5 Minutes with...Tweezerman Dal LaMagna

As an entrepreneur, Dal LaMagna failed…a lot. He started several businesses that crashed and burned but finally found success when he started the Port Washington, NY-based Tweezerman, a multi-million dollar international beauty tools business. He managed the company with socially responsible and sustainable business practices.

When he sold it in 2004, and “walked away with millions,” he proved that sustainability can be very profitable. Today, he is founder and CEO of ReelUMedia.com, an online film, music and book distribution company. He serves as a trustee for the Bainbridge Graduate Institute’s sustainable business MBA program. He is author of Raising Eyebrows, A Failed Entrepreneur Finally Gets It Right and an investor in several other sustainable businesses.

Daria Meoli: You ran Tweezerman as a socially responsible company before it was a trendy. Why?

Dal LaMagna: I had been exploited twice by powerful men whose orbit I had fallen into, thinking they were going to mentor me. And I was determined that when I finally started my own company, I would never exploit people—not my employees, my vendors, or anybody. I have a whole series of best practices that I call responsible capitalism. The difference between running a company just for the benefit of the shareholders versus for the benefit of all the stakeholders is what makes a company socially responsible and what makes a company sustainable. Part of responsible capitalism includes teaching employees how the business works and giving them more responsibility than even they thought themselves could take on. When I finally sold Tweezerman, I was able to walk away because I had designed the company to be self-sustaining. The employees ran the company.

DM: How did that work?

DLM: I like to say that if you’re a person who is lucky enough to start a company that makes a living for you, that’s quite an accomplishment. But how do you go from making a living to making a fortune or making enough to retire? I contend that one of the ways you do that is you practice responsible capitalism, part of which is empowering your employees, giving them responsibility, and rewarding them.

Right from the beginning of Tweezerman, I intended to end up with my employees owning 20 percent of the company. By the time I sold the company, 10 percent was owned by my key management people and the other 10 percent was owned by all the other employees who participated in an employee stock ownership plan (ESOP). When employees have ownership in the company and when they earn a percentage of the profits each year, you have a group of people who are very loyal to the company. Some people say, “Oh, you’re such a nice guy.” I have my principles and I bring them to my company.

But I’m totally convinced that I made many times more money with that company than I ever would have if I acted the way that most people think you have to act in business—exploitive and ruthless.