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[MUSIC] On behalf of the Stanford Graduate School of Business, I'd like to welcome you to View From The Top.
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We are so excited to have you here.
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>> Thank you for having me.
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>> We have so much to learn from you here at the GSB about your business Savy and your tenacity in building a truly fantastic company.
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So I'd like to start today with the origin of honest.
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So much of the company is built upon your personal experience as a child with health challenges, and as a mom who struggled to find products that were affordable and eco friendly for your own children.
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So can you tell us about how these pain coins led you to developing a business solution? >> Yeah, gladly.
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I think it really was for me, Filling a need and finding a real opportunity to show up, not just for myself, but for many people in a way.
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I think I was seeing that companies that make products that really interact with you every single day, and could have an effect on your health and wellbeing over time.
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They just weren't really considering I think, holistically your health and wellness as the top priority.
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And for me, I just felt like our health and wellness, like when you go through your life and you are thinking of quality of life and thriving.
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And when your health is compromised, and your health and wellness is compromised in any way, shape or form [COUGH] it's really difficult to then live a life where you can thrive and be happy [COUGH] and live life to the fullest.
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So when I was a child, and I was very sick and I was constantly reminded that I wasn't like others.
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And I was isolated, I had severe asthma and allergies.
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And every time I had an allergy to something, it actually triggered my asthma, and I was put in the hospital on steroids.
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I was in the hospital, I would say at least three or four times a year, for a week to two weeks doing steroid treatments and breathing treatments and dealing with pneumonia and bronchitis.
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And every cold turned into pneumonia, so it was just like a whole situation.
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[COUGH] But I wanted to play baseball and soccer and be a normal kid.
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And so I would go on the soccer field with a breathing machine.
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And I would have that next to me.
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I also had kidney issues and cysts and many different other surgeries on top of that, and all of this before I was 11.
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So I just dealt with a lot of health issues.
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And when I was pregnant with my first daughter, about 13 years ago, I had an allergic reaction and I had pretty much stayed away from the things that were causing reactions.
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And I started to really create sort of this subconsciously, the safe environment where I wasn't exposed to a lot of the things that would trigger my allergies or asthma.
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And then when I was pregnant with Honor, I had an allergic reaction to a detergent that was marketed to parents to use on their baby's clothing.
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And my mom said she used it on me and I didn't know very many moms.
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And when I had this allergic reaction, I got like a flood of the memories of me as a kid, and having all of these health issues.
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And I was like, my god, what if my baby is like me?
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What if she has these sort of issues, and it really kind of shaped who I am and I think it builds character to go through difficulties but it could be avoided, let's avoid them.
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I also was dealing with, sorry there's a plane, they like planes over here.
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[LAUGH] My mother got cancer when she was, I believe she was 23, 22 or 23, and had to have a full hysterectomy.
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And meaning she couldn't have children any more.
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And her cancer was environmentally caused because it was nothing genetically that was linked to that.
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So when I sort of looked, I like took sort of a reflection on my childhood, my mom's health and wellness.
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Now I'm bringing this little person into the world and thinking about quality of life in a different way.
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I was told I wasn't allowed to eat deli meats, and I couldn't use my retinol on my face because it could possibly affect the baby and her health and wellness.
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So I started looking at ingredients and thinking about my health differently and hers obviously.
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And I learned about lots of untested, and potentially harmful chemicals that we use and are exposed to on the daily.
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And a lot of it is in beauty products, hair, skin products, makeup products, fragrances, home detergents.
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And so then I was like, my goodness every every single day we're being exposed to all of these potentially harmful chemicals, and we don't even know it, and we don't even know how it's affecting our health.
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So then I was looking at, I looked at data and was trying to understand the research around the rise of illness.
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And there was a pretty parallel path in the industrialization of these chemicals and then being put into consumer products and beauty products.
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And that rise really paralleled the rise of many illnesses that people are dealing with from.
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Because they're hormone disruptors, and they're endocrine disruptors.
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[COUGH] And they're linked to things like various cancers, learning disabilities, and also the way that it affects your hormones.
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It's basically giving your body steroids.
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And it really screws up your hormones, men and women, the exposure to a lot of these chemicals.
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So, I was like how do we not know about this, and how is this even allowed in this country, shouldn't there be a governing sort of practice or rules or standards?
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And in the UK they actually make companies test chemicals for safetybBefore they are even allowed to be brought into the market place in personal care and beauty.
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And in this country, the way that the system is set up is it has to be proven to kill enough people before they'll even look into it being dangerous. So I was like, what?
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So basically we're just being tested on?
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And I was like that is so messed up.
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And then people who live in a sort of different circumstances where they can't necessarily control their environment and their shopping Habits because they're just trying to survive and they're living paycheck to paycheck like I grew up.
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And a lot of black and brown families as well are disproportionately affected by the exposure to a lot of these chemicals.
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And so I was just like wow, and so I legislated for chemical reform to try and at least get our standards in this country to be more like Europe.
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And a lot sorry, not legislated, I lobbied for the legislation for chemical reform, excuse me, and I did it twice and basically as you know during COVID, our health has been politicized.
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And, it's basically whatever opinion someone wants to decide is truth becomes the truth, versus facts.
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And so, I was like, wow, we this shouldn't be about a political party.
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This is just common sense and human health, anyway I'm frustrated with the system.
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I was like, well how can I create a solution for people that really has the ethics and values around it human health safety?
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Also, thinking about the planet, [LAUGH] and sustainability.
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[LAUGH] And then obviously I think the last and the most important piece of the puzzle is really showing up for people and meeting their needs no matter where they live in the country.
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It shouldn't be like I afford the most expensive things and so I can shop at a whole foods or whatever type of grocery store, but everyone else is sort of left out.
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And I was like, that just isn't fair.
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And also I felt like there weren't a lot of companies that stood for health and wellness.
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That also like spoke my language.
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I don't know I just feel like I love beauty in design and I love beautiful things in the home.
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And I just felt like there was a way to kind of like show up in a beautiful way, but still have the ethos and the values and ethics that I had as a person.
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So that's really where the business came from, and the idea, and that's how it started.
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>> Well, I love the intergenerational aspect of it, of watching your mom go through something, experiencing something yourself and then trying to create a solution for your children.
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That's obviously a really wonderful brand story.
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But obviously not everyone was sold in the beginning, so I'm curious.
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How did your business pitch evolve as you experienced some initial naysayers or some knows?
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>> Yeah, and I think you have to know your audience, know their capacity.
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And originally I was pitching this idea to start this business with people in entertainment.
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Not knowing that the very business model in entertainment is incoming calls and licensing deals, right?
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And it isn't starting from the ground up and investing in a concept.
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Now I think Hollywood has gotten a little bit more savvy and I would say the success of my company has moved the business to be a little bit more open, two different ways of operating.
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I also think that because the shift in access to content and the Internet and habits changing and consuming has changed so dramatically over the last, I mean 20 years, but really ten years.
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So the business Hollywood has had to also try and figure out where they fit in that.
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And I think they're still challenged because they're holding on to a lot of the old sort of systems, but yeah, so I guess I was pitching this idea to the wrong audience, that's first and foremost.
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And then I started pitching it around to different people outside of my scope.
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And I would say, while as an entrepreneur, you're so excited and you see you're end goal, right?
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And you're moving towards that end goal, you have to make it palatable for what can happen here, and now, and today.
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So it's like well you want to sell the dream of this is going to be a global brand that stands for the health and well being of people in the planet.
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And we're going to make not only build community and educate people on how they can live a better life, but we're also going to create the solution for them.
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And it's going to to be in various categories, around home detergents, around bath and body products, around baby products, and around skin and beauty products.
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For me, I had to distill my idea down to the thing that was trendy and hot in the moment where investors were excited to invest into these new business models.
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And I knew that I didn't want to take this concept to a retailer because I didn't want the retailer to then, because when you take your concept and your idea and you build inside of a retailer's environment.
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They essentially get to take the reigns and mold it into what fits into their business model.
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And you often will compromise on your values, especially when you are right out the gate.
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I also knew I wanted there to be a charity component, and I thought that was just really important and I also really wanted there to be diversity and inclusion.
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Just embedded in the values and the practices of who we are.
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So all of those things I would say are just very new concepts, in apply in, especially back in ten years ago, people hadn't really seen successful bus businesses that have values, like that.
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I mean there's like there were very few and far between that hit on all of those things.
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And so I had to figure out like know your audience distill the concept down to what is hot in the moment that people are excited to invest behind.
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And make it, get your elevator pitch down because I have like 100 page deck with everything from home paints and furnishings and detergents.
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All the way through to beauty products and then brands that sit in different price points and a distribution.
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>> Like a [INAUDIBLE] site.
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>> I mean, I had the whole kit and caboodle.
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And so I had to really distill it down to, at the time, what was hot was a predictable subscription business model.
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And I partnered with essentially the guy that had paved the way for that business model to come to life.
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He founded LegalZoom and another business called ShoeDazzle.
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And so I partnered with him and pitched him the business and he turned me down.
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And then he came back about 18 months later and I pitched him again.
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And at that point he had had a kid and saw his wife change her beauty habits, change what she allowed in the house.
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Throughout all of their detergents in their home, the cleaning products and basically was shopping from a very small and curated set to provide a healthy environment for their their little child.
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And so he was like, okay, so people do change when they had kids and they start thinking differently about gradients, chemical exposures, the planet and those types of values.
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I would say now, and so when I partnered with him, then we basically went on pitched sandhill like five or six companies and VCs.
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And we got five term sheets by the end of the day and I was eight and a half months pregnant and I was told by my doctor, I wasn't allowed to fly anymore.
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And that was my second child.
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I was pregnant because it took me actually three years to get to that point and yeah I think you have to be very humble if you want to be an entrepreneur.
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Or be part of a business, know what you know what we know what you don't know and the surround yourself with people that really support your strengths and your weaknesses.
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>> Yeah I love that point about knowing your audience and how his life circumstances changed how he acted as an audience member to receiving your pitch/.
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And just that little moment of his wife experiencing exactly what you're talking about was all they really needed to see as a benefit for the company.
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So at business school in all of our classes, we're constantly reading case studies to learn about pivotal moments in a company's history.
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So we talked a little bit about the pitch, we can fast forward to honest CO is now an amazing company.
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What do you think would be the inflection point that you would choose if the GSB were to do a case study?
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>> It's interesting, I would say going from and operating from a startup and that's a high-growth startup with that sort of high-growth business model.
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And really transitioning into a more steady state growth business model [COUGH] and building the foundational principles to operate, like a business that could be around for 100 years.
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Because the people that you bring in and that can get capital to start a company are very different people that usually I would say 99% of the time is usually a very different team.
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That can operate and build out foundational principles for a company that can stick around for 100 plus years.
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>> I love that, and speaking of teams actually, an instrumental part of your team is your current CEO.
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I'm curious, how did you find him?
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How did he convince you that he was the right person?
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That he was really going to be able to carry your vision forward as CEO.
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>> Nick worked at Clorox and actually, when we were starting the business when we had such high growth and being a digital first business, and building community.
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It was such a different approach and the values, and the ethics, around how the wellness again, was also such a different in the way that we went about it.
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Was such a different approach to the way a lot of the big CPG companies operate.
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And so we've had all of the big companies knock on our door and you have to take those meetings.
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And so he had spent time with us and looked at us years before and really sort of understood our business model.
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And then when we were at time to bring in a new team to really build those foundational principles >> I think because he had historic data and understood the mental model of like what needed to be true.
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And also he had done it with bird bees when they brought bird bees into Clorox.
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And, he really has a very creative approach to business and I think you can't have someone who's so stuck into what they know.
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But you need to have someone who's really genuinely open and curious to building out what the business needs at that moment.
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And he really felt like he was grounded and in and having conviction about that but then also I would say.
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The other big piece of it is he really lived this life these values are very meaningful to him.
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And his family he's a father of four two sets of twins and his wife and him and the kids they live very much these values and these are the types of products they have in their home.
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And this is how they live their life so just those the purpose and the mission of the company really resonated with him so.
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>> Have that, well, an amazing moment that you had last year was when you took the company public. So congratulations not. >> Yeah, I'm curious.
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Did the IPO feel like a moment to pause and appreciate all of your accomplishments?
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Or was it a wake up call that new challenges and opportunities were ahead of you? For me, it was both.
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I would say that every time we hit a different sort of transition or milestone, at this point I feel like I've been through [LAUGH] it all.
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And you'll see guys when you start your own businesses [LAUGH].
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And yeah, it almost felt like we're starting from zero again and building the foundation of what it means to be and operate like a public company.
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And now like we're building those building blocks and those foundational principles again, but in this new space.
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>> I love that, so I would be remiss if I didn't mention your previous role and current still role in Hollywood and where I learned at least at your talent agency CAA branding your personal brand is everything.
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And I'm curious what learnings carried over from that world.
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>> To the business world I'm now at UTA but I yeah I would say that your personal brand As someone in Hollywood but then even someone like you or any of you guys sitting there, you can't.
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You guys are living in a very kind of, it's sort of like welcome to the party of being exposed.
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You guys are living a very digital reality.
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And people pan on Earth who you are and your past and your life, if anything, is much more on display, I would say, than any other generation and will continue to be on display.
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And so where you go in your life and who you surround yourself with and how you align yourself along the way will have an impact on your future opportunities.
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And so I think for me, I was always very cognizant of that from a very early age.
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And I think it's just something to be mindful of depending on what your aspirations are, making sure that you own all of your decisions.
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And you are honest with yourself along the way and I'm not saying don't be fearful but just be aware and I think a lot of people don't always think of step three, four and five.
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They just see the shiny penny in front of them, and they get excited.
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But I always think of three, four and five because I didn't have a backup plan.
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I didn't grow up with a safety net. I had to create my own.
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So I think I just operated with that in mind when I was building out or making any decision from age 12 on.
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>> Right, yeah and important to note that it started so young and social media and everything has changed so much and you've been adapting since you were 12, which was is amazing.
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I'd love to talk about the future of where honest is going.
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You recently launched the daily defense collection, >> [LAUGH] >> Which is a line of skincare products designed to defend against environmental pollutants which is so incredibly important.
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I'm curious how do you- >> [INAUDIBLE] screens, who knew these screens could affect your skin, my god.
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>> [LAUGH] The screens that are currently blasting stuff at us right now.
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>> All day [LAUGH] >> I'm curious how you predict future trends and continue to build products for the future.
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>> A lot of it comes from I think trusting my gut and my intuition.
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It's weird like I don't necessarily need McKinsey data, to substantiate where I like, what I feel or what I know.
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And oftentimes, I feel like I can be in not everything is a home run but if you will need a bain or McKinsey study to validate your marketplace opportunity, it's often a little too late.
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Because the trendsetters did it three years before, it became a trend that it would even become a case study or a study at all.
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And so I would say that keeping your feet on the ground and really understanding the pain point or the needs that you are filling in whatever business you're creating.
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For me it's being very consumer centric and very personal.
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I always start from that place and then I do my research from there on around sort of like what other companies are doing things like this or what other like our sensitive skin care line.
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All of us want benefits in our skin care we want brightening and we want our fine lines to go away and we want you know our discoloration to go away.
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We want to have those skincare benefits in our skincare we just don't.
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We're not looking for something that's just sort of like, put this on your face and it'll be a shield and then there you go and it's better than having this rush.
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Now, I'm allergic to a lot of those products, even the gentle ones that the dermatologists recommend.
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So I couldn't even use those.
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So I was like, how about we have a skin care routine that works for people with really sensitive skin but actually like does something for you.
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And our head chemists she has very sensitive skin as well.
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And so that's just something where we were like hey if you get rashes if you have sensitive skin a lot of people who break out a lot also have very sensitive skin.
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There's nothing for you and you're sort of just left in the dust.
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So I was like this would be a cool one to be able to create a full solution where you can have exfoliation, brightening, really hydrating.
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We have a lightweight moisturizer and a heavier moisturizer so it's for different types of skin.
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It doesn't clog your pores, all of those things.
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So that's another a lot of it comes from the personal and then you look at the marketplace and you see how many people are doing it.
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And then there's other things where you're just like hey, this is table stakes.
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You need to have X or you need to have Y in order to really like be in this category. So, it's a blend.
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>> Yeah, I love how your ideation process for new products kind of always goes back to how you started honest itself, which was based on problems that you experienced yourself.
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And obviously you're not the only one to experience those. >> Right.
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>> So we started this talk with a TikTok.
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[LAUGH] You are a parent to Gen Z kids and a marketer.
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And I'm curious because we are always talking about Gen Z and I feel like articles are always Gen Z this Gen Z that as a parent and as a marketer.
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What is something you think we're getting wrong about that generation?
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>> I think we try to overcomplicate it and the gap of understanding feels so wide, And I think there's sort of like a frustration in the way that they're moving at a pace and are going to continue to move at a pace that is beyond any other generation just because in the digital age.
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Before you had to reimagine your business sort of like every five years.
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And then I would say about ten years ago when I launched honest, it was like no, you've gotta reimagine your business and how you operate and the way that you do it every three years.
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Now, I would say it's like every year you've gotta reassess and reevaluate and reimagine.
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I think that because they're so young, maybe it's hard to, Trust that they know what they're talking about and allow them to.
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Take some leadership and hand the baton over like know what you don't know and also like, if something is meant to appeal to them it doesn't necessarily need to appeal to me or to you, right?
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And sometimes it'll appeal to me and it'll appeal to you.
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But I think that is one thing that like, I feel like when you're running a business or when you're trying to understand a demographic, you feel like you should also be on the same page as them but it's totally okay that they think the way that they think.
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And they respond to things differently than you and you don't need to take it personally and know that it's okay for you to have your differences.
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What I appreciate about Gen Z and I actually don't think of it as being an issue is just that they love authenticity. They are values driven.
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And the brand values are meaningful to them and the more that you really show up authentically, the better I think the businesses that are in trouble and appealing to Gen Z are the ones that are trying to be tricky.
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>> Well a clear of today for sure is knowing your audience and you clearly know this audience as well.
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So much about honest Co is educating the consumer.
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You've been doing that since before you even started.
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The company as many of us here are looking to start new businesses.
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Some of them might be quite complicated deep tech, web three, what have you.
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What lessons can you share about what works best in educating your consumer?
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>> Make it entertaining if it's boring for you to watch, it's going to be boring for anybody to watch.
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What I mean, if it's boring to read it, it's going to be boring for everyone.
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I think more and more because we have so much It's almost like the volume of content, it is so daunting and overwhelming and is only going to get more daunting as we start to integrate AR into our day to day.
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And as we integrate more of the Web 3 into our day to day with wearables and all that, we're going to almost have information overload and so having really short and sweet, pithy Ways of communicating, no matter if you're a software company or not even a B2B.
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I would say when we're choosing partners for the B2B type of partners are something that will help a function for in our company and in some form or fashion.
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We're always looking at how difficult is it to integrate and usually the difficulty has to do with how boring it is.
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To [LAUGH] understand it and to apply it.
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In making your materials as consumer facing as possible is important even for software companies or B2B is. >> That's great advice. Thank you.
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So you've shared incredible advice with all of us.
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And we're all super grateful for your time.
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And you're also an incredible model for so many founders from underrepresented groups and for women, so thank you for being here today.
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I could go on forever, but we do have some questions from the audience.
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So I would like to to turn it over to our first question from Jay Why. >> Hi, Jessica.
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I'm originally from Singapore and moved to the Bay to attend a GSB.
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I'm an aspiring entrepreneur, so super excited to be here.
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And my question for you is, what are some of your biggest fears in building the honest core and how do you overcome them?
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>> Maybe my biggest fear was not connecting with my truth in a way and allowing people who had trust and a history in business sort of take over the narrative or run the business in a direction that I intuitively knew wasn't right.
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>> And I felt imposter syndrome because I didn't have a traditional business degree and backgrounds.
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And so it took me a hot minute to really like step into my skin as a person and I think the more I've trusted my intuition and my gut and stood in my truth, the better I feel in everything, right?
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In business and and in life.
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But I would say that was my biggest fear.
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It's scary when you've never done it before, right?
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Absolutely thanks for sharing. >> Hi Jessica.
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My name is Kristen Lim and I am also an aspiring entrepreneur, looking to do something within the beauty space.
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I'm also a power user of honest products and I can't live without my magic mom.
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[LAUGH] I'm so impressed with honest growth in just the first year you've achieved 12 million in revenue and this grew to a staggering 150 million in revenue just two years later.
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And at the GSB we use the lean startup methodology for profit Product ideation.
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And I know from the talk that you talked about honest product ideation starting from your own pain points, but I'm curious as honest continue to scale how the product ideation process evolved.
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>> Yeah, I mean, I would say that it started from a very pure place and then [LAUGH] I allowed I sort of gave away my power and my truth for a little while.
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And I allowed for it to be a bit of a mosh pit of everyone wanting to chime in and not having clear roles and responsibilities and boundaries defined, and, I think I'm still a work in progress when it comes to that, but t76jhe biggest thing is really, again, trusting your instincts, knowing what needs to be true in order for you to have a real authentic positioning in the marketplace.
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For me, I knew my gut was telling me from day one we needed to have an in house lab and an in-house team and a regulatory team and also a sourcing team.
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Because that was the only way we were going to have true differentiation in our formulas that can meet the standards of conventional or exceed them.
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And if I was just going to operate like other companies there was no way to get there.
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It was just going to be too many hurdles and so I went through all the hurdles, right?
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But that is the biggest thing is just know what needs to be true for you in order for you to have a real authentic position and also a reason for you to even exist.
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It's a crowded marketplace so why are you here and what are you doing that's materially different. >> Thank you so much. [MUSIC]