68 - Ken Landis, Bobbi Brown & TULA Skincare
Conor Begley: Ken is one of those behind the scene guys that is just a wealth of knowledge and you can see it in his track record. It's pretty unparalleled. I think you guys will love it. Remember, if you do love it, be a friend, tell a friend and share. Thanks guys.
Speaker 2: Explore the minds and marketing strategies behind today's winning brands and businesses. Tap into the power of the creator economy with Earned by Creator IQ. Here's Conor Begley.
Conor Begley: Today, I've got Ken Landis on the show. Welcome to the show, Ken.
Ken Landis: Hey, Connor, good seeing you.
Conor Begley: Let me brag about you a little bit just so people know who you are. You've got close to 40 years of experience, either as a CEO or founder at this point, over 20 years investing. Your first role as CEO was at Benetton, the cosmetics group there. Then you've been CEO at LeSportsac and GHURKA, which eventually became more of a conglomerate of fashion brands. You're also were the co- founder at Bobbi Brown, along with Bobbi, which you sold to Estee, co- founder at TULA Beauty, which became our number one skincare brand, which you guys sold to Proctor and Gamble. Then most recently, DIBS Beauty, which is rocketing up our rankings and then again, 20 years investing out of your own capital. I think that's a wealth of experience that we're not going to be able to cover in an hour, but we're going to try.
Ken Landis: Just want to just clarify it for the sake of my marriage, actually, my wife and I were both co- founders of Bobbi Brown. My wife in particular was the president of Bobbi Brown and ran the company along with Bobbi, so they were both the faces of the brand. I was in the background, just like I am with TULA and DIBS. I would hate to take the credit because she and Bobbi deserve a tremendous amount of credit for that company.
Conor Begley: Well said. Tell me about that actually, in terms of co- founding of Bobbi Brown, you went from more of an operational role within larger companies to being an entrepreneur. What was it that attracted you to it in the first place? What drew you into it?
Ken Landis: What drew me into Bobbi Brown or?
Conor Begley: Yeah, into co- founding Bobbi Brown, yeah.
Ken Landis: I was the CEO of a cosmetic company at the time, Benetton Cosmetic, which was the global business. I was traveling quite a lot and we did business in 55 countries, which was quite interesting. My wife was actually a vice president in a PR agency that specialized in cosmetics. We were friends with Bobbi and her husband. The whole thing transpired as we talked about the industry and we thought, " Well, let's give it a shot." We started off with 10 lipsticks in one door. That door was Bergdorf Goodman, and we had no employees for two years. We wanted to give up the day job. We met in evenings and weekends. My wife is Rosalyn and she was the first one that left her job and became president of the company and she ran the day- to- day operations along with Bobbi.
Conor Begley: Very cool. How long did she stick with the group post- acquisition or did she?
Ken Landis: She stayed there about 11, 12 years. It was post- acquisition. We had a fairly complex acquisition agreement. I can't go into detail, but there was a large element of earnout. She stayed during part of that earnout period.
Conor Begley: Yeah, I was reading about the acquisition earlier. I didn't realize it literally until today that Bobbi herself had a 25 year non- compete, which is crazy. I've never heard of one that long. It's good that you guys didn't have that same restriction or at least as long.
Ken Landis: Well, there was a reason for it frankly, because that was part of the earnout.
Conor Begley: Yep. For you, particularly in beauty, you've had a pretty good string of successes here between Bobbi, TULA, DIBS, obviously a lot in between. What do you think are the core elements, if you were to look at the core pieces that make one of these new businesses, particularly beauty successful, what are they to you?
Ken Landis: Focusing on beauty, you raised Bobbi and then TULA and DIBS, and what were the elements that made that those successful? There was a large span of time between what we did in Bobbi's, which was the early 90s, to when we started TULA. Then we followed that with DIBS. I can say that it was fairly similar concepts there, which I think was helpful for making it successful, but yet there's different tactics involved because the environment were totally different between when we started Bobbi and when we did TULA. I see a lot of early stage companies, I think one of the biggest mistakes people make and one of my pet peeves is on distribution and the distribution strategy. I think that's really one of the core elements of what makes a successful brand. Quite often, I'll see somebody will pitch me an idea on a beauty company and one of my first questions will be just, what's your distribution strategy? More often than not, they don't have one. They'll say, " Well, we'll see who comes along." I'm a big proponent of, it's not the amount of sales that you have, but the quality of sales you have. Anybody who knows me, who's worked with me, knows I have a mantra, which I use at least once a week with people and it's both narrowing deep. If I get involved in an early stage company, I want to start small and be relevant wherever you are, relevant in any distribution channel you're in, relevant in any door you are in if you're going into traditional retail. Let's go back to the Bobbi Brown situation. At Bobbi, the world was a lot different than it was today. There was no direct- to- consumer. There was no Sephora. There was no Ulta. There was a very, very dark demarcation line between the specialty stores and the department stores, and then department stores and a JC Penney or a Kohl's. You had to really understand what your distribution was. Now, the big advantage we had there is that there we were basically two indie companies at the time. There was Mac that came out before us and then we created the company, but we wanted to be differentiated from Mac so we chose the high- end specialty stores as our focus on distribution. We were laser focused on that distribution and because there were very few in the companies, we were able to really get some pretty spectacular deals for giving exclusivity. People used to ask us, " What was your distribution strategy?" We would joke and we'd say, "Oh, we say no to everybody." It's really true. We would choose the store that felt was the leading prestige specialty store in that city, then we would say no to everyone else until such time we became the number one brand in that store. Then we would consider some other distribution. We were really, really focused on market share within any door we're in. It's really narrowing deep for me. That was really in my mind one of the keys to success other than of course, product is everything. You have to have product, but I see tons of great products that fail because they just don't have a good distribution strategy. Now fast- forward to TULA, totally different retail environment. Obviously, you had direct- to- consumer. Obviously you have Sephora, you have Ulta. You have Sephora at Kohls, you have Ulta at Target, so there's a lot more of the blurring of the lines. More importantly, whereas there was really only two indie companies when we did Bobbi, there are many, many indie companies now and it's really hard to break through the noise. It's really hard to get the level of support that you need from a retailer to really create your brand and maintain the brand image the way you want it. You can go in and you're going to get a few facings on a new and notable section, but it's really doesn't give you the ability to create your brand image the way you want it. I have to say between Bobbi and TULA, I saw many, many companies and I really decided not to get involved because I thought it was too risky. It was too many people looking for the same shelf space, looking for the same consumer. You want to find some way of differentiating yourself. As you know, I found a phenomenal partner in Dan Wright who is brilliant when it comes to e- commerce and brilliant when it comes to tech. Between the two of us, we had complimentary skills. We became very close. We could finish each other's sentences, but yet I rely him on him totally on the e- commerce side and he relies on me on the beauty side. We decided with TULA, that our track would be basically do the digital first strategy. Within the digital first strategy, as you know Connor, we focus very, very much on the influencer section, and created what we felt and what we decided was a specific distribution channel separate from paid media, separate from wholesale, that was that influencer channel. We managed it as a separate and distinct influencer channel. By doing that, we were narrow and deep within that sector
Conor Begley: You got all the way to number one deep.
Ken Landis: Yes. Believe me, we tried desperately how to break the code on your EMV, but we didn't. We created our own. We said, " Okay, fine, we like this." I'm going to give you a little ad advertising here. It's not about the eyeballs, it's about the engaged inaudible. That was really what we were set out to do. We didn't go after the beauty bloggers. We went after small, micro- bloggers that were either lifestyle bloggers, mommy bloggers, health and fitness bloggers. People who were just interesting people who were our target consumer. We worked with them as a partner. Really, we built a whole team of people that just worked with the individual influencers to make sure they knew everything that was going on in our company and we would give them ideas of what worked, what didn't work. We saw them as entrepreneurs just like we were entrepreneurs. We were able to build pretty impressive businesses with them. It allowed us to break through the noise and also create a path to profitability pretty quickly. Then when we moved on to DIBS, it's basically a similar playbook, but with some tweets, which we can get into down the road.
Conor Begley: Yeah, we should definitely get into it. I was trying to keep track of all the questions I had as you were talking, but I'm going to do my best. I don't want to rewind too much, but it's something that's stuck with me. You mentioned early on, I'm really focused on the quality of the revenue. Quality, you mentioned one aspect there which is like, " Hey, how are we doing the channels that we're in? We're in this channel, are we the number one brand in that channel?" Whether it's a door or online influencers, whatever. What are other signals for quality of revenue that you pay attention to? What's important, repurchase rates, what is it that you look at?
Ken Landis: At the end of the day, we're creating a brand. Hopefully that brand will have a long life. It's how are we displayed? How do we look? Where are we within the store? Do we look important? Is the message of the brand being communicated? Those are the types. They're more important than the volume of sales.
Conor Begley: Interesting.
Ken Landis: The volume of sales will come, but it's just creating that brand. That's become harder and harder. There's so many indie brands, it's really hard to create a real brand identity, whereas in the old days, had a counter in the store and you were able to control that entire environment. It's different right now.
Conor Begley: Yeah, totally. Like you said, I think from a retailer perspective, there's training the staff, training the team that's there that's representing the product itself, but ultimately it's pretty hard to stand out just pure shelf space. At least compared to, " Hey, I'm going to watch a 25- minute video about this brand on YouTube where I get into all the kind of nitty- gritty." It's just a much deeper connection there theoretically.
Ken Landis: Which is why I like direct-to-consumer. In direct- to- consumer online, I can control every aspect of the interaction between the company and the consumer. The way they see the brand, the way we're communicating the brand, the way we do our customer service, everything is controlled. In the long term, that's really very valuable.
Conor Begley: Yeah, 100%. It's interesting because I think your background historically has been more on the back end operational side, or maybe it always has been deep into digital marketing, direct- to- consumer, et cetera. I'd be curious, having been the number one brand at TULA, I think one of the conversations we were having at dinner is how that space has changed now that you're at DIBS. Over the last four or five years, what have you guys observed is different in that space today than it was when you first started?
Ken Landis: In the influencer space?
Conor Begley: Yeah.
Ken Landis: Hold on. Okay. First of all, let me differentiate DIBS versus TULA. DIBS is a colored cosmetic line. TULA is skincare, as you know. The colored cosmetics is a different animal than skincare and you have to treat it differently when you're communicating with your customer. Color cosmetics is more fashion- oriented, basically a lower CAC, lower LTV. People aren't that loyal to the brand, whereas in skincare, there's higher CAC, higher LTV. It's hard to convert, so there's a different strategy that you have to use. You can't just use the same playbook and we're very sensitive about that. The other aspect that has changed is when we did TULA, you were relatively early on dealing with these micro- influencers and for the most part, we were able to create rev share deals with them. As you know, my background in finance, that's a variable cost and there's nothing better than the variable cost in a company. I love this. Over time, a lot of the influences and a lot of the veterans woke up and said, " Okay, we like this rev share, but now we want to pay- to- play or we want a retainer plus a rev share." It became a little bit more complicated and it became a little bit more expensive, but at the end of the day, it's the same concept. Whether you're paying on a pay- to- play basis or whether paying on a rev share basis, you look at the row ads and say, " Okay, is this a role I said I'm comfortable with?" You may not know it after the first shot, but over time we will analyze that, we will keep track of it. We want them to know and say, " Look, this is what we expect of you. If you maintain this, we'll do anything you want, but this is what we expect." Again, we try to partner that they need to understand we're not just going to write big checks to people if they're not going to perform and if they're not going to bring the register the way they should. It's become a little harder for us to keep track, but it's just still the same playbook of working with influencers and really teaching them to be our partners and to be entrepreneurs like us.
Conor Begley: Yeah, that makes sense. One of the things I'd be curious about there in terms of how you factor it in, and it's something that we think about a lot, is this concept of organic coverage. If you look at all the content about TULA or about DIBS, 90% of it's going to be organic. I think one of the underrated elements of saying, " Hey, we've got this person, they're a big supporter of the brand > they're now being cut into that." From a monetary perspective it's like, " Oh wow, I'm supporting TULA and now TULA is helping support me. I'm making a bunch of money off of that." That message spreads very quickly where like, " Oh, if you talk about TULA, you may get the opportunity to be a partner where you can actually make a lot of money." How did you think about that interplay between paid relationships and organic coverage or did you guys get that deep in terms of your thinking?
Ken Landis: No, no. We just sent product out to a lot of different influencers. We didn't ask for anything. We said to them, " If you like it, give us a call and let's talk. If you don't like it, give it to a friend." If they did like it, we were very serious about building the business with them and trying to teach them how to be entrepreneurs. Many of them, we started very, very early on. Over 50% of our sales was directly related to the influencer channel, so it was a big element. You got a big smile on you face.
Conor Begley: It's a big deal and that's probably of what you can track. There's probably more that's happening offline, right? Because the thing I think a lot about is who follows a makeup artist online, who follows a skincare influencer online? It's somebody that's really into the category. There's somebody that is disproportionately interested in that, so there's all these offline effects that occur as well where it's like, my wife likes to run, so she follows Hungry Runner girl, the blogger, and when her friends need advice on running gear, they ask her because she's the big runner. You have this same offline dynamic that's even more difficult to capture. If you're attributing 50% of it, I'd estimate that's a minimum, which is wild.
Ken Landis: It is interesting you say that because what we discovered is a lot of the sales from influencers, they were buying it at Ulta or requesting it inaudible.
Conor Begley: Yeah, exactly. Exactly.
Ken Landis: Talking about what's the best way of negotiating a retail deal is when customers start asking for you when they go through the stores. They pay attention to that. We've felt we had a big spillover from the influencer word of mouth into the retail stores. Remember, we entered Ulta, which we chose Ulta as our partner, we gave them an exclusive. They were very, very supportive. We started as the number 15 brand there and within three years we were the number one prestige skincare brand.
Conor Begley: Along those lines, we've had those conversations frequently, particularly in Europe because what'll happen is a brand will get momentum on social in the US and then people will start hearing about it in Europe. We were talking to, he was the head of All Beauty at Boots, which is a number one retailer in the UK. He's like, " Yeah, I remember starting to pay attention to our reports and top 10 lists." He's like, " I looked at it and I only had one out of the 10 brands on the list. Today, I've got nine out of the 10." I'm like, " I'm pretty good." But he made it an internal because he knew. I think frankly, to your point earlier, I think one of the biggest mistakes that brands make is prematurely going into retail before they've built up that presence. Then just not having the sell through and not having the momentum and then they don't get that opportunity again.
Ken Landis: To add to that, part of the problem is a lot of people, they'll go into Sephora and Ulta, and they'll get a few facings and some key doors and they'll do well. Then they say, " Okay, we're going to roll out now." They discover very quickly that selling is easy, sell through is really hard and they don't have the capital structure or the infrastructure to be able to support the brand in the stores. It costs a lot of money to support these brands and don't think that the products are going to sell by themselves. You have people in the stores on a regular basis. Unfortunately a lot of early stage companies and I'll see them because they'll come looking for money and they hit a wall.
Conor Begley: Totally.
Ken Landis: They go to Sephora. They'll get that big order for 200, 250 doors and they thinking happy days are here again. Then they realize that they're not selling through and then that's when the problem start.
Conor Begley: It's an even bigger challenge at that point. I like your say no first and then let them kind of pull it out of you. Seems like a better approach.
Ken Landis: The best way to negotiate anything is just say no.
Conor Begley: There's lot of power in that, right? I have a big problem. I say yes to too many things, but I think it's a good lesson.
Ken Landis: People want what they can't get.
Conor Begley: Yeah, yeah. No, I love it. You've mentioned early stage quite a few times and obviously, that seems to be where you've really made your bread and butter over time is these is early stage businesses, either as an investor or as an operator. What is it about the early stage that really attracts you and what sizes it have to get to when you're like, "Ah, it's not that interesting anymore."
Ken Landis: I get inspired by young people. I love learning about new business concepts. I love being involved at the earliest stage. There's nothing like being at an early stage company and seeing that first dollar sale. You just can't inaudible
Conor Begley: Wild. It's really cool.
Ken Landis: You're always at that point understaffed, if you have any staff at all, and you're running around chickens without their heads just to get things done. It's fun and it's exciting, but it's not for everybody.
Conor Begley: Yeah.
Ken Landis: But then over time, you start adding people and then you start stepping away and stepping away and it's still fun. You never get bored. Then your role changes to one more of an advisor or a board member. I'm generally a board member in all the companies. I don't necessarily want to be inside. I enjoy the role. I enjoy the role as an advisor and I get involved inside when I have to, but I don't push my way in.
Conor Begley: Yeah, totally. Yeah, I'd make an adjustment to your first dollar of revenue coming in. I think it's the first happy customer. It's like when you've sold something and they're genuinely happy because that's when you know have something. When they're like, "Ooh, I really like this and I want to buy it again." You're like, " Okay, we rolled out a product for the creators." It was like, you work on it, you work on it, released it, and then people started paying for it and they kept paying for it because they were happy and they wanted to keep paying for it. That's like an, " Oh, shit. Okay, we've got something here." We can find more of these people, we can make it better, we can improve on it, et cetera.
Ken Landis: That's what I love about the direct to consumer. You know the first sale, but then you also know when the second sale happened, when the third happened.
Conor Begley: Absolutely.
Ken Landis: That's the holy grail to be able to see and learn what the cadence of reorders are is fantastic.
Conor Begley: The best story I've heard of that by far is if Moiz Ali, so he was the CEO and founder of Native Deodorant, which they sold the Procter and Gamble for a 100 million dollars and they owned it outright in within a few years of launching. The thing they did that was just fantastic using that same direct- to- consumer model that you're talking about was they had about a 20% repurchase rate and they were like, " Okay, we have to work on this. We have to get it better." They released 24 different formulations over an 18- month period and they would side by side test it. They'd make very small tweaks to the formula, release it and then see which one would get the higher repurchase rates. Then they worked their way up over time using that to about a 40% repurchase rate. That was at the time of the acquisition, which I think gotten even better than since then. He is like, " If I'm putting a dollar of marketing in now, I'm getting twice as much out of it or more depending upon how you calculate the LTV." Yeah, it was a really cool story. I loved that one. Let's talk about investing a little bit. Obviously, let's put beauty to the side for the moment. You made a bunch of investments across a bunch of different companies since 2000, so almost 20 to 25 years so far. What are the patterns you've seen across those businesses that have been successful? You talked a little bit about the retail strategy and being number one in the doors that you're in or in the channels that you're in. What are the other patterns? Are there any patterns across the founders and teams? Any patterns across categories? Anything you avoid now that you used to put money into in the past?
Ken Landis: I'm very focused and very disciplined on the types of deals I will even look at. I generally look at companies that are not capital intensive. I don't want to be rounds and rounds and rounds of financing. I look for companies, in consumer products at least, where there's high margins and potentially a reasonable exit. Now, as you know, I also do some tech investments and although I certainly don't consider myself a tech person, I get involved in some SaaS platforms. There's a common denominator between all of them. For the most part, it's where I see a problem in an industry and a pain point in a company and how can they use technology to eliminate that pain point? I'll give you several examples. Sticking with the beauty category, a company that I helped to a co- found, called AllWork. One of the biggest challenges in the cosmetic industry, and especially in the prestige in sector where you have to bring beauty advisors into the store, is they're all freelancers. You have to staff this up throughout the whole country. It's a challenge of finding these people, of scheduling these people, training these people, evaluating these people, making sure they actually even show up. Coming from the industry, that was always a incredible challenge because you never knew what you were spending and you never knew how effective it was. I remember there'd be scrap of paper on somebody's desk saying, " Hey Mary Jo, four hours at$ 15." What AllWork does is, AllWork is a platform. It started out in the beauty center. It's a platform that basically allows brands to recruit, train, schedule. We have an app. We could demonstrate that they showed up at the store and we pay it. We take that entire problem area, including paying which is a real issue because you're having all these freelancers. We take it off their books and basically, they're on our platform managing the whole process. It's done very well. We now have expanded that into all freelancers, in any business. It's an example of you take a problem area and you use technology to make it better. Another situation is, you may have heard of it's done quite well, is called JOOR. JOOR is a marketplace connecting brands with their retailers, but all over the world. Running a company before this was always a problem. I remember I was running a cosmetic company, this is when I was at Benetton, and I get some request for some small little shop in Abu Dhabi. Do we want to sell, do we not want to sell? This allows you to basically know who you're dealing with, what other brands are dealing with any one of these stores. It's not only independent boutiques, it's also large department stores as well. That company now has offices all over the world and has over$ 20 billion of GMP flowing through every year. Now I wasn't a founder of that company, but I was the first investor in it.
Conor Begley: Yeah, they're actually a sister company of ours. We have a common investor with them. They're killing it. They've done a great job.
Ken Landis: Those are the types of things and that I like to do. Actually, I took the concept of JOOR and we created JOOR for cannabis. Cannabis, we have a marketplace which basically connects the manufacturer growers of cannabis to the dispensers on a state place, state basis. Obviously, you can't can't cross borders.
Conor Begley: Yeah, that I was actually one of the observations I had about your portfolios as I was looking at. There was a few more cannabis companies in there than I expected. What drew you to that industry? What was it about...
Ken Landis: I get up in the 60s. What do you think?
Conor Begley: Yeah. What's been your observation? Have they been good investments? Has it worked out? What are the challenges? I haven't spent a lot of time looking at it. Obviously I'm in California, I'm around it a lot.
Ken Landis: I think a lot of people expected it to go legal once Biden got in because he said it was going to go legal. It's deflated the market a little bit because it hasn't happened. I do believe in them. I do believe in the industry. I think there's a real place for it and not just from a recreational point of view. I was a very early investor, one of the founding investors, of a medicinal company in California. We're the number one medicinal company there. I think the rec space is very crowded and it's hard to differentiate a pre- rolled joint. I think there's a lot of room in the medicinal side. The vision is that the big guys really can't get involved right now, the big major company. If you can create a brand that has a national footprint and is aware nationally when things do become legal, it should be a relatively easy answer.
Conor Begley: It's a fascinating space right now generally. I can say from personal observation, I've got a lot of family members, I won't name them, that I would've never expected to participate recreationally that do now as an alternative to having a glass of wine or to going out to drink. Actually if you look at the data over the last five or six years, the percentage of young people drinking has dropped dramatically. I don't know if that's cultural, people just moving away from it, or if it's finding alternatives like recreational cannabis. I remember I grandpa saying it, which I wouldn't have expected it, he's like, " You know, can do a lot more damage with the bottle of Jim Beam than you can with the joint." That was what he said.
Ken Landis: That is really true. I'm also actually a big fan of CBD.
Conor Begley: Yeah.
Ken Landis: Which I don't think is the next coming, but I do think from a pain relief and a relaxing point of view and a sleep point of view, I think is very relevant.
Conor Begley: Yeah, 100%. The other one that was interesting only because it looks like it's being quite successful, was Artsy. I don't know why. That's just my personal, and I was just curious myself, what is it and it looks different than the other investments in some ways.
Ken Landis: Okay. The only reason it's different, Conor, is because it was later stage.
Conor Begley: Gotcha.
Ken Landis: I did not get involved in that company early on. I got in later stage, but remember what I was talking about earlier. It's that same taking an inefficient industry and make it more efficient. My wife and I are avid collectors of art. We love it. I've always said, every time my wife wants to buy a new piece, I said, " I'd love to buy it, but I'd love to sell some of the things we have some room." Put it up in the wall someplace. When I met with the founder of Artsy, I sat there, " I said I would buy more art if I could sell some of the crap I have." And he said, " That's exactly the point."
Conor Begley: That's a highly illiquid market. You're not regularly talking to art buyers, so having access to that easily is a big deal.
Ken Landis: That's true. What does Artsy do? If I'm following an artist or if someone's following an artist that I have and it's in gallery anywhere in the world, I'll see it. They have online auctions that you can sell artwork on. They give you information as far as what is the relevant value of the pieces of art. It gives you all the information and all of the methods available to really fix an inefficient market. There is a method to my madness.
Conor Begley: Again, it seems like almost everything you've invested in is something that you would either be a personal buyer of or that you have just deep knowledge of. You're not investing outside of your core competencies.
Ken Landis: My attitude is I have plenty of opportunities for passive investments. I have other people doing passive investments. I will only invest in industries that I feel comfortable with that I know. There are some situations where I have a friend who knows the industry really well and I'll piggyback off of him or her, but for the most part I only invest in industries that I know and where I feel like they add value. Otherwise, why bother?
Conor Begley: Have you tracked your IRR with your personal investing versus your passive investing? Has it outperformed?
Ken Landis: Can I only count the winners?
Conor Begley: No.
Ken Landis: You can't inaudible. Yeah, I employ with house money. I have not computed my IRR but I'm certainly playing with house money inaudible
Conor Begley: Okay. Let's talk a little bit about leadership. You've been a CEO at different times for a long time. Obviously, you're spending a lot more time as a board member now, not necessarily as an operator. Tons of time as a co- founder early stage. When you think about leadership, what have been some of your observations there? What have you seen in terms of, or even just your own personal philosophy in terms of being a leader?
Ken Landis: Right. Sitting on a board, a well- respected VC once told me, he was on a board with me. He said, " The only roles for a board member is to hire and fire a CEO. Don't bother to really get into too many other things." He's actually right. I think a board member has to be available 24/ 7 for advice, has to be available to be there at a turn on dime and be at the company it may be, but a board member should not be getting into the weeds of the company unless there's a problem. Now, with early stage companies, you have to be more involved. There's evolutions of early stage companies. At first, you're involved in everything and then you start stepping away, stepping away. One of the key things that I focus on when I'm in this early stage company and I know we're understaffed is you look for burnout. Again, I can see in people's eyes. I look around their office, when there were offices. It's a little bit harder with Zoom, but. We can see when somebody's burnt or somebody's stressed or somebody's not happy. I could also see when somebody doesn't have that much to do. It's really important to have that emotional IQ to be able to really go to someone and say, "How you doing? Is everything all right? Are getting the support you need?" I really try to do that in every company I'm involved in.
Conor Begley: Yeah, no, that's a big deal. I think one of the things I've observed that I think is interesting is, met a lot of CEOs, met a lot of exec leaders, particularly like leaders of the company. You find that they basically come from one of three disciplines, either finance background, sales, which is actually I hear the most common path to being a CEO, or you're a creative. You're a Bobbi Brown yourself, you become a CEO. In the case of software companies, you're like the lead engineer basically. Which oddly enough, I find that creative people and engineers are very similar in terms of just who they are. What I'm curious about is outside of the tactical skills, how to deploy capital or that may be one thing you want to talk about, what is it about a finance background that you think set you up for success? Is that something you'd advise somebody else if they wanted to follow your same path to go that route or how do you think about that?
Ken Landis: I'm coming from a finance background, but I was a CEO of the company so I was involved in marketing. I'm not looking at purely from a finance lens. I always fall back on my finance lens. From that point of view, as I said earlier, I look for companies that are not capital intensive. I look for companies where I could see early on if there's going to be something there. I don't want to throw good money out the door. I'm always conscious of how much money will it take to get to a certain level of traction and to be disappointed about that if it doesn't get there, unless I have a really good excuse why it didn't get there, I'm tempted to just pull the plug.
Conor Begley: Yep.
Ken Landis: Yeah. That's the benefit of consumer products. It doesn't really cost you a lot to see what you have.
Conor Begley: You can figure it out pretty quickly and pretty cheaply.
Ken Landis: Also, especially in the cosmetics industry as coming from finance, there's a clear exit strategy. The industry has changed dramatically in the last 20 years whereby basically you don't see the major companies launching their own brands that much. Sit back and see which indie companies are bubbling up to the top and go buy them and just put it through their distribution. It's a win- win for everybody. I look for a clear exit. Also, I have to say, as a finance guy, I love numbers. I'm a numbers geek and my wife hates when I say that but I am. I love sitting into these data meetings where we're analyzing inaudible down to the nth degree and LTV. I can't really contribute that much to it because it's over my head, but I just love looking at the numbers and for me, the numbers, when you have the type of data that you get with direct- to- consumer, it de- risks a launch dramatically. As a finance person, I'm always looking for how can I de- risk something? You could see how profitable it is. It's not like you're throwing a lot of advertising against the wall to see what sticks. You see what the impact is. I find that very, very refreshing and it's what keeps me going.
Conor Begley: Yeah, that's one of the best parts about the direct- to- consumer model at the beginning is you get such immediate feedback loops. You know very quickly, repurchase rates, what's working, what's not working versus you hand it off to a retailer, you don't really know. You don't really have that same connection to it or the same speed in terms of understanding it as well as the level of depth of data. I too, having been a co- founder of a company that basically does only data, also am a what you call data nerd. I geek out on it too. Let's do one fun end of show question. I'm curious, so your big art collector. Who is your favorite current artist? Like the one you're most interested in today, as well as what's your favorite piece of art that you own?
Ken Landis: We are looking for a specific piece of art. We have a place in London. We spent several months a year there. There's a spot that we're looking for a piece of artwork. I'm going to defer to my wife. She actually, I have to say, she's more of the protagonist when it comes to the artwork. She has determined there's an artist called up Pierre Solange that she is dying to find a piece of his that will fit in this spot. Unfortunately, it's pretty expensive. That's exciting. What piece of art? We have a lot. They're all like children. inaudible
Conor Begley: Can't pick one.
Ken Landis: We have a Robert Motherwell in our foyer here in the city that I always like looking at when I walk past it.
Conor Begley: Yeah, there you go. I am beyond a novice when it comes to the art world, so I will take your word on it. I really appreciate you taking out the time today, Ken. I think we've now had the whole TULA crew on here, which is a good crew to have on. Congrats again on everything you've achieved. Super impressive. Glad that we got to be your first podcast.
Ken Landis: All right. Hope I passed the test.
Conor Begley: More than passed the test. This was awesome.
Ken Landis: Great talking to you.
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In Ep. 68 of Earned, we sit down with beauty industry veteran Ken Landis. Ken has a proven track record of success, co-founding some of today’s top beauty brands, including Bobbi Brown Cosmetics, TULA Skincare, and DIBS Beauty. To begin the episode, Ken reveals the core characteristics of a successful beauty brand, emphasizing the importance of a focused distribution strategy and unpacking his mantra of “narrow and deep.” He explains why Bobbi Brown Cosmetics started out in the ’90s by being “laser focused” on high-end specialty retail stores, and prioritized winning market share in the few doors they were in, rather than maximizing distribution. We then dive into TULA, and Ken shares why the skincare brand launched with a digital-first, influencer-centric strategy, which quickly paved a path to profitability. We explore the difficulties of building a brand identity through retail compared to DTC, and Ken unpacks the differences in marketing a color cosmetics brand versus a skincare brand. We then discuss how the creator economy has evolved over the years, and how DIBS and Tula approach organic relationships versus paid partnerships with influencers. To close the show, Ken details the key factors that have attracted him to invest in a variety of companies, from beauty to tech to art to cannabis, before sharing his philosophies on effective leadership.
In this episode, you will learn:
- How to build a brand identity that stands out in a crowded market
- Strategies for leveraging organic relationships and paid partnerships with influencers
- Key characteristics that investors look for in a brand
[02:47] The core elements of a successful beauty company
[11:40] How digital marketing has evolved since Ken began in the industry
[14:40] Utilizing influencer marketing to expand brand awareness
[16:45] Common mistakes brands make in retail
[22:43] Key qualities Ken looks for when investing in companies
Connect with the Guest:
- Ken’s LinkedIn - https://www.linkedin.com/in/ken-landis-88b7423/
Connect with Conor Begley & CreatorIQ:
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