Lara Schmoisman 0:05
This is Coffee Number Five. I’m your host Lara Schmoisman. Hi, everyone. Welcome back to Coffee Number Five. And today, I will think of beauty. And well, I’m always thinking of beauty because you know, that is one of my passions. And I love to talk to beauty experts and entrepreneurs and people that are leading the trends in this video industry. I wonder why or how are how can we come up with new products? Or how could we maintain these trends on how we make something stick? That’s really hard, because you need to have a good product, but also you need to make it stick and have a strong brand that is going to go from generation to generation. And so today, and by the time I’m very special, I’m very happy that she said yes, Hind Sebti, thank you so much. I mean, I have your bio here. And it’s incredible. You were at L’Oreal Procter and Gamble, tell us more about because it’s so much that you did

Hind Sebti 1:13
Thank you so much for having me. All right. So it’s really a pleasure to be here. So yeah, so I’m Hind I am Moroccan, I spent all my career in the beauty industry, I started at Procter and Gamble in France, and then a moved to the UK. I’m currently in London. And then I moved on to L’Oreal. So in the span of 20 Years of Beauty career, I’ve worked on all the beauty categories hair, skin, makeup, some fantastic brands, both cult brands, smaller cult brands, and billion dollar brands. And that passion for beauty led me four years ago with my partner and co-founder Michelle, I will say to create welding gas because we wanted to be to be even more hands on beauty and, and really create with welding cast, what I like to call the home of the independent beauty brands of tomorrow, the one that really connects with the consumers from a brand story products and, and really practice.

Lara Schmoisman 2:15
But you mentioned something really important to me. First of all, I love that one of the things that you told about yourself that you’re Moroccan, to embrace who we are, because I really believe that all those experiences not only being from different cultures, also living in different countries make us so much richer as a person. And to understand that culture. When I came to this country and speak a word of English on a lot of things that people were saying, or that they found funny, I did it. And in a long, long time to realize that the only understand the language or a culture where you can laugh with them.

Hind Sebti 2:58
Yeah, for sure. And equally global citizens, right? You’re somewhere where do you belong everywhere, when you?

Lara Schmoisman 3:08
And also what is incredible is that you work with these huge companies. But also what people don’t know many times is that these big companies also have small brands.

Hind Sebti 3:21
Indeed, yes.

Lara Schmoisman 3:22
So can you tell us a little bit how is the process of having a smaller brand in this in a company like L’Oreal L’Oreal or because it’s something that you go and you purchase a brand or you decided in house that you’re going to create a small brand,

Hind Sebti 3:39
The most common path for big beauty players to have, like a small indie brand, like not inhibit a small grind is to acquire them, right? Because I think often the patience and the skills you need to create a brand from scratch is very different from that to kind of grow and globalize the brand. So the brands I worked on personally there were I would say on the Colts in the side was se you know, nail color and urology for hair color which is also for for colored hair as it happens. Those were two acquisitions that were made by L’Oreal, who saw potential in these brands and took them in house to globalize down most of the source of new color brands is the independent world right? We have you know, we have seen like all the majority of the growth in beauty over the last years has been driven by this new brands that are often created independently and then acquired somehow as part of a bigger portfolio.

Lara Schmoisman 4:45
I don’t know if you have recently saw an article from Glossier, saying that the be in the brands are dying, or many of them are going out of business. What do you feel how do you feel about that? And how affect as someone At L’Oreal

Hind Sebti 5:01
The indie brands you mean specifically? We think I mean, first, I think I haven’t read the article, so I cannot comment on it specifically. But the phenomenon is, there is a very, there’s a lot of new brands, quote, unquote, that are created, I don’t think there’s a lot of new brands or a lot of collections of products. Not every brand is really a brand with a capital V. Right? Because a brand in its DNA is something that’s going to be here in 100 years. It’s not just a collections of products. And we can talk about that later. I think the fact is, the growth in the industry is driven by this indie brands, either outside independently, or inside a big strategic company like the lighthouse or the Estee Lauder is of the world. I think there has always been a huge attrition rates, you know, not everybody becomes $100 million brand, you know, the success rate is very small. And I think we talk about the successes in beauty, but we don’t talk about the hundreds and 1000s of failures. I don’t think this has changed massively, I think maybe in numbers, because more people than ever are trying to create a new brands and new beauty brands. And I think the what’s helped that is that the cost of entry into beauty has never been as easy. It’s very easy issue there. You know, you go to contract manufacturing, they will love working with indie brands before you had to have your own, you know, facilities. So with very little investment, you can start kind of having some products. And then the Econ says the E-commerce, I would say revolution few years ago, many years ago, enabled brands not to be able to have a huge amount of inventory, they could just sell by being on their website, and they could mark it on social. So that’s changed. What changed is the DTC native brands, because what made them successful 20 years ago, which is basically the various social algorithm and so on have changed, it doesn’t mean that nobody can succeed anymore. And it doesn’t mean that indie brands overall are dying. It’s just about reinventing your playbook.

Lara Schmoisman 6:59
I want to make a distinction here because what he said is something that is very true that it’s very easy to make a YouTuber in this band. Also, there are a lot of people that they think having a brand is going on, why can I buy like that? And I will L’Oreal will be interested in buying something that is white label.

Hind Sebti 7:22
Probably no, no.

Lara Schmoisman 7:24
That’s why that’s something I want to clarify, because a lot of people and I talk to people all the time, I say, Okay, you have manufacturer, I do an r&d Because a lot of time, and it’s not just slapping a label only.

Hind Sebti 7:40
I mean, the way we talk about beauty, we talk about the pyramid of beauty, right? The pyramid of success products is super importance, mostly important at the beginning, but not over the long term. Because in beauty is very easy to do, right? Because there’s no patents and so on. So product is important to establish your brand and also to deliver on the benefits you promising to consumer. But the most important assets are what your brand, how your brand is unique and different and connects with your consumer. And at the top of that pyramid is what we call the beauty point of view. How does it make me look like when I close my eyes, and I think of you know, there are maybe 20,000 red lipsticks in the world right now. And I challenge anybody to make a difference between all of them. But however we need when you think I am an eastern Ohio woman or I am, you know, an Ohio Barris woman or, I am a Java woman, you can see which kind of red lipstick you once because that’s beauty point of view, that really is a beauty archetype of what the brand makes you feel and aspire to look like is very important. That’s the magic really, when you have that certain point.

Lara Schmoisman 8:48
That’s something that I always talk to my clients that if we’re not selling a product itself with the why are we selling the lifestyle that comes with the product? Well, yeah. So you were talking about the brands and the collections. Can we go a little deeper into that? Because that’s fascinating.

Hind Sebti 9:09
Yeah, because I mean, I’ve been in this job where we do what we do at welding classes, we create brands, we haven’t been too bad on one side but also invest in brands and then we acquire bigger brands. So people ask me, oh does the world need another skincare brand? And I’m like because everybody’s launching beauty brands and I’m like first not everybody is launching beauty brands people are launching collections of products. And by collections of products. I mean something like a jump on the trends. You know, one of the ingredients is you know is trendy right now we know what consumers want so let me just try and almost like copy something that exists already and try to have my own brand but I don’t know what does products you know to answer your kind of to what’s the why this brand exists, which gap does it fulfill? What makes a brand we give the brand a reason for existing is like one For example, in our portfolio when that was very personal to me, I was like, does the world need other skincare brands? No. But does the world need a skincare brand that talks about, you know, Solea and meets experiential inspired by Morocco and the whole Arab world? There’s no brand that talks about beauty point of view of hundreds and millions of people. So we’re going to do that. Because there’s nothing like it’s right. So that’s what I always ask when people come to us for investment or anything like that, like, what’s your reason for existing as a brand, you can have great sales. But are these cells going to be here in 50 years, when somebody’s just gonna do your products may be better and cheaper? Right?

Lara Schmoisman 10:42
Those are legacies there. That’s how I should yeah, I just writing a legacy. Everyone treats a legacy it creates, yeah, Nithi. I’m not temporary. And when a brand wants we acquire? How do you go about that, because I know everything that you need to that you guys have a lot, a lot of processes in place for acquiring a brand. They need your of course, transparency, you need to get formulation, you need to make sure that they have certain compliance, if you’re a smaller brand that aspires and one day to be acquire one steps to do what it needs to make sure that they keep in mind,

Hind Sebti 11:27
I think, I mean, shoot from being from being first, when you create a brand, you need to know the path that you want to be into, right? Do you want to have a brand that you set up to run for the next 25 years? Or do you want to have a brand that you want to you know, sell, which is a completely different type of founders, I, I, I learned, I think when most I wouldn’t say this is exactly the steps to be acquired. I think when you create a brand that is of value to people that is incremental to somebody spot for you, they’re going to say I am missing, I’m a big strategic like welding gas, and I missing this in my portfolio, that’s going to be interesting because of the brand. So I need to invest in the brand. And in the I would say the second thing, what most important thing is the sustainability, the financial sustainability of the brand, I think the most common mistake I have seen in early stage is people come into creating beauty brands out of passion. And they don’t look at the unit economics. In our incubator, where we create branded welding gas, we create products from the beginning with a focus on cost of goods, of course, I want to create, you know, a heck hair brand, I know that my sweet spot is $16 If I want to sell it at $16, because I know that what works for consumers, I need my cost of goods to be x. So then becomes the prop the real like know how of how do you engineer the performance you want the product the packaging you want, but also hitting the price of the goods because sometimes brands can be super successful than not make money. And when you look at the cost you like the product is so expensive to make, that you will never be able to

Lara Schmoisman 13:11
The margins are crazy. And also you know that if you decide to go retail with that brand you’re gonna have to sell at wholesale.

Hind Sebti 13:19
Sure, yeah. And I think it’s often has been the most common mistake in digitally native brands, because the only p&l are based on the E-commerce type of margin. And then when you go retail and so we always say, you know, it’s almost like the arts and commerce, you need to have a brand that resonates that you know, your consumer, you know, you build a brand that resonates with them and create your community, and at the same time have a product that is scalable, right that we can eat.

Lara Schmoisman 13:46
And that’s a decision you need to have early on to know what the plan for your brand. Even if you swear that you’re not gonna go really pale because your plan right now I always say I assume that in the future you might want to Yeah,

Hind Sebti 14:04
and I think the world evolves so fast today that it would be really You mean that the name of the game what makes indie brand actually successful, what they can do is they can pivot quite quickly, right. And I think the world is changing so fast. It’s in the media channel that we consume, it was all Instagram and it’s Tik Tok. God knows what’s gonna be next. So you have to have this flexibility in how you reach your consumers, but also where you reach out and be it’s EECOM be it retailers be it’s, you know, b2b, whatever is the business model. And you have to listen to the consumer, right? And the consumers are changing. They’re evolving, right? So the most important thing is that it’s been in touch and see how things are going. You know, I remember a few years ago, I really wanted to launch on the digital. Now I read Oh, it’s all about retail, where the reality is about who is your consumer and are in the repeat scene back so it will be different from brand to eight to brand B to brand.

Lara Schmoisman 15:03
See, I’m so glad you said that because this is a everyday conversation that I have with that. Do you have to be everywhere? Absolutely not. You need to be where your consumer is nice. Yeah. What are your thoughts? Because right now there are so many celebrity brands or brands that they think that the only way to scale is working with influencers?

Hind Sebti 15:26
So, two thoughts, I think, celebrities, celebrity brands have had many big successes and many big failures. As I think for us and welding class, specifically, we want to have one, they’re going to be here in 100 years, and often being linked to a celebrity, is that celebrity going to be relevant in 510 15 years, right? Because they tend to be trend related to some celebrities do it really well and build a brand that is much bigger than just about being about them. And that’s brand that has the potential. So the celebrity is a tool of the brand, rather than everything is about the brand is about them. So we don’t do them at welding gas because we like this, you know, more long term in 100 years that would anybody know who so and so is maybe not right? Yeah.

Lara Schmoisman 16:17
And we see brands like Dior or Chanel, that they use very iconic figures. Yeah. Very unique. Selected.

Hind Sebti 16:25
Yeah. And they and they serve a purpose, right? Because the current icons are not the same words they had 10 years ago, 20 years ago, before it was all actresses and it began influencers. Now the question influencers I think it depends on the brand, there is beauty influencers have a helped to build amazing successes in beauty. So again, it depends where you know, where your consumers our, you know, sometimes have a brand in our portfolio called glaze, which is about it’s one year and a half old, that is all about tinted moisturizer for your hair, you know, it’s about hair, where you can see the results, but see and feel the results. Because it’s almost like makeup for your hair was very powerful is before and after. So our most successful tool has been tic toc with, you know, our own consumers and community and also big influencers. So that is a brand that has been driven a lot by influencers organically. And based on other brands, it’s very different. It’s about communities about an experience where you create a destination where people want to go and experience his service. So I think when people say that the the digital model has been broken, I think it’s just that when the Econ boom has started, it was all about the algorithm, right? So everybody thought that the only marketing was done in marketing, what actually marketing to consumers is always understanding who is your target? Where are they receptive and to which message and talking to them? Sometimes it’s simply, you know, when you have it, we have a highly sunsoil experience in in unweaned. And our most effective conversion tool is putting our product or samples in the hands of the right consumers because that’s the type of consumers we were going after. So I think there is no when people ask me is that one way of like, there’s no one way you have to understand and tailor to your audience. And the beauty of being an indie brand is you can also iterate try learn they’ll quickly do better.

Lara Schmoisman 18:22
And also I mean my sound with indie brands and influencers is normally they need to understand the influencers or is just one more tool that the brand awareness I haven’t seen for indie brands yet that working with an influencer will bring them the return of investment that they were expecting. However, I’m a true believer in content creation and working with individuals is either the testing products or working with small scale influencers that I think those tribe, more community

Hind Sebti 19:05
It depends what the objective is right because I think I my experience I have seen a few micro influencers again, it’s the states and everything usually works better when you go and influence or works above and beyond it there my call my Miko Miko, Miko is if there are sets for your message, right? What if somebody is known for their brows and they speak all the time about their brows and how they are frustrated by you know browser whatever, and you have a broad product that you send them and they love regardless of you know, the conversation is genuine and authentic right because you’re solving a problem that they have already educated their community on I care about browse and find any here’s a product that works. Sometimes when I think it’s too much of a mechanical exercise, which is oh, I need somebody who has X million follower that is not gonna

Lara Schmoisman 19:58
Exactly and that’s had that setpoint is what they trying to, to achieve, I believe in giving a gift to an influencer and they love it. And they will do amazing for a brand. But however, if you go and select an influencer and just try to pay their price tag, and it’s not something that this is just one more product that they’re going to be promoting. I don’t know how it will work for your brand.

Hind Sebti 20:25
Yeah, it Yeah. And I think in my experience, it’s very, it’s very varied. What I tell my teams are the things I worked with is, you know, an influencer strategy is, again, who are your consumers? Who are they listening to? And who do they go to for discovering new products? Who do they go to for the latest beauty whole? And I think it’s a mix, it’s always a mix. It’s not black and white, because just in the portfolio of a few brands that we have, we have very different results and different types of activations but, but I think what remains true is of course, content creation and seeing UGC, user-generated content and people like me, is always a powerful tool for consumers, they want to see how they’re how that shade of lipstick, that shade of foundation, that hair that that hair products, that skincare product works on somebody that is you know, what we call connect with someone like me?

Lara Schmoisman 21:18
Yeah, so I’m gonna become relate. Also, when you started looking into these new brands that you might be interested in acquiring, how important is the work that they have been doing in brand awareness?

Hind Sebti 21:34
Not I mean, it depends on the stage, right? When when we look at welding class, PLC, where we acquired Milk Makeup and Obagi skincare, the what we liked about these brands is they were I mean, they’re already above a certain threshold, they lay in categories that we love. So Obagi in skincare, and darme led skincare, which is a booming category within skincare. And milk plays in clean Gen Z makeup, which is again, other two main categories, we didn’t make up itself a big category. And both of them we liked that they had an authentic community love, you know, milk is the Gen Z brand by excellence when it comes to makeup. And Obagi is the number one physician recommended brand that works across the whole of, you know, domestically in the US or globally is less relevant because this is where we bring the Aleksey to scared of welding gas to help them scale what occurred, right. So it’s not about awareness, it’s about the brand fundamentals, do they? Do they play in the right category? That we that is strategic to us? Do they have the right brand that is unique and different? And looks like nothing else? And have they successfully build the community? And of course the financial KPIs or you know, early days p&l And path to profitability was already profitable.

Lara Schmoisman 22:55
Okay, and what about two small brands? Do you think that there is something in a small run that you identify as

Hind Sebti 23:01
Small what do we what do we call small? Like some

Lara Schmoisman 23:05
Like a few months in? Would you even consider a brand? That is a few months? In what in June? What stature will confer brand?

Hind Sebti 23:15
So So I think a brand that is I don’t I don’t think you would consider acquiring a brand that is a few months in because I would question why would somebody wants to celebrate that they just started a few months ago. So that’s a big question mark. And especially in the early stage of the development of a brand, the founders voice is very important, right? Because it’s often comes from a personal insight observation, any the biggest sponsor of the brand or ambassador is often in beauty. The founder, you know, either dive directly in front of consumers, or at least with key stakeholders, price influencers and so on. So I have I don’t think you get acquisition ads, you know, which the brand needs to be at double digit type of millions of revenue to be, I think, considered by most player is there’s always exceptions, but I think you need to have a proven track record of at least concept success, and that you can have traction with the rights consumers add the rights, economic, like unit economics that then can be scaled up with those early stages, mostly for investment rights. And, and I think when you’re a few months in or just starting, you look for early stage investment, who tends to be more angel investments, which are often I would say people that almost take a bet on the concepts and on the thunder, right. So that’s what you see, because

Lara Schmoisman 24:38
I’m so glad. I’m so glad you’re clarifying this because there is a lot of ideas out there, I will create this brand and it’s going to be so great that they’re going to want to buy it from me and it’s not something that it’s going to happen from one day to the next. It’s a process and as a founder you cannot think about an exit strategy to you need to You’re tired, because you’re passionate about what you’re doing. And later on, if it comes to you that you want to sell it, or you have an opportunity, but it’s your baby as a brand. So you want to take it as far as you can. Yeah. So other recommendations, would you give a indie brand that they are, they want to do things, right? And want to go into this? Right, that classic experience of having a brand and making it a brand, actually not a collection a brand and to be there for generations and generations?

Hind Sebti 25:38
I think it’s down to the motivation, I think you said it at the beginning level, which is why do you want to create brands, you know, what needs it because a brand exists to answer a need in the market that is either emotional or functional and add bow. So if you are able to articulate why your brand needs to exist, that’s already in one sentence, that’s already a great, it’s an exercise of discipline to see if I pitch it in one sentence, what’s so special about your brand? And, and I think it’s, it’s really having a clear concept of the brands they want to build today. And tomorrow, you know, how it evolves over time, and the business plan to go with it? Because that’s, you know, when you say I’m gonna build a brand, it seems like a very creative process. And it is, but I think the discipline to write it in a piece of paper, who is my target audience? What am I offering them as a benefit, functional and emotional? How am I going to talk to them to tell them about my benefits, because consumers are not waiting out there for somebody to create runs, and how this whole model is going to make money. Because ultimately, when you try to run the business, you want to answer consumer need, but you also want it to be successful. But financial,

Lara Schmoisman 26:53
It’s a business at the end of the day, yeah. And how in this ever-changing industry, because it’s changing so fast, and the trends are changing all the time. And today, we’re talking about mono ingredients, or we’re talking about a clear theory, and those are like the keywords. And then one day, clean beer is not a good word anymore. So how to create a strong brand, with a strong component that it will get over all this or how you evolve as a brand, how flexible you can be where you should be in your brand,

Hind Sebti 27:32
I think it’s it’s all about the, you know, a brand is a point of view, right? And is a point of view that needs to be rooted on an authentic belief. So if you are trying, I’m gonna if my if my motivator is I’m going to start a brand, or what’s trendy right now pleading what the ingredients, I’m going to do clean money ingredients, I am most likely to fail, right? Because I am building it on no true conviction from my side, no true consumer insight and just trying to ride a wave. The thing with trend is by trends is by the time you know them, they probably already fading, you know, you have to be ahead of the trend, if you have to be successful on a trend, try to create a trend. Now I think the best way to create a brand is to be authentic to your DNA, own DNA, what makes you want to create this brand and this is truth, a consumer truth that’s not going to change, right? When, you know, I create for example, winter, which is one I can speak about when we created it, we said this is a brand about bottling up or bottling the beauty of the golden hour. Essence and science of glow inspired by Moroccan rituals, this can exist today is going to get this in 50 years, it’s not going to change, I can change how we talk about it right as the point of view for glow means and what Morocco means and what science is, we can evolve it, you know, as you know, as things have to evolve. But the reason for existing of the brand, which is representing of spotlighting a region of the world where there’s a lot of beauty heritage, that very little focus so far, is not going to change. And it’s true for the most successful beauty brands today. What made them successful 50 years ago in their statements, brand statements is still what they stand for today, some of them might become less relevant, because as the world evolves, and this is the macro trends, not the macro trend, right? We see the world of beauty that has evolved into a more diverse, inclusive, transparent way. So these are values that consumers wants. But these are not the only values that you can build a brand on, you’re not going to say I’m going to build a brand to be transparent because the expectation now is yes you have to be transparent, you have to be diverse, have to be inclusive, you have to be whatever clean or whatever is the the format. So these are functional elements that are macro trends that you can you know some brand struggle to navigate old world and new world. But you don’t build a brand just for that unless you are a category pioneer. And you’re the first one to create a key. So you use it as a marketing tool as well. I don’t know if that answers the question,

Lara Schmoisman 30:13
It was very clear, and it’s hard. It’s hard to evolve as a brand is also a new hub here are products that they’ve been there for so long. But at the same time, you need to evolve with the generations you want if the grandmother years, and they need to be a reasoning, why the granddaughter will use natural.

Hind Sebti 30:35
Yeah, for sure. And you give a reason for people to discover it. And you and it’s your and it’s the same DNA that is reinvented. That’s what is the difference between a brand and campaign, you know, kind of names to the brand. Those evolve every, you know, every year, every year, a couple of years, you know, big ideas, but the essence of what the brand is whether its reason for being created cannot do like a 180. So that’s the trickiness when you are managing the global brands, and you see the need to evolve, but you don’t want to you have an existing stroke fundamentals that you don’t want to do is in the process. So how do you evolve without forgetting who you are, which is a very, it’s a much trickier

Lara Schmoisman 31:17
challenge. Oh, absolutely. And thank you so much for your time. I appreciate your insights. You’re amazing. I think you keep doing the incredible work that you’re doing. It’s not only that you’re seeing beauty in the world, you’re heading to stories to legacies and that’s the beauty of branding. Really.

Hind Sebti 31:40
Exactly. I love that. That’s a great, great sentence to end on. Thank you so much for having me. I really loved to chat.

Lara Schmoisman 31:47
Me too. And to you guys. And thank you for joining me one more time. And I’ll see you again next week with more Coffee Number Five. Find everything you need at LaraSchmoisman.com or in the Episode Notes right below. Don’t forget to subscribe. We’re so good to have you here today. See you next time. Catch you on the flip side. Ciao ciao.