11 Mistakes beauty founders make article

11 MISTAKES BEAUTY FOUNDERS MAKE

You can learn from mistakes indie beauty founders make in this fiercely competitive, ever-evolving beauty world, to find your way out of a labyrinth of challenges & avoid failure. From a lack of focus to underestimating consumer acquisition, the journey of an indie beauty brand is studded with potential missteps. Yet, these pain points, if recognized and avoided, can help indie brands truly find their niche, thrive and even lead in their chosen market segment.

One can’t help but think of the many indie beauty brands we’ve seen rise and, unfortunately, sometimes fall. Various factors can play into these scenarios, and it’s never a simple, one-reason-fits-all situation. The examples provided in this piece attempt to analyze and learn from these brands’ missteps through the lens of my expertise at Jump. Note that while these analyses provide valuable insights, there may also be other factors at play that have contributed to each brand’s outcome.

Embark on this journey with us as we dissect the top 11 mistakes that indie beauty brand founders often make. Let’s dive in!

Table Of Contents

  1. Mistake 1: Not being Passionate about the Problem
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a beauty brand that made this mistake
  2. Mistake 2: Not in Love with Target Consumers
    • Frequency
      Why is this a mistake?
    • How to avoid this mistake?
    • Example of a beauty brand that made the mistake
  3. Mistake 3: Vision Pull vs. Flexible on Strategy
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a beauty brand that made the mistake
  4. Mistake 4: Not Validating Loyalty and Growth Hypothesis
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a beauty brand
  5. Mistake 5: Lack of Focus – Problem, Consumer, Products, Channel
    • Problem: Lack of clear understanding of the exact problem to solve
      • Frequency
      • Why is this a mistake?
      • How to avoid this mistake?
    • Consumer: Spread too thin across a broad target set
      • Frequency
      • Why is this a mistake?
      • How to avoid this mistake?
    • Products: Having too many products
      • Frequency
      • Why is this a mistake?
      • How to avoid this mistake?
    • Channel: Being everywhere, in terms of media or sales
      • Frequency
      • Why is this a mistake?
      • How to avoid this mistake?
  6. Mistake 6: Overemphasis on Competition and Larger Players
    • Frequency
    • Why is this a mistake?
      • How to avoid this mistake?
        • Differentiation
        • Relevance
        • Authenticity
      • Example of a Beauty Brand
  7. Mistake 7: Lack of Focus on Margins and Profits
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a Beauty Brand
  8. Mistake 8: Frequent Promotions and Discounts
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a Beauty Brand
  9. Mistake 9: Going to Retail Too Early and Ill-Equipped, With No Strategy
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a Beauty Brand
  10. Mistake 10: Cutting Corners on Your Core Operating Model
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a Beauty Brand
  11. Mistake 11: Neglecting Value Analysis
    • Frequency
    • Why is this a mistake?
    • How to avoid this mistake?
    • Example of a Beauty Brand
  12. Quick Summary

Mistake 1: Not Passionate About the Problem

Frequency: 

Medium to Rare, but significant when it does occur.

Why is this a mistake?

In the entrepreneurship journey, particularly in the indie beauty category, passion is not just a desire, it’s a requirement. The landscape is riddled with challenges that test your mettle, and it’s your passion that fuels your persistence. Without a genuine interest in the problem, there’s a risk of losing steam when obstacles arise.

Furthermore, passion fosters boldness. It allows you to break from convention and seek innovative solutions, rather than merely imitating what has been done before. Without it, your brand may lack the distinctiveness that sets it apart in a crowded market.

How to avoid this mistake?

The key is to pick a problem that has personal significance. It could be something that you’ve been frustrated with in your own life, or a cause that aligns with your values or sense of identity. This way, the journey of solving the problem becomes fulfilling and feels worthwhile, not just a pursuit of monetary gain or recognition.

Example of a beauty brand that made this mistake:

Most of the under-performing celebrity beauty brands like ProD.N.A by Paris Hilton fall in this category. Celebrity beauty brands that just try to encash fame rather than offering innovation to build the category further usually fail, since they lack the drive to innovate rather than maximise their celebrity status. Rihanna’s Fenty is the best-performing celebrity beauty brand ever as she offered inclusive shades to the under-served market, aligned with her image and values.

ProD.N.A is an example of celebrity beauty brand failure due to lack of passion for the problem
1st Mistake beauty founders make

Mistake 2: Not In Love with Target Consumers

Frequency: 

This mistake occurs with alarming regularity in the indie beauty industry.

Why is this a mistake?

  • Underestimation of Consumer Understanding:

    The beauty category is  very personal for consumers especially women, and an intimate understanding of consumers’ needs, preferences, and aspirations helps you resonate with them. Not valuing this deep understanding leads to misalignment with consumers.

  • Lack of Engagement: Process

    Engagement, beyond superficial interactions, is necessary to comprehend consumers thoroughly. Without proper engagement, brands may blindly follow trends rather than creating substantial value for consumers.

  • Absence of Genuine Desire to Improve Consumer Lives:

    A genuine desire to enhance consumers’ lives fuels persistent engagement, driving continuous innovation and adaptation. Lack of this motivation can lead to complacency and disconnection.

How to avoid this mistake?

The remedy is consistent, in-depth engagement with consumers. This can take the form of detailed surveys, direct dialogues, and consistent feedback loops. Regular interaction with consumers can provide invaluable insights into their evolving needs and preferences. These insights should be incorporated into the brand’s strategy and product development to ensure that the brand continues to resonate with its target audience.

Example of a beauty brand that made this mistake:

A notable example is Bite Beauty. Originally renowned for offering edgy & innovative, yet safe beauty products, the brand made a drastic pivot to ride the ‘clean beauty’ wave. The rebranding came off as a trend-driven move rather than a genuine response to core consumer needs, leaving their loyal customers alienated.

Bite Beauty is an example of beauty founder mistake where they ignored their core consumer
No. 2 mistake beauty founders make summary table

Mistake 3: Vision Pull vs. Flexible on Strategy

Frequency: 

This issue is quite common, cropping up more often than a trending hashtag in the beauty community.

Why is this a mistake?

Having a compelling vision is great, but being too inflexible about the strategy can lead to difficulties. This is like following a makeup tutorial step by step, without adjusting for your own face shape and features. Adjustments are necessary for success, and this is especially true in the indie beauty industry, where change is the only constant.

A key aspect of business success is Product-Market Fit (PMF). However, a rigid approach can hamper the journey towards achieving PMF, thereby affecting the brand’s success.

How to avoid this mistake?

The trick is to keep your vision in sight, but remain flexible on the strategy. Your vision should be around intent, but the path to achieving it can be malleable. Be open to new methods and routes that can manifest your vision effectively.

Example of a beauty brand that made this mistake:

Fluide, a beauty brand that closed down recently, serves as a poignant example. Fluide was a cause-driven brand with a passionate intent to bring about societal change. However, their unwavering vision pulled them towards a challenging strategy that became difficult to execute profitably when the going got tough. Their story highlights the importance of balancing a strong vision with a flexible, adaptable strategy.

Mistake no. 3 beauty founders make-vision vs. strategy
No. 3 mistake beauty founders make summary table

Mistake 4: Not Validating Loyalty and Growth Hypothesis

1. Not Validating Loyalty Hypothesis

Frequency: 

Very High

Why is this a mistake?

Overlooking the importance of the loyalty hypothesis is like rolling out a new beauty product without consumer trials. The insights gained from understanding why consumers become loyal and what triggers their buying decisions play a vital role in ensuring business predictability and profitability. Failing to measure and analyze this metric can lead to a lack of focus and scale creating unnecessary roadblocks in your growth path.

How to avoid this mistake?

Interrogate the data, understand your consumers’ psychographics and behaviors. Unearth the reasons behind their purchases and loyalty. Substantiate your findings by making calculated changes to your brand offerings and analyzing the results. Use techniques such as surveys, consumer feedback, and data analysis to better understand your customers.

Example of a beauty brand that made this mistake:

Fluide Beauty founder Laura Kraber stressed that the brand could not compensate for the high cost of consumer acquisition with an above-average loyalty. 

Mistake 4 beauty founders make-loyalty validation example: Fluide Beauty

2. Not Validating Growth Hypothesis

Frequency: 

Very High

Why is this a mistake?

Many founders underestimate the importance of consumer acquisition, often subscribing to the ‘build it, and they will come’ mentality. This can lead to lack of consistent sales, ultimately causing businesses to struggle or even fail.

How to avoid this mistake?

To ensure sustainable growth, it’s essential to have a solid consumer acquisition strategy in place. This could involve a mix of organic and paid channels, that can be scaled up as your business grows.

Example of a beauty brand that made this mistake:

Most Indie beauty brands that struggle to cross $1M in annual revenue make this mistake. Also, this is the reason for the glass ceiling at every growth stage of a beauty brand from seed to early-stage, growth-stage, late-growth stage and so on.

Mistake #4 beauty founders make around loyalty and growth

Mistake 5: Lack of Focus - Problem, Consumer, Products, Channel

1. Problem: Lack of clear focus on the exact problem to solve

Frequency:

Very High

Why is this a mistake?

If you constantly switch from one problem to another, you risk becoming a Jack of all trades, a master of none. This is similar to continually changing skincare products without giving them time to show results. A lack of consistent focus may lead to an average solution that doesn’t adequately address the consumer’s needs.

How to avoid this mistake?

Dive deep into understanding the problem you need to solve. Conduct thorough market research, engage with your target audience to get firsthand insights, and invest time in identifying the pain points your product can address.

2. Consumer: Spread too thin across a broad target set

Frequency:

Very High

Why is this a mistake?

Trying to cater to everyone can dilute your brand’s value proposition. It’s akin to a beauty product claiming to solve all skin issues—it’s simply impossible. A broad focus fails to generate a strong “this brand is for me” feeling, impacting desire, conversion, loyalty, and advocacy.

This ties into understanding your core consumer’s problem in great detail.

How to avoid this mistake?

Hone in on a specific tight-knit, self-identifying niche to start, but one that leads other niches or segments. It’s similar to the bowling pin strategy: knock over the lead pin for the domino effect on others.

3. Products: Too many products

Frequency:

Very High

Why is this a mistake?

Too many products can thin your resources, leading to logistical & inventory complications and a lack of leverage. Slow-moving products take as much space, time, and money to make as the hero products.

How to avoid this mistake?

Focus on a limited range of high-profit, high-volume products that truly resonate with your target consumer.

4. Channel: Being everywhere, in terms of media or sales

Frequency:

Medium to High

Why is this a mistake?

Channels & media are hyper-competitive, and you need to truly stand out and focus on moving products from the shelf or gaining attention and engagement on media platforms. Being everywhere often leads to lack of depth in channel penetration and understanding.

How to avoid this mistake?

Develop a sequential go-to-market strategy for both sales channels & media. Perfect your concept in a limited geography of a channel before expanding.

Example of a beauty brand that made this mistake:

Glossier is a prime example of a beauty brand that had to raise close to $100M even when it was doing revenues of a little more than $100M. The brand lost its focus on profitability and launched in categories that it stood against, such as makeup. The brand has its flagship stores and cult favorites and now partnered with Sephora to scale up further. Can it maintain the same level of loyalty at brick-and-mortar? Too early to say, but I doubt it.

Mistake #5 beauty founders make: Lack of focus on product, consumer, channel or media

Mistake 6: Overemphasis on Competition and Larger Players

Frequency:

High

Why is this a mistake?

It’s the equivalent of getting lost in the noise around you and too focused on others that you forget your strategy. Constant comparison with competition, especially larger players, can lead to distraction diverting your attention from crucial aspects like core business fundamentals necessary for profitable growth.

How to avoid this mistake?

Differentiation, Relevance, and Authenticity

Differentiation:

Create a distinctive brand identity and promise that stands apart from your competition. It’s not about being different for the sake of it but being different in a way that adds value to your consumers.

Relevance:

Ensure your brand promise is relevant to your consumer’s needs, preferences, and aspirations.

Authenticity:

Organize your efforts to uphold the values and promise of your brand. Authenticity and consistency are crucial in building trust and loyalty among consumers.

Example of a Beauty Brand:

A prominent example in this context would be Revlon. The company, according to several industry analysts, seemed too engrossed in monitoring its competitors in the mass beauty segment, consequently overlooking evolving consumer preferences. As consumers began prioritizing self-expression and acceptance of individual flaws over the pursuit of unrealistic beauty norms, Revlon struggled to pivot accordingly, leading to a notable dip in their market relevance.

Mistake #6 beauty founders make: Worry about competition and big players
Mistake #6-beauty founders make summary table

Mistake 7: Lack of Focus on Margins and Profits

Frequency: 

High

Why is this a mistake?

Concentrating solely on growth while neglecting profitability is like applying a dazzling highlighter but ignoring the foundation. It may shine in the short term, but it won’t hold up in the long run. Margins act as the financial fuel to drive sustainable growth. They provide the resources needed for further investments, marketing, product development, and more.

How to avoid this mistake?

The ultimate goal should not just be growth, but profitable growth. Before embarking on any initiative, consider its potential impact on profitability. For example, calculate channel profitability using this formula: Volume*(Gross Margin % -Channel Margin %)-Sales & Marketing Expenses.

Here’s an interesting fact to note: A 1% increase in price can increase profitability by 11.1%, while a 1% increase in volume only increases profitability by 3.3%. Additionally, a 1% reduction in variable costs can increase profitability by 7.8%. Therefore, focusing on this order can significantly improve profitability.

Example of a Beauty Brand:

Farsali Beauty boldly withdrew from all beauty retailers, including giants like Sephora, as it wasn’t profitable enough. They observed that a staggering 80% of brands in such retail outlets were also struggling with profitability.

Another example is the Purely Byron beauty brand co-founded by Elsa Pataky. The brand incurred a loss of $3.6 million in 2020 and was reportedly never profitable. This was largely attributed to the brand’s inability to strike a balance between growth and profitability.

Mistake#7 beauty founders make is lack of focus on margins
Mistake #7 beauty founders make-growth over profits summary table

Mistake 8: Frequent Promotions and Discounts

Frequency: 

Very High

Why is this a mistake?

It’s like being the party host who always lures guests in with a free bar, only to have them disappear when they have to pay for their drinks. Frequent discounts and promotions can initiate a vicious cycle that is difficult to escape. 

Consumers start expecting continuous sales, which can lead to forward buying (although this is debatable, some may argue it’s beneficial or doesn’t occur at all) and erosion of brand differentiation. Furthermore, regular margin loss can harm the business’ financial health.

How to avoid this mistake?

Instead of constant price cuts, focus on creating and communicating value. Differentiate your brand and products through superior quality, unique features, excellent customer service, or other unique selling propositions (USPs) that make you stand out. Also, keep promotions strategic and around conceptual initiatives with higher perceived value without heavy discounting.

Example of a Beauty Brand that made this mistake:

A notable example is JCPenney. Although not an indie beauty brand, its journey offers an important lesson. JCPenney attempted to transition from frequent sales to everyday low pricing. However, due to its previous high-frequency promotions, customers were conditioned to shop only during sales, leading to a severe decline in sales during the transition.

Mistake #8 beauty founders make is frequent promotions
Mistake #8 beauty founders make is regular promotions summary

Mistake 9: Going to Retail Too Early and Ill-Equipped, With No Strategy

Frequency: 

Medium to High

Why is this a mistake?

For the young swimmers out there, think of retail like the deep end of the pool – you don’t want to jump in until you’ve got your strokes down. Entering the retail sector too early and without a solid proof of concept for velocity can be like taking a knife to a gunfight. Retail is a capital-intensive arena where 99% of the game is sell-out, and merely 1% is sell-in. The sequence in which you approach this also matters significantly.

How to avoid this mistake?

To avoid falling into the trap of going to retail too soon, beauty brands must develop a Go To Retail Strategy. This involves being ready financially and having a proof of concept for velocity and category development using shopper marketing. 

A few other checks before entering brick-and-mortar stores is building a solid online presence and following. Brands must also focus on cultivating unique selling propositions and crafting an emotional brand story that resonates with their target consumers.

Example of a Beauty Brand:

A case study in this context would be Athr Beauty. Tiila Abbitt launched this ground-breaking beauty brand, which championed sustainability. They brought in over 20 brands with a Good Vibes Beauty Box, pursued fair-trade sourcing, and adopted green packaging initiatives.

Despite their strong value proposition and sustainability credentials, they faced significant setbacks. The brand decided to pull out of 1200 stores at Sephora due to a lack of funds to support the brand.

Mistake #9 beauty founders make is go to retail too soon
Mistake #9 beauty founders make-Jump to brick & mortar retail summary table

Mistake 10: Cutting Corners on Your Core Operating Model

Frequency: 

Low to Medium

Why is this a mistake?

A core operating model helps a brand deliver its unique promise and the methods to deliver it. The fallout can be severe when founders cut corners on this central model in pursuit of quick sales. This deviation dilutes the brand’s essence, muddles its focus, and diminishes its leverage in the market. It’s akin to abandoning your GPS mid-journey in favor of an enticing detour; you may end up entirely off-course and struggle to regain your original trajectory.

How to avoid this mistake?

The remedy here is self-awareness and discipline. A brand should be clear about its purpose and promise. Is it about delivering exceptional value, engaging stories, or bringing innovation? The brand must consistently reflect this core focus in every product, campaign, and consumer interaction. 

Example of a Beauty Brand:

Elf Cosmetics provides a compelling case study. Starting as a digital sensation, Elf made a splash in the beauty industry with its strategy of offering ‘masstige’ products – high-quality items at accessible prices. This model led to rapid online growth and popularity.

However, a shift in strategy saw the brand lose its focus. It embarked on an ambitious expansion plan, opening physical stores and launching a flood of new products. The change wasn’t well-curated and diluted Elf’s original value proposition, confusing consumers and impacting its market leverage.

Recognizing this misstep, Elf Cosmetics realigned itself with its original operating model. It returned to its digital roots, prioritized carefully selected, impactful products like the popular Poreless Putty Primer, and implemented a digital personalization strategy to reconnect with its audience. This back-to-basics approach helped the brand regain its growth trajectory, outperforming its performance during the detour period.

Mistake #10 beauty founders make is deviating from core operating model
Mistake #10 beauty founders make-core operating model dilution summary

Mistake 11: Neglecting Value Analysis

Frequency: 

Low to Medium

Why is this a mistake?

Every brand brings a unique blend of story, experience, and innovation to the table. However, these elements must ultimately deliver tangible value to the consumer. Failure to provide sufficient value can impact brand loyalty, particularly as a brand enters emerging or early mass markets.

Misjudging value has two significant ramifications:

  1. Validating Loyalty Hypothesis: 

    Brands must establish a strong value proposition to engender customer loyalty. If a brand fails to deliver adequate value, this can impede the loyalty-building process, leading to a weaker market position.

  2. Impact on Conversions:

    Value also drives conversions. A high-value offering reduces anticipated post-purchase dissonance, making consumers more likely to complete a purchase.

How to avoid this mistake?

Conduct regular value analyses to understand the perceived value your brand offers compared to competitors. You can calculate this using the formula: Value = Quality/Price. It’s crucial to ensure that your brand delivers a strong value proposition that resonates with your target consumer segment.

Example of a Beauty Brand:

DECIEM’s experience with its two brands, “The Ordinary” and “NIOD,” perfectly illustrates this point. “The Ordinary” found significant success by offering high-quality products at affordable prices, delivering excellent value to consumers.

In contrast, NIOD struggled. Although it boasted of superior product quality, its higher pricing didn’t correspond to a proportionate increase in perceived value. This disparity led to NIOD’s failure to capture market share and ultimately resulted in the brand’s struggles.

Mistake #11 beauty founders make-lack of value analysis: example of NIOD beauty brand
Mistake #11 beauty founders make is around value analysis with summary table

Quick Summary

In the thrilling journey of establishing an indie beauty brand, founders frequently face a minefield of potential missteps. Here’s a quick recap of the top 11 mistakes and how to avoid them:

  1. A lack of genuine passion for the problem can undermine the brand’s endurance. Founders should deeply connect with the problem they aim to solve.
  2. Disregarding a profound understanding and engagement with the target consumers can lead a brand astray. Brands should empathize with their audience and tailor their offerings to their needs, rather than just chasing trends.
  3. Sticking rigidly to a vision while disregarding strategic flexibility can stall growth. While visions are crucial, they should inspire intent, not impose inflexible outcomes.
  4. Overlooking the validation of loyalty and growth hypotheses can damage a brand’s long-term success. Founders must continuously understand and validate why customers buy and remain loyal, and constantly fine-tune their consumer acquisition strategies.
  5. A lack of focus, whether on the problem, consumer, products, or channel, can dilute a brand’s impact. Brands need to comprehend the problem thoroughly, cater to a specific niche, focus on high-profit, high-volume products, and implement a sequential go-to-market strategy.
  6. Overemphasis on competition and larger players rather than playing to your strength and focusing on core consumer
  7. Lack of focus on margin and profits leaves little room for investing in growth.
  8. Frequent promotions and discounts create a vicious cycle of diminishing profits
  9. Going to retail without a  proper proof of concept around velocity and category development is a recipe for disaster
  10. Cutting corners on the core operating model can jeopardize a brand’s performance and reputation. A solid investment in an efficient operating model, aligning with the brand promise and consumer expectations, is essential.
  11. Neglecting value analysis could result in missed opportunities for enhancement and innovation. Regular value analysis can offer insights into what consumers appreciate most about a product, guiding product development and marketing strategies.

The path to a successful indie beauty brand may be fraught with challenges, but understanding these common pitfalls can certainly smooth the way. Remember these learnings and that growing and scaling a brand is a journey. It’s essential to stay flexible, keep your consumers at the heart of your decision-making process, and continuously learn and adapt. Success, then, is not a matter of if but when.

Do check out my article on why beauty startups fail!

Jump accelerates women-led, early-stage beauty brands with a custom fit, full & fundamental solution based on science & emotion.

Leave a Comment

Your email address will not be published. Required fields are marked *

Layer 1