Advice Line with Vicky Tsai of Tatcha

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1:49Hello and welcome to the advice line on how I built this lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show who will attempt with me to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one minute message that tells us about your business and the issues or questions that you'd like help with. You can also send us a voice memo at h-i-b-t at id.wondery.com. And make sure to tell us how to reach you.

2:30And also don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at gyros.com. And we'll put all this info in the podcast description. All right, let's get to it. Joining me this week is Vicky Tsai. She's the co-founder of Tatcha. It's a skincare company rooted in Japanese beauty rituals. Vicki, welcome back to How I Built This. Thank you. It's an honor. It's so great having you back. So today we are going to talk to founders who are taking, you know, a lot of them are taking some big career moves to bring their business ideas to life.

3:09And we thought you would be the perfect person to give them advice because you started TACHA after making this really big pivot in your career. You worked in corporate finance. You worked for Starbucks. But you kind of became disillusioned with that world after a while. Not Starbucks, but just kind of corporate life. It burned you out and you're getting dermatitis and you took a trip to Japan and you met a geisha and you started using skincare products that they had. And it just kind of changed your life and inspired you to build this company. And this was back in 2008. And you struggled for some time to build Tatcha.

3:45But of course, now it is a huge multimillion dollar company now owned by Unilever. Such an awesome story. We are going to put a link to it in the show description. But Vicki, before we get to our callers, I was hoping to ask you a couple questions. At what point did you feel like you could jump fully into this? Because you went to business school. You got the brass ring jobs. You were on the path to sort of corporate success and you came from a family that really emphasized success and achievement. I remember you talking about this. And at what point did you feel like, I don't – it doesn't matter.

4:23I just can't do this anymore. I've got to do this other thing. I didn't have an idea and then decided to quit my day job. I quit my day job without any safety net because I was just – I felt that corporate life was so soul-crushing. And I just thought, if I continue doing this, there's a 100 % chance I'll be unhappy. If I try something new, there's a 50 % chance I'll be happy. And so I left with no plan and no idea. I didn't think I was going to start a company. I just knew I couldn't keep doing what I was doing. And then I stumbled upon Tatcha. Yeah. That's awesome. One of the things I remembered after our interview in 2020 is that at the time you had let you kind of step down as CEO.

5:10And then you actually came back and to lead Tatcha as CEO in 2021, a little bit like Howard Schultz, who's been back for the CEO three times. Can you talk a little bit about the decision, the original decision to step down and then the decision to come back? Yeah. I stepped down after we brought in private equity in 2018 because they recommended that we bring in a seasoned leadership team. And it really triggered this imposter syndrome in me that I had carried for my career. and I thought I don't want to be the kind of founder that ends up limiting the potential of their business because of their own leadership limitations.

5:57So I stepped down and I welcomed with open arms a new leadership team. And then a couple years later, Unilever asked me to come back. So 2021 in the midst of COVID and in the midst of API hate, we also did a turnaround. It was an honor to be able to step back in. And it gave me the opportunity to lead in a different way that I never thought possible. And then at the end of that year, I actually put in place a new leadership team, including a new CEO. It was the first diverse leadership team in beauty at any scale. And so they lead the company now. I'm no longer CEO, but I'm proud and honored to continue to support them and be an advisor to the company.

6:43It's an awesome story because I remember we talked about it when you were on the show, you know, and, you know, you trusted these investors and they were, you know, basically doing what they thought was in the best interest of the company. But for you, and I think a lot of people feel this, and I do too. I mean, I think, you know, obviously I think women tend to experience this more than men, but I think lots of founders experience this feeling of like, okay, now we're really big. Maybe I'm not the right person to do this. And it's a very natural feeling to have. But you sort of said to yourself, wait a minute, no, I can do this.

7:17Yeah. Yeah. It forced me to be curious about where those ideas came from in the first place. Why had I believed that I didn't have what it took? Because I had the experience and I had the track record, the numbers were there. But I think I had internalized a lot of feedback over time. And when you're an entrepreneur, as you know, you get so many no's and so many people doubting you that you have to become your own hype machine in your head. And every day you have to be like, I can do it. I can do it. But some part for me crept in. And that little bit of leakage eventually was enough to overflow my sense of self-worth and self-confidence.

8:04and then I had to watch the company disintegrate for two years from my perspective. And that was what caused me to come back and say, I don't know why I doubted myself like that, but it's time to get to work. There's not really time for doubt right now. That's a bit of a luxury I don't have. So let's finish what we started. And it was a joy. It was a joy. Yeah. Yeah. Your Steve Jobs moment, you know, coming back to lead the company. or Howard Schultz moment. Vicki, what do you say we take our, go ahead and take our first call? I can't wait. All right, let's do it. Hello, caller number one. Please introduce yourself.

8:43Tell us where you are calling from and a little bit about your business. Hi, Guy. Hi, Vicki. Thank you so much for having me here. Hello. My name is Jessica Liu. I'm calling from Newport Beach, California, and I'm the founder of Petite Anjou. I design and handcraft demifine and fine jewelry with a playfully sculptural aesthetic. Amazing. Okay. And first of all, tell us a little bit about the business. Do you buy the jewelry from somewhere else? Do you make it? Tell me about it. No, everything is handcrafted by myself. I'm a self-taught metalsmith. I tend to gravitate towards making organic and flowy designs with a bit of texture.

9:24But I also really struggle with sensitive skin. I know, Vicki, you can relate. And so I made a vow to only work in precious metals. I don't use brass in my studio. So most of my pieces come in sterling silver or 18 karat gold vermeil. And I'm in the process of rolling out a fine jewelry collection as well. Okay, so you are a metalsmith, which is awesome. I mean, because, you know, I think you think of metalsmithing, I think of like the 19th century, like a guy hammering away at a horseshoe. Do you have an art background, a design background? Is that where this comes from? No, completely different.

9:56I actually come from the corporate world. I used to be an attorney, but I always had a creative streak and I've been listening to the show for ages. I was always so inspired by the female founders in particular. And so I wanted to create my own thing. And I read the story about this woman who made a jewelry business curating designs. And I thought I could do that, but I couldn't find designs that resonated with me. So I decided I was going to make my own, what I couldn't find out there. And so I taught myself. I watched YouTube videos. I bought all the books. And pretty much after my kids would go down for the night, I would stay up late at night teaching myself.

10:31I'm like kind of blown away. I mean, you were a lawyer who taught yourself on YouTube. And now I'm looking at your website, Petty Anjou. And these are really beautiful, complex designs. I mean, congrats on the business. And what's your question for me and Vicky today? So as you can probably imagine, jewelry is a super saturated industry. And so I'm wondering how I can increase visibility and brand awareness, especially coming as a brand that has higher price point products, where it's not always feasible to give out samples or do gifting to influencers or editors as part of a marketing strategy.

11:06And roughly, what's the price ranges of your products? They start at around$195 and go up to about$1 ,600. Right, because you're dealing with gold and silver. Okay, fair enough. All right, Vicki, let's see what we can do here. Jessica's got, she makes everything. They're beautiful products, handmade, high quality, but it's challenging, right? This is all direct to consumer. Jessica, right? You're not selling in stores. So first of all, any thoughts, Vicki, about her approach? What do you think? I love what you do. I love the intention and the craftsmanship and the quality. I think your brand is exactly the kind of brand that people are looking for these days.

11:45They're sick of stuff that just falls off a factory line somewhere else in the world and that doesn't have a heart and a soul and a purpose for being. And I think people don't buy products these days. They join brands. If I were in your shoes, a couple ideas. One is I would let people into the craftsmanship piece of your work. You're not competing with someone who's buying stock jewelry, putting their brand name on it, and selling it on their website. you are looking for a client that cares about craftsmanship and wants to know their maker. So I don't know if you're doing this already, but really allowing people to see the work that goes into crafting your products from the design to the making.

12:27TikTok is a really great place for that. The other thing is inventory. Are each of your pieces one of a kind or do you sort of make a little inventory of each? I do have an inventory of each. So there is, I do maintain stock of each design. Got it. So to just manage your overall capital outlay, one potential is to only make one of each design, show it to people. And then if they want it, then they get part of the drop and say, I'll make 10. So if you want on and you eventually scale from there. So just sort of shifting the product development cycle will help your capital cycle. And then in terms of gifting, I actually have the same problem.

13:12Our things are handmade in Japan. And so when we send people four pieces, it costs about the same, I'm guessing, as one of your pieces. And so you can sample yourself out of business. We didn't do broad sampling the way that most beauty brands do. And we also did not do heavy celebrity sampling the way that most beauty brands do. Instead, we thought about how to turn our best clients into advocates and ambassadors for us because we found that they really loved gifting our products. And so I don't know if you have a really passionate group of clients already, but talking to them and asking them about how you can serve them more and then what they're looking for that might be something that's giftable and let them become the people who get the word out for you.

14:08I love that because something I've really grown to appreciate as a small business owner is the sense of community and people really do buy into brands. That's what they're interested in and being part of a community and part of the experience. And so I do try to showcase the craftsmanship on my Instagram page. But you're right. I do think that I could do more of that, maybe even on the website. That's actually a great idea to showcase that more. I think it's all TikTok. Yeah. Yeah. If you go to the about page on your website, it's awesome. You've got these photos of you in the shop and you do with a soldering iron or whatever it is.

14:43And they, you know, basically melting down metal. It's so cool. And I think about, do you make videos of you making jewelry? I do. I do the best of my ability with my iPhone. It's not great cinematography, but I do try to capture the process because I think people love to see where their pieces are coming from. You know, like you said, Vicki, it's not off of a conveyor belt. You know, each piece is handcrafted. And I think people want to see their piece being made right in front of them. How have you tried to build awareness so far? So actually, when I first started, I did hire a PR agency. I used them for a few months before quickly realizing that it wasn't going to be economically viable as a startup.

15:24So I do my own PR at this point. I've reached out to editors. I'm part of an affiliate link program. And so I've landed a few editorial mentions in TV spots. But, you know, it's like I mentioned, it's tricky because I can't give them samples to try in person. So it's kind of like, here's my jewelry. You know, it's great. Just trust me on it. And also, I've been trying to do more in-person shows. I love live events because it lets me meet my audience and see what they gravitate towards. It's almost like market research for me, too. But the trick with that, the tricky part has been that a lot of my local events tend to be like craft shows that are at a lower price point.

16:06And so I'm not sure if my audience is really there shopping for high-end jewelry. So it's kind of been a balancing act navigating that. Jessica, did you hear – we did an episode a few years back with M.M. LeFleur, with Sarah LeFleur, who founded this apparel brand. And essentially, the idea in her mind, because Sarah came from sort of a business background, was to make clothing sort of a wardrobe, a uniform. So women wouldn't have to like spend hours every morning trying to figure out what to wear, but it was a clothing design for professional women. And it's an amazing brand. I found out about it like I often do for my wife who would go and buy their clothing.

16:47And I feel like there's something to that idea with what you're doing. And I mean, given your background as a lawyer and what you are creating, I wonder whether there's a way to kind of tap into, you know, this sort of networks of professional women who are going to the office. And because the pieces that you create are very timeless and very, they're just very classic. And so I don't know, have you explored that at all? yeah no you're absolutely right um you know i think my pieces are timeless and elegant and my audience is looking for something like that but they want something that's unique and different you know my audience is not interested in blending in with everyone else and um like you mentioned they are they're very professional they're accomplished they're strong women and so they are looking for something that's going to make a statement that they can wear every day um be comfortable in.

17:44So that is something that I would love to pursue further, kind of promoting that angle of something that you can live in every day. Guy makes a really great point. Because of your craftsmanship, you're not looking for 100 ,000 clients yet. You want like 1 ,000 great ones. And so being clear on who your bullseye is, both demographically and psychographically, will help you stay super, super focused. I think you're right. Trunk shows will be better for you than craft shows. I wonder whether to Guy's point, whether you could partner with a complimentary clothing brand or bag brand where you can help each other, where your ethos is the same, and then you can sort of share lists and email lists with each other, do trunk shows together.

18:33I love that. And that's actually something that's been suggested to me before the collaborations, because you share each other's audiences as well. And that's something I'm looking forward to pursuing for sure. Congrats on what you're building, Jessica. It's so cool. I mean, jumping out of the corporate world as a lawyer and going into something totally creative is really courageous. And I really can't wait to see what you do with this. I agree. Thank you so much. I'll be buying everything and sharing with my friends. So keep going, keep going. I appreciate it. Thank you so much. I'm big fans of both of you.

19:10Thanks, Jessica. Bye. I can't believe that she didn't know how to do this until 2020. I mean, I remember during COVID, because I remember during that time just thinking, there are going to be so many businesses that come out of this moment because people are just like, okay, this is the sign from the gods. Like, this is the time for me to just do the thing that I was too scared to do. I love talented people. Incredible. Stay with us because after the break, we'll talk to another founder working to take their business to the next level. That's after the break. I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.

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22:15Welcome back to The Device Line on How I Built This Lab. I'm Guy Raz, and today I'm taking calls with Vicky Tsai. So Vicky, let's get right into it. and take another call. Let's do it. Welcome to the advice line. Please tell us your name, where you're calling from, and just a little bit about your business. Hi, Vicki. Hi, Guy. Thank you so much for having me. So excited to meet you. And I'm calling in from New York City right now. I'm the founder and CEO of Baya, Baya's premium vegan skincare that addresses intimate concerns. So thanks, sweat, odor, body blemishes that affect our confidence. Wow.

22:51Okay. And tell us a little bit more about how you started this. So I actually wrote in my second grade journal that one day I was going to have - Second grade. Second grade. I wrote in my journal that I was going to have a beauty company one day. And at 16 years old, I asked my grandma for a investment of, I think,$500, which was a lot of money. And I started B-Low Cosmetics, which was a mascara brand. And I very quickly learned how hard it is to start a beauty business. Wait, when did you start B-Low Cosmetics? How old were you? I was 16 because I didn't have business courses in high school. So I was like, I think I love business, but I have no idea, like, will I actually like it?

23:36That's a great name. B-Low Mascara, your name. It's awesome. And did you make mascara? Did you sell it? I did. So it's hilarious to look at my emails with this contract manufacturer. I was like, I would love to meet with you. I would love to share my vision with you. And he took me so seriously. I think I ordered, I forget what the minimum was. I think it was 2 ,500 mascaras. It had the logo on it. And it was amazing. But we still probably have like 10 cases of mascaras at my parents' house to this day. I can't believe you were 16. You did this. Okay, so obviously you were on a mission from a young age to start a beauty brand.

24:21And how did you get, I mean, tell me a little bit about Bea. How did that idea come about? So I ended up graduating from Babson College and I had a full-time offer with L 'Oreal. But again, I wrote in my second grade journal that I was going to have my own company. And so I was like, wait a minute, I got to do my own thing. but where's the white space in the product world of beauty because it's so saturated. And I honestly couldn't come up with a good enough idea. And that's when Drybar and a lot of these beauty services were popping up. And so I was like, if I don't know where the white space is, the next best thing is creating a service company where I work with real women to understand their beauty pain points.

25:02So then I could build this product business. So I ended up turning down L 'Oreal and starting my first company, Butini. And so what was fascinating is we really do specialize in weddings and events. And so they would come in and be like, listen, I'm getting married in August. I sweat like crazy. Is my makeup going to melt off? Or like when I sweat, I smell, I'm going to be hugging my guests, let alone let's talk about my wedding night. Yeah. What do you do? And I was like, wait, that's kind of, I've never heard these questions. I guess it's a beauty question, but I honestly have these insecurities of like smelling and being around people.

25:37And I just thought that was a me thing. And so that's what I was like, wait a minute. Well, fast forward pandemic, there were no weddings, there were no events. So there was no business for Butini. So rather than just sitting around, I realized it was my perfect opportunity to start Baya. And our whole philosophy is like taking moments for yourself. So whether it's like taking deep breaths and just rehydrating your face and body or, you know, going into the bathroom and refreshing so you feel a little bit more confident, that's like the whole ethos of the brand. That's so awesome. I'm thinking about how much I smell right now because I took a run before this interview.

26:15And I'm so happy that I'm in a separate studio from you because I would need Bea right now. I wish I could teleport them to you right now. And what's your question for us today? So my question is, if you were building a skincare hair brand, say Taja in 2024, what would be like the top three things that you would be focusing on right now, knowing that, you know, you want to be on QVC, you want to land a retailer like Sephora, like what there's so many things to do as a founder, what would be your top three areas of focus? All right, Vicky. Yeah, let's start with you. Well, I really love that you're focusing on Femcare because this is a really hot new area.

27:03So when you go to a category that's growing, you get to sort of ride the wave up. And I get tapped a lot for advice or investment in growing Femcare brands. So this is of the moment. So good job on timing. So to your question about how to break through these days, we were talking in the last one about how people don't buy products now, they join brands. So your point of difference will not just be your products and your formulary promise, but your intentions. Why do you exist? When you break through, particularly in social media, then those retailers come to you. So you can pitch Sephora all day long, but they get pitched all day long.