How Kindness and Smart Scaling Built a $92 Million Skin Care Business

0:00We wanted to put more kindness out into the world, and that meant kind to our bodies, our minds, and kind to other people in our community. Hey, how's it going? Welcome to Shopify Masters. I'm your host, Shuang Esther Shan, and this is your companion for starting and building a business. Over 17 years ago, physician and longevity researcher Dr. Brent Ridge and his partner, Josh Kilmer Purcell, started a business that would change hundreds and thousands of skincare routines with the launch of Beekman 1802. By turning goat milk into a full line of sensitive skincare products, Beekman 1802 grew from scrappy beginnings into national retail, direct-to-consumer, and ultimately successfully exited at$92 million.

0:53We call all of our customers neighbors, and we say that we grew Beekman 1802 neighbor by neighbor by neighbor. Brent and Josh are also the authors of the new book, Goat Wisdom. Brent is here today to share his journey of leaving behind safe careers to jump into entrepreneurship, the art of selling and fundraising, all done with kindness. Brent, thank you so much for being here. It's great to be here. I'm so excited to chat. Your journey is so unique. You had a successful career in medicine. You were working with Marcia Stewart, and then you decide to start your own business. How did everything lead up to Beekman 1802?

1:34Well, as you summarize much more efficiently than I did, my partner and I were both living and working in New York City. I had been a physician working at Mount Sinai Hospital in New York City, had decided to go back to business school, and then went to work at Marcia Stewart to head up her health and wellness division. My partner was working in advertising. And in 2006, we were just doing an apple picking trip in upstate New York for a fall weekend getaway. And we drove by this beautiful farm property in this tiny town called Sharon Springs, New York, about three and a half hours north of the city.

2:11And on our way out of town, we saw this for sale sign at this farmhouse. And we said, oh, we need that farmhouse. so on our way back to the city we concocted all of the different ways that we could buy this farmhouse uh and we did we took out a million dollar mortgage cashed in everything that we had ever saved and we were only going to use it on the weekends because that's how obnoxious we were at the time and all of our friends at the time were buying their weekend places too and shortly after we purchased it we came up one weekend and there was a note in our mailbox from a local farmer who was losing his farm.

2:49And he asked if he could bring his herd of goats to our property to graze. Otherwise, he would have to sell his herd of goats. And we said, oh, yes, bring them. It's fine. We're only here on the weekends. And we say that ultimately that was the original act of kindness that started Beekman 1802, because in 2008, when the recession hit, my division that I was heading at Martha Stewart folded. Josh's advertising agency went under. And we had to figure out how we were going to survive and how we were going to save this farm and pay our million-dollar mortgage. And so we Googled, what can we make with goat milk?

3:28And we started making goat milk soap around our dining room table with the help of another local neighbor. And that's how Beekman 1802 started. We never dreamed that in 16 years, we would have gone from that moment to selling over 60 million bars of soap. So it sounds like the start of Beekman 1802 was picturesque, very scenic, but your situation was actually really stressful with both yourself and your partner losing your job during the recession. It kind of mirrors what founders are going through today. What would you share with them now when they're thinking about building a new business in this current economic climate?

4:10Well, yeah, you're very astute. The circumstances that surrounded the starting of Beekman 802 were so similar to today. We had economic chaos. We had geopolitical chaos. We had kind of a technological revolution happening. That was Web 2.0. And now, of course, we have AI. And I would say for us, because we were both in the same situation at the same moment, desperation was our motivation. And so we were just trying to survive. I think if other people found themselves or are trying to start a business at this moment in time, I would recommend that either they make sure that their partner, if they have one, has a good, stable career that can keep them afloat while they're starting to try to launch their business.

4:57Or if they can manage it, can they do something else that will bring in a small but steady paycheck while they also try to get their business up and running? And again, that comes from my place as always being risk adverse and how can I manage to accomplish what I want to do while still not taking on too much risk? And I think when you've got this trifecta of technology changes, geopolitical changes, economic changes, that's the best way to do it. You want to de-risk as much as possible when you're evaluating if your business idea is worth pursuing. Correct. Yeah. So the idea of taking the goat's milk to create some soap, that was the start.

5:41How did you then get people who were strangers excited about what you were making? So the first thing that we did was create a website. And this was back in the days where you had to learn how to code and figure out how to design a website. But 16 years ago, no one was making a lot of money selling stuff on their website. And so we said, OK, there are two routes that we could go with this product. We could either try to go the cottage industry route, where we go to farmers markets and try to sell it that way. or we could design it so that it could fit into a luxury setting where there would be less competition for this type of product.

6:21And so because we had been in New York City for the past 20 years, we were very familiar with luxury retail. And so I took the product down and did cold calls on all of the luxury department stores in New York City, literally just walking in saying, hey, can I speak to your beauty buyer? And just, you know, told them our story. And the first one that gave us a shot was this beautiful department store. It's no longer there, sadly, called Henry Bendel on Fifth Avenue in New York City. And the beauty buyer there said, well, we won't just bring you in without any sales record. However, the upcoming holiday season is getting ready to start and we will give you a three by three table on our main floor.

7:04And if you will come here every day for the next six weeks during the holiday period and sell your soap. We'll see if it resonates with the customer. And I said, okay, this is my shot. And so every day I would get up about four o 'clock in the morning, load up our truck with the product, drive down into the city, this three and a half hour drive, set up on the floor of Bindle, stay there until eight o 'clock when they closed, drive back home. And I did that every single day for six weeks. And so many things happened during that time. First, of course, as a physician and as someone working in business at Martha Stewart, I really had no experience selling anything.

7:46I had no idea how to sell a skincare product. And just by watching the other salespeople at Henry Bindle in the beauty department, I understood, okay, here's how you sell a beauty product. Here's how you get it into the customer's hands, how you get their attention. So I learned by watching. And then two very important things happened. One, the beauty editor for Vanity Fair happened to come through Henry Bendel just shopping. And she heard me tell my story about these soaps that we were selling. And she said, oh, this is so interesting. I'm going to put you in the magazine. And so she gave us our first big media cover.

8:24She wrote an article for Vanity Fair magazine about these two city guys who had lost everything and were trying to start over. And the second big thing that happened was that the beauty buyer for Anthropologie heard me tell the story. And she said, oh, this sounds perfect. Would you consider coming to Anthropologie? And so they became our first big national account. and neither of those two things, really critical moments in the history of our company would have happened had I not just said, you know what, here's an opportunity. I better take it to stand on the floor of Henry Bindle and that the rest is history.

9:05I also imagine it might be really humbling as well, right? You're coming back into the city. You probably might see friends who are shopping there and they're probably thinking to themselves, You used to be a physician, you used to be at Martha Stewart, and here you are literally as a salesperson. So for you, how did that work in terms of like a mental hurdle? Was there one at all? You know, it's so funny. Lots of people have said that and talked about humility. And I'm like, at the moment, I didn't really think about it. We were just so desperate, you know, to make it work. And I've always just been a lifelong learner.

9:44So I just looked at it as, wow, look at this new thing I'm learning. So yeah, I didn't think about it in that way of like having to swallow my pride or anything. I just did it. Yeah. And I think that positivity is so important. And then on the flip side, were you ever scared? Because this is a big risk. And to your point, both of you, yourself and Josh, were at this turning point that you had to make something work. Yeah. Yeah. Well, I would say probably for the first six years of the company, we were always scared because we were trying to make a go of things, trying to not only grow the business, but also pay off this million dollar mortgage.

10:23I would say the scariest moment was at the very beginning. We got in this big anthropology order. They had placed an order for about 52 ,000 bars of soap. And we were so desperate to land that account that we basically said yes to it without really looking at how much money we were going to make from actually entering anthropology. And I think we later calculated that we were making about five cents per bar of soap. And so we couldn't afford to hire anybody else to help. It was just us. And we had about six months to get the order going and out the door. and finally about two weeks before we were supposed to ship, Josh said, you know what?

11:07You're never going to get all of these bars of soap wrapped because I was still hand wrapping every bar of soap. And so he sat there and calculated how long it took me to wrap each bar of soap. And I had gotten it down from about 35 seconds per bar of soap when I started to about seven seconds per bar of soap. And he said, even if you sit at this dining room table for 24 hours straight for the next 14 days, you will not get this order done. And I'm a very optimistic thinker anyway. So naturally, I'm like, I can get it done. But when he showed me that hard data, like there's literally no way you can get this done.

11:44I said, okay, let me think of how to get myself out of this situation. And I had befriended the local mail clerk at our little post office in Sharon Springs. Her name was Maria. And because we were still shipping out some, small amounts of orders from our website. And I went to drop off packages at the post office, and Maria was just asking how I was doing, because that's what people do in small towns at the post office. And I said, oh, Maria, I'm like, I've got to get all these bars of soap wrapped. I don't know how I'm going to get it done. And she's like, oh, well, why don't I just call some people I know in the community who are retired or stay-at-home moms and see if they want to come over to help.

12:24And she did. She started a phone tree and we had about 20, I would say 25 people who said, oh yeah, we want to help with this. And so for the next two weeks, we had people like running shifts in our dining room at the farmhouse, wrapping these bars of soap. And through the help of our neighbors, we got it done. And still to this day, in honor of that moment, we call all of our customers neighbors. And we say that we grew Beekman 1802 neighbor by neighbor by neighbor. Even today, when we're a company,$100 million in revenue, we still fight for every single neighbor that comes in. And once we get them in, we fight to keep them in.

13:07And I love the thread of kindness that goes throughout your journey and the fact that you were able to get that order in. And I also imagine learning so much through this experience at Henry Bendel, also having that account with Anthropologie led you to your next chapter of selling on TV with QVC. What was that experience like being on TV and selling to a wider audience? Well, you know, when we first got the opportunity to be on TV retail, we had really no exposure to TV. We knew that it existed, but we had never really watched TV retail. So we didn't really know what it was about. So, of course, the first thing we did was research, OK, how do people sell on TV retail?

13:55What makes it interesting? What makes it engaging? And this was back at the time when people were still, you know, watching linear TV. more than they are now. And so people often landed on TV retail because they were clicking through the guide, right? And they saw something pop up and like, oh, that's interesting. I'm mesmerized. I'm going to watch it for a few minutes. And so we said, okay, what will make people stop and watch if they're just scrolling through the channels and, you know, what's going to capture their attention? Certainly to middle-aged guys with, you know, body care products, we're not going to be the most riveting TV.

14:31And we said, okay, how can we be disruptive? Why don't we bring baby goats live on air with us? And our thought process there was, okay, if someone is clicking through and they're landing on QVC or HSN and they see baby goats, they're going to first think, is QVC selling baby goats now? Like what's going on? And so with anything, you have to capture people's attention first, and then you have to convince them to get them to the sale, right? So So the baby goats were so effective at getting people to stop and watch the channel for a few minutes and become engaged in what we were saying about the product.

15:08And then what really turned us into the number one beauty brand across QVC and HSN is that people would then come and watch our shows because you never knew what the baby goats were going to do. So unlike just watching a regular sale of a beauty item where you're like, okay, here's this product, and now I'm going to talk about this, and here's the before and after, they were always cutting away to what the baby goats were doing in the studio, which made it engaging television. Because you didn't know if the baby goats were going to run around the studio, were they going to run up the stairs behind us, were they going to pee and poop live on air?

15:44And so people stayed and watched the entire hour of our show when generally when a customer lands on QVC or HSN, they might stay 10 minutes at most. People were watching our entire shows and recording the shows and then watching them in the replays because the baby goats were so entertaining. And so that really became a very disruptive standard. And now, even now, you'll find other guests will bring their pets. Like, they might bring their dogs on with them because it just adds this level of entertainment that wasn't there before. Yeah. Yeah, I would love to watch some baby goats for sure. And I also love how adaptive you are because, you know, you tried selling online very early.

16:30There was national retail. There's TV. and you also kind of bring that mentality in the product range as well, developing outside of just the bars of soap. So when you were thinking about building out new products, what was that process and philosophy like? Well, I have to also credit anthropology for helping us expand initially beyond soap. The soaps were so successful in anthropology, they asked us, could we develop other body care products? Our first four or five SKUs beyond the soap were really done by holding hands with Anthropologie. They let us know what type of products their customer were interested in.

17:09And then we went back, formulated, thought about the packaging design, and then really worked hand in hand with Anthropologie to launch those products. And then a really interesting thing happened with that degree of exposure is that we started hearing back from people who were using the product about how great it was for their skin. And particularly people who had eczema, who had psoriasis, some type of skin issue, the goat milk was really effective for their skin. And that just intrigued me as a scientist. And I said, oh, OK, maybe there's something there. Let me investigate that. So then we just started pouring resources into the scientific study of goat milk.

17:53And what could it be in the goat milk that could be influencing people's skin in such a profound way? And the first thing that we learned was that goat milk had a very similar pH to human skin. So when you used it for cleansing or moisturizing, you weren't changing the pH barrier of the skin, which is such a crucial thing. So many of the products that we expose our skin to, whether it's skincare products, cleansing products, home cleaning products, so many of them are disruptive to the barrier of the skin. And our products just naturally by the pH were not disturbing the barrier of the skin. So that was the very first thing that we started researching with the goat milk and formulating around that idea.

18:33And then as the science around the skin microbiome started to develop, we started looking at the oligosaccharides in goat milk and how those can be prebiotics to the microbiome of the skin. And now even up to the point where we're extracting exosomes from the goat milk to use as delivery vehicles for even more potent actives in our skincare products. So it's just been a continuous process of reinvesting in the company, learning, reinvesting in the company. You know, it's the old fashioned way of growing a business, I say. Yeah. I mean, I would imagine that because you were curious and you were also working with anthropology to develop all these new product lines, you had to expand beyond the milk that's coming from just your farm.

19:19You had to expand outside of the friendly neighbors. How were you thinking about finding suppliers that you can work with, production partners, the ones that are helping you with logistics and things like that? Well, yeah, that was a very big concern with us, particularly when we started on TV retail, because that just really ramped up the demand for the product. But we also wanted to make sure that we didn't alienate people who had been with us from the beginning when we were making all of the products right from the milk on our farm. But our farm, you know, we had at our max, we had 150 goats.

19:56So there was no way we were going to meet the demand for all the milk that we needed for these larger accounts. And so what we decided to do was work with a goat milk cooperative that works with 24 goat farms around the country. Each one of the goat farms, in order to be accepted into this cooperative, has to be certified by the Humane Society for the way in which they treat their animals, which was super important for us because we have a certain way that we think about our animals on our farm. And we want to make sure that all of our suppliers were also treating their animals with kindness. And we were very transparent with our customers.

20:34We said, listen, we're growing. We need more milk than we can produce ourselves. here's how we're thinking about scaling. Here are the partners that we're bringing in. Here's how we're making sure that they have the same philosophy of care that we have on our farm. And the customer loved that and they realized that. And as we went into bigger and bigger retails, TV Retail and then Ulta Beauty, we always relied on our partners to help point us into the direction of other people who could help us scale our products. Working with bigger and bigger labs, bigger and bigger co-manufacturers. We always relied on our retail partners to help guide us.

21:11I feel like that's such interesting advice as well. I think sometimes people don't think about asking for help from a retail partner versus trying to solve all these problems on their own. So I think that's very important to highlight. It absolutely is. And you know, when you enter into a retail partnership, it truly is a partnership. And your success is going to mean their success and vice versa. And so always, you know, ask them for help. I think a lot of times with, when you're a smaller brand, you are frightened to ask those questions because a lot of times small brands will try to make themselves appear bigger and more sophisticated than they actually are.

21:52But we've always approached things with curiosity and with a humbleness and letting people know exactly where we were in the stage of our business. That has really helped us because in general, most people do want to help when you ask for help and most people want you to be successful. Yeah, yeah, that's amazing. What else would you tell founders who are going through that giant scale up stage where you do have to expand on your supply chain and also your logistics? What else should they keep in mind as they go through that change? I would say to be very conscientious about your growth. I think over the past 10 years, there's been a little bit of perversion in the way that people think about growing and scaling a business.

22:42When interest rates were so low, there was lots of money floating around, private equity money, venture capital money. And I think people got away from the fundamentals of what it took to build a great business because the money was readily available. And for a big portion of the past 10 years, investors really weren't expecting returns. Like they wanted growth, but they really weren't looking for profit. And so it just made it a very perverse time to be starting a business. And a lot of people who started business in that time and only knew that time period are really not prepared for entering a period as we are in now where there's inflationary concerns.

23:25Of course, there's tariffs. There's a weakening economy. and private equity and venture capital wallets are tighter and you have to make a stronger case for what you're going to do with your business. And so I would just say, be very conscientious about how you're going to grow your business. Look at every opportunity and really try to the best of your knowledge to cost out every opportunity, how much it's going to bring in, how much it's going to cost you to bring in and make the opportunity worthwhile. So that would say that, just be very, very conscientious. Yeah. There's definitely a need for more financial discipline, especially investors are not just looking for growth anymore.

24:03They do want profitability. I think this brings us to also the Alta moment where you've invested heavily to make sure that the launch was going to be a great one nationwide. But you did also face the fact that then all of retail went into lockdown. So, yeah, how was the aftermath of that reality? I mean, we really dug our heels in against taking any outside financing. And that was because we had started this business during the midst of the recession. And for us, you know, when the recession hit and we felt like everything that we had worked our lives for up to that point kind of had been pulled away from us unceremoniously.

24:44And we blamed financial institutions for that. You know, had they not gone into these packaged mortgages and things like that, the financial crisis would have not happened. And so we were very hesitant to take any outside financing. And for the first decade of the company, we didn't. We were all self-financed. And as you said, we got this opportunity to expand from TV retail into Ulta Beauty. And for those of you who are unfamiliar with how entering a big box partner like that works, is that you have to not only invest in all of the inventory, it takes a lot of inventory to roll out to, you know, a thousand stores, thousand storefronts.

25:28We were also entering with an end cap in Ulta stores. And so you have to pay for the whole build out of the end cap, which is also expensive. You have to hire Phil team to go into the store and educate people, you know, the team and customers about your product. So you have to build up a sales team. It's a huge multimillion dollar investment to do that, which we were self-financing. And so we had put in all of this upfront capital to prepare ourselves for the launch at Ulta right as the pandemic was swinging into high gear and the stores shut down, basically. I mean, I think they were allowing like six people into a store at a time.

26:06That was really what made us have a change of heart about taking outside investment. Because at that point in time, you had no idea how long the pandemic was going to last. You didn't know, oh, was this the new normal? Was this how retail was going to be for however long? And we said, OK, we're going to have to take investment if we're going to keep our team employed, if we're going to continue as a going concern. And so that's what led us to take our first private equity investment was the pandemic. And it has been great for us because being outsiders in the beauty industry and just learning everything on our own at that time, We'd never really had an outside sounding board of beauty industry executives or veterans to tell us, okay, here's how you can grow your business or here's how you can scale your business more effectively.

26:58And our private equity partners at Eurasio really assembled an executive team with strong credentials in the beauty industry. And we really credit them for helping us survive that very tumultuous moment in history. I also find it, again, very interesting about how adaptive you are and also the dramatic mind shift, right? You've bootstrapped for a decade and then you also reach a point where you get an investment of$92 million and you, in effect, partially exit in a way. Was there like much self-convincing you had to do or how do you go from one end to the other and be happy with your decision?