 Well, that's bright. Wow. Yeah, that's bright Awesome. Good morning everyone. Thanks for joining us. Marcia. It's so good to see you. Good to see you too. Really looking forward to chatting Huge disclaimer. We're obviously one of your investors and happy happy very happy with that and I really enjoy working with you and hopefully you can share a little bit of What God is excited in this conversation and a little bit of insight into Many of your successes, but let's talk about beauty pie first, which is obviously the business you're building now Maybe just to set the scene it'd be great to hear From you a little bit about what is beauty pie? How does it work? And why did you? Start it over the time was right. There's why are you doing this now? Sure Well, I've been in the beauty industry now for 30 years and one of the things that started to really irk me about it was that there really was a monopoly on distribution and And we find that as consumers of beauty products We're paying 20 times sometimes what the actual cost of goods of that product is And knowing that there started to be less and less places for a creator of brands like myself To distribute that would actually end up in building a profitable business a lot of the large retailers We're starting to have their own in-house incubators. So Sephora for instance has its own in-house incubator The altar will have its own in-house incubator boots will have its own in-house incubator So if you're a person like me who loves to create a brand and wants to distribute it There's nowhere to do it anymore Because you'll have the retailer so used to be your partners you were the creator and they were the retailer now being the creators themselves However, they will take your brand, but they won't give it equal showing on the shelves So I thought because I had an incredible network that I've built over the last 30 years of Italian labs and French noses and Swiss skin care scientists that I would go direct to consumer I'd approach all of these labs to create ranges for Club where people could buy without the crazy retailer markups that are inherent to the Traditional beauty industry, so it was a bit of a leap off a cliff I did think everyone in the industry would want to kill me Because I was ripping the doors open and showing you know the egregious markups that existed But it was really the only way forward for someone who wants to do a brand now in in beauty It is so hard because it used to be that You know retailer would take 50% Now they take 70 and as we know if you're not paying a retailer 70% now or paying a landlord you're paying Google or Facebook So the idea for a club that had recurring revenue where people came back Every month or every two months to shop for their beauty products and get much much more competitive prices Just seemed like an obvious thing to do Now the I mean maybe to elaborate a bit more on the pricing because it's On face value looks crazy Well, you have a membership model and then prices which are just radically different to anything you would see On the high street when you were coming in to build a beautify and thinking about this Pricing but my understanding you spent quite a bit of time speaking to academics other people try to understand the psychology of People's purchasing in this category. I would love to I'm sure the audience would love to hear a little bit more about How are you against that where you learn some why you felt this was gonna work and ultimately why it does work as an interesting model Sure. Well as this is my first tech startup And also my first I guess membership business. It's not a subscription. So we don't actually send anything out to people it's more like Really we like to call it like a luxury American Costco, but for all beauty products and wellness products I first read a fantastic book if you haven't read it Called hooked by a behavioral economist named near I L and and I remember actually I Think I was listening to it and walking and every time something that was relevant would come up I would stop and you know take a note and figure out how this might apply to the business and it was full of Really great insights some of them being you know, this is there are 12. I'll probably remember six One is that you've got to have fuel right to get somebody to do something So it might not be that the motivator for someone to switch to your beauty product is because it's cheaper It might be that you've got to still create desire for that product So the same type of beauty marketing the same type of pictures the same Same type of descriptions and the desire building has to be there beauty is about pleasure It's not about rewards, and there are two different Parts of the brain there are two reward systems in the brain one is is pleasure and one is rewards And so you have to make sure that you're stimulating both It's not always just about getting it cheaper. Although getting it cheaper makes you feel egotistically smarter About yourself. So there is a boost In in your dopamine right from feeling like you got a good deal But at the same time there is something called price value inference and if something is too cheap people will think it isn't of a high quality and so the Luxury industries of course have brainwashed all of us for a very long time to tell us that something is expensive It must be good and that's not necessarily always true although more active ingredients in a product will make it more expensive So we had to figure out online how to fight that price value inference if something's going to be a low price How do you then communicate that it's high quality and so we do show two prices online? We show the non-member's price So what the typical retail would be and then we show a member's price So if you are a member what type of price you can access There are so many so many great behavioral economists that if you are doing any kind of model like this You should be studying Dan Ariely Near I L I mean there's hundreds of them and all available on on YouTube, right? If you don't have access to them individually, there's also a great I'm trying it's called nudge stock so if you're if you're looking for more information from the greats of Behavioral economics there is on online and every year Ogilvy sponsors. It's kind of like a conference Based on Richard Thaler's work Which is what nudging people to do things and it's called nudge stock and you can watch Literally 36 hours of nudge stock speeches from all the greatest and smartest people in the world on YouTube an hour at a time. I would highly recommend amazing amazing obviously what one of the one of the things you just talked about obviously is how do you position the product and then the brand to Have they have the appeal of quality? But while, you know massively discounting the price that people are used to paying and you've been raising stuff So building many many brands Kind of have that kind of magic touch, but as you came into this business maybe with a little bit the pricing and the positioning in mind and Going direct to consumer more than ever before. How was that? Brand building experience being how you managed to create beauty pie into a brand which people love They think the product and they recognize what is being incredibly high quality at the same time They are experiencing a radically different price point. That's a great question And we've sort of learned a lot as we've gone along the way. We're always experimenting with different formats of Communication certainly social media has had this incredible surge of popularity in the last few years But is now a little bit on the down slide I think and so you always have to follow what customers are spending their time on and one thing that we're quite I guess quite lucky, but it's all part of my experience to have is Expertise in the beauty area. So for us long-form communication Newsletters emails are really a huge source of shopping revenue from our customers We are able in long form to describe why this product might be better than that product We actually try and do it in good layman's terms, but include Statistics and you know ninety two percent of people who use this for however long loved it And and really describe what a certain product does for you I mean number one and consumer goods is with them If we don't know that was what's in it for me And you just have to always remember to go back to with them because if you're not describing what's in it for them You're losing them, right So it is a little bit old-school to be emailing your customers But we generate so much of our revenue from email And also being able to remind people throughout the journey on the website You know why a product might be different or better We have been hampered by some of our technology. We chose a really terrible platform at the beginning So we're just almost now getting started with what we can do But being able to really educate people we we use in our communications an acronym, which is Frida, so it's fun if it's not fun You know or if it's not reiterating what the proposition is and and what the whiff them is for the customer If it's not educational If it doesn't demonstrate and if it's not aspirational, we don't do it And so we try and keep everybody really focused on on Frida When we're creating any kind of content to to try and stimulate sales or stimulate acquisition of new customers Frida, okay. I'm gonna remember that And You know one of the things that we were impressed with and continues to be the case is you have incredible retention A long-term engagement with your customers now, obviously the membership model lends itself to that if I've started paying for something And I and I get good product, but I'm sure there's a lot more beyond that I'd love to hear a little bit about the relationship you have with the customers Obviously you're delivering a message to them. What are they sending back to you? How do you take on board that feedback and keep the product catalog fresh keep the Relationship fresh and sustain those the level of engagement sure lots of questions in there. I hope you don't forget them all So number one a warning. I think our retention rate might have gone down one point. No. Yes. I know I'm sorry, but it's a terrible economy and there are all these articles out there about people not having their memberships anymore So we may have dropped from like 73 to 72, but we're working on getting that back up Obviously, you know for for generally women, right? We have a small contingent of men and and probably transgender people As members but women love something new all the time. So built into our model We work with about 50 of the different the best Suppliers of beauty and wellness products around the world and built into the model from the very beginning was constant new product drops It's kind of like Nike and sneaker drops, right? But it's beauty pie and beauty product drops So she always has something new to look forward to I think it's really difficult if you don't have Dynamic product range to keep the interest of a customer who is constantly being You know bombarded with marketing from other People you almost have to be several brands in yourself to keep her interested We of course also remind her how much she saved so it might be on an email It might be when she logs into the website. I personally have saved 37,000 pounds. Wow, it's beauty pie started Of course I buy a lot of candles and I buy a lot of gifts But I always feel like if I'm not gonna if I'm not gonna buy these products Why would she buy these products if I don't like it? You know why is it good enough for me then it's good enough for her So I think of course keeping the quality up And if you are lucky enough to be an industry where you're selling something that you love Making sure that the standard is high enough for yourself We also find it really important to just respect the customer's intelligence. I know that sounds quite basic But it's so important if you're speaking to her that you aren't trying to fool her into doing something and you know it because I think she feels it and then she loses trust and Having a customer trust you and trust your proposition and know that you are being Upfront with them. It is really a two-way street. It's almost like a partnership when somebody is a customer of yours for that long They want you to do well Right and and they are very invested so we to your point also about how do we Include the customer in that product development cycle I'm from from very early on and this is one of the wonderful things about the internet From very early on we've been able to communicate with her directly about what she wants How does she feel about a new product that we've launched? What would she like to see us bring into the assortment? Down to we will say we're gonna launch five new candles, right? Here are their fragrance here their names and here the fragrance triangles Which ones would you buy and why we will take a poll either on Instagram or Facebook? Or we'll do it through like survey monkey and then we'll buy according to what they've said and I can tell you It's never more than 3% off that poll We did another sort of an exit poll and you haven't joined today went for a lot of customers who had come in you haven't joined yet today why not and I was talking to you about this a little bit earlier some we are a membership model So you have to buy a membership and commit to buying this membership in order to access the really lowest prices So we said you haven't joined as a member today Tell us why not right and the question was I'd rather shop at retail and just get free shipping Or I'd rather pay twenty nine dollars a year instead of fifty nine and get fifty percent off in blah blah blah Or I'd rather have I like the membership the way it is Right and of course when you send out a survey you have to mix up the answers So you got to send to different cohorts in different In different order because there's order bias and then you also have to make sure that there's no bias in the question And the way that we've worded it because some people will Always agree with what you're already doing because they don't want to seem disagreeable That's another thing from behavioral economics, right? So you you got to make sure you're doing your surveys, right? interestingly when we did the survey about 27% of the people even though they could be seven saving 70% on everything by joining 27% of the people said I'd rather shop at full price and get free shipping which is not rational But I think what you learn is that people are totally irrational They just the emotions often take over so if you think you're explaining to something to somebody really clearly It doesn't matter you have to watch what they're doing in their natural environment And then work around that and kind of go from there. It's a lot easier now Interestingly 27% of people said they'd like to shop at full price So we put up a full price journey and in the first week 27% of people shoved at full price Is that crazy? I mean and and those people well We don't know how many more times they will shop with us It's likely that they will probably shop at the same interval as members according to a behavioral economist that Consulted about this. So they will actually be very profitable customers for us Given that we have the machine in place. We have all of the products in place. We have the inventory in place You know, we let her let her do what she wants to do And and I think one of our big learnings has been like don't force them to do what? We want them to do let them do what they would naturally do. It's incredible insights I think it's so easy to find one user group Who like buying the product you've decided to sell them at the price you thought how how have you decided to sell it? I'm just trying to keep find more and more of those yeah, and it's a great reminder to remember that actually there will be alternative buying groups Perhaps a rational rational so you're not gonna you're not gonna kind of logically deduce So this is the thing to do and so in your experience that was really learning from talking to them Do you have you been able to leverage data as well to just bought some of his insights? Well given that we have had a terrible platform We've kind of had to build this business so far with blinders on our faces But we now have more data coming in and it's so incredibly helpful However, I will caveat the data tells you about yesterday So in the footwear industry, we would always say that buyers, you know the buyers in the department stores You know their experts at yesterday, they're not gonna bring you the brand new thing So you still have to be out there being a little bit crazy and thinking okay What is the thing that we can't see right and I would always say that to my To my head of e-commerce. They'd be very proud. Well our conversion rate is 3% and I'd say our conversion rate 97% of the People coming in here aren't shopping from us That's 97% that's really terrible and he'd say but 3% is really good No, it's not we're missing the majority the people so then you have to really focus on why are you missing them? And so some of these new user journeys that we're looking at our I Guess our attempt to try and figure out who are all those other people And how do we have something for them as well because we do have the very best products out there We're getting them from the very best sources. We believe in them And it's a you know, it's a great place to shop no matter how you want to shop So why wouldn't you but let's make that really easy for him her them no matter how they come in. Yeah, yeah amazing Yeah, when we invested I think you were just providing the service to people within Europe But then you made the move to the US and it's gone really really well, yeah I'd love to hear a little bit about The challenge how you how you kind of took that on was it kind of copy and paste? Did you have to think about things in a bit of a different way and what's what's led to that success? That's a really great question. I think the US actually we're only in the UK. We're not even in Europe yet Software issue, but that has opened up as well. So this year is like a big year Actually, it'll be next year. That's a big year of opening up for us. So it's really exciting in the US I think what you have to remember is that the US customer has a Lot of choice right it's a plethora of choice out there And there are a lot of things that have already been done And they are bigger spenders and they are so and they want to move really quickly and they're not necessarily as Considered with their cash and of course, I'm generalizing hugely, but it does seem that way so far And they don't necessarily want something that's really inexpensive More customers in the US shopping at full price Because they don't necessarily understand the model and they just want to do something fast So they'll see something they want to click on it. They want to buy it. They don't necessarily want to Consider so the funnel may be different for the US customer If you are on a membership model or a subscription model, you might just want to let them buy the product as well I think rent the runway, which is a business that sends. Are you familiar? I know you're a guy, but yeah, okay That sends up clothing right you can rent your clothing It has started to sell clothing because of course if you Rent something and you love it, you know, why not buy it whereas previously they just rented it So for us what we had to really do is go into the market and then look at What does she what's already there because one of our biggest hurdles with the when we first entered was that she thought We were a subscription box and that's because there are so many subscription boxes that already exist So the heuristic for her was to look at it and think oh, this is another one of those when it's in fact Not we don't send you anything so people would sign up and then a month later. So I didn't get my box And it's like we don't send you a box. You're paying for access to these prices So then we realized well, maybe need we need to send her a box, right? She wants a box raise the price send her a box and then everybody's happy and she gets you know what she thinks so we are currently now Building that team but also looking at with again all the infrastructure that we've built What is the best and easiest way to deliver this in an understandable fashion to a consumer who has seen something? Familiar and make it easily confused because they're just like rushed up their feet Doing whatever it is they do. Yeah, so that makes sense. Yeah, that's awesome. Thank you You know your previous businesses and even beautify the the start were bootstrapped. You didn't take venture capital But now you have taken venture capital in the last few years. What's what led to our decision? What was different about this business and I'll tell you Daniel the venture capital thing. It's quite stressful What don't tell me that but only because it's so much less stressful when you're only spending your own money And so if you are a responsible individual, I'm quite a frugal responsible individual Now I feel like I have to perform for the investors and I hate it But I'll just say a little ad for Balderton if you could not find a more supportive group of investors Then Balderton and also one of our other well actually all of our investors are great but we love Balderton for for There's so much support that's offered And this is my first VC backed business. I always just stuffed whatever profit I had under my mattress and then reinvested it but when I Was doing my first tech startup trying to find tech talent of any grade was quite difficult if you were not VC backed So we would interview people and and think wow, you know, you get to the end of the interview You think this is the one this is one and their question when you would say well Do you have any questions was always so are you venture backed and then my answer was always yet? No, I'm I'm funding it myself and then they wouldn't join Because I think venture-backed businesses are always, you know the pot of gold at the end of the rainbow that everybody is like so excited To be in a venture-backed business and of course it provides a little bit more stability as long as as long as there's enough capital And so we found that as soon as we had venture-backing we got a lot of great talent And so tapping into the talent networks that companies like Balderton have and then also the partners and the operating partners who have so much Experience that's been incredibly helpful. So besides the self-induced stress of wanting to do well for you Which I just need to work on that, you know, it's my own individual baggage It is super helpful to have people who know what they're doing in the tech world because it isn't what I come from And it has opened so many doors So I am eternally grateful To to have had that opportunity. It's also really fun. I think for me at this stage in my career this is my fifth business and So to have something where I can enter a completely different realm and really learn every day from so many talented people It's it's quite a gift. Yeah, we've enjoyed working with you I think it sounds like a lot of benefits bit of extra stress But it makes for a kind of accountability. I think you You're a fantastic steward of the money you've been given so thank you Maybe maybe kind of looking forward. What's you've talked a little bit about the US and hopefully you're the rest of Europe next And next year what else is coming down the line to be to play? I think we can So many options. I think we're still learning We're looking at that different models that we can have with the people who want to show You know shop full price the people who want to be on a mini membership The people who are the hardcore members of whom there are a lot And we'll be looking at which model suits different markets Again, we've got that whole machine set up the marketing machine is ready the the manufacturing machine is ready The supply chain machine is ready So we can enter, you know the next market quite easily We just have to do the math and make sure that it makes sense And I think not bite off more than we can chew You see a lot of and I've talked to a lot of businesses who have just opened websites all over the place thinking That that was going to be a good thing to do and it would be profitable But most of them retreat with their tail between their legs if they do too many at the same time So we're going to be quite measured about it Just make sure that we open one at a time or two make sure that we can really deliver you know and go deep and And make a success out of it For you it for you and for me for all of us and for the and for the customers will look that we're out of time Thank you so much. You know, I think it's it's great to get those insights There's so much more you make it kind of sound very easy. We just launch a brand we do this we do that and and the customer loves it Of course, it's incredibly hard and I think you've given us a little bit of glimmer about the magic behind making that successful so thanks again and Great to see you. Thank you for supporting me. Thank you you