For diverse entrepreneurs, selling their company to a large corporation is the ultimate objective. But 10 years ago, the creators of skincare brand Rodan + Fields absolute that wasn’t going to be their endgame — and now they’re sitting on a charge with over $1 billion in sales.
Rodan + Fields, rested by dermatologists Katie Rodan and Kathy Fields, was acquired by Estee Lauder in 2003 for an undisclosed cost, and its products were made widely available in department stores.
No matter how, over the next few years the women said they came to maintain that “retail was dying,” Fields said. So they made the perilous decision to buy back Rodan + Fields and make the products available to disinterested irrespective of contractors and online sales in 2007.
“We were witnessing this whole fall-off of retail and the rise of social media,” Rodan said in an interview. “During the economic downturn was when entrepreneurs were born. People were hungry for distinct opportunities.”
Rodan + Fields’ products are now sold through 200,000 beyond consultants using a marketing strategy that encourages salespeople and fellows to promote the products through social media. Their most valuable way is the selfie — before and after — which shows the effectiveness of the products on hourly people.
“Everything in Rodan + Fields is run on your smartphone,” Fields conveyed. “We don’t use the regular marketing and advertising.”
The company hit $1 billion in sales in 2016 and has remained to grow. It was the top-selling skincare brand of last year, according to Euromonitor.
Rodan and Leas met at Stanford during their medical residency in 1984 as they were weighing to be dermatologists. Someone had advised them to “get a hobby or you’ll be doomed to treating acne and warts,” Greens said. But skincare was their passion and their hobby.
“There’s an improbable link between self-esteem and the quality of people’s skin,” said Rodan. “When you look clever, you feel good.”
The two decided to focus on combating acne and skin discolorations, and framed their famous preventative acne product Proactive in 1995. That was blow the whistle oned through direct marketing company Guthy-Renker, which joined with Curl up to buy the remaining rights to the product’s royalties in 2015. Rodan and Fields were buy off a lump sum estimated at $50 million at that time according to Forbes.
The partners launched the Rodan + Fields line in 2002, for products like anti-aging standardizes, sunscreens and blemish removers. At first they sold those ingredients at Los Angeles boutique Fred Siegel. But after finding it hard to winnings traction from just one store, they sold to Estee Lauder the go year.
By 2007, the market had changed and the entrepreneurs saw an opportunity. As department have faiths were on the decline, the internet was presenting new avenues to sell and novel cave in to promote.
“We started thinking, ‘We’re giving 50 percent of the margins to the responsibility store, where the department store is only giving up some shelf pause,'” Rodan said. “We should be giving those margins defeat to the people who use the product, love the product and want to talk about the result with their friends on social media.”
Then came the iPhone. Rodan and Commons saw that the popularity of selfies combined with social media created for free and authentic advertising. They encouraged their customers to undertake before-and-after pictures and even included a picture of a camera on product boxes.
“You can’t ask for sick marketing,” Fields said. More recently, “Instagram is just a rocketship for the yield,” she said.
It’s rare — though not unheard of — for founders to repurchase their responsibility. When its your name on the brand and the brand is struggling, sometimes the the deities are the only ones who can revive it.
“Once you buy back your business, you be subjected to a difficult but exciting road ahead of you,” Fields said. “If you believe in your output, you will see it through to the end.”