Thrive Causemetics: Karissa Bodnar. How a Beauty Business Made Millions for a Mission

27:49They were filled with latex and parabens and sulfates, which were really irritating to people who are immune compromised or just people in general. And the lashes wouldn't stay on. And I also thought about Christy's experience with losing her own hair and how important it was that she felt like herself and that she had that dignity of beauty until her last day. And I wanted to be able to create a solution for that. I had no desire to start a beauty brand. I remember being a makeup artist, and so many makeup artists at Sephora wanted to start their own brand. And I was like, oh, my gosh, no, there's so many incredible ones here.

28:29Why would anyone ever start one? And so for me, it was more of Christy's passing was this catalyst for me saying, I love this industry. I love what I get to do every day. And I also have this bigger calling to honor her life. And I want to solve this problem for people around false lashes that don't work if you don't have your natural lashes. Okay. So you decide that you want to start something and you know you want to do something inspired by Tom's. We did that episode many years ago on the show with Blake Mycoskie. It's a really interesting story. And that was sort of the kind of a moment in time where you had a lot of brands, Orby Parker and others starting up, that were doing one for one, which was a really – it was a thing.

29:17So from what I understand, you decide to quit outright, quit at L 'Oreal and start this company. I'm assuming because you didn't, you can't really start a makeup brand working inside of a makeup company because they are going to own that IP. Yes. And I got another job before I quit. My dad would always talk about, Carissa, it's very important that you're gainfully employed. And I had about$100 ,000 of life savings that I put into starting Thrive Cosmetics. But I also worked a full-time job, but in a different category, which was the nutrition and coffee industry, which I had no business doing.

29:57It was Bulletproof, I read, that you worked for, right? Yeah. Like the Bulletproof Coffee Company, yeah. Yeah. All right. So you – meantime, you said you're making formulations. What are you actually doing? What are you making? The first product that I was making were these false lashes that worked whether you had lashes or not. And we still, I mean, they're a huge part of our business. But how would you make that? I mean, I would think you just order those ready-made. No, no, because the traditional lash bands didn't work on people who had lost their lashes. It needed that flexibility as well as a curve to it to really affix.

30:37Because if you think about your eyelid and where your natural lash line is, if you're putting on false lashes, you have this shelf of your natural lashes that are going to ultimately keep the lashes up. And so because that didn't exist for people who had lost their lashes, I worked with ophthalmologists. I also worked with oncologists. And because of my background at Clarisonic, I had filament suppliers, which are essentially what false lashes are made out of, that were really generous with their time and allowed me to source fibers from all over the world that were really lightweight. And then the product that was also very important to pair with those lashes was Infinity Waterproof Lash Adhesive.

31:20and that lash adhesive or lash glue couldn't have latex or parabens because I was working with oncologists to develop the products and ophthalmologists. And they were like, people who are going through cancer or have any immune compromise situation absolutely cannot have latex on their skin. They cannot have parabens. So I made that formula in my Vitamix. I got a ton of raw materials from raw material suppliers that I knew from working in cosmetic chemistry. And I mean, they were literally sending me hyaluronic acid powder to 330 3rd Avenue West in Seattle. And I got an acrylic copolymer that I could blend and whip at a certain frequency and speed with the water.

32:09And it ultimately became what was Infinity Waterproof Lash Adhesive. How long did it take before you had something that worked? Three years. Okay. But meantime, you're still working for Bulletproof at this time when you're developing. And did you have a name for your company yet? When I was working on the lashes, I did not. No, I really struggled to come up with a name. And I was working on the formulations in my kitchen, and I had a TV, and I would watch Good Morning America every morning like so many people. and basically they were doing Good Morning America Goes Pink, which was all about breast cancer awareness, and they were doing makeup on breast cancer survivors.

32:52And Robin corrected the host and said, these women are not just survivors, they're thrivers. And my eyes welled up with years. And I just knew that that was the name. Because that's what beauty is all about, is about helping people thrive. So it just struck me that that was what we were going to be named. All right. So I think this is around 2015. You quit Bulletproof Coffee and formally launch Thrive Cosmetics. And you had already kind of built a community, right? Working with cancer patients and some nonprofits. But I think at this point, sales are entirely direct to consumer online, right? And by word of mouth, essentially, is that right?

33:45Yes. I would have given you my left arm and I am left-handed to be carried at Sephora, Nordstrom, Ulta, Anthropologie. I mean, I was pitching to everybody, QVC. And I just think at the time, they didn't really see the vision of what I was creating. And you pitch them on the lashes. Yeah. And then what would become Infinity Waterproof Eyeliner and Infinity Waterproof Eyebrow Liner and Triple Threat Color Stick, which it's funny. This is a really full circle moment because when I was – I remember working on Triple Threat Color Stick in my kitchen when I was listening to you and Jane from Dermalogica in 2016.

34:26Mm-hmm. Yeah. I'm curious. So how did you fund the initial run of – you've got a website and you had some savings, I think, from your jobs. Yeah. And you had to manufacture these lashes and then hopefully sell them. Yeah. How did you finance that initially? Well, so I had about$100 ,000. And the initial production I invested, it was$20 ,000, let's say. And then it was – Infinity Waterproof Eyeliner, when I wanted to produce that, I took some of the proceeds from selling the lashes. which again, there were many days where we had no sales. Having a$150 revenue day, I felt like an absolute baller.

35:07And so I was funding the production through working my full-time job, as well as my life savings. And I wiped out my entire life savings. And I had a 2007 Honda Civic and a one-bedroom apartment, so there wasn't much to leverage. So yeah, it was by working that job that really funded the inventory and the company. So, all right. What was your kind of strategic thinking about even getting the word out about it? So I love this quote, scarcity drives focus. And my scarcity was capital. My scarcity was time. And so for me, it was like, okay, well, I know Elena George at Good Morning America has an Instagram.

35:53Could I DM her? Who do I know that could help me get in touch with her? And I just built a relationship telling her what my mission was. But for every Elena George, there were 30, 40 people who never responded. Same thing with beauty editors. April Franzino at Good Housekeeping. I had LinkedIn messaged over 20 editors, and she was the only one who responded. And even when she did respond, it took six months to get a meeting with her. And then I believe it was July of 2015 when our first print article came out. And it was a tiny little feature in Good Housekeeping. But again, it's about, to me, I think it's about playing the long game.

36:39And it's one person at a time. Because you never know who can change your life. If you keep showing up and treating everybody with the same passion and purpose and really communicating that consistently, I do believe that your people will find you. Tell me about the first hires. Who were they and who were you looking for? The first department that we built out was customer service. It was because the business went from zero to 30 million in a matter of months when the business finally took off in November of 2016, before Black Friday. And it was really our customers making us go viral. I had made an ad on my iPhone talking about Infinity Waterproof Eyeliner.

37:25And then little by little, those customers started commenting. And I remember calling my sister and saying, oh, my gosh, we're going to do$5 ,000 in sales this day. And then I remember calling her the next day and saying, oh, my gosh, we're going to do$25 ,000. And within seven days, it was$100 ,000. We had no employees. and so my friends i mean my friend megan who's a dental hygienist would come after work and she would do customer service my sister would take a lunch break and do customer service my mom i mean it was everybody in my life was showing up and then so the to get back to the first employees it was people from christy's sorority at university of washington and they had never met christy they were five years younger than us, but they knew.

38:15They knew about Thrive and they knew about our mission. And it was students at DECA, which is a marketing organization, extracurricular activity program. And it was the Renton, Washington DECA students that showed up or the Future Business Leaders of America students that showed up and would box eyeliners into cartons or they would ship products. And we made a lot of mistakes. I remember there were times where we would accidentally, in ship station, double print the labels. And my aunts and uncles and friends and family would be there until midnight doing order fulfillment, and we had double shipped people.

38:55We had customers calling us being like, hey, why don't you know you double shipped me? So there were a lot of ups and downs in that time, but we cared deeply. And that's really what built the business. So I think you introduced the mascara in 2017. Yeah. And as you are growing, right, are you starting to think about moving the business? Because you're now based in LA, but at that time, did you start to think, I should probably move it to a media center like LA or New York where, you know, there is a lot more attention and celebrities live and et cetera, et cetera. Yes. So May of 2017 was when Liquid Lash Extensions Mascara launched and we sold out within 48 hours.

39:46And that was absolute bananas. And so, yeah, it was getting really tough to do order fulfillment out of a 2 ,300 square foot office in Seattle. and it was getting really tough to find cosmetic chemists. So after we built the customer service department, I wanted to build out our cosmetic chemistry expertise. And there aren't places where you can go really learn that in Washington state. And so I didn't have this grand plan of moving to Playa Vista, which is right in Los Angeles. I just, I thought, okay, well, it's probably New York or LA. And so I made a job description for cosmetic chemistry.

40:31And I said it could be in LA or New York. I mean, all I had was an apartment in a 2007 Honda Civic and my dog Cody. That time in my life, I had total freedom to go anywhere. And I was so committed to this mission. And the first person that I hired was in Los Angeles. And so got a Regis temporary office down in Los Angeles. My family helped pack up the apartment. and, you know, got down to Los Angeles. All right. So you eventually do move the team down there. And I want to ask you about fundraising because I know you would raise money, but tell me a little bit about some of the challenges you ran into as you were trying to raise money.

41:15I mean, this was a good time to raise money, 2016, 17, because especially direct-to-consumer, there was increasing interest in it. did you run into some challenges trying to raise money? I spent a lot of time in 2013, 2014, 2015 trying to raise money and was very unsuccessful in it. And so the business was already very profitable and it was over$30 million in revenue before I was able to get capital. And we needed a few hundred thousand dollars for inventory. and when I did actually bring on capital, I had a different negotiation, as they would say, and I wrote the term sheet myself with a lawyer, and I was able to protect my ownership in the business.

42:09I own the majority of the company. I control the company. Nobody can tell me if we're going to sell the company, and for me in particular, I always tell entrepreneurs, raise less because it's going to allow you to keep that scarcity driving focus mindset. And every business is different. But I don't think in the beauty industry that you need that much money in order to make it because I think launching with an entire line of products wouldn't have worked for me. I needed to formulate every single product to make sure that we had that level of excellence. And so had I had all the capital in the world, I think I would have lost that focus.

42:50And we were always profitable, even when we did$78 ,000 in October of 2016 before the business took off. You were profitable because you stayed lean? You kept a small team? Well, we didn't have any employees at the time, and I wasn't on payroll for many years. And so it was – I mean, the profitability was somewhat due to the fact that nobody was getting paid. But yeah, again, it was just building that really simple spreadsheet of saying, okay, if I sell a product for$26, how much am I going to keep? And then how much can that fund in the business? And when you're running a business out of an apartment, you don't have that same overhead.

43:32So I just had to worry about making my own personal rent. And so, again, even as I invest, if somebody does their own order fulfillment, I will pretty much write them a blank check because I'm like, I know that grit and I know that discipline that it takes to do that and to walk past that inventory in your living room every day and see that it's not moving. It's deeply motivating. Infinity Waterproof Eyeliner, which is ultimately what built the business into a$30 million business, that didn't take off for a year and a half. And so I had to walk, it was like the walk of shame every day looking at that inventory.

44:09And again, I think that that reminder of like, you invested, Carissa, you invested$25 ,000 to make Infinity Waterproof Eyeliner go into production of your personal money that you've been building since you were, you know, 16 years old. It was really motivating. When we come back in just a moment, how Carissa balances giving back with the realities of running a company and why her decision to keep sales only online works out so well. Stay with us. I'm Guy Raz and you're listening to How I Built This.

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45:53Hey, welcome back to How I Built This. I'm Guy Raz. So by 2020, Thrive Cosmetics is making about$150 million in revenue. The company is working with several hundred charities, and that mission becomes central to company culture and supporting its growth. People have always asked me, is it the mission or is it the product? And I said, product. It has to be the product. And our mission is inextricably linked to that because there are thousands of ingredients we will never use because we know we're donating to cancer patients. You know, so there's, and that's, you know, that's one of our causes. So they're intertwined.

46:30It's like. It's interconnected. Your products are not using certain ingredients, which may appeal to lots of customers because they want, you know, I hate the term clean and I know a lot of people use it. It just doesn't mean anything. But let's just say there are, you know, ingredients that people trust more than others. So that might appeal to them. And you do that because it's tied to your social mission, essentially. Well, I think our social mission is a lot bigger than the causes that we support. Again, our customers have chosen all of those charities. And so my vision was to give back to a woman going through cancer.

47:03And then one person asked me if we would give to domestic violence. Then I met Shirley Raines from Beauty to the Streets, and we started giving back to the homeless. So it has really grown through the community, and it 100 % drives customer retention. They're voting on our charities. They're getting to choose. But is that why they're coming to us? No. No, no. They're not coming to us because of that. They're coming to us because Liquid Lash Extensions is Allure's Best of Beauty winner, which is essentially like winning a Grammy in the beauty industry. And so if the formulation and the product is not delivering a solution to customers, then, yeah, you're dead in the water.

47:43Because if people want to give back, they'll just write a check to their local charity. But with Thrive Cosmetics, you actually get to do both, which is really special. Well, Carissa, I'm curious about D2C because you don't have any brick and mortar stores. So your expenses are a lot lower, but there's just so much more competition today, right? And the economy is where it is now. There are challenges. So how do you think about making sure that you guys are going to thrive? I think the beauty of direct-to-consumer is that you know exactly where you stand every single day. And so, you know, for me with direct-to-consumer, it's about really staying committed to the daily numbers, being in the numbers.

48:32Because there have been times where I have taken my eye off the ball. And, you know, then all of a sudden our air shipping costs have gone, you know, through the roof. And so I think also I'm a part of a lot of different WhatsApp groups and texting groups where we are constantly talking about, okay, what's going on with Shopify? What's going on with Meta? What are you seeing on TikTok? And I've found that this entrepreneurial community that's beyond Los Angeles is super, super generous. And I think it starts, though, with how we show up with our own generosity of information and wanting to see people thrive.

49:07So how we thrive is because we are supported by so many people. And I'm inspired by my friends who are running a business that might not even have done a million dollars in revenue because it reminds me how scrappy we can be. And I don't think that that needs to go away as a business continues to scale. I read that you've got about 70-ish employees, which to me is very smart if that's true because the lean operations are generally – it's generally easier to hit profitability. Is that right? Do you keep your team as lean as possible? We do. Yeah. And I think, you know, it ebbs and flows, right?

49:46The world is constantly changing. And I think where we always over-invest is in customer service and product development, in, you know, making sure that the people who are connecting with the customers, whether it's marketing, the things that are really driving the business, we try to be well-staffed there. But for me, it's also about, you know, whether the employee base was 30 or 70. It's about how do we continue to know everybody's name? How do we stay on the same page? And by the way, we're a work in progress in that. Even when we had five employees, it's hard to stay on the same page when the world is constantly changing.

50:23And I imagine like there was a time when brands were really focusing and some still do to some extent on like being totally vertically integrated, right? Where you own the production facilities and sometimes it makes sense. Like if you're making gluten-free something and you can only – it can make sense. It's very, very expensive, right? And in many cases, it makes a lot more sense to work with a co-manufacturer. I think that is probably the case for you, right, and for a lot of cosmetics brands. Oh, yeah. Yeah. I don't think anybody needs to own their manufacturing facilities. I think what's most important is owning your formulations.

51:05There's two things. Ownership, which comes from creation. And so that's why we invest in cosmetic chemists. I mean, the cosmetic chemists that we have on staff guy, they could run a marathon while I'm still trying to run a 5K. I mean, I'm the worst product developer in this building. And I think I'm pretty good. I made liquid lash extensions. And so I think it's about investing there. And then it's also about negotiating exclusivity because those two things protect the formulations and the integrity of that. And even so, don't do it on a handshake. You need a contract. And then you need to reinforce that contract a lot because as the products start to take off, that is going to invite in competition.

51:52And I love competition because I think it keeps us sharp. And I stay really focused on what does our customer want from us, knowing that there are probably thousands of brands that are out there being, you know, constantly developing new products. But I think that that is one of the most important things is to really, really own your formulation so that you can say with integrity that you can't get this anywhere else. Yeah. So what are your sort of the categories that are the most successful? and where are you seeing an interesting kind of trend, growth trend? Yeah, it's interesting. We were just talking about this as a team and just the opportunity that we have in complexion and sun care and how excited we are about that.

52:37We have incredible sunscreens and complexion products, but the world doesn't necessarily know that much about that for our business. The brand was really built product by product, and every single product has had to fund the next one because this business is self-funded. This business is profitable. And it always has been because it had to be in the beginning. And so by keeping that rigor, if we don't sell enough of Empower Shine, which is a lipstick that we developed for over many years, if we don't sell enough Empower Shine, we can't launch Lasting Mark Lipstain that we really hope we can launch in a month.

53:20You know, it just doesn't work. And so for us, it's really important that we stay really rigorous, even with our skincare line. We developed that with dermatologists, oncologists, ophthalmologists, but we still are quite small relative to the rest of the business in skincare. When you think about, you know, the outcome here, I mean, would you be happy if you were acquired by a bigger company like Tatcha and other brands have been on the show. Is that something that, you know, down the road you imagine is going to be a good outcome for you? No, I don't want to sell the company and we've had opportunities to.

54:05To me, the outcome is continuing to show up and develop products that are changing people's lives. I grew up, you know, Pretty humble beginnings. My parents worked very hard to provide for us, and I had a great childhood. And now I have more money than I need. And so I get to give that away. And so for me, it's really about how do we leave the world better than how we found it every single day? And how do we build a sustainable business that can outlive us? And I believe that by keeping the company privately held, that that is the best way to do it. and building from within and promoting people who maybe start out as a cosmetic chemistry intern and is now a product development manager.

54:48And someday, hopefully, she, you know, is running the whole thing, you know? So to me, that's really what the end game is, is continuing to do the same work every day and then evolving how we do that work together. When you think about where the brand is now and where it started, because you're now officially 11 years in, but you've been working on it longer than that. How much of it do you think has to do with the work you put in and how much do you think has to do with luck and timing and being at the right place at the right time? Oh, I think it's a blend of both. I love the song Moment for Life.

55:33And I remember listening to it when the business finally took off. And I was up till 2 a.m. printing labels from Ship Station. And I was listening to that song. And I had listened to it for years. It came out many years before 2016 when I was listening to it. And it hit me differently because I heard her say, I want this moment for life. And it was that feeling of like, oh my gosh, we actually are going to do this. Like, it's actually happening. I'm breathing rarefied air. So there is luck in that. But in that song, Nikki also says, no, I'm not lucky. I'm blessed. And so I do think this business is divine.

56:14I mean, I wear this ring every day. It's a sunflower. And it's for Christy because that was her emblem when she passed away. And so, you know, is it luck or is it my angel Christy that is, you know, here with me or is it hard work? You know, I work seven days a week for sure, for sure. But yeah, there's no way that a kid that grows up on a dirt road in Stanwood, Washington winds up on Good Morning America. You know, that doesn't happen. And I'm really, really clear on how fortunate I am. And so I think it's a blend.

57:21It was edited by Andrea Bruce with research by Chris Messini. Our audio engineer was Jimmy Keighley. Our production staff also includes Alex Chung, Elaine Coates, Carla Estevez, Neva Grant, Casey Herman, J.C. Howard, John Isabella, Catherine Seifer, and Carrie Thompson. I'm Guy Raz, and you've been listening to How I Built This.