebody respond. And the interesting thing is nobody wanted to work for me because I was going to give them a check.

Alan Li (08:13) Uh-huh.

You're not, you're not posting on Instagram. Yeah. I see. I know. I know. Yeah. Exact. Buy space. That's a friendster. Yeah.

Shobha Tummala (08:37) And back then in the beauty industry, they were used to getting paid cash. And so they didn't want to check. So that was like another difficulty. And I said, no, I have to stick to this. It's going to be a real legitimate business. I want it to be a check. And I found this one person who's probably one of the best hires I've ever had. She stayed with me for many, many, many years and actually moved out of the city. But she wanted a check because she was trying to buy a place. And so anyways, the timing of this worked out. I hired her, ended up bringing the editor in for her experience. She loved it. Thank God.

Right? And then we, the article, you know, the article was written and it was a two page spread on how threading was going to be the next big thing. And so, and it was delayed actually, it was 2001. So 9-11 and the timing of all of that, it got delayed to October. So we opened in this space in June, end of June, right before July 4th. And then for those few months before Vogue came out,

Alan Li (09:13) my gosh. So.

yeah.

Shobha Tummala (09:30) I was going outside telling people they could just come and experience it. Because my whole thing was that I just wanted to educate people about it. And they thought threading. They're like, you're going to sew hair on my eyebrows? You're going to do what? They just had no idea what it was. So I was trying to get people to just come inside. And it was so challenging. I would give them free services. I was trying to just go educate. And it wasn't the way it is now. No influencers, really no social media. The only way was through magazines. And so trying to get into New York magazine or trying to get in through

you know, whatever it was, friends and family. It was really hard to get in. And so when Vogue came out in October, those are really our first tranche of clients that walked in. what I wanted to see is, are they going to come back? Is this a gimmick in their mind? Is this actually going to work? And they came back. And they kept, it was a repeat kind of business. So nine months later is when I actually opened my own location in SoHo.

Alan Li (09:59) Yeah.

got it. How did you have the foresight to get press even before you scouted your first location? Because I think the typical mindset of opening for wall or even physical product is let me build a great product. Once I have it built, let me get pressed and let me focus on marketing. But you did it the opposite way. Why? How did you know how to do that?

Shobha Tummala (10:34) Yeah. Yeah.

I did, I did.

Well, I was scared that there wouldn't be a market for it. So it's not as if I was taking the market share from an existing product. Eyebrows weren't even a big thing back then. So nails were a big thing, big spas like Elizabeth Arden were, and bliss were a big thing where you get facials and these oxygen things and whatever, but not eyebrows. Eyebrows were not a thing. And so I was actually just worried that this was something that I thought was important and a couple of people that I knew.

Alan Li (10:53) Hmm.

Shobha Tummala (11:08) But this wasn't actually going to be something that was scalable, something that could exist for a long period of time. I think a lot of people think entrepreneurs are very, they're risk takers. But I think they're actually very calculated risk takers. And that's how I think of myself. I'm careful. I'm careful about what I'm going to be risky about, if that makes sense. And so, right. That's exactly right. And so.

Alan Li (11:29) Educated risks.

Shobha Tummala (11:32) To me, I needed to prove that this concept was going to work before I actually sat down. And I had a lot of pressure. The people around me thought I was crazy. My family thought I was crazy. You're going to ditch this job offer from whatever bank, and you're going to go do what? In the service industry? We don't do that. What is that? And so there was this idea that what I was doing was crazy. My business school classmates thought I was crazy. My friends thought I was crazy. I really didn't have anybody except a few entrepreneurial folks around me.

Alan Li (11:40) Ha ha.

Yeah.

Shobha Tummala (12:00) that were new in my life to a certain extent that encouraged me. So I had this fear, I went running every day. It was almost like just to get kind of the, you know, the butterflies in my stomach out for the first hour of the day so I could start my day. It was scary. And so I needed to kind of give myself things that I had proof of concepts along the way to say that this is the right path for this business and me.

Alan Li (12:23) I see. So it was

more out of necessity and proving to yourself that there was some sort of demand or need for the product you were creating versus capturing market share. That makes sense. ⁓

Shobha Tummala (12:31) Correct. Correct. Correct. Yeah. And I also didn't

want to raise money, Alan. So I was coming out of the tech, you know, the bust, if you will, you know, where they raised a ton of money. And then I had been working at a startup, they raised $50 million. And then guess what? Like literally a few months later, they came and said, the investor said, we're losing our shirt. We want our money back. And we had to close shop.

Alan Li (12:40) Yeah.

Wow.

Shobha Tummala (12:52) Right? So I came from this place and I said, I'm going to sell a widget and I'm going to get money for it. It's going to be very, very safe. And so I came from that. And I really wanted it to be something that I controlled, that environment, and not have to go raise a lot of money, spend a lot of money, and all of that. So that's how I started. I was very careful even from that perspective.

Alan Li (13:11) Got it. Yeah, it seems to come in waves where there's a lot of venture funding. It's, the top highlights on all the press. And then, maybe interest rates go up and then venture funding drives up and people are back to fundamentals. you lived through that through 2000 and obviously, you know, over the last few years as well. ⁓ Exactly. Gotcha.

Shobha Tummala (13:28) Right. And I didn't want to be at the mercy of that. I really didn't want to be at the mercy of that. Yeah.

Alan Li (13:33) And for when you when you did the handwritten notes, what was that a decision you made versus over email or was that just how it was traditionally done back in 2000?

Shobha Tummala (13:41) So

yeah, have to, it's all kind of blurring now, but I don't remember that I could write emails to specific editors. It's not as it was now. It's kind of like the editor in chief and then here's the magazine. And I had to go find who wrote what. And it was that I had to guess, kind of. And so I hand wrote. And I also thought this idea of handwriting would separate me. But I don't think it was as easy as I could just get their email and email them.

Alan Li (13:51) I see.

Got it. Okay. Um, well, that's really cool. And then now you have customers coming in from the Vogue cover. You're going out on the streets, talking to people, bringing them in. It's a recurring business. Oh, it's going on the streets. That didn't work. I not even offering them free services.

Shobha Tummala (14:16) that didn't work. Just saying that didn't work. I just got really hot. Not

at all. I mean, maybe one person would come up, but you know, think about New York City, right? They're used to people coming up to them, offering them a free microwave, like whatever they're so used to ignoring it. They thought it was crazy. They didn't know what it was. They didn't like threading. What is that? You're to use needles. You're going to sew my hair. Like I don't get it. So it was. It was almost it was Vogue Articles and word of mouth.

Alan Li (14:39) So what was the growth in the beginning? it almost all the Vogue article or

word of mouth?

Shobha Tummala (14:44) It was the

Vogue article and word of mouth. So the people that initially tried it, they were hooked. And they're like, this is amazing. Why have I not done this before? Because it didn't exist here. It existed 45 minutes away and not in an environment that you would have enjoyed. And then they told their friends. And so that's really how it grew initially.

Alan Li (15:00) And then after eight months, you open your own studio, walk me through your day to day. What did you do on a day to day basis?

Shobha Tummala (15:06) I mean, even finding the place I had to, you it was hard to just find a place. Like I actually ended up opening in an office space. So I didn't open retail level. I opened on the fourth floor of a building and that was not necessarily common. And so finding the space, I did everything myself, painting it, like whatever it is with friends, right? And a lot of it was just trying to get, trying to educate people about what this service was initially. We're talking about the first few months.

Alan Li (15:30) Mm-hmm.

Shobha Tummala (15:30) what threading

was, right? And trying to just get people. My thing was just trying to get people in. And so once they came in and they tried the service, was much easier. But it was about how do I educate people? So I was involved in a lot of networking groups. I would go and meet people at different events. And we were trying to give away free gift cards. Because that was different if you got it in a goodie bag. It felt different than me coming up to you on the street.

and trying to get you to come up to my office space or whatever it was it felt like at the time. And also I spent a good amount of time just talking to people, trying to get contacts within magazines because really that was the main influencer at the time was magazines, editorials. I didn't have money for paid ads, but I wouldn't have done that anyways because I think a paid ad has less value than an editorial.

Alan Li (16:20) Yeah. you're doing all these growth activities, I'm assuming after you open slowly, people are being educated, there's good word of mouth. Opening one location is one thing, but how did you think about your second location and what was the turning point of, okay, now things are running smoothly, I have the confidence to open up more.

Shobha Tummala (16:31) Yeah.

Well,

our clients would ask for more, right? Like our clients would say, do you have a midtown location? When are you opening the next one? Whatever it may be. So before I even opened the second location, we added other services. So I actually thought, and that's why I said we've had multiple starts, we added sugaring and waxing because our clients were asking for more services around hair removal. And so I didn't know it was a hair removal concept. And so that's very interesting just to keep it flexible in terms of how the brand grew.

Alan Li (16:47) Mmm.

Shobha Tummala (17:02) So we added sugaring. I was making sugaring gel in my kitchen, right? Because it didn't exist back then. So it was a family recipe that I perfected. And sometimes some batches would work, some wouldn't. But I was making this stuff. And we added on those services. So then we were able to increase our average service ticket. So we needed fewer clients to break even. I kept my costs very low so I could actually break even. And so we were breaking even before we even moved into it because of the nine months worth of clients.

that were coming into my space, I already knew we were breaking even. So now with the addition of these additional services, my average service ticket went up. I was actually making money at this point because it wasn't expensive, right? It's me, my time is free, and then the people that are there. I'm trying, yeah. not for a while. Not for a while. So probably, I want to say a few years in, and I would say that that's probably one of the things that I would have done earlier.

Alan Li (17:43) When did you pay yourself?

Not for a while.

Shobha Tummala (17:54) is that I would have put my kind of salary in there earlier and think about it even as a loan to myself. And I didn't do that. I didn't kind of prioritize that because I had had savings and I said, OK, this is my savings. This is what I'm going to live on. And so I didn't think about my own. I was just excited that the business was breaking even and then I could grow and I opened a second location. I opened a second location within a year of opening that first location. So yeah.

The press really helped a lot. We were on the front page of the New York Times style section. you know, and we, and that really helped us. We actually started doing, you know, there was a movement and a timing of all of this where hair removal was really taboo. And we were in that moment when it was starting to, Sex in the City was a big deal. They were talking about this idea of Brazilians and bikini waxes. And so, you know, and so it was starting to get more airtime in that way, but there didn't exist kind of a place other than maybe one place.

And we wanted to bring cleanliness and safety and process and speed to this kind of quality experience to a service that didn't exist at the time. So because we were able to do that, we got best Brazilian in New York Magazine. And I will tell you, Alan, that just made us. mean, the amount, we couldn't keep up. We couldn't keep up with the traffic that came in. Because there was just no, but we were really the first ones to enter the space, right?

Alan Li (19:11) Wow.

Shobha Tummala (19:14) And so, and I was still thinking we were going to become this Ayurvedic spa, by the way. Like we're doing a gazillions of Brazilians at this point and threading and everything. It was growing. We couldn't even keep up with it. But on the side, we're creating a product line. We're adding facials. And I think a year after we started doing that, we just realized, wow, we're adding so much complexity to the experience and so much cost. So the operations were not complex. shh, we have a facial.

but it's a Brazilian, like we can turn the music up. It's just very confusing. So we decided to really focus on hair removal, which people thought it was crazy to do that because one service places didn't exist back then. So like, except for nails and even nails that you could always do other stuff there. So the fact that we were just going to do one service, but it really felt like from an economics, when you looked at the economics, it really made sense to do it. So, you know, we took a 45 minute service and systematized it so much that it became a 15 minute service.

Alan Li (19:42) Gotcha.

Mm-hmm.

Shobha Tummala (20:08) So if you're making $55 in 45 minutes, now we're doing it in 15 minutes and people are coming in and we created an experience around it, it just made sense for us to focus on hair removal. We could do it well. The whole entire four-wall experience was about the same experience. And that made it so much easier to manage.

Alan Li (20:25) Gotcha. And now I know that you have, I believe it's seven locations throughout, ⁓ six locations in New York, got it, New York and Washington DC. And now there's more people aware of hair removal and different types and there's more competition. How do you think about competition? Because you were one of the first to start and they're seeing Shoba doing really well. They're copying the idea.

Shobha Tummala (20:29) Six, we have six now. Yeah, we closed a few during COVID. Area.

⁓

Yeah. Yeah. Yeah.

Yeah. So, you know, I mean, so we, and that's why I think at the beginning, I said, we've had multiple starts and it's because you have to keep reinventing yourself. This idea that you start a business on one thing and then you just stay there, right, is just not realistic. And so, you know, we started with just threading. We added sugaring. We added waxing around the same time.

Both sugaring and threading were new concepts to the marketplace, if you will. The idea that we were just hair removal. And so we added facials. They didn't do well. We added laser hair removal. So we're actually the only one-stop shop for hair removal right now, which means you can get multiple forms of hair removal under one setting. So that is unique about us. But we've had those starts along the way. So we've stuck true to our brand, but we've evolved. And I think that's really important to do.

as time goes by, because we've been in business for 24 years now. That's a long time to, you you could very easily go stale. And so it's very important to keep up with the evolution of the brand, but staying true to who you are.

Alan Li (21:45) Yeah. And, so now you have locations in different cities. ⁓ tell me about the thought process of opening in a completely different city, but maintaining quality control. Cause I know that's an issue for a lot of listeners and people who have one or two locations in the city they're in, but, how are they going to get confident with hiring a manager or someone else in a different city?

Shobha Tummala (21:55) Yeah, yeah, yeah.

Yeah, and I think, so one of the things that we really do focus a lot on is quality control. So training, we train more for something like threading and waxing than some hospitals do on a procedure is what I've learned. And I've learned that because we have nurse practitioners who do laser hair removal and they think it's crazy that we...

Alan Li (22:22) Wow.

Shobha Tummala (22:27) that we train them for two weeks before they can actually go out on the floor and be by themselves, almost be on the floor by themselves. And that's after two weeks. they said, I said, aren't you used to this? How do you do procedures in the emergency room or whatever? And they're like, no, they show it to us a couple of times and we're good to go. yeah, and I think so we focus a lot on the training. So even for some services that seem very simple, like threading or waxing, mean, how complex is it? You're putting some wax on and you're removing it, make sure the hair is gone. But there's a lot to it.

Alan Li (22:41) That's wild.

Shobha Tummala (22:56) The idea of the dance of how you apply the actual wax, how do you remove it, how do you make sure that the client is comfortable. There's a lot, and people learn in layers. They don't just learn everything at once. And so you have to go over the same process multiple times so that they can learn different things in that same process. And so we spend a lot of time on the training at the beginning. We spend a lot of time on quality control. So we actually look at people's services every now and then.

So we have quality control sessions where we do that. Because the idea of consistency was very important to me. That was what actually was one of my pet peeves, is I would go someplace and then I only wanted to see one person and I didn't feel like I could go. And my whole goal was that you go to a place in New York, you go to a place in DC, it's going to feel the same. Whether you walk in, the experience of the actual store, but also the experience of the actual service. They're going to do the same steps.

And so it was very important to me. They obviously have their own creativity, because threading and eyebrow shaping is still an art in that way. But there's a lot of things that you can systematize and make into a process. I'm an electrical engineer, so I come from that background of process and structure. And so I brought that in to kind of a creative and an industry like beauty.

Alan Li (24:05) Gotcha. And I know that you also currently sell direct to consumer products too. And I think maybe this started throughout the pandemic. Talk to me a little bit about.

Shobha Tummala (24:11) Yes, yeah.

Yeah,

actually it started much earlier. It started in 2003 when I launched the second location, I actually launched products. And so one of the biggest things and challenges that we were facing is because we were in national magazines and because hair removal was so taboo, people didn't have a place to ask questions. People didn't have a place to go that they felt comfortable and felt that they could actually learn about this. And so we would get, we would start getting emails. We had a website that was back then it was

unheard of to have a website, believe it or not. We had a lot of information. People thought it was amazing. And so we would get a lot of emails and they're like, can I do this at home? Is there something that I could do? So it was really something that came, was born out of that. And our clients were asking for products that didn't exist in the marketplace at the time. And so I would try to buy products to sell to them that I thought would take care of that. And then they would tell me what the issues were. And I think that's one of the things, Alan, that we've done all along the way. And I think that as,

companies grow, it's harder to do, is that you've got to listen to the clients. Because they were the ones who gave me the idea to, I was in a training session and the client said, why don't you do laser? I get my eyebrows threaded, but I want you guys to do laser. I just want to do everything in one place. And that's how I I said, would you trust us to do laser? Now, I think that I can learn it and I can train it, but would you trust us? We do eyebrow threading. She's like, I would trust you guys. And that was literally how the idea was born. Same with products. We had our ingrown relief lotion.

I used to bring in a product and they said, this is really drying. I don't like it. Plus, it's a liquid. I want a lotion. And so we said, OK. And so we went out there and created it in small batches with a manufacturer. And we started slowly and small and came out with these products. The sugaring kit was really because we wanted to be able to ship it to people because they couldn't come to one of our salons. And so they said, I want to try this product, but I can't. Can you?

sell me something that I can sell to my provider or I can give to my provider and they'll use it or I can do it at home. we actually were going to focus much more on products, Alan. And we went to shows and things like that and people, the providers themselves didn't understand the market. They're just like, what you do hair removal and then you sell products after? like, you give a haircut, you sell products after, you would give a facial, you sell products. They just didn't understand. And I said, this is silly. We need to go back and just open more locations because

Alan Li (26:23) That's right.

Shobha Tummala (26:28) You know, we're doing really well on the service side. Why are we going to focus on trying to convince people that this is actually a marketplace when we could be doing more services? And so when we were trying to raise money, it was really challenging at the time. People did not like beauty services. Frederick Fakai was a big brand. They were a great salon. And their product business was bought, but their service business, no one wanted to touch. Nobody wanted their salon. And so it was really this kind of idea that we want the, you know, that the service side of the business was not a real business.

And the product side is something that you can scale and we can put through our channels, our distribution channels, but service is not something that we want to really be a part of. And I think Danny Meyer says it really well. He said, in a service brand, like a restaurant even, your brand starts over every day. And it's because if a client that's come three times and has an amazing experience, but they come that fourth time and didn't have a great experience, it's a stain on the brand.

So that idea of having to, you know, needing consistent quality and having quality control and being so, you know, what's the right word, just vigilant about your brand experience is much more challenging on a service side of the business. And I think, you know, a lot of funds, you know, a lot of private equity funds or venture funds, they don't want to touch it. They didn't want to touch it back then.

Alan Li (27:34) Totally.

Shobha Tummala (27:39) Now it's a different story. The margins are so high for service businesses. They're excited to be in a part of it. And service has also become really big with Amazon and some of the stuff that's coming in. It's much harder to be a retailer with products, right? So service has become all of a sudden much more interesting in the last 10 years or so, I would say. But that's not how it was at the beginning.

Alan Li (27:59) Was that a major decision point for you, whether to focus on product or focus on opening new locations? Because as an owner of a self-portrait studio, that's a classic question that I had. How do I grow this business? Well, if I want to grow a four-wall, then I have to sign a 10-year lease. I have to hire so many more employees. It's much more challenge. The capital investment is so much more challenging than offering a product that I could ship anywhere in the US.

Shobha Tummala (28:11) Yeah. Yeah.

Capital investment, ⁓ quality control.

100%. That's actually,

that was, mean, and I got burnt out. That was, you know, and I was at this point, you know, in my early thirties, I wanted to start having a family. It felt much more challenging to do the service side and still be really excellent and good and quality and all of the things that I wanted, right? I'm a control freak in a lot of ways. And so I wanted to, that felt much more challenging as we were growing. And I also moved out of New York.

So it was, you I moved to the DC area. it was just, it was something that I said, this is silly for me to not try to focus on something that's much easier to scale. And that's how I started on the product side on, I started focusing on the product side. I told you how I started on the product side, but started focusing on the product side. And then when the market didn't seem ready for it, right? And so you have to remember again, Instagram, all this stuff didn't exist back then. Twitter was just starting. I mean, it was just, you know, brand new, right? So it was much harder to be D.

D to C, I had to really go through other stores, and I had to go directly to providers through the salons. And so when it was much more challenging to convince the end consumer, ours is a very demonstrable product. It's that we have to convince you that this works and show it to you in a video. It's not something that somebody could recommend at Ulta. It's something that people are searching for a solution and coming and seeking us. It's not something that they're like, I'm just going to get a new shade of.

lipstick or I'm going to get a new shade of whatever. And so it was challenging not having that direct relationship to a consumer. it was almost made for us, that decision, I feel like. I really didn't want to lose out on the opportunity to expand. And so when I went to go look for funding, it was really challenging, like I said before. And they said, you need to prove this outside of New York. Like, New York is a different animal. You need to go prove this outside. So I proved it in DC.

DC, well, that's another metro area. You've got to prove it. And so there's this idea of constantly I had to prove myself about whether this concept was real or not. And at some point, I had a family in there. And so my ideas of wanting to grow the business at the same pace that I had when I was single changed. It evolved for me. And that wasn't necessarily as important for me.

Alan Li (30:30) So did you end up taking on funding or just you kept it bootstrap?

Shobha Tummala (30:34) I never took on funding. I ended up taking some debt. There was somebody who became somewhat of a mentor. He had 100 stores of auto parts in Canada. He said, I've never taken funding. In Canada, we don't really do funding. We just take debt. And so he showed me how to do that. I took debt to open more locations. I bought office space in New York and just kind of expanded the business. then COVID happened, and then we shut everything down.

And then I reopened a couple, but other than that, I'm kind of staying where I'm at. And that's a life decision based on where my family is, how old my kids are, and what I want out of it. Right? And so.

Alan Li (31:06) Yeah.

And are the product side of the business a bigger part of the product-first service portion now or?

Shobha Tummala (31:13) They're

not still. We haven't focused on that as much as I would like to, Alan. And we're a small team, and it's kind of what do we want to focus on, and what do I want to focus on. And so that is an area of growth for us. I think that's really something that we could take now, especially in the last x number of years with how you can go D to C so much more easily. We just haven't done

Alan Li (31:34) for listeners who are interested in the beauty space and wellness space and given you've been here for 24 years having opened, you six locations, what trends are you seeing? And if you weren't doing Shoba, what other areas would you be interested in looking at?

Shobha Tummala (31:49) In beauty specifically? Yeah. So I think wellness is huge. And what I mean by that, it's not like, I'm not talking about Botox, fillers, things like that, but just really functional medicine. So this whole idea of kind of going to the doctor once a year and getting your tests and that's enough is not what I have seen to be true for me. And as I get older, I think this whole idea of supplements and

Alan Li (31:50) in beauty specific for wall. Yeah.

Shobha Tummala (32:15) getting tested and getting screened on a regular basis and those type of things that where you can just from the inside out that you can really be healthy and understanding that. So whether it's nutritional experts, products like supplements, things like that, but also, mean, menopause care, which is huge right now in terms of.

Alan Li (32:35) Hmm.

Shobha Tummala (32:36) People are kind of just, it's the Wild West. People are just prescribing things, not knowing exactly whether it's working, not working. This whole idea of screening, whether it's for menopause, whether it's hormone levels, whether it's whatever it is, I think, so this whole idea of beauty is expanding, I think, beyond just kind of the physical outside. Yeah, and to me, it's an area that's fascinating and very interesting.

Alan Li (32:53) I see.

Are there any specific brands that you really love that are doing some work in this space or is it yet to be seen?

Shobha Tummala (33:02) Well, Function Health,

have you heard of Function Health? Mark Hyman, Dr. Mark Hyman is doing it, where they're actually, they are, know, for a certain amount of money, they do all the screening and then they, you know, so through blood tests, and then they give you the results and then tell you what you should be actually doing. And now they're doing physical screenings too. So you can go and get a full screen of your entire body and then just, you know, be pro, just prophylactically make sure that there's nothing wrong. And so I've, I've liked them.

Alan Li (33:17) Mm.

Shobha Tummala (33:28) A lot of the supplement companies that are clean. I can't think of any names right now off the top of my head, but yeah, that's space.

Alan Li (33:34) I see. Yeah. I think I heard

a functional. Do they have locations in New York and they, did they raise some venture funding?

Shobha Tummala (33:39) They just

raised money. The interesting thing is I don't know. So I think the lab work can all be done through other clinics and other kind of places. I don't know if they actually have physical locations. Which I think is also really fascinating, by the way, about how to start a business in four walls these days without starting it in your own four walls. yeah.

Alan Li (33:47) Gotcha.

that's interesting.

And then I guess in today, in 2025, I know PR and getting in, know, Vogue and other magazines was a big part of your growth process. How would you recommend someone get into PR now? And I know the editors get probably thousands of pitches per day. Like how do they break through the noise and get press?

Shobha Tummala (34:10) Yeah.

I just think it's really hard. also just don't think press holds the weight that it did in 2001 when I started. We don't really focus even that much on press anymore. I just think there is no magic bullet anymore, Alan. I think it's really challenging marketing. You have to be everywhere and try to do everything. And I think influencers do have, and it's not just one influencer, right? It's a lot of different people. So you have to try a lot of different

things to see what works for you, but you can't just do one thing. But I do think, and I know this is so sappy to say because everyone says it, but it's really true. Focus on providing an awesome service or experience, and your clients are going to be the best word of mouth that you've ever had. Because their ability to tout your services and your brand for us has been instrumental in our growth and really kind of helping us over the 24 years.

Word of mouth is huge. so especially as press started going down for us in terms of not in terms of how much press we would get, but in terms of how much weight it would hold. People weren't coming in and droves like they were before when they read an article, right? And so, and now we have to be kind of everywhere. We're in Instagram, we're on TikTok, we're in, and they're all different, you know, they have different flavors for it. So it's much more challenging. So the thing that's the most consistent over 24 years is word of mouth. And that means you have to provide

Alan Li (35:26) Mm-hmm.

Shobha Tummala (35:41) quality service and a quality product. And you have to care. Yeah, you have to care about the experience.

Alan Li (35:45) That makes sense. think that's the truth. There's no silver bullet anymore. think there's waves. Yeah, there was, I guess, with press and then in the 2010s with Facebook ads, but everything now is there's so much content out there.

Shobha Tummala (35:49) No, there was at one time, but not anymore. Yeah.

Yeah. Yeah. Yeah. And the

change, the rate of change is so fast. And so something's working, everyone gets on it and it's like not working anymore. And so the rate of change is just, is, that's my, that is the most challenging part of this business at this point for me, is that you have to keep up constantly. Cause what worked even two months ago isn't working today. Yeah.

Alan Li (36:06) Yeah.

Would

you recommend someone get into brick and mortar today?

Shobha Tummala (36:22) That's a complex question for me. The first thing I always say is challenge that you need brick and mortar. Meaning that can you do what you want to do without having four walls? And I'll tell you why. think being in this business for 24 years, it is very different to hire folks that want to be in that type of role.

providing the experience at the level you want for as long as you want, because a lot of people want the flexibility of, want to drive an Uber for a few hours and then turn it off. I don't want to be there after hours and on the weekends. So the experience of, and so what happens is that you have limitations on how you want to create that experience in the store now.

And so when you first start, it's exciting. You're excited. You're like, I'm going to open the door, go in every day, whatever it is. And at some point, you're like, I don't want to do this anymore. I want to bring other people in. I want to show them how to do that experience. And then when they're not excited about it anymore, there's fewer people that want to do that, it's getting more challenging. I we used to have amazing folks coming out of high school, and they were in college and wanting to do this. Guess what? College students, they don't want to necessarily come in and work retail anymore. So it's much more challenging, that brand experience.

Alan Li (37:21) Yeah.

Shobha Tummala (37:33) to create what you want consistently. I think that I would challenge people to really say, is this sustainable? Do you need it? Are there other ways that you could do it? There was somebody who said that they wanted to start a menopause care business. And they said, I really want to open my own location. And I'm like, can I challenge you that you don't need to open your own location? Start an Instagram page. Start an Instagram page. Talk about what you want to do. Set up one-on-one sessions via online.

Alan Li (37:46) Mm-hmm.

Shobha Tummala (37:59) Start that way, build a network. Why do need four walls? Or go rent a space from somebody else if you want that. So this idea of needing four walls, I think it has to thought through very carefully. And if you do, please think about all of the senses. It's not just what it looks like. It's what it smells like, what it feels like. Because we were very much about people are going to come back every few weeks. We want it to be a very warm and inviting atmosphere.

Back in 2001, spas were cool. They had models up front. It was like a very cold experience is how I felt. And I said it wouldn't work for hair removal. So you have to really think about what is the product and service that you're providing? What is that experience you want to create? How are you going to manage it and maintain it? Who are you going to hire that's going to make sure that they do there? And how long will it be able to last, right? So it's a lot. It's a lot. What does it smell like? mean, everything. Everything you have to think about in terms of that experience. And it takes a lot.

Alan Li (38:31) Mm-hmm.

Yeah, no, a good piece of advice I heard was that when you have a physical business or a four-wall business, the space is the product, the smells, the decor, the seating, everything is the product. So yeah, no, it's challenging because it's daunting to assign a five-year lease or a 10-year lease. And it's not something that should be taken lightly. I think people have maybe a...

Shobha Tummala (39:05) Correct.

Alan Li (39:17) you know, concept of having a physical business or restaurant or a cafe and how cool it would be to, yeah, it's like a, it's like a.

Shobha Tummala (39:21) is fun. Yeah. Yeah. My friends

and I can go hang out there. It's fun. And it is. It is fun. I had a party. We have parties. Whatever it is. But at some point, there's the reality of having it. And I think COVID was my first experience where I said, whoa, what am I going to do? I have no people coming in. I have no income coming in. And I have these enormous costs. And so really thinking about it. And that changed the dynamic of having a four-wall business too.

Alan Li (39:38) Yeah.

Shobha Tummala (39:48) Yeah, and you have to, these are all long-term relationships that you're building. And so you're setting up a brand for yourself with your landlords, with your vendors, with all of these people. And so you have to go in thinking long-term and whether this is what you want to do every single day. I mean, there's different models, right? You can go raise a ton of money, have the pressure to really expand and grow. And that's a model that exists. Like my model was not that. I didn't do that. And so for me,

Could I have stayed in something like this for 24 years? I don't know if I knew everything that I was getting into. I was 28. I was just like, let me just jump in. But thinking about it now is a totally different story. Yeah.

Alan Li (40:26) ⁓

I think if most people realize how hard things would be, they probably wouldn't have started. ⁓

Shobha Tummala (40:30) Yeah. Yeah. Yeah. And it's very lonely,

right? Like they talk about the lonely entrepreneur syndrome. It's like very lonely. And I think that, you know, having I had a really great advisor network at the beginning of serial entrepreneurs because I needed it to motivate me and whatever. And over the years, I have actually this one of the things that I need to start doing again is that with the family, with having other priorities, you let that kind of go away and it becomes lonelier and lonelier to be, you know, an entrepreneur as the years go by. If you don't kind of

Alan Li (40:36) Yeah.

Shobha Tummala (40:58) continue to build that network for yourself. You need that external voice and motivation to help.

Alan Li (41:04) Yeah. Looking back on your journey over the last 24 years, is there anything that you would have done differently now knowing everything that you do now?

Shobha Tummala (41:13) it's so hard, right? Because I think that I didn't understand how successful I was at the beginning. I know that sounds so funny or silly because I didn't have perspective. The fact that we just had, you know, had Vogue call me of all magazines. I had these clients come in. Like it was just like, I was just trying to kind of keep up and I needed folks around me to say, this is

This is amazing. You've got to figure out how to all cylinders in and to do it. And I did everything on my own. So the limitation was me and my hours in a day, my effort. And I didn't have the guidance of saying, competition is going to come in. This is a really great business. Competition is going to come in. We were in the Inc 500 fastest growing list. so competition is going to come in. Get going. And I didn't do that fast enough.

Alan Li (41:49) Mm-hmm.

Shobha Tummala (41:59) And so I would try to raise money and then it was just too hard and people weren't interested and I said, okay. So I think that if I went back at the time that I had the motivation to want it to be a different type of business, meaning big and grow, I would have tried harder to raise money and actually make the business be bigger at that time. My requirements and what I want now are different, but that's probably what I would have changed. If I go back, I would have understood that

There was a moment of time where everything was just working for me, and I needed someone else to say, get going. Let's figure this out. How are you going to expand it fast and rapidly? Yeah.

Alan Li (42:37) Yeah,

no, that makes a lot of sense. kind of the old saying, we're strike when the iron's hot. Yeah. Gotcha.

Shobha Tummala (42:43) Yeah, that's exactly right. Yeah. So now,

we just have a lot of competition and it's great. We still have a great business. It's not that. It's just that the time is different. If I want to expand and grow into 1,000 locations, it's going to require a very different level of effort than it would have at that time.

Alan Li (42:58) I

heard a stat that there's over 20,000 salons in New York City. that correct?

Shobha Tummala (43:03) I mean, that could be. That wouldn't be, I thought you were going to just talk about hair removal salons, but if you're talking about just regular salons, I absolutely believe that. mean, you go to a corner and look around, nail, threading, I mean, you see it, right? Like, it's just, there is a lot. And there is a market for it. People are doing these types of services more often, ⁓ and more people are doing it, whereas services that you used to do at home now are more regularly done outside. So yeah, it makes sense.

Alan Li (43:12) Yeah.

Mm-hmm.

Gotcha. Well,

yeah, this has been really awesome, Shoba. I don't know if there's anything else that you wanted to leave our listeners with. Most of our listeners are people who are interested in brick and mortar or own a few brick and mortar stores who are thinking about expanding. But any last pieces of wisdom or advice?

Shobha Tummala (43:45) Let me see,

So the physical space, like, you know, do you need physical space? That was a big one. But I think focusing on creating a culture and focusing on some of those things that are harder to do at the beginning with your team is really important because that's really, like my mantra was always, I'm gonna focus on my team.

and they're gonna focus on the end user experience and the client experience because they're the ones closest to it. So my focus is really on creating a great work environment and creating an environment that is really good for them and then for them to create the environment for the client. So I think thinking about it and being more mindful about that experience for your team and for who works for you is really important. And I think it's hard. I think it's hard to do that.

Alan Li (44:30) Yeah, and I know we talked earlier about making sure there's good training, but what other aspects do you think people could focus on more?

Shobha Tummala (44:38) Yeah, mean, some of the things. So, know, Alan, we have more people in the company that have been with us for more than 10 years than under 10 years. you know, and some of it is things, habits in our company that have just naturally happened. They all tend to eat lunch together, which I know is just, it seems so silly. bring and they help, they bring like potluck style and eat together. We used to do events a lot more together as, you know, a group, but.

Also, like one of the biggest things that I said is that we really need to create a culture that's our culture because everybody comes in with their own family cultures, their own whatever, their own communication styles, whatever it is. We were very intentional. We have a respect for peers document in every single salon. And it's, and we talk about it at every staff meeting. We talk about what they are and what they mean and everyone's bored because everybody's been there for more than 10 years. But we talk about it because we remind ourselves that every day we, you know, we may falter in these respect for peers, but we're going to.

remember that these are true. And one of them is to be direct with each other, that we don't let issues fester, that we talk about it, we don't kind of compete, but we really make sure that we communicate with each other. And no indirect communication, which I know sounds crazy, but a lot of people don't do that in businesses, right, in companies in general. And so we focus a lot on the interactions that people have, and we spend an inordinate amount of time dealing with those types of issues.

So keeping the air clean and making sure that the environment is good is very important to us.

Alan Li (46:01) Awesome. Well, where can people find you and are you open to being reached out to by some of our listeners?

Shobha Tummala (46:06) Absolutely.

Oh my gosh. That's like one of my favorite things to do is to be able to chat with folks about if they're thinking about starting a business or a four wall business or starting a business in general. So our email, our website is www.myshoba.com. can find us on Instagram, TikTok, Facebook, all those things, YouTube. And you can, yeah, reach out to us. I would love to hear from you guys. Yeah.

Alan Li (46:26) Awesome. All right. Well, thank you so much for taking the time, Shoba.

Shobha Tummala (46:27) Thank you.

Good luck to you, Ellen. Take care. Bye bye.

Alan Li (46:31) Thanks for listening. If you liked this episode, feel free to visit openingsoonpodcast.com for all of our episodes online. If you run a retail store and need updated furniture or signage, please feel free to visit www.signsandmirrors.com. Lastly, if you have any feedback or would to be a guest on the show, email me at alan, A-L-A-N, at signsandmirrors.com. I promise I'll respond. Thanks for listening.