Case 1 The Lip Bar Pursuing an Opportunity Around You and Being Adaptable

Melissa Butler grew up in Detroit, Michigan, with a mother who worked as a crane operator in a steel factory. And as you might expect, her mother instilled a strong work ethic within Butler and taught her to stand up for herself.

Butler attended an all-Black high school before going on to a Historically Black College, where she obtained a bachelor’s degree in Business Finance. After graduation, she went to work as a stockbroker for Barclays Bank on Wall Street. She also started making her bars of soap at home in her kitchen, with different scents, shapes, and colors. She started selling online, calling her business “The Soap Bar.” On one occasion, she called on a supplier, asking for pigments for her soap. The supplier asked her, “Do you want soap pigments or lipstick pigments?” Although she was really looking for soap pigments, she responded, “lipstick pigments,” deciding to try something new.

Looking back on this conversation, Butler doesn’t know why she was so quick to switch directions, but immediately felt it was the right decision. She knew she wanted to produce vegan products that were as natural as possible. She also saw value in her experiences as a Black woman who had always been frustrated with the beauty industry’s lack of representation for women who looked like her.

Butler began reading books, researching online, and watching YouTube videos to learn how to make lipsticks. She would make large batches of lipsticks, go to work the next day to try them out on other employees, and repeat the same process when she got home. She next would have friends and family test the products. Based on their reactions, she began selling online.

Then in 2012, Butler decided to launch The Lip Bar as a business, spending $30,000 of her savings on inventory and shipping. After months of working on it, she quit her job at Barclays, planned a launch party, and focused on product innovation, marketing, and growing the business. After about a year, she decided to leave New York and return home to Detroit, a city that had recently experienced a resurgence in the community and innovation.

She worked to grow the company and eventually received an opportunity to pitch her idea to Shark Tank. Although that experience did not turn out well for The Lip Bar, Butler was thankful for the opportunity, as it steered her in a good direction. She went on to pitch to some 200 investors. Her response? Keep going. Things turned around for her in 2018, when she met Richelieu Dennis, CEO of SheaMoisture, at a trade show. Dennis eventually became the brand’s first investor.

Butler has continued to pursue her mission of making products that are vegan and cruelty free. Looking back on her experience so far with The Lip Bar, she believes several factors helped her get to where she is today:

• A willingness to ask questions and learn from experts
• A readiness to apply a trial and error process in product development
• Finding creative ways to grow her network
• A willingness to make changes in her company
• Being persistent in overcoming failure
• Raising money with the right investors

Without these philosophies, Butler says that The Lip Bar would not be where it is today.

The story of Melissa Butler and The Lip Bar demonstrates the entrepreneurial spirit and process, the motivations required of an entrepreneur to continue on the often-difficult path to success, and the impact of serving customers by fulfilling a socially conscious mission.

Questions

1. What opportunities did Melissa identify, and how did she capitalize on those opportunities?
2. How did Melissa’s background help her identify and tackle the problems she discovered in the beauty industry?
3. Describe how The Lip Bar can impact a growing segment of their customer base.
4. Describe The Lip Bar’s competitive advantage(s).
5. How does The Lip Bar’s mission help the company make an difference in the beauty industry? What should businesses be concerned with regarding social entrepreneurship?
6. Visit The Lip Bar’s website at https://thelipbar.com/ and explore the offerings provided. What stands out about these products?