292. Meet the YC-Backed Skincare Tech Founder Who Has Scaled Organically w/ Ahana Banerjee | Clear

0:00Amardeep Parmar:Great to have you back, Ahana. It's been, I think, two and a half years now. So founder of Clear, for people listening, like, where were you last time you came on and where are you today?

0:10Ahana Banerjee:Well, firstly, fortunately, building the same company. So Clear, we're a Y Combinator-backed beauty tech company. We have a free skincare app that helps you track the products you use, any medications you take, and you take progress pictures of your skin. We then analyse your skin to see how it changes. and we account for hundreds of different parameters and we use this data to make unbiased product recommendations for consumers. And we were doing that two years ago, although not quite as well as we do it today. And I'd say sort of that the key business change is more in firstly the scale of what we're doing.

0:43Ahana Banerjee:Our user base has grown significantly since last time. But also, and this I think makes me most excited, is what we're doing with that data. The last time we spoke, it was purely to help consumers navigate their skincare journeys. What we're now doing with that data is actually helping the whole industry, helping brands innovate, understand if their products are working or not working, running testing programs for them. So we really built out more of the B2B and data side, which I'm very proud of because I said we'd do that on day one. And I think that was one of the early risks or questions. So it feels nice to be able to say that we delivered on it.

1:18Amardeep Parmar:And you said you were listening to the podcast you had previously on the way here. Was anything that surprised you about what you said last time?

1:24Ahana Banerjee:Actually, how little has changed and how much I think my mindset and my sort of overarching strategy has stayed the same. One thing that I kept saying in that podcast, which as you said, was like two and a half, three-ish years ago, was until we achieve certain product metrics, that's going to be the focus. And I stand by that. I stood by it. And as of about now, almost two years ago, we achieved those product targets that I set out and hence why my focus shifted a bit more towards the commercialization, the B2B growth, and also going on the consumer side as well. And so I think it was really nice to see that even that early on, I had that level of clarity.

2:03Ahana Banerjee:I think what has changed though is maybe how I've adapted to life as a founder, because those first couple of years just personally were so grueling and it had an impact on my health. I think it had an impact on sort of my life outside of work. and I feel really proud that I've managed to continue building the company in the direction that I want to but I think I've done a better job of actually learning about what is truly important to me and building more of a healthy holistic lifestyle that's not just working 18 hour days every day.

2:38Amardeep Parmar:I think most finance can relate as well where there's always going to be somebody telling you oh you should do this you should do that you should do that and like you said the fact they've been able to keep your conviction about what you thought was important What do you think of some of the things that you're almost like proud of that you prove people wrong where they're trying to push you one direction and you've stuck to your guns and it made sense?

2:55Ahana Banerjee:Well, the very first thing is sort of the existential question of why was there no market leading skincare app? We have market leading period trackers, diet trackers, fitness trackers. There is no market leading skincare tracker. And actually a lot of the objections I came up against in that first round is, does there need to be one? And that's actually why for me product was so, so important because I felt like fundamentally that's the thing I have to prove. That's the question I have to answer. And at that time, there were sort of two potential answers. There is no market leading skincare tracker because A, there doesn't need to be or B, because it hasn't been done well before.

3:32Ahana Banerjee:And I firmly believe the latter because I had tried all of the existing apps on the App Store and I knew the market well enough to know that there was the space for it. But what that meant from kind of a high level strategic perspective is that that's the thing I had to prove. And that's not proven by spending money on ads or getting an influencer to promote an app that hasn't really been thought out. The way to do that is to focus on tech and product. And so I think what we did was maybe considered somewhat unusual for a company that has raised venture funding because normally that funding goes straight into growth, especially for a consumer product.

4:06Ahana Banerjee:But again, you know, the circumstances which we talked about in the last episode of how I raised that funding, went through YC when the company was basically at the idea stage, meant that I still had to prove that first and foremost, that we could build a good app. And by good, I mean sticky, an app that people come back to and get actual value from. So the first thing is we've done that. We've proven that our recommendations work. We have seen people's skin transform with our recommendations. And that is the most validating feeling ever. I mean, even if you look at my skin in that last, in that first episode I did with you, Clear has helped me as a consumer time and time again.

4:43Ahana Banerjee:And it feels even more rewarding as the person that's built it to be reaping those benefits. And the second side is very much on the data and the B2B angle. Because, again, I knew from being a consumer in the space for so many years that the market in some ways is a mess. You know, brands aren't competing on who has the best product or who's helping consumers the most. It's who has the most marketing budget and who's spending the most to acquire new customers. And that's not how I believe the industry should be. I'd always dreamt of a version of the beauty industry where you walk into a boots or a super drug and the products that say they will improve your blemish prone skin actually do.

5:20Ahana Banerjee:And so, you know, I remember, again, in the super early days, I received pushback that everyone says that they can sell their data. But is there really a demand for it? Are brands going to be willing to pay? And the answer is yes. And I told you so.

5:34Amardeep Parmar:You said there you built it as well, right? Because I think now there's always different things about people say that you need a CTO and a CMO and all these different roles. And with AI now, things are changing. But obviously, you did that before, right? Where there's people who started the company with, but then you've been leading it yourself as like sole founder for a long time. And people might not realize that you have both the customer insight and the tech ability to build it. And obviously, you work with other people and stuff too, but you have both those skills in one person. And how much do you think that's helped you for the last few years, having both hats?

6:05Ahana Banerjee:Tremendously. This is perhaps something that changed since the last episode. Because product was the focus, I was like, well, we need as many engineers as possible to move as quickly as possible. And in that episode, I had just hired my now CTO, who, again, I'm very happy to say is still the CTO of Clear. But as of the end of 2024, so this is now about two years ago, I made the decision to massively scale back the team. actually because I found that things weren't moving more quickly. We weren't achieving our product and tech targets as quickly as possible because myself and my CTO were spending more of our time reviewing other developers' code.

6:41Ahana Banerjee:And so I made the decision that I am going to get back into writing code. He is also going to spend his time writing code instead of fixing other people's. And that's ultimately what kind of led to that inflection point that allowed us to achieve our product milestones. I couldn't have made that decision if I didn't know. how to code or if I didn't have the confidence to continue building it myself. And so I think, you know, not only practically did it help tremendously, it saves a ton of money because I'm a cheap engineer relative to other software engineers. But it also means that I have tremendous confidence because I also kind of know that by myself, I have taken the business a long way.

7:22Ahana Banerjee:And, you know, in this world where so many things are uncertain, I know my company inside out, not just the market, the problem, but actually the solution and the tech stack and everything that comes with it. So no, even in today's day and age where you can vibe code something in five seconds, I feel tremendously grateful that I had the skills to be able to build this. And I'm very proud that I did.

7:46Amardeep Parmar:Are you using AI yourselves?

7:48Ahana Banerjee:Yes.

7:49Amardeep Parmar:How are you using it?

7:50Ahana Banerjee:Who's not using AI? Both on the technical side and also on the day-to-day sort of business side. I'm sure you can relate to this in the flurry of admin emails communications messages and it could be a full-time job in itself and so I think when it comes to you know I think the thing that actually makes it difficult in in the job is that it's not there's no mindless work everything is a conscious decision that that you have to make and so that part fortunately AI hasn't quite taken my job but just in the kind of admin side of just drafting the message so you know I'll write it all in slang and in broken English, and then just putting it together in a way that has my voice and sends it as a respectable email.

8:37Ahana Banerjee:Things like that, that when you're doing about 100 emails a day, it actually saves a lot of time. And then, of course, on the tech side, there are so many incredible tech tools that have made it even easier as a two-person team to ship faster than ever. So yeah, absolutely both on the technical side, but also on the day-to-day side.

8:59Amardeep Parmar:And you've also leveraged a lot of students, right? So you've been working at universities, you've been giving people internships, you've been doing a lot of work there. How has that been part of your journey too? And kind of one, giving people an opportunity, but then also using them effectively to grow your business.

9:13Ahana Banerjee:Yeah. So we talked about this in the previous episode that I started the company while I was at university. And the way I discovered entrepreneurship was almost by chance. It was through a guy messaging me on LinkedIn one day and me just being open-minded and saying yes and I love this job I love what I'm building I love that I get to do this and I feel like I have an impact and so that's if that is something that I can give to even one other person outside of you know what clear delivers to our users I feel tremendous satisfaction and so because of that doing these internships, partnering with both schools and universities has been something really important to me.

9:54Ahana Banerjee:So from our first year of business in 2021, we ran a 30-person summer internship. Bear in mind, it's a full-time team of two. So it's a lot of work. It is an active commitment. But, you know, as the years have gone on, I have also understood better what young people's skills are, how they can actually add value to the company and the types of skills they can get the most from as well that will help them either figure out what they want to do, what they don't want to do and kind of help them craft their own paths. And so, yeah, I'm again, very proud to say every year we've run internship cohorts of at least 20 students.

10:30Ahana Banerjee:We tend to have off-cycle interns as well. And I think, you know, on the one hand, it's always great to get fresh ideas, fresh perspectives. We have a very flat structure. Again, there's not that many of us, But something that I really emphasize is just because you have the title intern does not mean that your job is to feed me coffee. You know, I mean, we're a remote company anyway, so it wouldn't work. But, you know, I want everyone to learn from the experience as much as they possibly can. And so if there's anything from my journey that they can learn from, I try and share that as much as possible.

11:08Ahana Banerjee:So the internships are quite structured. We have insight talks, Q &A sessions. and again this is something that I can now appreciate a couple of years in students that did their internships with us when they were 16 for example are now finishing uni and some of them starting their own businesses and when they tell me that like it just like it gives me goosebumps I feel so proud and obviously not to take all the credit but it's like to have even played a small part in their journey or been the first internship that they did I just find that tremendously rewarding. And so, yeah, I love going to universities.

11:43Ahana Banerjee:I love speaking with students. I think now the culture is changing even more than it. You know, there's even more of an entrepreneurial culture than there was five years ago when I finished university. And I just feel really excited to see that.

11:57Amardeep Parmar:And obviously being a young founder yourself, right? How has that been an advantage for you and the hindrance?

12:01Ahana Banerjee:I remember very distinctly when I started my founder journey, one of my now angel investors and like favorite people, mentors, whatever you want to call it. He said to me, being young means you literally have more hours in the day available to you. And I think I really internalized that. And I was like, oh, yeah, I don't have kids. I don't have household responsibilities as such. I can literally outwork everyone around me. And I think I really, I took that very literally, especially in those first two years, as I mentioned. And I think that is an advantage genuinely um to be able to give your full attention to a business is a tremendous advantage i think the challenges just come with the network and at some stages of the business it can be about who you know as opposed to what you know um and so i feel that that's that's the hindrance um i remember for the first funding round a lot of the advice was start with angels friends and family when you're a young founder your friends and family are students with students loans and in their overdrafts you know that's not that's not really going to work and then to land a meeting with a VC it's very very difficult if you don't have those connections beforehand and that's why I'm so grateful to Y Combinator and that whole accelerator structure because you can just apply and it kind of doesn't matter who you are to some extent obviously it does matter who you are but not who you know and so I think it's that it's the network that takes time to build but overall if I was to kind of zoom out I and I said this in the last episode the thing that I already knew I wanted to optimize for at this stage of my life and my career was growth and learning and I don't think there is a better choice than choosing entrepreneurship to learn because whether your company succeeds or fails you are guaranteed to learn everything about everything.

13:56Ahana Banerjee:And in that sense, I think being young, having that open-mindedness, that ability to learn and absorb things is a huge advantage and a blessing as well. So for me, it was definitely the right decision to do this at this stage of my life.

14:11Amardeep Parmar:Hello, hello. I hope you've enjoyed the show so far. I'm Amiri Parma, co-founder of BayHQ and the host of this show. For those of you who don't know, BayHQ is the community for high growth Asian heritage founders and investors in the UK. Over 7 ,500 people have attended our events, 200 people have been for our impact programs, and obviously there's been over 250 episodes of this podcast. If you want to join us and take part in the programs and come to the events, go to bayhq.com forward slash join. We also just released our first ever book called startups for outsiders which you can get amazon now and the link is in the bio hope to see you soon at event hope you enjoy the rest of the episode and you mentioned about the fundings because obviously you're able to raise several years ago

15:00Ahana Banerjee:through yc and then after that but you managed to extend that runway for quite some time

15:04Amardeep Parmar:so obviously part of it is having a small team but then can you talk us through that decision because you said you went against i guess a lot of other consumer tech startups who might spend all the marketing and growth shit away. How did you extend that runway for so long? And as you reflect on that, do you think you made the right choice?

15:19Ahana Banerjee:Well, to answer the first part of the question of how, I just don't spend very much money. As I said, I'm a cheap engineer. We're a full-time team of two. We're fully remote. You know, our server costs are well-optimized. And so our burn rate's just really low. So then it's a conscious question of, well, should we be spending in other areas? And as, again, I said last time, until we achieved certain product metrics, I was not comfortable with putting money into effectively, you know, like filling up water in a leaky bucket. If we know that there is churn, why would we not address that first? And so I very much took that approach to begin with.

15:59Ahana Banerjee:But I think what is super exciting about where we're at now is we are ready to up the burn, we are ready to fill up the bucket, because there is no leak anymore. We've de-risked so much of those risks that existed in the early days that I said we would, that now is actually the time that I am more excited to raise funding and potentially deploy it in a way that investors would expect. I feel like the way I built Clear without knowing the term was seed strapping. You know, I raised that first round as if it was the last money I would ever have. And we're now at a point where we have a path to profitability without raising another penny.

16:37Ahana Banerjee:But it's now through a choice. And this was a question I had to ask myself, do I want to embark on another funding round to accelerate the growth or do I want to grow it profitably, but perhaps more slowly? And in my mind, I believe Clear can be a billion dollar business. If you look at the valuations of the market leaders in other consumer tech apps, it's doable, it's achievable. And as there is still no leader of that scale in our vertical. And I think Clear can be that. And so given that this is still my aspiration, even if the first couple of years may not have looked traditional, we are now at the stage where I'm so confident in the tech and the product.

17:16Ahana Banerjee:We have very nice, excuse the pun, clear unit economics that it really is a question of you give us X, we give you X plus five back. Why would you not invest in it?

17:27Amardeep Parmar:And obviously you said you've got a lot more users today than you had when you last came on without spending all that money on marketing and maybe money which could have been wasted. right? How are you able to grow the user base in that more effective way?

17:39Ahana Banerjee:Well, the first is product-led growth. So building a good product, people telling their friends. So until about a year ago, we still had very, very limited marketing. There's still no marketing budget today. But now, and I'll get onto this, I am now on social media, or rather specifically skincare social media, because I've used social media and LinkedIn since the start of my journey. But it was through people searching for skincare apps on the App Store and telling their friends. And that, again, to me was a huge sign that people actually wanted this without needing to invest in growth. You know, people, we were getting about 100 downloads a day literally from people telling their friends, which I thought was so cool.

18:23Ahana Banerjee:And so, again, once those fundamentals were established, I wanted to figure out what social media strategy would work, but without hemorrhaging money. Because again, I think that can be the quickest way to kill a company. If you don't know what you're doing, you hire a marketing agency and then you kind of cross your fingers and let them figure it out. So my reaction to that was, I'm just going to try it myself. And as with every part of the business, I like to give it a go. And it's very possible, plausible that I am not good at whatever the task is. And so I always have a backup or a contingency plan.