P&G Buys TULA – How It Started
Like all startup beginnings, the earliest days of TULA were filled with a lot of emotions. For me personally, some words that come to mind are things like “depressed” “anxious” and “lost”. After all, I spent about a year and a half wandering the desert trying to figure out what I wanted to work on for my next business.
During this time, I started to do a little angel investing, trading notes, and deal flow with people. In particular, I found myself most engaged with Great Oaks Capital. Just a year or so earlier, they were one of the VC firms that had issued us a term sheet for my last company Spinback and the founder, like me, went to UW-Madison.
After a while, they suggested that I work out of their office and look at companies together. We talked about how I could leverage their balance sheet and they could leverage my network and operating background to incubate or invest in great startups.
That sounded like a great idea to me.
So all of a sudden, I started ‘going to work’ as a VC of sorts. I wasn’t formally employed but at least I was more formally collaborating with other like-minded people that wanted to win and do so at the intersection of startups and technology. For a while, I debated if I should be a full-time VC, but I knew I wasn’t quite ready for that path, if at all.
We ended up getting involved in a few companies together, Olapic being one of them. It reminded me how much I missed operating.
I needed to get back to it.
So off the heels of working with the Olapic team, I started to think about the world I had just come from: e-commerce.
For context, my last software company Spinback helped online brands and retailers measure how much money they were making from Facebook and social media. This was around 2010 when Direct-to-Consumer (D2C) was just coming to life. We saw firsthand what that world looked like because some of the original D2C companies like Bonobos were our customers, and this was certainly accelerated when we merged with Buddy Media (we later sold to Salesforce). But other well-known brands and retailers were our customers too. Companies like L’Occitane, Under Armour, QVC, and more worked with us to figure out their social media monetization strategy.
And then at Olapic, the team took a similar approach but instead of leveraging Facebook, they leaned into Instagram as the primary medium to promote, sell and measure e-commerce sales.
It was clear that despite both companies exiting for good outcomes, it was still super early days for e-commerce, D2C, influencer marketing, and more.
Why not revisit this idea?
So that’s what I did.
I reconnected with all of my old customers and we discussed new ideas to help them continue to innovate and navigate their digital transformation not just as brick and mortar retailers, but as digitally native brands.
One of those customers was QVC. (thanks Chris Fralic for the intro!)
We met a few times to talk about how we can pick up where we left off, but rethink strategy around things like personalization, influencer marketing, and video. I started to get a line of sight into the product I was going to build for them as a beta customer. And then in one of my meetings, the conversation shifted.
Something along these lines emerged from QVC…
“We know the world is changing. Things are moving away from traditional media like print, radio, and TV to digital media. At QVC, we have finite shelf space with TV. Our shelf space is limited to 364 days per year, 24/7 with the exception of Christmas as our only day off. We think we can unlock new shelf space by launching brands digitally. And, we also know beauty is the hottest and fastest-growing category for us. What do you think of launching brands digitally on QVC?”
As I was listening to this, I had a flashback to a day at Buddy Media. There had been a huge spike in traffic and sales in QVC’s analytics, but it was for a brand and product that wasn’t on air. This was highly unusual since they only saw spikes in sales when brands were on TV.
So I dug in and looked at our analytics. As a reminder, we helped brands facilitate and measure how much money they were making from social media and influencers. And low and behold, there was some blogger that posted on the QVC blog about how much she loved some product. Buried at the bottom of the page amidst hundreds of comments, this one blogger ended up driving more sales than most brands saw from their TV appearances. I thought then, that if I could ever build my own omnichannel brand, and partner with a retailer like QVC, with some of these new strategies and tactics I learned over the past few years, I would do it. This stuff was just getting started. We were still so early with D2C and influencer marketing and I had a front-row seat over the past few years for what worked, what didn’t and where the puck was going across all of these brands and ecosystems.
Back to the QVC meeting…
“Dan, so what do you think? Is this something you might be interested in helping with?”
I said, “It’s a great idea. After all, I know your business well and digital pretty well, but I know nothing about beauty. However, I know someone that does. Let me run this by him to get his take. Maybe we all get lunch to talk about it.”
I went back to the office on 60th and Madison.
Now, during that time working out of the Great Oaks office, I had the chance to meet other people in the office.
There was another person that was doing his own private equity investing. He’s been able to do this because of a previous success he had as one of the founding partners of Bobbi Brown Cosmetics which later sold to Estee Lauder. By that time, Ken Landis and I had gotten to know each other pretty well. I was literally working out of his office and at his desk while he was out of the city. I also got to hear his story first hand and hear how he was CEO of the cosmetic division of a publicly-traded fashion house and then later, a co-founder of Bobbi Brown Cosmetics.
I debriefed him on the meetings I had and a lot of what we discussed resembled the earliest days of Bobbi Brown. Similarly, a lot of what we discussed also resembled the best-in-class customers of mine that were the most successful with digital marketing.
We believed that for a digitally-native brand to work in the environment we were in, and actually break through all the noise and get to $100mm+ in sales, a few things needed to be true:
- We needed to be digitally native. As I mentioned, I lived and breathed this world for years working with some of the best brands and retailers in the world helping them invent their social media strategies at a time when “Facebook likes” were all the rage. Moreover, my first company in high school was a D2C e-commerce site selling urban clothing wholesale. I knew how to do this part. I could also build our first website and save us some money. Check
- We needed to understand beauty. I heard countless stories from Ken about the beauty and fashion industry. There were so many nuances that people just overlooked. Basic and obvious things that, if not accounted for early, could kill a business. Ken had this part covered through and through. Check.
- We needed to plan for retail. I saw the early days of brands trying to be D2C only and quickly understood that it doesn’t really work. At least not all of the time. For this type of product and category, we always knew we needed to work with third-party retailers. Not just QVC, but brick and mortar too. We would need to develop our product assortment, margin profile, and cost structure to let us work with retailers like Ulta and Sephora. We knew what was important to them and what it took to work with them. We believed that, just like the streaming services all vying for their own unique content, retailers would also be evolving their business to curate special, semi-exclusive brands. So we figured we could start with QVC as our first motivated retail partner, but parallel process plans with brick and mortar, while also standing up our own D2C channel. Check.
- We needed to be smart about our capitalization strategy. This was not a tech company. This was going to be a brand, turbocharged by technology. There is a difference. And that difference matters a lot especially when we thought about financing and valuations. We always anticipated a forever home for TULA to be a company like P&G and we understood how they thought about multiples in the space. We did not ever want to get ahead of our skis. So we self-financed the business to start with some friends and family coming on board too as investors.
As we worked through the must-have list, it was clear we had enough of the pieces in place to give this a real shot and keep digging in.
I shelved my tech startup.
I was now building a skincare company.
There were a few more things on our list of ‘must-haves’ that we did not have yet.
- We needed the idea! We had no idea what the concept would be and even if we did, it wouldn’t be authentic. We needed help there. We weren’t going to spend our time building a new company if we didn’t think it had a real shot of positively impacting people’s lives.
- We needed a credible, experienced partner that could help us develop the concept and business in a way that was set up for long-term success, with real science behind it. In short, we thought we needed someone with a medical and scientific background who could bring insights and perspectives we felt we were missing. In addition, we wanted someone that could relate to our targeted customer base. Ideally, someone that was a young mom, with one or two kids, running around multi-tasking and operating as a modern-day superwoman. And lastly, for icing on the cake, we wanted someone that had some commercial savviness or better yet, had some media background. We knew at some point, if we did our jobs well, that we would quickly evolve from our digital-only channel to an omnichannel brand that appeared on TV too.
Where the hell were we going to find this unicorn?
I asked my wife, Amy, for her thoughts.
While she is a modern-day superwoman, unfortunately, she was not a mom at the time nor did she have a medical background. So we’d have to go elsewhere.
A few weeks later she sends me a link.
It’s a video of the Bethany Frankel show.
I watch it and sure enough, I see this well-spoken, highly knowledgeable gastroenterologist talking about gut health.
I think to myself, she is the missing piece. We need to meet with her.
I quickly shared the link with Ken and after maybe a 30-second conversation we both agreed we should try to meet her and see if she might be interested and willing to help us determine if there is an opportunity here.
I sent her an email.
She responds almost immediately and we set up a time to speak on the phone. A few days later, standing outside the New York Times building, I gave her a ring. We hit it off almost immediately. When we spoke, she mentioned that she had already been working on her own beverage line that was focused on digestive health using probiotics and superfoods. She already had a prepared mind, and work in progress, for her own consumer packaged goods company. I thought this was perfect!
Next step… we had to meet in person.
A few days later she came by the office to meet with me and Ken. We talked about how we might be able to apply some of her thinking and work but for a skincare line instead of beverages. She shared stories about how some of her healthiest and most radiant or glowing patients, all took probiotics. There indeed was something here but we needed to investigate further. And sure enough, as we’re deep in thought contemplating this wacky idea, she takes out a few pieces of paper from her bag. She pulled out a recent article that was written by the American Academy of Dermatology that claimed “Dermatologists encouraged by early research showing link between probiotic use and clearer skin in acne and rosacea patients.” From there, we did a bit more homework and diligence in the area and we were sold.
We were going to create a health and beauty company using probiotics and superfoods in skincare products.
We started to meet more regularly.
In one of those meetings, we needed to figure out what the hell we were going to call this thing.
Roshini showed up with a list of names.
- Blue Lotus
Sure enough, on the list was TULA, the Sanskrit word for balance. Healthy and beautiful on the inside and out! It seemed fitting since we’d be the first to repurpose probiotics for the largest organ in and on our body. Our skin.
In another meeting, we picked out some packaging concepts and the color. There was a certain blue that Roshini liked. Ken didn’t have a strong preference because he is color blind. This has been an ongoing joke in every creative meeting we’ve ever had.
So there we were, with the name, the concept, the first SKUs, a launch strategy, and a diverse but highly complementary founding team.
And just like that, TULA was born.
There’s a whole lot more to the story and perhaps one day I’ll tell it. Like one time I had to work at the factory for two days straight inspecting, hand by hand, 10,000 cleansers otherwise we would have been out of business before we launched. Or the time we thought we completely bombed on our first on-air QVC appearance, only to have sold out. Or the time we beat a patent and copyright troll at their own game. Or the time I fired myself as CEO because I realized there are other people out there better suited than me to run a women’s beauty company day to day, plus, I really missed building software. See Troops.ai.
The list goes on.
People often ask me, “what’s the best piece of career advice you have ever received?”
My answer is almost always the same..
Surround yourself with people better than you, that you look up to and want to learn from. If you are the smartest person in the room, you are in the wrong room.
I think Tula is a perfect example of me heeding my own advice. From the beginning, I tried to find people better than me, to help make this crazy idea a reality. And you know what? It worked.
None of this would have been possible without the team that made it all a reality that did the hard work, day in and day out. To each and every one of you, whether you are at TULA now or were a part of our journey in the past…thank you. You are the reason we are here.
To Ken and Roshini, we’ve come a long way!
And now, TULA will be able to continue to thrive and grow with P&G as a partner and continue the mission we started just seven years ago.