Augustinus Bader Co-Founder & CEO: Charles Rosier – Stem Cell Science, The Cost of Conviction, & Building a Skincare Icon

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0:49The Gstaad Guy:We're the Hartford, with decades of experience insuring millions of unique small businesses. When it comes to your small business insurance. Thank you. One size absolutely does not fit all. Get a quote or find an agent today at thehartford.com slash smallbusiness. Charles, thank you so much for being here today. I'm so happy to be here with you. So happy to be here with you too, I know. Last time I saw you was in Stockholm? Yeah, Stockholm, our annual rendezvous. Our annual rendezvous. It's great to be with you in London today. Around the world with your host, the Stade Guy, we welcome you back to the Stade Guy podcast, sharing stories of excellence with those in the know for those who just know.

1:31The Gstaad Guy:You are the founder of Augustinus, by the way. But your name is Charles. Yes. Who is Augustinus? Yeah. Yeah, he does exist. You know, once I remember somebody asking me, you know, challenging me on his existence. Yeah. Yeah, absolutely. So Augustinus, he's from Germany. originally from Bavaria. And, you know, he's quite a brilliant mind. He actually studied, he was an intern in organ transplants. So he was part of the team. I think it was organ transplant, like liver transplant was created in Europe by three professors. You had one in London, actually, and one in Germany called Hans-Peter Meyer.

2:28And so at Hanover, where he was heading that service, Agostius was an intern there in surgery. So he started with liver transplant surgery, and then he worked on artificial livers. And creating artificial livers and doing cell culture, He was part of the first generation of people doing tissue engineering and then stem cell science. And so he did the classic stem cell science, which was cultivation of stem cells. And then he became a disruptor in the sense that he came with the concept of saying, you know, when you cut yourself with a piece of paper, you have no scars. So how come my body is able of perfect healing in some circumstances?

3:14And then if I have a bigger wound, a bigger burn, then I will have scar formation, scar tissue, which is imperfect healing. And so he investigated the processes and the signals that happen in your body that create that perfect healing versus what is missing that leads to scarring and imperfect healing. so he kind of uncovered the signals that are there to awaken our dormant stem cells so he's a disruptor because from a place where most people come with a thought that we might not have enough stem cells and therefore you need to cultivate them re-inject them he came with the conviction that we have enough stem cells and what is missing are the signals to actually activate them, awaken them.

4:04And so anyway, so I, you know, a common friend introduced him to me saying his best brain is stem cell science today. It was more than a decade ago. And at the time, I was trying to help the French professor in terms of, you know, philanthropically contributing to the financing of his research on spinal cord injury. So I put that French professor, and Agustinus in touch, thinking, you know, stem cells. And then two, three years after, I visited Agustinus in Leipzig because he's still today the head of stem cell biology and research at the University of Leipzig. And he showed me the picture of a two-and-a-half-year-old girl that was burned second, third degree.

4:49And using the wound gel that he created, again, more than a decade ago, the head of reconstruction surgery in Munich was able to avoid scar formation and skin graft to that little child. And so I was shocked in the sense that it's insane that such a technology exists, but it's not widely available because that would obviously change the life of so many people. You know, scar-free healing, accelerating healing, especially for children, because when you have wounds from burns as a child, you might need to be re-operated, as you know especially for example that that that child it was between her the toes on her foot so sometimes you have to reopen the scars because you have to let you know the toes and the foot as the foot is growing etc if you do a skin graft or and uh and so anyway so so scar-free healing is really a big deal it's not just again uh an imperfect uh healing but the consequences you know again psychological maybe if you have burn scars on the body and and you grow up maybe you're too ashamed to go to i don't know to the beach or the swimming pool with your with the other kids etc so it's it's and again as we as we see today in all the conflict zone if if people like doctors without borders and red cross etc could have access to such a product that that That for me was, again, you know, my initial reaction was, okay, I'm shocked to see it's not available.

6:26But my second reaction was, okay, how can I help that guy find the funding for his research? And the same way I tried to help that French professor in spinal cord injury. and so that's where the I guess my mind that got previous stories in the past about skincare research or brand coming from burns or solving burns I thought again of reapplying that idea that a skincare cream could help finance his research and that's how you ended up starting the company initially? Yeah exactly it was really the that was really the purpose of the company was so we we created two companies a biotech and a consumer good company and the idea was that the consumer good company would finance the biotech that the the profit from the cream because he was licensing his technology at the time to anti-aging clinics like you know in switzerland in thailand and i thought okay but it takes him so much time to actually negotiate licensing.

7:37And it takes time from his research, and it's never going to be enough to finance his research. So I had a very naive vision to think his technology is disruptive, probably superior to what exists today in the market, so the product will be superior, so it will be a big success, so it will finance his research. But probably if I would have been trained at L 'Oréal or worked in the skincare business before, I would not have had such a strong conviction because I would have understood how difficult it is actually to launch a new company in the skincare field. So in some ways, my ignorance was a blessing at the time because it gave me the courage and because I had a vision and a very strong belief.

8:32And I think when you launch a project, when you become an entrepreneur, you have to convince so many people that you cannot convince them if you have a doubt yourself. So I was like doubt free. I mean, I was really convinced that success will come. and as I said it really came from a bit of ignorance from the sector because now with hindsight and having been through the adventure three times we were three weeks away from being bankrupt and therefore now I fully understand how a great product is not enough. Again, we were discussing it. It's the combination. I think the launch of a brand is a combination of hopefully, yes, a great idea or innovation or something different, an angle that is different and hard work.

9:23But luck is such a big element of the equation and an element obviously you don't control, how things come together at the right time. And yes, so that's how it started. And when was that? When did you incorporate that? So we incorporated the company. Actually, when I had the idea, you know, I mentioned that when he showed me the picture of that two-year-old girl. And he probably thought that I was crazy. So he kind of listened to me, that idea of creating skincare to finance his research. But himself was not using skincare and understanding really the skincare market. His wife is also a doctor in the public medical system in Germany, not a big fan of, you know, not really understanding the dynamic of the skincare market.

10:19So it kind of took me two years for him to take me seriously. We were catching up from time to time. And my last trip to visit him in Leipzig, I was like, OK, I'm not going to bother him anymore if he doesn't, you know, want to do that project. for me I was insisting because I was finding purpose in that project because for me it was the combination of finding something that could be a useful company with a positive impact. I've always been passionate about biology and always admire those doctors, professors, researchers. So that's why I was a bit persistent. But yes, so the idea, I guess, we had the first initial conversation on topic in 2014 and we incorporated the company in June 2016.

11:12And then we launched the product in March 2018 because it took a year and a half to translate the medical technology into a skincare approved product. It's very recent, actually. Yeah, it's recent. Yeah, we're seven years old. Seven years old.

11:30The Gstaad Guy:well congrats on all your success incredible to me over the past 3 or 4 years I've gotten more into my skin care and I care for my skin more the one thing I should do more is probably wear sunscreen yes I know that's what I hear as well from dermatologists I'm not as well the best user of sunscreen but I do keep my skin hydrated and as part of my rotation I have the rich cream which I love thank you for supporting us Thank you for making me a great product. It feels like support to my skin. So it's a fun thing. Congrats on your latest collab as well with DUA. You know, again, because it's an interesting, it's a technology and the purpose of what Agus News created in some ways and the purpose of the company is to democratize that technology.

12:22And in some ways, the Agus News Better brand it's not affordable to everyone. And I think the Dua collaboration is really a platform. We tailored the product to a bit younger skin that don't need the same intensity of renewal. And so we managed to make the product a bit more affordable. And therefore, it's, I think, a great opportunity to democratize a little bit that technology, which is the purpose of that platform. And it's true that Duane, I think she's someone that gives positivity nowadays. She has this energy around her where you can feel that she cares, she's honest, she's straight. And so that's what that collaboration is about as well.

13:22kind of you know fast efficient routine and and she's yeah she's and collaboration is for us an amazing opportunity because it it allows you to take a fresh look at what you do because you you have the inputs of somebody coming from a totally different universe sure and and and that makes our job super interesting because you you're not like living in your just in your own bubble but you kind of get different perspectives. So that's great for us. Absolutely.

13:57The Gstaad Guy:I'm always very curious about what products people use generally, especially people that look good. And I remember on Dua's stories, I'd always see the blue AB bottles on counters. So way before the collab, I would see that, okay, this is a natural part of her routine. So I love also seeing when people collaborate and brands collaborate and it comes from a very authentic love for the business. No, it's a privilege that we had in this journey. We had the support and the interest of very talented and successful people in their field that came to us and wanted to do a collaboration and using that scientific platform and innovation to also share it with their own community.

14:49and it's been very, to your point, it's been an acceleration when you said, you know, seven years, it's true, we are a young brand, but we benefited from the support. More recently, Dua support, and we're very proud of that. Before then, you know, the first person we collaborated was Victoria Beckham. I saw that at Selfridges. Yes, for her, you know, the makeup complexion line that she uses, as well, the TFC8, our proprietary ingredient in it. And then we did Hydra Ackerman, that is now the designer at Tom Ford, designed a vessel for us two, three years ago. And a year and a half ago, we also did a tinted version of our lip balm with Sofia Coppola.

15:33So, and, you know, again, collaborating with Victoria was, we learned a lot from that and was very interesting. And the same with Haider, the same with Sofia. Every time it's, there is a bit of, generosity coming from them as well because they share their community. And for a brand, to your point, in some ways, brands are also nourished by collaboration of this type.

16:03The Gstaad Guy:I think what's very cool is you founded this business at what seems to me as a consumer a very unique time for the category where although you're story for the business is incredibly medical the industry happened to step into both trend and fashion and pop culture for at least the first time in my lifetime perception wise to me skincare was always this thing my mom participated in and was quite medical or quite um secretive and it was just in the bathroom was never part of the outfit never part of the storytelling and i think maybe get ready with me culture on social media of people talking about what they're doing to get ready but also the care people have for who they are not just what they wear so they're actually caring for their bodies more allowed for more conversation around skincare in general and people feel very proud about the ways that they do care for their skin.

17:19I'm curious to understand how that tailwind may have impacted what you do to allow your brand to, of course, keep its medical tech,

17:33The Gstaad Guy:but also play in fashion, luxury, and pop culture at the same time. I don't know if it's probably a cumulative effect of events. You know, the COVID, a lot of people said COVID made, because people were at home, so what do you do? And so it was the people attribute that as well to the fact that we were a lot on Zoom calls. So we had, it's as if being on, because you have your own little image on one icon. So it was, okay, how do I look? became maybe a bigger issue because we had to face our own reflection for time. So it was this combination of, you know, and how do I look combined with a bit of health because COVID was all about also staying healthy because if you have to face a virus or if you caught COVID, you know, everybody was kind of aware that hopefully if you're in a better physical state, you will weather the storm in a better way.

18:37and combined now with this new very interesting trend this new I'm not going to say obsession but at least for some biohacking this whole conversation about longevity biohacking which is and I know you consult for brands and luxury brands and a lot of them I guess and some you help or work with and others it seems that the whole shift is going to experiences and longevity is one of the top luxurious now experience so the same you know five stars hotels are all now questioning the offering in their spa like the spa the same way to your point the spa was maybe the thing in the lower ground level of any five star hotel and not something you would showcase now how elevated is your spa is a big asset for any five-star hotel experience.

19:38So I think skincare is part of that because if you think about it, your skin is your number one organ in terms of size and what you put on your skin despite the fact that there is this belief that products are stuck in the upper layer side of your dermis, epidermis. of course some elements of what you put on your skin will be absorbed by your body so it's a clear part of your health routine, your skin care and therefore yes, I think there is this new focus on health and skin care is probably a new element in it and now it's transgender and transgenerational because to your point, when you were talking now, skincare was a thing for my mother.

20:35And now it's, I think men are also looking for efficient skincare. And we see it in the community of people. We have so many anecdotes of customers whose husband or boyfriend, etc., started to steal, wants the cream to try, and then became obsessed and then issues, and became customers. So, I mean, yeah, we've been lucky on the timing. I'm pretty sure that, to your point, skincare has become more of a relevant conversation than it used to be. And also, maybe, I'm not going to say a more interesting conversation, but it's a more global conversation that, again, encompasses science. People are more looking now to understand if a product is efficacious and why and what are the ingredients, what ingredients work.

21:31So you might be a savvy consumer who might understand what ingredient does what. I don't know if you've reached that stage. I have no idea.

21:39The Gstaad Guy:I actually never got granular about what the ingredients are. For me, it's all about the feeling. Okay. And I remember actually when I was about 17 is when I started actually using skincare, so quite a while ago now. and I similar story to the husband stealing from their wives I actually borrowed some skincare from my mom because my mom had this big stack she was a big Lamer I mean she was a big Lamer user and I started using some and she's like here have this tub and I just started using these creams from a young age and I would see what works well for my skin and slowly evolved that but I never got medical about it.

22:25The Gstaad Guy:I actually have never seen a dermatologist. It's always just been me washing my face and using two or three products I like that I test. Right. That's it. Yeah. So you were born to be converted to the rich cream. I was. I was born to be converted to the rich cream. I love the rich cream because usually these heavier creams lead to some level of oiliness and people use them at night. But I actually use the rich cream day and night and it just keeps my skin looking exactly as it did when I first put it on. It never evolves badly like many heavy creams do. And also it just gives us great elasticity.

23:12The Gstaad Guy:So I love it. Is that the intention of the product? Yeah, I think it's a product that is supposed to keep your skin healthy because, again, the whole scientific background of our proprietary ingredient and the research is about optimizing the communication at the cellular level so your skin do the job. So in some ways, you know, and I know nowadays there are so many things being used for skin care, like Botox injections and all those things. And I don't want to judge or criticize them. You know, they can all be useful. But I think it's hopefully our product contributes to keep a healthy skin. And also, to your point, an elastic skin.

24:03Because wrinkles are formed by a lack of elasticity. because it's like, you know, so if you keep that elasticity in your skin, the wrinkles are going to be less apparent or less deep. And yeah, if we, you know, if we are one of the vehicles that helps skin remaining healthy without using harsher instruments, then I think it's already a positive thing. How big is the business now team-wise? around 200 people now globally. But we have actually a big team in China now, around 60 people. Nice. Because China has been growing 100 % per year in the last two years. So we took a bet which was not a reasonable bet, which was to enter China at our second year of existence.

25:01Wow. Which was totally irrational. With hindsight, I should not have done that. That was a management mistake. But in some ways, you obviously learn from your mistakes. But because China is really, it's a very demanding market where obviously having a critical size is important to exist. So it took us a few years of reinvesting in that market without finding a formula to exist next to the giant players. and the same way the brand got adopted first by the US market. That's where it immediately took off and then the UK and then the rest of Europe. Finally, again, China seems to be now very receptive to our formulas and our product and we have now a nice team there doing very well.

25:57So it's great to see that all the effort to deploy globally now is, let's say, everywhere where we are present, we're starting to see a nice momentum. And would you say most of the team is quite focused on the medical side of things?

26:21The Gstaad Guy:And based on where you focus most of the priorities for the business? So now Agustinus has been able to sell a part of his shares. And with that, now he's fully focused, I mean, 90 % focused on the medical side. And he has used some of the proceeds of the sales to open a research facility. really fully focused on the medical side, which was always the intention. And at the beginning, we were using him as well and asking him to come to more marketing trips, etc., to be facing, again, the clients and journalists and explaining the adventure and the concept and the technology. But now that that has been made, you know, I think we've achieved that milestone where we don't need so much involvement from him because, you know, the key element is the proprietary ingredients that we have, the TFC-8 that we have in the cream and that evolution that we did with DUA is TFC-5, so it's another evolution.

27:32so we have the scientific team in Germany doing those appropriate ingredients and then the rest of the team I described is outside of the biotech it's purely focused on the skin care and hair care work that we do so that's where the deployment is because the medical side depends more of the rhythm of clinical trials and it's usually seven years cycles for clinical trials for products to be

28:01The Gstaad Guy:able to be approved. I'd love to know more about you as the founder and your personal desires to get into this space and what you were doing prior. So actually, I started working here in London when I was 22 years old in finance. So, you know, I was at Goldman Sachs and then managing director there. Then I was a partner at a Brazilian bank called BTG Pactual, who was kind of an up-and-coming emerging market bank. And so I met Agustinus while I was at Goldman Sachs, actually. And when we launched the project, I was a partner at that Brazilian investment bank. And the characteristic of that partnership is that you could not monetize your shares in the bank unless you would resign, which made my decision to become entrepreneur even more clearer because I could not, you know, do it halfway because in order to finance, because I had, I self-financed the project for the first year and a half.

29:09So I had to, again, you know, pay for the research and development, the building of the team, the, you know, the rent of the offices here we had in London and et cetera, et cetera. So, So I had no choice but to sell my shares in the bank. And therefore, I had no other choice but to resign and change complete life, which ended up being obviously the right decision. I never worked as hard as I worked during the setup and those last few years. Because people think, oh, when you are at Goldman Sachs, you work very hard, etc. But actually work harder. Being an entrepreneur, I think it's beyond because you live and breathe your project, right?

29:55You have no real concept of weekends or holidays. Everything is merged. You have to be 24 hours on your project. But luckily, as I said, for me, I found more meaning. I was never really passionate about finance. Like, you know, I kind of was part of this community of people who ended up in investment banking, not really understanding why. I mean, it was, yeah, you understand why because it's a pragmatic way to. But my idea was at the beginning to stay actually two or three years in investment banking and then make some saving in order to create a company and become an entrepreneur. So I had that in mind.

30:36But I nearly studied medicine. So for me, that project was, I became an entrepreneur, which was one of the things I wanted hopefully one day maybe to do. And I had to work and collaborate with doctors and professors, etc. So it was kind of mixing two things that really inspired me to do. So the jump was, again, sometimes you have to trust how some doors open because it was totally unexpected. It was not something I timed or thought, okay, I'm done with that career, so now I go to another career or I absolutely need to become an entrepreneur and I need to do it by day X, right? That project kind of fell on me.

31:28again, a dinner and suddenly you think about an idea and the implementation of that idea changed my professional life. But again, it's how things with HandSight could make sense because if probably I didn't work in London in that field, I probably would not have accumulated enough savings to finance the project. maybe I would not have learned certain skills that allow for the creation of a team and structuring that team and bringing as well the project forward so suddenly me being, I'm not going to say I was a tourist in finance but a little bit because I was there but not knowing exactly why, always looking for maybe the next project or the next thing to do and investing or co-investing with some friends or people in their project so suddenly those years made sense

32:26The Gstaad Guy:it's not a simple path at all to go from the banking world to the world of cosmetics and skin care I'd love if you could help paint a picture for the audience of what the industry looks like who the giants are who the entrepreneurs are and what the dynamic is in between those parties yeah no it's today I mean yes the number one player is L 'Oreal and again I haven't checked recently their market cap but I think it's north of 150 billion I can't remember if it's 170 or more so it's really a very successful very professional team of people that have been you know delivering years in, years out. Impressive organization.