Why Every Sephora Store Wants Tower 28 Beauty Products

0:00Benjamin Gottlieb here in the studio with our engineer Matt Schwartz who just reminded me we have a YouTube channel for Shopify Masters. So if you'd like to watch this episode instead of just listening to it, head over to YouTube or the YouTube app and search for Shopify Masters. And also, thank you so much for your continued support. Haley Bieber talked about us organically, which I almost fell down. I was like, how did this happen?

0:28Hey, everyone. Welcome to Shopify Masters, your companion for starting and building a business. I'm Shuang Esther Shan. Ever wish your makeup could look great while feeling great on your skin? Meet Amy Liu, founder of Tower 28. She's worked over 20 years in the beauty industry, battling her own eczema before saying enough is enough. We're the only beauty brand that is 100 % compliant with the National Eczema Association. In just five years, Amy turned Tower 28 into a multi-million dollar phenomenon by doing what beauty giants said couldn't be done. Produce clean, sensitive, skin-friendly makeup that actually works, feels luxurious, while bringing great value to customers.

1:15Why not me? Why shouldn't I go and try to do this? So excited to have Amy here to share how she's able to build an inclusive beauty brand, land on the shelves of Sephora, and go viral on social media. Amy, welcome to the show. Thank you so much for having me. So grateful to have you here. It's so impressive the career you've had in beauty working for some legendary brands like L 'Oreal, Kate Somerville. And it's often hard to carve out your own path. So talk to us about that journey where you always felt like you were great working for other brands, but you also had this idea of your own as well.

1:56Yeah, so I, like you said, I've worked in the beauty industry for a really long time. And I always also wanted to be an entrepreneur. So I grew up with my dad, who immigrated to America, and he was an entrepreneur, but he would have said if he was here that he did it, because he had to. So English was the second language. What he felt was the opportunity to really rise up the ranks in a traditional way. He had to kind of make his own job. And he actually really encouraged me not to become an entrepreneur. I went to business school and I majored in entrepreneurship. But coming out of that, I think, again, with the combination of maybe my dad telling me don't do it.

2:34And then also at the same time, I think I felt really afraid. I felt really nervous. I grew up really middle class, but it wasn't like I had a nest egg that I could invest myself with. And so I really wanted to make sure that I was able to take care of myself. and ultimately, obviously, I wanted to have a family too. So I have three kids today. When I started Tower 28, I was actually 40 years old. So I did it much later in my career. But when I left business school, and I think that's kind of what you're talking about, I went to go work for other people because I told myself, I'm gonna learn on someone else's time.

3:09I'm gonna learn from everything they're doing. And I actually think that was a great thing for me. I don't think there's anything wrong with doing it early, but for me, it helped me build up the confidence and I'm going to make my own mistakes. But I feel like as a result of that, I'm trying to at least not make the same mistakes that I saw. And I feel like it builds such a solid foundation for you. But you did mention before how you felt like, you know, I'm such a great number two. I know how to compliment founders. How do you shift from, oh, I'm a great number two, but now I have to essentially lead a brand into existence?

3:45Yeah, it's funny. I think I had both this strange combination of like fear and hubris. So hubris in the sense that I had worked in the industry for a long time. And so I thought, oh, okay, well, I know what to do. And then I think I quickly realized to be the CEO and founder is really different than being a number two. I think when you're close to something, it almost takes away some of the scariness of it. And the founders I worked with were all really smart, but it made me realize they're not necessarily so much smarter than me. They're just smarter in different ways than I am. And it made me feel like, well, why not me?

4:23Why shouldn't I go and try to do this? I think other people build up confidence in different ways, but that was a huge part of it for me. And I think being close to it and having like a seat at the table made me think a lot about like, what would I do when I was in that position? And I think so much of the way that I manage and I lead is based on that today. I love the fact that you almost spoke Tower 28 into existence because you always had this idea where you wanted makeup to feel great on your skin. It's good for eczema-prone skin. So in the pre-launch process, what were you doing to prep yourself for launching the brand?

5:04When I talk to young entrepreneurs a lot about advice, I think one of the things that I always try to say is just to tell everybody what your dream is. Because I actually really do believe in that idea of like speaking something into existence and that the universe will kind of help you in whatever way it does. For me specifically, I would say when I was in business school, nobody else wanted to work in beauty. I really wanted to work in beauty. And I told everybody like that I wanted to work in beauty. And so every time an opportunity came in that was even remotely related to Butany, people would immediately turn it to me because they'd be like, well, I know somebody who wants to do this.

5:43And I told everybody that I also wanted to start a business. And when I finally went to go raise money and I turned to people, so many people came to me and said, hey, I know you've been wanting to do this. I've been waiting for you. You've been saying this forever. Finally, like, let me invest. And that was a huge vote of confidence for me. But I think it's also people can't help you unless you tell them that you need help and you tell them what you're trying to do. And it's scary sometimes to let a dream out because you feel like there's so much fear in it. Sometimes I think people fear putting their ideas out there because they're afraid to be copied.

6:22That was never really my concern, but I do think a lot of people feel that way. Ideas are a dime a dozen in my mind. It's like all in the execution. totally yeah and so like to me i'm like if you want to do something i think like put it out into the universe and have people tell you hey let me connect you to this person let me help you in this way but at the same time you have to be mindful and like filter a little bit because if you tell people what you want to do you have to be ready for them to say that it's not good or it's stupid or you should do something different there's this balance between listening which i think everybody should listen.

7:00But at the same time, you need to then think about, like, if you just do what everyone tells you to do, you'll never find your lane. And I think for me, it was really helpful for me to put it out there because people were willing to help me, whether it was fundraising, connecting me to other people in my network, in their networks. My brother is an architect and arguably really good at design and all those types of things. And I remember showing him my logo really early days. And he was like, this is so ugly. This is so bad. And by the way, it's the same logo. And he's like, please don't launch with this.

7:34And I remember like it really hurt my feelings, but I also thought about it. And I was like, should I just change it, go back to the drawing board? But then I thought he's like a man who doesn't use beauty products. Yeah, I was going to say, he's not my customer. He doesn't get it. The beauty girlies on TikTok love it. Yeah. So I mean, so don't listen to your brother. He has his own merits. But like, I guess I'm just saying like you have to have some conviction, but then also be willing to listen. You got to like seek feedback, but be critical and understanding and confident in what you want to absorb as feedback.

8:12Yeah, because otherwise you will zig and zag too much. You can't please everybody. And you have to at your core know who you are, but then also be willing to pivot if that makes sense. right? Because if you put something into the world and the customer doesn't jive with it, you're not finding that product market fit. You also have to be willing to listen. Well, I think the concept for Tower 28 is so powerful because a lot of people right now, especially, they care about skincare. They wish products like this existed. So when you were in the early stages of formulating, figuring out partners, what is your advice there when you're starting out and you're trying to formulate differently?

8:56I think you have to have something about what you're doing that is really unique and that people resonate with. I really believe in the problem solution concept. I remember I had a professor once who told me, don't sell a vitamin, sell a painkiller. And the idea is that like vitamins are nice to haves, right? Like you can go a day and like skip your vitamin, but like if you need an Advil, you need an Advil like that really makes a difference for you and so if you can solve a problem that's what you should try to do what I try to do is to solve my own problem so I've had eczema my entire adult life I've worked in the beauty industry I was always the person who was going to Sephora Nordstrom Neiman's and bringing them the next innovation in like foundation or skincare and saying like hey this is going to make your skin look perfect and aspirational but yet I was like don't look at my skin because I would get eczema on my face and I would get it on my hands and I was just really self-conscious of it.

9:56Eczema they say has no cure and no cause which is really frustrating right but then if those two things are true fine but then I also just want to cover it up to make my skin look better and I was working and I have worked in beauty for so long that I wanted really good products and when I went to go cover up my skin I felt like I was so nervous that it was making my skin worse and it was just perpetuating my problem because products that are high performance before were not necessarily clean. They had a lot of things in there that potentially could be bad for your skin. And they say that what you put on your skin goes into your, they say 70 % of what you put on your skin goes into your bloodstream.

10:37I don't know if that's true, but if that's on a good skin barrier, I feel like when you have eczema, acne, anything where your skin barrier is compromised, then everything's kind of going into your skin. And so you should just be more careful about what you're putting on it. So I wanted products that were clean. And then I also wanted products that were safe for sensitive skin. So given that I have eczema, like that was something that was really important to me, but I also didn't want them to be, I don't know, boring and clinical. And I also wanted them to be really high performance. And then the last part is like accessibly priced.

11:13And so for me, that means I still want to shop at Sephora. I still want to go to Goop and these high-end retailers, but then I also want to pay$16 for our lip gloss instead of$30. It's so great to hear how the concept for Tower 28 grew from a personal need, and it definitely required so much testing and iterating, what kind of protocols were you following? Yeah. So, and this goes back to your other question about how do you make sure you have like a unique selling proposition or what kind of your brand promises, especially in, and I would almost argue that I think every industry is pretty crowded now.

11:53Beauty is incredibly, incredibly crowded right now. So I think people, again, And it needs to be unique and people need to resonate with it. And so for me, the testing part of it was really the, it has to be the brand promise. Like what is it that we're offering to the consumer? But then what is the reason to believe that you did it? And for us, so much of that is the National Eczema Association. So the National Eczema Association is a nonprofit organization that has a seal of acceptance. To be compliant with their seal of acceptance, it's three different steps. It's avoid. You avoid all the ingredients that they consider to be irritating.

12:31Then you have to test. And so for that, we have to test 100 people that have eczema and that have sensitive skin. And then they put it on their skin for a duration of time. RIPT is where you could put on a patch. We do the next level of it, which is called safety and use, where you have to put it on your entire face. If it's a moisturizer, I'm putting it on my entire face. If it's a product that maybe, I don't want to say it's a brow product. I'm using it the way it was meant to be used, right? And in the amount it was meant to be used. We also do something called cumulative irritation tests, which means then I'm also doing that same thing that I'm doing over and over and over again for a duration of time, 30 days, day and night, the way that the directions say.

13:15And then I'm not even just saying like, hey, 100 people, how did that work for you? So it's not a consumer test. It's a dermatologist is reviewing the results and saying, okay, that's not irritated skin. And then it goes to their third party toxicologist, dermatologist. Like they have a whole board that reviews everything. So they look at the ingredients. They look at the testing. They look at the product itself. And then they decide whether or not they're going to give you the seal of acceptance. We're the only beauty brand that is 100 % compliant with the National Eczema Association. And so that is a deep amount.

13:51And to me, that was important because, I don't know, there's other brands that I've seen just as a consumer and a person in the industry that say, like, hey, we're like, they claim things. And I think that's one thing. But how can I believe it? What is the credible thing? And, like, the truth is I'm not a dermatologist. I'm not a toxicologist. Like, you shouldn't believe me if I just say this is safe for sensitive skin. I believe in, like, third-party verification. So I believe like we're clean at Sephora, we're clean at Credo. I'm not spending all day thinking about what the next ingredient is that's going to be an endocrine disruptor.

14:30Like that's just not my skill set, but somebody else is. So I lean into those people. So I think all of that just to say, and for anyone out there who's developing a product, like think about how it's not just your promise, but how is it credible? Yeah. And it's such an intensive protocol that you followed, but I think it builds so much trust with your customers as well. Yeah. Yeah. And I mean, and now, honestly, so I just joined the board of directors of the National Eczema Association. Oh, my goodness. Which is so meaningful to me, too. Like I think, again, back to like the brand promise, like if you can find something that you really care about, I think for me it happens to be eczema, but that's really kind of a placeholder for like anyone who suffers from sensitive skin.

15:18And I really feel like I can understand the plight of the person who doesn't feel great in their own skin and wants to cover it up and wants to be a little bit more careful. the thing that has kept me really excited to continue on this path is really having a purpose and that's why I just recently joined the board because it's the National Eczema Association does more than the seal of acceptance they do a really great job of yes the seal which I kind of lump into the education side but they also work a lot in advocacy and research as well and so now like I see where the money is going. I see what is being done for non-steroidal, different kinds of remedies that they're working on.

16:03Yeah. And what a beautiful full circle moment as well. And I feel like that also just highlights the partnerships you have as well through this protocol process. When you were developing the formulas, how were you looking for partners when you're thinking about sourcing ingredients, production and things of that sort to like really build a network of partners? So it's a little bit easier for me in some ways because I was coming from the same industry I'd worked in in such a long time. So I was I just in general I believe that people earn their reputations and the same is true whether you're talking about people you're hiring or you're talking about retail partners or you're talking about vendors.

16:47And so for vendors I mean so much of what you need is somebody who can scale, somebody who can act quickly, someone who will do what they say when they say they'll do it. And so I did. I kind of canvassed and I asked around, but I think the other requirements to think about is, especially if you're making a physical product and you need to think about production, it's like, where is it being made? What are the MOQs? Because will they work with you when you're small and what does that look like? But can they also look at the scalability and the portfolio of brands that they currently carry. Because like, for instance, our original vendor was also working on Ilya.

17:29And I was like, well, if you can do Ilya, then you're obviously able to meet that level of scale as you are to doing mine. But like, can we then negotiate on like what an MOQ might look like? In the beginning, I was making 2000 pieces of each SKU, which, you know, now we're making much more. So you want someone that you can trust, someone you like working with. And I would just, I would ask around. Such great advice because I feel like, to your point, you're bringing in decades of experience into the brand. Were there something that you wanted to do differently when you were starting Tower 28 as well?

18:06I mean, there's so many things I wanted to do differently. I think we talked a little bit about the product side was a huge part of it, right? Like I wanted the products really to be efficacious. I started the company six years ago. I raised money five years ago. Almost five years ago, we launched. And six years ago, I would say like the idea of clean beauty was really different, where it was very expensive and not very efficacious necessarily. And it was also very highly natural. And so before I started Tower 28, I worked at one of the pioneering beauty brands that was pioneering in the clean beauty space.

18:42And so what we used to do is we used to write on every box, we would write how natural it is because that's what clean meant. We would be like 85 % natural, 90 % natural. And that was like a big part of it. The world evolves, right? So like now we know that clean, natural doesn't necessarily mean good for you. Like I always say like poison ivy is clean. it doesn't mean that it's like safer sensitive skin yeah so that part of it for sure product but I always go back to at the core of it it's like product and people that's really what makes a business um so the product part of it is that the people part of it again I think because I had been an employee for such a long time I think you parent in a way often that is dependent on what you got so like you try to fix the things that you did you wish you had differently and you try to keep the things that you got from your parents.

19:35I think I manage in a really similar way. And I've tried to create a culture and a business that is very similar, whether we're talking about like give back initiatives or even like, as an example, really early on, we launched in 2019. COVID came very quickly after that. And we, to my knowledge, were the first, at least in my industry, to start doing these things that we call like retreats. And so we started bringing the team together, going to an offsite because we had just been remote and apart from each other for so long. And we still do this. So every six months we bring the entire team together and we have gone to Palm Springs, Big Bear, Italy.

20:14Italy. We didn't Italy once. I don't know if we'll do it again, to be honest with you, because it was a lot of planning and we were smaller back then. But the idea is just to really invest in the people and in the team. I always feel like if you take care of your team, they'll take care of your customer. But you can't do one without the other. Yeah. You're building a cycle of positivity so that, you know, great team means great customers. And I also like to think that like, I mean, I say this all the time to my team too, but like you can pay someone to do their job, but you can't pay people to care.

20:48And so I think no one has the space to be able to care if they don't feel cared for themselves. And so I think like we try to invest in like actually tomorrow we have this leadership coach that's coming in and like doing we've been doing going through a series of these. So we learn how to like be a high performance organization that knows how to give feedback that can handle conflict management that we can be stronger managers. And so we we really just try to invest in the team. We have monthly lunch and learns where we have somebody from outside the industry come in. So we have like, we've had everything from like, I don't know, Olympians to, I had a friend who had like, he's a, has done like six different exits and he's an entrepreneur, like a serial entrepreneur and like just all kinds of really interesting people who come in and tell us about their perspectives.

21:42I'm trying to make it more than just a functional job that you clock in and out of, but rather something that feels meaningful to them to be part of. Yeah, you're investing a lot in the team. And I also wanted to chat about, you know, the other side of investing is also the fact that you did fundraise when you were launching. So I feel like that's also something hard to manage when you're trying to start a company, but you're also trying to fundraise. What's your advice there when you're going through something like that? So I feel like I had maybe the easiest time fundraising of anyone I've ever known.

22:19And I would, there were kind of two tranches, two different types of investing that I've, or investment that I've had to fundraise for. In the very beginning, I think I mentioned I raised, so I raised friends and family at the very beginning. I raised$500 ,000, totally pre-launched with nothing but my resume and a deck, and honestly a very different deck than what I ended up launching. I don't even think anyone really looked at the deck. I think it was very much based on just like who I am and my background was how I raised the initial 500. I mean, that sounds easy, but it's also your hard work over 20 years.

22:56Correct. And thank you for saying that because I think, you know, so often people will say to me like, oh, how does it feel to have this like overnight success? And I'm like, well. It is not. I feel like there's no such thing as an overnight success. I've been working in the same industry for 23 years. at this point. So I don't think it's an overnight success. That said, I think I worked really hard and I still feel like I work really hard. But then I think there are certain parts that came a little bit easier because of that. So for instance, when I did my fundraise in the beginning, I was already 40.

23:30I had three kids. We had a mortgage. We had opted for private school, which we then pulled the kids out of private school. Life is expensive in LA. I didn't buy my first house until I was 39. So we had just like bought our first house. We had just remodeled it. I was in no position to go and, I don't know, take out a huge loan. I was never the type of person who would have put like, and I, listen, there's nothing wrong with it if that it's just a risk appetite thing, but I was never someone who was going to put all of the money on my credit card and max it out and then do it again. And you know, I, you hear those stories.

24:04Like I started in my garage. I'm not genius in isolation. Like I don't know how to, even my process, like I'm someone who asks, like, what do you think? What do you think? And like, and then I come to my own conclusion. Everyone's a little bit different in that way. For me, I had to fundraise because I didn't have the money myself. And I also wasn't comfortable not hiring people and like doing everything by myself. And so I did raise the$500 ,000 in the beginning. I was fortunate in that I had a friend that I went to business school who had sold his own company and he basically offered to be my lead investor.

24:44And he was like, here are the terms. This is what I think, but don't just accept this. Go and walk around and get advice from your friends to see if this works. And so I went to other people. And I think that's another piece of advice I would give entrepreneurs is instead of asking people to invest and give you money, ask people for advice. Everybody loves to get advice. And then they will tell you, I want to invest. Or you can say, hey, do you know anyone who would be interested in this opportunity? And they will connect you to somebody else. But I think that was huge for me. And it just sort of, because I had the first money in, then it made it a lot easier to get the other things.

25:25That was my first, friends and family. Then when I raised, I did raise a minority interest through private equity at the end of last year. And at that point, and people say this all the time and it's hard to do it, but raise when you don't need it, right? Raise before you need it. Like it's really hard sometimes to know what's coming around the bend. I also similarly, I would say don't raise if you really don't need it. So it's like kind of this combination of terrible advice because I'm saying both things. Because the best time to raise is when you don't need it. And yet, if you don't know what you're going to do with the money, I would also say don't lose control, right?

26:06Like you don't want to sell off so much of your business so early that you aren't able to maintain control. So I think I was able to do it at a time when I knew what I would do with the money. I was ready to invest more in the growth of the business, whether it was the inventory, the people, the infrastructure. And I kind of understood what was happening. So we have like very real investments we have to make in terms of CapEx. So like the fixtures that you see at Sephora, we have to pay for those. Yeah. Inventory investing. And inventory, like all, and people, we moved into an office. Those are all really real things.