Advice Line with Vicky Tsai of Tatcha (September 2024)

26:54And so it 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. So 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.

27:28Yeah. 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. And 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 Bea. 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.

28:09That's so awesome. I'm thinking about how much I smell right now because I took a run before this interview and I'm so happy that I'm in a separate studio from you because I would need Bea right now. Yeah. I wish I could teleport them to you right now. And what what's your question for us today? So my question is, if you were building a skincare 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?

28:54All 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. So 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.

29:32Why 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. What you really want is for them to come to you. And they're going to come to you when you break through with your clients. So I would almost say, don't worry about the retailers, you know, build it and they will come. Just focus on your client and make sure she understands why she needs this, why to believe in you and why you care so much about her. Oh, that's really great advice. I love that. And honestly, we've had a few dream retailer like reach out.

30:09And it's interesting because you can get into a retailer and that's great. But that's when the hard work I found out happens, right? Like if people don't know about your brand and don't understand your mission, it's not going to succeed in store. So I think that's like, that's very valuable insight for me to really implement. Yeah. Brittany, can you talk a little bit about your sales right now where you guys are at so we're about we should be ending this year about a million and so we've had some great beauty subscription boxes that have we've gotten a big deal with that we're named yeah like a top 25 indie beauty from CEW which is a beauty professional organization so it's still small but I'm self-funding so just like Vicki, just really being very mindful because my life mission is to empower women to feel confident in their own skin.

31:03And I want to be able to figure out those pain points and that storytelling that resonates with people before we think about investment and whatnot. And how many people do you have working with you now? So it's myself and one full-time employee, one part-time, and then we have a handful of freelancers on retainer. Yeah. Right. You know, one of the cool things about this product is, as you say, it's an opportunity to show people how to use it. I think of two brands we've had on the show in the past. One is Dollar Shave Club. One is Liquid Death. And these brands, what they did early on when they had no money, no budgets, was to put like$1 ,000,$2 ,000,$3 ,000 into making a very low budget, low quality, but very funny video that would eventually go viral.

32:00You can imagine – I can imagine you or somebody putting something like that together around – I mean you've got these wipes, for example, to refresh wipes or I see body and intimacy serum. Like there are lots of fun things you could do with the products you have. And so I wonder whether you've thought about doing something like that, trying to create like a low-budget video that's fun and funny in that sort of Dollar Shave Club way. Would you say like just do one where you're really storytelling and thinking it through versus let's make a TikTok and see what sticks? I try both, but I would try to make them funny if you can because you're talking about your story about talking to people getting ready for weddings and you're thinking, wait, I'd be freaked out about if I smell, not if my makeup was running.

32:51And I feel like smell and scent is so funny. And we all smell. Human beings smell. There's no way around it. There's no human that does not smell. I feel like there's a lot of fun around that idea. I love that. And I think, well, my personal need for these wipes was because I was dating in New York City and you're at a hot, sweaty bar. And then maybe, you know, you meet someone and then I would be so self-conscious about my smell. So I do think I love that idea of like storyboarding something that's really funny and hopefully relatable to be able to resonate in like a lighthearted way, but hopefully get some variety behind it.

33:33I love Guy's idea and the fact that this started from your dating moments. It would be fun to partner with like a Tinder or I don't know what do people use these days. Bumble with coffee meets bagel. I don't know any of these anymore. You could put together like a little kit called like in case it goes well and you know just sort of do a co-marketing event to try to to try to get into that kind of audience. But I would try to first of all a million dollars on that small of the team is amazing. Congratulations. The first million is the hardest by far. I thought the first million was harder than the first hundred million.

34:07Really? No way. Yeah, I really do. I really, really do. So but then when it comes to a retailer, they'll throw anything against the wall. But if you don't climb rank very quickly, you're out. And then then it's like a stain. It's like a scarlet letter A. Then you can't raise money. Then you can't get other. So I would really try to get the fire and the buzz going before you go to a retailer. Because there's also fixed costs, CapEx, that goes with going into retail. And in an ideal world, you're on fire. They come to you. They take a few items. They put them on an indie wall. And they fly off the shelf.

34:45And then the party starts. And would you say that QVC is considered a retailer? Or would you say that's also part of that brand awareness built? Because you get to storytell. QVC is interesting because they are, if I remember correctly, they're a consignment model. And you have to build a lot of inventory to test it out. And if it doesn't sell through, you own it. But you have to repack it at a cost of$4 to$5 per kit in order to even be able to resell it. You also have to look at different retailers have different customer bases with different return profiles. And so if on a successful run, 50 % of your stuff gets returned, and that's stuff that you trash, you have to look at your margins.

35:34So I would say some retailers, they're great for awareness when you can handle that level of risk. And as a self-funded business, that's probably not what we can afford to do at this point. So I agree with you that maybe like I think, Guy, what you're saying is like build up like the storytelling in a really fun, relatable way. And you are the perfect person to do this. You got me from the second grade. Yeah, I agree with Guy. We just need you all over TikTok. Yeah, that's awesome. It's awesome. The brand is called Bea. Brittany Lowe, congrats. Good luck. We're going to be cheering you on and we'll be following up.

36:15Thank you so much for your advice. Go, Brittany. Go. And I'll be manifesting Bea being next to Tatcha and Sephora one day. Love it. So thank you so much. Love it. Bye. Thank you. Okay, next up after the break, another caller with another business challenge. I'm Guy Raz, and we're answering your questions right here on the advice line on how I built this lab.

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38:53Individual responses may vary.

39:02Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is Vicki Tsai. She's the co-founder and former CEO of skincare brand Tatcha. Vicki, we are down to our last caller now. And hopefully, hopefully, I mean, it's, you know, I was thinking and I said this, which is during the pandemic. I really, I was like, there are going to be so many businesses that come out of this. And now I'm thinking with Advice Line, we might be talking to some of these people on our show, like we interviewed you in the next couple of years. There might be a billion-dollar business here.

39:39I hope there is because these are great entrepreneurs with great ideas. I hope so too. All right. Let's take our last caller. Hello. Welcome to the Advice Line. You are on with me and Vicki Tsai. Hello. Please introduce yourself. Tell us where you're calling from and a little bit about your business. Hi, Kai. Hi. Hi, Vicki. Thank you so, so much for having me. Hello. My name is Devin Clymer. I am calling in from Cleveland, Ohio, and I am the co-founder of Mugsy Bakes. We make single-serve gluten-free mug cake mixes designed to spark dessert joy. No oven required. No oven required. Oh, so not even a microwave oven?

40:18A microwave. A microwave, okay. But no, like real oven. Right. Yeah. And this is like mug cakes, right? You see these things on Instagram. But this is specifically like a packet, like a hot cocoa type packet that you just pour into a mug and add water and stick it in the microwave? Exactly right. So we like to say that making a mugsy is as easy as one, two, three. You literally just add in the wet ingredients, pour in the mugsy dry ingredients, mix it up and pop it in the microwave and you're done. And then you get a cake in a mug. Exactly right. It's a beautiful thing. And dairy-free, too, actually.

40:54And dairy-free. Wow. Yeah. Tell me about how this started. Are you in the food business? No, not at all. And neither is my co-founder. We are actually both health care providers and professionals. I'm a clinical speech pathologist. And my co-founder, Nina, is an occupational therapist. And that's actually how we met is working in a hospital system together. And, you know, we watched as a lot of our patients, you know, struggled with chronic illness and often due to, you know, a broken food system. And so food was just very much so a part of our day in and day out. And ultimately, you know, it is that that inspired us to create our better for you, but super, you know, vibrant, celebratory baking mix brand.

41:49How did you guys decide to come up with it? Like, tell me the story. Were you sitting down in like the cafeteria at the whatever, the hospital, wherever you guys work? Like, let's make mug cakes. You know what? At the time when we, you know, kind of went in on this together, we were actually both had our own private practices. And so we would do a lot of co-working together. We would meet at coffee shops and talk. And I am a very avid listener of how I built this. And I just, I truly am. And really, you know, just after listening to, you know, so many of the episodes, and I relate to you, Vicki, as well, you know, just with making a pivot and doing something different and feeling like I am doing something that, you know, is really adding to my happiness is something I had just been thinking about.

42:39So I have been making mud cake mixes myself for years. And now that I have children, too, they've become a staple in our household. And I just got sick of pulling all the ingredients and leaving my kitchen a mess for something that's so small. Like, why should this be so complicated and messy? And so I started talking to Nina about this idea. And she's like, oh, my gosh, I love this. And the rest is history. We just jumped in together. And just to clarify, do you sell them? It just comes in a box, like a hot cocoa packet with individual envelopes inside? So we do stand-up pouches. They are single-serve stand-up pouches.

43:25So think of almost like a pancake mix pouch, but smaller. And so it stands up on its own. And we use a recyclable one as well. And do you use sugar or sugar substitutes? So we use organic sugars, organic cane and coconut sugar. And really priding ourselves on the high quality ingredients that we are using is really important to us for sure, especially given our healthcare background. Cool. All right. And what's your question for us today? Yes. So my question is, we are currently pre-launch. We're kind of soft launching our minimum viable product at the moment locally in markets and shops. In Cleveland.

44:11In Cleveland, correct. Yes. And we will soon be launching direct to consumer. We are very close to having our finalized packaging ready. So my question is, what would be your top tip for a new brand looking to generate buzz and more importantly, build a community when we have essentially no following or a very little following. Yeah. Vicky, your thoughts? I love how everybody who's been on has such a pure and uplifting intention. And their products and their brands are expressions of how they'd like to make the world a little bit more beautiful, a little bit more confident, a little bit more joyful.

44:55I think we need so many more businesses like this. So yes. What do you think the use case is for your customers to want to purchase this? There's the health component, but like there's something to do with your kids. Is it something to use at parties? Is it a snack? What is it? Yes. So really it's the convenience factor that we are hypothesizing will be, you know, a big draw and it's meant to just serve as that, you know, simple pleasure, you know, that moment of joy after a long day. You know, I enjoy mine after I've gotten my kids to bed and, you know, while my husband is doing the dishes or cleaning up the toys.

45:34But certainly too, you know, we envision kids perhaps, you know, with a gluten allergy, going to a birthday party and being able to have something that they can eat as well. So it can certainly serve multiple purposes. And also just for us being allied health professionals, We think this would be a wonderful product as well for senior citizens who maybe can no longer cook like they used to. But really, it's the convenience, the ease factor to it that we think is a big part of our value proposition. For when you absolutely need cake, which I love. I feel like I need cake every day. Yes, yes. Do you remember, I think it still exists.

46:18It must still exist. I just haven't made it in so long. But one of my great pleasures as a child was when my parents would come home with a Jiffy Pop pan. And you would take the thing off and put it on the stovetop and shake it. And then that big foil would just blow up. And then you'd rip it open. You'd have popcorn. Did you ever do that? Yes. And it was so fun. I remember it being like such a fun thing to do with my parents and my siblings. And we're going after the same type of thing with Muggsy. But you know where I'm going with this now, which is, is there a world where there's like a microwave safe, I don't know, maybe disposable or recyclable mug that you could sell it in?

46:59So then you just pop it in and it's like the jiffy pop of cakes. Yes, I love that. And that actually is, you know, something we we toyed with at the very beginning. But I love that you brought that up because that does, you know, certainly add to the experience. Yeah, it can even be a reusable mug. Maybe you just do like a limited series and you sell them at gift shops and the mug says something like, dad is the best. I don't know. I'm just trying to think of a lame sort of mug thing. But, you know, everybody. So that could be kind of a cool thing to try. I love that. Who do you imagine? I think this is another version of the question Vicki asked, which is who do you imagine using this?

47:43Like you mentioned senior citizens, but like at the end of the day, there is going to be a core type of user. It's going to be kids. It's going to be, you know, sort of women between the ages of 20 and 30. It's going to be there's going to be a certain type of user. So in your mind, who do you envision buying this product? Yes. Yes. So we are really envisioning it being perfect for, you know, that modern millennial consumer, mostly female, you know, women with really bustling personal, professional lives who are really going after that convenience factor, you know, whether they're preparing it for their kids or even for themselves, you know, because she's tired.

48:27She, you know, has a lot on her plate and at the end of the day doesn't even want to be mixing up a cake out of a traditional box mix. So that's really our target that we're going after. Vicki, I know that Devin's question was about how to build buzz. I think, and I'd be curious to get your take on this, I think that she's got to, instead of thinking building buzz sort of nationally, she's really got to build buzz in Cleveland first. And I feel like this is the perfect opportunity to start really showing people how this works. Like literally have a microwave oven at a farmer's market and just make these like, like, and just sort of start that way.

49:10I don't, what do you think? Yeah, I'm getting my head around it because I've never made cake in a mug before, but I do love cake. So food operates on very low margins and it's low price point. And so So in time, the goal, unless you wanted to stay a small business, and I shouldn't assume, do you have dreams for this to become a billion dollar business or is it a jewel of a business that you want to create? Yes, we have big dreams. We really want to take this as big as we can. So your end goal is grocery distribution. And then what you have to do is reverse engineer a strategy to get invited into grocery distribution.

49:54I think convenience is definitely one of your main selling points, but I think your point of difference is probably additionally the form factor and the health piece of it because you're both health care workers. So I think, Guy, you're right. This is one of those situations where you throw spaghetti at the wall, whether it's food fairs and farmers markets for local buzz, as well as social media content that shows your intention and your thoughtfulness behind the ingredients. on your own website. That's where you'd want to build the business first. And these are lightweight and easy to ship. So you might even want to create like a gifting program online.

50:43I'm going back to Guy's idea about the mugs and my original question about occasions. If you have birthday kits or... I love that. Yeah. I almost want you to do something like really unexpected too. Like, sorry you had a bad day at work. Sorry your boss. Sorry about your celiac. You know, like things that that will kind of cut through. I love that. Sorry he dumped you. Yeah, I love that. Or like or like make your own mug cake birthday party packet, like where everybody gets their own thing and they can make their own cake. And then you'd have like a squeezy little tube of frosting that you could frost it with.

51:22I love this. And that is just getting my mind buzzing. And those are wonderful recommendations. So thank you for that. Do you know what I've become obsessed with on social media? For some reason, I get fed these videos of like bread in an oven baking. Basically, you're looking at inside of an oven, like through the glass, and you just see the bread like it goes in, you know, the dough. And then you just see it grow, grow, grow into this beautiful baguette or croissant. And I could just watch those all day with like beautiful, you know, like the music from Amelie behind it or something. And so I can imagine just like the sound of like a hand ripping open the packet, pouring it in the mug, putting in the whatever it is.

52:09Is it water and butter? I don't know. And then putting in the microwave and then just watching it grow into this like popover cake. Yes, I love that. And I think that's definitely an avenue we will go down. I know myself and Nina included, we're ready to get more comfortable on social media because truthfully, that's an area that I don't have a ton of experience in. But I love that idea of getting creative with our videos and really showing not only what this product is, but how you could use it, how you can make it fun and different and unique to you. So thank you. Devin Clammer, the brand is called Mugsy Bakes.

52:51Good luck. Congrats on the launch. Thank you. Now I want some Mugsy. Now I feel like I need a cake in a mug right now. Thank you. Yes. Thank you both so much. Thank you, Vicky. Thank you, Guy. This was truly amazing. Thank you. Yeah, you can make cake in a mug. You didn't know. I feel like I haven't even lived. Vicky, before I let you go, I'm curious. just now with everything in the rearview mirror, and having built what you built and knowing what you know, what do you wish you had known in 2008 when you were starting your business that you think might've been helpful for you to know or to be aware of?

53:40In 2008, 2008. I'm trying to put myself back in that spot. Yeah. If I could do anything over again, if I could sit down with my younger self, I would say the entrepreneurial journey is so thrilling, but so intensely difficult. Don't make it harder on yourself by carrying around self-doubt. It's like carrying around a backpack full of boulders. It just makes everything harder and it's unnecessary. And it gets a lot more fun if you let go of the idea of, can I do it? And you just say, I will do it. Awesome. Vicki, thank you so much. Thank you, Guy. I can't wait to see you and have cake and a mug.

54:31We will. I'll be wearing fabulous jewelry and I'll be smelling good.

54:37That's Vicki Tsai, co-founder and former CEO of Tatcha. And by the way, if you haven't heard Vicki's original How I Built This Episode. You have to go back and check it out. You can find a link to it in the podcast description. And here's one of my favorite moments from that interview. We ran out of money over and over and over again. I couldn't afford a salary. My partner couldn't afford a salary. I couldn't afford rent anymore. And my parents had bought a place near the airport at that point, and they let me move into there. And we had this really, really incredible high-end clientele. And I was working on my mom's garage.

55:19Thanks so much for listening to the show this week. Please make sure to check out my newsletter. You can sign up for it for free at GuyRoz.com. Each week, it's packed with tons of insights from entrepreneurs and my own observations and experiences interviewing some of the greatest entrepreneurs ever. And if you're working on a business and you'd like to be on this show, send us a one minute message that tells us about your business, the issues or questions you'd like help with. And hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at hibt at id.wondery.com or call us at 1-800-433-1298 and leave a message there.

56:03And we'll put all this in the podcast description as well. This episode was produced by Catherine Seifer with music composed by Ramtin Arablui. It was edited by John Isabella. Our audio engineer was Sina Lafredo. Our production staff also includes Alex Chung, Carla Estevez, Chris Messini, Devin Schwartz, Elaine Coates, J.C. Howard, Carrie Thompson, Neva Grant, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

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