When we see a successful company in the market or interact with a particular brand as a consumer, we rarely think about all of the failures, sacrifices and persistence that it took to get there. After exploring a few of NPR’s “How I Built This” episodes, I not only have deeper admiration for startups and innovators, but I found that the most successful entrepreneurs share many characteristics and experience common themes as they establish their businesses:
They find “the greatest opportunity in the industry” and capitalize on it:
As we’ve talked about time and time again in this class, being an entrepreneur is about solving problems. In her job search, Dermalogica founder Jane Wurwand discovered that there were a limited number of skincare salons in California. Her passion and background in skincare coupled with this simple discovery led her to establish the thriving business that she has today. Herb Kelleher, co-founder of Southwest Airlines, similarly found an untapped market, specifically in Texas. He discovered that a price barrier for flying existed in the state, which inspired the launch of Southwest.
They are tenacious and have faith in their ideas:
Based on these entrepreneurs’ stories, tenacity is the foundation of any successful startup. Among various lawsuits and other airlines trying to monopolize the industry, Kelleher developed Southwest over a span of four years before introducing its first flight in 1971. Cathy Hughes, founder of Radio One, said her unrelenting faith in her abilities and contributions to the radio industry allowed her to work through the financial struggles she faced along the way. In her “How I Built This” episode, she remembers calling lenders and letting them know up front that she didn’t have enough money during particular months. However, she approached the call by saying, “I’m sending it to you [all the money I do have] as a token of good faith that I will repay every cent.” Because she believed in herself, the lenders believed in her too.
They find their “north star” and stay true to their brand:
Tony Hsieh, CEO of Zappos, talked about the company’s “north star” in his “How I Built This” episode. In entrepreneur jargon, this is your value proposition. Whatever you choose to call it, it’s important! I really like this analogy to a north star because it strengthens the idea that your value prop serves as your guide through all of the obstacles and setbacks. For Zappos, its north star is simple: It is a customer service company that happens to sell shoes.
They are forward-thinking and focused on growth
After Dermalogica’s first successful year hitting the million dollar mark, Wurwand refused to get comfortable. She expanded her products to different markets to avoid financial struggles if a recession hit and she thoroughly researched acquisition opportunities before selling to Unilever. Hughes put it best when she said, “You gotta grow or go.” If her radio station was going to thrive, Hughes knew that she had to expand to get ahead of competitors.
They enthusiastically put in long hours and sacrifice personal costs to see their ideas come to fruition:
Hughes slept on the floor of the radio station, Hsieh burned through personal cash and sold apartments he owned to support the early research and “testing phase” of Zappos, Wurwand lived off $300 a week for years (supported by her husband’s income at the same time), and Kelleher paid for Southwest’s many court costs out of pocket. Enough said.
After learning about the work and sacrifice that goes on behind-the-scences, it was interesting to read the Inc. article, the Psychological Price of Entrepreneurship. Exploring the anxiety that many startup founders experience can spark another discussion that plays into these ideas of tenacity and failure that are associated with entrepreneurship.
Based on the lessons we’ve learned in JRN 450 this semester, I’m going to break down some key points regarding Dermalogica as a brand:
Market – Skincare therapists both nationally and internationally who want the best products for personal clients and/or who are seeking continued education as professionals.
Potential Audiences – New skincare professionals trying to establish themselves in the industry, seasoned professionals looking to set themselves apart with new products, skincare salons seeking new products for their employees to use.
Value Proposition – “Make skin therapists more successful.”
Setting themselves apart – You can’t find these products on the shelf in any drug store. The company is not guided by improving one’s beauty, but rather making one’s skin healthier. The products are free of irritants like lanolin and are used primarily by skincare professionals who see results.
Revenue – Prior to launching Dermalogica, Wurwand established the International Dermal Institute where she made revenue by teaching post-grad courses to licensed skincare professionals. Now with its expanding product line (and loyal base of students graduating from the program), revenue comes from sales to consumers and skincare professionals.
Potential Competitors – Any health/beauty brands that sell similar products like exfoliants, moisturizers etc., including Clinique and Neutrogena.