Beauty, Fashion and Wellness trends shaping Berlin startup ecosystem
It was a great pleasure to host our first BeautyTech Meetup in Berlin and open the German chapter of the global #beautytech movement. With over 70 guests, inspiring speakers, founders and funders shaping the beauty, fashion and wellness industries in Germany, we had great conversations backed by the solid experience and knowledge of our panelists.
Being a founder in the wellness industry, I learned a lot from listening to other brands and founders. I think beauty and wellness go hand in hand, and not only because there are great synergies, parallels, and business models, but also in terms of customer and product experience. Last year while pitching our idea in Silicon Valley with my startup yoganect, I met Odile Roujol, the founder and a great role model behind the #beautytech global movement, the former CEO of Lâncome. She inspired me to bring #beautytech to Berlin and open the German chapter. BeautyTech, founded in San Fransisco, has become a global movement with more than 10 chapters worldwide. Through Beautytech, more than 1,500 founders and funders met in 2018.
Germany — an important #beautytech chapter
Germany is an important chapter of #beautytech and Berlin was chosen consciously due to its status as the ‘go to place for startups.’ Germany might not be the center of beauty or fashion in Europe but its focus on sustainability, eco-friendliness & innovation has substantially contributed to the emergence of many beauty, wellness and fitness startups in the city. Many clean beauty, self-care, sustainable brands have been born here; not to mention the power of AI, machine learning, robotics and data power which are deeply ingrained in the German startup infrastructure.
Exploring the Berlin Startup Ecosystem
We kicked off our meetup with our first panel exploring beauty and health in Berlin startup ecosystem. The session was moderated by Marguerite de Tavernost from e-ventures. She joined e.ventures as an analyst to do early stage (Seed, Series A and B) investments throughout Europe, with a specific focus on France.
Guest Speakers of this Panel: Claire Ralston — founder of MERME Berlin, Philipp Mehler — founder of PURISH, Fatih Girisken — co-founder of Glossom TV, Chanyu Xu — founder of ONO Labs, Pamela Wade-Lehman — head of Beauty of Zalando and Andrea Schmoll from Osborne and Clarke and founder of Fashion and Luxury Law Academy.
The panel had a great mix of the skin care, makeup, and beauty community, but also included health startups.
What We Learned: Claire Ralston, originally from Australia, founded Merme in Berlin which offers organic skin care products inspired by clean beauty. Rather than using Instagram, she focuses on building her brand offline as she realized that sending out samples was the best approach for her business. She also shared that promoting skin care is very difficult on Instagram. When you see a photo of food you can instantly like it, but when you see a photo of a skin care product, you don’t know whether it will work for you. Philipp Mehler, founder of Purish also agreed that skin care presents difficulties with the ‘one second visual’ image where the customer can make an instant decision to purchase or not to purchase. To handle this challenge, Purish works more with colors and the decorative makeup, which allows them to compete with other outstanding images on Instagram. Purish has a younger audience and has also been successful working with well-known influencers and YouTubers, which adds more value to their customer relationship as well as builds engagement with the products, making it more creative and inspirational to their audience.
The panel also explored the VC and funding environment within the Berlin ecosystem as well as the gender balance among founders and investors. All the founders agreed that VCs are still mainly represented by men and that there is room for female investors who would have better understanding of the beauty & fashion industry. Why? Because at times, within male-dominated VCs it is hard to explain the nature and technicalities of makeup & skin care brand which in turn makes it difficult to see the potential of the business idea. Chanyu, the founder of OnoLabs pointed out that working with VCs is about trust, and that each founder should also involve themselves with the VC as in the end, decisions about funding are all about trust.
The panelists also saw a great potential in innovative beauty solutions being formed in Europe. Pamela Wade-Lehman, head of beauty of Zalando, the European leader in fashion industry, shared that fashion and beauty are great complements to one another and that there is an enormous business opportunity to explore.
The panel conversation was backed by Andrea Schmoll from the Fashion and Luxury Law Academy, which helps founders with regulatory challenges in the market such as data protection, geo-blocking directives and new regulations concerning Instagram influencer marketing.
Product experience, beauty & fitness on demand and personalization trends
I was honored to moderate the second panel where we talked about personalization trends within content and technology. We deep-dove into how beauty & fitness operate on a demand scale, and how companies could build a sustainable brand as well as the differences within European and US beauty markets with inspiring guest speakers who joined me.
Guest Speakers of this Panel: Yoanna Gouchtchina — founder of Kozhya, Pascal Klein — co-founder of Asana Rebel, Estella Benz — founder of Skin Match (Switzerland), Gioia Fiorani — co-founder of Madame Miranda (Italy) and Thomas Fellger — investor, CEO of iconmobile.
What We Learned: Transparency and beauty are already big topics. But customers have a powerful tool in this field — information that helps them to make decisions when it comes to purchasing products. One solution that offers this transparency is Skin Match, founded by Estella Benz. It offers online beauty consultation. Based on customer data, Skin Match makes it possible measure the customer to each product, detect allergies and filter products that are e.g. paraben free. Customers can purchase products online without having the 1:1 physical consultation in store.
People’s perceptions are also changing towards their health as well as their beauty & fitness routine. In turn, the market is also changing by adapting to the customer’s needs. One example? The idea of beauty and fitness on demand is becoming very popular since people want self-care products and information at the tip of their fingers. This trend was one of reasons for Pascal and his co-founder started Asana Rebel backed by the success of subscription-based businesses.
Looking at personalization trends in technology for 2019, Thomas Fellger who founded iconmobile that offers innovative beauty apps, noted that technology is changing everything. When in the past, the focus was on TV ads, “as in the the more you saw, the more you wanted,” now with modern technology there is way too much competition. There are so many startups, based on the same ingredients and similar story combined with a personalization angle. Now it is more about the experience, meaning that founders should understand their customers, not just by asking questions, but by getting real data. He stressed that experience is a better and more sustainable message.
In retail, companies like Douglas also see this shift in personalization. To latch onto this trend, Douglas initiated #forwardbeautychallenge where two of our guest speakers were chosen as finalists. They shared their knowledge about the event. Yoanna Gouchtchina, founder of Kozhya, also shared that after 1.5 years of product development, it was important to her to find the proof of concept among big brands.
As beauty is becoming more personal, which opens the door for more indie brands, she stressed that she would encourage founders to turn to such programs, accelerators and challenges. ‘You don’t always get the funding, but you get the expertise and mentorship, which is very valuable.”
Both founders Yoanna and Estella who were selected as finalists of the #forwardbeautychallenge stressed the innovativeness and transparency of the event, where they spent two days with top management, who not only gave feedback but also conducted 1:1 sessions with each founder, with the goal of selecting a product to would become part of their retail.
The panel also stressed that personalization, product experience & being authentic are essential for building a brand. Pascal from Asana Rebel explained that “You can still build a brand by being authentic and making sure that performance marketing is not totally out of place.” In other words, the beginning of a new brand is always hard for start-ups especially as there may not be a brand budget, which means that marketing must be performance oriented.
Thomas from iconmobile believes that it is the experience that your product or service offers that truly creates the brand. “We live in a world especially in beauty, where it’s all about providing this extra experience. By doing this, offering this service you are already creating your brand.”
Gioia from Madame Miranda sees the importance in communicating the values of your brands to your customer. Why? Because your brand values represent the world that your customers want to be part of. For Madame Miranda, that meant creating the community of women who are different from each other, because their beauty services are different, everyone from millennials, young mothers to professionals.
A fireside chat with Anina Net from San Fransisco and Beijing was a perfect finish for our meetup. Moderated by Yoanna Gouchtchina, we had an insightful conversation with the founder of 360 Fashion Network focusing on fashion and wearables. Anina moved to Beijing and has been developing she range of fashiontech products for over 10 years. Her fashion tape maker kits, covering everything from robotics dresses to LED handbags and smart gloves are examples of her inspiring work that is serves mainly female audience. Anina pointed out that women have natural sense of style and wellbeing and it was a challenge to create something in fashiontech that women would wear and it would look stylish. Working with corporations such as IBM & Intel learned that it is important to remove the hardware problem so that fashion tech designers can focus on what kind of product is to be made and to transform it into something that people will wear. She also stressed that in order to create an innovative ecosystem she would like to see more collaboration between the big brands working together with the startups as it is the only way to create the innovative ecosystem that works.
Tips from Founders to Founders from the Event:
“Chose the right partners and team and right money sources
Do not wait too long until you are 100% ready…in the end you are never ready to go the market
Listen to your customers
Focus on your business, avoid being sidetracked, as at the beginning you have extremely limited resources, focus on whats existential for you and your company.”
I would like to thank all our great guest speakers for sharing what they’ve learned, their ideas and giving us insight into the next trends. Thank you to our attendees, investors, entrepreneurs for being with us and shaping the first BeautyTech event in Berlin!
There is still so much to learn from each other and with our #beautytech format, we want to create a platform where we value diversity, make sure the voices of founders are heard so that together we can shape the new trends.
Looking forward to our next event.
Thank you Gabriella Gricius for the edits.