What’s next for BeautyTech and should VCs be investing?
Last Monday, took place in New-York the first @BeautyTechNY meeting gathering the new rising founders along with inspiring investors in the beauty and fashion industries.
This new generation of entrepreneurs is purpose-driven and data-driven. They are truly shaping the future of our world. They will impact people’s life.
Their startups are Saas/ chatbots/ augmented reality solutions, skin diagnosis empowered by data and D2C businesses with subscription models. We talked about customized beauty products, diversity and inclusiveness, the green trend on the rise, and Millennials and Gen Z new behaviors shaping the new customer experience.
I’d like to share a few learnings listening to our great speakers and the open conversation with an engaged community, 80+ attendees, at a beautiful venue hosted by JLabs.
BE OBSESSED BY YOUR PRODUCTS!
Whether it’s a hairstyling booking platform (GlossGenius), a line of natural products for African American curly hair (Swivel), or customized prescription (Prose hair), you need to have products that enable you to keep your customer happy.
Neda Daneshzadeh underlined that she does not only look at the customer acquisition cost but first and foremost the retention rate for her investments. Prelude Growth has even defined a methodology to make sure they had customers testing the products, gathering feedback and ratings, and enabling to have the best experience on the market. It’s part of her process of decision making when they choose a company.
It reminds me of the golden rule at l’Oréal, beginning many meetings by “what does the consumer says”.
RAISING FUNDS? IN EARLY STAGE, START THE CONVERSATION EARLY
It’s tough. Before generating $ 5 Million revenues, investors can be Business Angels or VC that have a focus on the category or business model.
It’s a full time job for the CEO in the period of raising funds, be aware not to jeopardize your business and the daily life of your team.
Begin early, using your alumni network for conversations and introductions, take advisors expert in their field to make sure they can help you to better understand the ecosystem or have specific “superpowers”. Cold mails are not recommended on Linked in, but some founders on stage managed to convince valuable Business Angels via this point of contact.
William Lee has been connected thanks to an advisor to JLabs (Johnson Johnson) which is meaningful for him as his solution works for brands. Epigencare wants to be “the 23 and me for skin care”using genome data.
Siqi Mou is active on social media and make sure that people are aware of her company HelloAva, and would understand it as a reference for conversational agents and chat bots.
Our moderator Mary J Palmieri founder theBeautyMarketPlace has great stories every day on Instagram, every week she takes time to grab a coffee with people she identifies as having a fit with her company.
All founders agreed: choosing an investor is not just about a term sheet, who is the partner is big part of the deal. It’s a long journey where investors support founders for a few years. Building trust matters. The comparison was given of dating for weeks and months, and finally finding the partner in life.
Ann Carly Fergus XRCLabs has chosen Justin Stewart CEO Co-Founder of Cherry Pick AI, not only for his skills in Data and machine learning, but as sharing the same vision which was key for her in seed stage.
Joseph Sartre Bleu Capital has invested in For Days (sustainable fashion, subscription model), as they not only believed in the business model and founding team and looked at their early revenues, but also were convinced to share the same values. Their purpose: Educating consumer to be aware of the water consumed to have a T-shirt (are you aware?), find ways to reduce the wastage and have a simple solution to make customer’s life better.
At a later stage, Neda Daneshzadeh underlined how they spend time, with her partner Alicia Sontag, to deeply understand the market, key consumer insights, and then consider how the company could scale.
They have raised an $ 85 Million fund, and invest between $ 3 Million to 25 per startup, which means helping them to grow and become global champions.
I was really inspired by our conversation in New-York. It was refreshing as a different way to look at beauty compared to the Silicon Valley.
San Francisco would be first about the purpose and the community for sure, but we would spend a part of the conversation about the technology, whether algorithms or computer vision.
In New-York, we come back first to the customer experience, the look and feel of the products, the brand, and the retail & distribution strategy.
The more I attend different meetings in local chapters in Asia America or Europe, the more I believe each city has assets to build great companies.
BEST CITY FOR FOUNDERS IN BEAUTYTECH ?
I asked Neda Daneshzadeh which city she would choose to live if she would be in attendees shoes, a founder in the BeautyTech. Her answer: Los Angeles!
We have all heard about the success of Stitchfix and All Birds, Poshmark, Ipsy, Brit and Co, Style Seat or Hims and Brandless now. They are all founded in San Francisco. Platforms were born in the Silicon Valley: Pinterest has its office in the city, and Facebook and Instagram are opening theirs.
Manhattan content creator Emily Weiss, now Founder of Glossier, is not only on stage in New-York but also invited at Techcrunchdisrupt iconic conference in San Francisco and there is a good reason for that.
Let’s talk about LA. Yes, Dollar Shaving Club was founded in LA. What’s new in the Silicon Valley’s Beach?
Neda underlined that there is more money ready to be invested now in LA than ever, new funds and VCs opening offices, or business angels such as celebrity (the famous Ashton Kutcher). Celebrities are also creating their own line, following the huge success of Kylie Jenner (be ready for Lady Gaga!).
Los Angeles means creativity, talents with multiple skills, an ability to understand trends and retail, the aim to have an impact. And yes, they also have a platform with Snapchat creating an ecosystem around. But also the entertainment industry with all the augmented reality technologies.
As a Board member of Social Standards (thanks for coming at the event guys), I would add that they know what influence means, not only reach and engagement but virality, and users becoming best advocates.
As a neighbor (San Francisco is only one hour flight away from LA), I like to think that Los Angeles could have an interesting chapter to open. There could be bridges with the top Tech talents in the Silicon Valley, and investors more and more interested by the BeautyTech category.
As the founder and leader of the BeautyTech community, I’m happy to have our chapter Los Angeles opening with Zak Parker founder LUK network. As a serial entrepreneur, and super connected guy, he knows what growing a platform means, and offering disrupting services and products to people to improve their life.
Stay tuned, we’ll soon open the BeautyTech Co-Creation Studio in San Francisco. We aim at supporting founders with a unique voice, obsessed by their purpose and the customer experience. We aim at funding amazing startups reshaping our future, empowered by technology. Our new champions should soon lead global companies.
Thank you Philippe Garnier for leading the rising community in New-York. Next meeting should take place in the few months to come. Thank you for being with us dear speakers and attendees and it was great to chat after. See you soon!
@BeautyTechSF Instagram &Twitter (and see the list of @BeautyTechParis, NY, LA, SaoPaulo, Berlin, London, Seoul, Tokyo, and soon Shanghai.