Ju Rhyu launched her skincare brand, Hero Cosmetics, with only one product: the Mighty Patch. Today, Hero Cosmetics sells one box of Mighty Patch every 15 seconds. Listen as she discusses her inspiration for her brand, the differences between Korean and American skincare, and how to turn an idea into a business plan. With the skincare industry growing faster than ever, it can be hard for new brands to stand out but Ju shares some great tips for promoting your brand in unique and cost-effective ways.
Ju Rhyu: [00:00:01] I was living in Korea at the time. I was breaking out and I discovered these acne patches because people in Korea were walking around with them on their faces in public…
Sam: [00:00:12] Until a few years ago, makeup brands dominated the beauty industry in terms of both size and revenue. But in 2018, U.S. sales of skin care products grew 13%, hitting five point six billion dollars, while makeup sales increased just one percent. Ju Rhyu is the co-founder and CEO of Hero Cosmetics. She launched Hero with one product, The Mighty Patch, and it did over a million dollars in their first year of business. Hero Cosmetics now sells a box of Mighty Patch every 30 seconds in over twenty five hundred stores. Reviewers praise The Mighty Patches simply the best fast acting solution they’ve ever found. In April, the company started giving away their products, including their new rescue bomb product, more on this later, to health care workers who were plagued by acne after spending hours in PPE treating patients infected by Covid19. Ju, it’s such a pleasure to have you with us on the show today.
Ju Rhyu: [00:01:35] Thank you for having me. I love doing podcasts.
Sam: [00:01:39] Amazing. So tell us, what was the motivation that started you down an entrepreneurial path? You had an interesting career in consumer packaged goods and then you decided to go off and start this company. So tell us about that.
Ju Rhyu: [00:01:59] Yeah, my dad is an entrepreneur so I actually grew up with sort of that in my life or entrepreneurship in my life growing up and just seeing him and how he dictated his own schedule. He could travel when he wanted to, he had a lot of liberty and freedom. I sort of aspired to be like him. And so even growing up, I always wanted to start my own business and wanted to be an entrepreneur. Although it took until now to actually make it happen. But I think it was always something I know that was deep within me. And you mentioned how I worked in consumer packaged goods or did a lot of big companies. But even at the big companies, I was always in entrepreneurial roles. So working on new product launches or new features, kind of like a startup within a big company. And so it was just always something. It was always just something in me.
Sam: [00:03:02] And what made you decide that departure was going to be what launched you into entrepreneurship? You know, I think it’s so interesting that you were in very entrepreneurial roles at big companies. But that’s still quite different from sort of heading off and really starting, you know, on your own from scratch with your co-founders.
Ju Rhyu: [00:03:25] Yeah. I mean, you know, as I was growing up, I always had a million ideas, but this is the one, I guess, that sort of stuck. So I was living in Korea at the time. I was breaking out and I discovered these active patches because people in Korea were walking around with them on their faces in public. So I went to a pharmacy, I bought some and I tried them and I was amazed at how well they worked. And then sort of wondering, why is this product not available in the US? Why am I learning about it now? Like I should have, you know, I should have had this product when I was a teenager. It would have been so helpful. And so that’s where I started seeing the opportunity, the real opportunity in the US. And then joined up with my two co-founders and we started working on it. But I guess in a way, it’s sort of like cultural arbitrage, like I saw a product in one country that didn’t exist in another country and really thought that I could bring it to the US and make a big splash.
Sam: [00:04:31] So for the first time in a long time, skincare brands are growing faster than makeup. Gone are the days when the word skin care applied to liquid sport, acne treatments and fruity face washes. Now the industry is being defined by the consumer demand for natural, organic and effective products touted as a brilliant antidote to skin problems. One of the biggest trends has been acne patches such as yours. Tell us about what you learned during your time in Korea about K-Beauty and how you perceived the industry in Korea to be different from the skin care industry in the US.
Ju Rhyu: [00:05:15] Well, I think the skin care industry in Korea is light years ahead of the US. There was a researcher who actually said that the cosmetic industry in Korea was about 15 years ahead of the US. So they’re pretty advanced. I think the Korean consumer is very demanding. I think skin care is something that’s that people really grow up with and it’s talked about a lot. And if you look in the U.S., skin care didn’t really become a growing trend until maybe 2012. So somewhat recently. Whereas I think in Korea, it’s really part of the culture. And it’s been that way for a really long time. So that’s kind of on the demand side of things. I think there are consumers who are really, really demanding about what they want or what they need. And then sort of on the supply side, the Korean government actually really invests a lot in the cosmetics industry. It’s one of their greatest exports, along with K-pop and a lot of the companies, they invest a lot in innovation and R&D because that’s how they stay ahead. The industry is really competitive. It’s very cutthroat. And so you always have to have something new. You have to really be cutting edge in terms of formulations and ingredients and textures. So I think that’s why a lot of the best cosmetic manufacturers actually come from Korea. And so and so I think on the supply side, the advanced technology combined with the sort of heightened expectations on the demand side, those together make the Korean cosmetic industry really just advanced in general.
Sam: [00:07:20] Well said, Ju. You know, so many people have an idea, as you did, to bring the idea of an act, a patch to the U.S. with the amazing branding that you then came up with. But at inception, what were the first two or three things that you did to start taking what was an idea or a concept into what eventually became an executable business plan?
Ju Rhyu: [00:07:50] Yeah, it’s interesting because I stumbled upon acne patches like 2013, maybe, but we didn’t launch Hero Cosmetics and Mighty Patch until 2017. So what happened was the first time I discovered this product category. I thought it was amazing. I actually worked on the idea myself. So I hired a designer. I had a name. I had package designs. But then as I started calculating all the costs involved, I got very intimidated. And so I shelved it. And then it actually wasn’t until I brought up the idea to one of my co-founders that two co-founders. And so just over dinner one day, like, you know, I have this idea, you know, I’ve been thinking about it for the past few years. And he just said he’d want to try it out. I’ll do it with you. And then he roped in his brother. And so for me, I think in terms of turning it into an executable idea, one was definitely having partners, co-founders who could help share, share the workload, share the cost, share ideas, be sounding boards, because a lot of times, you know, you’re encountering things for the first time and the things that you’ve never really done before. And then the other thing was, you know, I had contacted manufacturers and so that I mean, in Korea, actually, brands have to they have to list the manufacture on their box. And so I had gone to a pharmacy, bought a bunch of boxes, turned them over and looked for the name of the manufacturer. And I just started cold calling and cold emailing manufacturers. I found the website, sent the M.O., and asked for samples. I started building those relationships. And that’s how we came to work with a manufacturer that we work with now who’s amazing. And then third was just sort of, I think, figuring out how we were going to sell and where we were going to sell. Knowing that, you know, we were a bootstrap business. We had to be really smart about our channel strategy and making sure that we’re profitable on the very first sale. So we picked Amazon as the first place to sell. And and so, you know, right then we had the product, had the manufacture. And then we had a distribution channel. And then we were able to get up and running.
Sam: [00:10:28] Amazing. So you put your product out on Amazon. There’s so many products on Amazon. What did you do to get noticed and how did you find your first few customers?
Ju Rhyu: [00:10:41] Yeah, it’s funny because so if you search for acne patches now on Amazon, there are now, I don’t know, a thousand products in the search results. But when we started in September 2017, there were maybe five. So when we entered, it was actually pretty I wouldn’t say like totally a blank slate, but there was a lot of whitespace, I’ll say. And so it just, you know, obvious to say it wasn’t as competitive as it is now for a new brand that was to launch today. So it was less competitive back then, but I relied a lot on earned media. So press and influencers were the two top strategies in our early years. So for PR, there’s a service I always recommend. It’s called Launch Grow Joy and it’s almost like DIY PR. It’s a platform where they share editor emails, US editor pitch requests. So they’ll say, OK, Real Simple magazine is looking for products to do a story on actually products or organic hair or something like that. And then they would give you that editor’s e-mail. And so I used that service. I pitched a ton of editors and then actually the first press mention that we got was with Into the Gloss, which was a really good one because she did the whole article and acting patches and then linked to our Amazon page. And then right off the bat we saw a big spike in sales that they. And then for our influencer outreach. I mean, I spent a lot of time on Instagram looking at different influencers, sending them free products, asking them to post. And then gradually, you know, they would post. It grew our Instagram following, it grew the awareness of our brand and our product. And I mean, those two were really like the most cost efficient ways to start getting our brand out there. And actually, I’ll say, like, you know, we have a lot of success in retail, and I think it’s because we’ve created the demand. So, you know, as a buyer, I think I read about us in Into the Gloss and then would reach out to us asking to carry our product. So actually after that Into the Gloss article, we’ve got a fair amount of in that request from buyers at different retailers.
Sam: [00:13:15] I love that. It sounds like you just found these incredibly cost effective strategies to start to get the brand and the product in front of people to build demand. I love what you said about, you know, being successful on the supply side or being successful with retailers because you’d build demand for your product. Was there, Ju, a customer, you know, the U.S. customer was sort of still relatively unfamiliar with active patches. Was there any sort of customer education or how did people beyond your PR efforts and influencers and then magazines? How did they realize or come to know that acne matches were so incredibly effective?
Ju Rhyu: [00:14:04] We relied a lot on sampling, so we wanted people to try it for themselves before they committed to a full box. So any chance of sampling? We took it and we really gave our products pretty liberally. And then we focused a lot on education, on our website and then just on our own channels. So what is it? What is hydrocolloid? How does it work? How do you apply it? What should you see as it absorbs up the pass? And actually that blog post? What is hydrocolloid is like our best performing blog post. And I think, yeah, I think we just relied a lot on our own channels to provide the education and the content and then and also press as well. But I think, you know, education was definitely a big part of it, because you’re right. It’s a totally unknown category. And so we had to tell people exactly what it was, how it worked and what they could expect from it.
Sam: [00:15:16] What was– You know, you come from a big company background where scale is a very different parameter, or how to think about scale is a very different discipline from the way that entrepreneurs think about scale. How did you think about– what was the sort of benchmark or milestone that you got to? Was it a certain number of customers or some number of units sold where you said, okay, we’ve really got something here and now we’re ready to invest in scaling the business to be at more points of sale and retail or to find new customers? Like, how did you think about that? And what was the stage at what you thought about that?
Ju Rhyu: [00:16:01] Yeah, I mean, in the beginning with my two co-founders, we set out kind of benchmarks, kind of benchmarks to decide, I guess, benchmarks. So we didn’t know if this would work or not. And so what I said was, we have to know when to fold and when to say, you know, this is just not working because we didn’t I mean, I don’t want to keep throwing money at a problem that probably didn’t or a solution for a problem that didn’t really exist. So what we said was, okay, if it’s a success, the decision is easy: we keep going. If it’s a failure, the decision is easy: we fold. But then the hardest part was like, what if it’s somewhere in the middle where it’s not quite a success, but it’s not quite a failure? Like, we kind of have something, but it’s going to take a lot more money to, you know, to continue or to see if it will become a success. And then for me, success meant, you know, probably in year one doing a couple hundred thousand dollars, like half a million dollars in revenue was it kind of my goal for or my benchmark for success and then for failure. Probably say like if we did fifty thousand dollars in revenue, I was going to say, okay, maybe the opportunity is not as big as we think. And then somewhere in the middle was going to be kind of hard, like, you know, if we do maybe one hundred thousand dollars, you know. What does that say about this product, this category, the market opportunity? So I think exercise is really helpful because I’ve actually heard other entrepreneurs say never give up. Believe in your idea – you should never give up. But I disagree with that because I think there is a time where you just know, you just have to realize that maybe the product market fit isn’t there and, you know, throwing more money at it isn’t actually going to do anything. And so for us, having those three scenarios kind of give us some kind of guideline in terms of how we were to proceed to the next level and then. Yeah, I mean, and then you mentioned before in our first year, we did over a million dollars, which is a great surprise. And so, of course, the decision was easy to continue to grow and then continue to scale.
Sam: [00:18:36] It’s super interesting. You know, I think your point about when you’re in that middle zone is when these decisions are hardest to make. And I think also when you are a team of co-founders, you know, different people have different perceptions about sort of what’s going well and what’s not going well. So those decisions are really hard to make. And, you know, it sounds like the results spoke for themselves. Right. And you guys have this incredible success. And so it was a very intuitive decision to scale. Looking back, Ju what are assumptions? You know, one or two assumptions that you or as a team, you and your co-founders made when you started the business that you either revised or pivoted away from later on.
Ju Rhyu: [00:19:26] So we launched with Mighty Patch, which is currently our original product. And then we were quickly going to create new product categories. So I think at that time we were thinking about doing like a mask and I forget like a cream or something like that, something that was not patch. But then actually I was meeting with someone who’s in the investing community, showing her the product and telling me early on, we’re working on new products, new product categories. And she said, no, no, no, no, no. You should stick to patches and dominate patches to different shapes, different sizes like, you know, anything and everything about patches. And so we think, you know what? She’s right, we should just specialize in acne patches. Just go deep in this category. Build a lot of trust and then we’ll expand out. And so when she gave me that advice, it really it actually I mean, all I tell her I’ve told her this and I tell other people it really changed the trajectory of our business because now we have Mighty Patch Original, Invisible Plus, we have Surface, we have Ready Patch. We have two micro point patches. And had we not gone in this direction, I think our business wouldn’t be strong. Probably because too early on we would have launched different types of products where we didn’t really have an expertise. So that definitely is a big one. And then another one, I think I was really surprised because I thought, like my assumption was, our customers were going to be young or younger. I think a lot of people think of acne as a teen issue, you know, like fifteen, sixteen or no. With all the hormonal issues and such. But when we did our first survey, we realized that our consumers were actually 25, our core consumer was really 25 to 35. We actually had a fair number of consumers who were like 40s, 50s. Occasionally I get reviews from people where they’re like, oh, I’m 60 years old. I still get the occasional pimple. And so it just made me realize that the market size for acne is actually quite big and broad. And that’s where I think a lot of the 1.0 brands fail because they’re very focused on the teen market. But adult acne is definitely on the rise.
Sam: [00:22:04] So Ju, so interesting. Every piece of marketing advice you get when you’re starting a brand is to pick a core customer. Be specific about that customer avatars you can and and then, you know, target that customer. And if you reach other customers in the process, that’s fantastic. But, you know, that’s still your core customer. Did it cause you to revise how you marketed or the further products that you created beyond the first SKU once you realized that you had such a broad audience, in a sense, who was still struggling with this same problem and found the product to be such an effective solution?
Ju Rhyu: [00:22:51] Yeah, I mean, it shapes our messaging and our positioning, our copy, because we, I think teen brands tend to be more cheeky. They just have a younger tone of voice. And so, you know, with our copy in our tone of voice and our messaging, we always try to, maybe we can be cheeky at times but you know, we do keep in mind that our customer base is a little bit older. And so we want to appeal to them as well. We don’t want to sound too young, I guess. And so that’s something that we’ve been working on and honing a lot.
Sam: [00:23:29] Interesting. Who do you view as your competition and how do you think about product and brand differentiation?
Ju Rhyu: [00:23:37] For competition, I mean, really, any acne product or any acne alternative? I would consider a competitor at least to our patches. So, I mean, that could be those the pink, what are they called? The pink creams or the white creams. It could be toothpaste. It could be a 1.0 brand. It could be a new brand. So basically any, I think, acne treatment type of product or brand I consider a competitor. And then in terms of differentiation, I mean, when I look at acne patches, just acne patches, we pride ourselves on having really high quality medical grade. Has your colleague patches. And so they actually absorb 50% more than other patches on the market. They have better adhesion. They have a quality difference that you can actually visibly see. And so we pride ourselves a lot in quality. And then, you know, we want to build a brand in the community with our own channels as well. And so ultimately, what we want to do is we want to create products for the entire lifecycle of the people before, during and after. And that’s really something that no brand is doing right now.
Sam: [00:25:03] I love that before, during and after the pimple. I can’t wait to see the products that come before, I need some of those. Rescue Balm is your second product, which just launched in April. What made you decide, having expanded The Mighty Patch number of skews right with different kinds of patches? What made you decide to pick a restorative cream as your next product?
Ju Rhyu: [00:25:32] We’re trying to make products again for the entire lifecycle of a pimple. And so the way that we see it, as you know, before, during and after. And then we pretty much had during the treatment per corner and like all this, all sorts of patches, our shapes and sizes. And then for me, I saw a lot of white space in the after area. Like no one was really making products to address issues that you have even after your pimple has started to heal or has flattened. So I sort of came out just like personal experience, like I would use a patch, take off the patch, but my skin was a little bit more raw or a little dry. I still had the hyper pigmentation, the dark spot after a pit bull knows where the products for my acne are at this stage, where the pimple has flattened and it’s starting to heal. And there just wasn’t anything there wasn’t anything targeted that wasn’t anything specific for this. And then Rescue Balm came about because I was talking to people just really off the cuff, kind of asking why nobody used for acne care. A lot of people told me they used Neosporin. They were oh it’s antibacterial and it helps heal the area really fast. Oh, interesting. People are wanting some kind of healing ointment cream type of product. And that was the inspiration for Rescue Balm. And actually we launch in April and since and since it’s become our second best seller. So I think that goes to show that that intuition was right. And there really is a demand for this type of product because it’s so new. Like, I don’t think there is really a similar product out there.
Sam: [00:27:23] That’s amazing. I love it that you’ve you know, you’re two months into this product and it’s doing so well. You guys have a good product conception thing going here, clearly. Last question. Ju, as you look back, what are one or two lessons that you’ve learned through this process of building your company that you think other entrepreneurs should be aware of?
Ju Rhyu: [00:27:50] For me, I tell entrepreneurs to start small. I think the idea of starting a business can be really daunting. But, you know, if you have an idea trying to make a prototype, make 20 of them, try to sell those 20 items. See, you know, see what they think and just iterate. It’s really an iterative process. I mean, you know, the growth and the success definitely doesn’t happen overnight. It’s a series of small steps and building blocks that sort of build on each other and then become, you know, what you see as a bigger business. I think that’s one. The other would be you’re probably going to hear a lot of no’s. And I take, I always take no as not yet or not now. So I’ve had a lot of retailers tell me no or I don’t know other vendors tell me no. And really, you know yeah, I don’t take it personally. You kind of have to have thick skin and just think to yourself, it’s not no, it’s just not yet. And then find a better time to maybe follow up. And again, I’ve had retailers tell me no. And then after we’ve created such a buzz and social and press, they’ve come to me changing their minds, saying, oh, actually, we’d love to carry your products. So definitely I think you might hit some of those roadblocks initially. But people can definitely change their minds.
Sam: [00:29:25] That’s such good advice. You know, to not take a nose and know and revisit that same person or topic again. Here’s something else you need to know. Consumers in the beauty industry have an extraordinarily high level of knowledge when it comes to natural and organic ingredients and skin care products. The demand for transparency is partly necessitated by a lack of regulation in the US. While Australia, Japan and other Asian countries and many European countries have restricted thousands of ingredients, the US has only banned eleven chemicals from being used in beauty products. The delay in large companies like Estee Lauder and L’Oreal offering more natural alternatives to the U.S. consumer has allowed smaller startups like Hero Cosmetics to flourish, thanks to CNN, Birdy.com and Business Insider for the data cited in this episode. Ju, we love the story of how you used a single product to eliminate acne skin troubles for your customers and more recently, first responders in the Covid19 pandemic and how you’re combining scaling your business with a genuine commitment to quality and effective skin care. Thank you so much for joining us on Ideamix radio today.
Ju Rhyu: [00:30:39] Thank you for having me. It was really fun.
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