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[FounderMade Beauty] Startups: 1989 vs. 1992 vs. 2013 vs. 2017

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  • Though Dr. Howard Murad founded his namesake brand about 25 years ago at the age of 50, his brand’s journey offers lessons to today’s beauty startups; photo courtesy of FounderMade.
  • Celebrity hair stylist, Harry Josh, founder of Harry Josh Hair, started his brand in 2013. Josh noted that he’d received offers to launch hair care “wet goods,” but that he believed the market already too saturated with “great products.” Photo courtesy of FounderMade.
  • Bobbi Brown founded her namesake beauty brand in 1992 and helmed it for 27 years. Now, she finds herself an entrepreneur for a second time in a very different world. Photo courtesy of FounderMade.
  • Carrie Gross, CEO and co-founder of Dr. Dennis Gross Skincare, noted that the brand, which bears her husband’s name, first got on the beauty map with its Alpha Beta Peel. Photo courtesy of FounderMade.
  • Lauren Wolk-Goldfaden, vice president of sales, Goldfaden MD Skincare. Photo courtesy of FounderMade.
  • Pree Walia, founder of Preemadonna. Photo courtesy of FounderMade.

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FounderMade Beauty recently presented a look at the world of independent beauty, including founders, investors, the latest startups and retail leaders. Like FounderMade's Wellness Summit, the event pointed to the key trends shaping the industry. This story is part of a multi-part feature covering the key topics from the conference.

1989: Murad

Though Dr. Howard Murad founded his namesake brand about 25 years ago at the age of 50, his brand’s journey offers lessons to today’s beauty startups. Speaking as part of the recent FounderMade Beauty event in New York.

Dr. Murad recounted his progression from pharmacist to doctor to entrepreneur, including his adoption of an esthetician at his dermatology office and the launch of his original day spa. Rather than a flash of innovation, the Murad brand was built through a gradual evolution as skin care expanded beyond the traditional three-step cleanse, tone and moisturize dynamic. Early on, he said, dermatologists were treating ailments such as psoriasis, but had less capacity to deal with pigmentation spots, wrinkles, etc.

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Dr. Murad began to prescribe compounded prescriptions that he customized for his patients. These compounds became the core of his brand, becoming an early booster of AHA in skin care. Expanding his services beyond his practice, Murad hired consultants and a lawyer, who warned him against anti-wrinkle and pigmentation claims.

Dr. Murad saw that while competition was strong in mass market skin care, there were few cosmeceutical treatments available for consumers.

He added that the worst naysayer is oneself, though there are always plenty of people willing to tell entrepreneurs why their businesses won’t work. Undeterred, Dr. Murad saw that while competition was strong in mass market skin care, there were few cosmeceutical treatments available for consumers.

If founded today, Dr. Murad may have leveraged the resources of a VC or Kickstarter campaign, but in 1989 he was forced instead to mortgage his house—twice. The founder built his business slowly, across salons and doctor’s offices, but soon realized he needed to broaden distribution.

At trade shows, Dr. Murad found it difficult to sell his scientific message regarding the benefits of harsh-sounding ingredients such as glycolic acid. So he hired some DRTV experts, created new packaging and launched an infomercial that featured two sisters—one who’d used Dr. Murad’s products, and one who hadn’t. The spot was, in Dr. Murad’s words, “a disaster,” which sold few products.

He went back to the drawing board with new DRTV experts and had much better success. In fact, Dr. Murad said that he couldn’t keep up with demand at first. And success had a downside. Salons, which often expected to have exclusive distribution of brands, were unhappy to see Murad products on television. But he persisted.

Dr. Murad has refocused his mission to help consumers improve diets, minimize “techno stress” related to social media saturation, reduce sedentary lifestyle habits, and diminish the sense of loneliness and social isolation consumers may feel in this day and age.

Today, Murad is widely available at major retailers such as Sephora. And, in 2015, Unilever acquired Murad for an undeclared sum, adding to its stable of prestige brands, including Dermalogica, Kate Somerville and REN. The acquisition allowed Dr. Murad to transition to the next phase of his career and the brand’s positioning.

Echoing the broader wellness trend impacting beauty, Dr. Murad has refocused his mission to help consumers improve diets, minimize “techno stress” related to social media saturation, reduce sedentary lifestyle habits, and diminish the sense of loneliness and social isolation consumers may feel in this day and age (EyesUp.com). As Dr. Murad put it, better lives lead to better skin.

1992/2017: Bobbi Brown

Bobbi Brown founded her namesake beauty brand in 1992 and helmed it for 27 years. Now, Brown finds herself an entrepreneur for a second time in a very different world.

When asked to reflect the toughest part of founding a startup, Brown said: finding and hiring the right people. Initially, she sold her products out of house, then leveraged a serendipitous meeting with a Bergdorf Goodman buyer into a retail partnership. After that, Brown expanded to Neiman Marcus and, eventually, QVC, which helped with her brand visibility. She was also able to use her media presence, notably on the Today Show, to raise her brand profile.

In addition, she kept her products the same, even as she expanded overseas. If she were to start the brand today, she conceded, she would likely have done things completely differently.

Brown is developing a lifestyle brand that will encompass beauty from the inside out by leveraging elements of health and wellness.

For her next venture, Brown is developing a lifestyle brand that will encompass beauty from the inside out by leveraging elements of health and wellness. (If that’s not enough, she’s also opening a hotel in New Jersey.) On this point, Brown’s latest book, “Beauty from the Inside Out: Makeup, Wellness, Confidence,” offers a preview.

The lifestyle guide includes “beauty food recipes, fitness tailoring, recommendations on nutrients, and restorative yoga and mindfulness,” according to the publisher. In addition, Brown has piloted her lifestyle concept with a concept shop ant Lorde & Taylor, which features beauty products, supplements, ethical brands and athletic wear.

Brown told the audience that the synthesis of topical products and what one ingests will be the next beauty frontier, and added that consumers are also seeking simple choices.

2002: Dr. Dennis Gross Skincare

Carrie Gross, CEO and co-founder of Dr. Dennis Gross Skincare, noted that the brand, which bears her husband’s name, first got on the beauty map with its Alpha Beta Peel. Unfortunately, the product’s launch coincided with a widely popular episode of Sex and the City, in which the character Samantha uses a chemical peel, rendering her face an unsightly and painful mess. Gross noted that, if nothing else, the controversy got people talking about the polarizing treatment.

Beginning in the professional space also gave the brand credibility and elevated its products and treatments.

The Dr. Dennis Gross brand was originally sold out of his clinic, then expanded across the professional channel for spas and estheticians. Having at-home products was a logical extension, Gross said, because “when you invest in your skin, you want products at home to protect your investment.” Beginning in the professional space also gave the brand credibility and elevated its products and treatments. The brand eventually expanded to Sephora, Nordstrom, QVC and elsewhere.

When expanding overseas, Gross said it was critical for the brand to highlight benefits because the Dr. Dennis Gross name wasn’t as familiar outside the United States. Europe served as the gateway to the Middle East, she said, adding that in the age of social media, people want access to a product globally as soon as it’s launched because they’ve just seen the latest product on Instagram.

Today, Gross answers consumers’ questions about skin concerns and offers tips and tricks on social media. She noted that the brand seeks to simplify skin science and translate Dr. Gross’ bedside manner via its digital communications. As for the future, Gross said that wearables will be the next big phases of skin care, as well as education for young women regarding the need to take care of their skin.

2011: Goldfaden MD Skincare

Goldfaden MD Skincare was founded six years ago and describes itself as, “The first physician strength, dermatologist developed, naturally inspired skincare line in the industry.”

The brand is a family operation, according to Dr. Goldfaden’s daughter in law and vice president of sales, Lauren Wolk-Goldfaden. Speaking at FounderMade, Wolk-Goldfaden noted that the brand was built around transparency regarding ingredients and formulations.

Clean beauty is prompting extensive research and claims substantiation in natural ingredients.

Like Murad, Goldfaden MD Skincare highlights the benefits of its ingredients, tough with a more natural and sustainable positioning. The brand’s ingredient highlights include soy peptides for skin firmness, apricot kernel oil for moisturization and suppleness, avocado oil for hydration, and seaweed extract for tone and texture, as well as antioxidant protection.

Wolk-Goldfaden noted that brands must be able to tell their story in just a few seconds and hit multiple touchpoints in the digital space with a consistent product story. Clean beauty is prompting extensive research and claims substantiation in natural ingredients, said Wolk-Goldfaden, and has allowed the brand to bridge the natural and physician-strength skin care worlds.

Today, the brand retails at Dermstore, Space NK, Credo and many others, and has secured distribution in Australia, Thailand, the United Kingdom and beyond.

2013: Harry Josh Hair

Celebrity hair stylist, Harry Josh, founder of Harry Josh Hair, started his brand in 2013. Josh noted that he’d received offers to launch hair care “wet goods,” but that he believed the market already too saturated with “great products.” Not wanting to compete with fantastic brands, he focused instead on tools because he felt that very little expertise has been focused on the space.

Josh added that he didn’t want to slap his name on an existing technology. He wanted to have a brand with real longevity, with tools so good that consumers wouldn’t have to know the Harry Josh name to be enticed.

Josh was adamant about having a plan before announcing his intention to launch a brand. The brand launched digital-only direct-to-consumer for the first four years. But once all of the diehard hair tool consumers were saturated, he realized there was a need to expand to brick and mortar. While profits inevitably dropped, overall growth continued. Harry Josh has even shown on HSN, which, while not a great boost for the business, engaged consumers who were unfamiliar with the name Harry Josh.

Josh was able to bring his products to all of his photo shoots and was able to Instagram Harry Josh tools with models and celebrities.

Josh noted that he is a partner in his brand but, unlike many entrepreneurs, he isn’t the money source. He said he makes decisions based on his feelings and instinct, which can sometimes conflict with the “money people.”

These gut moves include manufacturing Josh hair styling tools in France, which far pricier than manufacturing in China. But, he said, he knew he had to trust his gut on key decisions. Brown interjected that the very reason people invested in Josh was his gut.

Long-term, Josh said he believed his strategy was the right one as consumers begin to spend more money on fewer, better products. Josh added that his brand was born at the right time. In 2013, influencers were far less prominent than they are today.

As such, Josh was able to bring his products to all of his photo shoots and was able to Instagram Harry Josh tools with models and celebrities—without spending a dime or going through intermediaries. This strategy would never work, today, he conceded. Timing is everything.

Today, the Harry Josh brand produces difficult and easy versions of instructional videos in order to give consumers faith that they can style their hair themselves—whatever their skill level.

2017: Nailbot

During a product pitch, a panel of FounderMade Beauty’s experts heard a range of product pitches, including Nailbot, a device and app from Preemadonna, which allows consumers to design and print art onto their nails using their phone. (VIDEO: Nailbot and other beauty disruptors discuss their tech.)

The process takes “a matter of seconds,” according to the company and already has more than 30,000 people signed up on a waiting list to try the tech. Recently, L’Oreal included the firm in its beauty accelerator, perhaps to bring new excitement and customization into the nail sector.

During the Nailbot presentation, Pree Walia, founder of Preemadonna, showcased the company’s technology, which works as follows:

  • The consumer paints their nails with a light-colored base coat such as white to act as a canvas for the nail art.
  • The consumer can then select imagery to apply to their nails. Consumers can use their own photos, emojis or their own art designs.
  • Once the imagery is selected, the user can place their fingers in the Nailbot application device to have the images printed onto their nails.

The advantage for the technology, said Walia, is that it provides customized instant manicures, all powered by smartphone. The Nailbot hardware is being developed for a direct-to-consumer strategy, though the professional category could also be developed.

The hardware, or the bots, will be available in several tiers targeted at both younger (simpler tech) and older (more sophisticated tech) consumers and will retail for between $99 and $299. The hardware can be cobranded, said Walia, and the digital interface customized as needed. Consumers can buy ink replacements for the machine. The ink is edible, according to Walia.

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