Helena, Estée, Mary Kay. They made names for themselves as they made the cosmetics industry. Decades later, entrepreneurialism continues to reshape the beauty business, as indies grab an ever-bigger share of sales. Many of the fastest growing brands in hair, skin and color cosmetics rely on contract manufacturers to make their concepts come to life and make their lifelong dreams a reality.


But how and why these entrepreneurs found a career in beauty varies as greatly as the formulas themselves. Some saw an investment opportunity; others, the chance to add revenue to their existing business; and for some, the decision to start a cosmetic business was a very personal decision.


“For nearly my entire life my skin had suffered from chronic cystic acne, and then when my 40s hit, so did the ravages of the Arizona sun I had lived in all my adult life,” recalled Cherylanne DeVita, founder of DeVita Natural Skincare.


But when she couldn’t find a formula that did what it promised, DeVita, who owned an essential oils company at the time, began working with organic aloe vera and active natural ingredients to create the beginnings of an effective natural products line.


Ryan Sieverson, president of Seven Hair Care, has more than 20 years of sales and marketing experience in the beauty industry. During his career, he’s heard plenty of product pitches and found himself drawn to the people that create products. He’s worked in all facets of the beauty industry, hair, skin, color and fragrance, but it was working with stylists at Seven Hair Care in Seattle that propelled him into contract manufacturing.


“Hair care is driven by innovation and the stylists drive it; they are artists and technicians who have their own views on beauty,” observed Sieverson. “Our approach to product development came from the stylists themselves, who were looking for a natural path to product development.”


According to Sieverson, the aesthetic in the Northwest is different from that in Southern California or New York City.


“Women and men in the Northwest, for the most part, want natural texture—not photo-ready style. The consumers who come to our salon like to take care of themselves but want a natural look. We are serving professionals at Amazon, Microsoft and Boeing who come into our salon.”


Devin Graciano, CEO of hair care company Use Me, is a professionally-trained hairdresser. Armed with that knowledge, she found herself in many positions at corporate levels having to know and understand the performance of key ingredients.


“This ultimately grew into product innovation,” she told Happi. “Proudly serving as a hair geek, I took ingredients and formulations seriously which allowed me to work with our lab in a beneficial way.”


A Capital Idea!


But not every indie CEO has a beauty industry background. Finance has proved to be a proving ground for more than a few executives. Divya Gugnani, CEO and co-founder of Wander Beauty, started her career in finance and worked in private equity and venture capital, then became a serial entrepreneur.


“I’ve started four companies in different sectors and I’ve always had a passion for beauty,” she told Happi. “My first experience formulating was in skin care. I really enjoyed it, learned a lot, met with a lot of manufacturers and learned about ingredients, testing and stability.”


After that experience, Gugnani wanted to launch a business in the beauty space.


“Being time starved and constantly on the move, I really needed fewer things that did more,” she recalled. “My co-founder, supermodel Lindsay Ellingson, was in the same boat.”


The duo founded Wander Beauty in 2015.


Venture Capitalist Amy Errett built a career investing in consumer brands, particularly in the direct-to-consumer space. Several years ago, she was looking for an opportunity in a fast-moving consumer product category and was attracted to the at-home hair color segment because she saw very little product innovation from ingredient to delivery.


“At the time, you could only buy a toxic box of hair color from Walgreens or some other mass market retailer,” she recalled. “There were limited shade selection, bad instructions and bad outcomes. Or you could pay $150 at a salon.”


Her company, Madison Reed, offers 50 color shades and relies on algorithms and photos to color match customers. All formulas are free of ammonia, parabens, resorcinol, PPD, phthalates and gluten. The ingredients that Madison Reed formulas do contain include keratin, argan oil, and ginseng root extract, all designed to protect and pamper hair, according to the company.


Finding a Formulator


Errett’s VC background introduced her to a wide range of experts in a variety of fields.


“You get to know a lot of people when conducting due-diligence,” she recalled.


She used those connections to find formulating experts. But hair color is an emotional purchase for women and men.


“We had to understand those emotions and give support and advice throughout the process.”


That support includes a call center, dubbed Color Crew, to answer customers’ questions. Professional colorists are also the secret weapon behind Madison Reed’s online tools, which include a color quiz, shade comparison tool and step-by-step voice-controlled instructions with built-in timers on the Madison Reed app. Or, there’s Madi, the brand’s hair color “chatbot” to help users find their flattering shade. All of the technology is designed to deliver the right color to every customer.


“Every woman has a story of buying the wrong at-home hair color and not being able to change it,” she said. “Or, they’ve gone to the salon and have been unhappy with the results. It’s rare to find a woman who doesn’t have a ‘bad hair color story.’”



The Right Partners


Errett was determined to write a new chapter in hair color, but it took four months to find the right contract manufacturer. When she began her search, she was very focused on the Big 6 ingredients that she wanted to remove from Madison Reed hair color.


“Some of them didn’t want to do it or believe it or wondered why we would want to do that,” Errett recalled.


She found the right partner outside Milan. She was led to Europe, in part, by the continent’s more stringent approach to cosmetic regulations.


Errett said she considers her contract manufacturer a development partner.


“We don’t just outsource, we work hand-in-hand, sharing ideas and spending a lot of time there.”


Gugnani, too, started with a list of ingredients she didn’t want to see in Wander Beauty formulas. Her team met with many chemists, getting exposed to different schools of thought along the way.


“We formulated a list of no-nos—ingredients we absolutely did not want to have in our formulas—and a philosophy that we wanted to enrich each and every formula with global skin care ingredients,” she recalled.


Today, Wander Beauty works with a wide variety of chemists who all have competency in different areas.


“We concentrate most of our development in Korea where we see the most innovation across all categories of beauty, particularly skin and color,” she added.


Use Me hair care products were developed or inspired by the people Graciano worked with during her career.


“I heard about issues with product performance, the ‘what ifs’ people always asked and knew I had more information to get this product together,” she recalled.


When Sieverson created Seven hair care, the original plan was to hire a “truly local” chemist who could spend a lot of time in the salon and talk the stylists and create the formulas to their liking.


But soon, Sieverson and his team realized that they had higher aspirations than what the local chemist could supply. So, Seven looked beyond Seattle, focusing on the contract manufacturing hotspots of Southern California and New Jersey. Working with a West Coast manufacturing partner made the most sense, so Sieverson interviewed 10 before signing contracts with three manufacturers who had expertise in liquids, hot pours and aerosols, respectively.


Seven’s selection process was based on three criteria:

1. A thriving business, with multiple shifts and a lot of movement of raw materials.
2. Facility cleanliness.
3. Level of engagement.
4.  

“We wanted a manufacturing partner who was really interested in our business,” Sieverson recalled.


DeVita wanted a partner who believed in her idea of natural skin care which, according to SPINS, is the fastest growing all-natural, 100% paraben free, PETA Certified, vegan cosmeceutical skin care line in the country.


“I looked for a formulating partner who was willing to go ahead and assist me in the research of innovative ingredients and cutting-edge formulating techniques. As someone who has spent a lot of time in a lab, with a love for it, my requirement of being in the lab while formulation is in process is crucial.”


She also selected her contract manufacturer based on location, ingredient integrity, flexibility and level of innovation.


Gugnani said that the focus should be solving a problem in a women’s beauty routine and have a distinct point of view from what’s out there.


“Beyond that, it’s important that our partners have high quality, global, skin-loving ingredients and also have the technology to turn projects around quickly, as speed to market is very much a part of our strategy,” she explained.


When developing her Use Me hair care line, Graciano looked for quality and someone with true innovation leading their team of chemists—a team that was willing to take a chance on new formulations and that wasn’t scared to make something new.


“All too often, labs will duplicate products, drop a new scent in it and call it new,” she told Happi.


Her manufacturing partner, LaDove Inc., Miami Lakes, FL, does nothing like that.


“The quality, from the people to their global ingredient sourcing team, doesn’t even come close to competitors,” she insisted. “It was an easy choice to make.”


Thanks to her background, Graciano said it didn’t take long to find her manufacturing partner.


“I was always the girl that paid attention in meetings, taking in all of the information and feedback that was said at a round table discussion,” she recalled. “When it came time for me to make a choice, there was zero hesitation.”


7True Nail Enamel is made by a private label manufacturer, explained co-founder and CEO Maria Pantaleoni, “so we did not have any influence on the formulation. However, luckily for us, one of our business partners is a chemist and has extensive experience in the beauty space. She reviewed the ingredients for the polish to make sure it met our non-toxic standards.”


That expertise enabled 7True to find a formulator with ingredient integrity, seamless operations, a variety of colors and treatments, accessible and responsive customer service and a willingness to work with a small company.


“We researched a few manufacturers and narrowed down the list to two companies,” recalled Pantaleoni. “We had consumers try the polishes from both companies for a few weeks. At the end of the trial they had to pick the best polish based on application, drying and chipping. We moved forward with the manufacturer that tested the best among our consumers.”


Words of Wisdom


Pantaleoni urges startups to take the time necessary to thoroughly test the product with consumers to make sure it meets your standards.


“Don’t rush through this part of the process,” she advised. “Take the time so that you don’t run into any surprises down the road. It goes without saying, one weak product can destroy your entire line.”


Graciano said tapping into someone’s expertise is vital for any startup.


“(You need) someone who can help you understand your own line and the direction it’s going to take. Success starts as an idea,” she noted. “Be sure you surround yourself with people you trust. You need them close, personally and professionally. Lastly, avoid verbal contracts—always get things in writing!”


Wander Beauty’s Gugnani said it is important to conduct a lot of research to identify a white space in the market and really focus on innovation, not imitation.


“We surveyed 100 women about their beauty routine and pain points before launching Wander Beauty,” she told Happi. “And focus on quality more than anything else. Never compromise on quality.”


After several years of success, Sieverson said now it’s time to pay back the contract manufacturers who had faith in Seven Haircare in its infancy.


“They bet on us. It wasn’t easy for our account executive to go to his boss and tell him Seven would be ordering 2,500 pieces every four months.”


Now, as Seven Haircare rides the popularity of Kente Bond System, the company is expanding across the US and internationally.  In other news, Seven Haircare recently signed actress Portia De Rossi as a spokesperson and has distribution plans in Australia, her home country.


“We have the world’s best shampoo and conditioner and we want people to know it,” asserted Sieverson. “Our contract manufacturing partnership is nothing short of amazing.”