How I Built This with Guy Raz - Hero Cosmetics: Ju Rhyu and Dwight Lee
Ju Ru, inspired by the use of hydrocolloid patches in Korea for acne treatment, co-founded Hero Cosmetics with Dwight and Andy Lee. They launched the Mighty Patch, a product designed to treat acne by absorbing moisture from pimples, on Amazon in 2017. The product quickly gained popularity due to its effectiveness and strategic marketing, including influencer partnerships and PR efforts. Despite initial challenges, such as Ju's hesitation to launch and supply chain issues during COVID-19, the company grew rapidly. They expanded their product line and retail presence, eventually leading to a $630 million acquisition by Church & Dwight in 2022. The founders emphasized the importance of hard work, strategic partnerships, and a bit of luck in their success.
Key Points:
- Hero Cosmetics was founded by Ju Ru and co-founders after identifying a market gap for acne treatment patches in the U.S.
- The Mighty Patch, their flagship product, uses hydrocolloid technology to treat acne effectively, gaining traction through Amazon and influencer marketing.
- Despite initial challenges, including supply chain issues during COVID-19, the company expanded its product line and retail presence.
- Strategic decisions, such as focusing on patch products and leveraging PR, were crucial to their growth.
- The company was acquired by Church & Dwight for $630 million, highlighting the success of their business model and market strategy.
Details:
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5. 🛠 Ju's Korean-American Influence & Entrepreneurial Beginnings
- Ju Ru founded the acne treatment company Mighty Patches, drawing inspiration from her personal experiences and cultural background.
- The company achieved significant growth, reaching a valuation of $630 million within five years, showcasing the effectiveness of her business strategy.
- Ju faced initial challenges, including market competition and consumer skepticism, but overcame these through innovative marketing and product quality.
- She leveraged her Korean-American heritage, utilizing insights into skincare trends and consumer needs to differentiate her products.
6. 🌟 Creating Hero Cosmetics: From Idea to Reality
7. 📈 Amazon Launch & Retail Expansion Strategy
- The company positioned Amazon as a digital store shelf, designing product packaging with a medical and playful aesthetic to attract both genders.
- Launched on Amazon in September 2017, leveraging ads, influencer marketing, and a strategic feature in 'Into the Gloss', resulting in a sales spike.
- Sold out 10,000 units within 90 days due to a less saturated pimple patch market.
- Implemented a DIY PR strategy, sending 20 emails a month to editors, reducing reliance on costly digital ads.
- Marketed as an American brand to build trust with a local audience, rather than relying on the K-beauty trend.
8. 🏬 Navigating Retail Challenges & Building Brand Awareness
8.1. Initial Retail Approach
8.2. Anthropologie Partnership
8.3. Product and Packaging Adaptations
8.4. Transition from Consulting
8.5. Specialty Retail Expansion and Financials
8.6. Marketing and Customer Engagement
8.7. Cultural Adoption and Brand Messaging
9. 💡 Strategic Growth During COVID
9.1. Expansion Strategy and Product Focus
9.2. Remote Work Adaptation
9.3. Retail Expansion and Marketing
9.4. Financial Growth and Challenges
10. 💼 Investment Decisions & Acquisition Discussions
- Term sheets during COVID lockdown were unfavorable, with some firms dropping out to focus on existing portfolio companies.
- The term sheets offered were considered onerous and founder-unfriendly, leading to a decision not to accept them.
- The company remained stable during COVID by focusing on essential retail channels like Amazon and Target, avoiding major business dips.
- Supply chain challenges were managed by increasing inventory from one month to six months, a risky strategy that paid off as sales continued.
- Re-engagement with a previously interested investor led to a fair deal in October 2020, after initial rejection due to the company not being ready.
- The goal for acquisition attractiveness was set at $100 million in sales, which was achieved by 2021.
- The company began serious acquisition talks in 2022, focusing on cultural fit with potential buyers like Church and Dwight.
- The acquisition aimed to ensure the brand's longevity, with a focus on finding a 'forever home' for the brand beyond the original founders.
11. 🎉 Successful Acquisition & Future of Hero Cosmetics
11.1. Acquisition Details and Strategic Plans
11.2. Transition and Evolving Roles of Founders
11.3. Success Factors and Marketing Strategy
11.4. Future Plans Post-Acquisition
12. 🔚 Final Thoughts & Next Episode Teaser
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