When Diishan Imira pitched his startup to Silicon Valley investors in 2013, he was nervous that his product – hair extensions marketed to black women – wouldn’t resonate with them.
“Try explaining the business of hair salons in black communities to a bunch of white dudes,” Imira said.
Up to that point, he and his business partner, Taylor Wang, had bootstrapped the company with $48,000 of their own money, and investments from family and friends.
But they needed more funding, and Imira felt they also needed Silicon Valley’s stamp of credibility. So the pair started pitching to major investors.
“Some were uninterested. A smaller group found it so outside of their comfort zone that they listened. This is the group we attracted,” said Imira. “Today, we have some of the biggest investors in Silicon Valley.”
His company Mayvenn has since raised a total of $36 million from firms like Andreessen Horowitz and Trinity Ventures, and from individual investors like Serena Williams and Jimmy Iovine (co-founder of Interscope Records and Beats Electronics).
A new revenue model for stylists
Based in Oakland, California, Mayvenn partners with stylists who serve as the de facto salesforce for the brand’s hair extensions, weaves and wigs, which are made from human hair.
“The way we initially set up the business model was simple,” said Imira, who credits his sister, a hair stylist in Los Angeles, for getting him interested in the estimated $2.5 billion black haircare market in the United States.
Stylists sign up with Mayvenn for free and the platform creates an individual web page for them. The page features information about the stylist and directs shoppers to the company’s online store, where they can buy extensions or other products ahead of salon visits.
“If a client buys Mayvenn’s products through the stylist’s page, the stylist earns 15% commission per sale,” said Imira, adding that stylists can sometimes earn up to a 30% commission, which is paid in either cash or store credit or both.
This isn’t typically how the salon industry works, he said.
“Hair stylists are only ever paid for their styling services, even though they are the ones routinely telling customers about what hair products and brands to buy,” said Imira. “Yet they don’t have a way to cash in on this free advice. So we gave them the ability to do so.”
In the seven years since the business launched, Mayvenn has logged $80 million in sales and built a network of 50,000 stylists nationwide on its platform. It has yet to turn a profit, but Imira expects it will soon.
‘I had this hustle mentality’
Imira was raised by his mother in Oakland. “I grew up surrounded by the influence of hippies and the Black Panthers. I had an itch to see beyond this, to see more of the world.”
In 2003, he went to Shenzhen, China, to teach English for a year to middle schoolers. It was there that Imira caught the entrepreneurial bug.
“Everywhere you looked, someone was hustling, selling something. It was unbridled entrepreneurism,” he said.
Imira started a sneaker export business. “I see these Jordan sneakers selling for $20 on the street. I’m 23 at the time, from Oakland. I think, ‘Holy sh*t! I can make a lot more money on these back home,” he said.
So he started selling the sneakers for $70 to friends in the US. After a year, he moved to Miami where he got the idea to import furniture from China and sell it for a hefty profit.
“I advertised on Craigslist. Then I opened a small showroom and even lived in it. I had this hustle mentality,” he said.
Still, Imira craved something bigger.
“My business was low-level,” said Imira. “Silicon Valley was 45 minutes from where I grew up. I wanted to go play in that game.”
Imira enrolled in business school at Georgia State University and earned an MBA. His plan was to leverage the Internet and build something big. “But I also wanted it to be an impactful business,” he said.
Inspiration hit when his sister asked if he could use his connections in China to get her quality hair extensions for a cheaper price.
“It’s how Mayvenn started,” he said. “It’s the beauty supply stores that make millions of dollars selling extensions and weaves because salons don’t sell these products. But why should stylists be cut out of the action?”
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In 2013, Imira was accepted into the 500 Startups accelerator program, where he pitched Mayvenn to “dozens of Silicon Valley investors.” “I would even take them to hair salons in West Oakland, in the middle of the ‘hood,” he said.
These field trips helped give investors a deeper understanding of the industry and how Imira was trying to change it.
“My mom owned a beauty salon. I understood how Diishan was trying to change the business model to make it more equitable for stylists, especially in black neighborhoods,” said Marlon Nicols, founding managing partner at Cross Culture Ventures, which invested in Mayvenn.
“[H]e’s really studied the market and understands the problem and he’s willing to make adjustments along the way,” said Nicols.
Competition has forced Imira to do just that.
“Alibaba has become a player in this space. So Chinese manufacturers are selling hair extensions at factory prices now directly to US customers,” he said.
So Mayvenn tweaked its model. The company now sells both the hair, and stylists’ services at a discount through its online platform.
Toni Jaxx, a hair stylist at a salon in Harlem, New York, joined Mayvenn seven months ago. Although the fees he charges through Mayvenn’s platform are half of what he usually charges, he said the service has been sending a steady stream of clients his way.
“Before I was getting one or two new clients a week. Now I’m booked up with maybe 10 new clients a week,” said Jaxx. “There’s so much competition for clients that this is actually working out for me.”
Imira hopes Mayvenn evolves into a marketplace for all kinds of hair care needs.
“I’m trying to again define a new model in this industry,” said Imira. “But what gets me the most is when these stylists appreciate that someone has built something to help female African American entrepreneurs.”