Wharton Journal: What is Birchbox?
Katia Beauchamp: Birchbox is a discovery retail company designed to help women identify and experience the newest and best in beauty. Our model is simple: A customer signs up, receives a box of deluxe samples in the mail, visits our site to read content related to the products, and can purchase anything in full size. In essence, we are a 360 degree discovery service that enables women to discover what they really love before making a purchase.
WJ: You and Hayley (Birchbox Co-Founder) have often spoken about the importance of testing – be it a product or a business model – before doing a full launch. Can you talk a little bit about how you applied the concept of “minimum viable product” to the development of Birchbox?
KB: When we came up with idea, we were about to graduate from business school. At the time, we were so excited by the potential of our vision, that instead of developing a full business plan around it, we decided to test the model. We knew we wouldn’t have a business if we didn’t have suppliers, so the first unknown that we tested was, would beauty brands work with us? Would established brands with millions of dollars of brand equity work with us? We determined that the answer to this first question was “yes.” Two other important questions that we focused on as we designed and tested our minimum viable product were: 1) Would customers pay for samples; and 2) would samples drive full size purchases. In order to answer these questions and validate our MVP, we took a series of steps: we got product from brands, put up a simple website with a Shopify plugin, signed up a few initial users, sent out the samples, and gauged the extent to which customers would buy full-size products.
WJ: How important is content within the context of the broader Birchbox business model, and how do you see the role of content on your site evolving over time?
KB: Content has been essential to us since the beginning, and we have always felt really strongly about the role of content as a key part of the discovery process. From the beginning, we recognized the importance of giving customers the context around these products, of keeping them excited and interested by telling them the story behind each item. In fact, our first hire was Hayley’s best friend Mollie Chen, who was working as a beauty editor at Condé Nast Traveler, and who quickly became the voice of Birchbox. She managed our social media, helped build out the content team under her, drove our early marketing efforts, and always made content a huge part of our discovery-driven model.
WJ: Rocket Internet has repeatedly cloned Birchbox in markets across the globe. What is your view on the practice of cloning? How has the existence of clones impacted any plans you might have for international expansion?
KB: We feel proud to have pioneered a model that so many other intelligent minds believe in and are excited by. This has been very validating for us. At the same time, we’re realists, and we always understood that the proliferation of clones might accompany our success. We are also conscious that cloning is becoming easier and easier, and we recognize that we have to be completely aware of what’s happening in international markets. At same time, we remain laser focused on our core business, on what has made us the leader in the segment.
WJ: What are some of the most difficult execution challenges you and Hayley face on a day-to-day basis?
KB: Everything is very execution-oriented here, and we are constantly facing execution challenges, but a few inflection points do stand out. About six months into the business, Hayley and I were running a very lean team of about 5 or 6, and we were still doing virtually everything on our own. We were so involved with every aspect of the business that we had difficulty finding time to make key hires, and as a result we continued to do a lot the heavy lifting. Eventually we saw that things were becoming unsustainable, so we took a step back and dedicated ourselves to hiring, and to transferring our knowledge and vision to top talent. This was an important and necessary step in the evolution of our company, and we continue to view hiring as one of the most critical components of our job.
WJ: Thanks for your time, Katia. Any final words of wisdom for the entrepreneurial community at Wharton?
KB: Think about the different roles that you could play in the world of entrepreneurship. A lot of times in business school your focus is exclusively on becoming a founder, but there are many other non-founder roles that offer tremendous opportunity. Startups and other young organizations need incredible operations professionals, incredible marketers, and a host of other key roles that MBAs could fill. Here at Birchbox, we weren’t always sure of the role MBAs would play within our organization, but more recently we’ve seen the tremendous value they can bring to the company. It would be great to see more MBAs consider important positions within startups, even if it’s not their vision or idea. So if you’re interested in an entrepreneurial endeavor, think about where you could have impact and about how you could drive innovation, and remember that it doesn’t necessarily have to be at a company of your own. We would love to see this interest awakened in more MBAs.