The Business of Beauty

For Restørsea Founder Patti Pao, Pro’s the Way to Go

RR Restørsea Founder Patti PaoNewsflash for would-be entrepreneurs: It’s okay to exist in a protracted beta mode until you figure out your ultimate game plan. Especially if that beta mode includes maintaining a retail foothold in Bergdorf Goodman, enlisting Gwyneth Paltrow as a brand ambassador and securing a $55 million nest egg of other people’s money.

Brainy, chatty and long on charm, it isn’t hard to envision Restørsea founder Patti Pao talking a potential investor into pumping big bucks into her luxe natural skincare line. Now five years old, it’s a rare species: High tech but glamorous, gentle yet effective.

It looks great, smells incredible and works. So why not dive in, capitalize on Bergdorf’s early sanctioning, and build-out the distribution, brick by brick, in the specialty store arena?

According to Pao, the bigger, better question is “why?” As in, why assume that the standard industry playbook is the one to follow? “I don’t really know why I ever thought my route to market was in the consumer space,” she says. “I think I was just so excited that I got any distribution at all based on a lab sample.”

Now 55, Pao logged decades in and around the corporate beauty trenches before embracing entrepreneurship. After graduating from Harvard Business School in the late 80s, she landed at Avon at the exact moment it was about to set the skincare world on fire with Anew, the first-ever OTC glycolic acid.

Any industry-watcher worth his/her salt knows Avon Anew was a game-changer. For an aspiring beauty mogul, to cut your post-grad teeth on a launch like that is the textbook definition of dumb luck.

Quarterbacking a Staggering Amount of Product

From there, Pao plunged into consulting, attaching herself to projects for a wide swath of brands – Elizabeth Arden, Guerlain, Peter Thomas Roth, to name a few. In total, she estimates she’s had a hand in developing a whopping 400 products.

Despite all that – or maybe because of all that – Pao was able to pinpoint one of the few remaining holes in the market: Truly effective anti-aging products that aren’t laced with harsh chemicals. Now the hottest thing in beauty (just take a look at all the marketing Sephora is doing against its new “Future Naturals” skincare initiative), gentle de-wrinklers weren’t even a twinkle in a mad scientist’s eye when Pao launched Restørsea in 2011.

It’s an oft-told tale, but interesting nonetheless: While visiting a salmon farm in western Norway, Pao was present during a mass “synchronized hatching.” Eagle-eyed, she noticed that the hands of the fishermen whose job it was to herd the about-to-spawn salmon “fry” into tanks were suspiciously youthful. Could that be result of the salmon egg enzyme-enriched water their hands were plunged into for hours at a pop?

Why yes, it could be the water. And that same H20, Pao learned, could be filtered and reduced to the youthifying enzyme itself. Voila, a miracle crème was born. One that turns back the clock without excessive peeling or irritation.

Baby-stepping into the market with her own website and Bergdorf as her sole retail account, Pao made the rounds at Condé Nast, Hearst and Time, Inc., wooing beauty editors. Having been on the receiving end of one of those pitches, I can assure you that Pao will get you to try Restørsea. Off the charts enthusiasm combined with a stellar track record can go a long way in getting jaded magazine types off the dime.

The buzz was building. Paltrow, already a fan, agreed to sign on as an ambassador. Investor dough, a $25 million chunk of which was used to lock-in the rights to the salmon-spawn enzyme water, flowed in. The obvious next step was to build, build, build.

Rejecting the Standard Industry Playbook

But Pao freely admits she just didn’t have the stomach for gutting-out that climb. After all, she isn’t some dewy-eyed millennial who didn’t have the sense to be scared about what she was up against. “Beauty is an oligopoly – it’s these huge companies with tremendously deep pockets,” Pao says. “And here I am, little Cindy Lou Who on the dust speck saying: ‘I’m here! I’m here!’ I was being drowned by the Estée Lauders of the world.”

After a few years of hemming and hawing over whether to push further into luxury retail, a new way forward emerged. And happily, it came from a nudge by a sector of the industry Pao greatly admires: Marquée-name dermatologists.

Remember, this is a woman who worked alongside the legendary Sheldon Pinnell, Albert Kligman and Eugene Van Scott in the development of Anew.

So when high-profile skin docs Vic Narurkar and Jeanine Downie reached out to Pao, requesting a professional-strength version of Restørsea, she got to work. Restørsea Pro, comprising seven “Naturally Derived And Non-Toxic” SKUs, contains 10 times the amount of active ingredients as the retail line.

Soft-launched in September 2015, Restørsea Pro is on fire. “We’ve really started selling it within the last three months,” Pao notes. “It’s in 50 points of distribution, there are about 15 accounts we have the paperwork in for, and another 90 are trying it right now.”

As for potential growth, the sky’s the limit; according to Pao, the MD-dispensed product market in the States is now at roughly $1 billion. And that’s purely the derm/plastic surgeon world and doesn’t even include salons and spas.

Of course, that’s a spit in the ocean compared to the U.S. retail skincare market, which is expected to climb to $11 billion by 2018, according to GCI Magazine. Still, it’s yet another indication that the consumer wants what she wants when and where she wants it.

To hear Pao tell it, her new baby has three huge selling points other professional lines don’t: Powerful yet gentle formulas devoid of parabens, phthalates, mineral oil and silicones; gorgeous packaging, and drum-tight distribution.

“We’re the only medical-grade brand that’s natural,” she says. “And because we were developed for consumers, our line is really pretty. Most professional brands are made by pharma companies. And pharma companies don’t make aesthetically appealing products. They aren’t packaged well, they aren’t formulated well.”

Pao’s also dead serious about ensuring channel purity for her new doctor client base. “We’re only sold at dermatologists and plastic surgeons,” she says. “All the other medical brands are selling everywhere – on the Internet, at Bluemercury.”

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Diversion is a non-issue, too. “Every one of our products leaves our warehouse with a code,” Pao notes. “If it shows up where it shouldn’t, I can tell who sold it.“

So far, so good. “Re-orders have been very consistent,” says Pao, who is actively developing additional Pro products.

Not only is the business piece of the puzzle coming together, Pao is just a flat-out happier camper in this new arena. (Sales of the original retail line are now confined to the Restørsea website. Bye bye Bergdorf.)

Though she initially hired a few reps from other pro brands, she’s since taken all that on herself. “They were great salespeople, from like SkinMedica and Allergan,” she notes. “But it’s very different selling a brand that’s 25 years old versus selling new technology.”

Since no one knows the ins and outs of her line better than she does, she hit the road. “I do two cities a week,” Pao says, “and probably see about 15 to 20 physicians.”

Criss-crossing the country wooing derms and plastics has allowed her to unleash her inner geek. “I got into Harvard Medical School and Harvard Business School because I was one of those girls who found out late in life that she was good at both science and math.” Math won out, at least for grad school.

“Everyone warned me that physicians would be really hard to talk to, that they’re so picky, that they want to know the method of action and every conceivable detail,” Pao notes. “All my life, I’ve heard, ‘You talk too much. You confuse people.’ And these guys just want more. We sit there like big science nerds and go through the whole thing. With these doctors, I’ve found my tribe.”

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