Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / Securing a $630M life-changing acquisition, with Ju Rhyu from Hero Cosmetics

Transcript

Securing a $630M life-changing acquisition, with Ju Rhyu from Hero Cosmetics · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:00
  This is Juru for Female Startup Club. Hello, everyone, and welcome back to the show. It's Dune here, your host and hype girl. I'm coming to your ears from Sydney, Australia, and it is a beautiful day over here. It's very sunny, no clouds in the sky. Okay.
• 0:28
  If you've just found us, I am so grateful and so happy to have you here. Every week on the Female Startup Club podcast, I interview some of the world's most successful founders and women in business to understand their blueprint to success. And today, you're going to meet someone very, very special. Ju Ru. She's the founder of a company called Hero Cosmetics. Now, we had Ju on the show back in 2020.
• 0:57
  And as you can imagine, it was the pandemic, I was London-based, and it feels like a total lifetime away from where we are today. But she was on to share her journey in starting the business. And if you didn't hear that episode, I highly recommend you go back and listen to it because Ju took a very interesting path to launching Hero, and it's well worth a listen. It's got so many interesting gems and mini tactics that we can all take note of.
• 1:26
  But today we're digging into something very different. It's very exciting and it's kind of crazy, like insane crazy. It's her path to acquisition.
• 1:39
  We often hear on the show from entrepreneurs who have raised millions of dollars in capital and are in the middle of the journey. But last year in 2022, Ju sold her business for $630 million. $630 million. That is more than half a billion dollars.
• 2:01
  Wow, crazy. And it's rare that we get to learn from someone who's actually pulled this off at this scale. This conversation is so insightful and as always, Jew shares it all. So buckle up because we are in for such a treat today.
• 2:20
  Just one thing before we get into this episode, and while I have you here, I just want to give you some hype girl energy to get out there and start posting on TikTok today. Today, people. Last week, I shared something completely left of field to my usual content online.
• 2:38
  It's very personal, it's kind of gross, and it has just exploded online. I'm talking millions of views, thousands of followers, hundreds of new subscribers. And it really just reminded me that the power of TikTok is still just so insane and so here for everyone to access. We can all use it today. It's free to use. It's just a time investment, and it's so worth it.
• 3:08
  So go check out the video and then DM me if you want to chat about your TikTok strategy, because I'm thinking about doing some solo episodes where I break down key strategies and also answer some questions. Alrighty, let's do this. Let's get into today's episode. This is Ju for Female Startup Club. Hello, welcome to the Female Startup Club podcast. Hey, Dune. I haven't seen you in so long. How are you?
• 3:35
  I know, I haven't actually seen your face on camera or RAL in a really long time, but I have seen you all over the news, so I have seen your face a lot. I love this for us. Oh my gosh, how are you today? How's Paris? I'm doing great. Paris, we're, I mean, it's springtime, so the weather's getting better. There were a bunch of protests recently, but that's sort of calmed down, so things are good here.
• 4:03
  I feel like on TikTok, Paris looks really bad. It looks, it doesn't look good. Yeah. Is the rubbish cleaned up? Is it as bad as it looks online? What's the vibe? It's all cleaned up. It was that bad. So whatever you saw on TikTok, it was pretty bad. I mean, the trash, it was like walls of trash.
• 4:24
  You'd be walking around, you'd just be grossed out. But it's all cleaned up. It's all back to normal. There are no more protests. That's died down. So yeah, sort of back to normal. Back to normal. Relatively normal. Yeah.
• 4:38
  Oh my gosh, I'm so excited about today's episode. And I want to give everyone listening just a little bit of context because if anyone's starting to tune into the show recently, you might not know that we've had Jew on the show before. And I think it was in like 2021, maybe early 2021 or even 2020 potentially.
• 4:58
  Don't remember. But yeah, it was a while ago for sure. And a lot has happened since then. It was a while ago. A lot has happened since then. At the time, you were absolutely crushing it. And I recommend everyone going back and listening to the first version of your story because that tells the kind of early stages of what you were building and how it was going. And you'd always done things a little bit differently. You launched exclusively through Amazon. You grew through these crazy retail partnerships like Target and Alta.
• 5:27
  And then in 2021, you crossed over the $100 million in revenue mark and you went on to sell your business for something totally nuts, like $630 million.
• 5:41
  acquisition vibes, like that's on track to a billion dollars. Like that still blows my mind. So I'm so excited and I'm so happy and I'm so inspired by what you've been able to achieve. And I'm very grateful to have you back on the show to talk about part two of the Hero Cosmetics journey. Yeah. And just for anyone listening, additional background is June and I were having drinks or coffee in Paris and...
• 6:08
  And this was before we sold the company. And I was talking a little bit about it. And June was like, oh, my gosh, you have to come back for part two. So here we are. We're doing it. And I'm happy to share a little bit about the experience. Gosh, I really remember that night. And I just remember feeling what I feel now, very excited for the future you of what was about to happen and how the course of your life was going to change in a very significant way. So I'm really excited to get into it.
• 6:37
  Where do I want to start this? Because I want to obviously circle around the acquisition. How do you sell a company? You know, you're still kind of fresh. This is like six months since it's been actually announced. So maybe let's start by just understanding your point of view on an acquisition. Had you always planned to sell the business from the get-go or was that something that came along the way? For us, we always knew that at some point we
• 7:08
  And especially when we took on investors, we took on investors in 2020. And usually when that happens, the investors, they put in a certain amount and they expect actually their money to be returned to them with some kind of return. And usually that's the way that gets done is in some other kind of transaction, it could be another sort of growth equity round, or it could be selling the company to a strategic, which is what we did in our case.
• 7:38
  And then I have two co-founders who are not family. So the other thing to consider is who you have started the company with. Because if you started the company with family, a lot of times those businesses get passed down to the next generation of the family. But for us, since we were not related in any way, we knew that at some point there would be some kind of exit where eventually the company would be,
• 8:07
  under the wings of someone else. And we'd probably have, you know, we'd probably move on to different things.
• 8:14
  I bet those investors are real happy with that return. They're real happy. Yeah. And I mean, and for context, I mean, we were their first investment. This is a new fund. The fund is called Aria Growth Partners. And I mean, they're both longtime consumer investors, but it's Jackie and Trevor, and they came together to start a new fund. And we were investment one.
• 8:40
  So I think we both took bets on each other because they took a bet on us, but we took a bet on them and it worked out really great. And I think they're really happy. I think we're all happy. I just missed the name of the fund. Could you say it again? Aria Growth Partners. Yeah, A-R-I-A. Aria, okay, great. Gonna look that up later. So you're building the business, it's going really well. In 2021, you crossed that 100 million mark.
• 9:09
  What point were you like, hey, let's look to start selling the business? Or was it like, let's be proactive, identify the buyers that we would go to and see what happens? Or is it like someone actually just dropped into your inbox one day and you went down a different pathway? For us, so it can happen many different ways. But for us, the way that it happened was internally, we always had this $100 million mark as
• 9:35
  the benchmark, like once we get there, once we're on that path, we should seriously think about trying to sell the company. And I didn't realize why the $100 million mark is important until after we started the process, but internally that was just sort of the hurdle that we had. And so we got there a lot faster than any of us really expected. So we were on that path in 2021.
• 10:00
  And we had received the investment in 2020. So we had a board with board members and two of the board members were the investors from Aria Growth and then it was three founders. And so once we were well on to the track of $100 million, it became a board topic actually. Hey, we're gonna hit this benchmark. Do we wanna consider putting the company out for sale
• 10:29
  you know, sooner rather than later. And I remember at that board meeting, one of our investors, I mean, without hesitation, he was like, yes, and we should go out as soon as possible. Because even, I mean, the economy right now is very weird and
• 10:45
  And we're probably going to be in the U.S., at least we're probably going to be in a recession later this year. But even in 2021, I don't know how he had the foresight, but even back then, he was worried about the clouds darkening in the global economy. And so for him, he really did push us to move quickly because he knew that, you know, who knows what was going to happen in 2022 or 2023. And it turns out he's very right, because I think the M&A environment right now is it's not great.
• 11:16
  And is that what you mean when you said 100 million was actually very important? Or was there a different reason why 100 million specifically is very important? So what I learned, so why 100 million is important is because a lot of bigger companies, when they want to buy these growing indie brands, they want something, quote unquote, of scale. That means they want to know that you have proved out that this product or business, it can...
• 11:45
  reach a critical mass. So usually, I mean, some companies go earlier, but usually they like to see you around, let's say an 80, $200 million mark. And then what I've heard is that the bigger you get,
• 11:59
  the harder it gets to sell the company because your universe of buyers gets smaller. And so once you're at the level where you're looking for close to a billion dollar valuation, I remember our banker said, you know, if you're looking for a billion dollar valuation, there are four people who can buy your company. And so it just really limits the pool of potential acquirers the bigger that you get because not
• 12:26
  every company has that much money to be able to, you know, mix to big acquisition. So there's kind of a sweet spot, which I didn't realize until we started the process. So it's around like that 80 to 100 million ish mark. And does that mean also, like, if you're growing bigger than that, and you're doing multi hundred millions of revenue, then you would need to go straight towards IPO because no one can then buy you?
• 12:54
  It depends. I mean, we've seen some really expensive acquisitions, right? Like ASAP just got bought for over $2 billion. 2.6, I think. Yeah. Something crazy. Like Paula's Choice was over a billion. Nutrafol. I mean, so there are definitely exceptions. But then...
• 13:15
  you know, if that path doesn't work out, like if you don't sell to one of those four buyers, then the only option that you might have is actually, yeah, in the public markets. But that can also, I mean, that also comes with risk, right? Because we've seen some of the IPOs, especially with some of these like DDC brands that haven't gone so well. Totally.
• 13:35
  So you're in this board meeting. Your investor is like, hell yes, let's go for it right now today. What happens then? Like, do you hire an M&A firm to work with you directly on like going out and, you know, brokering this deal? Or do you hire like a team internally to build out a strategy? Blah. You're going to hire a banker. So that's what we did. We interviewed four different banks.
• 14:05
  And we gave them a little bit of information about the company and then they took that, they digested it and then we had sort of had a pitch off.
• 14:14
  So we asked them to take the materials that we had sent them and basically pitch us why they would be good for us, why they should be awarded this amazing business to find a buyer for. And so that took probably a few months, I want to say, yeah, three to four months.
• 14:37
  And then so we probably kicked that off like, I don't know, July ish. And then by November, we had picked the banker and we had signed the engagement letter with them.
• 14:47
  So we went with a bank called Neko Raymond James. And yeah, and they're the ones that really run the whole process for you. They do a lot of work, actually. All sorts of financial models and they create the decks and they're managing the relationships. And then even at the very end, they're helping with the negotiations on all the points as you're about to sign the purchase agreement. And what made you choose that banker out of the four? Like, why did they win the pitch?
• 15:18
  So we worked with a woman named Vinette and she's, she's like the beauty banker. I mean, if you look at the previous clients that she worked on, Drunk Elephant, Tatcha, she worked on the Paula's Choice deal. And then, and so, I mean, she has a really amazing track record, but it's not just that. Like, I think we're all really impressed with their pitch because
• 15:46
  Again, we had prepared a few slides to give more information about our company. And then when they pitched to us, it was clear that they went one level deeper. And they did, they commissioned some study and they did really go one level deeper than other banks to help really inform the story that eventually would be really important in the deal because
• 16:10
  Even in an M&A, if you're an M&A banker, you're actually still a marketer because the story that you tell to potential buyers is actually really important. The way that you position a company and the way that you talk about the strengths, it's really important. So it was really clear from the deck that they had sent over that they went a level deeper in researching who we are and how they felt like they could position our company in the best way.
• 16:39
  Yeah, I love that. They're like gaining your trust. Yeah. And also I love that she's a woman. She's a woman in historically a very male-dominated industry. And yeah, I mean, that's not why we chose her, right? But I think it's really amazing that she's...
• 16:58
  You know, she's such a kickass banker in a very male-dominated. 100%. You said that, you know, in that process, they also helped you on the negotiation side of things. Like, how does the negotiation work?
• 17:13
  and it's like a multiple question here. Firstly, how did you settle on the valuation? Obviously, there's numbers and spreadsheets and blah, but do you guys also have a feeling of, I want this to be our valuation, and then you kind of have to settle on it and then go into a room with lawyers on both sides and discuss, or are you in the room discussing? How does that work? Okay, so it's so weird because
• 17:40
  First of all, like our transaction happened last year, but everything was over Zoom. Almost everything was over Zoom. We did a lot over Zoom. I mean, there were in-person meetings and stuff, but even the, like I've seen pictures of deals where both sides are in like one big conference room and they're all stuck together until four in the morning because they just have to like hash it out. And then they like physically sign the documents.
• 18:06
  But it was not like that for us. It was all like digital and DocuSign, which was kind of weird. But, oh, shoot, I just forgot your question. Yeah, like how does the negotiation happen? Like are you in the room? Like do you settle on evaluation based on like personal, like take an informed choice or like how does it work? So, yeah, I mean internally you kind of have your own number and,
• 18:35
  And you can, you know, you can do your own models. Like our, I remember our VP of finance, she had like done her own model and, and, you know, shorthand, we were sort of like, well, we think we're going to end up here in terms of revenue. We think a fair valuation for this company would be blah.
• 18:51
  And then on the other side, the bankers will talk to all the potential parties and people who might be interested. And they asked them with very limited information to come back with a valuation number. And so at that point, it's a very loose number because they don't have all the data.
• 19:09
  to kind of, you know, that usually goes into evaluation, but it's sort of like a straw man approach. Like here's some limited data, like what would you be willing to pay? And so they all come back with our number. And usually, I mean, I don't know, for us, like we, in that first round, that first round there was like a very wide range of valuation numbers. And I think our number was definitely towards the upper end.
• 19:37
  But it's interesting to see because you can see sort of what general sentiment is in terms of how they would value your company. And then from there, you whittle it down like, you know, these numbers are too low or these people, we don't think it'd be a very good fit. Or, you know, we're not sure, you know, these people would actually be able to make it happen. And so you start whittling it down.
• 20:01
  And then from there, you know, you pick the parties that you want to go into the next stage with. And then from there, you give them more data, more information. So all the, you know, financial reports and, you know, all sorts of data room items. And then from there...
• 20:18
  That's where they really do the homework and they dig in and they start spending money on things. And then they'll come up with usually a firmer number, like based on all the information that we've seen and, you know, based on the resources that we've hired to look at this category. Like this is our number and that number is usually a lot more solid. And then from there, there's sort of like a third phase where you might end up.
• 20:41
  maybe you're with like two or three potential acquirers and the number is sort of like, I don't know, in a closer range. And then to pinpoint the exact number you want, that's usually when the banker will go back and forth and say, hey, you need to do better. Like you need to do better. You know, we're looking more for like this sort of number. And then it just gets more, it gets tightened up.
• 21:07
  Did anyone that lowballed you get through to like the last round? No, no. No, you're out. See ya. Yeah. And is the number that you settled on, 630, what you expected or thereabouts?
• 21:25
  I mean, I think we're all really happy with it. And I think as a founder, you, you know, you always want more. You always want more and you always have huge ambitions for your company. But in the end, yeah, I think we're all really happy with how it turned out.
• 21:44
  Did you have like, you know, other founders in your network and like people around you kind of like advising you through this process? Or were you like upskilling through I don't even know what resources? Like how do you navigate this? It feels so like there's only such a small pool of people who have actually done this.
• 22:06
  It's a really good question because I did have a hard time finding other founders who had sold their companies. I mean, I knew of a few, so I did ask them from time to time their advice and what they had done. And, but it is, it does, I mean, it's true. Like it gets lonelier, the bigger that you get, because not everyone has had successful outcomes and
• 22:36
  But I did have probably three people that I knew who I had asked questions along the way. And then outside of that, you're sort of relying on your bankers to teach you, your investors to teach you, the lawyers. And then there's a good chunk where you're just figuring it out on your own. And there's no one that you can really ask. And that's where I think having co-founders or having like our leadership team was involved in the process too.
• 23:04
  And having them was really great too because then, you know, you like complain to each other or you ask each other questions and you just figure it out together. If your exec team is kind of across it, do your staff know at all during this process or like you have to keep it under wraps because it can't leak to somewhere or something? Yeah. We kept it very – we tried to keep it very under wraps.
• 23:29
  So we had a question, I remember very early in the process, the question was who's in the tent and who's not. And so there was a very clear line in terms of like, who should know that we were going out with this process and everyone else should not know.
• 23:46
  Just because we were still pretty young and I didn't want people to worry about what an acquisition meant. And also, God forbid, if it didn't happen, I didn't want people to feel disappointed or like we failed or anything like that. But I've seen different approaches. I've seen some companies make a press release saying, hey, we've hired such and such bank to look at strategic options. So yeah.
• 24:11
  I mean, I don't know. It might be more of like a personal preference as much as a strategy discussion. But for us, we decided to keep it under wraps. I think you said you had that first board meeting in March 2021. How long did it take, like, from that kind of meeting of like, hey, let's actually start taking action to like, the sale is done, we've announced it, signed, sealed, delivered?
• 24:41
  Yeah, I think it was, okay, so we probably had that meeting, yeah, maybe, maybe around March-ish. And then I think it became finalized around June because by then we had six months of data and we knew we were well on that track. And then that summer, so like July to August, September, we were meeting, you know, we were interviewing.
• 25:09
  the four different banks and giving them some information about the company. And then we had the pitch-offs, I think, September-ish, September, early October. I think we had the banks pitch us. And then probably by end of October, November, we had signed with the bank that we worked with.
• 25:29
  And then from there, we kicked off immediately. So November, we kicked off. And then we closed our transaction October of 2022. So from signing the engagement letter to closing our transaction, it was about 12 months.
• 25:48
  Wow, that's like 12 months is so short in so many ways, but also so long in so many ways when you're having to still run a company, make sure it's on the up still managing like life, everything else. And then also trying to do this huge thing that is. Yeah, it went by really fast, but it was it was a hard year. I mean, selling a company is no joke for sure.
• 26:15
  And you feel a lot of pressure because there's like, I mean, in our case, like hundreds of millions of dollars at stake, you know, and it's not just you as a founder, but, you know, you're thinking about your investors, your team, like you want things to go well. And I mean, it was my number one priority for those 12 months. Like, I mean, and luckily, you know, we were a good team where we had enough people who were focused on.
• 26:43
  like the operations so that I could be focused on making sure this transaction really went well, but it's a lot of time just meeting, you know, meeting potential buyers and traveling here and there. And I mean, I had to go to New York a bunch of times. I went to Korea a bunch of times and, and sometimes like the travel is, is literally it's very last minute. Like I found out on a Monday that,
• 27:08
  I had to go to Korea and I had to leave two days later. So I booked an emergency trip, like things like that. So, yeah, it's a lot of work for sure. I've heard on other podcasts that acquisitions are rarely kind of straightforward and linear. Were there any moments or hiccups when you were feeling like, holy shit, this might actually fall through, like at the last minute, it's not going to work? I mean, you know what?
• 27:39
  a sort of do we do this or not? Because last year is when the war in Ukraine started. It started in February. And that I just, I remember like everyone was so freaked out about the war and how it would impact the economy and like politics and all that. And so
• 28:03
  I just remember all of us, we were like, do we do this or do we not? Because, you know, no one had been in a process when there was a global war happening in the world. So, you know, there was no data in terms of, oh, you know, we saw a process in a similar situation and it went like this. So we feel confident that
• 28:25
  you know, things will continue as normal or, or the reverse. So we literally all on a conference call had a whole hand, hold hands and just say, let's give it a shot. Um, but I remember that, that was a big, a big moment for us. Yeah. Gosh, no precedent set. Wow. And now you've said it. Yeah. Yeah.
• 28:46
  Now you've done it. So you sell, everything's finalized October, 2022 ish. Can you describe the moment when the money hits your account? Like how do you feel when everything is like a hundred percent done? Somehow you've got this wild number in your bank account and your life has forever changed. Yeah. It's,
• 29:11
  It's pretty surreal. And, but, but you know what, in a way it's like you forget about it too, because it's in your bank account. And I mean, I, you know, it's not, I mean, maybe for the first like few days, I was checking my bank account all the time just to make sure it was still there. But, but also how do I explain it? It's, it's not in your face all the time. So a lot of times I forget, um, I don't, you know, I forget about it.
• 29:40
  It's not something I think about all the time these days, but it is very surreal. And I remember looking at my bank account and just almost like just laughing because it was so ridiculous and an outcome I had never even dreamed about happening.
• 29:58
  Um, and I remember people were asking me like, you know, how has your life changed? Like, what are you going to do differently? And I don't know, my life hasn't changed that much. I, you know, we still live in the same apartment in Paris and, um,
• 30:12
  You know, I still have the same clothes. Maybe some clothes are a little bit nicer. But I don't think it's something where your life goes from zero to 100 and it changes overnight. It's probably a gradual thing. And I think it also depends on sort of like –
• 30:32
  how you value money, what you want to do with it. I mean, I'm sure there are some people who just go crazy with it, but in my case, um, in my case, I think I'm just going to sort of ease into, ease into this new lifestyle. Um, and yeah, and kind of see what I'm going to do with it.
• 30:51
  Wow. I mean, becoming kind of like richer than your wildest dreams that you could have imagined and then having it actually kind of like happen, it just seems so, yeah, so strange to even talk about and be like, what is that like? Like all of a sudden, did you actually do anything to celebrate, like buy something, do something, take a moment, meditate? Like what was, what did you do like straight away?
• 31:18
  Oh gosh, well, you know what? It's not just one thing. I did a lot of smaller things, I guess. So I, last year was just so busy. So I wanna take a minute. So I went to a Monzoe in Greece with a girlfriend for a few days. Cause I just, I was like, I wanna get away. I just, I wanna stay somewhere kind of iconic and just relax. So did that.
• 31:45
  And then, yeah, I mean, I treated myself to like, you know, certain things. I hosted a party in New York, actually, and that was really fun. So I bought out this pizza restaurant and invited like. My business school friends, my college friends, I invited people in the CPG community, a bunch of people that actually met on Twitter who I'd never met in person, but, you know, we were friendly.
• 32:14
  I invited vendors and, and, you know, people that the company had worked with and I didn't invite anyone from the company.
• 32:23
  because for me it was really just like a personal, a personal party. But that was really fun because I even, I remember like on the paperless post in my, like the title of the event was I sold my company party and, and I just invited everybody. I was like, just come. And also because I hadn't seen people in a really long time. I mean, the process, it really does take a lot out of you. And
• 32:45
  every time I was in New York I had no time to see anybody I had no time to do anything personal so that was my moment to you know to see my friends again and catch up as best as I could and that was really fun and it was great to celebrate with with a wider community too because they had been cheering us on from the beginning. You're hype guys and gals yeah exactly love that.
• 33:10
  Are there any negatives? Like, I know that, of course, everything's so amazing. You've sold your company. Crazy, crazy cool. But obviously everything's not always positive. Life isn't always full of ups. Has there been anything that you didn't expect or any downsides that have come out of this time?
• 33:29
  I mean, I can't think of downsides, but things that I didn't, I didn't really think about before was, I mean, obviously there are a bunch of us that were really excited about the acquisition because we've been working on it for so long and, and, you know, a lot of us really saw it as a success, but there were people, especially on the team who were not happy about it or very nervous about it because for example,
• 33:57
  they had been part of other acquisitions. And as a part of those acquisitions, they lost their jobs. Or like, I think there were people who could know an acquisition with like bad vibes, you know? And so that I didn't realize, and that was something that we were trying to be mindful of. I mean, with our acquisition, no one, I mean, everyone, 100% of people are staying and no one is losing their job.
• 34:25
  So it was really important for us to reiterate, but I know there was a lot of nervousness around that. And otherwise, I mean, you know what? The other thing that founders probably have to recognize is your job changes. I'm like, my job now is very different. There are things that I used to work on that I don't work on anymore. But also, I'm not the end decision maker anymore. And I think that issue...
• 34:50
  probably is something that founders get frustrated by because for so long, like you're the boss, you make the decisions. This is your company. It's your vision. Yeah, it's your vision. But once you sell the company, you have to recognize that someone bought the company and probably in a lot of cases, you're not going to be the decision maker. It's really people higher up and, um,
• 35:14
  I've had to make peace with that because there are decisions that get made at much higher levels than me, and it can take some getting used to. How long do you think you'll stay working with Hero Cosmetics now that you've gone through the acquisition? You know what? I'm there for as long as they need me. And, yeah, I mean, I don't really have specific plans. I don't have, like, a date where, you know, I'm like,
• 35:44
  you know, this day I'm out, I'm just there. Yeah. Like this is a earn out contract moment, date locked in kind of thing, right? You're just going with the flow. Yeah. For us, it's not like that. Yeah. Wow. That's cool. Yeah. I'm just, I'm here to, you know, be helpful. And it's great because now I'm doing things like, I'm working more with some of the international teams to prepare this brand to go international. So
• 36:11
  you know, traveling for retailer meetings. And I don't know, I might have to go to Canada in a few months for a big like launch event. And those types of things I think are really fun for a founder if you, you know, if you like that type of thing, like sharing the story and the vision and getting people really excited about it.
• 36:30
  Now that you've played the business game from literally the very beginning to literally the best case scenario, I feel like in business, people talk a lot about like the zero to one phase and the like one to 10 phase and then that getting to 100 million phase. When you look back, what was your favorite phase of building the business? Like if you had to like just choose that bit to do again, where would you sit? Oh gosh, that's such a good question. I mean,
• 37:02
  I really liked the zero to one. I think I liked from zero to 10. I mean, there are just different things that I liked about different parts of the journey, but I would say zero to 10, you know, because now our companies, we're probably like 80 people and I don't, there are a lot of people I don't know. And I don't,
• 37:28
  You know, there are a lot of people I don't work with anymore, but from zero to 10, like I knew every single person at the company, I knew, you know, what they were doing, we'd have regular check-ins and it was like going on in their lives. I, I've lost that just because the company is so big now, which is sort of sad. Um, and then I, I just remember like early on, like every win is so sweet because yeah, you're literally building something from scratch.
• 37:54
  I mean, I remember moments like when we were mentioned in the New York Times and like what an amazing moment that was just like seeing our brand name in the article and and us all trying to get ready for all the traffic that was going to come from this article or a first retailer. That was that was such a proud moment seeing us in anthropology and like being so excited. So I think there's like such.
• 38:19
  sweetness to those like small moments, those small wins, because yeah, you literally are starting from nothing that I really cherish. Oh, love that. Would you do it all again now that you know the journey?
• 38:35
  Yeah, I mean, I would. I don't know if I would start something from scratch. Maybe, I'm not sure, but I'd also be interested in maybe like buying an existing company that I see potential in that just needs like a little, like some resources and some help. But yeah, but generally, you know what? I would do it all over again. This is my first exit. I hope it's not my last.
• 39:03
  Oh, that sounds exciting. Yeah, I hope to. I mean, there's a little bit of, you know, it's probably like giving birth, like right after right after you sell the company, you're like, oh, my God, I'm never doing this again. It was so hard.
• 39:19
  But then after you're like, hmm, I could do it again, you know? I could probably do this again. I mean, as well, like, this was a five-year journey for you. Like, it's not that long in the big scheme of things. Yeah. Yeah. Like Aesop, that's been around for a real long time, you know? Yeah, 30 plus years.
• 39:38
  Yeah. Holy moly. Now in hindsight, and also having like a little bit of distance, six months ish to like process what it's been like for you. What are your kind of overall key takeaways or like insights slash learnings that you would want to pass on to anyone listening to the show who is a founder or a future founder wanting to build a business?
• 40:05
  Ooh, let's see. I would say, um, it really comes down to making an amazing product. I'm reading this book called breakthrough brands because I mean, you know, there's so many brands out there and not everyone breaks through to, I don't know, let's say, yeah, like the $80 million level. So like, what is it about these brands that do break through? Like,
• 40:32
  what makes them breakthrough. And he talked a lot about like the basic thing is just having an amazing product. Because when people try it and they really like it, they will repeat. I think in the beginning, there's a lot, there's probably too much weight put on brand.
• 40:51
  and not enough weight put on the product. So I would say, focus on your product. And for us, I mean, the Mighty Patch product, which is our hero product, I mean, it is an amazing product through and through. And,
• 41:05
  Even in the very beginning when we had a different look for the packaging, which was, it's not what it is today. Like it still did really well just because the product experience, I think, was really amazing for everybody. And for us, you know what? I think the fact that we were really profitable was very important in getting that transaction. And especially these days, I think,
• 41:32
  You have to be profitable. I don't think anyone will. Well, I don't know. I mean, maybe there are exceptions, but it doesn't seem like there are many cases where anyone will entertain a business that's not profitable. So yeah, like focus on building a business, a good business that can really last the test of time. And that's going to be it being cashflow positive and profitable and not always relying on raising money.
• 42:03
  Love that. Obsess about the product and obsess about the numbers. What do you want to shout about for Hero? Like, what are you doing now since you've been acquired that are like on this next level kind of stage or arena that you can tell us about? Well, we just launched our first ever brand campaign on Connected TV. I mean, for the first, we're going into year six. So the first, you know, five years, four or five years, we only focus on lower funnel content.
• 42:32
  So it was very kind of ROAS driven and it was, you know, really about efficiency. But also we spent the first four years really fine tuning our brand and figuring out who like who we are and what we stand for as a brand.
• 42:47
  So we did that work the past two years. And then now we felt like we were in a really good place to start moving our dollars from our upper funnel. So I don't know if he's on LinkedIn, but I posted one of the commercials that we filmed. And it's all around pimple, your mighty patch. So we personify the pimple on someone's face.
• 43:07
  you know, and all those like terrible moments, like at a wedding or on a date or when you're on a vacation. And then we have the Mighty Patch, like fall down and really get rid of the pimple. But that I think the hero in the story. Yeah, exactly. And so far, I think the response has been really great. And, you know, we're finally moving more into that brand area, which we haven't done for the first like five, six years. So I think it's going to be huge.
• 43:35
  Oh my gosh, how exciting. Goodness, I love that for you. We are up to the six quick questions part of the episode. So question number one is, what's your why now post-selling this business? Like what's your why every day that takes you back to Hero Cosmetics? I think my why is...
• 44:00
  I want to turn Hero Cosmetics into the number one acne care brand globally. So I think before it was really about focusing on the U.S., but now it's sort of changed a bit because now like the ambitions are international. So I have that sort of like that's kind of like the goal that I'm really focusing on for us and also for the team.
• 44:29
  That's really exciting. I feel like that should mean trips to Australia. I feel like that should mean like you coming here often. Yes, actually there might be, there might be. I will definitely let you know. Oh, great. Yes, you keep me posted. Question number two is what has been your favorite marketing moment in the journey so far?
• 44:51
  Gosh, there have been so many amazing moments. I mean, most recently we were in, so I don't play the New York Times crossword puzzle, but I know a lot of people do. And we were a clue in the New York Times crossword puzzle. So the clue was Mighty Patch Target. And then the answer was Zit.
• 45:16
  And that, I mean, I love moments like that because it's totally organic. We did not, you know, we didn't pay for it. We didn't see, we didn't do anything. But moments like that, that are really organic, I think are really amazing just because you know that you've like entered sort of like psyche of American consumers when, you know, the writer of the New York Times crossword puzzle considers you.
• 45:44
  that iconic that, you know, they add you as a clue in their crossword puzzle. And I just, yeah, I think organic moments like that are just, they're really special.
• 45:55
  That's insane. First of all, I've never heard of that happening before. And it's crazy that that's like, that's a level above marketing. That's like zeitgeist stuff. You're like part of pop culture now. You're part of the culture. That's like insane. Yeah. Oh, shit. Wow. I hope you have that framed. That's really cool. Question number three. I know you've mentioned a few already, but what is your go-to business resource if we have to think about a book, a podcast, or a newsletter?
• 46:26
  I listen to the Allman podcast, which is more about tech. I mean, you know, it's like for tech people, but actually their commentary on more macro things is very interesting for me as a business leader. So I listened to that. I am reading Breakthrough Brands, which I would recommend because it's
• 46:52
  Yeah, because like for me, it was sort of like wondering why us? Like why was Hero able to break out? Because interestingly, I mean, there are a lot of other brands that have a pimple patch out there, especially in the U.S. There are a lot. But we have the most market share. We're at like almost 50% market share. And number two is at, I don't know, they're like 20%.
• 47:18
  So our lead is that much bigger. Wow. Yeah. Significant. Yeah. And so I always, I mean, I think I kind of know why, but I also wanted to read this book because I wanted to know, I kind of wanted to, in a more methodical way, like learn, yeah. What was it about what we did and how we did it that really made us stand out like that? So yeah, I would encourage people to read that. And what else? I mean, I read, I,
• 47:47
  you know, all the business sites like Wall Street Journal and Financial Times, because, yeah, I think it is important to have a pulse on what's going on in the world. And these days I've been reading Financial Times a little bit more just because it has more that global view. So that's a little bit of what I do.
• 48:06
  With the book Breakthrough Brands, I know we touched on it before, but if you have to think about like what are, you know, parts of the success formula for you, like, is it like supply chain distribution, like having that like down pat? Is it having a brand that speaks to a broad American audience? Is it someone who is like the right kind of partnerships? Like what are the things? Well, it's a lot of different things, but actually he does talk about
• 48:35
  making sure your target audience is kind of brawn, because he gives an example of, there are like two tortilla brands and there's one that's really focused on, I think like the Latino community because everything's in Spanish and there's a sort of like authentic Mexican history with the tortillas and the recipes and all that stuff.
• 49:02
  And then the other brand, it was broader because it targeted not just the Latinos, but also like general Americans that really liked Mexican food. And so when you look at the size of the category or potential category for those two, the one that was targeting the more general Americans who love Mexican food, that category is so much bigger than just targeting the Latino community in the U.S.,
• 49:29
  So he gave that as an example of, yeah, it is better. Like maybe you start out in a niche, but like as you grow, you really do have to broaden your horizons. And I think that's why, that's definitely one of the reasons why we're successful because, you know, the way that our brand is constructed, it's very, you know, it's very gender inclusive, but also age inclusive because there are a lot of brands that focus just on the teens, but Hey, there are a lot of adults that have acne too. And I think we,
• 49:58
  communicate to them as well. Yeah, for sure. Cool. Question number four is how do you win the day? What are your AM and PM rituals and habits that keep you feeling happy and motivated? So now that I have more time, I'm actually working out a lot more consistently. So now I'm doing like three days a week, an hour in the gym, focusing a lot more on strength training, eating more protein,
• 50:25
  And that's been really great. Also focusing on getting outside and just like walking, getting, you know, getting my 10,000 steps. But I like the idea of like the 10,000 steps because it does make me just get outside. Sometimes I, you know, turn on a podcast, sometimes I don't. But actually those walks are the times where I get the sometimes the most inspiration. Just like, you know, you with your thoughts, you know,
• 50:54
  letting your mind wander and it wanders into certain places and then you just get an idea. Those have been actually very productive for me. Yeah, I agree. I think like we need to have more time where we're just in kind of like idle thinking phase, like nothing on, nothing, listening to nothing in particular and just like enjoying being outside. Yeah. Question number five, what was your worst money mistake in the business and how much did it cost you?
• 51:24
  Oh, gosh. I don't know. I can't. I mean, I'm sure we made them. I know we made them. But nothing sort of comes to mind at the moment. But I mean, generally, we do try to be careful with our money. I don't know. I really can't think of one. Fair enough. Good for you.
• 51:55
  Question number six, last question. What is just a crazy story, good or bad, you can share from the journey of building Hero Cosmetics? Oh, geez. I mean, the one thing that comes to mind is, I think, with our process. And, I mean, it really, you know, just for anyone who's listening, who may be selling their company, it really does take over your life.
• 52:25
  And just to give you some examples, like I got tickets to Wimbledon, the Wimbledon men's semifinals last year for, as a birthday gift to my husband. And we were in these amazing seats and we were in the third set and, and then I got a call and they were like, you have to be on this conference call. It's very, very urgent. So I had to step out of the match and take this call and,
• 52:56
  Um, and I was hoping for a fourth set. Um, so it was like on this conference call about like legal stuff at, and then, and then after the call ended, I got back and then basically the match was over. Uh, so there's like, there are moments like that. Um, you know, we were on vacation and I remember, you know, we were in California and we were at lunch, you know, just like me and my husband were having lunch.
• 53:22
  And they're like, you have to be on this conference call. So I was on this conference call during our lunch, you know, I have like my AirPods in and my husband's like, you know, opposite me, just like eating. He's basically by himself, you know, because I'm distracted on this conference call. But it's just like those are the, I mean, those are just snippets to give you a sense of like, you know, how much time it takes.
• 53:45
  um and how you know you do sometimes you do have to de-pri- unfortunately de-prioritize like other aspects in your personal life um and i remember at the end like everyone was really sick of it um you know myself my husband you know i'm sure like my family members also um but yeah
• 54:06
  Wow. Oh my gosh, Ju, thank you so much for taking the time to step us through that playbook. That was wild. Huge congratulations. I know I said it a million times already, but huge congratulations. You are such a role model and such an inspiration to everyone building a business in today's world. So thank you so much. Well, thanks for having me. I'm still your hype girl. I love it.
• 54:38
  Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
• 55:03
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 55:25
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.