Andrew Goetz [00:00:23]: Hi, I’m Andrew Goetz, I’m the co-founder of Malin & Goetz. This is…
Matthew Malin [00:00:27]: Matthew Malin.
Andrew Goetz [00:00:28]: And for us, it’s a matter of time.
Kelly Kovack [00:00:32]: Many brands today focus on valuations, the size of fundraising rounds, top line numbers, and their path to an exit. I’m Kelly Kovack, founder of Beauty Matter. The motivations for launching a brand vary, but make no mistake, it’s hard work, but incredibly rewarding work, even when things don’t go to plan. Most brands from the indie beauty revolution from the ‘90s and early ‘00s were self-funded. Success in this paradigm is not based on the size, but the ability to execute on your purpose, your vision, your strategy, and being profitable. The brands often create an impression of scale that belies their revenue. There is nothing more impressive than a vision well-executed guided by intuition that results in commercial success. Matthew Malin and Andrew Goetz, partners in life and business, are the founders of Malin & Goetz. They set out to create a modern apothecary 16 years ago with a simple range of efficacious products, what has become iconic packaging, and a store just around the corner from their Chelsea apartment.
Well, first of all, thanks for – we finally made this happen.
Andrew Goetz [00:01:55]: Who knew it would take this long?
Kelly Kovack [00:01:57]: I know, and it has literally taken months and months and months.
Andrew Goetz [00:02:00]: Yeah, I think we may be over the 12-month milestone.
Kelly Kovack [00:02:04]: Not quite, but I mean, it’s sort of very similar to trying to get together for dinner. You would think that we were solving world peace or something, trying to organize our calendars.
Matthew Malin [00:02:16]: Yeah, and now dinner will probably be impossible.
Kelly Kovack [00:02:18]: I know, right? It’s crazy, crazy, crazy. Alright, so, let’s get started. My first question, and apologies in advance, because I’m going to date us all. Matthew, you and I met when I was at Bliss developing the catalogue business, and you were at Kiehl’s, so we were known as Matthew at Kiehl’s, Kelly at Bliss, Jane at EFX, we all were sort of like attached to the businesses, and you know, it’s kind of ironic to hear, for me, anyway, this indie beauty trend, when, you know, it’s exactly how we sort of started our careers, and Andrew, you were working in sort of design at the time. Did you guys always know you wanted to start a business together? I mean, what was the impetus for throwing your hat into the entrepreneurial ring and leaving sort of the corporate world?
Matthew Malin [00:03:18]: Well, I’ll start, but it’s really Andrew’s story. So, I had been working for a couple of businesses, Kiehl’s was probably the most notable, and when Kiehl’s was sold to L’Oréal, Andrew had said to me, “Let’s do this on our own. Let’s jump ship and start our own business.” We had both been working for small, entrepreneurial, successful start-up businesses, and at the time, I said no. I was really risk-adverse, I wasn’t interesting in doing that, I was scared, and many things, and I took a job working for Prada, and then when that job, after a couple of years, was not working out the way I had hoped, Andrew came back and said this again. So, Andrew is really the entrepreneurial spirit behind all of this, and he can probably add a little.
Andrew Goetz [00:04:05]: I mean, I think we were both at a crossroads in our careers where we had reached a certain level and you know, obviously we could continue to develop, but we’d also been in a relationship for what, ten years, at the time, and everything just seemed – the moon, the stars, the sun, and the earth were all aligned. I thought this was a great time, and also, the zeitgeist in the market was a great time. Kiehl’s was an amazing brand, but it was based on heritage, 1851, whatever it is, and L’Oréal was just going to sort of blow it out of the water, and I just really felt there was an opportunity to do something really, really modern and take my background in design and architecture and combine it with beauty and create this beautiful, wonderful, functional brand that had an aesthetic to it based on minimalism, and the time was right, and people were looking for a story and they wanted real people involved, and not just a marketing speech.
Matthew Malin [00:05:05]: And, as you know, Kelly, we both were coming from independent indie brands, so LVMH purchased Bliss at the time, L’Oreal had purchased Kiehl’s, Shiseido had purchased Francois Nars, all of these little brands that I and you and then Andrew, to some degree, as well, having worked for a privately owned business, second-generation business called Vitra, we’d been part of this whole process in development of these businesses that then were being sold off to large corporations. We can be that indie brand, we can be family owned and operated, we can have a soul, and you know, after a second round of this, a couple years into it after Kiehl’s had been sold and I was working for Prada, which was also a privately-owned, family-run business as well, still is mostly family-run, you know, it just seemed like the right time, and Andrew really had given me sort of this confidence to be able to do this, and he comes from a very entrepreneurial family, and I don’t, so I needed the support to have that sort of place to jump off.
Andrew Goetz [00:06:11]: But also, I think coming from the industry and looking at the industry from the outside, I looked at it, particularly when Matthew was working at Kiehl’s, it was very Baroque to me. I mean, you’d walk in there and there were like thousands and thousands of products, and it was really, really intimidating, and this was from a purely design aesthetic, but also a functional, like how could it be that complicated? So, that was really the tenant of Malin & Goetz: how could we create a brand that went to the opposite direction, that was based on this idea of simplicity and uncomplications?
Kelly Kovack [00:06:48]: You know, I think the interesting difference between sort of the businesses and brands that we were a part of and today is all of those businesses were pretty much self-financed. There wasn’t this huge sort of venture-backed component to what we see today, so, you know, I think the consideration of starting a business back then, at least for me, was very different than a consideration today; the stakes were totally different.
Andrew Goetz [00:07:20]: The barriers to entry were lower.
Kelly Kovack [00:07:22]: Yeah, in some ways.
Matthew Malin [00:07:24]: You could start a business with a lot less money and have it be special and unique, whereas today, you know, I don’t know. We’re not starting a business today, nor are we 25 anymore, so it’s really time and place. One of the more interesting things that’s happened over the past 16 years of being in business, and having some notoriety, having some press that gets our name out there, is we get connected with other entrepreneurs, and we get to hear their stories, good and bad, and it’s fascinating. It’s probably one of the greatest joys of having a business in New York around other entrepreneurs, whether they’re in beauty or not, that you get to hear these start-up stories and you get to hear the trials and tribulations and exactly how, in many ways, they’re things that you’ve gone through, or at least processes that you’ve gone through, and it really is one of the greatest pleasures.
Andrew Goetz [00:08:13]: The other important component is that at least for us, was that not having a lot of money, that tension was a great incubator for creativity, and I think that, you know, money does change everything, and it’s not that you can’t be creative with it, but you tend to waste a lot of money, and you waste a lot of time, and when you have to be really, really focused on everything, not having the fall back of, “I can just buy my way through it,” you have to have idea generation of how you’re going to solve a problem.
Matthew Malin [00:08:44]: And, there’s also all these – I mean, it’s so complex because we came to the table with experience, not a lot of money, and intended to do something for ourselves to support ourselves. So, you know, it’s a very different mindset when you’re in your 30s, you have experience behind you, you know you’re going to use your own cash because this is your business, you want to be in control, because you’ve seen people be in control that were self-funded and have done this before you, and so there’s a business model already in place that we were sort of falling into and understood and saw a way forward, and you know, it’s very different from somebody who just graduated from college and is like,
“I’m going to raise capital and I’m going to start this business and I’m going to sell it off in five years and then I’m just going to do something else.” You know, we didn’t – that wasn’t the intent, and we just had a very different mindset that this has to win, it has to succeed, we can’t fail, it needs to support us, this is our lifestyle, these are our careers, and in so many ways, at least for me, fear drove success. It drove, at least, having a viable business.
Kelly Kovack [00:09:56]: It’s very interesting, because I distinctly remember when you told me you were going to launch a brand. I was up to my eyeballs in Rescue Beauty Lounge shipping flip-flops and nail polish, and you know, I think we went and had coffee around the corner, and you were kind of saying you were working on a business plan. Ultimately, I think the conversation ended with, “Okay, are you going to raise money or are you going to self-fund this?” and the conversation we had was – because I, obviously, was in Rescue Beauty Lounge, and so I was really looking for somebody else to kind of be in the thick of it with me that was a friend, right? And at the end of the day, I was like, “Well, you know, can you write the check or not? Do you want to take that leap?” because the business plan was up in your head, and you know, you guys had such a clear vision for what you wanted to create, and then at the time, it was really unconventional, and you guys were way ahead of your time, because I mean, you know, obviously, I talk to lots of brands and founders, too, and 16 days later – or 16 days, 16 years later, you guys are still sort of on inspiration boards, and as relevant as you were when you launched. Can you talk – well, it’s true. Can you share a little bit about the genesis of the brand, and what was that early vision, and what were your non-negotiables?
Matthew Malin [00:11:26]: I’ll start, and then Andrew will probably add a lot more to this. So, when we finally decided that it’s a now-or-never moment and we’re going to do this, we had had some mentorship early on, which is really kind of incredible. So, at the time, I probably wouldn’t have said this, because she asked not to be involved, but I’ll say it now. So, we had some support and help from a dear friend in the industry who has a very, very successful beauty business, and her husband, who is Oxford and Harvard educated and worked for the Boston Consulting Group, had written her business plan. So, we had this – and, she gave it to us. She basically was like, “This is a brilliant idea, you’ve got to do it, I want to support you, here’s my business plan, use it as a model,” and the model itself was very different from what we were doing, but it thought of every sort of problem that could happen along the way.
Andrew Goetz [00:12:23]: It was a great roadmap.
Matthew Malin [00:12:24]: Yeah, and one of those issues or concerns to think about was whether you were going to self-fund or you were going to raise capital. So, we were approaching it with the idea perhaps we may raise capital, but we were always intending to self-fund it, and just trying to get some feedback as to whether or not that was viable. The other thing was that having worked for family-run, privately-owned businesses that were successful, by happenstance, had no business plans for the most part, but just succeeded, not probably dislike Bliss, in some ways. We had seen the successes and the failures or the concerns along the way, and we kind of knew the business model that we thought we could leverage our careers to make a success, and so we were doing a lot of the same things we had always done in our careers, Andrew from a design and architecture perspective and a marketing perspective, and myself from beauty, sales, marketing, as well. But, really, applying it then, together, to really create a point of difference and do something unique at the time that was exciting to the two of us.
Andrew Goetz [00:13:36]: Yeah, and I think the other thing is that you can plan and you put everything down on paper, but you also have to be able to pivot on a dime and you have to be intuitive, and some things just can’t be explained on a spreadsheet. I always say that everyone is dealt the same percentage of good luck and bad luck, it’s a matter of how you run with the good luck and diminish the bad luck that really makes a difference. So, you’re going to have bad days, things are going to go wrong, but there’s an opportunity to find – there’s always a silver lining, and sometimes when it’s raining and your hands are open and all the opportunity is going through your fingers. So, I think we really have to figure out how to capitalize on the good things and assuage the bad things, and that just takes intuitive thinking.
Matthew Malin [00:14:23]: We also spent – well, I had left my job at Prada, and so for the next 18 months, I was writing a business plan in Starbucks, with like a group of other people. It was this real little community of friends; we were all sitting there sort of working on projects, whatever they happened to be, and did that over the course of 18 months, implementing the business and then launching it. Andrew had always been part of the process, and he had joined about six months after the business had launched, but the process of writing the business plan, which I had never done before, I don’t have an MBA, so you know, it was a real…it was kind of like getting an MBA. It was sitting there and learning, and it was really exciting and fascinating and isolating and scary, all at the same time.
Andrew Goetz [00:15:14]: If it wasn’t for me, he’d still be sitting in Starbucks.
Matthew Malin [00:15:20]: I’m not the smartest person in the room, but I am very tenacious and determined, and you know, sometimes, at least from my perspective, the devil’s in the details, and I really toiled over making sure that I didn’t leave anything out, and when I’m focused, I’m really focused. I can block everything else out.
Kelly Kovack [00:15:40]: So, you know, you guys were together over a decade sort of in life before you started in business. How has – what is your secret for making it work? I mean, did you divide and conquer? Was it more of a collaboration? You guys think very differently, but have the same aesthetic.
Andrew Goetz [00:16:01]: Maybe a combination of both. I mean, it was obviously a lot of collaboration, but we also learned that we needed – we also had different separate skillsets and different areas of expertise, which made us sort of dive into different areas, so that gave us a little bit of variable. When we were working in the store, we were both doing everything, it was very collaborative, and you just had to get through the day. As the business developed, things siloed a bit more, which was better for both of us, because you know, you’re not on top of each other, and it sort of diminishes your sitting Nancy moments, and that’s where we are today. So, everyone has a more defined role.
Matthew Malin [00:16:43]: As partners in life, and I’m sure a lot of people can relate to this, we’re opposites attract sort of situation, and we come from two entirely different perspectives; however, as with most relationships that succeed, you agree on the most important things in your life, and that held true in business as well. So, when we needed to make a very important decision, there wasn’t a discussion or argument or a disagreement about it, we were pretty aligned all the time. It was the small details along the way that we didn’t agree on, and in many ways, as we look back, and even if we have a fight today about something, we can kind of fall back on the idea that it’s that tension that really does bring us to the best solution.
Andrew Goetz [00:17:28]: And you know what they say, what doesn’t kill you.
Kelly Kovack [00:17:32]: Well, you guys are still going strong, so something works. You know, so you opened your first store in Chelsea, and you launched the brand – the product brand – and the store at the same time, and that first store was right around the corner from your apartment, it doubled as an office, and you guys really are kind of a neighborhood apothecary brand sort of at your DNA. One might also argue that you were early on the D-to-C trend in an analogue way. But, you know, why was a store important, and what role did it play in establishing the brand? Because they kind of feel intrinsically tied.
Andrew Goetz [00:18:19]: I couldn’t agree more. I mean, the store was incredibly important, and the stores remain incredibly important, and from the very beginning – I’m just going to backtrack a little bit – our goal was never to be McMalin & Goetz and have a store on every single corner and just carpet bomb all the continents of the world with Malin & Goetz. It was always meant to be strategic, which actually worked out very well; while we sit here in the pandemic, the last thing you want to do is be over-scored in this environment. So, that was never part of it. And then, every store was individually designed, so there was never a cookie cutter approach to it all. So, we believed in how design could educate people and inspire people and brand, and that was really the crux of what the store did, and it remains equally as important today as the day that we launched the brand.
Matthew Malin [00:19:13]: Right. Like you, Kelly, I started my career in retail, and I loved retail, and it’s really a part of everything that my career is about and the things that I enjoy most about working every single day. So, you know, having the opportunity to be a merchant, to develop a store, to really participate in a community, our community, those were just non-negotiables. We also – or, I also, had come from a place of retailers, like really great retailers, you know, that had forged ways, and even interestingly from a business model perspective, Kiehl’s had a single store, and it was, again, very happenstance, it had been a store in the family for three generations, and when I was working for the then owner of Kiehl’s, Jamie Morse, she…I don’t think she ever intended to open up another store because her father, first of all, never wanted to duplicate it; it was too special, and secondly, as she took over and her legacy was coming into play and she was developing the business much more on a global scale, her focus wasn’t – it was always on the store as a marketing opportunity or what was special in the brand, but it was never about having to manage that level of complexity, you know, so the wholesale business just sort of ran on its own and it generated all of this income. For us, as we started to look at this, we saw this opportunity to create a very modern vision of what an apothecary or a neighborhood environment could be, and do that entirely different from our predecessors. We also loved the idea of having a store and having multiple stores. We wanted to be retailers and have key locations to support our wholesale businesses around the globe, which is what we started to do and what we’ve accomplished, and it just feels, I don’t know, it feels right to the brand, like you tell your story best in your own environment, and you don’t have anyone dictating to you what’s right or what’s wrong or how you should do it in a different way than what your vision is.
Andrew Goetz [00:21:29]: But, you still have to embody integrity and it can’t just be a place for transaction, there has to be a component of inspiration and education and service. It’s really, you know, you’re stepping into a special world, and it’s not special if it’s the same at every location.
Matthew Malin [00:21:49]: Those things are harder today than ever, because there just aren’t a lot of…in my opinion, there aren’t a lot of great old school retailers who really put the customer first, and digital has changed the full dynamic of what this is and what it looks like entirely, so the paradigm has shifted obviously, but it’s really something that we hold dear, and now, as you’re saying, things are coming full circle, and it’s for entirely different reasons, but it is still this place where people gravitate; they want to come back to their community, to what’s local, especially.
Andrew Goetz [00:22:29]: Yeah, people like – I mean, this is the whole conundrum of corona and COVID, is that people want to be around one another, they like to interact, people like density, they like to socialize, and a store provides that opportunity.
Kelly Kovack [00:22:46]: No, it’s very interesting because while your stores, like every sort of design detail and function of the space is so well thought through, but you don’t have kind of those Instagram moments, like the store itself is beautiful and takes beautiful pictures, but you guys haven’t kind of like leaned into those gimmicks that a lot of pop-up stores or retailers have. I mean, how many stores do you have? And, I know this is a hard question because you can’t have a favorite child, but do you guys have a favorite store?
Andrew Goetz [00:23:25]: I mean, I think we would probably agree, we might say Chelsea, just because it was our first born, and that store was like, built on such a shoestring budget, so to have created that environment with so little means and just pure energy and willpower, I guess that’s remained my favorite.
Matthew Malin [00:23:45]: I would say the same. I mean, it really is, you know, it’s where the brand began, it pretty much looks the same as when it began. It still feels really good in there. It’s no longer our biggest volume store, but it’s number two, so it still is a significant piece of our business.
Andrew Goetz [00:24:10]: It’s a heritage for us, and I think, you know, even if you look at that stretch of Seventh Avenue, it’s not exactly retail center; it never was and it never will be, but yet that store performs pretty much one of the best, because there’s a heritage there that people remember the two of us there and the dogs being in there, and it was this really, really special environment, and that carries over 16 years later.
Matthew Malin [00:24:34]: It was also the paradigm for everything that came after it, too, so how the stores would be set up; how we would merchandise fragrances and candles versus skincare; how they would sit in the neighborhood, whether or not we wanted to created destinations or destination-oriented streets. So, we’ve learned a little bit. We moved to another downtown location in New York, Nolita on Elizabeth Street, that was a much better positioned location just in terms of traffic and volume. So, that was important as we…
Andrew Goetz [00:25:10]: Yeah, it’s a proper shopping street. Seventh Avenue was very utilitarian.
Kelly Kovack [00:25:14]: Well, and also the store sort of helped inform how you are merchandised in sort of retail partners as well, because it was sort of something that you could point to.
Matthew Malin [00:25:26]: It’s very difficult to convince retailers to do things your way and not their way, and having a store allows you the opportunity to convince them…
Andrew Goetz [00:25:42]: It sells the culture of the brand.
Matthew Malin [00:25:44]: Yeah, if you can get them in your store, if you can get the retailer to come to your store - the easiest way is to say, “I’m going to give you a gift box of everything – one of everything,” whatever it is, and you get them to come and then you give them a tour of the store, you really then can showcase why and how certain items are important to the brand, how the brand and what the brand stands for, how you want to merchandise it in its environment, because you become romanced. It’s this beautiful little jewel box that offers you these sort of special little details. The opportunity is if you love shopping, to get in there and find stuff that you wouldn’t see necessarily somewhere else.
Andrew Goetz [00:26:28]: Yeah, they’re curated. I think that’s what makes it so special.
Kelly Kovack [00:26:31]: I mean, retail distribution and who you launched and when you launched I know was highly controlled. I mean, having – I remember the conversation we had when I had a client that wanted to carry you, and I’m like, “You guys, we know each other, just do it!” but you were so diligent in understanding every single person that you were getting into business with, and you know, I don’t know, I wonder if people sort of take that care now, it seems like distribution happens so fast now because people are trying to scale so fast, and also, it’s 16 years ago there was kind of a formula you followed, and now, everything has kind of become open game, right? You can be in mass and you can be in ultra-market. Yeah, I mean, it’s kind of a free-for-all, where it was very structured. But, you know, how did those retail choices sort of help lay the foundation for both the brand, but kind of the culture, because you had people staffing them, as well.
Andrew Goetz [00:27:42]: I mean, they totally helped because I think the most important component, other than that were carrying the brand, is that we were creating a relationship with somebody, and when there’s a relationship, there’s passion, and so going through all those – jumping through all of those hoops and all of those details to make sure it’s going to succeed, the pay-off was that there’s a lot of enthusiasm and a lot of passion and they’re selling your brand because they believe in it so much because they have a relationship with you, and they’re just excited about it; they love the product, they love everything about it, but they really love the process equally as much, I think.
Matthew Malin [00:28:19]: When you were asking the question, I was thinking exactly the same thing, and this really goes back to being a retailer and a merchant. I mean, one of the things that you read about almost daily in Women’s Fair Daily or whatever it is about Stanley Marcus of Niemen Marcus is how he was connected to his customer, that it was about the customer first and how he was this relationship builder, like that was the most important thing, and it is instilled in the culture at Niemen Marcus today; people get on the phone, they don’t even have to have their customers in front of them, they clientele them, it’s all about that. For us, we really thought about every single customer, whether they were a store selling our products, or direct-to-consumer, and what that meant, how we were servicing people, the kind of service we were offering them, the information that we could deliver, and this became sort of the backbone of how and why we were choosing certain retailers. Did we have synergy? Were we going to represent the brand in the way we felt the brand could be represented? And, by the way, when you take the opportunity to jump ship and do this on your own with your own money, you kind of want to work with people that are likeminded all of the sudden; I think you do. You really say, “I want to work with people I like, or people that like us and want to do it our way or ways that we both agree on.”
Andrew Goetz [00:29:42]: Yeah, there’s nothing – actually no better day when you jettison somebody who’s just been – regardless of the sales and the income, the revenue that they brought into you, you’re able to say, “You know what? The way he treats our staff and our employees and the interaction that we have with them is just not worth it.”
Matthew Malin [00:30:00]: That’s happened several times, where we’ve taken an account, it has generated some money for us, and it has been miserable, and we’ve had staff members abused by people on the other side, and once it’s happened, we’re just like, we don’t care. We’d rather not do business with people like that; we don’t have to do business with people like that.
Andrew Goetz [00:30:19]: And ultimately, those people aren’t good representations for your brand anyway, because if they’re treating you that way, you know they’re treating other people that way, so you’re going to be associated with that negative mindset one way or the other, so it’s just better to cut off the limb and put your energy in positive stuff.
