Selling sample beauty products that are otherwise free doesn’t seem like an obvious business success story. But the two Harvard Business School grads behind the fashionable online startup Birchbox have proved that the devil really is in the details.
“We’re reimagining sampling entirely,” explained Katia Beauchamp, the 29-year-old co-founder of the subscription-based e-commerce startup.
Instead of going up to the beauty counter at a department store and selecting samples as you look for your next beauty product, Birchbox chooses four to five cosmetics based on a beauty profile you complete when you sign up. For around $10 a month, customers receive beautifully-wrapped samples in a chic recycled box.
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“We differentiate ourselves by focusing on the discovery aspect,” said Beauchamp. And by helping guide consumers through a cluttered market, “it helps you have an open mind, pushes your boundaries a little bit and we try to introduce you to categories, brands and products you wouldn’t have otherwise tried.”
Hayley Barna, who started the company with Beauchamp in 2010, was inspired by her best friend who was a beauty editor at a high-fashion magazine.
“She was literally taking things out of the beauty editor’s closest and giving them to me and explaining how to use them,” said Barna.
Birchbox gives context to the samples with stories about each product on its website. The site also sells full-size versions of everything it sends out. That makes Birchbox a compelling business model for big brands looking for fresh ways to to get their names out and new platforms to sell their goods.
“When we first started, we emailed the heads of some of the best brands in the country, talked a little bit about the idea and asked them if they would be interested in a really simple beta test,.” said Beauchamp.
“We thought of the value propositions for the brands… and it was really off to the races after that.”
Birchbox’s first partners included big names such as Kiehl’s, NARS and KORRES—and since then the list has expanded to more than 200 brands.
“They spend millions of dollars creating their brand identity and two girls were asking them to re-imagine retail online,” said Beauchamp. “So that was really an accomplishment that they took the risk [to partner with Birchbox].”
So far, the company, which would not disclose whether or not it’s profitable, has received more than $11 million in capital—and with 50 employees and looking to hire, Birchbox doesn’t show any sign of slowing down.
“When we first thought of the idea in our second year of business school, we immediately thought of the different ways it made sense to the consumer,” said Barna. “We thought of the value propositions for the brands… and it was really off to the races after that.”
Six Shooter with Hayley Barna and Katia Beauchamp of Birchbox
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1. What is your favorite quote and why?
Barna: "Stay hungry. Stay Foolish" - Steve Jobs. We always talk about building a business requires a crazy mix of optimism and ambition.
Beauchamp: "Longer, better, faster, stronger" - Kanye West
2. Why will Birchbox succeed?
Barna: Birchbox will succeed because it provides real value for both consumers and brands. We create a win-win and that virtuous cycle will be the engine that helps us to continue to grow
Beauchamp: Birchbox will succeed because of two main things- it is a sound idea where the ecosystem is positively impacted, and the team executing to create that impact is the best- relentless in their pursuit to deliver on the vision.
3. Why will you succeed?
Barna: A willingness to make mistakes, learn from them and get excited about the next challenge.
Beauchamp: I won't accept any other option.
4. Do you think starting a business with a partner (co-founder) is cruciall.
Barna: It's been important for us! On a practical level, we have different strengths and solve problems in different ways. Emotionally we also balance each other out, when one of us is having a bad day the other one will have good news and vice versa. Our partnership and friendship helps us keep perspective. The whole adds up to be greater than the sum of the parts.
Beauchamp: For me, it seems impossible to do this any other way. Everyday I am grateful that we are in this together. You have someone to completely share this experience with and makes the ups better and the downs less lonely.
5. How did you know that you would be able to get customers to pay for something that--in many instances--they could get for free?
Barna: Because we knew we were adding value beyond the sample itself through the curation, the editorial, and the special experience of receiving a delightful surprise package in the mail. We knew we'd pay for the service ourselves and quickly proved with our beta test that others would as well.
Beauchamp: We believed customers would see and value that this is a service with a lot of work and heart that goes in to make the product.
6. Where do you see Birchbox in 5 years? Are you going to stay in the beauty industry?
Barna: Defining the category of discovery retail through editorial, personalization and sampling. The beauty market is our foundation and will continue to be our focus, but we are confident that there are other related categories where we can successfully apply our innovative retail process
Beauchamp: Bigger, better, still trying new things and pushing ourselves to innovate within the vision of discovery retail.
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