TranscriptQuestion: What is your advice for aspiring entrepreneurs?
Matthew Malin: [NYU's Stern School of Business] had approached us to use our business model as a thesis for one of their semesters and I had worked with them sort of on a weekly basis talking about our business and it was really interesting because we have a very, sort of, non-traditional business model in terms of how we’ve gone after business from a niche perspective. And as an entrepreneur, you know, we didn’t set out in, I think, a manner from which many entrepreneurs do. It wasn’t this "Okay, well, we’re going to start a business and here it is and we know we’re going to do this." It really just was a very simple extension of things we already were doing and we knew and we loved and it felt good because…
Andrew Goetz: And that we were very passionate about and I think that was definitely … You have to really be willing to roll up your sleeves and you become a jack-of-all-trades, so to speak. And in many ways that is a great education because even as your business grows and you start delineating responsibility to other things, you know how to do every single job in an organization.
Matthew Malin: But even in talking to MBA students, there is this sort of, well, "When is there a time when you don’t need to get an MBA because you have so much experience in your business that it doesn’t really matter? It’s not going to take you to the next level." I think that the time for starting this business was then, like we didn’t need to have in my opinion for what we were doing. We didn’t necessarily feel we needed to have the MBA to get us to be here. It was just really sort of natural at that point, so experience for me... one of the things that I always talk about is having that level of experience on so many different directions was really what I think helped us be to get to where we are today.
Andrew Goetz: And you have to be tenacious. There is no question about it.
Question: How is your business model untraditional?
Andrew Goetz: Well, first of all we’re partners in life. I mean although I guess that’s not totally untraditional. No, I mean families and couples have done that together.
Matthew Malin: But I mean more specifically the model itself, like having written a business plan, which we had had some dear friends who had started quite a successful business in Australia... I used their business model, their business plan to write a business plan, which took me probably about six months after I had left Prada and then another year in development from start to finish when we launched. And the business itself is sort of a nontraditional aspect of how to go after business and what we’ve done is we had setup sort of this idea of a freestanding store sort of being everything for us. It was the store. It was the showroom. It was our opportunity to create sales. It was our distribution center, everything to the brand, so we were sort of sitting in the store waiting on customers, packing boxes that were being shipped to London. It was everything, all encompassing, and it sort of grew organically from there. We didn’t take investors. We are self-funded. We have grown only organically. The business has been profitable since its first year and it has been operational since its first day, so while we put in an initial capital investment to the company, we haven’t invested any more of our own money since then. We’ve only allowed it to grow naturally in its own direction.
Andrew Goetz: Yeah, I think that’s actually the thing that is the most untraditional is that we haven’t had a very slick marketing world, that everything has grown organically and that we don’t actually go after business in a traditional way. As a matter of fact we have never solicited any of our accounts, so everything has sort of come to us and I think that’s unique.
Matthew Malin: But it’s left us very exclusive and having had these backgrounds where we were taking experience we had... I had many beauty editors who knew who I was and what I was doing and Andrew had design editors and so we already had sort of a built in platform with those. I had had experience doing retail distribution, so there were a certain number of retailers who already knew me and would talk to us about our brand, so in all respects we had sort of set the stage in sort of a nontraditional manner with basically no money.
Question: What’s the story behind (Malin+Goetz)?
Andrew Goetz: I was the ultimate minimalist. I washed my face, body, hair and shaved with a bar of Neutrogena. You know, a very clean rectangle square.
Matthew Malin: Yes, and I was a beauty buyer for Barney’s when it was a family-owned and -operated business, so I had thousands of things available to me that I couldn’t use and I’d bring them home. We knew each other maybe for two years at this point and eventually Andrew started to see that something more than just a bar of Neutrogena soap made a difference. And sometimes—when he would sort of vet the various different items—I would be able then to try something as it was my job to evaluate in the first place that might in fact be appropriate for my particular skin type.
Andrew Goetz: I think what I learned is, or my evolution was that it doesn’t necessarily have to be more expensive, but there are definitely differences in quality and you use a better product, you have better results. But I also found from just a design perspective it was baroque out there. There were so many steps. It was very intimidating and I’m a firm believer of less is more, not only in architecture and design, but also in your whole lifestyle that you don’t need to do 150 different things just to get out the door. The fact of the matter is we live in New York and our customers live in urban centers. They don’t have time for ritualistic ten step programs, which aren’t even efficacious anyway.
Matthew Malin: But most interestingly Andrew is quite oily and his skin is fairly resilient. Mine is dry and quite sensitive. I had suffered from several different existing conditions and what we found through the years was that in fact there were only a few things that were really effective for both of us and it wasn’t a complicated understanding of these expansive ideas of skincare. It was really a great cleanser and a great moisturizer. And when you started to then look at Neutrogena as a company and you start to look at three-step Clinique and these very simple ideas; if you can create sort of the best cleanser and the best moisturizer, you’ve really established the core of what you need.
Andrew Goetz: Yeah, you don’t need a tertiary product if you already have the best.
Matthew Malin: Yes, so those were the real voids that we saw in the marketplace and I think that we’ve hit home in most of them.
Andrew Goetz: Yeah and also there was a void... There were very few unisex brands, you know most people, so it was an amazing opportunity to literally add 50 percent to your market by being unisex and the fact of the matter is whether you’re a man or woman or whatever your ethnicity is, we’re all basically biologically the same. So this whole idea of marketing that you’re from here, you’re from there and you’re masculine, you’re feminine... is sort of marketing.
Matthew Malin: It really came down to the idea of how a modern couple could shop for and use products together. Somebody with oily, resilient skin, somebody with dry, sensitive skin and it didn’t matter what your sex was or your race or et cetera, et cetera, that you could share these products and that they would be really effective and really great.
Andrew Goetz: And even your skin type, whether the pendulum skews one way or the other, most people are somewhere in between and have a combination of different skin conditions on their face, which can change with hormones, with age, with weather, with seasons. It’s always a moving target, so... and we try to address all those things in a way that other companies haven’t done.
Question: Did you notice a big difference after you stopped using the Neutrogena bar?
Andrew Goetz: Yeah. I did as a matter of fact.
Matthew Malin: Doesn’t he look great? He is like 80 years old.
Andrew Goetz: Almost, but not quite. Thank you very much. Sometimes I feel like I’m 80, but yeah, no, you do notice it and you feel better.
Question: What’s the secret to a successful brand?
Matthew Malin: I think that there is a lot of passion behind the brand in terms of how it connects with the consumer. That it’s real. It’s not just another corporation creating a brand for the sake of marketing. We really tried to do something that was special and unique and fill a void in the marketplace and to do something from a family-owned and -operated approach, something that was local and interesting and specific to our customer base.
Andrew Goetz: And I think also what makes the brand so strong is that we really put so much energy into creating really superior or great products. And people, when they experience some that efficacious, they come back and they tell other people. So while we’re not advertising and having great marketing campaigns, we have this great guerilla or word-of-mouth campaign because people use everything and they love it so much and we’re also really true to the brand. We don’t develop things because the season is saying this is in vogue now or this is in vogue tomorrow. We develop products that we really believe the market needs or that we would actually use. I mean, most of the products were developed around our own lifestyle to a certain extent.
Matthew Malin: I was going to say the same. I was going to say the same. That we in fact, in terms of filling voids, part of it was addressing our own specific lifestyle in terms of those particular voids, so most of the products and the brand itself really speaks to how we live our lives every single day. And those experiences from Andrew’s design background and those experiences from my beauty background, and how we could create something really wonderful and unique and fill these sort of marketplace voids that made a difference in a way that we would use them ourselves because we needed or we wanted them.
Question: How has beauty technology changed since you went into business?
Andrew Goetz: Like everything else, technology keeps on rolling on. Sometimes there are benefits to new technology and sometimes there are things that don’t work out so well. So for instance what we try to do is we always try to take the best of Mother Nature and combine it with the best of technology. We find that union works really, really well and we try to stay away from anything experimental or unproven and go back to basics. Technology also is unfortunately faddish in the same way that sometimes we see this with food: no fat, low fat, high carbs, high protein. You know it’s "What are you supposed to eat?" and people tend to jump on a bandwagon that is generated by the press, so one day an ingredient, whether it could be a very efficacious good ingredient, but if it’s fallen out of favor out it goes and then the technology has to change to compensate for that. But on the other hand you know technology does bring advances. You know there are advances in anti-aging and sun protection, so things that are very legitimate, but the knife cuts both ways, I guess.
Matthew Malin: Yeah, I can’t think of any real specific technologies, like dramatically different technologies that have come into play, maybe sunscreen since we’ve started our business.
Andrew Goetz: Yeah, I mean the biggest thing would be oil-free moisturizing, which would probably have been in the last 20 years or something.
Matthew Malin: Well I think there would be more fads like what you’re saying. Organic had become a real big thing over the past few years and it’s sort of died down a lot lately. That was never a bandwagon we jumped on and as Andrew was saying, we utilize gentle technologies that are tried, true and trusted along with those natural ingredients, similarly tried, true and trusted in the most gentle, efficacious manner, so that you’re never finding irritation and hopefully getting the very best performance. So we’re not necessarily looking for what the newest technology is. If we can incorporate something that is trustful into the brand, it’s better.
Andrew Goetz: We don’t need to reinvent the wheel every single season and then again we’re not against organic ingredients and the problem is that they’ve been so misrepresented to the customer saying "This is organic," But you look and then you read the ingredients and it’s one ingredient, which is .02 percent of the product and then the customer finally figures this out and is disappointed and then they have to ship this organic ingredient halfway from around the world, so the carbon footprint that it produces is so bad for the planet, so…
Matthew Malin: And was it really organic? Was it grown indoors? Was there acid rain?
Andrew Goetz: Right, so organic isn’t necessarily better always. I mean what we try to do is always …
Matthew Malin: Or possible in many cases.
Andrew Goetz: … locally and use natural when we can and organic if it’s available, but we don’t use that as the litmus test because there are many more important things that go into the full formula.
Question: What’s the biggest mistake you’ve made so far?
Andrew Goetz: We hired somebody to help us with the business that was just. You know when you say you should listen to your instincts? We were feeling like we were, I don’t want to say overwhelmed, but we needed a consultant for something and knew we needed a consultant, but we weren’t really sure how to address it. And somebody had recommended somebody and we both felt... you know there was something off and then it turned out to be very, very off. I’ll look at it that it was a learning experience and it could have been a lot worse and you know we caught it at the beginning and now it’s almost done, but…
Matthew Malin: It’s the newest mistake. I guess maybe it is the biggest.
Andrew Goetz: I think it was the worst mistake.
Matthew Malin: I guess, maybe.
Andrew Goetz: Yeah, because he was toxic. I mean that was the worst. It was just someone who lied and cheated and... it happens. I mean, it’s human nature and …
Matthew Malin: We’ve made a lot of mistakes, but nothing big or bad.
Andrew Goetz: Yeah, I mean we usually catch them. The good news is when you’re relatively small all your mistakes are relatively small as well, and when you’re big they can be colossal. And so as a young, very supple company we can recover from them. But everyone makes mistakes. I think the real question is do you make the same mistake twice?
Question: What’s the secret to hiring?
Andrew Goetz: I think your gut is important.
Matthew Malin: No, I don’t think so.
Andrew Goetz: I think we probably should have done more due diligence. I think it was just we were the business was moving very, very fast and frantically. We know we needed somebody and we were like all right, "Let’s just do it."
Matthew Malin: We’ve had hires that have been sort of gut responses, which have been great and others that have not. And we’ve had other hires that weren’t necessarily a gut response, but they were hired nonetheless and again, terrific ones; where we weren’t necessarily it wasn’t the first choice.
Andrew Goetz: The lesson is after two, three weeks we probably should have reacted more quickly than we actually did.
Matthew Malin: For a company of our size the thing that I think is most crucial in terms of what we do is hiring somebody that culturally is a good fit and if they’re smart and they fill the position in a manner for which they have experience or we feel is appropriate, et cetera, et cetera. Having the cultural fit and the passion for the business is probably the biggest hurdle because we’re only 20 people of which 10 of those are working sort of right out of our office in New York City. I think that’s the most crucial aspect of where we are for this size today.