How a skin condition and not pivoting led to a million dollar beauty biz

 

A self-proclaimed beauty-addict herself, then-financier Victoria Tsai ended up giving herself acute dermatitis by testing too many beauty products on her own face. It was so bad that she needed topical and oral antibiotics in addition to antihistamines to treat it. With all the bleeding and blistering she was limited to using Vaseline as a moisturizer and subsequently looked greasy all the time.

 

Her experience made her take a more serious look at what she was putting on her skin and the chemicals that all these products contained. When she became pregnant with her daughter, she became even more dedicated to looking for non-harmful alternatives.

 

Tatcha Founder & CEO, Victoria Tsai
Tatcha Beauty Founder & CEO, Victoria Tsai

 

The trip that started it all

After getting her MBA from Harvard, she was working for Starbucks to help launch its consumer products business in China. Every two weeks she flew from headquarters in Seattle to China with a layover in Japan. While on a layover she discovered Japanese blotting papers – a lightweight paper women use to blot the oil off their skin. With her skin condition they were the only thing that didn’t irritate her skin and unable to find them anywhere in the US, she wrote to the small company in Japan that made them and told them she was interested in bringing them to the U.S.  The owner wasn’t interested but agreed he would meet with her next time she visited Kyoto, the city where they were based.

 

 

Going to the source

During her visit she learned that blotting papers were actually a by-product of the gold-leaf beating process and it was geisha who actually figured out that they could use the paper as a beauty tool. She wondered if Geisha were even real and was soon introduced to a real geisha, Kyoko.

 

Victoria Tsai of Tatcha skincare and her muse Kyoka
Victoria Tsai of Tatcha skincare and her muse, Kyoka, a geisha in Kyoto. Photo credit: Miki Chishaki.

 

She says in an interview with Inc. that recalls thinking, “Kyoko had no makeup on yet her skin was flawless.” She asked what she uses and geisha proceeded to show her various “jars of powders and waxes” which Victoria immediately bought and took back home to the US along with 10,000 packs of blotting paper. After four weeks of using the products under the instructions she’d received from her new geisha friend, the smoothness of her skin returned, and after eight weeks her skin was almost back to normal. The doctor had told her this would never happen.

 

 

Launching Tatcha Beauty

 

She soon went back to Japan with a translator to learn more launched Tatcha Beauty (more on the name) later the same year. But it wasn’t easy. As for the 10,000 packs of blotting paper, to buy them she had to sell her car and work several jobs. She also sold her engagement ring which fetched a much needed $30k.

Victoria Tsai at the airport
Victoria Tsai at the airport in Japan on one of her many trips. Photo credit: www.butterboom.com

 

She started sending samples to editors, celebrities and the TV shows etc. After getting some press and meeting with a number of potential retail partners she was eventually rejected by all of them and was told her product was not ‘hi-tech’ enough from a retail angle.
At that point she thought it was over. She thought about doing a pivot but what made her product great is that it was simple, pure and natural – there was nothing about that that fit with what the market was telling her it wanted. She didn’t think it made sense to pivot but she was quickly running out of money without a retailer.

 

 

Not pivoting was the right answer

Based in San Francisco, she tried to meet with all the VC’s she could get a meeting with but they weren’t interested and she was too small at the time for private equity funding from a bank.
A meeting with an angel investor turned out to be the big turning point. One of them believed so much in her and her product that they went to her dream retailer and asked them to give the product a chance and told them they would buy them all back personally if no one bought them. ‘I will never ever forget that, it’s the only reason we got our chance, and I’m glad we stuck to our guns and didn’t pivot’.

Tatcha blotting papers
Tatcha Beauty blotting papers – what started it all.

By 2014, Tatcha Beauty sales were $12mm+ and the company was #21 on the Inc 500 list of fastest growing companies in North America. Tactcha Beauty products are sold at Barneys New York and Sephora stores across the US, Joyce Beauty stores across Asia and online on QVC and their own website at www.Tactcha.com.

 

 

What can we learn from Victoria’s story?

When asked what her goal for Tatcha Beauty is, Victoria tells CNBC:

 

“The ultimate dream is to have a brand that is around for the long haul, a brand that in 100 years outlives me.”

 

What’s interesting is that if you believe you have a good product and believe in what it can do for people, changing it to meet ‘market demands’ is not always the answer to making it a success. Tatcha Beauty is an example of this in practice. Why change something that has worked for hundreds of years? maybe it just needs a fresh introduction.

 

More with Victoria Tsai:

 


Success stories are great but they often leave out the information we really want to know. The How They Did It series is dedicated to stories about entrepreneurs that have succeeded but with a focus on the failures they experienced,  the obstacles they overcame and the tough decisions they had to make along the way.