When actress Jessica Alba first conceived her idea to launch a line of nontoxic household and baby products in 2008, skeptics tried to push her toward the same tried and true starlet formula: "Why not just be the face of a new perfume?" A few years later, she has a pretty good answer. The Honest Company is expected to pull in more than $150 million in revenue in 2014, has a reported $1 billion valuation, and is poised to go public. Take that, Hollywood.
Jessica says ... I founded The Honest Company on this
idea: Everything that touches you and your family--everything in your
home--needs to be nontoxic, needs to be effective and beautiful to look at, and
needs to be affordable. I really wanted it to have an e-commerce model.
What are the things that all parents need? Diapers and wipes, for sure. And
then a mix of cleaning and personal care products. Wouldn't it be great if you
could pick five things and get them delivered through a monthly
subscription?
Everyone I approached was skeptical. There
wasn't one person who said, "Yeah, that can happen." I heard
"Just do one thing really well and then you can expand" a lot. But I
wanted this to be a whole lifestyle brand. Everyone I talked with in Hollywood
could not wrap their heads around the idea. Whenever I tried to sit down with
them about it, they would just get this glazed look on their faces.
Entertainment is a totally different business. It's like, how do you squeeze
the most out of a person for five seconds, and then you move on to the next
one. It's hard for people to take anyone seriously who's never done this
before. They see you only as something else. But all that just gave me fire to
move forward.
I approached this guy who built the
top-selling accessories brand at Macy's. We're friends, and he was trying to
help me figure out how to execute on this idea. But he built his brand off of
one item and then expanded. He found traditional retail partners and then
opened his own stores. He didn't understand how to build this thing from
scratch. Friends want to help you, but they're also going to be the most
critical. We launched with 17 products. Even my husband, Cash, thought the idea
was too big.
It took me three years to find
my business partners. You have to be brutally honest with yourself and
understand your strengths and weaknesses. I'm not a business person--I'm a mom.
I wasn't going to be coding. I wasn't going to be in the lab mixing potions.
(Though I do test all the products on my kids!) I wasn't going to be the one
doing the business model and running the operation. If I went in there and
said, "Hey, I'm going to put together this business from scratch all by
myself," I'm sure it would have been a lot more difficult to get VCs to
take me seriously, but once you have the right partners, it isn't. Having the
right partners also means having people you like. They're all people I wouldn't
mind getting stuck with at an airport for five hours. We can hang and have a
beer and chat it up, or stay silent together and be totally cool with that.
That's really important.
Then the team sat down with a lot of people
who weren't going to invest--friends like Tory Burch and Narciso Rodriguez,
both of whom built successful businesses, and people from big tech companies
and public companies--to test our pitch. They asked us great questions: What
are you going to do when you run out of product? What if it's not delivered on
time? How are you going to get people to your website?
With them, it didn't matter that we weren't
perfect in the way we pitched Honest. It was kind of like how comedians go out
and do stand up in small clubs in different cities to test their material before
they do their HBO special: All of that back-and-forth helped us refine
our pitch. And it got a lot shorter--we got it down to a 10-minute pitch deck
and a 15-minute question-and-answer session. So then we knew we could do it in
a 30-minute meeting.
Almost every VC we talked to was on their
first or second child and told me their wives were doing the same research that
I was, trying to find a brand they could trust. We didn't try to find investors
with young families. It just happened. But in retrospect, that would have been
a good tactic!
By the time we got into the room with VCs, it
wasn't that hard of a sell. We went in with a real plan of attack, a strong
process, and smart people. By that point we had talked to so many people,
having them try to poke holes in the idea. Because that is exactly what the VCs
are going to do. Inevitably, they're going to ask questions you can't answer.
If you're writing down the 20th question to which you don't have an answer,
that's a problem. You can say "I'll get back to you," but not more
than five times.
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