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The ink was barely dry on President Donald Trumps April tariff missive, when owners of independent nail polish brands sounded the alarm that the changes could chip away at their businesses. That shocking executive order ushered in sweeping tariffs of as much as 145% on Chinese imports. Much has changed since then. In May, the U.S. struck a trade deal with China that included a 90-day truce and reducing tariffs to a still-high 30% for most imported goods; then, in June, President Trump said a trade deal with China is done and tariffs on goods imported from China will total 55%, while Commerce Secretary Howard Lutnick said the level wont increase again. There’s currently a pause on tariffs of goods imported from China, effective until August. But the prolonged chaos of the past few months has dragged small beauty brands into the middle of a big trade war. And its created uncertainty that could leave a long-lasting smudge on business. Even the latest news doesnt provide much reassurance, says Rachel Wraith, founder and owner of Rogue Lacquer, a Phoenix-based indie line of nail polishes. It still feels like a slap in the face and I never feel certain with any set decisions because everything seems to change, regardless she tells Fast Company. Waking up each morning lately, Wraith says, has meant bracing herself for what news might come that day that will affect her livelihood. Hurdling one obstacle, she adds, makes her question what the next one will be. The uncertainty is very hard and very stressful. Going rogue For more than a decade, Wraith has been making customized nail polishes and she launched Rogue Lacquer in 2018. The business is a primary source of income for Wraith and her husband; he works full-time for the business, while she also has a full-time job in healthcare. The powdered pigments that Rogue imports from China are a crucial component for Wraith to create the customized nail polish colors that she sells in small batches. And there arent really alternative locations to source these pigments, which meant news of tariff increases left Wraith with little option but to pay up. This is a broader problem for the beauty industry as a lot of manufacturing is concentrated in China, adds Sucharita Kodali, a vice president and principal analyst at Forrester. The issue right now is there is no definitive place that is an alternative to China because you dont know what that situation is going to be in three months or six months, Kodali says. Until the dust settles, no one knows.” Advantages for big brands Even as tariff increases rocked indie beauty brands, the impact was less severe on the industrys biggest players. Thanks to margins of about 80% to 90% on many beauty products, some companies are able to absorb higher tariffs without making price increases, Kodali says. But the longer-lasting impact tariffs will have on the beauty industry remains to be seen, notes William Curtis, senior industry and risk analyst at IBISWorld. In the short-term, the big winners will be the companies with a more diversified, more domestic manufacturing base. Curtis points to LOréal, which has been actively diversifying where it produces its broad array of beauty products in recent years. Two-thirds of the LOréal products sold in the U.S. are now produced in the U.S., according to company figures. Of course, moving production elsewhere isnt an option for small beauty brands. Business owners could have taken a lesson from Trumps handling of tariffs during his first administration, Kodali says, and their options now are rather limited, which means some will face irreparable harm. Adds Wraith: Did anybody think to ask a small business how these decisions would affect them? Pushback on pricing After Trumps announcement of tariff increases in early April, many brandsincluding Rogue, Lurid Lacquer, Atomic Polish, and Dam Nail Polishposted candidly on social media that their businesses would be directly impacted, even if they werent quite sure then by how much. Comments from customers were overwhelmingly positive, with people empathizing about the stress the uncertainty was causing. Some of that sentiment has since changed as brands have begun testing just how much they can increase prices without their polishes losing luster in the eyes of consumers. Mooncat, an indie brand of nail lacquers, announced it would increase the price of its polishes by $1 to $2 each while also upping the free shipping threshold. Most bottles of Mooncat lacquer now retail for $16 to $18an amount some customers will happily pay, but a bridge too far for others. I cannot ever imagine paying almost $30 (including shipping and tax) for one bottle of polish, one person posted on a thread discussing the price changes on the RedditLaqueristas subreddit. Other customers have complained in comments on Instagram that, amid the price increases, theres no longer transparency about how much money is going to benefit cats in need of new homes, the brand’s charitable mission. Mooncat declined a request for an interview for this story. Brands embrace transparency ILNP and Cirque Colors have also recently announced price adjustments, with both brands opting for selective, rather than across-the-line, increases. Most bottles of ILNP polish now retail for $12.50 each, while many of Cirques polishes start at that same price but also go up to as much as $16.50. The reception to these price changes has generally been more positive among the 940,000-plus members of the RedditLaqueristas community. Some people commended ILNPs transparency and others noted that Cirques hasnt raised prices in several years. For beauty brands already struggling, tariffs have introduced a wild card that could make their future more uncertain, says Curtis. In May, the owner of Dimension Nails announced she was shutting down her store effective June 30, though she didnt specifically cite tariffs as a reason. The owner of Triple O Polish announced in mid-April that she wouldnt be able to keep her business open if the highest-planned tariffs went into effect, though shes still operational amid the tariff pause. What works best While the community of indie nail polish brands is niche and very friendlya group where Wraith might seek out guidance or compare notesshes intentionally not monitoring what other brands are doing in the wke of tariff announcements. I dont want to make a decision based on somebody else’s business model, she says. You just have to figure out what works best for your business. The risk of mirroring price increases taken by other brands, Wraith says, is that doing so could lead to a drop-off in sales in a year thats already proven to be a bit weaker. That appears to be a broader trend, as LOréal reported that U.S. sales of beauty products were more challenging than anticipated in the first quarter. For now, the biggest change Wraith has madewhich she announced in Aprilhas been to increase the threshold on orders eligible for free shipping, from $75 to $100. For those polishes made with high-end pigments, Wraith has bumped up prices by 50 cents, but shes resisted across-the-line price adjustments and most bottles of polish retail for $12 or $13. Navigating a new normal Prior to the initial tariff announcements, Wraith says she was fortunate to have a lot of pigments on-hand, and shes since limited imports to only those supplies she really needs. She has paid tariffs twice since April, including when they were at the highest level, and in this period of flux, shes opted not to branch out so much with the range of products shes creating. By keeping costs more consistent, Wraith is optimistic that Rogue can ride out this period of uncertainty. But its hard to make decisions, she says, when theres the very real possibility that she could place an order one day, and tariffs could change the next. This is characteristic of the chaotic rollout of tariff increases thats created a lot of confusion for small businesses, as Kodali notes. My hope is that in six months, all of these business owners will be in a better place.” Even if nail polish is a luxury item, creating lacquersfirst as a hobby, now as a businesshas brought Wraith a lot of joy over the years because she enjoys making other people happy. And people need that more than ever right now.
Category:
E-Commerce
The data, both empirical and intuitive, could not be more clear: Generic, direct-answer and productivity AI platforms, most notably OpenAIs ChatGPT, are dumbing down an entire generation of students, eroding critical thinking skills, and atrophying the muscle that is such a core component of what makes us human. And yet, universities and K-12 institutions are agreeing to substantial deals and partnerships with generic AI platforms, such as ChatGPT EDU, to bring these destructive tools into their classrooms, encouraging their use among the student body even as the correlation between usage of current AI tools and critical thinking shows devastating negative effects. Reading competencies are down for the fourth straight year and 50% of students admit to using ChatGPT for a quiz, test or essay. Weve all had some version of the same conversation about COVID’s effects on students. Many lost an entire year or more and were just passed through to the next grade level. It was a disastrous effect for students who were already behind the curve. In effect, direct answer generation AI tools are creating a “COVID 2.0” generation of students who wont lose just one year but a significant portion of their educational experience. Their development and personal agency is diminishing every day by using AI as a tool for shortcuts and cheating. Its Worse than you Think Theres a reason we dont allow children to drive a car before a certain age. Theres a level of responsibility society has determined is necessary to drive a powerful machine. AI is a powerful machine but were handing our children the keys to a Mustang GPT with no training and no protections. Predictably, its not going well. You may be wondering why a founder of an edtech AI platform is critical of AI in education. To be clear, I know that AI can have an immensely positive impact on education. I know that AI can act as a force-multiplier for teachers and it can open up a world of knowledge and inspiration for every student, everywhere. AI can do all of these things but not the way were currently using it. Not with generic AI platforms like ChatGPT that simply give students the answers. AI makes things substantially easier, and that’s amazing. I use AI, including ChatGPT, consistently every day and it makes me and my team 10x more productive. Ive seen some amazing things, like a 6-year-old building a functioning app using AI, and so many others releasing a massive amount of creativity. But we cannot teach children that life is as easy as sticking in a prompt and waiting for an output, there will always be hard problems that require critical thinking and a lack of tools. As a recent student, I have seen the outsized role this technology plays in our day-to-day lives, the immense ramifications of irresponsible integration, and that the situation is far worse than even the media is portraying it right now. Let me repeat that: the situation is far worse than even the media is portraying it right now. Seemingly every headline regarding AI in education highlights the devastating impacts and, for maybe the first time in history, the media is actually downplaying the ramifications. A friend and recent graduate told me that he hasnt typed an assignment in two years; hes simply copied and pasted from ChatGPT every single time. He just graduated from a top-tier university and is wholly unprepared for the workforce. Have an issue? Oh ill just ChatGPT it, no how, no why. This is the norm now, its not an outlier. As 96% of teachers acknowledge AI is the future of education, change must be made today or this and subsequent generations of students will continue to see their critical thinking, literacy, attention spans, and ability to contribute to the workforce severely degraded. This change must begin with an acknowledgement by the wider educational and technology communities: generic productivity AI platforms, like ChatGPT, are not a solution to integrating AI into classrooms. There is Hope, if We Act. Right. Now. Every school needs to make a simple declaration today: they will not use platforms that do not focus on ethical and responsible use of AI for studying and learning. This means tools like ChatGPT, which allow for direct answer generation, have no place in our educational system. The promotion of purpose-built AI learning platforms that dont give students the answer will provide schools and teachers, regardless of their bandwidth, with a foundation to take confident steps forward and create a better future for students. Tech Leaders and Educators Must Work Together to Establish Guidelines The education establishment is in a tough spot right now. They know they need to implement AI solutions into their classrooms to prepare students for the workforce of the future, but the leadership often doesnt see alternatives to generic tools like ChatGPT. Universities are eager to remain competitive and educators on every level want to give their students the best chance to succeed in the AI world. We have to start with a set of core principals that we all agree is in the best interests of our students and in the best interests of society: Responsible AI edtech companies must work hand-in-hand with educators at every level to develop and enhance AI platforms built for true learning. Generic direct answer generation AI tools, like ChatGPT, have no place in the classroom. AI must be used as a tool for learning, not shortcuts and cheating. AI will never replace teachers. AI is a tool to help teachers, to save them time and free them up to focus on their students. Any AI tool introduced to classrooms must be designed to promote responsible studying and true learning. This is a list that will grow and evolve over time, but we have to start somewhere. Tomorrow is Too Late We have an opportunity right now, today, to act. Were already seeing the devastating effects of ChatGPT on our students and the worst side effects wont even show up for years to come. We have a chance to change course and realize all of the amazing things AI can bring to our students but only if we act now. Its time to introduce responsible AI use to every student, everywhere, including productivity tips, prompt strategies, collaborative tutors, and true workforce prep for the AI world. AI can have such a positive impact on education. It can help us realize true equality of opportunity for every student who wants to succeed. The time to act is now. There are alternatives. There is a better way and a better future. If we dont act soon, we risk lobotomizing an entire generation and making them completely dependent on I systems to do everything for them; but maybe that’s what some want . . . Lets get to work.
Category:
E-Commerce
Sudden equipment failures. Supply chain surprises. Retaining staff as the goalposts move in real time. These arent challenges Ive faced as a tech founderbut I have faced them running restaurants. Twenty years ago, I cofounded a conveyor belt sushi concept that grew over 10 years across 12 units and six states. And if I’ve learned one thing from over two decades of operating restaurants, its that they require more discipline than any startup, with far less margin for error. On paper, hospitality and tech dont seem to overlap. Yet, many of my current practices as a leader were forged in a restaurants back of house, where staying close to the numbers and the customer experience was key to survival. A master class in leading under pressure I didnt expect my time running a sushi chain to influence how I run my software company. But the leadership fundamentals that were critical in the restaurant business turned out to be the same ones needed in tech. Putting out fires in tech usually means resolving a bug. At a restaurant, there could be a literal fire. Once, during a lunch rush at one of my restaurant chains Washington, D.C., locations, our hood system failed. As teriyaki chicken smoke filled the HVAC system and forced a 14-story building to evacuate, we scrambled to fix it without stopping the line. Even when the crisis isnt so dramatic, leaders have to rally the team quickly. Staff and customers depend on you in person, so you think on your feet to handle any challenge at hand. As you juggle priorities on the floor, youre also protecting razor-thin margins behind the scenes. Unlike in tech, theres no bridge round to float you through a rough quarter. Its your job to monitor costs and adjust staffing or procurement to keep things stable. Anyone whos worked in a restaurant knows that its a unique type of chaos. But the instincts the environment encourages can also drive resilient tech companies. 3 restaurant rules that tech leaders should borrow Restaurants dont have the luxury of recurring subscription paymentsthey have to fight every day for every dollar of revenue. That reality pushed me to be data-driven and relentlessly hands-on. While some lessons didnt feel obvious at the time, they guide how I lead in tech today. For example: 1. Be actually customer obsessedWell-run restaurants are maniacal about customer service. If you need proof, look to restaurateur Will Guidaras concept of unreasonable hospitality: creating extraordinary experiences by exceeding customers expectations. In this mindset, every touchpoint during a meal matters, from the first greeting to how the check arrives. Staff are expected to embody that service culture, no matter their role. Tech companies love to say theyre customer-centric, but how often does that ethos extend across the org? If customer experience is siloed to success or support teams, you limit your ability to build with empathy. Tech leaders should take a page from restaurants and make it everyones job to surprise and delight customers. It can be as simple as a program that lets team members nominate partners and clients to receive curated giftswhether theyre celebrating a win or going through a difficult time. Real customer obsession shows up when service is a shared culture, not a siloed department. 2. Your unit economics matter I could go on about how restaurants profit margins force you to get the math right. But one habit it encourages is a laser focus on unit level costs. If any element of a takeout order, from packaging to ingredients, is out of balance, your margin disappears. Before you know it, your profit & loss statements have red at the bottom. Tech companies often overlook unit economics, but getting back to the basics of cost structure helps prevent unnecessary burn. Metrics like customer acquisition cost and lifetime value let you stay laser-focused on profitability and ensure you’re building a business that can sustain itself. It’s surprising to me how many tech entrepreneurs will claim success when they have early clients with strong usage metrics but little or no revenue. If you cant charge for it, is it really adding value? Rigor at the unit level lets you scale responsibly and course-correct as the market shifts. 3. Break down silos and build a culture of teamwork Imagine if the kitchen and front-of-house staff stopped talking during a dinner rush. Orders would back up, wait times would spike, and customers would walk out before their food hit the table. Since coordination is make-or-break in a restaurant, leaders are wired to instill a culture of teamwork. Front-of-house and back-of-house employees don’t point fingers at each other, they solve issues together. In tech, building that instinct to collaborate means giving teams visibility into each others work. Engineers listen in on customer support calls and product managers shadow the QA team. When staff realizes how their work ladders toward the same goals, people start offering support without being asked. In fact, we are so focused on hospitality for our customers that we often see too many people running toward the same problem. But thats the better issue to haveit means teamwork is the norm, not an anomaly. Bringing restaurant discipline to the startup world When margins are tight, customer expectations are high, and every dollar of revenue takes real work, success depends on rallying employees with a culture of shared ownership. Thats the kind of leadership restaurant operators practice every daywhy should startups be any different? The stakes are distinct, but the playbook holds: get close to your customer, know your numbers inside and out, and build a team that solves problems shoulder to shoulder. The sooner tech leaders embrace this discipline, the better their odds of scaling something that lasts.
Category:
E-Commerce
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