Divya Gugnani [00:00:24]: Hi, I am Divya Gugnani, Co-Founder and CEO of Wander Beauty. We create fewer, better beauty essentials, and to me, it’s a matter of determination.
Kelly Kovack [00:00:38]: Building, scaling, and exiting. This is most entrepreneurs’ dream. I am Kelly Kovack, founder of Beauty Matter. For most entrepreneurs, it remains elusive, but there are others who have mastered this formula. It’s never been easier to bring beauty products to market, but building a brand in today’s hypercompetitive landscape, one that resonates with consumers, has never been more difficult. It requires creative and analytical thinking, but it also requires determination and passion to make an idea a business reality. Building a brand that scales is one thing, but building a brand that consumers love is something entirely different. Divya Gugnani, the CEO and Co-Founder of Wander Beauty has nailed the entrepreneurial formula of launch, scale, exit, and repeat.
So, Divya, I’m so excited to have you on. I feel like we – well, in the time when we used to actually go to events, we were always bumping into each other, we’d show up on the same panels, but this is the first time we’ve actually done something sort of with you and Beauty Matter, so I’m super excited, because you have built a fantastic brand, but beyond that, you have a really interesting background, and a really varied background, because this is sort of your first venture into beauty. So, I’d like to kind of back up to the beginning and talk a little bit about your background and how your path led you to co-found Wander Beauty.
Divya Gugnani [00:02:15]: Okay, great. Well, I’m so excited to be here, so thank you for having me. My career really started in finance, like the very dorky stuff: investment banking, Goldman-Sachs, worked in private equity and then venture capital, and I became really an accidental entrepreneur and started my first company in the auto parts space, second one in the culinary space, like you mentioned, very different things, and then my third company was basically a tech company, but it had a little bit of a beauty element. We created subscription service for privately-owned label fashion accessories and also beauty, and I raised venture money for that and sold that to QVC, and it was while I was actually at QVC that I really learned a lot about the beauty industry and really got deep into beauty. So, that was my learning ground, I would say, and while there, I worked with a lot of incredible brands that had passionate founder stories and really accelerated growth, and I met so many beauty founders, and I think it really inspired me on my own journey, because I was taking the subway one morning, and I was on the F-train from the upper east side to midtown Manhattan to my office, and I had two children within two years, I was exhausted to say the least, working full-time, and I just was putting under eye concealer on, and I just was like, “I need to put this on because I need to look 25% better than when I left my house, and that’s all I need.” I’m like, “I’m not going for glam, I’m looking for like not looking like I was awake all night,” and so when I was putting on my makeup on the train, I looked around and I saw people putting on their mascara and putting on their SPF and doing their hair, and I, you know, go to the gym, and now I’m biking outside more than going to the gym, but when I used to go to the gym, I used to always do my skincare routine at the gym, and I just realized I was living my life in motion, and there was no brand that was giving me beauty in motion and making my life easier, and so when I looked around at my friends, and I looked around at a lot of other people I knew, it was like we’re all time starved, busy, and active. You are, I am, you’re on the go, we were running into each other at events all the time, you’re speaking on panels, but there’s no brand that’s making us be gorgeous on the go, and that’s, to me, what was missing, and that’s what really inspired me to create Wander Beauty.
Kelly Kovack [00:04:33]: You know, you say that you were an accidental entrepreneur, but you’ve had sort of three other entrepreneurial ventures, and you know, you’re certainly not the first one who has gone from sort of finance to entrepreneurial ranks, but sometimes that experience doesn’t always translate, because a lot of brands are intrigued by the finance world because they need it or want it, but you know, there is sort of an analytical detachment in relationship to brands that it doesn’t always translate when sort of people from finance decide they want to become entrepreneurs, but it clearly did for you. But, what do you think that sort of experience on the finance side…how has it helped, I guess, in your ventures? Because I’m sure it did.
Divya Gugnani [00:05:25]: Yeah. I think what you said is actually 100% of what I agree with. So, I think so many people actually manufacture brands. I feel like they say, “Oh, I want to be an entrepreneur because I think that’s a cool and sexy thing to do. I want to raise money because I want the article in Beauty Matter and in Tech Crunch and everywhere else, and I want everyone talking about me in the industry. And, I want to have a brand and I’ll just hire people to do it and I’ll just do it.” So, I’m the exact opposite. This brand, this business, came out of a personal pain point, a personal problem, my own life. I met my co-founder, Lindsey, she was going through the same things for totally different reasons and validated what I was thinking because you know, here’s a super model who’s planes, trains, and automobiles, who is getting ready in every random airport, train, plane, Uber, all the time, and felt the pain points that I was feeling as a working mom, which is a totally different life. And so, I think that you know, my finance background, listen, I’m not discounting it, don’t get me wrong, I think it was great to learn finance skills, I think it was great for me to have those skills and have operational guidance, but ultimately, brands are created out of passion. Brands are created out of personal pain points. Brands are created so that you can create value for a community and customers. And so, my lens has always been that. My true north, my compass, is serve the customer, always serve the customer, obsess about the customer. Before we even created this brand, we surveyed 100 women and we did focus groups, and we surveyed women from 18 to 72 across the United States and we asked them what their pain points were in their beauty routine. I say always, my mom says, “You were born with two ears and one mouth, listen and speak in that proportion.” So, if you’re going to be a brand founder, I think you have to be a listener, you have to be a problem solver, and you have to have passion for what you’re doing; that’s the DNA of a founder to me. It’s not the, “Oh, I worked in finance and so I know how manage money, I know how to work numbers, and so I should create a brand. I’ll just hire a lot of people around there to figure all of the other stuff out.”
Kelly Kovack [00:07:26]: Yeah, I mean, you know, you can’t just…especially sort of, I think, at the inception of a brand, you can’t just throw money at problems. It never works, because the problems…it’s like a Band-Aid rather than a solution.
Divya Gugnani [00:07:43]: So, and I think it actually masks product market fit. So, what I think is really interesting is when we started our brand, there was product market fit immediately. We created one product: we created the On-the-Glow Blush and Illuminator, and we launched that and we sold six-figures of it within six weeks, and so we created one product that really allowed women to understand how to be gorgeous on the go, because it replaced four products in her bag. It was like your lipstick, it was your blush, it was your cream eye shadow, it was your highlighter, all in one. So, our brand was all about being gorgeous on the go and giving you fewer, better beauty essentials. This is fewer, better: it’s going to replace everything in your bag. So, for us, when we think about that lens of like, it has to do something for you, it has to create something for you, that organic fit and that messaging worked with the consumer and people bought the product. What I think happens in the finance world and people who come from finance and raise money is that they launch a brand and they spend millions of dollars in marketing, and that brand awareness that they create through out-of-home advertising, billboards, subways, Instagram ads, YouTube, paying influencers, it doesn’t create the product natural market fit, it creates, “I feel like I have to buy this because I’ve seen it 80 times everywhere I’m looking,” and so you buy it once, and you buy it for the marketing, but you don’t come back and buy it again and have an authentic love of the product because you bought it because of the hype. So, when you think about a brand and what I’m so excited about is like when I think about our brand, we have such a high retention rate and such a high repeat purchase rate because we’re authentically creating value in a consumer’s life, we’re not just pouring money into marketing to make her think that she needs it.
Kelly Kovack [00:09:24]: No, yeah, because you know, it is – I honestly think like you just have kind of entrepreneurship in your DNA because you also have sort of a very traditional educational background. You went to undergrad at Cornell and you received an MBA from Harvard, and you know, running a brand is very different than a Harvard case study as well.
Divya Gugnani [00:09:45]: That “H” word, we don’t use that “H” word in our house.
Kelly Kovack [00:09:50]: But, you know, I wanted to talk to you about something slightly different about your background, because you know, something is happening now during the pandemic that’s put sort of traditional, higher education and the system we have in our country, under a microscope. I mean, let’s face it, it costs a small fortune to put a child through college, let alone an Ivy League college, and many people are questioning the real value now, because everything is either hybrid or they’re going back for how long, we don’t know, is it worth the money if it is completely virtual? You know, I’d love to get your opinion kind of coming out of that system, your perspective on how your education helped you along your career path, and kind of beyond being just super impressive on a LinkedIn profile or a CV.
Divya Gugnani [00:10:40]: So, I believe, genuinely, that when I think about our society as a whole, when I think about my children and I think about my own person experience, I genuinely believe that education is super important, I really do. It’s something that I feel core, is like in my DNA. I believe you have to educate yourself. Do I believe that you have to go to a four-year college to do that? I think that is really being called into question right now. I believe education can come in many forms. It comes from work experience, it comes from reading books, it comes from attending lectures, it comes from networking with people. I’m getting educated every single day. Education is in my DNA. When we talk about the values at Wander Beauty and we give an offer letter to a new employee, it says, “We believe in team work, respect, integrity and learning,” and the learning piece is such a core piece of our DNA; everyone is learning every day in our organization. So, I believe in learning. I believe that the education system in the United States is broken and it is too expensive for people to go to college, hence they decide not to go to college. It is too expensive for people to go to private universities, so they don’t go to private universities for that reason, and the educational system here is broken. It is just…the cost of education is deterring people from getting that education. Further, the value they’re seeing in that education is deteriorating because we’re not keeping up with the technology advancements that so many other countries are, and that’s a tragedy that I feel upset about. And then, the third piece to that is really that 15+ companies, I’m sure you’ve seen this in the press, have now taken off this requirement to have a four-year degree, so Google, Apple, so many other companies have said, “You don’t need to go to college for four years to work here,” and so people are not going to college for four years to get those jobs that they aspire to get, and so I’m really in the camp of educate yourself and the way that you respond to education. So, I personally got three degrees. So, I went to undergrad, I went to culinary school, and I got a Master’s. If I were to do it all over again, would I do it? That’s a very big question for me. I was able to have parents who were very gracious in giving me that undergrad education, and then every bit of school thereafter, I worked. I worked, I paid for that education, it came out of my own pocket, and it was painful, and I know that experience firsthand because I went through it, and so I feel the pain of so many people who are making that hard decision right now, but I do believe, at the root of it, we must educate ourselves in any way, shape or form that we feel is best for our personal and financial situation.
Kelly Kovack [00:13:14]: And what about sort of I guess the network effect, right? Because there is sort of a very – especially sort of in ivy league schools, my brother went to the naval academy, it’s the same thing there, where sort of by virtue of the fact of having gone to that institution, there’s a connection that goes, and can be leveraged, in business. Do you think that can be created virtually?
Divya Gugnani [00:00:24]: I do think so. I will be honest with you, I do believe that we live in a new age where there are virtual organizations, there’s so many networking opportunities, there’s so many great angel groups, and there’s organizations like Chi for professional women and there’s Hey Mama for moms, there’s so many amazing networks out there across different interest groups and different sectors that I genuinely believe that you can build a very strong network if you just choose to. And, I will be upfront with you, you called something out in my background of like, “Hey, this is your first real beauty company,” and you’re right. How did I figure it out? I didn’t know anything, right? I went on LinkedIn and I reached out to people. I said, “Hey, I would love to talk to you. These are my questions.” And I’m not like, “Hey, I want to pick your brain,” because I think that’s a useless email to send anyone; no one wants their brain picked. So, I always say, “Hey, I have a really…these are my questions about this, you seem like you’re an expert in it. Do you have 15 minutes of your time to talk to me about it?” and I was very hungry to learn, and I think you need that hunger, and I really just LinkedIn people. So, was my Harvard network helpful in creating this beauty business? Quite frankly, not so much. I think I’ve met a lot of people going to school there and built long-lasting friendships, and I think in many facets of my life, that network and those relationships have been powerful, but in building Wander beauty, ultimately, I was learning an industry, and so I was starting from scratch and I really believed that my persistence and perseverance of being a student of the industry and reaching out to people and building those connections was what helped me the most, and anyone can do that.
Kelly Kovack [00:15:24]: Yeah, no, of course. I mean, I get LinkedIn – I’m sure you get the requests all the time, too, and I’m always happy to take time and answer questions if I can.
Divya Gugnani [00:15:36]: Me too, every Friday I do it. It’s like give back Friday. Every Friday, I put time on my calendar for young entrepreneurs, new entrepreneurs, people who are seasoned who have questions about people and hiring and recruiting, I’m there for them, because people were there for me.
Kelly Kovack [00:15:51]: Yeah, no, I agree. I also think this isn’t your first entrepreneurial venture, so you had one in auto parts, as you said, another that was sort of culinary in nature, and then sort of accessories and beauty that you had an exit to QVC. How did those other ventures kind of inform Wander? Because I’m sure not everything was a success, and I think especially in the past few years, there’s sort of like…I don’t know, it’s like an urban myth that it’s easy to launch a beauty brand.
Divya Gugnani [00:16:32]: It is not.
Kelly Kovack [00:16:33]: And there’s also this idea that every entrepreneurial venture is successful, and it’s not.
Divya Gugnani [00:16:39]: It’s like a restaurant. People are like…how many restaurants are successful? The failure rate of restaurants one year in is like over 50%, and then it accelerates I think to like the 90s within the five-year mark. So, the odds are actually stacked against you, not in your favor, and the reality is that you have to be different, better, and innovate to succeed. So, I could not agree with you more. I really believe that it’s very challenging, it’s very difficult, and those prior ventures actually taught me a lot. So, my first company was a huge success. It scaled dramatically; I believe our first month of sales we did like $3,000. You could not imagine the joy and elation on my face when I was like, “I made $3,000 doing this nights and weekends on the side as a side hustle? This is amazing!” I was so excited about the $3,000, it was like, I was thrilled, and I started doing $100,000 a month within three months, and it was like, our margins were amazing on auto parts because the parts actually don’t cost that much and the price that you sell them for is a lot higher, so that business was a real success, and I think that…I almost wish that it didn’t work that way. So, I had this great success and I thought everything was easy, and then when I built my second business, it was just impossible. It was like I felt like I was against a brick wall every day. We had an advertising model, one day the phone would ring, we’d get a six-figure check, and then the phone wouldn’t ring for six weeks. So, I suffered through not having the right business model, not having the right revenue model, having difficulties in hiring. I hired some – people were like, “You need senior people, you need leadership.” I hired some senior people who didn’t deliver because they didn’t have the kind of mindset to work in a start-up, which is really a mindset to hustle, to wear five hats, it’s a different mindset than working in corporate America. So, I made so many mistakes that I feel like I learned from the hiring mistakes I made, I wasted money, I invested in things I shouldn’t have, and so by the time I got to Wander, I feel like having three entrepreneurial experiences, two of them very successful and one of them profitable but didn’t scale, I had made a lot of mistakes, had learned a lot, and I was able to do this brand better, faster, cheaper, because I had the experience of going through it three times prior to this.
Kelly Kovack [00:18:58]: You know, when you launched Wander in 2014, the way you launched it was sort of unconventional. You mentioned the fact that you launched with one product. So, now hero products are like the way to launch, but back then it was not, because you would have been told, “Well, if you go to retail, you’re not going to sell enough, there’s nowhere to merchandise it,” yada, yada, yada.
Divya Gugnani [00:19:21]: So, you hit the nail on the head. That’s exactly what happened to me. I had the idea with Lindsey in 2014, we launched in 2015, we made one product, On-The-Go Blush Illuminator, which by the way has won an Allure Best of Beauty Award, is a hero product, and it was the first thing we ever launched. Every retailer told us they would not take us. They were like, “Where’s the collection? But X brand is launching with 60 skews, and Y brand is launching with 80 skews, and in order for us to put you in retail, you need 80 skews or 60 skews,” and I was like, “I have fewer, better beauty essentials. My whole point is that you don’t need a lot of stuff. Let me tell the story with one thing that makes sense. Let me actually see as an entrepreneur if I have a brand. Does this make sense? Do customers want to buy it? Why am I going to launch 60 things so I can fail at 60 things? I’d rather launch one thing and say, ‘Am I going to succeed or fail at one thing?’” So, nobody understood it, and I had to kind of pave that way.
Kelly Kovack [00:20:12]: And so you launched D-to-C and on QVC with the one product, and was that as a reaction to the fact that you couldn’t open a retail door, or did you decide to launch that way? In which order did it happen?
Divya Gugnani [00:20:29]: I decided to launch that way, but after that, I decided to launch that way because in my gut and in my DNA, I was trying this. I said, “This brand makes sense for me. I’ve done data and research; it seems like it makes sense for a community of women. Let me make…” I had never formulated a makeup product. I’d formulated some skincare when I was at QVC, but I had never formulated a makeup product. Lindsey and I worked on the lab – we wanted to get it right. We worked for over a year to get that product where we wanted to be, the packaging, the branding, everything. We invested the time. We wanted to tell the story with one multitasker, so we chose to do that. We chose the format of QVC, because the product needed explanation; you needed to say and talk and explain and demo and show how it worked, and so we made those decisions. Right after I launched on QVC, the two specialty retailers that everyone thinks reached out to us, and so one of them wanted to launch us right away, and I was like, “I have no product to give you, I have one thing,” and so that was the conversation and then we had a few other conversations, and we were lucky to have Net-A-Porter come back to us and say, “Okay, we’re going to launch you,” because they were very forward-thinking in building their new beauty category, and they said, “Okay, you’re a hero. This is your hero and this is the first product you launch with, we’ll get behind that on dot com, launch in the U.S., then in the U.K., then in Asia,” and it sold, and then we went into Sephora and kind of built the brand and were very curated about our assortment thereafter, but I never lost sight of what I believed our brand should be, and I didn’t want to give in to something everyone else was doing.
Kelly Kovack [00:22:02]: And how many skews is the brand today?
Divya Gugnani [00:22:04]: We have about 47 active skews, and that’s really across categories, so we say we’re fewer, better beauty essentials; fewer because they’re multitaskers, better because it’s all clean beauty, we have the clean seal from Sustain Net-A-Porter, from Birchbox, and we are clean by our standards, which everyone has their own standards, and then beauty essentials. We are servicing that modern woman who is time-starved and on the go, and so we’re giving her what she needs cross-category so she can buy it on her iPhone in a minute and 30 seconds on Apple Pay. So, we have color cosmetics which we first launched with, we have an amazing skincare business which is growing, especially post-COVID, up 38% and growing, and we have two select skews in hair and body, and we’ll be building that assortment. So, we really want you to come to one destination, just like you go to Amazon Prime to come get a lot of different things that you need in your personal life and your home, we want Wander.com to be that destination for you.
Kelly Kovack [00:23:01]: And, even though you have sort of expanded in sort of traditional brick-and-mortar retail and online, D-to-C sort of remained really important to you.
Divya Gugnani [00:23:11]: Always, and that was the core DNA of what I was telling you about the story of the brand. If you were going to create a brand for the people, you need to speak to the people and have a direct relationship with them. So, our whole brand is community driven. Every single multitasker that you see from us is socially co-created. So, we work with people in our community to create the formula, the packaging, the delivery system, the ingredients. 360 product development is done by focus groups, text message surveys, polls, Instagram feedback, every day we’re building that connection and the D-to-C business is the gateway to do that effectively.
Kelly Kovack [00:23:50]: Well, you know, another thing that I find really interesting is I get approached by a lot of tech platforms, and I know that you’re always testing out new platforms, always.
Divya Gugnani [00:24:03]: Always. I’m always on the test list. They’re like, “Oh, this new tech, Wander Beauty is doing a pilot with them,” because I love – listen, we have a philosophy at work: Test. Learn. Iterate. Build. That’s what everyone on every team does. Our product development team is testing, learning, iterating, and building; our e-commerce team is doing the same thing.
