509: Shark Tank Winner Reveals How to Create a Million-Dollar Beauty Brand | Alicia Scott

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0:39Just head to omnisend.com forward slash founder without the E to get started. All right, now let's jump back into the show. Being an entrepreneur, it's not for the week at all. I had to find worthiness and stepping out of my comfort zone and even deciding to launch something that I didn't even have any experience with. Her name is Alicia Scott. The founder of Range Beauty. Being on a platform like Shark Tank. Range Beauty. I think you're going to find a better partner here. So I'm out. I'm out. I'm out. And then to have Emma invest. It feels to me like a premium product. We think that we'd like to make you an offer.

1:21She's a powerhouse. People love to say beauty is so overcrowded. It's so oversaturated. You absolutely have to find something that no one else is doing that makes someone see you on the shelf next to other brands and they're reaching for you. Before we dive in, I want to extend a warm invitation to join our thriving founder community. It's the perfect place to discover more insightful interviews aimed at helping you build, grow and scale your business. So don't forget to hit subscribe. Your support means the absolute world to us. Thank you so much for subscribing. Let's get stuck in today's discussion.

2:00Hear the stories, learn the proven methods and accelerate your growth and future through entrepreneurship. Welcome to the Founder Podcast with Nathan Chan.

2:14thank you so much for joining us alicia the first question that i ask is what did the first 60 days of business look like for you well thank you so much for having me i'm so excited to talk about everything so for me it's it's a little bit of a unique journey so my first 60 days i was still working a nine-to-five that had nothing to do with my background it was just enough to pay my bills my personal bills and any bills for the business. And so the first 60 days, honestly, were just me building our social media platform. So it took a little bit before I actually had physical products, but I wanted to make sure our presence was felt.

2:54I wanted to make sure I was communicating with people who I thought would be our audience members. And so it was a lot of digging on social media. It was a lot of social listening. It was doing a lot of research. And so I would say Our first product didn't come until probably three months into us having our social media up and running. Yeah. And you started like with$150 to get your first order. Talk me through that, how that came about, how you brought the product to life. Because I know that a lot of people when they want to start a beauty brand, they think you have to place this big minimum order quantity.

3:35Talk us through how you funded it and brought it to life because you bootstrapped it for quite some time. Yes. Yeah, that's a really great call out. And that was something that was key for me. So because I worked in fashion and I was in sales, I was very familiar with minimum order quantities. I was very familiar with margins. I was very familiar with that side of the business, just not beauty specifically. And so for me, I know I need to find a manufacturer and a lab all in one. I didn't want to try and figure out how to get this over to here and all of that initially. And so I went onto this website.

4:12It's called cosmeticindex.com. I don't even know if it's still around because this was initially when I first had the idea back in 2015 when I actually started researching. So I went on this website after a Google search and it was this like yellow book for, I don't know, like yellow pages for anything you would need within the cosmetics industry, manufacturers, packaging, if you're trying to hire team. And so I went through their manufacturer database, and I had my list of absolutely what I have to have and what I'm not bending on. And so for me, I knew I needed this to be a clean ingredients line.

4:53I needed it to be someone who could honor me not having, you know, a large amount of capital to deal with big MOQs. That was okay with me starting small and building with them. They needed to be US-based in case I needed to get to them. And they needed to understand and grasp what I was building. So saying that I want to do skincare infused makeup back in 2015 when that wasn't, you know, now it's so popular, but that wasn't the called I dated I found a list I think it started off with maybe 10 manufacturers and I got it down to four and then I got those four down to one um and I went with this woman-owned manufacturer here in the U.S.

5:39and I loved them because they're your first run with them was$150 you just have to spend$150 and so with that I was able to get formula I was able to get the base like pigment I was able to get toners. I was able to get different ingredients if I wanted hydrating, mattifying, all of this, beakers, test, like my own mini lab basically with$50. That's crazy. And so how'd you get your first sale off the back? Talk us through that, like, cause I think people would really like to understand that detail. Yes. So as I mentioned, we had our social up and running and it's funny because initially the entire theme the name was completely different so we were originally called skinny dip cosmetics because I loved the idea like skinny dipping you're you're at your freest moment right and so that's how I wanted you to feel even though it's makeup I still wanted you to feel free I wanted your skin to feel free as if you weren't wearing anything like skinny dipping um and so that was our initial name and you know we were very clinical girly so lots of pinks and glittery and all of that and our first initial order came under that name and it came um when we added our website to our social media so I had a landing page with the wait list and so once the the page went live those people who were on the wait list were notified and so um and we were also hosted on Squarespace initially so our first order came through Squarespace and we operated under Skinny Dip I believe I was I maintained it live for a month before I was sent a cease and desist um by what's called Skinny Dip it's a company out of London and they actually started off with phone accessories and then they went into fashion I believe and then they launched their own makeup line and they emailed me and my little self they emailed me and said hey you're infringing on our trademark.

7:37So we can go to court or you can shut down. And I was, oh my gosh, like I'm so small. I didn't even, it's fine. So I shut down and that's what led me back to the drawing board and how range was actually born. So this is an interesting experience because I had something similar happen to me in the early days founder. So when I started founder, it wasn't called founder. It was called Key to Success Magazine. And we were sued by a big business magazine out of the States, one of the biggest ones, for trademark infringement. They didn't send us a cease and desist, though. They lodged proceedings. So I got a FedEx package basically saying that I needed to appear in Dallas, Texas on this date for trademark infringement.

8:32and this was the first four months of starting founder and i remember waking up in the morning and receiving that letter and being like oh my god and just like was so scared and i'm like i remember speaking to my mentor at the time and i said he's like i said i'm so scared and he's like what do you like he's like do you have any money and i was like i was like no and he's like well because i was scared i was going to go bankrupt and he's like we have any money and i I was like, no. And he's like, well, what does it matter then? And yeah, it's a scary feeling, right? It was scary because I remember getting it and I do recall ignoring it at first because I'm like, no.

9:17And back then I did, obviously it was my error, not, you know, I filed for my LLC, but I didn't look up to see, okay, is this trademark? and then I was thinking well I spell it this way and you spell it that way and I'm doing this and you're so then I can't be infringing and they repeatedly they kept sending emails and said okay we can take these to court and and I remember I sent off an email like you know I'm a small business I just I'm just getting started you know for you to come at me this way but you know it was fine I think I was fortunate where at the time I was hand labeling bottles so I didn't do a run where let's say I had bottles printed with the name, but at the time I did have boxes.

10:02I had outer packaging with the name that just went to waste. Obviously the website, our social media, like going through the process of changing everything, but it was scary. And at the same time, it made me feel, am I doing something that landed me on your radar enough? Where I have barely launched, our so at the time our social media was very much buzzing I will say um but it was it did give me that little what did I do that would land my small brand on your lord because they were sold in top shop they were sold you know and all these different stores in the US as well as their UK presence but it did make me feel like okay I have there must be something that you feel a little threatened by maybe so yeah no that's awesome and I don't know about you but my experience was it was a blessing in disguise because then that's how I got the name founder right exactly it was absolutely a blessing in disguise because even at the time our tagline was clean beauty for the forgotten shades and I was nervous to really push our story of being for acne and eczema prone skin because, you know, we're in an industry where flawless skin is pushed and we're in an industry where conventionally pretty is pushed.

11:25And so even though it was our benefit and everything, I was just like, oh, let's focus on being clean beauty. Let's focus on saying we prioritize deeper skin tones. But it absolutely was a blessing in disguise because range beauty, like coming up with that name, the whole rebrand that we did, like our packaging now and our branding now and our messaging now we needed that to happen yeah it's such a great story thank you for sharing just lastly on that did you like did it did you ever think about giving up when all of that happened no i think that was another blessing was that you know god forbid i was five years in under skinny dip and they sent me that you know for them to send it and i honest like i say, I believe it was one to two months.

12:12It was very shortly after we launched. And even though I was upset about the waste of money again on the outer packaging and things like that, it wasn't a large run though. So it wasn't, oh my gosh, I have thousands and thousands and thousands of things with skinny dip on it that I now have to discard. It was definitely still like, oh, I hate that I had to waste my money and I can't use these things. But for it to be so early on, that was where I was fortunate yeah thanks for sharing um so i have to talk about your pitch on shark tank so we you've been on shark tank america and uh we've interviewed emma greed and uh she actually invested in range can you tell us what you've learned from her and the experience being on shark tank did it make a massive difference to sales talk us through that whole journey oh yeah I mean, being on a platform like Shark Tank, especially as an indie brand, is so invaluable.

13:15You can't pay for that level of marketing, right? Especially for us, like I said, we prioritize melanin-rich skin, although we're inclusive of all skin tones. but being able to face that demographic which was completely new for us um and having the receiving I guess the feedback that we did where all of the sharks loved what we were creating there were just sharks who were like I think there's a better shark here for you no one had anything negative to say um no one downplayed what I've built um and so it was very validating. And then to have Emma invest, I mean, you know, like her marketing mind, she's a powerhouse.

13:59And she used to being in an industry with fashion and having to push inclusivity, you know, with Good American and having to also teeter that line with skins of like what's been accepted and what shouldn't be accepted and having to voice her opinion about that and having to show up in rooms where people think that she shouldn't be. And so having someone like that on my cap table is it's incredible, especially for a brand my size. And when the when it went live, tell me through like what happened. Yes. And so we filmed Shark Tank. that was July of 2021. And my episode did not air until the end of February of 2022.

14:46So it was a lot of like, you know, and they tell you along the way, they tell you, hey, there's no promise or guarantee that your episode is going to air. And so the whole time you're just waiting and you're waiting and you're waiting and waiting until you get the notification, they let you know, I think we had three weeks, four weeks, maybe to prepare. And so you're using that time to prepare your inventory, to prepare your customer service, to prepare your social media. Your brushing three weeks goes by so quickly. And the night of, we did a watch party and we were surrounded by family and friends.

15:22And we had all the screens loaded up with, you know, the show. And we were the first to come out, which was incredible. And it was just crazy because you're actually out there. we talked to them for close to two hours and they cut it down to like, I think it's 10 minutes for pitch. Um, but I was so, I was so, so, so appreciative of like the edit that they gave us. I think they showcased us in such a great light. Um, and the, you know, feedback and everything, the press and our social media and everything we received while it was airing and after it aired was amazing yeah that's exciting and tell me like were you watching the shopify like all the people on the store like what did it peak to can you share i can't share what it peaked to but i have always shared i'm like we have sample kits our foundation sample kits that we um sell so that you can test your range and then find your actual specific shade and i remember we sold 1500 of those kits the night of and that was most that we had for sale and one day not even including you know our full-size products and I just remember watching the Shopify and I had obviously other founder friends there and so we're all looking on my phone and we're like oh my gosh oh my god just elated to see like for us I mean I will say I think it was like what we would probably make in six months plus we made in that weekend.

16:56Wow. Yeah. Very, very changed the production of range for sure. Wow. That's crazy. So let's talk about the juicy stuff for everyone watching. How do you start a beauty brand? So there's future founders that want to start a cosmetics business. Where's the best place to start? Yeah. So I think the best place to start is figuring out what exactly is going to be so special about your brand. You know, people love to say beauty is so overcrowded. It's so oversaturated. The thing is, is you have to find your niche and then even try to niche down from that. It's not, you know, you don't have to reinvent the wheel, but you absolutely have to find something that no one else is doing.

17:43And you have to figure out how to market that in a unique way that makes someone see you on the shelf next to other brands and they're reaching for you, whether it's your packaging, whether it's your messaging, whether it's the testimonials, the before and afters, like what is sticking out about your benefits, about your claims that is not being seen across other brands? And then so once you find your niche, you absolutely have to do your market research to back it up. It's one thing to say like, oh, I talked to five people and they said they would love to have you know a blush that does x y and z it's like no we have to make sure you're really going to have that wait list that you're going to have the demand there um to say like hey this is something we truly need so really making sure you have the market research to back up your niche and how do people work out what their niche is because it it's scary right to know what it's got to be you want to get it right are there any tips or advice that you would give from your experience to make sure you get it right or give you the best chance of success yes i think you will see especially across a lot of indie founders is that we typically start brands out of a problem we were trying to solve for ourselves or for a family member or for a friend.

19:02So for me specifically, I was never a makeup wearer. Like I steered very clear from the makeup aisles for one, because I never saw my skin tone represented. And then for two, because I was already dealing with cystic acne and eczema. And so being very fearful of what I put on my skin that would exasperate a breakout or that would cause a flare up. So I said, okay, I'm having this issue and then at the same time I'm working in fashion where I'm seeing a lot of the black models are also dealing with the lack of shades and makeup options available for them and I suck it I mean that was my light bulb moment where I said I don't see it I want it I think there are others who would want it I'm talking to my family and my friends about it who are like that's an incredible idea I would love makeup that also helps my skin and so that's what put my real emotion.

19:58And so sometimes it's just looking so close to home. Like, is there something that's going on in your daily life where you're saying, I wish I had a, so that it would make this easier. Or are you hearing your friends talk about it? Or are you on social media seeing this reoccurring conversation about a problem and there's not a solution? So making sure that you're looking at yourself and then your community too. And how did you know when you got it right? Like at what point in time did you go, yep, I'm onto something? Because I remember even in the early days, founder, like I've never even talked about this.

20:34I remember one time, you know, I'd even gone full time on founder. We had at least a few thousand magazine subscribers and I did a free call with this guy called Ramly from Canada and he did like product market fit calls like with founders just for free. And I was like, man, how do I know if I've hit product market fit? and he's like well how many customers you have we got a couple of thousand uh readers like paid subscribers and he's like yeah you've definitely hit product market fit so i was constantly looking for that validation that i was on to something and and it was after that call i was like oh okay maybe i am on to something and eventually it just clicked when did it click for you that you'd got it right that you were on to something i honestly had a few instances so one major one was a makeup influencer um took a picture from our instagram i think she did a screenshot and she tweeted it out and she said this is what you call range and it was a a aerial shot of our foundation shades like lined up that i had posted to our instagram and it went crazy um and so to see it for us i think that kind of said john like these shades really are needed and to see it equate to orders on the website.

21:46It was like, okay. Honestly, I would say, yeah, the volume of customers. Once I saw, I'm like, okay, we're getting more than five orders a day consistently. That's pretty decent. But honestly, it was the testimonials themselves where I would say one that always sticks out to me that we received early on was a woman who said she went to her dermatologist for eczema. And her dermatologist said that you will not be able to wear makeup. You will never be able to wear makeup that won't cause you to break out even more. And she left us a testimonial saying she gave us a shot and she's had no issues with her skin with it.

22:24And seeing testimonials like that where people have been told they'll never be able to wear makeup or who feel they can't play in makeup and or use it to feel extra confident or whatever it is that they're using it for. to feel like they had to avoid that because the beauty industry overlooked them. To see that in writing was like, okay, this is very validating.

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23:38Try Founder Plus today for just$1 for seven days so you can accelerate your business goals. Visit founder.com forward slash start dollar trial or click the link in the description to claim your trial. All right, now let's jump back in the shot. That's amazing. Yeah, look, it's funny you say that because I think you're looking for proof. You're looking for proof that this works. And if you can get one person to say, this works, this is amazing, this changed my life, this was transformational. If your product is transformational in some way, shape or form, it's only a matter of time that you get enough proof to go, yes, this needs to exist.

24:23Yes, I need to get this into the hands of more people. So there was a transition though, and there was a buildup. So in 2019, you went full-time to pursue range and really get that business going. And the business went from$45 ,000 to$350 ,000. Talk us through that particular transition. Because I remember for me, I had another mentor challenge me. Founder was making, I think, similar numbers, similar numbers, like probably about 40, 50 grand a year. and I said to my mentor, you know, oh, look, I'm going to wait till I get to this, this and this and then I'll feel ready and I'll have this much saved in the bank.

25:11I'll have three months worth of rent and whatnot saved in the bank. And he really challenged me and he said, Nathan, I think you should do it now. Like, I think you should shorten that cycle because the more time that you spend on your business than working in your day job, you'll actually compound it really quickly and you'll get faster growth and he was right but can you tell me the steps that you made to make that transition and your experiences there yeah I was the same way I told myself so I went into 2019 in January I said this is going to be my last year working here and it was because things did start to pick up for me I was also at this time winning like pitch competitions I was able to rack up a few grants in 2019 to support range and not only have to rely mostly on like my personal paycheck.

25:59But I also felt the same way. I'm like the energy that I was burning, it's like that whole thing, you're burning the candle at two ends where it's like I'm working my nine to five and then I'm coming home. I take like an hour break. And then the second half I'm working on the side hustle. And it was something I truly believed in. I saw the prints we were receiving, the orders were coming in, the opportunities were coming in. And I remember going back and forth with my dad about it. And I remember my dad being like, so what if it doesn't work out? What, you're going to have to get a job again? And I was like, I mean, yeah, I guess like he's like, is that the worst thing that's going to come of you quitting your job and going all in on this?

26:41If it doesn't work out, you're going to have to go to work again, you know and go to corporate again and I was like yeah so I did set a number aside for what I wanted to put away for my personal um because I'm like okay let me at least make sure I have this amount of months covered for my rent for my car etc um and then let me make sure I have a little put away for range and I remember I walked into my boss's office in October of 2019 and she said something that something about the way the company was moving, like changing in a drastic way. And I remember saying to her, like, I actually have to quit.

27:19And she's like, you have to quit? I said, yes, I have to quit. And she asked me again. I said, yes, I have to quit. And I was like, I have to put in my notice. And she said, are you quitting today? Are you, you know, I had a really great relationship with my manager. And I told her, I was like, I would like to quit in December. I want December to be my last month, if that's okay. And she said, that's completely fine. And I think I needed to say it. I had to, there was no going back, even though from October to December, she was like, are you sure you don't want to? It's like, nope, nope. And I remember in December, I had a pop-up with Target and it was conflicting with days that I had to work.

28:02I couldn't get the days off. And it was so perfect that I gave my notice because I'm like, it's no longer my concern. um and so i did that target pop-up in december of 2019 um i that was my last month at my nine to five and then january i started in the target takeoff beauty accelerator where they take you behind the scenes for six months to get you ready to launch at target and at the same time while we're at headquarters for target they're announcing the pandemic they're announcing covid um they're like, you know, there's something going on with COVID. We're not really sure how serious this is, but oh, you guys don't worry about it.

28:43Like we'll keep you updated. And we flew. So this was in Minneapolis. I flew back to Atlanta and shortly after we had the shutdown and I was like, well, this is the perfect time for me to go all in on my life to not have the back of my nine to five right now. But it was the perfect time because what was everyone doing? Shopping from home on their computers. And I went so hard on social and that's when our sales blew up. And simultaneously, if we think about 2020, that was also when we saw the huge uproar of the Black Lives Matter movement. And again, what was everybody doing? Everybody was at home.

29:27For the first time, they were able to put their eyes on this movement and decide if they thought this was right or wrong and how they wanted to support. And there was a huge, huge call out to, hey, put your money where your mouth is and support these Black-owned brands. So on top of people already shopping from home, on top of makeup and beauty being, now we know, recession and pandemic-proof, because no matter what's going on, people want to still look good. They want to feel good about themselves. We also have this outpouring of support for black owned brands and black owned beauty brands I mean so many of my founder friends skyrocketed in 2020 and so all of that I mean 2020 we were on Beyonce's website in 2020 we were in Allure we were in Cosmo I was in Forbes like everything was happening at once that just really shot up our traffic and our revenue yeah crazy and so how do you get these opportunities right like you like you you're really kind of taking it you're on shark tank you went for the target accelerator i know like before this you're talking offline i think um you guys what's the other big retailer that you guys are working with right now um because of four are there you go yeah like how do you get these opportunities like what's the secret honestly it comes down to like your social is so important um I was first contacted by Target by a buyer for Target through my social media um when we had the opportunity for Shark Tank it was because we were on the radar from someone who initially saw us on on Instagram and then everything else that came to you know follow with us um so I would say your social presence your personal social and your business social presence are both very important and key.

31:14And on top of that, I love telling our story. I love public speaking. I love pitching. If I could just do pitches every day, I probably would. So during this time, I was doing a lot of pitching and grant competitions for major, major partnerships like Visa, New York Fashion Week, Bumble for Business, Stacey's Pita Chips, Chase, like we are constantly applying and racking up this exposure through not only my platform, but of course, these brands were posting about us. They were doing press releases about us. We were getting picked up, like I said, by huge publications organically. And we had a few viral moments on social as well.

32:01So it was honestly a culmination of just making sure I had eyes on me. And that definitely converted into these major opportunities that just allowed me that bigger platform. Yeah. And talk to me about getting your social right, like particularly the branding and the messaging to make it connect with an audience. Can you talk us through your kind of experiences there, how you've been able to do that? Yes, it was a hard to learn, I would say, because when you think about all these channels, when you think about your email marketing, your SMS, your website, social, in-person activations, retail, these are all various channels where you have the ability to utilize different voices of your brand.

32:48So it's not always going to be that same messaging and same branding across all these different platforms because most of the times you're reaching different parts of your audience. So figuring out our different voices while still maintaining the integrity of the brand messaging and our brand admission was definitely very hard. And it took a lot of experimenting and testing. But that was something that was like how we show up in our email is not how we show up on social. and figuring out for us, I was like, I want to be, I want our voice to be like your best friend who's super into beauty, but also happens to be a dermatologist in your friend circle.