Big Think Interview with Matthew Malin and Andrew Goetz
Matthew\r\n Malin: [NYU's Stern School of Business] had approached us to use \r\nour business model as a thesis for one of their semesters and I had \r\nworked with them sort of on a weekly basis talking about our business \r\nand it was really interesting because we have a very, sort of, \r\nnon-traditional business model in terms of how we’ve gone after business\r\n from a niche perspective. And as an entrepreneur, you know, we didn’t \r\nset out in, I think, a manner from which many entrepreneurs do. It \r\nwasn’t this "Okay, well, we’re going to start a business and here it is \r\nand we know we’re going to do this." It really just was a very simple \r\nextension of things we already were doing and we knew and we loved and \r\nit felt good because…
Andrew Goetz: And that we were very\r\n passionate about and I think that was definitely … You have to really \r\nbe willing to roll up your sleeves and you become a jack-of-all-trades, \r\nso to speak. And in many ways that is a great education because even as \r\nyour business grows and you start delineating responsibility to other \r\nthings, you know how to do every single job in an organization.
Matthew\r\n Malin: But even in talking to MBA students, there is this sort of, \r\nwell, "When is there a time when you don’t need to get an MBA because \r\nyou have so much experience in your business that it doesn’t really \r\nmatter? It’s not going to take you to the next level." I think that the \r\ntime for starting this business was then, like we didn’t need to have in\r\n my opinion for what we were doing. We didn’t necessarily feel we needed\r\n to have the MBA to get us to be here. It was just really sort of \r\nnatural at that point, so experience for me... one of the things that I \r\nalways talk about is having that level of experience on so many \r\ndifferent directions was really what I think helped us be to get to \r\nwhere we are today.
Andrew Goetz: And you have to be \r\ntenacious. There is no question about it.
Question: \r\nHow is your business model untraditional?
Andrew Goetz: Well,\r\n first of all we’re partners in life. I mean although I guess that’s not\r\n totally untraditional. No, I mean families and couples have done that \r\ntogether.
Matthew Malin: But I mean more specifically the\r\n model itself, like having written a business plan, which we had had \r\nsome dear friends who had started quite a successful business in \r\nAustralia... I used their business model, their business plan to write a\r\n business plan, which took me probably about six months after I had left\r\n Prada and then another year in development from start to finish when we\r\n launched. And the business itself is sort of a nontraditional aspect of\r\n how to go after business and what we’ve done is we had setup sort of \r\nthis idea of a freestanding store sort of being everything for us. It \r\nwas the store. It was the showroom. It was our opportunity to create \r\nsales. It was our distribution center, everything to the brand, so we \r\nwere sort of sitting in the store waiting on customers, packing boxes \r\nthat were being shipped to London. It was everything, all encompassing, \r\nand it sort of grew organically from there. We didn’t take investors. We\r\n are self-funded. We have grown only organically. The business has been \r\nprofitable since its first year and it has been operational since its \r\nfirst day, so while we put in an initial capital investment to the \r\ncompany, we haven’t invested any more of our own money since then. We’ve\r\n only allowed it to grow naturally in its own direction.
Andrew\r\n Goetz: Yeah, I think that’s actually the thing that is the most \r\nuntraditional is that we haven’t had a very slick marketing world, that \r\neverything has grown organically and that we don’t actually go after \r\nbusiness in a traditional way. As a matter of fact we have never \r\nsolicited any of our accounts, so everything has sort of come to us and I\r\n think that’s unique.
Matthew Malin: But it’s left us \r\nvery exclusive and having had these backgrounds where we were taking \r\nexperience we had... I had many beauty editors who knew who I was and \r\nwhat I was doing and Andrew had design editors and so we already had \r\nsort of a built in platform with those. I had had experience doing \r\nretail distribution, so there were a certain number of retailers who \r\nalready knew me and would talk to us about our brand, so in all respects\r\n we had sort of set the stage in sort of a nontraditional manner with \r\nbasically no money.
Question: What’s the story behind \r\n(Malin+Goetz)?
Andrew Goetz: I was the ultimate \r\nminimalist. I washed my face, body, hair and shaved with a bar of \r\nNeutrogena. You know, a very clean rectangle square.
Matthew \r\nMalin: Yes, and I was a beauty buyer for Barney’s when it was a \r\nfamily-owned and -operated business, so I had thousands of things \r\navailable to me that I couldn’t use and I’d bring them home. We knew \r\neach other maybe for two years at this point and eventually Andrew \r\nstarted to see that something more than just a bar of Neutrogena soap \r\nmade a difference. And sometimes—when he would sort of vet the various \r\ndifferent items—I would be able then to try something as it was my job \r\nto evaluate in the first place that might in fact be appropriate for my \r\nparticular skin type.
Andrew Goetz: I think what I \r\nlearned is, or my evolution was that it doesn’t necessarily have to be \r\nmore expensive, but there are definitely differences in quality and you \r\nuse a better product, you have better results. But I also found from \r\njust a design perspective it was baroque out there. There were so many \r\nsteps. It was very intimidating and I’m a firm believer of less is more,\r\n not only in architecture and design, but also in your whole lifestyle \r\nthat you don’t need to do 150 different things just to get out the door.\r\n The fact of the matter is we live in New York and our customers live in\r\n urban centers. They don’t have time for ritualistic ten step programs, \r\nwhich aren’t even efficacious anyway.
Matthew Malin: But \r\nmost interestingly Andrew is quite oily and his skin is fairly \r\nresilient. Mine is dry and quite sensitive. I had suffered from several \r\ndifferent existing conditions and what we found through the years was \r\nthat in fact there were only a few things that were really effective for\r\n both of us and it wasn’t a complicated understanding of these expansive\r\n ideas of skincare. It was really a great cleanser and a great \r\nmoisturizer. And when you started to then look at Neutrogena as a \r\ncompany and you start to look at three-step Clinique and these very \r\nsimple ideas; if you can create sort of the best cleanser and the best \r\nmoisturizer, you’ve really established the core of what you need.
Andrew\r\n Goetz: Yeah, you don’t need a tertiary product if you already have \r\nthe best.
Matthew Malin: Yes, so those were the real \r\nvoids that we saw in the marketplace and I think that we’ve hit home in \r\nmost of them.
Andrew Goetz: Yeah and also there was a \r\nvoid... There were very few unisex brands, you know most people, so it \r\nwas an amazing opportunity to literally add 50 percent to your market by\r\n being unisex and the fact of the matter is whether you’re a man or \r\nwoman or whatever your ethnicity is, we’re all basically biologically \r\nthe same. So this whole idea of marketing that you’re from here, you’re \r\nfrom there and you’re masculine, you’re feminine... is sort of \r\nmarketing.
Matthew Malin: It really came down to the idea\r\n of how a modern couple could shop for and use products together. \r\nSomebody with oily, resilient skin, somebody with dry, sensitive skin \r\nand it didn’t matter what your sex was or your race or et cetera, et \r\ncetera, that you could share these products and that they would be \r\nreally effective and really great.
Andrew Goetz: And even\r\n your skin type, whether the pendulum skews one way or the other, most \r\npeople are somewhere in between and have a combination of different skin\r\n conditions on their face, which can change with hormones, with age, \r\nwith weather, with seasons. It’s always a moving target, so... and we \r\ntry to address all those things in a way that other companies haven’t \r\ndone.
Question: Did you notice a big difference after \r\nyou stopped using the Neutrogena bar?
Andrew Goetz: \r\nYeah. I did as a matter of fact.
Matthew Malin: Doesn’t \r\nhe look great? He is like 80 years old.
Andrew Goetz: \r\nAlmost, but not quite. Thank you very much. Sometimes I feel like I’m \r\n80, but yeah, no, you do notice it and you feel better.
Question:\r\n What’s the secret to a successful brand?
Matthew Malin:\r\n I think that there is a lot of passion behind the brand in terms of how\r\n it connects with the consumer. That it’s real. It’s not just another \r\ncorporation creating a brand for the sake of marketing. We really tried \r\nto do something that was special and unique and fill a void in the \r\nmarketplace and to do something from a family-owned and -operated \r\napproach, something that was local and interesting and specific to our \r\ncustomer base.
Andrew Goetz: And I think also what makes \r\nthe brand so strong is that we really put so much energy into creating \r\nreally superior or great products. And people, when they experience some\r\n that efficacious, they come back and they tell other people. So while \r\nwe’re not advertising and having great marketing campaigns, we have this\r\n great guerilla or word-of-mouth campaign because people use everything \r\nand they love it so much and we’re also really true to the brand. We \r\ndon’t develop things because the season is saying this is in vogue now \r\nor this is in vogue tomorrow. We develop products that we really believe\r\n the market needs or that we would actually use. I mean, most of the \r\nproducts were developed around our own lifestyle to a certain extent.
Matthew\r\n Malin: I was going to say the same. I was going to say the same. \r\nThat we in fact, in terms of filling voids, part of it was addressing \r\nour own specific lifestyle in terms of those particular voids, so most \r\nof the products and the brand itself really speaks to how we live our \r\nlives every single day. And those experiences from Andrew’s design \r\nbackground and those experiences from my beauty background, and how we \r\ncould create something really wonderful and unique and fill these sort \r\nof marketplace voids that made a difference in a way that we would use \r\nthem ourselves because we needed or we wanted them.
Question:\r\n How has beauty technology changed since you went into business?
Andrew\r\n Goetz: Like everything else, technology keeps on rolling on. \r\nSometimes there are benefits to new technology and sometimes there are \r\nthings that don’t work out so well. So for instance what we try to do is\r\n we always try to take the best of Mother Nature and combine it with the\r\n best of technology. We find that union works really, really well and we\r\n try to stay away from anything experimental or unproven and go back to \r\nbasics. Technology also is unfortunately faddish in the same way that \r\nsometimes we see this with food: no fat, low fat, high carbs, high \r\nprotein. You know it’s "What are you supposed to eat?" and people tend \r\nto jump on a bandwagon that is generated by the press, so one day an \r\ningredient, whether it could be a very efficacious good ingredient, but \r\nif it’s fallen out of favor out it goes and then the technology has to \r\nchange to compensate for that. But on the other hand you know technology\r\n does bring advances. You know there are advances in anti-aging and sun \r\nprotection, so things that are very legitimate, but the knife cuts both \r\nways, I guess.
Matthew Malin: Yeah, I can’t think of any \r\nreal specific technologies, like dramatically different technologies \r\nthat have come into play, maybe sunscreen since we’ve started our \r\nbusiness.
Andrew Goetz: Yeah, I mean the biggest thing \r\nwould be oil-free moisturizing, which would probably have been in the \r\nlast 20 years or something.
Matthew Malin: Well I think \r\nthere would be more fads like what you’re saying. Organic had become a \r\nreal big thing over the past few years and it’s sort of died down a lot \r\nlately. That was never a bandwagon we jumped on and as Andrew was \r\nsaying, we utilize gentle technologies that are tried, true and trusted \r\nalong with those natural ingredients, similarly tried, true and trusted \r\nin the most gentle, efficacious manner, so that you’re never finding \r\nirritation and hopefully getting the very best performance. So we’re not\r\n necessarily looking for what the newest technology is. If we can \r\nincorporate something that is trustful into the brand, it’s better.
Andrew\r\n Goetz: We don’t need to reinvent the wheel every single season and \r\nthen again we’re not against organic ingredients and the problem is that\r\n they’ve been so misrepresented to the customer saying "This is \r\norganic," But you look and then you read the ingredients and it’s one \r\ningredient, which is .02 percent of the product and then the customer \r\nfinally figures this out and is disappointed and then they have to ship \r\nthis organic ingredient halfway from around the world, so the carbon \r\nfootprint that it produces is so bad for the planet, so…
Matthew\r\n Malin: And was it really organic? Was it grown indoors? Was there \r\nacid rain?
Andrew Goetz: Right, so organic isn’t \r\nnecessarily better always. I mean what we try to do is always …
Matthew\r\n Malin: Or possible in many cases.
Andrew Goetz: … \r\nlocally and use natural when we can and organic if it’s available, but \r\nwe don’t use that as the litmus test because there are many more \r\nimportant things that go into the full formula.
Question: What’s the \r\nbiggest mistake you’ve made so far?
Andrew Goetz: We \r\nhired somebody to help us with the business that was just. You know when\r\n you say you should listen to your instincts? We were feeling like we \r\nwere, I don’t want to say overwhelmed, but we needed a consultant for \r\nsomething and knew we needed a consultant, but we weren’t really sure \r\nhow to address it. And somebody had recommended somebody and we both \r\nfelt... you know there was something off and then it turned out to be very,\r\n very off. I’ll look at it that it was a learning experience and it \r\ncould have been a lot worse and you know we caught it at the beginning \r\nand now it’s almost done, but…
Matthew Malin: It’s the \r\nnewest mistake. I guess maybe it is the biggest.
Andrew Goetz:\r\n I think it was the worst mistake.
Matthew Malin: I \r\nguess, maybe.
Andrew Goetz: Yeah, because he was toxic. I\r\n mean that was the worst. It was just someone who lied and cheated and... \r\nit happens. I mean, it’s human nature and …
Matthew Malin:\r\n We’ve made a lot of mistakes, but nothing big or bad.
Andrew\r\n Goetz: Yeah, I mean we usually catch them. The good news is when \r\nyou’re relatively small all your mistakes are relatively small as well, \r\nand when you’re big they can be colossal. And so as a young, very supple \r\ncompany we can recover from them. But everyone makes mistakes. I think \r\nthe real question is do you make the same mistake twice?
Question:\r\n What’s the secret to hiring?
Andrew Goetz: I think \r\nyour gut is important.
Matthew Malin: No, I don’t think \r\nso.
Andrew Goetz: I think we probably should have done \r\nmore due diligence. I think it was just we were the business was moving \r\nvery, very fast and frantically. We know we needed somebody and we were \r\nlike all right, "Let’s just do it."
Matthew Malin: We’ve \r\nhad hires that have been sort of gut responses, which have been great \r\nand others that have not. And we’ve had other hires that weren’t \r\nnecessarily a gut response, but they were hired nonetheless and again, \r\nterrific ones; where we weren’t necessarily it wasn’t the first choice.
Andrew\r\n Goetz: The lesson is after two, three weeks we probably should have\r\n reacted more quickly than we actually did.
Matthew Malin:\r\n For a company of our size the thing that I think is most crucial in \r\nterms of what we do is hiring somebody that culturally is a good fit and\r\n if they’re smart and they fill the position in a manner for which they \r\nhave experience or we feel is appropriate, et cetera, et cetera. Having \r\nthe cultural fit and the passion for the business is probably the \r\nbiggest hurdle because we’re only 20 people of which 10 of those are \r\nworking sort of right out of our office in New York City. I think that’s\r\n the most crucial aspect of where we are for this size today.
A conversation with the co-founders of (Malin+Goetz).
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