1. Beauty Products Coming Soon
It’s easy to get excited about beauty products coming soon, particularly when you have a product that solves a real problem and is arguably the first of its kind. Beauty products are a great place to get your feet wet and get customers on your side, but it doesn’t necessarily mean we should expect them to be used as an organic growth tool.
Let’s use Lush Cosmetics as an example: it was launched in 2015 and has been described as the first “unicorn” cosmetics brand in the UK, with a $1 billion valuation. It has been described as the “first unicorn” of cosmetics — that is, one whose market cap is over $1billion.
That said, I think we should not make too much out of this success:
In essence, Lush was an attempt to use crowdfunding (previously unheard of in the world of beauty) to launch a new category: bath bombs. And at this early stage in its lifecycle, there is very little evidence that consumers are willing or even able to use them (and even less evidence that they want them). But the £1 million raised through crowdfunding isn’t money wasted — if you look at where it has been spent so far (over £300k), it’s mainly on marketing and PR. The majority of funds were spent on product development and R&D (with just under £20k allocated for “waste/reuse”).
But this year, Lush launched its second product: bubble bath. There was nothing wrong with Lush’s original version — but its launching two products within 12 months means we shouldn’t expect them to be used broadly. Rather than the traditional model where one product launches before another would be expected (a “bombshell”), we have a situation where two products have been launched within 12 months of each other and more than half of the funds have gone towards marketing etc.
I think there are three ways we can think about this: 1) The market has reacted differently from what we expected; 2) We’ve effectively created a new category; 3) We’re building too many products too quickly for consumers’ comfort.
2. Beauty Products Are a Growing Market
I’ve been a long-time supporter of Toni, a great brand for so many years. It’s been a lot of work to keep up with all the new launches, and their continued growth, but I just couldn’t let go. So when it felt like enough was enough and I could no longer support them financially or emotionally, I did what any good partner would do: I cancelled my account and just let them do it themselves.
Being an independent developer means you are constantly competing for funding against other developers who are trying to get the word out about their products (and so are more likely to pitch you). While that makes the life of a small developer extremely difficult at times, if you can find an alternative funding source to help you out in exchange for some equity, that’s even better.
I think we all have our own reasons for doing this. But if there is one thing we can all agree on it is that being independent means that we have to be able to do it ourselves. If we don’t (or can’t), then we won’t be able to develop products very well (or at all).
3. Competition in the Beauty Products Industry Is Growing
Much has been written about the beauty products industry over the years. One of the less frequent topics is competition in the industry. Here’s a little bit from this very popular post on Medium:
“The beauty industry is a competitive industry. It is in constant flux, like an avocado growing inside of its skin. In other words, it’s extremely difficult to predict what will happen next.
A huge amount of economic activity happens within these industries, and it’s easy to see this as a huge source of opportunity: we are all very aware that we can do better than our competitors, and that means improving our product (even if they aren’t)! It also means that we are all very aware that we can improve one another’s products, and that means making improvements to each other’s products (even if they aren’t).”
Yes! Why not? If you saw the above quote and thought “concrete examples?” well… I don’t know either, because I haven’t seen any. We can definitely do better than our competitors at many things in terms of features and functionality; but how about improving on their race to market with smaller products with lower prices? That could actually be excellent for everyone involved! For example, makeup companies need to move faster than the competition does so they can bring their innovations into mass production more quickly — which could actually be beneficial for both consumers and producers. The beauty industry is very much in flux! Innovation is keeping up with it all day long; so let us continue to innovate faster than our competitors!
4. The Future of Beauty Products Looks Bright
As a curator of beauty products, it’s all too easy to get frustrated by the current state of the industry. I see a lot of beautiful and inspiring products coming to market, but there are far too few who are taking that next step to bring their product line to market.
That’s why it’s important to keep your eye on the future, so that you can make sure you’re there first.
In fact, I think we are seeing a tremendous increase in the number of companies at every level starting up in beauty (from startups with less than $5 million in funding, to established companies with names like Estée Lauder and L’Oréal). There is a huge opportunity here for new ideas and approaches to beauty products. And that means we have every reason to be excited about what is coming out of this space — from disruptive startups like Cremesheen and Skyn Skinny, to established brands like Estée Lauder and L’Oréal (and even Lush!).
I am hoping very much that this list will help you stay up-to-date on what is going on in this area, so that you can start making some informed purchases sooner rather than later.
5. Conclusion
If you are thinking of launching a beauty product, first off, there is no such thing. Beauty products are the wrong way to think about products; they are seeking to make products that people inherently want to buy (and not just buy, but want to use and love). Products like shampoo, shampoo bars, body wash and others fall into this category; they are very specific in their purpose and intended use.
There are also two other categories of products that I will touch on in this post: those which have a connection to fashion but have a different target audience (like hair dye) and those which have a connection to traditional beauty (like makeup).
Now for some general thoughts about launching beauty product startups:
• If anyone can do it and does it well, it’s probably you. You don’t need huge amounts of capital. A few hundred thousand dollars is perfectly fine. You don’t need to be an engineer or an MBA or have any formal training in business or marketing. That is not a requirement for being successful but it is certainly helpful.
• Getting started shouldn’t take too long — the sooner you start the less chance there is of failure (the more experience you have with the product, the better your chances of success). But if you want to wait until big-time VC funding arrives, then by all means do so! Just be warned that there will likely be other startups before yours become successful (perhaps because they were funded before yours) and they won’t necessarily be successful as much as yours — just look at how many failed startups came out of stealth with billions in market cap before going public where each has since been acquired by one of the big guys.
• Make sure your first few customers aren’t just someone else’s friends — their friends should already know about your product (which makes them more likely to buy from you).
Finally…
• There isn’t anything special about “beauty products coming soon” either — anything launched today can potentially grow into something very significant tomorrow. The best time for launching any new product today is when everyone expects something else from you tomorrow.
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