Divya Gugnani, CEO and co-founder of Wander Beauty, joins us today to discuss the foundations of building a beauty business. After being unable to find beauty products to fit her on-the-go lifestyle, Divya set out to make these products herself. Listen in to hear Divya propose the philosophies necessary to create depth in your business in such a competitive market, while also offering advice for how to tackle and avoid biased feedback and how to get through the tough times of entrepreneurship.
Divya Gugnani [00:00:01] And there was really no beauty brand out there that was making my life easier. In fact, the beauty industry was making my life more difficult.
Sam Jayanti [00:00:11] Welcome to Ideamix radio. I’m Sam Jayanti, and every week I chat with entrepreneurs, Solopreneurs, career changers, experts and enthusiasts for insider tips that you can apply to turn your idea into a business. So sit back and enjoy today’s show.
Sam Jayanti [00:00:34] Imagine this, it’s pre pandemic and you have a full day at work. The forecast calls for heavy rain and you’re looking at multiple subway trips. Wouldn’t it be great if you could take your entire makeup bag with you so you didn’t look quite as frazzled as you felt? Divya Gugnani is the CEO and co-founder of Wander Beauty, and she spent nearly 20 years searching for beauty essentials that could keep up with her with her on the go lifestyle. Divya, welcome to Ideamix radio.
Divya Gugnani [00:01:06] Thank you for having me. I’m excited to be here.
Sam Jayanti [00:01:09] So, Divya, tell us, in your words, what is Wander?
Divya Gugnani [00:01:14] So Wander Beauty really came out of a personal pinpoint, as you just described in your intro. It was my life. It was getting up every morning, having two children, getting them ready, getting out of the door, doing my makeup on the F train subway in the Upper East Side in Manhattan to head to midtown Manhattan, doing my skincare routine at the gym, doing my hair sometimes on planes, trains and automobiles or my desk at work. And there was really no beauty brand out there that was making my life easier. In fact, the beauty industry was making my life more difficult. The beauty industry was telling me as a consumer, a multitasking mom of two kids who was a career mom, working a lot of different hours, that I needed a lot of steps and I needed a lot of products. And the reality of my life was that I wanted fewer things that did more. I wanted clean beauty. I wanted fuss-free fool-proof do-it-yourself, beauty. And none of that existed in the market. And so Wander Beauty really is a brand that embraces the modern woman and the way she lives her life. It focuses on real women in the context of their real lives. And we create clean beauty essentials free of harmful and toxic ingredients, enriched with global skin loving ingredients, clean beauty essentials that you reach for every single day, wherever you wander. And that’s really what the brand is.
Sam Jayanti [00:02:39] I love the way you’ve described that it’s just music to our ears, because, as you said, one of the reasons so many of us don’t use makeup or have sort of shied away from it is because there’s so many steps and it’s such a time sink and having clean, simple products where you can really be done with your makeup routine, with just a couple of products and do it anywhere you are while you’re on the go is super, super important.
Divya Gugnani [00:03:06] It’s how we live our lives, and so why not have a beauty brand that actually suits women in the real context of the real lives and really that was the inspiration for the brand. It was real women. Our first steps were serving women, understanding their beauty routines, finding their pain points and really creating multitasking essentials that would service those needs.
Sam Jayanti [00:03:30] So during the 2008 financial crisis, spending in the beauty industry fell only very slightly and bounced back by twenty ten. Analysts are predicting a similar resilience in the market after the pandemic comes to an end. That said, I’m sure it’s been very hard with a significantly changing and constantly changing set of circumstances in your business and in the industry that you’ve witnessed and had to manage through over the last several months. Tell us a little bit about that.
Divya Gugnani [00:04:05] It’s been tough. Listen, the first thing that we focused on during the pandemic was the health and safety of our team and our community. And that’s where our time, energy and focus was. I think we very quickly realized that this would be a different year in all senses of the word, and it has proven to be so. So we said, you know, the beauty industry puts out so much newness and launches and we just took a step back. And we’re like, what really matters right now? What are people really doing at home? Baking banana bread, sour dough starter mix, doing home streaming workouts, spending time with their immediate nuclear family and not moving around as much and working from home. And so we really said, OK, now a lot of people are not going out there and getting services that used to be a luxury that they enjoyed before, like facials and haircuts and all of that stuff that you love to do that makes you feel more beautiful and confident. And so we just understood where our consumers were and what they were doing and actually surveyed them and spoke to them directly and got input from them and said, OK, now let’s re-craft the narrative and the storytelling around what we are going to do as a brand. Let’s leverage our community to do some good in this world. While, you know, this started out to be a health crisis which evolved into a financial crisis, which evolved into a humanitarian crisis, we said, OK, let’s take our community and let’s go out there and do some good. Let’s, you know, support front line workers at hospitals by giving them good to go and body essentials from Wander Beauty because they’re not getting time to go home and take a shower in many cases, and they’re working around the clock with crazy shifts. And so we really took this moment to go deep, to get deep with our community and really activate our resources and our base to do some good to donate, to volunteer, to support our community in the ways that we could. It was less about business. It was less about launching and building. It was more about let’s take what we have and focus on that and let’s provide education and entertainment to our audience. And that may be a way that they support us during this difficult time. And so it was doing streaming workouts on Instagram. It was, you know, focusing on tips on how to do a facial at home with Wander Beauty, clean beauty essentials. So we really changed the narrative of the storytelling of what we do as a brand. And I think as a result, we’ve built a deeper connection with our community. And that’s been great for us. But it’s been a tough year. That’s all I can really say. I mean, we’re excited and happy to be alive and to be growing, which is more than I can say for a lot of businesses and sectors out there. So we’re grateful. And the gratitude is really the biggest sentiment of 2020.
Sam Jayanti [00:06:58] It’s super important, and I think you’ve said so much in there that I want to pick up on: one, it sounds like you have a close, iterative, feedback based relationship with a group of your customers that have sort of been your North Star during times like this, with whom you can have an honest conversation, from whom you can solicit honest feedback and then use that to inform your strategy as you have during this period. And then, as you said, arrival was the name of the game this year. It wasn’t trying to blow the park in any other way. So talk a little bit about how you built that sort of power user customer with whom you have this very close feedback loop.
Divya Gugnani [00:07:44] I think it was the premise of the business from day one. If we were going to create a brand and a business with clean beauty essentials for real women in the context of their real lives, then we had to have that deep, direct connection with them from day one. So this was important from us from the very beginning. We said we are going to be direct to consumer first. We are going to have that feedback loop directly. We’re going to build a community on Instagram. We’re going to have customer service feed directly to our team. Everything was a dedicated step to build that direct connection from day one and involving our consumer in what we call social creation is a tenet of our brand. So we involve our consumer in many different ways, whether it’s Facebook polls or IG quizzes or voting to help give us ideas. We do surveys via email. I mean, every type of feedback mechanism that’s out there, we’re employing it in some way. We’re really actively engaging with our community to create our multitaskers to build our business from ground up with them alongside them and service their needs.
Sam Jayanti [00:08:56] Fantastic. You started wonder in 2015 with a co-founder, with Lindsay Ellingson, what made you want to do this then?
Divya Gugnani [00:09:06] I think it was kind of an inflection point in both of our lives and it all kind of collided together in one moment. I had had two children. I was had sold my business to a large corporate. I was time starved on the go and feeling the pain points of the beauty industry first hand. Lindsay, my co-founder, being a super model, planes, trains, automobiles, modeling around the world was looking for the same thing, multitasking, clean beauty, essentials. And they weren’t on the market and she was traveling nonstop. And so we knew there was a white space. We worked with a test group of people to understand what the opportunity was and then launched a brand with one product. And we really just said, like, we have no idea what we’re doing here. And to be totally frank, like we launch one product, we put it out there in the universe. We told our story via digital and video. We created this one essential, the wonder of beauty on the globe and illuminator. It has since won an award, Best Beauty Award. And we went out there with this one SKU and we showed a video of how you could use it 20 different ways. And when people saw that, they started buying it and mixing and matching and using it the way they wanted to. And that was the beginning of our brand. We said before we go out so many brands launch 60 skus. Look at all these celebrity lines that you’re seeing in the last few months, 60 skus, 80 skus, 50 skus. I was like, do a few things and do them well. Like that’s the premise of our brand. Let’s have that be a core tenet of our product development philosophy. Do a few things and do them well, create multitaskers that solve a problem. This one SKU could be used 20 different ways. It replaced your lipstick, your blush, it replaced your cream eyeshadow, your highlighter. It was all in one, going to save you time and make you feel more put together and polished in minutes. And you could use it in the back of a cab. So let’s do that and see if it works. And then if it works, we’ll take it from there. And that was always our strategy. Try something, test, learn, iterate and then build from that.
Sam Jayanti [00:11:19] It’s totally the right way to run a business. Let’s take a quick break. So, Divya, I want to come back to something you said, one of our other podcast guests on Ideamix radio has been Duru, the founder of Hiro Cosmetics and The Mighty Patch, and they also made a decision to launch with a single SKU. And you were just talking about that in the context of other brands that have chosen to launch with multiple Skus and how this is so much at the heart of the philosophy behind Wander where you want to keep it simple and succinct and really focus on performance products. How did you hone in with your test group on this particular product as being your launch product?
Divya Gugnani [00:12:11] Yeah, I felt strongly that do one thing and do it well and see if you have product market fit, because this concept of this brand sounded great to me. It sounded great to the hundred women that we surveyed before we launched the brand. But would it really be commercially viable? You don’t know that until you put it out there in the universe. And I will tell you one thing that I see in the industry that is disturbing, but true. A lot of people are able to disguise true product market fit by simply just raising tons of money and the private financing markets, venture capital, private equity money and pouring it into marketing. They can brainwash any consumer into trying a product by flooding them with ads, Facebook ads, Instagram ads, you know, billboard ads, pop up shops, influencer marketing, paying influencers, paying celebrities. You can be forced into drinking the Kool-Aid because there’s so much media at you every day telling you that you need to.
Sam Jayanti [00:13:12] This has become sort of a third and deeply destructive strategy to build a consumer brand.
Divya Gugnani [00:13:19] A hundred percent. So that’s like so for me, I was like I’ve seen as my career was in investor and being in finance, I just saw this over and over again, brands that outraise and outspend other brands. You know, we’re just disguising the fact that the product actually wasn’t that great. No one was coming back for repeat use and it was just a money game. And I said, I actually want to do the opposite. Like, let’s not raise money. Let’s just word of mouth. If we have a brand that can grow and thrive and survive with word of mouth and minimal funding, then we really have a brand. And that was the name of the game since the beginning. And we’ve raised very little money in the context of where we are in terms of scale and size. And it’s really been this idea of building a direct consumer business. We’re profitable and that’s something very hard to achieve as a consumer products business and being direct to consumer because so many brands out there are just on spending sprees.
Sam Jayanti [00:14:19] So true. Let’s shift gears a little bit, Divya. Tell us, as you look back now over this five year period since you founded Wander, tell us about when you’ve made a key change or pivot with the business and what that was. Why did you do that?
Divya Gugnani [00:14:39] I think a big pivot that we made was sticking to our direct to consumer business, it was very easy early on when we launched and we had built some buzz organically among celebrities and influencers and in the press world, in 2015, when we launched, we had this unique opportunity to be a new and indie brand at a premiere retail distribution. So we had multiple retailers reaching out to us saying, hey, we’ll put you in all these stores, we’ll do this, we’ll do that. And that was very tempting. So we could have gone and gone that route, which is the traditional beauty route. Most brands that you probably have in your bathroom, vanity, are brands that are sold at a Sephora or an Alta or like you’ve discovered them there. And that’s, you know, a part of life. Right, because they have the discovery process, they have the engine, they have the people, they have the physical footprint. And we just said this is so tempting, but this is not who we are. Our brand is…
Sam Jayanti [00:15:45] That’s super fascinating because for most beauty brands and so many founders, especially as they’re getting started, think this the Holy Grail is to have your branded a Sephora or Alta or… Talk a little bit about why you rejected that.
Divya Gugnani [00:16:01] Yeah. So to be in stores, everyone’s like, oh, I need to be in stores and be in stores, I only want to do this if I’m in stores like so many founders and I invest through my fund Concept Toco and a lot of consumer companies and I see a lot of things across personal care and beauty. And the reality is that that’s what people want and they don’t realize that like, that’s great. And it’s a model. There’s a lot of brands that are successful and grow in bills through retail distribution. There’s absolutely nothing wrong with it. It’s just not the model of the brand of the business I am building, because I can’t have that middle layer between me and the consumer. In order to create the best multitaskers and clean beauty essentials across color, cosmetics, hair, skin, body. I need to be directly connected to a consumer. I need to know what she wants, what she’s using, how she’s using it. I need that direct connection in order to inform that development loop of ideating on what to create and stress testing it with testers and then making it. If you’re primarily distributed through retailers like you’re getting second hand anonymous feedback through readings and reviews, which, by the way, sometimes are authentic and real and a lot of times are negative reviews left by other brands and competitors. And, you know, so there’s so many factors that go into those ratings because they get bought these days and people pay money for that. And so it’s just not what we were set out to build. And as tempting as it is, I think we stuck to our guns and said we’re direct consumer. It’s still the majority of our business five years later.
Sam Jayanti [00:17:40] That’s really, those are great points. What do you feel has been your most effective method of selling and growing your business? How have you thought about growing that? What you have seems to be a very dedicated customer base.
Divya Gugnani [00:17:58] I think it’s the innovation in the product. I really feel like we have always held a very high bar around what we create. And there’s so much beauty out there. You can buy excellent quality beauty at the drugstore, at a department store, at a specialty retailer. There really is wonderful stuff out there at all price points. And it’s not that you just have to buy prestige. You can buy great stuff, mastige, en masse. And so when we think about creating something at Wander Beauty, it’s like how do we create an overnight concentrate that is literally going to fundamentally transform someone’s skin with a one percent retinoid, which is going to stimulate collagen production, reduce the appearance of fine lines and wrinkles and have real results. And so every time we create something, there’s such a high bar for: is there something out there that already does this? Because if there is, we’re just not going to bother with it. How are we truly innovating? When we created the mascara, it was a lash treatment with nourishing lash ingredients to strengthen and help fortify the lashes, vitamins, antioxidants. It was a treatment slash performance product. It gave you the glossy black volume from root to tip that you want from a mascara, no smudging, no flaking, but also a lash treatment, but also in a tube that stays fresher longer. And so every time we’ve launched a multi task for Wander, we always call the multitask first because they’re all multi-use and multipurpose. There is such a high bar for doing, does the world need this beauty product? Because we’re not creating it if they don’t. And so that’s innovation.
Sam Jayanti [00:19:40] That’s a super important question to always be asking, right, is does the world need another one of these and why? And it’s such an important thing you’ve highlighted.
Divya Gugnani [00:19:50] So we have one thirty six beauty awards and six Allura Vestavia Awards, which is like the Oscars of the media industry, purely focused on innovation. We have chemists, we are no nonsense formulas. They have real ingredients. They have real results. Our moisturizer, Diven, has one percent (unintelligable) and lots of moisture in your skin for seventy two hours. Our baggage claim gold eye mask, which you may have seen on Instagram genuinely works. It de-puffs, it brightens, it hydrates that delicate periorbital skin. And so everything we do, there’s a lens of innovation. It’s breakthrough technology. It’s something unique and different that has real results. Otherwise we don’t do it.
Sam Jayanti [00:20:32] Well said. We’ll be right back. So Diyva, tell us a little bit about how you allocate responsibilities between you and Lindsay.
Divya Gugnani [00:20:45] So I think the most successful business partnerships that I’ve seen in my career are when the two founders or co-owners, have uniquely and distinctly different skill sets. And that makes the best partnerships. I find that first of all, I invest a lot in consumer companies, and when I see co-CEO’s and like literally run the other way, because the fact that two people share the responsibility to be the final decision maker to me is like starting off the business in the wrong place. So I feel strongly to have a long lasting, effective partnership, which we have had. You know, we launched the brand five years ago, but we worked on it a full year before that to six years in the making, is that Lindsay is what I consider a creative genius in mind. She is very creative. She till this day, despite being a new mom, she was on location today shooting content for January. So she was actually with one of our team members doing a shoot because of covid. We’re taking all the precautions necessary and only having the people who need to be there and wearing masks and all this other stuff. But she still shoots our videography, our photography. She’s a team of talent that also assists, shoots, also edits also. But she’s the creative director and she’s the creative vision and force behind our brand. And that is distinctly her department. She owns that team. She owns that responsibility. I trust her implicitly. I don’t question any decisions that she makes, whether it’s her budget or her aesthetic, her campaign ideas. That’s her domain. And she owns it. She lives it. I trust her and she does it. And I am the CEO of the company and I run the business and that’s my domain. And she questions me never and trust me always. And that’s how you build partnerships and yes, question meaning like we obviously show the other side of an argument to each other. And I think that challenges us that in good ways. But ultimately I make the decisions that I’m responsible for and she makes the decisions she’s responsible for. And I never cross over into our world and try and make decisions for her because that would be a recipe for disaster. Our successful partnership is built on us having different skill sets, different talents, and trusting each other to fulfill and deliver on those talents.
Sam Jayanti [00:23:07] I think distinct remits, but a lot of mutual respect and professionalism because of course, in making these decisions with hindsight, everything is twenty, twenty. And some of them turned out to be right and some of them turned out to be wrong. But that atmosphere of mutual trust is so key. What keeps you up at night right now?
Divya Gugnani [00:23:30] Now, what keeps me up at night is what is 2020 one going to look like? I have no idea. Like am I going to be wearing sweatsuits for the next year? Like, I’m really not sure. Maybe that’s the case. Am I going to be going back to wearing makeup and not wearing a mask? I don’t think I’m going to feel comfortable with that right away. So there’s a lot of unknown. And I think the biggest thing that I’ve learned and this year has taught me is to be flexible and to be resilient. And so I’m just you can only control what you have control over and everything else is out of your control and you need to embrace that and deal with it. So I am definitely going through day by day as it comes. And I’m very, very excited to have my amazing team at the helm of this business helping grow and build it with me.
Sam Jayanti [00:24:24] Wonderful. Where do you see yourself and your business three years from now?
Divya Gugnani [00:24:29] So I think for us, a big movement for our business has been this growth in skin care. It’s super important for us to build our skin business. We’re seeing initial growth from it post since covid has hit the scene. We’re seeing our skin business up pretty dramatically. People are really loving our Drift Away cleanser, our Dive In moisturizer. Most importantly, two treatment options are do not disturb overnight concentrate, which I mentioned in our missed connection by Fais Essense, our two stars and our skincare portfolio. And so I have been able to really focus my time and energy on that. It’s a huge passion of mine to build and grow our skin business. So I think that’s really on the horizon. I think we’re going to deepen and build our direct to consumer business in the US and also pursue select international expansion. So we are already operating through Southeast Asia with Sephora as our partner there. We’re growing our footprint in the Europe and you’ll see a lot more from us there. And so we really have kind of put together three missions. One is for our skin business. Two is really deepen and build our direct to consumer business in the US and three is build our international footprint. And those are three big things that we’re focusing on in our near term kind of three year roadmap.
Sam Jayanti [00:25:53] Great goals to have. Tell me before this year, what was, how would you say your business broke down between makeup via skin care and sort of what does that look like now after this year?
Divya Gugnani [00:26:09] So this year it’s grown rapidly. So I can tell you directionally asking for business is almost doubled, I would say, which has been fantastic and it’s been organic, which is wonderful. I think we have a lot more innovation and skin coming for 2021. So I think we have one incredible formulation that we’re working on for Spring 2021. So I’m excited about that. I think having more newness in the skincare categories can be great. Really developing our core is going to be great. I would love in an ideal world as we grow our brand and our business to kind of have that ideal mix of about, you know, 40 ish plus percent skin, 40 ish plus percent color and the rest hair and body. And so I think that would be an amazing ideal mix to achieve. Right now, we are known for our baggage claim gold eye masks, which is a skin care sku. It’s one of our hero skus. And so skin is very important and powerful, and especially in retail. That’s a hero sku for us. But we have to do really well in mascara, we’re known for our mascaras. We won Allure Best Beauty for our mascaras, complexion also, our duelists concealer, our new illusion foundation, our wanderlust powder. We’re known for complexion. So right now a lot of our business is complexion, mascara and a bit of skin care. But I do see that evolving over time as we introduce more newness into the pipeline.
Sam Jayanti [00:27:36] Wonderful. A report in May 2020 predicted that U.S. beauty industry revenue could fall by as much as 35 percent with the onset of the second wave of the pandemic. But with news of the vaccine, the end seems perhaps cautiously optimistically, finally in sight with the after effects still to be determined, thanks to McKinsey for the data used in today’s episode. Divya, we love what you and Lindsay have built because it ensures that even the busiest of us don’t have to give up on the simple joys of great performance, skincare and makeup. So it’s makeup that works and isn’t a huge time sink. Thanks so much for being with us on the show today.
Divya Gugnani [00:28:20] Thank you for having me. It was a pleasure.
Sam Jayanti [00:28:24] Thanks for listening, today. You can subscribe wherever you get your podcasts. And while you’re there, please do review the show. We love hearing from you. So e-mail us at info at theideamixradio.com or Instagram DM us. Our episode this week was produced by the incomparable Martin Milevski with music by the awesome Nashville based singer songwriter Doug Allen. You can learn more about Doug at DougAllenmusic.com.
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