From building India’s largest beauty discovery subscription to creating a digital-first beauty brand that disrupted the monopoly of international players, Vineeta’s insights are a lesson in customer-centricity. She shares her learnings from scaling the cult-favorite makeup brand that led a ‘matte’ revolution.
Q1. Post your masters from IIM Ahmedabad, what was the key driving force to start your own venture as against a relatively stable corporate job?
A: I have always believed in following my passion rather than the money, and that passion was to build my own company. So, at 23 while graduating from IIM Ahmedabad, I figured that it made more sense to jump right in rather than spend a few years in a tangential investment banking career.
I did doubt my decision for the first few years because I hadn't envisioned that it'd take so long to build a sizable business, but in hindsight, it was great that I took the plunge at such a young age as it's given me a longer horizon to unlock the power of compounding.
Q2. How did you transition from Fab Bag to SUGAR Cosmetics?
A. Subscription commerce was a complicated business for India, so educating consumers on how the monthly customised beauty bag worked was proving to be expensive. While scaling Fab Bag for 3 years, we got a ringside view of the evolution of the millennial woman from wearing makeup only on occasions to everyday usage. We saw these millennials spend more time on their phones getting inspired by other real women and wanting to stay updated on the biggest global trends. We saw them shop more online. In the last 5 years, women as a percentage of eCommerce shoppers have grown from 10% to 43%. And even those who were not yet shopping online were choosing products based on the digital content they'd consumed. That's when we realised in 2015 that the timing was right to build a new-age beauty company for young India.
Q3. SUGAR Cosmetics could have been yet another lipstick/cosmetics brand but managed to create a niche of its own. What was your thought process behind taking on a product category that had multiple well established brands?
A. SUGAR managed to create its niche by sharply focusing on millennial customers by doing the following:
1) Creating products that suited a millennial lifestyle by being easy to apply and still lasting them all day even in the heat & pollution.
2) Building for a more diverse range of skin tones including the warmest and deepest that were often neglected by international brands and Indian legacy brands.
3) Leveraging social media for brand building by creating authentic content on real women and building an engaged community of consumers, influencers and the brand team.
Q4. You have successfully been raising funds from marquee investors. Based on your experience, what do you feel are the key ingredients that investors are focused on while evaluating startups?
A. I think except for the seed stage, what matters the most in fundraising is growth numbers combined with how sustainable and capital efficient that growth is. We did not find it easy to raise significant capital till the time we started growing fast with high gross margins and low cost of acquiring new customers. The other thing that matters a lot is the size of the market. Most funds have certain exit expectations and they'd rather invest in a high risk category where the market size is massive, rather than taking safer bets in smaller markets. And finally, another important criterion is the founder and the leadership team. Markets change and business models change, so investors look for teams that can adapt and create robust businesses in spite of these changes.
Q5. What is your take on the evolution of the beauty products market in India and how do you see it going forward?
A. Beauty & makeup all started with homegrown practices, origins of which could be traced back to Ayurveda. Through the decades, this industry has been transformed by the waves of tech-induced changes brought about by the advent of international brands. Indian beauty & makeup practices are now at the cusp of tradition and innovation: while Indian women keep beauty habits such as hair oiling, ubtans and kajal as part of their everyday life, they also get inspired by influencers on Instagram to learn face contouring and highlighting.
Q6. During your journey so far, did you feel that being a woman brought a certain advantage / disadvantage to you?
A. Both actually. Being a woman allows me to relate better to our customers. Men sometimes find consumer behaviour like "buying makeup in the lockdown" hard to understand, but for women, these seemingly irrational behaviours make total sense. I also test our products all the time on myself and that makes it easier to predict how well it would do, although I do get it wrong at times! The slight disadvantage to this same point - of being a founder in a category where 99% of the customers are women is when fundraising with male VCs. It would have been easier if I were building a company that solves a problem that a male VC could quickly relate to.
Q7. Besides SUGAR Cosmetics, which ones are your top 3 cosmetic brands?
1) MAC (Love their speed of innovation in spite of being around for so long)
2) Banila & Co. (Korean brand with a great mix of skincare & makeup)
3) Glossier (Love the content & community around the brand and the founder's storytelling)
Q8. Who are your top 3 favorite entrepreneurs?
1) Steve Jobs - I am one of the many entrepreneurs who had him as their first hero. I think he has had the greatest impact as a role model for young people with no financial backing dreaming of building large companies.
2) Phil Knight - I recently read his story, "Shoe Dog" and it is the most inspiring memoir ever. I am also a runner and a big fan of Nike as a brand that's been timeless.
3) Katrina Lake - She is the CEO of Stitchfix, a profitable fashion tech company with more than a billion dollars in revenue. Her IPO photo holding her toddler is such a massive inspiration for all women entrepreneurs.
Q9. Which 3 words best describe you?
A. Passionate, Energetic, Emotional (these 3 mostly go together!)
Q10. What are the top 3 things in your bucket list?
1) Do an IPO
2) Be an incredible employer for 10K women
3) Qualify for the Boston Marathon
Interviewed by Chandni Chetani