Episode 140 – Coffee N5 – Counsel and Coffee: The Perfect Partnership Blend with Katie Staba

Discover the dynamic intersection of law, marketing, and society on Coffee N° 5 with your host Lara Schmoisman, and legal guru Katie Staba. Dive into the ever-evolving landscape of legal trends while uncovering the vital role of contracts in business relationships. Explore trademark navigation, and gain expert insights into selecting the perfect partnership. Learn how to collaborate with entrepreneurs effectively and build success through open communication. Join these legal and marketing experts for invaluable lessons that could shape your journey. Don’t miss this enlightening episode!

We’ll talk about:

  • The influence of law on marketing, business, and society
  • Trends in law
  • Contractual law and the importance of forward-thinking when drafting and entering a contract
  • How to navigate trademarks
  • What to look for when choosing a new business relationship (a partnership is a relationship too)
  • How to team up with entrepreneurs and build a successful partnership based on open communication
  • Valuable lessons learned from these two legal and marketing

Learn more about Katie Staba here.

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About Katie Staba

Katherine Staba is a partner in the technology transactions and data protection practice group in the Chicago office. Her practice focuses on complex global transactions and counseling relating to digital media planning and buying, advertising, and marketing, claim substantiation, software licensing, and intellectual property issues in mergers, acquisitions, and investments, unfair competition and trade secrets, and competitive intelligence. Katherine’s recent experience includes assisting businesses with agreements and engagements related to cloud services, mobile applications, and artificial intelligence products.

Katherine’s clients span multiple industries including beauty products, home products, sports organizations, media platforms, cloud computing providers, luxury goods, clothing retailers, consumer electronics, and pharmaceutical products. For these clients, Katherine leverages her in-house experience to offer practical, business-sensitive guidance and representation.

Katherine’s recent representations include (a) advising consumer product brands on influencer engagements; (b) negotiating technology and joint development agreements related to health-related products and pharmaceuticals; (c) counseling and negotiating agreements related to the application of artificial intellectual and machine learning to consumer interactions; and (d) drafting transactional consumer documents for a leading fashion retailer.

In addition to her counseling practice, Katherine’s experience includes litigation of cases involving patents, copyrights, trademarks, licenses, and trade secrets in both trial courts and appellate courts.

Lara Schmoisman 0:05
This is Coffee Number Five. I’m your host, Lara Schmoisman. Hi, everyone. Welcome back to Coffee Number Five. Today have my coffee almost finished. Well, that’s a matter because I’m ready for a great conversation. And, you know, guys, I come from a family of lawyers, I always mentioned this. And that’s why I kind of have to escape the family. No, just kidding. But I grew up like giving some things for granted that I understood, because that was the kind of conversations we had at home, always. But as I got into business, I realized that there is a lot of things that business owners are not aware, or they don’t know where even to start, or when is it the right time to get a lawyer or not. And now also, we have all these tools online, go and download the contract and do this and do that or have a friend check in your contract. And it’s someone who study law, but they never really practice law, which is a huge difference of what do you do learn in school, and when what happened in the real life of a lawyer, so I thought it was time to bring someone that I super respect. I love to chat with her. So Katie’s Staba, I always chopped every last name. So welcome, and please pronounce your name right.

Katie Staba 1:32
Hi, everyone. I’m Katie Staba. I’m a partner and a lawyer at K&L Gates in Chicago, which is a global law firm. And as you mentioned, I’m interested in everything on paper, I’m interested in the claims you make for your products, I’m interested in the contracts that you sign, from getting those product from building those products from the beginning to get them through manufacturing to get them in the hands of customers. I work primarily with brands in the cosmetic, and beauty, space, and luxury. So we have a lot of synergies there in terms of our clients. And I am delighted to be here today. No one ever wants to talk to the lawyers. So I understand how momentous and special this is

Lara Schmoisman 2:12
Yeah, well, I love to talk to lawyers. I mean, I always love to pick their mind, because I really understand that you guys, everything that you have to do in the legal space is a lot about research and studying. And you get a lot of data and information. And I’m passionate about getting that information and to know the precedents of what happened. And law is a lot about that.

Katie Staba 2:39
It is and it’s a lot about just having your finger on the pulse of what’s the industry standard, right, in terms of what are you charging for services? How do you charge it, how your fee models works, and like, you know, what people expect these days, right contracts are about memorializing what party’s expectations are. And I always tell my clients, if I do my job, right, and everybody understands what this deal is, the contract will go in a drawer or an electronic file and never be seen, again, it’s when you don’t have one, or when maybe there’s a misalignment of expectations that things go sour, and you’d be really happy that you have something good in writing. And hopefully where we can add value to our clients is not just you know, the writing of the words on the paper, but sort of explaining and coming and bringing the perspective of what we’re seeing in the market, what we’re seeing across brands or with a particular, you know, need, whether it’s manufacturing, or how to how you’re working your return policy for products, and all of those types of things change with time and no one. And lawyers get to see a lot of that right, we saw.

Lara Schmoisman 3:45
Yeah, and you know what’s trending and what’s going on?

Katie Staba 3:48
Yeah, you know, what’s trending, Lara, but I also know what’s trending in a geeky way, and then

Lara Schmoisman 3:53
It’s completely a different space. And I really need that information. Because when I’m making recommendations to my clients about the return, I need to be and bringing all the returns that from other companies, or how I mean, even though I will never write for them, I always say no, you need to take that to a lawyer and bring it back to me. I’m happy to put it in your website. But I need to know as a marketer, what’s going on, and what are the industry standards. But also, let’s talk a little bit about contracts. Because every time that people enter in a contract, you always come into a contract with the best principles session of easily and that you want to enter a contract. The contracts normally don’t start in a bad situation. But if you don’t have the terms very clearly and specified in the contract, then when things go ugly, that’s when you need that contract.

Katie Staba 4:49
Yeah, it’s so true. I often say you know, we’re in the honeymoon period. When you’re negotiating, everything’s happy. Everything’s promising. Everything’s possible. But we’re planning and I’m helping the clients have all was gross conversations about what happens with the divorce, right? I’m helping graphic prenup between these two businesses. And we need to figure out what happens if everything doesn’t work out as well as we expected. And they’re challenging conversations to have. And often lawyers are in a happy and unhappy position as sort of being sort of the bad cop, right? We forced those conversations about Okay, so who gets to terminate? and for what reasons? And then who walks away with what money? Or what intellectual property? And those are conversations that are worth having? Right? Like, I don’t know, would you enter into a marriage with no prenup these days? I’m not sure. So it’s the same thing with businesses?

Lara Schmoisman 5:41
Well, even if you don’t, let’s put them aside. I don’t know if everyone would put a prenup these days. But I in businesses, it’s really important to understand and put those points that they both have the same set of expectations. Because this is all not only about bond and creating a bond in a relationship. It’s about expectations of that relationship. Going back to the marriage, it will be like you talk to your partner, if you want to have kids in the future now, before you get married.

Katie Staba 6:15
Yeah, yeah. And you’d be surprised how many times right, everyone comes in saying like, Oh, this is great, we’re gonna build this huge thing. But someone in the back of your mind, everyone has sort of expectations about like, milestones will hit or like sales projections, right? And if you don’t put those on, maybe not on paper, but at least have those conversations. So sometimes we’re just sort of prompting a conversation. And it really has very little to do with the terms of the contract. But it has a lot more to do with just a general commercial understanding.

Lara Schmoisman 6:43
Yeah, it’s also I always say that partnerships are about relationships. But and that’s how you want to work. So it’s about if we have a problem, how are we going to be dealing with the program, how we’re going to send the lawyers directly, or how we’re going to try to negotiate or first see if we can get away from their legal action, because legal action, it’s not only expensive, hosts can meet draining

Katie Staba 7:11
It’s draining, resource draining, like time draining everything. And emotionally, everybody loses right? At the end of the day. And there are plenty of good reasons to bring litigation, but there’s plenty of things that can probably be sorted in different more commercially savvy ways, right. And so I’m seeing definitely a lot more contracts in b2b contracts where they have like escalation clauses, right. Like, if there’s an issue and it’s you know, of a certain severity, your, you know, your C suite person talks to RCCB person and they have a conversation. And if that doesn’t work, then 15 days later, 30 days later, then different people and it escalates further, right, and you have the stepwise person

Lara Schmoisman 7:49
I love that. I love that, that people are starting to think ahead of time. And also, I think that a lot of people don’t understand it’s the that you don’t require a lawyer only for a contract or when there’s an issue. It’s amazing to have a lawyer. And it’s really important to have that feedback that how to handle certain situations in and also in the negotiations.

Katie Staba 8:14
Yes, yes, it’s, um, it’s sometimes you can find the tricky sticky conversations to Oh, my lawyers insisting on this, right. And so we get to sort of take that position of being being bad cop, as I said earlier, but also we can sort of force the conversations to maybe some things that are not so happy to talk about, or so comfortable in the sort of early honeymoon stage. But we love being involved with the clients throughout the thing. So I mean, my bad, my big, favorite clients, the ones who I’m with through beginning, right, like product, Inception counseling about how to protect intellectual property rights, but you’re also dealing with the contracts and the partnerships and joint development and all those things that might come with it. And you sort of see the whole story arc, right? You’re, you’re helping them bring this product to fruition, and everybody wins, the more successful everybody is we’re all invested in sort of the same success.

Lara Schmoisman 9:04
But let’s talk for a minute about intellectual property, because for example, in the beauty industry, there is no way to have intellectual property ammonia formula.

Katie Staba 9:16
Yeah, I mean, it’s interesting. And I definitely have a lot of clients in this who maybe have, have sort of cobbled together a different compilation of of different intellectual property, right. And so while you might not be able to patent your formula, right, if there’s nothing novel or non obvious about it, but you might be able to have keep how you make it right the process for making it and when the ingredients are included, and then and certain elements of that process that could be your trade secret. Or you could have patents around certain different processes. Maybe you built a machine to be able to create, you know, pieces of something in such a small way that it like it fuses into the skin better, maybe you created a like a machine around it where you can patent certain elements of it. So you have might have pieces covered and more traditional IP protections. But beauty is an interesting place where if you’re looking at it, you’re not necessarily saying, Okay, you have a formula, you’ve got a patent for that formula. And okay, we’re great. No, it’s usually a much more of a patchwork quilt of things. And I would say so often the brand, right, the brand, the goodwill associated with it, it’s like recognition to consumers. And that trademark and that logo around it are often the most valuable thing of a beauty company. Because it’s just so entrenched in the consumer dialogue.

Lara Schmoisman 10:40
That’s something that I will recommend anyone 100% If you’re serious about opening a brand, trademark line.

Katie Staba 10:49
Yeah. So it’s interesting in the US, right? Trade, you can, you can obviously register to federally registered trademark with the US Patent and Trademark Office, right. And that’s kind of the traditional form of trademarking. And when you see the circle are that symbol means that someone has gone through that process and gotten a registration. But trademark rights in the US are actually gained, even if you don’t have that formal registration, because you get those rights through common law usage, right, you’re using it for a specific good or service. And over time you develop rights in that whether or not you seek registration. Now, there’s a lot of really good reasons to seek registration, all the –

Lara Schmoisman 11:27
It’s always recommended, because over you need to create that overtime. So when you want to be protected,

Katie Staba 11:34
You want to be protected, right. But it’s also like a signal. It’s a signifier to others, right. So there’s a couple really good things that happen when you’re about to seek a trademark registration, right? You check to see whether anybody else is using that, right. And so you run this clearance search, and hopefully, if there’s anyone else already out there, either it’s not a problem, or you deal with it, or you choose a different mark. Right? So you know that you know, the landscape, right? You figure out if there’s anybody else out there. So that’s one really good question.

Lara Schmoisman 12:03
Like, for example, I have a trademark, I got it. But they someone who’d been using this name for a while, then you find out, I got the trademark. What’s the case there?

Katie Staba 12:15
Yeah, so there’s always more devils in the details. But if you have a trademark registration, and you have prior use of the mark for specific goods or services, and someone later comes on the scene, and starts using a very similar mark, or confusingly similar mark,

Lara Schmoisman 12:32
What was what did they been using it before for a while, but they didn’t trade the market.

Katie Staba 12:38
So they didn’t trademark it? Well, they might be able to come after you. Right. So a good trademark attorney would have probably sussed that out, right? We searched through websites. And there’s all these great tools out there that help you identify if anybody’s out there using it, but not registering it. Right. They have valid rights. And maybe they have rights in a certain jurisdiction, like just one area of the country. They have like really limited sales. And maybe they have rights that are a little bit different to yours, right? You are on beauty products, and they’re on peanuts, right? Like there’s probably not an oval.

Lara Schmoisman 13:09
That’s it. That’s a different kind of trademark. So what’s the difference between putting an r and a TM in your logo?

Katie Staba 13:18
It’s a great question we when we get all the time, so an R means you actually have the registration, that’s the USPTO has stamped it and said you’ve got a federal trademark registration, right. And so you need to use the R consistently. And on the actual mark, you have a registration for a TM is something that you can put on this Tm symbol, something you can put on your mark, if you’re claiming rights in it, but maybe you’re not seeking federal registration, or you just haven’t gotten the registration yet you’re in the application process. So they both indicate like a signal to the university, you are claiming trademark rights in this logo, this name

Lara Schmoisman 13:53
But people really don’t never put in logos. And I know that huge brands, they have the registration, but they never put it on their logos. So they probably put

Katie Staba 14:03
Well, it depends if they’ve got the registration, right. They don’t You don’t have to put it everywhere. But you do need to put it in certain places. So you’ll kind of if you go on the next website, and now I’m sure everyone will do this, right? You go on a website, you’ll see the TM signal, maybe the most prominent first usage of the word, right. So it will say like the darl TM or registered Is this okay have either way. Thank you Good. I’m glad to hear. And then but they might not say it every time you mentioned the darl because it doesn’t need to be every time it just needs to be the most prominent times. Right? It’s, it’s a signal to the world that you have these rights and you could enforce them. But it’s but it doesn’t need to be perfect compliance. There’s no need to put it every single time use a mark. So you’ll see on some brands, brands and packaging, they never put it. They never put it for a lot of good reasons, right. Like with packaging, like you’re kind of creating that copy once and then it goes off to multiple different hands. So you don’t want have to put anything on there that you might have to pull back and change. Because you certainly don’t want to like put stickers over things that are already on the shelves or in manufacturing process. And you certainly don’t want to have to like pull things back. So if something happens with that trademark, or if it changes from TM to AR, you might not want it. And there’s a lot of good reasons for like ad copy and like optics and visuals that it might just not flow.

Lara Schmoisman 15:21
Well. Let me tell you something very recently, it happened to me and it was interesting, funny, but not so funny. Haha. So I have SEO, as you know, we send SMS to clients, or our clients, and one of our clients wants to use in the logo that are. But what happened somehow that are sending that text that symbol with the R. Costas three times SMS. Why? I don’t know. I don’t know why they come tell us why. But those kind of symbol is like a sending three times an SMS.

Katie Staba 16:01
Yeah, that’s a really good reason not to include it in terms. Yes. Yeah. For them.

Lara Schmoisman 16:07
But that’s what’s recent in very interesting. So of course, we remove it from the SMS. But as you said, it’s very, so those races make you choose where to put them. And we’re not. Yeah. And also, from the branding standpoint, I don’t think the consumer cares if you have an hour or not. I they just you want the brand to stand out for what it is. And I think that’s why in packaging, people don’t use it.

Katie Staba 16:33
Yeah, yeah, I think that’s right. And you also don’t want your brand. Like if it’s a word that’s commonly used, you don’t want it to become genericized. Right. So like, Kleenex, that’s a common example, right? That’s a brand, but we all refer to it just to refer to facial tissue now, right? Because it’s become synonymous with the thing that it’s used on. So you kind of want to be careful to it’s a little bit less likely in sort of the beauty.

Lara Schmoisman 16:59
Any product will come a common word that I mean, like

Katie Staba 17:04
From a sales perspective and an adoption perspective. It’s great from a trademark perspective, not so great.

Lara Schmoisman 17:09
I know. Well, yeah. If you’re the trademark, I mean, if you’re the trademark owner, then we have might have a different conversation.

Katie Staba 17:16
Yeah, you might not, you might not be great for you, but you’re probably rolling in dough. So you’re probably fine. Yes.

Lara Schmoisman 17:22
So as a new business, any new business in any industry? What are your recommendations? Because, again, we know that lawyers cost a lot of money. And there are a lot of indie brands out there that they cannot afford lawyers. So how can they cover themselves or protect themselves? In in the starting stages?

Katie Staba 17:42
Yeah, it’s a good question. I mean, there’s plenty of organizations out there and different cities that sort of focus on different industries to try to help businesses sort of, sort of get their feet under them with the basics right, forming your corporation or your LLC, like all of those things that you might need some like a helping hand in. And there’s plenty of those, like in Chicago, where I am, there’s lawyers for the creative arts, right? So if you’re in visual arts or performing arts, maybe that’s something you can leverage or if you’re writing a book even. But for like other brands, I guess my first advice is, if you don’t have access to a lawyer at a certain point, right, like, choose your partners wisely, right? Maybe you’re not choosing the ecommerce provider that’s like new on the scene, but you’re using the one that’s a little bit more tried and true. So you have a little bit more faith in them. Also, you can do your diligence as to sort of who’s gotten sued,

Lara Schmoisman 18:31
Right, for me is more than, like I say, choosing your partners, when you talk about partners, it’s not about partners, like are you going to be part of your company? It’s about choosing your vendors, right? I see a lot of the conflicts created of people using freelancers, maybe or companies that are not well established, yes, they are going to save you some time, some money, but at the end of the day, they want because,

Katie Staba 18:57
Yeah, I think that’s a good point. Right? Like your, your vendor selection is so critical. I mean, both from the perspective of like, you’re gonna want someone that can like work with you and scale with you, right? Like the goal is to bigger, brighter, better, maybe get bought. And so you want a vendor that can scale with you. And so naturally, that’s probably going to be the more established ones. But you also want one that has their own brand at stake, right.

Lara Schmoisman 19:22
For example, me as an agency, my agency standard, I want to grow with brands, we meet the work the clients out, so we can grow with them. And that’s our goal. But also the clients need to come with a very clear idea that they’re going to be starting as a smaller brand, and they’re going to have to scale their expectations need to be clear at what they’re gonna get. They cannot I feel like a lot of brands are looking to the side to the grace of the neighbor, but they don’t know what kind of fertilizer the neighbor uses, or how much it cost or how many times a gardener comes to fix it.

Katie Staba 19:58
Yeah, I mean, it’s true. right, like, and so I’m sure you’ve gotten a lot of clients who come in your door who are, like curious about how you operate and say I wanted that. And you say, Okay, well, that is, you know, a three year plan that’s been sort of put in motion years ago and costs this much, right. So there’s

Lara Schmoisman 20:18
Also three years ago, it was a different, different innovation in the world. Everything evolves and everything is different. There is no brand that is each brand is unique, because they have their own budget, and there are the unique brand.

Katie Staba 20:32
Yeah, yeah, absolutely. So obviously, you heard it here, you to choose Lara’s agency, because they’re thinking about these things. But in all seriousness, there’s some pain points for any sort of consumer product or service branch, right? If you are potentially regulated by the Food and Drug Administration’s to the FDA, you’re probably going to want a lawyer involved, right? Because you run afoul of those regulations. I’m not that person, but my colleague is and she’s brilliant. And I’m always aghast at all the things that she sees that I don’t see. So like, if you’re in a highly regulated area of financial services, you know, any sort of regulated drug or pseudo drug or soup, or like nutraceutical, you’re probably going to want to have a lawyer involved. But beyond that, I mean, just having smart people and having processes in place are going to save you a lot of headache, right? If you’re working with an agency who’s creating ad copy for you, you’re gonna want to have a really tight close eye on maybe what the claims are, that are, copy and make sure you’re comfortable with those, right, because you’ve either spent a lot of money testing something to maybe run a comparative claim against a competitor, who’s probably not going to be too pleased about it. Or you just haven’t done any of those things. But you certainly don’t want someone going rogue right

Lara Schmoisman 21:53
I always go, we go exactly the same point, as always go is let’s talk about the communication that and this is when you hire an agency, you have to have a very strong communication, they have to communicate, this is the words that we can use. These are the ones we cannot use, you need to have that gray area, very clear words, you’re limited, you cannot do.

Katie Staba 22:15
Right. Right, exactly. And I mean, either you’ve got, you’ve got a partner or a vendor that you can trust and work with who’s going to follow your guidelines that you’ve probably very carefully crafted to match your risk profile, or your insurance, which hopefully you have. But you know, and you have to trust that that’s going to get done. But on the flip side, like you’d be surprised at how many times right, like, if things just don’t go, don’t get blessed by a brand at the right level and things go kind of haywire, right? And so having like internal controls and processes and checks and reporting structures that support that, and maybe this is not such a big issue for companies, when they first start out who maybe have sort of a smaller nucleolus of people. But as you grow to make sure that you’ve got that in place, I think is a huge risk mitigator that all brands can do. Not involving a lawyer,

Lara Schmoisman 23:08
Even for example, me as an agency, and I use always my example because it’s what I know, I have a clause on my contract that nothing will be published by my agency without client approval.

Katie Staba 23:23
Yeah. And I think that benefits both parties, right? Okay. Clients want that they want to make sure they’re controlling the messaging and things change quickly on their side, too. And they might not be okay with something they were okay with last week. And you guys need to make sure that you know, you’re not both in the hot seat, but also tasked with pulling everything back to the extent you can

Lara Schmoisman 23:45
If it’s something that I learned from working with smaller brands and or entrepreneurs is that many times is one or two people operations. And then when we come in as an agency, we take a lot of their workload, and they’re happy for that, but they still really busy. And as they growing, they need to do pop ups, they do shows they do meetings, if they’re looking into financing, they need to learn there’s so much to do shipping, more packaging, and always creating more. So I really understand that people are entrepreneurs are really busy. It’s it’s not the fun part of being an entrepreneur, it’s an you’re putting many times your own money into it. So I try to be very careful of how I communicate with my entrepreneurs because I know that they’re busy, but at the same time I need that they’re their baby and and they need to teach me what they want for the baby and their babysitter only.

Katie Staba 24:49
But you’re also providing probably a very pivotal role, right? You’re like you’re triaging things, right. I need this answer today, this one next week and like it so you’re helping them sort of control the chaos. And in a way, if particularly if you’re handling sort of like a huge swath of their business, just by virtue of the fact that you know, you’re just equally invested in their success,

Lara Schmoisman 25:12
Absolutely the same as you as a lawyer is like, these are your steps that you need to do. Or this is how you protect yourself or like, starting a business without forming a company. That’s every school.

Katie Staba 25:27
Yeah, yeah. And hopefully, they they’ve come in your door, fully kitted out with all of that. But to the extent they’re not, I mean, I’m sure you’re helping them find these issues, right? It takes a village right?

Lara Schmoisman 25:40
Many times, it’s not my place at all. But it’s many times as I say, hey, in order to have any commerce, you actually need to be forming a company, otherwise, there is no way that you’re going to be able to make money.

Katie Staba 25:53
Yes, yes.

Lara Schmoisman 25:55
Thanks so much. It’s not simple anymore. It’s not like having a lemon lemonade stand.

Katie Staba 26:01
And if it is, we should be worried.

Lara Schmoisman 26:03
Yes. Because even the lemonade stand should be paid taxes.

Katie Staba 26:07
And you know, that firsthand with your recent launch as well. Right? You, you now see both sides of the of the fence, which is a really unique perspective. It’s unique. Yes,

Lara Schmoisman 26:17
you just say put it out there. First of all, thank you very much. Yes. With my recent lunch, I, I start seeing things in different perspective, I have the I have the knowledge of marketing. And I knew that is the easy part for me, but developing a product, I had to learn so much.

Katie Staba 26:39
Any major lessons that you’d impart to your listeners? Journey?

Lara Schmoisman 26:44
Maybe you should tell us, what are the lessons that you learned from your clients?

Katie Staba 26:49
Oh, my gosh. Wow, bring lawyers in early and often. We’re not the enemy. Right? Messaging, right. I have some clients that have been with me for a long, long time. And I always they always joke with me like, oh, no, Katie, what did I do this time? Like, am I in trouble? I never thought of myself as like the teacher who scolding people. And that’s not a fun role for anybody to play, and certainly not one that I actually do play. They’re kidding. But you know, your lawyers are in it to help you. And sort of that’s the message and takeaway, I hope, lessons learned Oh, plenty, plenty.

Lara Schmoisman 27:30
For my side, what I learned is that you need to do everything in tandem. And this cost me time and money. Like I would have saved a lot of time, if I will start doing a lot of things at the same time. Instead of waiting, one to start another. Like I didn’t know that from the marketing side. And I started with that what for me, was oh, when was ready to switch, the turn on both on and everything was ready in marketing. But in the production of the product. I was like, Okay, let’s do this. And then let’s do this. I didn’t, it was I want to experiment without having any consultants. I want to do it myself. And but I’m paying the price for it.

Katie Staba 28:12
Next time. Will you hire someone? No. You’ll just do it better. You’ll multiply yourself,

Lara Schmoisman 28:19
I will need to have a lawyer than between me and the consultant because I No, seriously, I, I think I learned already. And because of the industry that I’m in, I have amazing connections, and I know who I want to work with. So that I I’m very grateful for that I knew who I really wanted to work with and who I wanted to be involved in my product.

Katie Staba 28:46
Yeah. And I think that sort of access to that knowledge that you have visibility to is so helpful to brands, I ran into some companies recently, where are their entire business model is effectively giving the benefit of scaled businesses to like individual indie brands, giving them the back end with IT support and marketing support and all of those things and giving them access to maybe manufacturing that you really need volume to get access to, and sort of offering that as a suite to try to bring these brands to an sort of equity position with like the bigger brands who maybe have the benefit of product pricing, first scaled volumes, purchases. And I think that’s a really interesting model because like, more and more and so many different industries, right? Like the smaller brands are just not surviving as long or getting to the point of exit that they’re hoping for because it’s everything is just it’s very expensive to approach from start to finish, as I’m sure you’ve recently learned.

Lara Schmoisman 29:47
But before we go because I mean I can keep talking to you all day. But I want to ask you one more question because I seen this a lot as a dream of the entrepreneurs mostly in the beauty industry that what they do they do it in order to be acquired. Don’t ask me because I don’t think that that’s my goal. This is my passion project and idea because I want to do it. I don’t know where I don’t have a goal in, I just My goal right now is everyone to try my product, because it’s my passion. But at the same time, I see that a lot of beauty industry are really hoping to get acquire. And that doesn’t happen to everyone.

Katie Staba 30:28
It doesn’t.

Lara Schmoisman 30:32
And I think it’s a nice goal to have, if that’s what you want, but you need to be prepared, that might not be your faith. But if you’re interested in going into that direction, and preparing yourself for being acquired, what should they do? Because compliance into that, there’s a lot of compliance.

Katie Staba 30:49
And you know, I work with a lot of mostly the acquirer, so the buy side, right. And so I do get sort of a behind the, behind the screen, look at a lot of companies and how they operate it to the getting to the point of trying to make an exit. And I, you know, if I had one, one piece of advice is to get your hands on a diligence checklist, right? Like all the questions that someone’s going to ask and make sure you’ve thought about it, because no one’s expecting absolute perfection. But they are kind of expecting that at least you’ve thought about these things, or you consider them and opted to go a different direction. But you’ve, you know, kind of looked at it from the viewpoint of an entity that that’s acquiring you or an investor who’s about to make a big investment, right, they all use the same, they all ask the same questions across everything from sort of corporate to employee issues to IP issues, right? They all cover on the same hot topics. And as long as you’ve sort of at least thought through all of those, none of those questionnaires will be a surprise. So you’ll be in the best place to if you are approached, enter confidently, and be able to talk really, with with authority as to you know, what you did and what you didn’t do candidly. And then you’ll be in the best spot to if those opportunities arise, like hopefully bring them to fruition successfully.

Lara Schmoisman 32:08
Okay, what brands do you see that they have the opportunity to be acquired? Or what did they do to be special enough to be acquire?

Katie Staba 32:16
Well, no one asked me those questions usually, so I don’t know. But I will say that, you know, you’re seeing a lot more trends in terms of right COVID Did a lot of terrible things. But one thing it did was make focus poke, people focus more on health and wellness more. So in terms of any product or service that sort of thrives to that angle, I’m just seeing a lot more activity in right, we’re seeing a lot more brands pop up. But I’m seeing a lot, I’m seeing more traditional beauty brands sort of taking a dalliance permanently or not, I don’t know, into more health and wellness, whether that’s a supplement area, or that’s like a hydration product. So I’m seeing a lot more of that. And people are more interested in products that, you know, are better for them, right? They’re organically made. They’re cruelty free, all of those things, right. So it’s like those hot button issues that we see just as regular consumers, I’m seeing reflected in the acquisitions that I’m seeing cross beauty brands.

Lara Schmoisman 33:16
Thank you so much, Katie for being here and for being such a good sport and to be able to put the law in really simple words. I love when lawyers can do that.

Katie Staba 33:26
Well, I am delighted, thank you so much. And I will talk to you soon.

Lara Schmoisman 33:30
Okay, and to all of you. Thank you so much for having coffee with us today. And I will see you next week with more Coffee Number Five. It was so good to have you here today. See you next time. Catch you on the flip side. Ciao ciao.

GUESTS

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