Sidney Neuhaus: Co-founder of Kimai

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0:59Welcome to the Jazz Shapers podcast from Mishkondorea. What you're about to hear was originally broadcast on Jazz FM. However, the music has been cut due to rights issues.

1:14This is Jazz Shapers with Elliot Moss on Jazz FM. In partnership with Mishkondorea. It's business, but it's personal.

1:27Listening Colour. Welcome to Jazz Shapers with me, Elliot Moss, bringing the shapers of the business world together with a musician shaping jazz, soul, and blues. My guest today is Sydney Newhouse, co-founder of Kimai, the lab-grown diamond jewellery brand. Growing up in a diamond trading family in Antwerp, just like her future co-founder, Jessica Wash, Sydney and Jessica shared a frustration for the lack of transparency and ethics found in mining and across the fine jewellery industry, an industry that for hundreds of years has created a huge environmental and social cost. In 2018, aiming to meet the expectations of more consciously minded younger customers, they launched Kimai using 100 % traceable lab-grown diamonds and recycled 18 karat gold.

2:08And we'll find out exactly what a lab-grown diamond is shortly. I've done my homework, but I want to know more. Receiving a burst of publicity and investment when Meghan Markle wore a pair of their earrings after they approached her, by the way, with a cold email, Jessica and Sydney took another leap forward when their risk to refuse an offer on Dragon's Den led to the support and deal they wanted to build education around their brand. Though digitally native, Kimai now has a London store on a very nice street too, one of my favourites in London, and they're one of the first fine jewellery brands to be certified B Corp.

2:39It's very nice to have you here. Thank you. I've got almost a TV celebrity. I know that's sort of a joke, but you are on Dragon's Den, which means millions of people get to see you pitching. Yeah, thank you for having me. No, it's a pleasure. It's good to meet you properly. Quite a thing to take on. You're from a family that's been involved in the diamond world. I know you're sort of a gemologist. Gemologist, yeah. Gemologist. And you go, you know what, we're going to shake it all up. Why? You know, always like I had a strong passion for jewelry because of my family background and Jess with my co-founder as well.

3:12Just to give you a bit more perspective. So my father is a jeweler. My grandfather used to be a diamond dealer. and Jess's father is also a diamond dealer. So we kind of both were surrounded by diamonds, jewelry, and we always wanted to create our own fine jewelry brand. At some point, it's kind of like always a girl's dream to create your own diamonds. Sparkly, beautiful things that I designed for me. Yeah, exactly. And then we went to study in London, both of us the same year. We studied different things. I studied gemology and Jess, she studied more business and we felt we were kind of complimentary.

3:46and we wanted to start as a side business but we wanted definitely to create something that's for our generation. We felt the jewelry industry was far away from what we wanted as young people creating our own life, etc. And we saw that there was an opportunity because there was a lack of transparency in the industry in terms of the jewelry itself because you have so many persons in between from the goldsmith till the consumer. There are so many gaps and then the margins are huge from making the jewelry till the store. And then also from a diamond perspective, so we were asking around like our families and diamond dealers, like, oh, do you know where this diamond comes from?

4:33Like in which mine it was created, et cetera. And then nobody could give us a straight answer. And they said it's pretty much impossible because it goes through so many hands and then diamond dealers exchange diamonds all the time because it depends on what their clients want. So then we say like, okay, there might be something we can do. And then at the same time, it was the beginning of lab-grown. So we heard for the first time in 2017, we heard about lab-grown diamonds. And at first we were like, oh, but it can't be the same. It can't be identical. Then we went to the diamond industry and then we started seeing proper lab-grown diamonds.

5:07And I studied gemology, so I could really see that there's no difference. So in terms of chemically, physically and optically, you couldn't see the difference. Even with microscope, it was impossible to tell them apart. It's just a sped up process as I understand it. Exactly. Thousands of years happen in a hugely hot compressed space which then alters the actual form. But the mining process, like to create a mine, is a really, really long process. And that's why also it's so damaging for the earth. But it's misleading to say that diamonds are rare. It's not really true. No, that's apparent. I mean, once you get into these things, it's all marketing.

5:45And of course, it's going to take a lot to get that particular type and that particular color and all that. But let me ask you, it sounds the way you describe it as a very rational thing to have done now that you talk about it. And often always in life, we go back and we go, okay, that's how I remember it. Where's the heart in this? Was there a sense of just, I believe that I need to change the industry or was it a sense of there's an opportunity to create a category here? Which one do you think it was? I think we were set on creating something. We wanted to be entrepreneurs, just really wanted to create a brand and a company and I really wanted to because I was so passionate about jewelry and I really wanted to create a fine jewelry brand.

6:27But we said ourselves like we can't create something that's not representing our values. Sustainability, it was the beginning of sustainability at the time. I mean, like, we were conscious about what we eat, how we buy clothing. It was the beginning also of brands like Reformation that use recycled garments, etc. And it was really, in jewelry, there was nothing done yet. And then, I don't know, like, all the stars aligned at the same point. Like, we heard about lab-grown diamonds. The shiny, sparkly stars. Actually, using lab-grown diamonds, not only it's cheaper, it's definitely less expensive.

7:02At the time, it was already 50 % cheaper than mine diamonds. but also you can really know where your diamond comes from because you can visit the lab, you can see. And don't get me wrong, I think we have many labs today in the world, but it depends how you choose them. If they use renewable energy, there are so many factors that you take into account. And we're going to find out lots more in a second. Sydney is, no, no, it's beautiful. Sydney Newhouse is just going to have lots of stuff to share with us and I can't wait to find out more about lab-grown diamonds. It's evident that this is in your blood.

7:35and as you were talking so passionately about all the different reasons why you got into this and how a younger person would say, I need to know where it's from. I need to know it's not kind of hurting the planet and obviously the diamond trade does. The very specific question I have, and I want to come back to kind of the techniques and things, with your family involved in the traditional mining of diamonds, passing of diamonds and all that, the traditional methodology, the traditional part of the industry, them doing that and then you coming over here doing your new thing, was there a tension around the kitchen table ever or the dining room table when they said excuse me Sydney what are you doing?

8:12A bit yeah I think there was definitely some pushbacks because it was really the beginning we were one of the first one starting doing lab grand diamond jewelry I think people didn't think clients were ready to purchase lab grand diamond so they were also thinking it's not the same market, it's not the same clients. And we wanted to be luxury as well. So we wanted to touch the same client as them, actually. So we definitely had some pushbacks. I think we're still getting some pushback outside of our family in the diamond trade, because the LabGorm diamond market, and we can talk about it afterwards as well, it's taking a big market share of the diamond market.

8:55What percentage roughly now, would you say? It depends on which category. For example, in the US, engagement ring was more than 60 % last year. So just to give you perspective, US being the biggest diamond market in the world, of course. But it's definitely... Significant. Yeah, it's significant already. It's significant, it's growing. And did you get, what's the word, your reaction to that? Was it to say you and Jess went, we're onto something here. Definitely. They're annoyed. They're a bit defensive. do we keep going yeah we keep going was there that 100 and still for example we had some pushbacks from magazines because they couldn't talk about love ground diamonds because they were sponsored by big diamond brands etc lots of them but lots of them yeah and i mean actually we never gave up never sounds like the opposite happened like it created we were yeah as you said it's like we're onto something her eyes are sparkling as much as the diamond she's wearing here going yeah you're Yeah, damn straight.

9:55That's what pushed me on. Stay with me for much more from my business shape. It's Sydney Newhouse. She'll be back with lots more. And she's the co-founder of Kimai. And she's got a fire in the belly. Fire in the belly for sure. Right now, though, we're going to hear a taste of from the Michigan Innovation Series, which can be found on all the major podcast platforms. Lydia Kellett invites business founders to share their practical advice and industry insights for those of you thinking about starting your very own thing. In this clip, we hear from Bianca Rangecroft, founder and CEO of Wearing, a fashion app on a mission to upend the buy, use, dispose model.

10:26The Mishcon Innovation Series. Inspiration from founders of cutting-edge businesses. In association with Jazz Shapers with Mishcon Derea. And if you had to give a piece of advice to somebody looking to break into the fashion tech world, Bianca, what would that be? I'd say two things. The first, if you're a founder and you're starting this journey, I'd say really focus on your strengths. solve for what you cannot do and be really really honest with what that is because the roi and you focusing on your strengths and building that out as potentially the face of the brand or the face of the technology or the face of the operations of the company is so crucial because time really is money and this journey is a marathon and you really can't burn out because you are the mvp and so solving for what you're not good at allows you to remain as much as possible in a percentage of enjoyment of the work that you do rather than in a percentage of I've just got to get this done to keep things moving.

11:25So really picking that team, being honest with yourself about what you can and can't do is really important to just getting there faster and in a better mental health state. The Mishcon Innovation Series in association with Jazz Shapers with Mishcon Derea. Jazz Shapers on Jazz FM. In partnership with Mishcon Derea. It's business, but it's personal. You can enjoy, and I hope you will, all our former business shapers on the Jazz Shapers podcast. I think there's around 500 of them or something. And you can hear this very program again if you pop Jazz Shapers into your podcast platform of choice. My guest today, I'm sure you've been paying attention, is Sydney Newhouse, co-founder of Kimai, the lab-grown diamond jewelry brand.

12:10You strike me as someone who knows how to manage themselves, Sydney, and you and Jess seem like you're quite focused. I've only read positive stuff about your journey. words that people use, but you know, the progress that you've made. Tell me about when it hasn't gone so well. What's been the kind of, have there been any fundamental obstacles to you getting to this point where lab-grown diamonds are a thing, where your business is taking off, you're opening in Los Angeles, you're in London, you're going to be in other places, I'm sure, soon. When was it not such plain sailing and how have you reacted to that?

12:47I mean the entrepreneurial journey is hard it's a long journey and you can see all the highs especially in the business we are it's very sparkly and fancy but just being an entrepreneur like your life sparkly and fancy small children and everything it's just easy isn't it it's not easy it's definitely not easy it's a lot of work we are lucky that we're both of us so being two founders I think definitely help because if someone has like a low energy because of X, Y, Z reason, then the other one can help her just get her motivation back. You know, that really, really helps. I think just hiring, for example, for us was really difficult.

13:31I think we were 25 when we launched the brand. We didn't know anything about how to manage people, how to manage a store. Not even, we didn't have that background or that experience. so I think everything was a learning curve and then yes definitely we have some lows like everyone and it's just about like fighting through like also I think we're very good at creating opportunities and also taking those opportunities so like the stores for example it was a pop-up then we managed to sign the long-term lease the LA store for example it came about like as an opportunity and we decided to take it but the journey itself has been hard also the pushback from people who don't want to talk about lab growing, etc.

14:16But that kind of fills your energy as well in a way because you know you're doing something right. Because you're irritating people. So it's a good sign. And for the two of you, how long did you say you've known each other, you and Jess? For a long time, probably 20 years. And that friendship, which has then become a business partnership, has that worked entirely or are there moments when it's tough because you were friends before? In other words, some people start and they work together and then they become friends. You've gone the other way around. I think you have pros and cons. We're lucky that we, and I think that's necessary, is to have different part of the business to handle.

14:54So I do mostly everything that's creative, more clients focusing, and then Jess will take care of everything that's more business operation. And the partnership has been successful because both of us have so many different skill sets. and that definitely helps. Then you also get to do that with your best friend, which is amazing. But also then you never stop working because there's no difference between, you just constantly talk about work all the time. But it's good because you live those experiences and this journey with your best friend, which is amazing. And friendship in a way like that is fluid, isn't it?

15:29You just talk and you talk and you talk. Stay with me for more talking with my business chef today at Sydney Newhouse. She's the co-founder of Kimai. We're talking about partnership, and that's great, and the friendship is there, which I think is very important. When you have raised money together, what's that been like for the two of you? What's the experience been? Because you've done pretty well. I mentioned briefly, I think, that you were on Dragon's Den, and you can now quickly go into YouTube and put Sydney Newhouse and Kimai. I can hear you tapping away. And it goes into YouTube, and there you see.

16:02And it's a few minutes, and it's great, because you hold your ground and you say no. So you want 3%, it's 250 ,000 pounds. We're not going to give you 5%, sorry, and you take it or leave it. Very punchy. Were you like that with all of your investors? Yeah, we raised some investment at the beginning of Kimai when we had this Meghan Markle moment. Yeah, exactly. Big moment for the brand because it was three months after launch. So we had a moment and then we took this opportunity again to raise funds because we had great numbers and very little brand. So yes, we were very picky, always picky. I think it's hard to raise money when you're female founders, even though we had the opportunity to talk a lot with investors.

16:51But I think it's mostly men that you're talking about too. So I think it's hard also to tell them what you're kind of creating. I think the jury, there was not much investment in the recent years. So I think they just, I don't think it resonated with them as much. So it was definitely hard. I think we raised the first round, we raised with a lot of women founders, which is great. And then Dragons, then, yes, we were very picky. I think also we were talking with like younger investors and also the fact that we're speaking to consumer directly. So it's different than talking to VCs, I think. But what struck me was the confidence and you held the line.

17:33And I speak to so many founders, but especially female founders. As you said, it's really hard to raise money and the data would concur with that. There's only, what, I think two P in every one pound that goes to female founded businesses, which is outrageous. But how have you adopted such a confident position? Where is that confidence from, Sydney? Because we had a brand already. We had good numbers. But at the beginning, I mean. Ah, at the beginning. Yeah, it feels like there's so much belief. And I'm just trying to work out why you knew and why you know this is going to be a winner. Because there was this opportunity.

18:10Everyone was talking about Lab Grand Diamond. We were the first one. So I think we had that confidence. I think also Jess, my co-founder, she's kind of like managing all the business and operations side and she's quite a confident person. And when she has something on her mind, she's set and then she's going to do it. She's a doer. so that definitely helped and I think again we're two so I think it helped like bringing that energy in as well and we had really good numbers by just doing everything by ourselves like we were just the two of us and we didn't have like we had like a few products in and then we managed to get on Megan Marker's ears and Emma Watson and other celebrities just by doing things ourselves we didn't have a team at the time So I think we said like, okay, if we can do that by ourselves, like imagine what we can do if we have a team.

19:03Imagine what they could do. Here's what they're doing. We're seven years in and it's going rather well. Final chat coming up with my guest today, Sydney Newhouse. And we've got some Irma Thomas for you as well. That's in just a moment. Jazz Shapers on Jazz FM. In partnership with Mishkondorea. It's business, but it's personal. Sydney Newhouse is my business shaper today. She's the co-founder of Kimai. that confidence which I mentioned I alluded to with regard to the funding this email that you sent the cold email to Meghan Markle and probably other things that you've done where is that confidence rooted where is that ability to say you know I don't care what people think and why has it been successful why have you managed to cut through and actually make things like the Meghan Markle thing happen I think if you don't try you will never get and I think like a cold email can be done by anyone.

19:56If you create a good email, meaning like what your message is, if it resonates with the person who's going to read it, they might get back to you. And I think that really worked for us when we raised money from investors or from female investors, it was just cold emailing. Not a lot of people do it, actually. I think you get a lot of cold emails from salespeople trying to sell you something. but if you're telling them your story and how you admire them because of what they've done then it might resonate with them what you're selling to them in terms of the company so that really worked for us and you still do the same equivalent of the same email you have to know that we probably send hundreds of emails and then you get one or two answers and that you shouldn't give up basically and I think most of the people they send like oh she didn't get back and then they just give up.

20:51Sometimes you have to follow up like two or three times before getting an answer. Never give up is a big motto for us. It's like never take no for an answer. You continue, continue. And then if you can't get to that person, you find ways to get to that person. So like going through her circle. That's what you did. Yeah, that's what we did. Persistence. I read somewhere that the mission, if you like, talking about persistence is to end an unethical industry. That's how you have described the diamond industry. If 10 is the end and 1 is the beginning, where are you? I think we're on 4. And how are you going to get to 5 and then 6 and then 7?

21:31What's it going to take in the future for you to keep pushing on? Is this 100 years away? Is this 10 years away? I mean, does the end mean it stops and there's never going to be a mined diamond again? Ah, you were talking about the sustainability. I thought about the brand, sorry. No, no. So I'm talking about the, when we talk about ending an unethical industry, as in the mining for diamonds, I think that's what I've read about. You believe that's the mission, if you like, of Kimai. Beyond obviously growing your own business, that means also the old way of doing things needs to stop. How far are you from achieving that?

22:02Because that's a biggie, isn't it? I mean, won't people always want to buy the traditional diamond? I think it's changing, definitely. I think we're on six. I think basically creating a product is not 100 % sustainable. You can't be 100 % ethical because you're creating something which involves energy, which involves so many people to create one piece. But that doesn't make it unethical. That doesn't make it unethical. No, unethical can be… I think people perceive sometimes you're not 100 % sustainable. And I'm very upfront, like you can't be 100 % sustainable but if you're creating a product, right?

22:36And that's fine. I mean the unethical part being the old way of mining. Yeah, I mean, because is that still what you want to do as a business or are you more focused on just delivering fantastic lab-grown diamonds? We're focused on our mission is bringing ethical jewelry for our clients. Okay. And I think it's definitely what we've achieved so far is that a lot like as I told you about like 60 % of engagement in the US sold were lab-grown. so it's already a significant impact we recently introduced two years ago engagement collection and that really works super well for us so you you can tell already there's a huge shift since we're taking clients buying lab grown diamonds versus mine diamonds so there's a huge shift and i think it's going to evolve like dramatically in the next few years as well and quicker than we think and have you got strategies in mind you'd have to give them away which say in five years we're going to X percent of lab-grown diamonds in 10 years.

23:34Is it like that or is it just more every day you're trying to get to more consumers to buy lab-grown diamonds? Is it more evolutionary than it is revolutionary? It's definitely more evolutionary because we are still a brand. We're not a lab-grown diamond company. We're a jewelry brand. So we're selling a story. We're selling craftsmanship. We're selling our values for sure and designs and i think the yes definitely we have a strategy to go international we are opening in la as you mentioned we're planning to open more stores the next one probably will be france since it's our third market so that definitely worked for us so that's definitely how we're gonna grow as a brand and attract more clients and last question just before i ask you your song choice does anything daunt you you're a few years in you're still young in the scheme of things you know you're now seven years into the business you started at an incredibly young age like so many of the people I meet are there things you worry about or is it all just show me the problem I'll learn we'll move on what's Sydney feel about things that are new every day is a challenge definitely you have ups and downs so I'm definitely for me at the moment is like work-life balance in terms of like building my family and building the business is definitely tough so that's my focus as well is like trying to find I know it's like you can't find your balance because we keep on working and working etc but to find at least the right balance while still growing the business and still putting all my energy into our growth as a brand good luck with the balance when you find it let me know how you did it just before I let you go what's your song choice and why have you chosen it so my song of choice is Amy Winehouse, Valerie.

25:18And any particular reason? You just love it. I love it. I'm a fan of Amy Winehouse and I would have loved to go to one of her concerts. That was Amy Winehouse with Mark Ronson and Valerie. The song choice of my business shaper today, Sydney Newhouse. They were energized by the pushback. The fact that this new business was taking on the old way of doing things in the diamond trade was a key factor in propelling Sydney and Jess forward. If you don't try, you won't get. I love their approach to winning business and to creating a brand. They literally were relentless and persistent. And finally, the power of friendship, how founders working together can be so much easier than doing it on your own.

25:58Great stuff. That's it from Jazz Shapers. Have a lovely weekend. Jazz Shapers on Jazz FM. In partnership with Mishkondorea. It's business, but it's personal. We hope you enjoy that edition of Jazz Shapers. You'll find hundreds more guests available for you to listen to in our archive. To find out more, just search Jazz Shapers on iTunes or your favorite podcast platform, or head over to mishcon.com forward slash Jazz Shapers. Today's episode is brought to you by Apple Ads. Ads on Apple Maps are changing the way local businesses get discovered. Reach customers when it counts, right when they turn I'm looking into I'm going.

26:36They're in decision-making mode, actively searching for businesses like yours and deciding where to go. Customers can easily call you, visit, and more from the same place they're viewing your ad. And all of this happens on Apple Maps, a privacy-first environment that respects customers and helps them discover new places. Get started with ads on Apple Maps today, and for a limited time, receive 15 % credit back on your monthly ad spend for a year, up to$1 ,000 per month. Terms apply. Head to ads.apple.com slash maps to get started. Try business like never before with ads on Apple Maps.