Beauty Delivered: How Birchbox Is Disrupting the Cosmetics Industry

**Waqas** · August 16, 2011

The Extraordinary Entrepreneurs Series is supported by Diet CokeÂ®. Now, the drink that helps you stay extraordinary brings you extraordinary people. Find Diet CokeÂ® on Facebook for access to a whole lot of extraordinary.

Female-helmed startups are having a hey day. Harvard Business School has bred the powerhouse duos behind Gilt Groupe, Rent the Runway and and a cosmetics company you may have heard of, Birchbox, run by Katia Beauchamp and Hayley Barna. Born out of the notion that women need a beauty editor to help them “curate the clutter,” Birchbox is a $10 monthly subscription service — you fill out a beauty profile, and then every month, a little box of high-end beauty samples from the likes of Kerastase, Laura Mercier and Nars arrive at your door. The YouTube channel offers product demos, and the website has tips and tutorials to help you “discover products you love.”

Mashable spoke with Beauchamp about how she and Barna built Birchbox, how they got brands on board, and how Harvard helped prepare them for the big leagues.

Name: Katia Beauchamp, 28

Company: Birchbox

Year Founded: 2010

Fun Fact: Prior to Birchbox, Katia worked in structured finance and commercial real estate for three years. She attended Harvard Business School to leverage her finance background into a career in entrepreneurship. Her foray into beauty isn’t too surprising — she had interned at Estee Lauder during her years at Vassar.

How did Birchbox begin?

Hayley and I met in business school. We were best friends and not two people who were intent necessarily on starting our own business. In late 2009, we were going to be heading into our last semester, and we came up with this idea for a few reasons. First, we thought there was a real void in one thing for women — people had come up with a great way to sell women’s fashion online, but beauty hadn’t been really cracked, in our opinion. And the reason was because it’s extra challenging to develop an online business for beauty, because it has a touch, try and feel element to it. So that, coupled with the fact that Hayley had a best friend [Mollie Chen] who was a beauty editor, really inspired the idea because [Hayley]‘s a very passive beauty consumer, but she always had the best products, and I always noticed it. I would be like, “Why do you have the newly launched Benefit mascara?” And she would be like, “Oh Mollie gave it to me.” All the time!

By looking at the market and thinking of what hadn’t been discovered yet or served yet, we were inspired by the idea that every woman would want a best friend who’s a beauty editor and is helping them curate the clutter. We came up with this idea of a subscription business where we were leverage brands’ samples that they were already creating and getting them in the hands of a more qualified consumer. Creating an efficient marketplace was the vision, but focusing on delight for the customer, as well. So efficiency plus surprise and delight — we were excited by the intersection of both.

How did you get the brands on the Birchbox bandwagon?

â€œWe were inspired by the idea that every woman would want a best friend who’s a beauty editor and is helping them curate the clutter.”

The brands [came on board via] cold emails to the presidents and CEOs initially, just telling them about the idea and seeing if they want to chat and hear more. It was great because we did hear back from those brands right away. And the ask was, “We have this idea, would you help us test it?” Hayley and I didn’t come out and say, “We’re going to launch, we need hundreds of thousands of samples!” We said “We’re going to test it during our last semester of business school, will you be a part of that?” And they were extremely receptive to that, got back to us immediately and we met with them a few weeks after. And it was amazing how quickly they said yes.

And then after the beta test at school, we had results and we had data. And they answered two really big questions for us. The first was, would consumers pay for samples? And the second was, would these great brands work with us continuously?

When we launched and we had a little bit of street cred, but we really had to go after brands in the first few months.

What was the turning point in the Birchbox story?

I think it happened a few times — you have to be a little bit naive and optimistic to get this going anyways. There’s the first phase, of just the idea and getting a lot of nodding heads from professors who said it sounds like it could be interesting. And then we had to get the industry, and hearing their quick reception gave us an immediate sense of “Wow, this really could work, they really want it.”

We signed up 200 paid subscribers pretty quickly, but then there were still so many moments of fear. When we launched, we had 600 and we were like, “Are they going to tell their friends that this is great? How are they going to feel about the boxes?” We didn’t know.

Around October, when we started vetting our first vloggers to do unboxing videos, it was a pretty surreal moment to see tens of thousands of people watching them open a Birchbox. And the person on the screen was saying the words that we really wanted them to say about our service. Things like “this is so exciting” and “I’ve never tried this product before” and “I would have never used this product.” I think that was a pretty exciting moment. Then the holidays were right after that, and that was a really good time for us, but that isn’t to say that there were so many days when we worried about whether there would be supply and demand. This is something where you can’t get complacent. It’s never, “Yes, we’re winning.” One thing I say to myself and to the team a lot is, “We’re still really just starting, and there’s a long road ahead of us.” We’ve had some great traction, but there’s still so much to do.

What’s the biggest challenge when you’re starting your own business?

Starting [laughs]. Being in business school and having the tendency to analyze everything — what are all the possible outcomes and what’s your idea. Your idea usually isn’t a small thing, it’s usually a pretty huge idea. For us it was: change the way people shop for beauty online. I think it can be pretty daunting to go after a huge idea, and also you want to run every potential outcome for the idea. You can get so wrapped up in those numbers and how you’re going to do everything that it can take a long time to start. I think because we had this incredibly pressed deadline — graduation — we didn’t have the luxury of really laboring over it. We said, “We’re going to take a small version of our vision and launch it with the small amount of money that we have and see if people like us.” And that really empowered us and helped us see the minimum viable product for us, and that was such an important way for us to feel comfortable personally with taking a leap of faith and to really get our brand and our customers excited. And then knowing how excited they were about our smaller vision, we knew it was only going to get better.

You have a successful startup less than a year after launch. That’s pretty awesome — what is your vision of success?

I don’t have a firm vision of success — it’s definitely not a number, and it’s not somebody we would sell to. For us, I think it’s really building a company that’s adding value to the employees, to the brands, to the customers and being able to support itself. I think that feels like success. We’re making money, and the fact that it all works — it’s not a Ponzi scheme or a house of cards! — is something that we strive for, and that’s what makes us feel successful. And also, it’s knowing the people who are working with us feel like they’re having an incredible opportunity and they’re building the skill sets they want.

Do you feel like you learned to be an entrepreneur at Harvard? Do you think entrepreneurship can be taught?

I hope so! I don’t think i was born one, but I definitely think there a lot of tools they teach. In general, the way HBS classes are taught is that they require you to take 20 pages of information and make decisions. That’s what the class is every day, that’s how the case method works, and I think it’s an incredible exercise for what the life of an entrepreneur is. You have to make a lot of decisions every day, and the longer you put it off, the less likely you are to get to it. So taking a little bit of information and trying to make the best assumptions you can — that was incredibly helpful. Now they have an entrepreneurship program at Harvard, and it’s growing — since Gilt and Rent the Runway, they’ve invested a lot more in getting students to understand the tactical elements and tools that are really necessary to do this.

So, I definitely think it’s something that can be taught. For me, being in the entrepreneurship class and hearing from failed and successful entrepreneurs was the moment when I thought, “Wow, I don’t think everyone had the stomach for this.” And I got really excited, even when people talked about taking out a third mortgage, failing and then trying another idea, I was like, “That’s the life I want.” Because I really felt that working everyday and loving what you’re doing is not something everybody gets to do, and when you’re working for yourself, it’s such a privilege to see yourself persevere through challenges.

What makes you a great entrepreneur?

Um, everyone’s going to say this, but I don’t think I’m a great entrepreneur. I have a will to survive and hopeless optimism — it’s a never-ending sense that things are going to work out. There is no “no” for me. Ever. I don’t even hear it. One of the biggest things is that you have to stay a little naive, I think, and believe that you can do anything, that you can change peoples’ minds, that you can change behavior.

You, Gilt, Rent the Runway — these are all female founder duos. How do you divvy up the responsibilities, and could you have done it alone?

I don’t ever want to think about doing it alone! We divvy it up pretty cleanly — Hayley does everything internal for the business, and I do everything external. And then of course we talk about all the big decisions for the company together. And even the smaller decisions where it’s like, “I just need to pick your brain and bounce some ideas off you” and we touch base with each other. And it’s amazing for a few reasons. The obvious is that we have different strengths and perspectives and experiences, which helps us — we think — create a better outcome for Birchbox. The sum of both of us is greater than the parts. I’ve never questioned that, and it’s such a blessing to have each other. The other reason is, it’s kind of like if you’ve ever been a runner, having a partner to help you get through when you’re exhausted gives you the energy — you kind of run behind your partner [until you gain strength]. It’s amazing, you just tend to be off at different times. And that’s what it’s like to have Hayley. If I’m having a bad day and thinking, “How are things doing to be okay?” she’s having a great day and she’s like, “Listen to all the great things that have happened today on my side of the world!”

I feel like that trade-off really helps — it can be a roller coaster, but having a partner helps to smooth the ride.

What inspires you?

Hayley said it really well the other day — I think there are different phases of what inspires you when you’re starting a business. At first, it’s the idea and the excitement about the idea and the possibility of the idea and thinking, “Will this take off?” And then there’s delivering to the brands that have given us something that’s very treasured to them, and then it’s really delivering to the customers who are paying. We have made a promise to give them something that is good enough for what they’re spending, but that also really delights them. And every month we have this task of delighting them again.

And I think today, it’s really the employees. That’s what happens — you build this organization full of really talented people, and every day it’s inspiring to see everyone help the organization rise to the occasion. And that’s really where the responsibility lies, because we have so many talented people who have so many other options, and we get to be around them. It’s really an honor.

Outside of Birchbox, to be horribly philosophical, I feel like having this one life inspires me. I think feeling like every day is an opportunity to feel very empowered and very lucky for having impacted at least this small corner of the world we live in is pretty inspiring.

As an entrepreneur, you live, eat and breathe Birchbox and business. How do you pull back and see the bigger picture?

You try to, but it is a little bit hard. Getting back to working out has made me feel a little more like myself, because it had really been such a long time. And I think really making the time to not do emails and to spend true quality time with people, because it’s so easy not to, having your mobile device with you everywhere. If I’m meeting with a friend for an hour, I’m not going to think about whatever it is I have to do when I get home or talk about it either. You have to realize that there are so many other things happening in other people’s lives, and it still feels like all of those things can get drowned in the day. So consciously making mental room for others.

What advice do you have for other entrepreneurs?

â€œThere is no “no” for me. Ever. I don’t even hear it.”

We met with one of our friends yesterday who’s leaving to start his own company, and he was getting really bogged down in what we were just talking about — building these huge models for all of the scenarios. Hayley and I were just like, “Stop right there. Make three of these products and put up a website and see if anybody will buy it. Baby steps!”

And it’s a lot easier today to get started — there are amazing tools and platforms with which you can launch an ecommerce store. And of course, one of the hardest things to think about is, how are you going to get people there? But now there are so many tools to help you do that, and partners that are willing to take a chance on great ideas. So I feel like opening your eyes a little and seeing that you don’t have to spend so much money to acquire every customer. You can think creatively and do a small test to say, “Okay, am I the kind of company that can continue on this path and bootstrap it?” — which is such an important question to answer — or, “Am I the kind of company that has proven something and, if I could put more money on it, that’s all I need because I have the proof that I’m heading in the right direction.” And you’ll never know, but [the test] helps you tell a more compelling story when you want to fundraise, if that’s the right path for you.

You mention free tools — do you mean social media?

Yes, social media — we built the company on social media, honestly. The first thing that happened on YouTube was one of the biggest moment for us, and then Facebook and Twitter became huge referral sources for us. We’re realizing that this is where our community was convening and people were talking about Birchbox, so it was a huge realization in terms of where we could be allocating resources. So Mollie, the beauty editor who was the inspiration for Birchbox, is the director of content, and she has a small team that helps write and create all the content.

But also, I honestly think partnerships with large- and medium-sized companies that are willing to think outside the box are a great resource if you have a idea that they think is compelling. They’re looking to stay fresh and exciting and new to the people who subscribe to their emails or the people who visit their sites. So I really think there’s a huge opportunity to leverage brands that are larger than you, where really all you’re doing is giving them something good to talk about.

Series Supported by Diet CokeÂ®

The Extraordinary Entrepreneurs Series is supported by Diet CokeÂ®. Now, the drink that helps you stay extraordinary brings you extraordinary people. Find Diet CokeÂ® on Facebook for access to a whole lot of extraordinary.

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