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In 2010, Harvard Business School friends and roommates Katia Beauchamp and Haley Barna started Birchbox out of their dorm room. The duo wanted to create an easy and efficient way for people to discover and try new beauty products without having to purchase the full-sized version before knowing if they loved it. They created a monthly subscription service where people get a box of sample-sized beauty products delivered to their door. When people find a product they love, they can learn beauty tips and tricks on Birchbox's blog and social media and buy the full-size versions on the Birchbox site or at the retail store in Manhattan. Beauchamp called 2016 the "biggest challenge and transformation to date" but proudly announced that Birchbox reached profitability with self-funding accelerated growth in 2017. Here's how Beauchamp and Barna built a beauty empire.
Elana Lyn Gross: Congratulations on reaching profitability and self-funding with re-accelerated growth! What are some of the proactive changes you made, and what advice do you have for entrepreneurs to lead their business to profitability?
Katia Beauchamp: All the changes were proactive, we were lucky in that we recognized it was something that was important because we knew we wanted to be in control of our own destiny. When the markets are changing all the time you realize you're not in control of your destiny until you are profitable. We had to look at every aspect of the business, we really focused on costs and what we could do with our core product to tighten up over the course of at least a year. It really came down to leadership coming together, it was by no means me, it was a group of a lot of people agreeing about what is core to the business and what we need to take a break on while we focus on the core. Then it was everything from looking at the strategy around those core things to re-negotiating a lot of things and cutting costs to do that and, of course, we had layoffs too. That was a part of it.
The biggest part came from a lot of changes in operations and logistics and more efficiency in the marketing funnel. I would say my advice is to make sure that you are having this conversation with your leadership team. It's so important that people understand the context of what you're trying to achieve and feel ownership so that they're excited and motivated to do something different. If you say profitability is the alpha goal, you can't be the only one who thinks that's important; there has to be conversation and dialogue so it becomes truly important to the team and then that trickles down. The team has a lot of pride in it and what's amazing about it is that it feels in some ways like you can never reverse the mentality. There's a lot of great coordination across teams to think about what we need to be focusing on as a company.
Gross: What would you say has been the biggest challenge and then on the flip side the biggest reward of starting Birchbox?
Beauchamp: I think you have a preconceived notion of how you will define success when you're starting a business. But frankly, the job changes so much every six months and it feels like you are learning entirely different things. You're stretching, you're failing, you're finding some success, but you never feel what I would call comfortable or good at your job. In order to feel comfortable or good at your job, you have to have more time and experience doing it and instead, the job just requires new skills often.
It is really challenging when you have any job where success feels like a nebulous idea and you can't really pin it down and you have to basically decide that that is success. Success means you're always learning and you're pushing yourself; it means being uncomfortable is a good thing.But it's super uncomfortable.
Gross: You've raised more than $80 million dollars. What's your best advice for female entrepreneurs raising funding for female-focused businesses when we know it's stacked up against them?
Beauchamp: This is a big problem everyone's touching on because access to capital has so much to do with equality in terms of getting more women to be leaders and then killing it with their businesses. It's interesting because it feels like there has been some progress made in the early stages of capital. There are funds founded by women who have left large firms who will fund everyone, but they are really dedicated to helping female-founded companies.
When you're fundraising in the early days, the most important thing is to know your audience and to be armed with the two sides of the coin. You're the founder and you have an insight about the market at large, but you also have a real emotional connection to the insight. All investors look for that kind of passion, that vision, that drive to fix the problem. I don't think you want to leave that at the door, but I think you have to balance it with the irrefutable facts of the market size. Show why you are unique.
And think about the investor. We really made that mistake initially, we just met with everybody because everybody will always take a meeting. Look for people who seem to like the industry you're in or the type of company you have and look at their track record in who they've invested in.
Gross: You've said that your secret weapon is hiring new moms, what do you mean, and how did becoming a mom yourself help you come to that conclusion?
Beauchamp: We came to the conclusion early, definitely years before I was a mom. It was an accident that we had new moms. We were very junior, very young founders and we needed some more perspective and experience on our team. We found women who happened to be moms, and relatively new moms, who were looking for more balance. They wanted to come to work in a place that made it worth coming to work because they loved what they were doing. They also needed more flexibility and we were so excited about their skillsets and what they could bring to the company.
It really helped me understand that there is such a fundamentally hard thing about being a woman in terms of becoming a mother because we only address maternity leave. I actually think the problem is coming back to work. There's almost this thought that for some reason your motivations have changed, that somehow you're less motivated or you don't have as many aspirations. We were finding these women who were so motivated and had so much to bring to the table. They certainly weren't looking to just settle into middle management and not work hard, they just needed more flexibility. It's not about hours it's about effectiveness.
We have a lot of women here and want to be a place where we focus on maternity leave, but also on continuing to help women develop in their careers and encouraging them to ask for the things they need. We want to help people continue to reach their own goals.
Gross: You once emailed Steve Jobs and got a response. What is your recipe for a perfect cold email?
Beauchamp: The recipe is really pretty simple. It's very important to have a unique subject line that is compelling, which I know is subjective, but try to think about if it's compelling to the audience. Then make the email extremely short so actually look at it on your phone and see if you can you read it without scrolling. And then make the ask something that is hard to say "no" to.
I've emailed Steve Jobs, and I've also emailed hundreds of other people to get the right partners to work with us. I've learned that people answer those emails. If you're thoughtful about the audience on the other side and you're really asking for help, but defined tightly, a lot of people want to help.
Gross: What's one thing that you wish you'd known when you were starting out your entrepreneurial career?
Beauchamp: I think that the gift of being a first-time entrepreneur is that being naïve is just so valuable. I would never want to show myself what all of this was because I think that being naïve allows you to suspend disbelief. It allows you to believe it's possible to do something that, if you had more experience, you'd probably think "No way." Everyone told us Birchbox wouldn't work for a variety of reasons, people that had a lot more experience than we did, and I think being naïve allows you to believe in the impossible and then set the actions in motion to put one foot in front of the other every day and then suddenly things are changing.
Somebody told me something that was the nicest thing anyone's ever said to me, which is that I have never lost that kind of naïve view that anything is possible. That is truly such a compliment, and that's something that I am happy to have as a part of me even though I'm sure it's challenging in some ways for a lot of people.
One thing I'd say is that I really wish I had prioritized getting more help and not being as solitary in all decisions. Again, it's not really about asking people a specific question, but it's just gathering information, gathering perspective and making it a critical part of my job to hear how people are approaching the variety of things that you have to field on any given day.
Gross: What do you think is the best advice you've ever received?
Beauchamp: I think it's changed over time. A lot of what I've been talking to peers about lately has been grounded in this idea of trying to recognize that there isn't some kind of mythical ending goal. This whole experience, this whole journey, is such a gift and it's so special to get to have an experience where you're learning so much, it is so hard and you get to impact so many people's lives. You impact the people that work for you and the consumers that are giving you their money and their time, that it's just so special. People remind me that, even though I'm still going a million miles an hour thinking that there's so much more to do, you also need to recognize what you've already accomplished.
It's important to hear that and to take that advice. You need the energy to keep going. If you never recognize the accomplishment factor, which is hard because you always know you can do better, it can be challenging. You can kind of slow down and feel tired, so feeling the energy of "yes we did," "yes we can" and" yes we are going to" is really important.
Gross: What is your best business advice for other young professional women?
Beauchamp: I think that women right now need to be coming together in ways that we never have, and supporting each other in ways that we never have, and I think it's a two-sided experience. All of us need to be asking for, and being very thoughtful about, giving support. Don't think, "Well, if I'm at this stage in my career I'm only a taker." It's all about giving each other perspective. The reciprocity and a mentorship relationship is the recipe for it working. It's working when it really feels like you are exchanging ideas and perspectives and shaping each other's views. I really hope that women are more motivated today than ever to think about what is going to change all of this for us and also for the next generation. What are we going to do to really make them feel like this is different and to keep pushing for it to be different? I'm optimistic that change is happening, but I'm really discouraged by the speed.
Disclaimer: This interview has been edited and condensed.
