Function of Beauty: A New Take on Personalization
In today’s post, we delve into the strategies Zahir Dossa implemented to scale his business, Function of Beauty, to a 100M+ valuation. Feel free to share your questions / comments / thoughts below!
Company Overview: Function of Beauty offers personalized hair care products tailored to its customers' specific hair profile and goals. A link to their website can be found here.
The Problem: over saturation in the hair care market, coupled with one-size-fits-all products, has left consumers confused when deciding which hair care products to purchase.
To put it another way, there is a finite number of products out there and an infinite number of possible problems and solutions; hence customer cohorts and one-size-fits-all products.
The Solution: personalized hair care products that suit the needs of each user.
How: The company implemented a “Hair Quiz” to pinpoint the exact hair care needs of each user. To understand which questions to ask, the company tested and iterated upon a variety of quizzes, focusing on the marginal benefit of each question. Testing of the quiz proved to be impactful, with an increasing rate of users completing the quiz and ultimately being satisfied by the end product.
Operational / Business Innovation: From startups to multi billion-dollar enterprises, personalization imposes a breadth of problems at the operational level. This especially holds true for CPGs, where the marginal cost of creating a personalized tangible product is magnified. So how did the FoB team counter these obstacles in their pursuit of personalized hair-care products?
The team approached personalization one step at a time, implementing more robust and efficient solutions as the company scaled. Let’s break it down below…
#1 – Zahir and team started hand filling each bottle. During the initial stages, the company (as with all startups) had minimal capital to expend and ultimately wanted to gauge the demand for their product. Partnering with a manufacturer therefore did not make sense for the team.
#2 – Once proof of concept was established, Zahir was able to secure additional funding to invest in custom equipment and manufacture bottles in-house. Manufacturing and bottling the formulas in-house has proven to be a key strategic step for the company. By straying away from third-party manufacturers, the company has provided itself increased flexibility in experimentation and reduced manufacturing costs in the long run. Zahir and team could experiment with new formulas, allowing the company to provide a more refined product, adapt to new trends, and expand their product portfolio in a more nimble and cost-efficient manner. Additionally, the company could experiment with new bottling processes to reduce manufacturing costs and boost their bottom-line. Not to mention, contract manufacturers have a certain minimum order size, thereby making customization on a small scale (each bottle is unique) costly.
Wrap-Up: After studying FoB’s growth story, I think the main takeaway is that disruption does not occur instantaneously – rather, it’s a process. From the outset, personalization is a daunting task that may seem insurmountable, especially on a operational and cost basis. But by staying focused on the vision, approaching the task one-step of the time, and continuously iterating / experimenting, Zahir and team were able to disrupt the hair care industry.
By Gyan Kandhari