Building a better hair Net HairBoutique.com grows into coiffure central for those tress-obsessed
What is it about hair that brings out the entrepreneur in Dallas women?Tomima Edmark turned ponytails and fashion inside out with her multimillion-dollar baby, TopsyTail. Former hairdresser Denie Schach made a fortune with Hairdini, a styling gizmo that creates Audrey Hepburn-like updos.
Now Karen Shelton is testing the coiffure limits with HairBoutique.com, where hair aficionados can peruse 1,000 virtual pages of hair information or e-shop for 400 staff-tested products that range from wave tamers to dreadlock wax to hair jewelry.
"My karma was to become the cross between Ann Landers and Ralph Nader of Internet hair-care information," she says. "Ann Landers isn't really an expert, but she gets the answers. And Ralph Nader keeps an eye on things to make sure the consumer doesn't get taken."
The 49-year-old Ms. Shelton, who describes herself as "hair-brained and tech-minded," wears two hats as CEO of both HairBoutique.com and T&S Software, a Richardson-based telecommunications software company.
Three years ago, she repossessed a site she'd developed for a local hairstylist who didn't pay her. Then Ms. Shelton transformed it into one of the 10 most popular hair destinations on the Web - one that's actually making a little money.
And yes, in case you're wondering, there are hundreds of hair-related offerings on the Internet.
"We have 821 hair-care articles and 105 book reviews, and that's not enough," she says, flipping the golden tresses that fall three inches below her waist. "It's hard to believe that people get so consumed, but for some people, their hair is their life."
MSN.com, the huge entertainment, e-commerce and news portal, recently chose HairBoutique for its WomenCentral's best of the Web guide to the "most illuminating and intoxicating sites," along with NaturallyCurly.com and Hairdos.com.
Every day, HairBoutique attracts 10,000 to 15,000 inquiring minds who each scroll a dozen pages or so, says Ms. Shelton in her feng shui-designed office in a Richardson lowrise. In the last three months, HairBoutique has snared 14 million page views."Some come for the message boards, some for the photo gallery and some to buy products," she says. During prom season - mid-January to June - the number of visitors spikes to 20,000 to 25,000 daily as high-school girls flock to the gallery looking for just the right style.
Ms. Shelton owns 56 percent of HairBoutique. The rest is owned by her business partner, Jeff Hines, a T&S software developer who helped develop the site and is responsible for all the "behind the curtain" tech tasks. She and Mr. Hines (who also sports waist-length locks) draw salaries from T&S Software, so they can plow everything back into building HairBoutique.It's a labor of love in many ways," he says. "We put our own money into this because we didn't want to be saddled with debt or have to answer to venture capitalists."
The key to getting advertising revenue these days is the 4 million to 5 million ad impressions or "click-throughs" that HairBoutique registers each month.
"We write wild articles trying to keep an edge. You can only do so many, 'How to do perms' and 'How to do updos.' So we'll do things like 'Does acupuncture make your hair grow faster?'"
"Well, some people think so," she says with a shrug, "but it's all anecdotal evidence."
The site also conducts monthly polls. The most popular survey asked what people hated most about their hair. "That one was huge. We got 4,000 to answer that one. Everyone has something they hate about their hair."
Anyone who knows Karen Shelton knows that her chemically smoothed blonde mane is one of her most prized accomplishments.
In 1988, a year before her 15th high school reunion back in St. Louis, Ms. Shelton took an assessment of herself in the mirror. What she saw gave her a fright.
"I had that bleached white thing going with frizz at the ends," she says, blanching. "Terrible, ugly long hair. A blonde Brillo pad with roots."
She was doing everything wrong: addicted to Clairol Nice & Easy, blow drying and hot rollers; and using the cheapest shampoo she could find at the grocery store.
A stylist who handled only long hair promptly chopped off six inches, highlighted the roots and sent her to hair reform school.
"It was very traumatic to give up my blow dryer," she says in all seriousness. "But I started seeing results. By my high school reunion in '89, my hair wasn't really long, but it looked fabulous."
Ms. Shelton, who holds a bachelor's degree in sociology and a master's degree in urban planning and public policy, took one Fortran computer course while an undergraduate at the University of Missouri's St. Louis campus. That somehow pushed her career into the emerging field of technology.
"I guess I had the aptitude, because everywhere I went, they'd say, 'OK, you're doing all the computer stuff,'" she says.
In 1977, she opened a St. Louis regional office for Computer Associates International, a high-falutin' name for a fledgling company of two dozen people with a ritzy Madison Avenue address. Company founder Charles Wang worked the graveyard shift as a computer operator for the landlord in return for reduced rent.
"I'd fly up to New York for meetings, and he'd be punching holes in user guides, typing letters or cleaning toilets - anything to make the company go," she recalls.
The chaos of a start-up proved too much for the 26-year-old. "I quit and watched the company skyrocket," she says, noting that Computer Associates is now the third-largest software company in the world. "All of the people who were there when I was there became super millionaires or borderline billionaires because they stayed and helped the company become something. I realized I should have hung in there."
That lesson stuck with her when she joined a young Richardson telecom software company, IEX Corp., in 1992. She stuck with the company for seven intense growth years and cashed in when Tekelec acquired it in April 1999.
Her buyout booty combined with savings, her off-hours sidelines and profitable investing gave Ms. Shelton capital to build HairBoutique into a 1,000-page interactive giant.
Initially, she just wanted to teach consumers things about hair care and tell them about products - the good, the bad and the ugly.
"All these people who were e-mailing me with all these horrendous hair experiences. They'd send me pictures, 'I got a perm and look what happened.' Their hair would be sticking straight out."
By mid-1998, HairBoutique's popularity was mounting rapidly but so were the expenses.
Hoping to generate enough income to pay the bills, Ms. Shelton started selling banner ads on the site. She hoped to find worthy products to sell.
Advertisers were quickly drawn to the number of hits HairBoutique was getting, and the site was breaking even by the end of 1998.
But mainstream hair-care companies still wouldn't let this unknown entity sell their products on the Internet.
An exclusive shot
Her breakthrough came in March of this year when noted Midwestern hairstylist Edwin Paul gave Ms. Shelton an exclusive online shot with his hair products. "That really helped open doors," she says.
Mr. Paul says he took a chance on HairBoutique after seeing CNN tout the site as highly informative and then personally coming to Dallas to scope things out.
"We saw the Internet as an untapped source for distributing our product, and she seemed to have a good handle and was in a growing phase," he says from his Grosse Point Woods, Mich., salon. "So I said, 'Let's give it a go.' So far, all our expectations are being met."
Now she has all sorts of manufacturers knocking on her virtual door.
HairBoutique's hot seller this Christmas, she says, is Hair Formula 33, vitamins that are supposed to stimulate healthy hair. She says they work. Like all HairBoutique offerings, the vitamins were staff-tested.
"One woman has really short hair, and it grew like a Chia Pet," she says with a laugh.
A lot of times, Ms. Shelton is the human guinea pig. "There have been times when I thought my hair wasn't going to recover."
Like the time she tested Knotty Boy Dread Wax. Actress Jennifer Aniston set a craze in motion by donning dreadlocks, which until then were most often associated with reggae bands and Whoopi Goldberg.
"Everybody went wild," Ms. Shelton says with a note of astonishment. "Jennifer Aniston could show up with Brad Pitt's jockey shorts on her head, and a new fashion trend would emerge."
Finding no volunteers among her half-dozen cohorts and contributors, Ms. Shelton twisted and waxed her hair with Knotty Boy, which she discovered while surfing the Net. "It worked great, but it isn't a temporary thing," she quips. "I was peeling gunk out of my hair for three weeks."
Tom Carson, whose award-winning photographs appear in leading hair fashion magazines, was persuaded after a year of persistence to sell Ms. Shelton the rights to some of his work.
"She's very thorough and has a good feel for where consumer hair is going," he says. And she's willing to go after interlopers who steal his work - a big issue among the top fashion photographers.
Plenty of missteps
There have been plenty of missteps along the way, Ms. Shelton admits. The first product she offered was custom hair jewelry that arrived in customers' mailboxes way too late and didn't look anything like the pictures on the Web.
She came precariously close to running out of certain products before she installed a sophisticated inventory system.
The site is still not making mega-bucks. But the $150,000 in 2000 revenue is three times last year's and is more than sufficient to pay the overhead and invest in the technology and inventory needed to double again in 2001.
Ms. Shelton has had offers from people wanting to buy the site, but she's sitting pretty.
"It's so much fun, and it's my baby," she says, adding that having two companies under one roof gives certain flexibility and economies. "T&S Software is a very serious business, and it's doing very well, growing by almost 1,000 percent in revenue this year. HairBoutique is like my true love. It's so creative and so much about people."
So are Dallas women different when it comes to hair?
"Oh yes, very different," she says emphatically. "Dallas has earned the reputation for being the big-hair capital."
But she's not talking "big" as in "bouffant."
"Dallas women will spend a lot of money. They want only the best for their hair."
Cheryl Hall is business columnist for The Dallas Morning News. Ideas at Work is intended as a forum for ideas and opinions of interest.
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Published December 17, 2000