Differentiation Strategies Every Founder Needs to Hear

0:00Hey everyone, in case you didn't know, we launched a YouTube channel for Shopify masters. So go ahead and subscribe for brand new video episodes. Thank you so much. When I see that, it makes me smile because that means that we are together really changing the landscape. And I've also realized that I'm not competing against these other emerging brands. If anything, together, we're creating a new category. Hey, everyone. I'm your host, Schweng Esther Shan, and welcome to Shopify Masters. your companion for starting and building a business. It is so easy to get stuck in your ways, but as entrepreneurs, we know you're constantly looking for new ideas to change the industry norms.

0:47Meet Baba Rivera, the founder and CEO of Ceremonia, a ritual hair care brand rooted in Latinx heritage, and she's changing the narrative around hair health. We're going to dive into her best exercises for standing out and how you can break into any industry. Baba, welcome to the show. Thank you so much for having me. Very excited to chat about all things Ceremonia. I understand you had this relationship that you were discovering about your hair and it's through that journey that you founded Ceremonia. So can you talk us through the process and that moment when you realized that there was something you can do within this industry.

1:30Yeah, for sure. Ceremonia is in many ways a homecoming for me, I feel like, because I grew up as the daughter of a Chilean hairdresser in Sweden. And my father immigrated to Sweden from Chile during the Pinochet dictatorship. And because of the language barrier, he was never able to get a job in the field. and so I grew up with this front row seat to all things beauty rituals as a result of my father's passion for hair but I think because I saw him struggle to make ends meet I never really thought of beauty as a real career if one will and it seemed to be not a viable option given how hard it was for my father to make you know his financials to make sense and I think growing Growing up as an immigrant in a very homogenous country like Sweden, I also just felt extremely authorized.

2:25And as a result, felt quite ashamed of my Hispanic roots. So I never really owned my culture. And if anything, I feel like I spent my entire childhood and teenage years running away from my culture. And Ceremonia today has sort of helped me make peace with myself and my heritage. And it's the first time that I'm really owning my full self and celebrating my culture through this brand that is also very proudly rooted and inspired by my heritage. It's such a beautiful full circle moment because I think as a fellow immigrant, there's so many things you realize that it is actually things that you've grown up with.

3:12They were done a certain way for a reason. talk to us about the ritual and caring for your hair that kind of echoes the similarities we see in skincare but that was actually missing so much within the hair care industry yeah for sure so i grew up with um a father that was very um focused on the care aspect of hair care he would create his own little like oil tinctures that he would put on my scalp and give me scalp massages he would also practice, I guess, hair oiling, which is, you know, trending on TikTok today. But back in the days, no one was talking about that. So I remember just feeling extremely embarrassed about it.

3:51And now I'm like, wait, dad, actually tell me all about it. But what I felt was missing in the market was really, truthfully, just like the care aspect of hair care. Because the hair aisle for the longest time has been dominated by the styling first approach. And it's been fronted by, you you know, celebrities and celebrity hairstylists. And it's been all about the red carpet looks. And the reality is that most people are not walking on any red carpets. We're just trying to have a good hair day on a day-to-day basis, right? And most hair products were packed with very toxic ingredients that actually have no businesses in our hair.

4:32And I'm talking about ingredients that for some people are pretty known, like sulfates and parabens, but some are less known, like silicones. It's one of the sneakiest ingredients. It's literally in almost every kind of hair product. And it's sort of like a microplastic that will create the illusion of shine because you're putting this coat on your hair and the way the reflection and the light reflects on it will make people think that their hair is shiny. But over time, that same ingredient is actually making your hair drier, less shiny and more prone to breakage. so I found myself in that vicious cycle myself where I was buying all these products hoping to get shiny hair that was freeze controlled but instead I just ended up with more damaged frizzier and drier hair than ever I'm really inspired by the skincare category because just like makeup can't make your skin problems go away they can just mask them for a little moment but they're not going to treat your acne and they're not going to treat your pimple, right?

5:36But skincare has the power to do that. So I wanted to create the skincare version of hair care. I was like, what about a product that would actually treat Frisk, not just mask it for the day? I'm not interested in just covering it up. I want to treat it. Yeah. You weren't just providing a band-aid solution. You were actually going in for the root cause. And I think that's really interesting because this is something that all aspiring entrepreneurs need is look at their day-to-day and spot opportunities in their own lives. Are there any exercises or ways where someone going through and identifying these opportunities can do with any industry?

6:17Yeah. I mean, I think it's, it's so fun. I can probably list a million business ideas like on the spot, because I'm Just like once you go on like the entrepreneurial journey, you have these glasses on that you can't take off and you're constantly just seeing the world through an entrepreneurial lens. But I think it's about identifying shifts in consumer behavior. And those shifts are happening all the time because each generation is different. Right. And your experience as a customer is real time data. right like when you're experiencing something it's very likely that other people are experiencing it too it doesn't mean that you know you have a billion dollar business on your hand but it does mean that there is a problem at hand and sometimes the problem has not been solved by anyone or and sometimes it's been solved but it just hasn't been marketed the right way and so there's many ways to approach a potential entrepreneurial journey and also i think when you're thinking about disrupting an industry, it almost sounds really intimidating.

7:20And especially when you're thinking about integrating into someone's set ritual and asking them to change it. But I think the way that you launched Ceremonia was very smart. And it was a process that smoothly allowed you to integrate into someone's ritual. So talk to us about that process and how it doesn't have to be that scary as you think it might be? Yeah, I think a lot of, you know, brands or founders sometimes overcomplicated for themselves. They think that they need to have, you know, a full suite of products before they can launch or they need to have, you know, like everything figured out.

7:59But the reality is that just start somewhere and start sooner rather than later. So you can start getting data. The moment you go live, you are able to collect feedback and data from potential customers. And for Ceremonia, what that meant was going to market with one single SKU. When we launched, we did not even have a shampoo and conditioner. And when you think about hair care, right, usually you would think about the shampoos and conditioners of the world. But I realized that there's probably not a single person out there that's currently not washing their hair with a shampoo and conditioner, right?

8:32Like there is a lot of shampoo and conditioners in the market. So most customers, whether they love it or not, they have a shampoo and conditioner. So instead of introducing something that basically would require them to stop using something that they already are committed to, I asked myself, how can I get into someone's hair routine with a lower barrier to entry? And I landed on this scalp treatment opportunity because we were starting to see all these science around healthy hair starting with a healthy scalp. Even beauty editors were writing about the importance of scalp care. But when you looked at the hair aisle, scalp care was basically non-existent.

9:14And this was, you know, five years ago now. So I realized that one of the things a customer can do today that's going to have the biggest impact on their hair is actually implementing a scalp ritual. And scalp care was either not accessible or not attainable or cool, or it was just too clinical. It was very sort of like I have this, you know, prescribed concern. And my doctor dermatologist told me I have to use this super weird brand from a pharmacy, you know. So Ceremonia went to market with a scalp ritual called Aceite de Mosca. It's derived from the Dominican Republic. It consists of eight very powerful oils that are clinically proven to accelerate hair growth and perfectly balance the scalp.

10:05And we have learned that most scalp concerns actually stem from an unbalanced scalp. So customers who struggle with greasy roots or an itchy scalp or even dandruff, a lot of these things are just symptoms of the same problem, which is an unbalanced scalp. So our first product to market was the ultimate scalp ritual that will help you to perfectly balance your scalp, which would in turn make your hair shinier, softer, stronger, and grow faster. And it's been such an easy approach as well. You're not asking for consumers to overhaul their whole routine. It's just to try something new in addition to what they're doing.

10:47how does it feel going to a hair care aisle now because i think even compared to a couple years ago a lot of the major players are adding in their own hair oils or maybe even conditioners that you can leave in i think you were so ahead of the curve and now the hair care aisle to your point actually looks very different yeah for sure i mean beauty is so busy there's so much happening in beauty and hair care is one of the fastest growing category within the beauty space So naturally, a lot is happening there, you know, where there is a growth and opportunity and when there is money, the big players will, you know, hover over it immediately.

11:25I think what I've found is that a lot of the like legacy brands, unfortunately, don't have the DNA like to create what we're creating. And like, we're really focused on clean. We say no to a long list of toxins, you know, they're perfectly legal to use, but that doesn't mean they're good, right? And so we just hold ourselves to really high standards. And the reality is that for most of these like mega brands, that's too expensive. They can't get the unit economics that they're used to, you know, because the reality is that filler ingredients like silicones and sulfates, they're cheap and they will give you quick illusions of results.

12:04So for them, it's easier to stick to what they know, which is cheap filler ingredients that will give sort of like quick fixes that are just bandage solutions. But then we're seeing a lot of independent brands popping into the space and doing really interesting things. Like there is a brand that's specifically targeting the prevention of gray hairs, right? Like that's super exciting. And there are brands that are similar to Ceremonia, but maybe rooted in like another culture. When I see that, it makes me smile because that means that we are together really changing the landscape. and I've also realized that I'm not competing against these other emerging brands.

12:42If anything, together we're creating a new category. The real competitors or enemies or who call it what you want are the big players who can outspend us, right? They can spend so much money acquiring a customer. So we're really up against them and not against each other. And I think creating this change also involves a lot of laborious process where you are working with manufacturers, production partners, and you basically have to go through the process of finding the right way to actually bring your idea into a viable product. How can founders approach that development process and make it as smooth as possible?

13:26Yeah, I think that one thing that I definitely, you know, assumed before I started Ceremonia 2 was that all the strengths of these big players were my disadvantages but then I realized that actually a lot of like the fact that these companies are so big and have so much money and can also be a disadvantage for themselves meaning they're less innovative and they have such like rigid structures that for them to try something the stakes are too high and so like basically owning the fact that you are set up differently and and I remember reading Peter Thiel's book actually no it was a memo that I did like a blog post that went viral this was like 10 years ago and one thing that I still live by was his advice to early stage startups to do things that don't scale and I think that's exactly how we went about it we actually went straight to our community and involved real customers in the product development process.

14:31And that's the kind of thing that a mega corporation can't authentically do, because they are surrounded by so much red tape and so much corporate structure. And the other unfair advantage that I would say an entrepreneur has is passion. Like when you are the customer yourself, you understand that customer better than anyone else because it's you, right? And you have this endless curiosity and you're just not going to settle until it's amazing. And most companies don't have a champion like that, but that's the founder spirit. And that's why you see a lot of companies sort of like go down in value once the founder steps out, because there is some magic to this founder energy that can't be replicated regardless of how many millions or billions of dollars you have in your bank accounts.

15:20And I think that one-on-one kind of customer discussion where you're just getting to know their feedback is so valuable. And a lot of times I think founders really benefit, as you said, from those interactions for those process where you're actually having a lot of conversations. It's kind of qualitative research. How do you then distill all that feedback and make it make sense when you have to bring that into a production partner to make sure that you're distilling the information that's needed. Yeah, you're juggling a lot of things because you're juggling your intuition, right? That's usually like what got you started on this journey to begin with.

15:59There is a thesis and then you're relying on data to validate or inform how to shape your thesis. And then you have this qualitative input loop, which is real customers or community. And for me, it was really about dancing the dance between the three of these things. And I think it's really important to have all three ingredients because again, most big corporations, they only look at data and data only tells us about the past. Data doesn't tell us about the future. And the other thing is everyone has access to that same data. So if you're only reacting on historic metrics, then you're always a step behind.

16:42And that's actually like the opposite of innovation. And the other thing I will say to that too, is that data usually works in aggregation. And we talk about averages, but the average consumer doesn't exist. Like there is no single person that is just like an average version of all these data points, right? Like real customers are unique and they have a unique point of view. And then when you try to aggregate them into data, you get these weird averages. So I wouldn't underestimate the magic of intuition. And I think that's usually what makes founders so extremely powerful and innovative is that they're seeing something that has maybe not yet been done.

17:22And that's why it's not showing up on the charts of data. but there is this vision and intuition. Sometimes you have to fill the data gap with your intuition and I think another gap as a founder is that there might be some knowledge gaps where you fill with additional team members or different partners. What are some strategies founders can actually bring on and build connections with those who can help them with those knowledge gaps? Yeah, for sure. I think you only know what you know. So sometimes it's hard to even know what knowledge gaps you're looking to fill. Because again, you only know what you know.

18:03But once you identify areas that are out of your, you know, sort of like expertise, I think there is so much value in having this like founder to founder exchanges. I did that a lot in the early days of Ceremonia. obviously I'm not a chemist I had never you know formulated a product and I knew that I was going to work with someone to create that product but I didn't even know like how product formulation worked and if you don't know that it's hard to vet a partner and accordingly so I started having all of these like lunch and learns with this fellow founder who had more of like a chemical background and he was lacking brand and design and marketing.

18:53So he was asking me about how he could market his product that he already had created. And it was an amazing formula because he was really good at that, but he didn't know how to sort of like package it and sell it. And I had a very clear idea for my brand, but I didn't know how to go about actually creating the high standard of a product that I was looking to do. So this became this like perfect exchange of learning from each other and it being mutually beneficial. And this is why I'm a huge believer in peer to peer mentorship, because there is just such a natural exchange. And you're both equally invested in seeing each other again and sort of like downloading more and more information from one another.

19:35That learning is so precious. And also, I think your expertise in branding is what sets Ceremonia apart. And a lot of founders go through that process when they're trying to find their brand identity. Are there certain exercises that all aspiring founders can do to actually identify certain key pillars so that it brings them closer to that ideal brand identity, even though it is a process that evolves over time? Yeah, I say this a lot of the times to founder friends. I used to run a brand marketing agency before, so I used to have a lot of founder clients. And my advice is always to stand for something for someone, because otherwise you end up nothing for no one.

20:21And that's just the reality, especially in an early stage company. You don't have the marketing dollars to go after every single human on the planet Earth. So you need to sort of like dare to stick your pole on the ground somewhere and just stand for something. That doesn't mean you're limited to that one niche for the rest of your life, but it just means that that will give you a fair shot to cut through the noise. Because if you're just trying to be, you know, a little bit of everything, you're just not going to have a chance. You're not going to stand out. No one is going to notice you. And so for me, that was really owning this, you know, powered by Latin American rituals and really being rooted in Latin culture.

21:03That doesn't mean that I'm only serving the Hispanic audience. Actually, 50 % of our customers are non-Hispanics. But it gave me a very clear foundation from where I could build a brand. And it made it easier for retailers to look at Ceremonia and see what we would be adding to their portfolio of companies versus if we were just trying to be another brand that is serving everyone for every concern under the sun. Yeah. Because I think if you're trying to be an identity that relates to everyone, to your point, you don't really have an identity at the end of the day. So that makes it extremely hard to stand out.

21:39And I think because you've nailed down on the brand identity, it was also the great basis to build a community and have others join in. How can people build community today to actually have a fan base before or in adjacent to launching a brand? Yeah, I mean, community building is an art in itself right and I think that um there needs to be a passion for it I I or else I think it's really hard to do it and this is a passion of mine so for me I like the first version of community for ceremonia was basically this series of lunches I would buy people lunch and we would have this like round table conversation around like our relationship to our Latin heritage.

22:26And my thesis was that there was a lot of people like me who, you know, grew up Hispanic, but weren't proud of it. And I was just curious to understand why, like, why, how come that like, the beauty category has been dominated by this, you know, French culture? Like, how come that it's super aspirational to buy a perfume with a French name that I can't even pronounce. but the moment I would put a Spanish name on something, it would be perceived as less or people would think it's only for Hispanics. So it was like driven through this curiosity of understanding why certain cultures were perceived as more than others and how come that us Hispanics ourselves weren't proud of our identity.

23:10And I realized that it was all stemming from a lack of representation. We just never saw our culture be part of an aspirational context. The only times we were represented in media, we were either cleaning ladies or criminals in movies. And we just don't have a single global beauty brand that is aspirational, that has its roots in Latin culture. But we have so many doing the same thing with French culture. So in many ways, I'm inspired by L 'Occitane. I think L 'Occitane is a great example of a brand that most people cannot even pronounce. Like it's a very strange, you know, combination of letters for a non-French speaking audience, yet their biggest audience, it's outside of France.

23:59And they built this entire world around Provence and like the natural ingredients of Provence. And they really took the world by storm of wanting to be part of that. And I think Ceremonia is basically doing like the same thing, but for the first time, putting Latin American culture on the world map and sharing it with the world. Having those one-on-one discussions with customers is so important because you get that qualitative research and then you get to distill it into tangible data that you can take to production. totally and and that is informed a lot of like the brand decisions for me in the early days because I had you know this hypothesis but if I were good to go and just build this brand in isolation by myself it wouldn't necessarily maybe be a relevant brand for anyone else but me right so by inviting the community I was able to really shape it together with them and I I realized I learned which ingredients have this nostalgic you know connection and I even invited our community to do the survey for the brand identity like which colors were they gravitating towards like which logos did they like more and so it made my sort of like very creative intuitive brand have a sense of data backing and and and the community eventually grew from these lunches because after each lunch each person would be like oh i want to bring so and so and so to the next one and then the lunch will like triple in size every time.

25:33So then we moved it over to a WhatsApp group and then we hit the max capacity you can have on a WhatsApp group and we moved it to like an official platform. That's so amazing to hear because I think this is also linking to your decision to also have a retail store in New York, which is a hub for the community to actually meet in real life. Why was having a space also very important for Ceremonia? Yeah. So we actually opened the retail space around the same time that we expanded to all doors with Sephora. And the decision for that was actually very connected to that because now we were in this, you know, incredible space, which is Sephora.

26:15But the reality is Sephora is super busy and noisy and we were the youngest brand. And so we had just one shelf and our shelf was at the bottom floor. Like it was really hard for us to tell our full brand story with that limited space. So then we decided to simultaneously create our own space where we could really tell our brand story and use that space as a marketing tool. And then we can drive, you know, reach and brand awareness through Sephora, but then storytelling and community through our own space that we got to decide how we design it and we use it a lot for community events we do photo shoots there and and it is also a retail space like people can go in and shop and but it's so much more than just a store for us yeah this is the end goal for a lot of beauty companies to actually be able to enter into sephora stores what was that process like any tips for people who are going through pitching a retailer of that size?

27:23Sephora is definitely a dream partner, I will say, because they're uniquely positioned to build brands. I will say that the best way to get on Sephora's radar is by just, you know, build a brand. Like the reality is you don't need Sephora to create what you want to create, right? Like, so if you're just like focusing on building your community and get your point of view across, that will eventually get to the radar of Sephora. And even if you cold email them, having a press or influencers or testimonials or really strong reviews or really high repeat rates, like those are things that Sephora is going to look for.

28:07And because there are so many beauty brands, right? So for Sephora to take something new and they want to see some sort of like unfair advantage or unique potential that they don't currently have with their current assortment. So it either needs to be a brand that's just taking over or a brand that's very differentiated, but it still needs to have a loyal community. I think that's a non-negotiable. And that's just step one of the hurdle. I think once you do get that large product order, you actually have to scale up production and you also have to help market your product so people would actually go and buy it at Sephora.

28:47So yeah, how did you manage this scale-up chapter as well? Yeah, I think there is a misconception sometimes that, oh, if you enter Sephora, that's it, you made it, you have these big POs and you make a lot of money. The reality is you usually don't make money on your Sephora business in the first five years. so that means being like set up to operate on a loss right or having enough business in your other channels that you can sort of like invest that into the growth with sephora and so i remember a lot of founders being like are you ready to enter sephora and i didn't understand what they were talking about and now i get it i'm like okay yeah it actually there is a level of preparation that that needs to happen and um we had to build the plane as we were flying it and not sure if i recommend that to everyone out there.

29:37But it is possible. And I think that there is something to be said about that founder naivete. And I think that is also a superpower of founders. Because truth be told, if I knew exactly how hard everything with ceremonia was going to be beforehand, I don't know if I would have embarked on the journey. But now, you know, I just I figured it out step by step. And honestly, for anyone who is a mother, I think that's the best analogy to like, you don't know exactly all the steps that you're going to have to take in your motherhood journey. And you're going to be challenged in ways you never thought were possible.

30:14But somehow you just grow with the role. And it's the same thing in entrepreneurship. And you just have to have enough faith in yourself that whatever comes your way, you will be able to figure out. And that doesn't mean that you need to learn everything, but you will either have, you know, the awareness enough to know when and who to hire or where to seek advice. And also a lot of things you will just learn yourself. Retail partnerships, very important. And also speaking of partnerships, I saw the recent collab with Jolie. So excited to see that you've made a ceremonial limited edition showerhead.