Building a Fairer Beauty Industry for 5,000 Bay Area Workers

The beauty industry promises glamor and success, but behind the scenes, it often leaves its most passionate artists feeling used and discarded. I poured my heart into my work, only to see my worth diminished and my dreams deferred. After a tough time through the last few years, we are to call this the new normalcy, and still, there is no guarantee of secureness.

— Gina Bernardino

Gina’s story is not an isolated incident; it reflects a systemic issue affecting millions of workers across the beauty industry and beyond. A 2023 Upwork study reveals that 64 million Americans are freelancers, including over half a million beauty professionals, many of whom share Gina’s experience of feeling undervalued and unsupported.

Freelance beauty workers, driven by passion but often lacking business skills, struggle in a retail system that prioritizes sales over support. Many are pushed into the shadow economy with minimal protection, stifling their potential and diminishing their value to both their industries and the broader economy

These challenges are not unique to beauty workers; they are emblematic of the broader gig economy’s systemic flaws. As an artist and beauty tech entrepreneur who has personally navigated these difficulties, I have witnessed firsthand how these issues undermine both individual careers and the industry as a whole. This realization has driven me to focus on a singular goal: creating a modern support system for excluded workers, beginning with the industry I know best—the beauty sector.

The beauty industry’s three key components—artists, brands, and clients—are interdependent, yet misaligned interactions waste resources and diminish client satisfaction. Restructuring, supporting, and maximizing their relationships would change everything. By addressing each component’s pain points and strengths and restructuring the system with technology support, we can optimize the overall user experience by nurturing these relationships. I know this because I was one of them.

My career began 23 years ago, and, like Gina, I started in retail and, after five years, transitioned to full-time freelancing until 2014, when I joined www.StyleBee.com—a Silicon Valley VC-backed company founded in 2013. I have deep knowledge of the beauty industry and have seen its dynamics firsthand.

As StyleBee gained momentum in Y Combinator’s 2015 summer batch, we were surrounded by venture capitalists and investors who embodied the “Grow or Die” ideology. I noticed that the nature of gig platforms creates friction in this vital relationship. Customer loyalty and retention are crucial, especially in the beauty and personal care industry, where deep personal connections are key. Yet, no one around me seemed to understand how this mentality hindered the user experience.

StyleBee, like many gig economy platforms, serves as an intermediary, managing client-artist interactions such as pricing, scheduling, and billing. The platform controls the relationship, diminishing the personal connection between clients and artists. Significant resources are spent on client acquisition, supported by budgets, loyalty programs, and user experiences designed to please clients—often at the expense of service providers—all in an effort to increase client lifetime value and prevent moonlighting, i.e., clients bypassing the platform to work directly with artists.

For instance, a client can’t see an artist’s work or communicate directly with them until after booking and providing their credit card information. If a client wants to adjust their appointment or inquire about products used, they must go through customer support, which relays the message to the artist and then back to the client. This process is inefficient and frustrating and detracts from the personal touch clients value.

Adding to the list is the issue of contractor payments. Uber’s introduction of Instant Pay is a prime example of addressing gig worker needs. Initially, Uber struggled to attract new drivers despite offering substantial sign-up bonuses. Instant Pay provided immediate access to earnings and significantly improved Uber’s driver recruitment and retention by addressing immediate financial needs.

The gig economy, particularly in the “on-demand space”, lacks a support system that balances flexibility with security, leaving workers vulnerable. While many freelancers value independence and the potential for substantial pay, they face significant challenges such as job and income insecurity, lack of benefits, and minimal administrative support. This double-edged sword makes it difficult for gig workers to thrive, as they are often left to navigate these challenges on their own.

The future to success in the gig economy is finding the means to balance the flexibility and independence that gig workers value with the financial stability and personal connections they need to thrive. Up until now, the platform service industry has spent billions trying to retain users and prevent moonlighting. Instead, we should make something too good to leave, something people want. That is what StyleBee is doing.

With the help of industry experience and abundant data, we identified that the key to capitalizing on the gig industry’s opportunities lies in addressing its dysfunctions. This solution involves separating the technology side of the company from the service provision side, streamlining the job procurement process while granting providers the autonomy to operate as they desire and offering the administrative tools they genuinely need and want. By doing so, StyleBee will eliminate inefficient user retention and support expenditures, optimizing the platform’s overall effectiveness.

The Split
Since acquiring StyleBee in 2021, we’ve been preparing to split the platform into two entities: StyleBee Inc., a tech company, and a worker cooperative, creating a “sister” relationship between them.

Over the last decade of operations, the StyleBee platform has cemented its brand presence and built valuable relationships. The decision to adopt a cooperative model was driven by extensive research focused on finding the best ways to support our talent rather than from an initial intention to create one. Our goal is to provide the support and equality they have earned and, for the first time ever, a voice with a seat at the table where their future is decided.

StyleBee Inc., as a separate tech company, will relaunch using its existing ‘smart matching’ technology, positioning itself as a technology-backed ‘launching pad‘ for over 45,000 clients and service providers. The prospective co-op members will be transitioned from our database of 5,000 beauty professionals to join and run their ‘independent’ business; the best part is the infrastructure and relationships are already solidified; all members need is a phone capable of receiving SMS text messages.

Splitting Sinto two stand-alone companies will harness the strengths of each entity while addressing inefficiencies. StyleBee Inc. will retain ownership of the technology and brand, leasing both to the cooperative, which will take over StyleBee.com’s service-based revenue model. This structure allows each entity to thrive independently while remaining strategically interconnected.

How It Works
Post-transition, StyleBee will shift its focus from individual client service requests to managing and nurturing its existing brand relationships and corporate clients, which include companies like Coty, NFL, Google Pixel, Chanel, AXE, Gucci, Equinox, Sephora, Bumble + Bumble, Juice Beauty, Mineral Fusion, and OPI. Resources will be invested in expanding the platform functionality to grant access to our user segments.

The pivot transitions expenditures from reactive to proactive, prioritizing technology development, experiential marketing, lead generation, data aggregation, and relationship management, emphasizing brand exposure and scalability. Our goal is to be more than a marketplace; we aim to drive economic empowerment and vocational growth. The cooperative model is strategically designed to address industry disparities and improve the transactional dynamic.

For co-op members, what was once just an SMS directing them to a service has now evolved into a completely customizable, all-in-one business solution using the Strobe App Creator Interface as the gateway. For StyleBee Inc., the new economic model provides business opportunities at scale without the need to micromanage providers and customers. Effectively addressing core issues in the gig economy by shifting focus from middle management to service-provider relationships, building loyalty and trust through ownership and incentives. The cooperative, supported by the StyleBee Inc. platform, will offer financial independence, localized empowerment, and technological access.

Our strategy tackles critical economic challenges like wage gaps and income disparity in the gig worker industry by integrating cooperative members’ vested interests in the tech platform. This approach enables rapid scalability and optimizes operations and marketing through ethically sourced data insights, creating a unique synergy that enhances growth and revenue for both StyleBee Inc. and the cooperative while fostering a fairer economic model for members. Though separate entities with distinct focuses, this segmentation aims to address systemic gig economy issues and improve conditions for all stakeholders. The cooperative offers unprecedented opportunities for service providers while creating a profitable and scalable economic solution.

A nominal 5% commission fee is charged on each transaction to cover business expenses. This fee directly benefits members by reinvesting in the cooperative and supporting essential benefits such as increased earning opportunities, exposure, access to retail and commissions, administrative support, fair compensation, liability insurance, health benefits, discounts, consolidated tax forms, industry-specific education, expanded professional opportunities, online profile and portfolio management, and access to the StyleBee hub and spoke marketplace.

These benefits foster loyalty, drive retention, and maximize engagement while paving the way to capture audiences and revenue from every industry segment. The economic byproduct of these advantages, perks, and membership incentives is a natural increase in transaction volume—a “trickle-in economic” effect, as I like to call it that arises from formalizing and empowering our members. This format appeals to gig workers seeking better work-life balance. Alleviating administrative and financial stresses boosts productivity, creativity, and well-being, improving the provider-client relationship.

Membership’s advantages and incentives are designed to increase transaction volume and engagement by making the platform easily integrable and valuable for providers, promoting equity and driving growth within a sustainable economic ecosystem. Additionally, as they work harder, they will earn more shares in StyleBee Inc. through platform engagement and activity, further boosting both StyleBee’s and the cooperative’s performance and growth.

Freed from the pressures of administrative tasks and financial uncertainties, professionals can focus on building their client base, creating user-generated content, delivering exceptional custom services, and fostering genuine client relationships. Unlike retail experiences, freelance providers establish connections based on mutual respect and trust, enhancing client loyalty and satisfaction.

With the co-op’s administrative support, these relationships have the potential to thrive, and this structure encourages workers to integrate their predominantly cash-based client transactions into the cooperative, boosting overall performance while upholding the cooperative ethos of one member, one vote. My industry is evolving, and we are at the forefront of this change by shifting to a more inclusive format. This plan introduces a frictionless, scalable model designed for a sustainable and equitable future, benefiting not just the initial 5,000 www.stylebee.com professionals but gig workers worldwide.

Turning a great idea into reality is challenging, especially when doing it alone. My experience across various fields has underscored the importance of collaboration. Seeking guidance, I turned to advanced AI, which led me to Start.coop and Platform Cooperativism Consortium. With the invaluable support of Greg Brodsky, Mica Fisher, and Trebor Scholz, we are now bringing this vision to life.

We invite beauty professionals, ethical investors, Donations, and supporters to join us in transforming the industry. Together, we can build a fairer, more inclusive beauty industry.

Learn more about the author here. More information here. Donate here.