Jolie CEO Ryan Babenzien on how to market a shower head as a wellness product in the post-DTC era

0:28Hello, everyone, and welcome to the Modern Retail Podcast. has approached that marketing and getting that type of person to buy it and how they understand the benefits of this product as opposed to just being something that's in my shower that I use every day. Correct me if I'm wrong, but Jolie's profitable. You guys have seen some really great growth over the last few years. I really want to talk about building a company now and how you're able to go about all of that because that's difficult, but also a mindset that I imagine many of our listeners are thinking about. But Ryan, how are you doing?

0:55Thanks for joining. I'm good, Kale. Thank you for having me. First, let's start with you because I was doing a little bit of research about you. You have not been in the water space, we shall say, for your entire career. You're the founder of a shoe brand, right? That's correct. Yeah, I would say I have not been in the water or beauty space up until very recently when we started Jolie. And my career, for the most part, has been as a brand marketer and then brand creator in the brand greats, which was a sneaker company. So what made you decide to go into showerheads? Yeah, it's a great question.

1:32And it was really decades of working inside the footwear industry at large, then creating the first D2C sneaker company and really paying attention to what e-commerce was good at and what it was bad at and how consumers behave and what that means in terms of building an business. So the idea for Jolie really was derived from the lessons I was learning, building a primarily e-commerce based sneaker company and learning how inefficient e-commerce can be for fashion broadly, or more specifically things with sizes. And that got me thinking about, is there sort of a perfect product that is limited in sizes, ideally just one?

2:24And I really started to think about that and ultimately came up with a framework that is how Jolie came to be. So it sounds like you came up with the business model or the framework before you had the product? That is correct. I came up with a framework and then reverse engineered a product inside that framework and it landed inside the beauty space. I should probably share the framework with you because I think that's pretty important. Yeah. I felt that if there was a product that could cater to vanity, that would be useful because vanity really drives a lot of our decisions. It's probably the last part of your wallet that you do not get rid of.

3:04We sort of invest in ourselves for the last dollar we have. The product would be singular in size, one size fits all. and the product would need to be used habitually without thinking about it. Something we do every single day without consideration. And I developed that framework years ago, put it on a whiteboard in my bedroom or in my home office rather, and looked at it for years. And then one day in the shower, sort of think about why are my legs dry? My legs at this point in time were like a little more dry. By the normal, I was using more lotion. That led me to researching water. And unfortunately, I learned that water in North America and most of the world has really harmful contaminants in it that are really just bad for your skin and your hair to simplify it.

3:55Put that on the whiteboard. And then one day in the shower, I had a shower thought that I would create a beauty wellness company that purified your shower water for better skin, hair, and well-being. Can you walk me through how you went about, like, you had this idea. I don't believe you're the first filter shower head, though tell me if you are. We are not. We are not. Yeah. So was it the idea that you put this all together, you knew that this product existed, and then you found a co-founder and decided to go from there? I started to buy filtering showers because once that idea was established, I realized, oh, there are filtering showers in the market.

4:29Let me see if my idea is just not that good because it's already been really built out. And what I learned through that process was is that there was no filter that really did what it said it was going to do. And there was definitely no filter that was aesthetically pleasing. And I felt there was an opportunity to, one, create the best filtering shower in the world in terms of efficacy and what it really did to the water and how that affected your skin and your hair. Two, something that was beautiful in design. You know, we like to reference Nest, the thermostat. And, you know, before Nest, there was really a pretty ugly box on the wall that you sort of had a slider and it was it wasn't attractive.

5:16And Nest came along and reimagined the utility of this and as well as the design. And the design was an identity of the user itself. So if you go to your friend's house and they have a Nest, you sort of identify you're sort of a part of a crew. You're part of a tribe that you care about the environment and you're concerned about electrical bills. But they did it in the design because you can see the nest from across the room. And we really wanted to create a product that had that effect, that you could go to your friend's restroom. And without knowing the brand, just by the design ID, the sort of silhouette that you would identify this thing as a brand, which ultimately is Jolie.

5:58And it said something about you as a user. Makes sense. I wanted to dive in to that part about being a beauty and wellness brand, because it makes a lot of sense to tap into people's vanities, but you're also using a product that no one has associated with it in that realm. So how did you approach that for when you launched? How did you go about trying to switch people's mindsets when it related to something as ubiquitous as the thing above my head when I'm showering? Yeah, this was going to be the big challenge. And we thought, okay, if we don't, it's not just positioning and messaging, it's actually like what it does, right?

6:37So the utility of a showerhead historically is just to push out water. That's what it does. We believe that all showerheads ultimately will be filtering over some period of time because it's necessary now to filter the water, not just spray it out. So there is the sort of timing of us coming into the market is out of need, right? Like that's just luck. We happen to be hitting the market when it really is a need. But we call it step zero. We think of this, you know, beauty trends come and go, right? There are new products in the beauty industry every single day. They call it the wet business, whether it's lotion or serum or hair or skin or SPF.

7:24And they come and go. And you might even try them and use them for six months and then try the next one. And that's generally how the beauty industry works. The one constant in all of that is your shower. You may change your shampoo every week, but you still shower. So we call it step zero. We think it's the most critical part of whatever your routine is, whether you have a one-step routine or a 10-step routine. If you're not purifying the water and giving your skin biome and your scalp and your hair the best water to work with, the products are then sort of less effective, right? They're having to make up all the damage that the water itself is doing.

8:03And the beauty industry has overlooked this source of so many issues they're trying to resolve. The source is the water itself. So we think it's fundamental to the future of better skin and hair and health. That makes a lot of sense. But how did you go about explaining that to people? It seems like that would be something they never even thought about before. So is it just in education? I feel like that's a behemoth task just in launching a new brand and explaining a new type of product that they know about but haven't thought about it with this lens. Yeah. Yeah. Well, education is sort of the broad, you know, shell that all of this lives under.

8:49But we needed to make sure people understood that their water was not what they thought it was. Right. It's not we're here in New York. People think that the water here is excellent because we have great bagels and pizza. And the reality is that should not be the proxy for good water. So you're saying the fact that New York bagels are so good does not mean that it's helping my head. It definitely not. Unfortunately, I wish I wish that, you know, it was the indicator that the water was fine for your skin and hair. But unfortunately, it's not. So we we created a really incredible. This is one of the one of the best things I think we've created.

9:29We licensed the national water database, which every state by law has to report what's in the water. So so this this information is public. It's just very difficult to find. State governments are not particularly thoughtful on how they present information. So we licensed that database and still do. And we make it really easy for a customer to know what's in their water. That was step one. And by giving us your email and your zip code, so this thing is hyper localized, hyper personal, we will tell you what your water is and the contaminants that are in it and the multiples above the EPA recommended value in three seconds.

10:14You just put in your email and your zip code and we send you a free report. That was step one in the education. And we did that pre-launch and it worked as good as any, let's just call it a lead gen tool, but it was with real purpose. It wasn't about capturing your email. The email was just the vehicle we needed to send you this really valuable piece of information. It was about informing you that your water is shit and you should fix it. And, you know, I think from that moment on, education became vital in that people started sharing their water reports across both their digital networks, but their personal ones in real life and educating the market along with us.

10:59And I think that has really been a a unique part of Jolie and the velocity that we've seen in just 24 months. We just turned, you know, two a couple of weeks ago. And what we've achieved, thank you. Thank you very much. What we've been able to achieve in a very short period of time has been enabled by the customer themselves. Just to give some context in terms of it, correct me if I'm wrong, but your first year you did about$4 million in sale. This year you're on track for$25 million. Is that correct? That is correct. It'll be higher than 25, but I'm not ready to make that statement yet. Feel free to let me know when it is.

11:37Talk about just like how you achieved that velocity. Was it really just that you had, you know, this tool that let people know their water was contaminated and they were aghast and like took to TikTok and said, I can like see the TikTok posts about this in the sense that like, I imagine someone being like, did you know like this? Was that what helped it or what other tools or steps helped get this word across that led to this growth in less than two years? Yeah. As you probably know, having interviewed many, many founders, there's no silver bullet. There's no one thing that we can attribute to this sort of success.

12:14But it is a really important part of our success. And we believe that people influence people. paid marketing has not performed well for over a decade and and yet the entire industry is sort of still spending the majority of their marketing budget on on paid it just isn't working guys like so we wanted to approach the market differently and rely on people the way we do that is getting them to share their story with the use of Jolie, whether that's at the dinner table in real life, which we certainly cannot measure, or, you know, just out shopping with their friends, or them sharing it on Instagram or TikTok or whatever their preferred channel is.

13:01In two years, we're now approaching 20 ,000 pieces of unique UGC. That is, in my 20-year career, I've never seen anything like that. I don't think anybody's achieved that level of volume. And when you have a network of people who've become advocates for your business, that is the most powerful form of marketing in the world. It's still the most elusive thing to create. It's how do you get Ryan or KL to refer five people simply by just saying, I tried this new thing and here's my experience. That's really powerful. So that is the core of our marketing. That's how we do it. There's a thousand other things that surround that, that, that, you know, we're quite good at marketing and we're good brand builders.

13:53And, you know, we take sort of a, we don't believe in best practices. We believe that they're sort of dated and challenged and we should try to do things differently. We have, you know, five trucks driving around the city of New York with a billboard on it that talks about Jolie in a non-beauty way. Most beauty brands would put a very glossy picture of a beautiful person and saying, look at me. We made the truck look like it was covered in dirt where, you know, you were a kid, you would like write on somebody's back window, wash me because the car, We took that approach, that concept. So this truck looks like it's filled with mud.

14:36And on the side, it looks like you wrote in big, giant letters, what if we told you your shower water was dirtier than this truck? That has been an incredible engagement tool for the city of New York. We have hundreds and hundreds of people that have just photographed that truck driving around the city and then posted it on their Instagram. So we have fun with marketing. We do things. We have a lot of stickers that are posted all over the city on the sidewalk. You know, that subway handle is dirtier than your shower water. We've picked selective watering holes or bars around the city. That martini is dirtier than your shower water.

15:18You know, we just try to get people's attention in a fun and informing way. So marketing plays a role. But the last point I want to make, Cal, is it just works. This provides tremendous value to our customers. We have thousands and thousands of letters from people of what it's done to their eczema, their dry skin, their dandruff, their frizzy hair. And when you have something that actually provides that much value in a tool they're using every single day, the word generally gets out pretty quick and starts to amplify. We're going to take a quick break and we'll be right back. Let's go deeper into the UGC because I wanted to talk with you about this and I'm glad you brought it up.

16:04And I guess my ultimate question, and it's pretty broad, but I imagine you'll have some view on this, but how do you systematize it? UGC is so vast. There are people with 10 followers. There are people with a thousand followers that are so like, what is the way that you've been able to harness it so that you've been able to have some semblance of control over the narrative? We, well, we don't, we don't, um, try to control it. We, we, we, we felt confident that every individual was going to tell a real and unique story that was complimentary to the brand itself. You know, a firsthand testimonial of a customer is really powerful.

16:48Now, it may not say all the words that we would say as a brand, but it gets the message across to their peer set, to their social set, way more effective than we could, because I don't really know how you talk to your friends. You know, I don't really know how you speak or what your dialogue is. So if you told your friends what was cool about this thing or what it did for you, that's probably a better way for you to communicate to your network. And we don't sort of dictate what they can say or can't say. Do the campaigns or projects that you do, are they all with the focus that they will engender some response that then you can harness?

17:29From our marketing that we actually... Yeah, yeah. The point, like, someone will take a picture of it and post it. Or, like, how do you go about it so that you continue making that momentum? Tom? It's always done. We like to think we're clever. I mean, maybe we're not. And that usually qualifies us to be recognized in a different way than sort of a fucking, excuse my language, just down the middle, bland, boring thing. And I think there's a lot of bland, boring things in marketing today. We created a, you know, we did an April Fool's campaign this year where we said we partnered with Secession.

18:10And every character on Secession had a custom jolly. And we created a news article. And it was the second week. So it was the last season, but it was the second episode. And the day after that, it was April Fool's. that was so successful we still have people asking if they can buy it right six six months later seven months later then for the thing i'm just giving you some examples of how we like to have fun uh we created a snoopy float for the thanksgiving day parade and it was snoopy with a giant joley and it was just flying through new york with the rest of the floats we created that with chat gpt and posted it on social and i put it on linkedin and people were asking how much should you pay to get the float in the parade?

18:58And it just like, it was hyper relevant because it was a moment in time. We knew people were going to watch the parade. And if we knew we talked about it, people would also talk about it. So the short answer is yes, we like to try and engage people in a fun, creative way. And I think that's what marketing can be and should be instead of, you know, a boring digital ad on meta that doesn't really say much. Just to make sure, did you actually have a float in the Macy's Day Parade or did you just say you had a float in the Macy's Day Parade? We actually never said we had a float in the Macy's Day Parade.

19:33You just posted a picture? Of a float on the day of Macy's Day Parade. And this is sort of how the mind, you know, this is just how the market works and the mind thinks. Because we did that, people just made the assumption that we had a float. We had a Snoopy float and it was completely artfully created. It was a piece of art that we posted on social that was the most engaged social post we had all year. Really? That's very funny. So do you spend at all with digital media? Or you say what a lot of other people say, which I've written about for a decade now or whatever, like that, you know, customer acquisition is high.

20:14It's really just a hamster wheel. But do you put any of your advertising budget into there? We do. And I certainly don't want to be misleading that we don't spend money on digital paid or paid marketing. We do. The difference is we're able to get a lot more efficiency out of it than if we weren't doing all these other things. And when we put it all together, we just have an incredible flywheel of a first purchase profitable business that has been operating that way for the better part of our entire existence. We got profitable in the fifth month of existence. And that has always been the goal, to get profitable really, really quickly, because that gives you leverage when the market gets bad.

21:05If you were actually raising money, you don't have to because you can self-sustain. There's just a million reasons why being truly profitable, not like these creative, adjusted profit. You wouldn't imagine the amount of different hoops I've had to jump through asking, are you profitable or were you profitable? We are profitable by GAAP standards and every accounting firm in the world would go, this company makes money. that's how we measure profit. You have expanded into wholesale in some interesting places. You're on Goop, you're Nordstrom, Blue Mercury, Anthropologie. So can you just talk about how over the last two years or however long you've been doing these, why you chose these ones?

21:52Do you want them to be core or do you want them to be more complementary to the business? How do you think about them? Well, I also wanted to say that from the beginning, we were always going to be an omni-channel business. I personally don't know of any purely digital consumer brands that are profitable. So I think we all know that it's clear to have other points of distribution other than direct to sort of support the business. And that was our approach. In terms of where we went or where we are today, you didn't mention Erwan, but I think that's a really interesting one because you know they're the number one luxury grocery store in the country and we're the top beauty or one of the top beauty products in the in in the company we're also on revolve.com which has historically been a women's fashion brand but they're building a really big beauty business we are in places where customers are looking for beauty and wellness products that was sort of step one let's show up where the customer with an interest in this stuff uh will shop it's pretty pretty pretty simple not a lot of complexity common sense and and from there we can start to scale out um you know we we see ourselves going into some other more mainstream beauty stores but then beyond that we see us showing up in home depot one day and costco even though we're a beauty wellness tool we're just going to be positioned slightly different in Home Depot, but that would be a reasonable expectation that we'll be there.

23:32Well, you just answered my next question, which was, would you ever be in Home Depot? Especially with a place like Erewhon or a place like Anthropologie, when you're in those stores, how do you think about A, where you're placed and B, how you're able to say what you are, given that for the most part, the other products are, as you said, liquid or wet? We recognize that this is a brand new category, right? Again, we're not the first filtering shower in the world, but we are the best. And we are the one that has positioned it where we're considered a beauty wellness tool. And that goes down to the packaging and the experience of unboxing, as opposed to some of the other ones that you could find that are sort of, you know, in shrink wrap, like one piece of paper that says, you know, screw on here.

24:22this is a really thoughtful experience from the unboxing to the installation and the way we show up in the stores though is sort of everyone's different because there's no section of the store that says all the beauty wellness filtering showers are over there so this is an education for the retailers themselves we tell them our story and what the consumers are saying and doing and how they're using it and that usually indicates where we should show up in the in the store and in the case of Erewhon we're in all their stores and we have a big end cap that essentially is designed to look like a shower it's it's a porcelain tile wall with a joly coming out of it as if it were a shower with some information on there and text and then shelving.

25:15It's been overwhelmingly successful for them and us. And we were both sort of like, hey, let's see what happens. Nobody went in and thought this was going to be the number one product in the whole beauty section, but that's what it's turned out to be. So we think that that's a combination of one, educating the market in the way we have. And I think that's starting to expand rapidly and the value proposition we provide to the customer. They know they have terrible water in LA. They know it. And when they use Jolie, they have better skin and hair. And that usually goes pretty, that travels, that information moves quickly because every customer and woman who's using it, or even men, they want their friends to know like, hey, I know you have problems with eczema or acne, it might be the water.

26:06You should try Jolie. I use it, and this is what happened to me. And that is literally thousands and thousands and thousands of stories just like that. I wanted to switch gears because we've mentioned this a few times, but I want to get more into how you approach this. But the focus on your unit economics and profitability, did you think that that would always be quarter this? Or was that just because of the weird times the last two years have been, you knew that you needed to have a sustainable business. And correct me if I'm wrong, but you're bootstrapped, right? Correct. Yeah. So will that always be the case?

26:40We're so profitable now we don't need capital. So the answer is yes. Yeah, it was always by design to get profitable, not raise institutional capital for a couple of reasons. One, selfishly, let's own as much of the company as we can. And then practically, it would be really nice if we We didn't have to operate under the sort of operational needs that a fund has, which is having a board and dealing with all of the maintenance that comes with institutional capital. And frankly, it's not that there's not great investors out there. It's just distracting as an operator when you have to manage that at least quarterly, usually more often, but at least quarterly.

27:23you've got to take time out to build reports and do the things and give them the information that they need. We don't have to do that. On the one hand, it's a nice check and balance if you're not doing well, right? It might help discover the things that should be fixed. We don't have that problem, thankfully and fortunately. We are very profitable. One of the few brands, I have not been able to find a brand in the last 10 years that's been as profitable as we have, certainly in the timeframe we're talking about. And we've managed to do that in a coming out of COVID and building in one of the most volatile economies in the last 50 years.

28:05So I think we're doing something right. Yeah. I mean, as I was saying earlier, I talk with a lot of brands, a lot of them tout very specific caveats of profitability, if that makes any sense. You know, like we reached our first profitable month in July or something like that. And then you say, well, are you still profitable now? And they'll be like, we can't comment. So like things like that. So it's very impressive to talk to a company that's been able to do this since day one. Yeah, like the way we measure, the way we look at profit is very simple. There's a line on the P &L that says EBITDA.

28:38And either that number is in brackets because you didn't make money or it's not in brackets because you did. And every single month we have a non-bracketed number. And at the end of the year, it's also non-bracketed. It means this is how much money we made. that's how we measure profit. We didn't even talk about this and maybe it's implicit, but I think that the subscription model, the fact that you have filters in there, was that a core to the beginning of it? Do you think that that is sort of you have people hooked? I always find subscription offering so interesting because usually they don't work because you don't need every day.

29:08You don't need to get a new box of clothes every month. But if you do like your showerhead, you will want that replacement filter. So how has that fit into the unit economics? It plays a huge role. And I agree with you. I think most brands were creating subscription to sort of try and juice revenue, but you don't need subscriptions for everything in your life, right? Showering is something we know with like a very small degree of failure, like how often you're going to do it, how much water you're going to use. And we developed the product that can last for a certain amount of time. If you want the benefits of Jolie, you will have to replace the filter every 90 days on average.