COSMOFACTORY

Deanna: [00:00:00] This episode is about brand extensions, product development, and color cosmetics. It's about the power and potential of a massive social media community. It's also about the risks and rewards of building a brand around one key person and in a single category. And it's about staying creative despite an endless product launch cycle.
Deanna: Claudia Soare, president of Anastasia Beverly Hills, is my guest today on the CosmoFactory podcast. Welcome, Claudia.
Claudia: for having me.
Deanna: So glad you're here with [00:01:00] us. Um, Anastasia, the founder of Anastasia Beverly Hills, is quite often given credit for creating a beauty category exclusively for eyebrow products when she launched the brand, uh, in 2000.
Deanna: About 10 years ago, the brand did expand into color cosmetics. Uh, before we explore the brand extension part of the story, can you just share a little bit about the early days of the brand?
Claudia: Yeah, absolutely. So, you know, my mother started out in a salon. She has been an esthetician, um, before, even before I was born. And basically what she did is she, um, saw clients, uh, prior to owning her own salon in Beverly hills, working for other people and what happened along that process is she created a niche in shaping eyebrows, which I guess wasn't a common practice in the late nineties.
Claudia: And, um, and because of that, uh, or in the early nineties, I should say, wait, when was that? I think that was 1990. Oh yeah. And, uh, and, and because of [00:02:00] that, she was able to open up her own salon and eventually create a category for eyebrows with eyebrow products that she launched in 2000 that kind of really revolutionized, um, the way we saw eyebrows.
Deanna: Yeah, and as you've described, clearly there was a, an opportunity in the market, um, a space that could be filled, but I'm curious, um, why was the brand then about brows for nearly 15 years and only brows?
Claudia: Yeah, it's, you know, actually it wasn't. So the real, the real secret is initially Anastasia created, um, a brow line and then she expanded with makeup because she had very small distribution in Nordstrom's department stores. And because she operated a salon in Beverly Hills and had Hundreds of clients walking through their daily, um, and would want to obviously offer her clients makeup services.
Claudia: So she did create a line. It just happened to fail. Uh, no one knew about it. Um, you know, she didn't have the money, the resources, the finances, there was no social media. [00:03:00] And it's very, very hard to become a kind of a nationwide makeup line when you do not have, you know, the resources, the manpower to really do that kind of marketing.
Claudia: Um, and I think it was really, even though she got a ton of press, the press was very focused on her expertise, which was browse. So the line folded, I want to say two, three years later, just because she couldn't sustain it, took the loss and then try it again.
Deanna: Yeah, yeah. You know, um, in preparing for our conversation today, I read an interview with CEW in which Anastasia gave you, Claudia, a full credit for the idea of relaunching into the color cosmetics category. Um, and if I'm right, you can tell me if I'm not, that your first launch included like contouring powder, um, and some eyeshadow palettes.
Deanna: Um, can you take us back to that decision making process? Why was it time to then again, move into the brow category? Sure.
Claudia: you know, at the time social media was new. I loved Instagram from day one [00:04:00] and we had a challenge on our hands. Anastasia had been in Sephora since 2005 Nordstrom since obviously, I want to say two, I don't remember the exact, but it was like. 2001 maybe um and also since 2008 and you know as with all retailers Um, there is an expectation to grow year over year.
Claudia: That's just what happens and there's only so many eyebrow products consumers will purchase It's just not necessary to own that many as opposed to the rest of the makeup you own So, um, you know the logical solution was you have to do more product Uh, and that product being makeup. It's also part of our dna.
Claudia: It's what we do You Uh, as I said, I grew up in a salon. She's been in a salon her whole life. So beauty is a, is an easy tie in for us. Um, so, you know, contour was important because a, it's something that we were using as part of our routine daily. And it was something that consumers really wanted and resonated with, but there was no one really creating a kit that had [00:05:00] all the pieces together time.
Claudia: Everyone's buying all these separate pieces, et cetera. So I thought about creating this contour kit. And I want to say it was 2014 and that really kind of helped boom us into makeup as opposed to just brows, you know,
Deanna: No, that makes good sense. Um, if I'm, if I kind of in my imagination picture the team at this, at the time of this expansion, I'm envisioning a lot of people who had quite a bit of expertise and obviously experience with brow products and how did you then ensure that you were making good choices in terms of pigments and color cosmetics, uh, formulations and even product format?
Claudia: well, the team was myself, my mother and one other person. Um, and, and, and, and to this day I have probably the smallest team on record. It's, it's me and two other people. Um, and of course my mother as well. Um, I think that, you know, when you're new and you're a startup, the, The pressure is not there quite as when you're a big [00:06:00] brand and then you have to continue expanding.
Claudia: Um, and, and I just think about how much product marketing has changed over the years. You know, I, I don't recall, even though the formulations were always great, but you didn't have to come to the table with clinical testing and with all the formula ingredient marketing background, and all of these things that are challenged for all brands today, because you have to come with such a huge portfolio for every product.
Claudia: So back then, I think it was a little bit more fun in the sense that it was about creating a makeup that works, that performs incredibly well. Um, and then educating the consumer about it and us having a lot of experience in makeup. You know, that was kind of easy because not that I knew anything about making formulas.
Claudia: I knew what I learned from my mom because she's been doing it. She was an amazing teacher. But I think that, um, I also feel that it was about performance and because I know quite a bit about makeup and how it's expected to look that kind of helped me, um, communicate with the [00:07:00] labs and what I wanted to see.
Deanna: Sure. No, that's interesting. And I, I like your point too, that, um, at that time, the, the actual experience of the makeup and whether it was quality, um, was a, was a really strong selling point. And we're now, of course, that's still true, uh, but the consumer expects a lot of other information. Um, so, so that's, that's a nice point.
Deanna: Um, Let's talk, if you don't mind, about some of your more recent launches. Um, as you suggested, you're still very hands on with new product development. Um, you know, I think it was just a few years ago, then, that you added a mascara to the line. And it's not unusual for brands that are in the brow space to bundle, right, brow and lash products together.
Deanna: So, I'm curious, why hadn't there been mascara previously?
Claudia: Mascara is the hardest category to crack into. I would say foundations probably second, you know, you have industry giants that own that space and that category. Right. [00:08:00] And um, the challenge with mascara, I don't know if some people know this or not, is that there are a lot of patents on brushes. So a mascara has two things, it's the brush and it's the formula.
Claudia: And if you are very, very limited, think about all the years a mascara has been around, how many patents there are out there, it's very hard to be innovative. And also the market is, So incredibly locked in by these legacy brands that a lot of people aren't willing to switch, you know, um, so it was, it was something where we have to wait.
Claudia: I feel that until we have the right budget to market it the right way and have the million samples at launch, which is clearly expensive.
Deanna: Mm hmm. No, that's that's an excellent point. I'm curious, though. Um, you know, given those challenges, what has the consumer response been? Is is mascara a strong seller?
Claudia: Actually, our 1st 1 flopped and not because it wasn't great, but because we didn't have the budgets to really market at the right way and sample it was cares all about sampling. Um, and it's and it's really costly [00:09:00] and the 2nd 1, you know, it launched. It was, it was quiet and then it started picking up. So it was, I'm really, really excited about that because it jumped, I want to say 10 points.
Claudia: So it really, really, really, now it's a contender and it's going to keep growing. You just have to keep at it. Mascara is not like. A trend item where you launch it. Everybody goes. Oh fun color. I want to try that It takes some time if you stick with it, and it's a good product you can get there.
Deanna: Yeah, it's funny. It's it's almost like a personal care item. It is just such a standard. Yeah, that's so interesting. Um, um, I want to keep thinking about about new product development a bit. It was I think this year, even you launched, um, Your first multifunctional makeup, and I might describe this product, um, as a complexion product, um, but it has the benefits of a serum as well.
Deanna: Will you tell us, um, about Beauty Balm?
Claudia: Yes, beauty balm is such a passion project of mine Um, I really you know Honestly, I I really [00:10:00] wanted to do two things number one I wanted to start introducing the thought of skincare from this brand to the consumer by not being too literal Um It's hard to digest for consumers that a brow brand is now a makeup brand is going to do skincare.
Claudia: Um, you don't want to just jump in headfirst. And I thought a transition that kind of ties both together with was like the natural decision to make. Two, we really needed a product that let consumers know that, hey, I know Anastasia is known as like the perfect face, full face, glam, makeup, girly. But, if you don't wear makeup, if you hardly wear makeup, if you don't know anything about makeup, if you, if your idea of makeup is applying it with your fingers, we have a product for you.
Claudia: Um, and that was it. That was, you know, a more approachable item from the brand for someone that's literally petrified when looking at our gondola thinking like, oh, I don't know anything about makeup, they're too scary for me.
Deanna: right, right. That's helpful. And what about the product development process? What was that [00:11:00] like? Can you share any notes or details?
Claudia: God, that was painful because, um, you know, it's really, really challenging to make a stick that is dewy and glowy. That also retains pigment that has skincare benefits. That doesn't get waxy. That doesn't fall apart. It's, you know, it took so many versions. I want to say 25, but I'm probably in, I think I don't look at, but I'm an incredibly patient person.
Claudia: So I just kept sticking with it. Like I was not going to let go. Um, and it finally got there. Like, had we done a liquid, it would have been easier, right? Like a, a pump or whatnot, but doing a stick, which was important for me because it made, you know, the first BB cream in a stick made it important because it was innovative.
Claudia: Um, you know, I stuck with it and, and, and you, by the way, it's not a one and done. I have to be hands on with every single batch to make sure it doesn't. Like it doesn't go left. It doesn't vary from what my standard is.[00:12:00]
Deanna: No, that's helpful to hear. Thank you. Um, when you launched Beauty Balm this year, you also opened the first Anastasia Beverly Hills pop up shops. So I'm curious to know how important these sorts of in person retail experiences are to your community of consumers.
Claudia: I think they are important. I think they're fun. I think Gen Z loves, uh, an experience. Um, it's also, you know, fun for social media. You can take a great photo. I think that was my test to see, you know, what a pop up does, how worth it is, uh, from a monetary perspective. So it was, it was my way to kind of do some market research and to allow consumers to come and test the product out
Deanna: Yeah. Yeah. And how did you select? You were in, in New York city and then also in Berlin. Is that, are those the only two spots?
Claudia: I haven't done Berlin yet. I'm going to do Berlin this upcoming year. I tried to get Berlin. It was like so challenging to get it going that I decided to wait. [00:13:00] But New York is easy because they have huge, you know, walk by traffic as opposed to Los Angeles. So that was easy.
Deanna: Yeah. Excellent. We're hearing a lot about product development and, and you told me even before we started recording today that you're still very active with that process. And that's quite clear. Um, yeah. You mentioned you're bringing out new products almost every season.
Deanna: I'm wondering how you and your team, your tiny team, stay creative, um, and come up with products that will delight your customer. And, and maybe some of that has to do with the partnerships you have in manufacturing, or maybe it really just is sort of, um, your creative process.
Claudia: You know, I think it's very challenging. You know, 10 plus years to to continue to be extremely, you know, innovative every single season, um, for any brand, um, because that's just that's just a lot of product. But, you know, retail kind of, uh, is set up in a way where you have to launch products every season.
Claudia: It's not that. Oh, my gosh, I choose to launch product every season. That was very different when we were [00:14:00] a startup. So you can't just slap things out there like so we really, really strive to look at the missing categories for us, which surprisingly, because we're so strong and browsing eyes for so, so many years, there's a lot of gaps and spaces for us to build.
Claudia: So right now, I'm in a process of filling categories outside of the comfort zone outside of the usual. So, Um, and and that's. And then putting a lot behind the formula innovations such as beauty bomb. Uh, and that's been helping the process along. It's a mixture now of being calculated and creative.
Deanna: hmm. Mm hmm. Mm hmm. No, and I appreciate your sharing a little bit of the, I'm not sure if this is the right way to say it, but the experimental approach that you're willing to take, um, you know, mentioning a couple, um, product failures, um, you know, sharing that, um, You thought about doing the pop up in Berlin, but you know, you need to [00:15:00] sort of keep working at that.
Deanna: Um, I, I'm imagining the same thing happens, um, in filling these categories, right? You might try a new category and find out you don't have it right yet. Um, so I, I think that's, yeah. Can you say more there?
Claudia: I mean, I think, you know, honestly, I don't know if this is for everybody, but 50 percent of the time you can launch a great product and, you know, for lack of a better term, nobody cares. It's just, it didn't resonate. And, and. It is what it is. I've learned over the years not to take it personal. You know, it used to kind of bum me out, um, as a creative person, but it's not personal.
Claudia: It just didn't hit for whatever reason, but you'd be surprised sometimes if you have the capacity and you're able to hang on to it, you don't have the pressure of taking it off or discontinuing it from retailers. Um, hanging on. Sometimes you'll be surprised that if you stick to it, it will revive. It will bubble back up.
Claudia: I'm actually, I'll give you a really good example. We have an amazing concealer. It's amazing. [00:16:00] It's called Magic Touch Concealer. It launched at the height of the pandemic. Needless to say, it did absolutely squat when it launched. But it's been bubbling up now because consumers have just gotten around to knowing about it This is two years in the making and i'm so happy and i'm so proud because i'm like, yes fine I mean you see it.
Claudia: So, you know, sometimes it doesn't mean A failure doesn't mean like oh my gosh, you know, I could never launch a concealer again this failed. Absolutely not Absolutely not. You have to stick. You really think it's great. Stick to it. If you feel like you could change some things, do it and relaunch it. But everything has its time.
Claudia: You just have to be patient. The consumer is bombarded with noise.
Deanna: Yeah. Yeah. And I like that the, you know, the reason it failed isn't because the product, you know, or didn't take off right away isn't because the product isn't a good product. Um, there are so many other factors there that's, that's helpful to hear.
Claudia: Sometimes it's just not on trend at the moment, but it will be in a year from now.
Deanna: Yeah. Yeah. Let's think a little bit [00:17:00] more about your, um, customer community. I know that you've regularly worked with influencers for many years. That's. That's obviously a great way to reach customers directly. Um, can you tell us something maybe that you've learned that might be useful for other brand leaders to know about working with influencers?
Deanna: I imagine it takes a lot of trust. They're helping tell the story of your brand. They're helping educate followers about your product. What are some learnings you have from, from influencer marketing?
Claudia: Well, it's changed a lot. You know, like we're the first to work with influencers back in 2013, 2014. Um, and back then it was a very personal process. We didn't know anything about social media and what was going to happen with it. They certainly didn't know anything about being a brand themselves because they are.
Claudia: And it was very much a very personal, fun, creative process. Not to say that it's not anymore, but now they have a lot of help. They've got agents, they've got managers. So now they're a brand. They have a team and it, and really checking off all of the logistics, uh, is [00:18:00] easier. Um, so I think now it's kind of a well oiled machine based on the help that they have, um, on their side.
Deanna: Yeah. You know, something else that Anastasia mentioned in that CEW interview, I referenced earlier, um, is that the brand is where it is today, thanks to our community, um, and literally, uh, the Anastasia Beverly Hills Instagram today has over 18. 5 million followers, and I know you personally appear regularly in social content, um, followers, of course, know you as Norvina, uh, in case anyone, uh, Is also looking at Instagram and they can find you.
Deanna: Um, but how would you describe the relationship you and the brand have with your online community?
Claudia: Um, I think that we have always been extremely connected to online. We started literally the makeup journey on, um, Instagram. And I think that it's always been extremely close. And I feel like I know everyone, not everyone, God, you cannot say that, but I feel like I know who are, are ones. [00:19:00] Um, I think that there are new platforms now, like Tik TOK.
Claudia: So, you know, the challenge for any executive that also is, you know, Or creator owner, whatever that also is, um, on social media, but, you know, has to go to work every day. Um, is, is really how you can be everywhere at once because you no longer have just one platform. You have many. And how can you do that?
Claudia: And then still do your job? Because I always, you know, people always tell me like, you should do more content. And I go, do you have any idea what it means to be a content creator? I literally can't be true people. I wish I didn't sleep.
Deanna: Yeah. So do you have any tips for other people trying to keep up?
Claudia: You know, I think that, I think I'll have a tip that I gave myself is I have to start thinking. Not giving myself the pressure to say, Oh, you're going to be active on tick tock, because that means you have to post three times a day, which is never going to happen. I have to start thinking about what is the kind of content that I want to reach, you know, consumers or whomever people that don't even know our brand.
Claudia: Um on [00:20:00] social media that speaks to the brand that is important that can go up whatever even if it's once a month And it it it does something it moves the needle even from an emotional perspective with the consumer.
Deanna: Yeah. Yeah, no, very smart. Um, do you have any examples of how community engagement has impacted your business decisions? Maybe in terms of product development that we were discussing earlier, or even collaborations with other companies or brands?
Claudia: I mean, yeah, absolutely I mean consumer engagement is so important because consumers will always let you know what they love and what they don't love and you know, you can buy all the reports and all the data and stuff, but Sometimes consumers will let you know where the trend is going. If you just pay attention and that's really the, the community, the maker community is very strong, very vocal about what it likes and what it doesn't like.
Claudia: So it's, it's super important to listen. Um, but also listen objectively, you know, you can't jump on every trend. Um, so you have to take from the noise, you know, what is useful to the brand.
Deanna: Yeah. [00:21:00] Yeah. Can you share an example of something that you did respond to from your followers?
Claudia: I mean, gosh, there's so many, there's years of product development of us just speaking through, um, I, okay, perfect example, launching lip velvets, and that's a really big product for us. Um, people love it. I launched a ton of nudes because that's what the retailers obviously will always want to buy nudes.
Claudia: Um, I felt strongly that we need. Darker shades. Retail doesn't always like to, um, buy them because they don't do well, but it doesn't matter. It's good for inclusivity. But then, of course, um, consumers, our followers have been asking us like, Hey, what are the darker browns? What are this? And I knew it. It just validated what I was feeling.
Claudia: And I was like, I'm doing it. I don't care. I don't care if it doesn't even, but of course, and it's been selling anything as we suspected. So the community really helped to validate and support that. Honestly, yeah.
Deanna: Yeah. No, absolutely. That's an excellent example. Thank you. Um, we know, um, Anastasia founded the brand as, as, um, yeah, that's just the [00:22:00] whole story, I think. Um, and she, she continues to be very active today, especially, um, in terms of sales and company finance, but I'm curious to hear your thoughts, um, on the pros and cons of building a brand around an individual person or, you know, I suppose I should say, uh, given the depth of your work, um, building the brand around two people, could this brand exist without Anastasia and Claudia Soare?
Claudia: if you look at, uh, I mean, my social media is my personal one. But if you look at the Anastasia one, you don't see me on there. Um, you also, you see Anastasia very, very lightly, very, very gently. We're not in all of our marketing. We're not in any campaign. Um, you know, we've done very well over the years and, you know, we used to be extremely involved, but I think.
Claudia: That is an, and what I mean by involved, I mean, just outward facing to the consumer, but it's, it's very important to have a little bit of separation and let the product speak for itself. Let the brand evolve, um, to, to basically ensure that if Anastasia, you know, not that [00:23:00] she ever would, she loves to work, but doesn't show up to Mario, the brand continues, people wouldn't know.
Claudia: I mean, obviously they know she's there. They know she's involved. She's been doing the funniest talks lately, but. It's I think we've, we've done a great job in letting a BH be known as a brand. And I think very few people know me. It's more just the day ones and the early, you know, social media community.
Deanna: Thank you for that. Um, before we finish our conversation here, um, I do want to ask about funding and scaling a brand. Um, uh, just this week, uh, the financial information and analytics company S& P Global projects that the current valuation of Anastasia Beverly Hills, uh, the brand could. That could currently range, um, from between 600 million to 1.
Deanna: 2 billion. Um, and just to be clear for our listeners, uh, this is the last week of November, 2024 when we're recording the interview. Um, but just thinking about growing a brand to that level of valuation, what role did funding or external resources play in company [00:24:00] growth? You mentioned earlier that, that it was helpful to have, um, additional resources to, you know, fund marketing and that sort of thing.
Deanna: Can you say more about the importance of funding?
Claudia: I think that we did a phenomenal job in growing the company and got a minority, uh, investment in 2018. And that has really helped us scale to the expectations set forth by the market. You know, Uh, there was only so much more that the brand could grow as a mom and pop more or less, um, without having the kind of funding that will allow us to scale globally, um, have a bigger footprint, bigger presence.
Claudia: Um, teens, you know, it takes a lot of people to do this globally. So that that definitely helps. And then, of course, marketing marketing expenses. I want to say for everyone. I don't mean, just a B. H. from the 2018 to now are extremely different and extremely higher.
Deanna: curious to, um, you know, sort of a personal [00:25:00] or career driven question, how you have needed to grow as a business leader, as the brand scaled to this level. Um, as you've, you've said several times, and even just then, right, things have changed significantly, um, over the years. Um, can you share how, how you've grown or any sort of leadership lessons we can take?
Claudia: I mean, inevitably. I had to change, you know, once we had the, um, obviously the task of scaling up it prior to that, you know, a lot of the job was, was just the fun stuff, right? It was social media and it was making makeup. That's what happens when you own your business and it's a small business. You can go at your own pace.
Claudia: You can do whatever you want. Um, when you have obviously investors and then expectation to go forward, there's, I have to really separate and dish out my world and, and, and take on a lot more responsibility that is corporate facing, really looking into not only the numbers, the marketing, what are we doing?
Claudia: What's the ROI for everything? It became a lot more serious. It's, it's, it's literally, it's, it's the [00:26:00] next chapter.
Deanna: Yeah. Yeah. And do you have advice for other entrepreneurs who might want to scale their business to this multi million dollar level? You know, folks aspire to big things for sure.
Claudia: Absolutely. I think that one of the most important things is to evaluate what you want. And I mean that on a personal level, because then, you know, as a, as a small business owner, you're always thinking, Oh, my gosh, imagine if my business was selling 100 million product or whatever it may be. Um, how amazing would that be?
Claudia: Yes, it would be amazing. But what isn't what is important is to really keep task of what is important to you if your goal is to make a lot more money and have a lot more time for family, fun, friends, hobbies, it's not going to work that way. Um, it's going to be quite the opposite. So if you are. If you want to scale bigger, be prepared to give up more and more and more of yourself.
Claudia: And if you're okay with that, then please, by all means, go for it. Because what happens is [00:27:00] when you're responsible for business that has hundreds of millions of dollars, it doesn't stop. It doesn't end, you know, us business might be done at the end of the day, but guess what Asia is. Bubbling up there's Europe, uh, there's problems everywhere for any company.
Claudia: So, you know, unless you're going to take on a massive team and take a step back, the, the, the more money, more problems saying it's very real. So, you know, it's just, it's, it's, what do you want from this life? You know, like if you want to be creative and just have fun scaling up might not be the best thing to do.
Deanna: Now that's really helpful to connect really the personal values then with, with how you might want to grow a business. Well, I really appreciate your giving us the chance to learn from your experience today, Claudia. Thank you for joining me
Deanna: here on the Cosmo Factory podcast.
Claudia: Thanks for having me. It was so fun. [00:28:00]