An AI case study with Madison Reed, a new parenting app to know, and the Bigscreen product drop captivating VR fanatics
True Ventures
A Silicon Valley-based venture capital firm focused on early stage technology startups.
Greetings, all. Our team’s still feeling the love from True Founder Camp. Over 200 of us gathered in Ojai this year to hear from AI leaders, connect offline, and benefit from shared stories and challenges. Catch clips from the event and leap into the story below where Amy Errett shares a case study on how she's completely rebooted her customer support function, resulting in meaningful ROI.
AI Transformations for Consumer Brands: A Case Study With Hair Color Company Madison Reed
By Amy Errett, Founder and CEO of Madison Reed
As a Founder of a consumer brand that’s been growing for over a decade, I intimately ‘get’ both the challenges and opportunities of AI automation in business operations. Madison Reed has used AI since its inception to match a consumer’s hair color, however our business is not AI-native — we make tangible products that our customers pick up with their hands and use on their hair… There’s nothing more personal than that.
In 2016, we expanded AI capabilities with an augmented reality app that let customers virtually try on hair color and ultimately help them find their hair color match. It was an obvious, fun way to use AI and AR to benefit our customers, and at the time, it was innovative. Needless to say, looking back, it was just the tip of the iceberg in terms of how AI would later impact our bottom line. We’ve found that if a consumer uses this tool, they have a 33% greater conversion rate… Meaningful!
Six months ago, we went deeper and began working with an AI software company called Sierra to do three things: 1) train an AI agent skilled in customer support chat to reduce churn, 2) make product discovery more accessible, and 3) book appointments with ease for our 95 Hair Color Bars. We affectionately named our support agent Madi.
We went live on our website in February, and the revenue and savings resulting from this agent – no exaggeration – will pay for half of what we spend on customer support in a year.
The agent is already improving our customer lifetime value, increasing bookings and reducing our cancellation rate by 5x of what it was before.
Because my team and I are ecstatic about the results, I wanted to share what we’ve learned for other Founders running businesses that aren’t AI-native but have massive opportunities to apply automation in ways that actually move the needle beyond productivity hacking.
Identifying Use Cases for AI Experimentation
We partnered with Sierra to launch three AI agents over the course of four months. We chose to experiment with the three use cases to reduce customer service live interaction because it’s one of the simplest and most straightforward cases for testing traction and learning. As noted above, each of the three AI agents we built has a specific function:
To manage the implementation effectively, we formed three dedicated working groups in November 2024, each focused on one of those use cases and staffed with team members with relevant expertise.
After three months of development, we launched our AI agent in early February 2025 – a realistic timeline for what companies of our size can expect when implementing similar AI solutions.
The new AI agent now handles 90% of our web traffic. It started at 30% and, as we learned more, we increased to 50%, then 90% as it stands today – and the impact has been immediate.
And for us, this isn’t just about rebooting customer support — AI is changing how we operate across the board with creative too, as you’d suspect. With AI, we can take both older and current owned and licensed photography and written content, modify and enhance it, and save significant photoshoot and creative costs to get more use out of a single image, article, or social post. It’s a massive cost savings and lets us work in a smarter, more scalable way. And it reserves human talent for the creative act of ideation, not the tedious amplification of output. We can change hair color, outfits, and backgrounds at record speed – this has real impact.
Selecting AI Partners
There are so many new AI tools every day to consider. In choosing to work with Sierra, we evaluated a number of other AI technologies focused on customer support and felt Sierra’s functionality was best equipped to customize for our specific use cases as well as our omnichannel business strategies.
My best advice for selecting the right partner is to really ask a lot of questions around capabilities of these companies. Explore their ability to customize the agents for your use cases, and while they may seem inexpensive at launch, understanding the cost of the ongoing platform is critical. We found a lot of inexpensive options that became expensive after launch. In our case, we have in-house development and engineering as well as digital product teams, so it was crucial to get their buy-in. They’ve been critical to driving this project.
Learning Limitations
Once your AI agents are launched, you’ll continue to learn and encounter scenarios that unveil what the agents aren’t trained for. That might result in frustrated customers from time to time but it will give you what you need to improve. For example, our customers sometimes want to have consultations with our human stylists through our AI agent, which our agent can’t coordinate yet – so we need a clear plan for directing those inquiries to appropriate channels.
Every consumer brand should be thinking about how to use AI not just for efficiency, but to solve the real business problems of the leaders of various departments on your teams. When you align and design AI solutions to meet the needs of departmental leaders, you will spark greater internal enthusiasm for experimentation, not resistance, and discover new and interesting ways to increase your output, potential cost savings, and potential profit.
Amy is the founding CEO of hair color company Madison Reed and an investor at True. She serves on several boards spanning the startup ecosystem and academia – and believes in the power of leading with love. Meet more of our team.
✨AI Company Briefing
Tough time keeping up with all the new AI companies out there? Here are a couple apps and platforms to know.
Riley: AI-powered parenting app.
What You Should Know
Riley App’s question-and-answer platform suggests personalized, data-backed advice, citing reputable medical studies, and tracker function allows parents to log sleep, diaper changes, vaccines, and feedings with suggestions on frequency.
PraxisPro: conversational AI for pharmaceutical sales training.
What You Should Know
PraxisPro 's focused on AI-powered enablement of commercialization for the life sciences industry, starting by bolstering pharmaceutical sales teams’ ability to communicate to medical professionals effectively.
New Product Drop: Bigscreen Beyond 2
Bigscreen VR launched the Beyond 2, the company’s second VR headset with next-gen optics and edge-to-edge clarity with an even wider field of view. In 11 days, Beyond 2 sold more than Beyond 1 did in its first year and the verdict is in: VR fanatics, gateway hobbyists, and hardware critics alike are about it. Watch our favorite unboxing and review.
Social Spotlight: Digg's Back
Shaping AI Policy
We invited startup founders building AI technologies to join us in influencing the shape of our country’s AI policy following the Presidential Administration’s request for input on its AI Action Plan — a framework that will influence the direction of United States federal AI regulation for at least the next four years.
With the help of True Founders and our team members, we crafted and sent a letter to Washington D.C. that shares our perspective on what's needed in order to enable AI innovation to thrive in the U.S. Our Partner Gus Coldebella shared the letter to help those building emerging technologies gain a greater understanding of ways to advocate for their industries.
Portfolio News
Riley in TechCrunch
Ditto in TechCrunch and Authority Magazine
Madison Reed on Masters of Scale and in AdWeek
Sanctum in ZDNet
What We're Reading
AI as Electricity by Eric Flaningam, shared by Rohit Sharma
Using AI to Decode Language From the Brain by Meta Research, shared by Gus Coldebella
Listen Up: Great Chat Podcast
Venture Partner at True, Helen Min , and friends - Ashley Du , Ashley Mayer , Mac Bohannon , and Sally Shin - launched the Great Chat podcast to help the next generation building and fueling startups make sense of today’s technology zeitgeist – a high-stakes moment calling for candid discussion, hot takes, and periodic banter. Tune in.
Community, IRL
True Portfolio Careers
Ready to level up in a new role? Work with a True Portfolio team building AI agents, next-gen' therapeutics, enterprise automation products, robotics, and much more. View jobs.
About True
Founded in 2005, True Ventures is a Silicon Valley venture capital firm that invests in early-stage technology startups, often leading pre-seed and seed rounds. If you're building an enterprise AI company and are looking to raise between $500K-$3M, pitch us.
Venture Partner at Comcast Ventures, Co-founder at Raive | Young Global Leader at World Economic Forum | Former CNBC & NBC News, UnitedMasters
1wThank you True Ventures for the pod shoutout! 😍