How to Scale Up and Stand Out in Beauty & Personal Care.
Please listen to the whole webinar hosted by Mike Gelb. Here in this short article, we only wrote the insights from Odile Roujol founder of FaB community, and also GP Founding Partner Fab Ventures (seed stage)
How To Scale Up and Stand Out In Beauty & Personal Care. Feb 15th
A session not just to inspire but to equip you with strategies you need to finance your growth, scale your operations, and get into retail.
An incredible panel of leading experts:
• Odile Roujol from Fab Co-Creation Studio Ventures
• Cristina Nuñez from True Beauty Ventures
• Vanessa Ting from CPG Growth Partners
Moderated by our own Mike Gelb.
We have discussed:
📈 Margins & Pricing: Understand what the ideal margin profile is to build a compelling retail business in beauty and personal care including how do you price your products and analyze the competitive set?
🛍 Retail Mastery: From crafting the perfect pitch to understanding the nitty-gritty of retail partnerships, get ready to see your products on the shelves of your favorite stores.
✨ Financing Insights: Dive into a variety of funding options to fuel your brand’s journey. Whether you’re eyeing venture capital, crowdfunding, or traditional loans, learn how to secure the investment you need to grow.
Key messages from Odile:
Hello my name is Odile Roujol, French, living in California. I am an ex CEO of Lancome L’Oreal, now Founding partner of Fab Ventures seed stage investing in Fashion and Beauty. I’m also the founder of FAB fashion and beauty tech community, now 15,000 founders and VCs have met in 4 years.
When you are building brands and/or analyzing which brands you want to invest in/advise how do you think about product differentiation?
What is true differentiation in beauty and personal care?
How do overall themes and trends tie into differentiation?
How do you think about claims a brand says it can do for someone’s skin or hair or body
I’m Obssessed by science, and way to measure products performance, and tests.
If you want an exit, you need great products and proof of your claims — reason to believe you.
k18 hair, their mask was with stunning results. The founders believed in biotech and had scientists advising them.
Do you have to have a strong digital presence in order to get into retail? Can you go into retail straight away?
How do retail buyers make decisions about which brands they are going to let in?
How has retail buying changed?
What are some ways to increase velocity when you first get into a retail chain and your product placement isn’t ideal?
You need a Community even before launching a brand:
Good light world is about gender inclusiveness. They are available at Ulta stores, but as a brand you need first a community and D2C business. 55% 45% balance.
Same for Bubble. They began with Videos with influencers at the launch 3 years ago, targeting GenZ, offering a new concept of skincare for them (having listened to them) , they were part of the teens’conversations on platforms such as Geneva, they invested in spaces such as mental health to help them during the covid.
Bubble is now available in Walmart, CVS, and Ulta, now in the UK (Boots). It’s a global brand. Fast growing.
What information do brands need to know about their consumer that they might not consider or think of?
Not only age, location, and income, but also how they shop and what is important in their lives. I’m a Big believer in social media analytics.
The founder of Yuni has been a past guest speaker. In Hermosa Beach, he was super close to people practicing yoga; the same is true for Kiehls. What is their life, what interests them? It matters to you as a brand founder, then to the people able to purchase your company. A deep knowledge of your customers to better serve them.
When does it make sense to raise an equity round?
First, you can bootstrap. especially in the period. Then, friends family. then milestones with BAs. When having repeated purchases, insights about customers, potential leads as retailers, and a path toward profitability, you can begin a conversation with VCs.
What line items when it comes to costs should you use venture funding for?
I don’t like to pay for inventories and marketing spending. I invest in talent and tech
In this current market, how should companies think about financing growth for their businesses?
When does debt make sense?
When does it make sense to raise a round of equity?
How should you think about financing inventory? What are the options you are exploring that might make the most sense?
Debt is perfect for inventories.
500k revenues/year helps to have a first VC round. Else most seed stage funds have already companies to support in their portfolio.
VCs help with skills and connections (not just the investment), and prepare founders for the next round. Do your due diligence.
How do you determine the right pace and sequencing for rolling out new products? What signals indicate it’s time to expand into new categories?
When launching new products or entering new markets, how do you strategically finance the required inventory without overextending?
Rule is first to have iconic products. Repeat purchase. No more than 20% of new products every year. For startups only 1 to 3 sku per year. Be careful with all retailers’requests! Keep your top priorities and North Star in mind.
What are growth benchmarks that you like to see?
+15% plus growth if not new retailers
repeat purchase 30% plus. 40% I love it! under 20% there is a red flag.
AOV (else cost of shipment!)
subscription models with cohorts. I back Cleverman. Color for beard, boxes, now available Amazon plus D2C.
LTV
I’m a proud investor in Veracity, Yina, and Novos, they are with a premium positioning and their price enables healty AOV/LTV ; topical and supplements, or test and suppplements!
How do you evaluate different retail expansion opportunities? What retailers may expect exclusives or special products?
Plenty of sets, bundles that will decrease your profit margin.
from time to time affordable SKUs not suiting your positioning.
Again, keep your North star, retailers can quickly kick you out of the shelves, you CAN’T depend on them for revenues. They are partners, they can help for raising awareness but you exist without them. You need to have healthy metrics looking at your community and own revenues. That matters.
For fundraising, how do you determine if a beauty brand is at the right stage for VC versus bootstrapping or debt financing?
if 0 friends and family, then BAs at least for 500K funding, then VCs if you have achieved milestones. There are always exceptions: I have been the first VC to back Bubble, with no product yet, 3 months before launching!
Right team? Ideally, co-founders, if solo founders, have a council with advisors, show you are aware of your superpowers but can’’t be the best in everything.
VCs love when products have been shipped! and when you can share some metrics about your customers.
Product margin needs to be good: 75% for skin and hair, 65% for makeup, and more for scents. Otherwise, no exit is possible, as it is not a virtuous circle for a corporation to acquire the company.
We’ve seen live streaming in China as an incredible distribution channel to sell beauty and personal care products.
Of course, influencer marketing is massive here in the west, but do you also see (or have you seen) livestreaming become part of a growth strategy moving forward?
I’m an investor in BuyWith. The company with a SaaS solution is growing fast, with customers such as Walmart and Charlotte Tillbury. Yes, it will come, even if we don’t know at which pace.
Trendio is working with TikTok shop. It’s interesting to see them successful so far, helping brand to grow.
How should early-stage beauty brands approach social media? Should they focus on one channel or diversify? What types of content/engagement work best?
All channels. Try Tiktok not just Instagram and FB. All platforms are great in organic at the begining, then need paid media and reach and engagement are lower. Keep some content on Pinterest and X. At least have your accounts!
Try also new channels, such as video shopping and livestreaming. Amazon.
Explore new ways to touch your customers. I’m a big believer in the future of social commerce.
Fab friends, have a lovely week!
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