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CNBC Transcript: PATTERN Founder and CEO Tracee Ellis Ross Speaks with CNBC’s Rahel Solomon at the Inclusion in Action: CNBC Opportunity Forum

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The following is the unofficial transcript of a CNBC interview with PATTERN Founder and CEO Tracee Ellis Ross at the Inclusion in Action: CNBC Opportunity Forum, which took place today, Thursday, March 18th.  Video from the interview will be available at cnbc.com/inclusion

All references must be sourced to CNBC's Inclusion in Action forum.

RAHEL SOLOMON: Tracee, good to have you with us. Really excited to have this conversation. You and your hair have sort of been a package deal even in a lot of the characters that you've played. In fact you once said, "I've been marketing my hair since my social media started. It's a huge part of my beingness, of who I am and how I dress myself. Now I have a name for it." So the idea of you creating a haircare line seems to make sense, I think, for a lot of people who follow your work, but for those who aren't familiar, explain a little bit about the idea behind PATTERN.

TRACEE ELLIS ROSS: Well, the truth is that PATTERN as a beauty brand started when it was a personal situation for me. So I feel like I could truly chronicle my journey of self-acceptance through my journey with my hair. And it took 11 years, 75 products, experiments of samples, to launch PATTERN. And long before I was on social media, I was walking through this journey with my hair. And I went from my own personal discovery to realizing that I was not alone. That there were so many people in this curly, coily and tight textured community that didn't have products that really met them where their hair was. That supported their hair, how it naturally grew out of their hair, and that could really give them access to their most beautiful and juicy and joyful hair in their own bathroom. And so PATTERN was born. Again, 11 years – took 10 years, 11 years from when the formula started.

SOLOMON: And the landscape for haircare for multi-textured hair has really changed, I think, in the last 10 to 11 years. And speaking of that consumer, right, the black consumers spent $473 million on haircare and $465 million on skincare on 2018, and yet it does feel like black haircare or multi-textured haircare has been sort of a niche for an offshoot of more mainstream products. Do you feel that investors or some of the partners that you maybe initially thought about were as receptive of this idea of becoming a more mainstream product as opposed to sort of a niche product?

ROSS: Well the truth is that that's one of my missions with the brand, and it's also one of my missions that sort of guides me through everything I do. I feel like celebrating the joy, the beauty, the importance and the diversity, and the power of black people, and black women in particular, is my life's work. And no, the reason it took 11 years to get this idea off the ground, you know, the first time I wrote – my first haircare brand pitch was, I think, 12 years ago now, but it took 10 years to get anyone to understand that this is not a niche market. You named that number, right, and I don't think that number even cracks the surface. And unfortunately, our industry and the world still uses numbers as a way to qualify and quantify our worth. And we are so much more expansive than that. And so, I think people are waking up to that, and the partnerships that I have had have really understood the vast importance of this curly, coily and tight textured community and it's the same way we see with the CROWN Act, honestly. That, you know, how essential it is to have policy that safeguards our existence, our dignity and our humanity is the same thing with having products that we can actually use to support our hair the way it grows out of our head.

SOLOMON: Yeah, absolutely. And if I may, you know, as much as you feel comfortable sharing, how do you even sort of impart to people who don't have curly or coily hair or who don't really even understand – some I hear you and say, "wow, that sounds like a lot of work for hair," right? So for those who don't understand what that struggle or even what that is like as a person of color, looking for products that meet your more unique needs, how do you even impart to people who may not understand that journey why it's so important to have products like PATTERN?

ROSS: The truth is that is the reason that we need to go beyond just D&I executives and mast heads, you know, to put on masthead. That there is a real opportunity to break down this systemic misunderstanding of the economic opportunity that has blocked all different kinds of people out of spaces. And I feel that those are conversations that I think are getting better and easier, but I don't think one needs to explain why you need to have products for your hair. I think it's a given in my opinion.

SOLOMON: No, yeah I understand.

ROSS: Sort of like, do you need shampoo? Do you need conditioner? I think the difference is all different people need different things. And we need a world that actually matches the needs for each of us. And it's the reason why we keep talking about the diversity that needs to happen around tables. You know, otherwise, our world continues like if the gatekeepers don't change the system, the gatekeepers – the system will stay the same. And we need to be –  you know, all of us, I feel like in all different industries, we're all still walking through how to make these changes. But the validity of my needs does not need to be justified. And I think that's the same for hair products, you know.

SOLOMON: So how do companies move beyond as you just said, right, just the masthead or the figureheads – the sort of hiring practices and the diversity initiatives, which are important, but how do you move beyond just the goals and the benchmarks to even expanding diversity with the suppliers you work with, the vendors you work with, and how do you think that impacts a company's bottom line?

ROSS: Well, I mean you just saw the study that came out about Hollywood, and there's like $10 billion on the table you know what I mean. Like if you diversify, it actually does have a dollar effect. But I think what really needs to be looked at is the value. The value that we bring. And you know, historically there hasn't been an infrastructure that could accommodate an anti-racist strategy, which means that the system unfortunately has been doing what it is set up to do. And I think that, as I said, we're beyond just the DEI executive that gets put into place and there needs to be a clear intention to break down and dismantle those systemic places, so that there's a space for economic opportunity that's blocked others out. And I do feel encouraged by what's happening right now. And I think that there's foundational changes that are happening under our feet. We're leaning into conversations that used to feel taboo. I think that, you know, I'm a part of a community of women who are still working and living like you and all of us. We're still breathing these things in our lives. We're still experiencing these walls on a regular basis in our careers and in our lives. And we're pushing up against those cultural norms. And I think these are the moments that are starting to change that. For example, in my partnership with Ulta and the fact that I have become their D&I advisor, I think is a real indication of a company that understands the importance of this growth and the willingness for this growth and what it takes to make this kind of growth.

SOLOMON: And actually we got an audience question about that role, so I just want to weave in that. So this comes from J Adam from Cap-H Technologies. So how did you become a diversity and inclusion advisor, and how do you get companies – which this is the part that I think is really interesting – how do you get companies to buy into this as not just another fad or concept, but something that should have a tangible bearing on creating permanent transformation?

ROSS: You know, I think that that is – so there's two parts. So let's start with the first part of that question. My partnership with Ulta has been a partnership in the true sense from the beginning. Conversations with them about diversity and inclusion were happening before and are the reason I decided to launch with them. And this role for me is a natural extension of conversations that we were having already, and that we were frankly strategizing about for a while. So my job as an advisor is to continue sharing, not only my resources, but my lived experience. And particularly with an entity that's willing to have those conversations, they have a willingness to lean into foundational change. And so, the other thing I want to say about that is that this is not, as we can tell it and as this question indicates, this isn't a retail issue, this isn't an industry issue. This is a societal issue that we are all working through and have been for quite some time. But how do we create foundational change and fundamental change that actually holds and stays? I think all of us need to lean into those uncomfortable spaces. Be willing to bring along thought partners that are going to help us see the blind spots that we have and how to get through them. To really look at not checking boxes, but where the systemic oppression actually meets the road. Like where the rubber meets the road and it's actually affecting people on a regular sort of day-to-day basis. To not be afraid to be transparent in the journey because I think the more that we feel siloed off and think that our experience is so unique, we can't help each other move through and find solution. And I think root the market growth strategy for any business in diversity, equity and inclusion. Like if it's anchored there, as opposed to in these other things, I think we all start working towards something better.

SOLOMON: Yeah, and that's not the goal. Tracee, before I let you go, I want to circle back really quickly to PATTERN as we close this out. It's become a very – I think, maybe surprisingly I don't know, you tell me – but it's become very crowded, competitive space.

ROSS: Yeah.

SOLOMON: How is PATTERN being received in the market?

ROSS: First of all, I'm so excited about that. I personally think that the more the merrier. The more the better. Like this is what I wanted when I was growing up. There were no choices. The choices were the same. Our little shelf space was at the back in a dark corner in the store and it was the same products from when I was a child to when I was an adult. So I love that the space is crowded. There is a specific mission and intent behind PATTERN – it is to meet the needs of the curly, coily and tight textured community. And also to be an active space where we are centered around the celebration of Black beauty. And we are the subject of the content and not the object. And so I think that specifically PATTERN is there to meet specific needs and people should have choices. But I stand by PATTERN, I gotta tell you. It's been my dream come true for my hair and I think that the response has been extraordinary. We are in a space of expansion. It's selling out and we're growing. We're continuing to grow, which is all a very good sign.

SOLOMON: Yeah and we do wish you continued success. Tracee Ellis Ross, so good to have you with us.

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