Stories of modern business.

Courier Weekly Friday 30 October 2020

Courier Weekly Friday 30 October 2020

Courier Weekly

Nomshado Michelle Baca launched her beauty and wellness brand A Complexion Company only weeks before lockdown. The South African-born, UK-based founder explains how she did it after years of listening, researching and finding her niche in the market. Plus: can email make you calmer? We talk to the co-founder of Berlin-based email product Tempo, who says ‘yes’.

DANNY GIAOCOPELLI: Hey guys, you're listening to the Courier Weekly. I'm Courier's editorial director, Danny Giacopelli. First off, before we dig into this week's show, I hope you guys have checked out our new six-part podcast series called Looking Up. Every week, I'm joined by Amirah Jiwa, who you probably know from our Workshop podcasts, and we virtually travel up and down the UK to meet small business owners in six cities who have adapted and pivoted during the pandemic. So far, we've been to London, Manchester and Brighton. Next week, we're heading to Bristol. You can search for Looking Up on Apple podcasts or Spotify. 

Right, with that said, let's get into it. A bit later on the Weekly we're with the founder of a new email product that claims to help you focus better, we'll talk about how communication is changing during the pandemic, and what it means for productivity. So stick around. But first, I'm with the South African-born, UK-based founder Nomshado Michelle Baca who launched her beauty and wellness brand A Complexion Company only weeks before lockdown. She did it after years of listening, researching and finding her USP in the market. We're gonna dig into her journey till now, and what she's learned.

NOMSHADO MICHELLE BACA: My upbringing is a vast contrast to my life today. I am the third generation in my family to be educated, and probably the second to learn how to speak English. My mother got a scholarship to the UK and she started her education here. I spent my first formative years with my grandmother in Zimbabwe and then crossing the border and going to South Africa to see my father's family and his relatives. Life was very different, we weren't even middle class – we were very poor. It was fortunate that my grandmother was a teacher and therefore the importance of education was instilled into us very early on. She was the first to have an education, followed by my mother, followed by me.

I came to the UK as a child, when my mother prepared everything for my arrival in order to continue an education here. Things were very challenging. In South Africa there was a culture of drugs and crime. It really was a dangerous place for anybody, let alone a young daughter, who could be kidnapped. So my mother saw it as an opportunity for me to have a new life and a new start. She had managed to get out of the country for the purpose of education and she did that primarily for me. So I came to the UK for my education. It was one of the most important decisions that my mother ever made for me.

DANNY: When did you realise that there was a gap in the market and that you knew how to fill that? 

NOMSHADO: I identified it quite early as a young female who was growing in her career, having more disposable income to enjoy certain things, and one of the things that she enjoys the most are beauty products. So I identified it pretty early, that the industry was wanting something within the wellness space and within the teen beauty space. Especially as a person wanting it for myself. I would probably say that I actively began my plans in 2016. That's when I started attending trade shows, I started putting together an idea of what it could be, what I could stand for and how the brand could be formed. 

I do what I call social listening. During that time, it was really interesting to see what was happening in society. We had the softer version of Black Lives Matter happening at that time.We had Fenty Beauty come out, Roma Beauty come out, this call for diversity, of 40 shades being the standard for foundation lines and cosmetics. I thought it was quite fascinating to watch that transformation and that change. While Fenty Beauty had that first mover's advantage, it gave me the opportunity to learn from what they were doing well, but also to listen to the criticism that came from some of these foundation launches and these diversity plays. What I identified was that there was still a certain dissatisfaction with this type of diversity within the industry. It still felt a bit like an add-on. I remember having a reflection that our customer doesn't quite know how to vocalise what it is that they want, because they said they want more colours; they got more colours, but then they still weren't happy. So that means that that wasn't really the problem. 

At the time, I was really big into reading Elon Musk's biography and the first principle of that really stressed the act of asking a question before you look to provide a solution. I had to ask, what is the question? What is it that they're actually demanding and what it is that they want? That is when I discovered this desire for authenticity, this desire for heritage. Simultaneously, outside of the beauty industry, you were having this big diaspora explosion, the year of the return in Ghana, $1bn dollars were spent on investment into Ghana tourism. You had a lot of conversations about Africa and Pan Africanism. The diaspora was having a big conversation about its connection to the continent of Africa. This was all happening as an undercurrent of identity and political activism. I was able to have a look at that, listen closely and refine that over time to identify that our consumer didn't just want to be caught up to what is currently happening in the market. Whilst Fenty was new, it wasn't doing anything new, particularly as a brand. It was just catching up black women to where we should have been in the first place. What they now wanted was the future. The future meant heritage, it meant identity, it meant reconnecting to their culture or to wherever they're from.

DANNY: And you think Rihanna didn't deliver that through her bold personality? Do you think it needed more grassroots or smaller businesses to add that layer of authenticity?

NOMSHADO: I think so. Coming off of LVMH, the brand was a little bit tainted to begin with. It couldn't have the authenticity which an entirely new brand self-funded from a micro-community could have had. She began the conversation, which I think is really important. She began the conversation at a really elevated level, at a level which is at department stores, which is at the premium price bracket, where people of colour were pretty much being ignored. Having started my business, I understood why she needed that type of funding. But nevertheless, it did lack a little bit of authenticity based upon the fact that she was leveraging a platform, which was already heavily established and very European. What she did do was begin the conversation and open up a space for a company such as myself to come in.

DANNY: I know that you have a belief that there's not a lot of understanding of black skin types in the beauty world and in the skincare world. All these labs manufacture things not for that demographic – they manufacture things for white people, basically. And that skews all of the R&D and the innovation and the research, and the result is a substandard product. An afterthought for people who aren't white, right?

NOMSHADO: What I have discovered in the makings of this company is that the labs and the contract manufacturers are not incentivised to create these products because they're not being demanded by the brands. If a brand by somebody wanting to create a diverse line approaches a lab or a contract manufacturer, they need a lot of funding in order to get the lab to actually create a sample, a test; nothing can be taken from their category and from their catalogue and used without modification. That hinders a lot of companies from starting and from starting with a developed product because you already have this barrier to the market, which is a financial barrier; you have to now have minimum order quantities, you have to have an entirely new formula being made. Unless you have the financial backing for that, you're not going to be demanding it from the lab or the contract manufacturer. 

If you want to start a company, it's so much easier for you just to take what's off the shelf because they don't have high minimum order quantities when you take it off the shelf. You can just work with that if you can work with that. The problem that lies there is that with clean beauty you can't do that. There isn't a wide variety of catalogue for you to pick and choose from and then modify later. Everything has to be bespoke. Clean beauty is a space which is even less diverse than the general beauty industry. It's been spearheaded by the likes of Gwyneth Paltrow, Emma Stone and also Glossier, which does also have some clean beauty products. At least on the brand level, it's not been made accessible for people of colour. If people aren't buying at the end of the value chain, there aren't any customers purchasing. It's not because there isn't a demand, it's just because there aren't any products to buy. So if you want to create the products to buy, you now have to go to the top of the supply chain; you have to spend as much as you need to spend for product research and development in order to get it into the market in the first place, just to test it out and see if customers are going to buy.

You have a bit of a chicken and an egg conundrum, because you're demanded on both ends. What is quite interesting with clean beauty is that it is growing in demand; at a micro-scale, you have a lot of BAME founders making their own products at home. There's a lot of clean beauty when it comes to hair products and face masks and other ingredients which they're making from within their home kitchen: it's plant-based, it does fall under this bracket of clean, sustainable beauty. However, even if you’re making it from home, it does not necessarily mean that you're going to come up with a formulation that's going to be safe for use on skin for a long period of time. I see those activities happening, but from the consumer end where they're just buying different ingredients and making it themselves. That demonstrates the demand for these types of products within a brand that is established within department stores, online and also within global retailers. 

DANNY: Yeah, that makes a lot of sense. With A Complexion Company, what specific app were you then going to plug after you had this big insight?

NOMSHADO: After I identified all of these separate elements, which sometimes they seem to conflict with one another, it was about the journey of trying to bring it all together in a manner which is both sellable to investors, authentic to the consumers, effective to the user, and also different to what is currently being offered within the market. This was a really big challenge, which is why I will say that it has taken me about four years to refine the company for its current proposition. I could only lead it in the manner which I know best, and that's as authentic as possible.

DANNY: Investing, as you touched upon, was the next logical step. I know you went through a big process of trying to raise the money to get such a thing off the ground. What were your experiences with raising money?

NOMSHADO: It was the hardest thing I've ever done in my life. It was a challenge. Often, I found myself in rooms where I was seeing others pitch, others seek investment just the same as myself, but I was experiencing different questions in comparison to what my other fellow founders were. With a beauty company, one that was also being led by a solo female founder, I was asked a lot about why I wanted to do my business as opposed to how I was going to do it. There was a lot of justifying and defending my idea along the way, which made it really exhausting. Somebody can come in with a proposition that's been done before multiple times over and the questioning of that individual will always be: OK, tell us how you're going to do it – where they're then able to dig deeper into the company and share their proposition. I felt I wasn't always afforded to get to that stage. I had to justify why I was standing there in the first place.

DANNY: You've spoken about the assumption that founders can just bootstrap or go to friends and family, that people have tens of thousands of pounds squirrelled away somewhere in their bank account. Well, it's not true. Not everybody does have that. Can you talk a bit about how a lot of times people do need outside money, you can't just always bootstrap?

NOMSHADO: Absolutely. In my experience, the gatekeepers to the industry – the gatekeepers to the money – they don't look like me. They don't have my background, they don't understand the challenges that I go through in order just to stand in front of them and be able to send that email. Many of them can't even fathom a member of their family not being educated and not being able to read and write and speak English, but that's very much my reality. So I had to learn that very quickly, that I was not going to be talking to anybody like myself. I had to learn how to sell and win them over. 

I also had to be confronted with this question of why don't you have a friends-and-family round? How could I then explain that I'm an immigrant, I'm from an immigrant community, and what tends to happen within our communities is that the move from one country to another is so expensive that a family will spend all of its wealth on the education of their child. That child is the investment that will then take care of them. 

Many of my friends who also are immigrant children or first-generation children are supporting family members who are five, six times our age. We're supporting family members abroad even with our small salaries and our small businesses. That is very much a cultural thing. For the reverse to be implied, that I'm able to now go to them once they're retired and ask for money to invest in my startup, that money has already been spent. The children who are between the ages of 25 to 50 are responsible for taking care of those who are younger, and those who are older, they're the working generation. Even our personal wealth is not ours, it tends to be divided within our families. Your first paycheck is not yours in my culture, you give it to your parents. So you work the first month for free. 

Cultural differences make it difficult for many people to understand why this or that company hasn't raised a friends-and-family round. They'll assume, surely she can put together £30,000 from the network that she has? She's well-travelled, she's got a good education, there should be resources amongst her family. That's not the case, because the investment was already made. It was made into me already as a child, all the way through my upbringing until I became independent. The model which is taught in business school, that every accelerator, every book that I've read includes, this step-ladder model which assumes you start with friends-and-family round, and that that's the only way to get external funding, it does not apply to BAME communities. It creates this big £30,000 gap of funding to get us started. For many of us, even with £30,000 or less, we can do ten times more than what others can do, because we've just learned how to be resourceful. We have a community for sure. We come in big groups, many of us, but we just don't have that equity, we don't have that money. We have labourers, we have workers, we have anybody who can lend their time, but if it was taught that we needed that £30,000 just to get started, we would see a lot more diverse companies in the market today.

DANNY: That was Nomshado Michelle Baca, founder of the beauty and wellness brand A Complexion Company. Finally, spread across Europe, from Berlin and Lyon to Copenhagen and all points in between, a small virtual team of engineers and product developers are building an email client. That's what they call a calming experience to help you focus. It's called Tempo, and it has features such as batching so you can get email delivered when you want it and a focus mode for distraction-free periods. I caught up with one of the co-founders, Sebastian Stockmarr, to find out more. 

SEBASTIAN STOCKMARR: I think that it can be summed up by how you just mentioned you're one of these people with thousands and thousands of emails. For most of us in the team, when we look back, the best work and the work that we're the proudest of, that has the most impact in the world rarely happened in an email. Even though it takes up so much of our working days, that great work happens outside of email. Whether it's in a conversation like we're having now, or you're sitting writing something, in my case, or physically designing a unique product. 

DANNY: What about the competition? If I'm looking at email right now, you have Gmail, Yahoo, Outlook. You have a couple new entrants into the market, like Superhuman and Basecamp. All of those guys must have quadrillions of dollars in venture capital and market share. Gmail and Outlook, I assume have the most. Why enter that space when you probably won't get the same market share? Is there a place for an alternative email service that just does what it does really well, but never gets giant?

SEBASTIAN: That's spot on why we see a need for something like Tempo to exist. We've seen it with telcos and fintech and all these other industries where technology has gotten so good, that super- small teams like us can compete with some of the biggest, most impactful companies in the world like Google and Microsoft and who else. Then these markets fragment into niches. It's no longer about how much power you have, but how well do you know this demographic? How good are you at not building everything, but saying ‘no’ to almost everything, and just building those unique small pieces that are really, really good for that demographic. That takes a really good understanding of that demographic, and that's what we feel like we can come to the table with. Why we, a small team of seven people, can actually go in and compete with both Google and Gmail and Outlook, but also, those hyper-venture-funded companies like Superhuman and the other players that are out there.

DANNY: What is the demographic that you guys are attracted to?

SEBASTIAN: It's a lot of makers. For better or for worse, we are the demographic – we're building this product for us. We're makers, we like to create stuff, whether it's written word, or design, or code, or any of these other things, we actually create a lot of stuff outside of just communicating with people. 

We're not traditional marketing people, either. We'd rather go about it by really obsessing about what we're creating, like painting the back of the cabinet. We can see that this is something people really respond to, that we continuously obsess over the product and over these tiny details. Those turn into day-long discussions about what is that perfect thing, what is that thing supposed to be? I think this also comes from a misunderstanding in our field of how much our tools actually shape our behaviours and who we are. It is not mindless, you build something, and it actually shapes people's lives quite a bit.

DANNY: For us at Courier, since lockdown we've really doubled down on our usage of Slack. Whereas once we were in the office and we could yell across the office to ask questions, you could have lunch or go out in person and ask questions, now, it's just Slack, Slack, Slack. I imagine, across the world, more people are using something like Slack to communicate. Do you think that'll lead to a decrease in the email usage of those companies and people?

SEBASTIAN: For the kinds of things that Slack is being used for, hopefully, yes. Slack is reactionary 90% of the time, right? You see something or someone pings you, and then you have to go in and shoot something off the hip because otherwise you forget it, you can't find it again, it's gone. Even if you say something that's deliberate, considered, this thing is lost in the stream again, in a few days no one will find this stuff. We create so much random communication in there that the real golden nuggets here are also just left out. 

What we saw ourselves doing more and more in the early days of this was every time that we had to actually sit down and have an original thought, do something that's like deliberate and considered as we talked about, we fled away from Slack or Teams. We went into a writing app like Notes, something that was completely disconnected from everybody else, and where you could really sit in like this little vacuum and actually think about what you want to say. Then when you want to send it, it's there, it's not going to be changed, it's not going to disappear into a stream. It's just this unit that you now have, that you can take with you, you can reference. Hopefully, it'll give more value when you actually then open your inbox and write an email. I think it's just two very separate jobs that, right now, in many companies are being merged into one.

DANNY: What I find interesting about you guys is that you explicitly say: ‘We want you to be spending less time in your inbox.’ Most companies who design a product will use gamification to try to get you to stay in a space or to keep using its functions. That documentary on Netflix that everybody's seen, it teaches little hacks for you to click, click, click, watch, watch, watch more and more and more, but you guys try to make this as minimalist and least-addicting as possible. We're gonna batch things up, so you don't have to continuously press refresh, right?

SEBASTIAN: Exactly. If we were building this for a mass market and wanted to compete with all the other players in the mass market, we would need to use these so-called dark patterns to trick people into becoming a little bit addicted and always wanting to check and do all of these things. First of all, it's not something that any of us want to spend our time doing. It's not something we're proud of if we've ever had to use any of these things. So, again, building this for people who work in the industry, or who at least are aware of it, have watched the Netflix series here, they will value not being coerced into becoming addicted to this product. We hope that that will create an affinity that will bring them back. Then it's because they actually want to come back and not because we had been giving them dopamine hits throughout the day.

DANNY: Are you guys witnessing any other macro trends in the ways we communicate and use technology? Off the back of the pandemic, are there any ways or trends that you see communication going in?

SEBASTIAN: The problem is that the person who initiates the conversation chooses the platform. That gives this a bit of a skewed power relationship, and it's why Facebook Messenger took over, right? We force read receipts. If I send a message, I'm going to go to that platform. Some of these things have led to us getting an incredible amount of notifications each and every single day on so many different platforms, that I think unless they really, really, really, really have a strong value and a strong purpose, most of us are just getting bombarded to a point where we just want to cut this stuff out. 

DANNY: And that's it this week. As always, any questions or comments, just hit me up at [email protected]. I'm Daniel Giacopelli, Courier Weekly is back again next Friday. We'll see you then.

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