This week’s featured founder is Ju Rhyu, Co-Founder of Hero Cosmetics. Hero Cosmetics is an acne and skincare brand. Hero started out with the Mighty Patch, an acne patch which provides you with a real solution for pimple emergencies. When I mentioned to my 14-year-old daughter that I was interviewing the founder of the Mighty Patch, she knew exactly what it was.
This week’s featured founder is Ju Rhyu, Co-Founder of Hero Cosmetics. Hero Cosmetics is an acne and skincare brand. Hero started out with the Mighty Patch, an acne patch which provides you with a real solution for pimple emergencies. When I mentioned to my 14-year-old daughter that I was interviewing the founder of the Mighty Patch, she knew exactly what it was.
Ju’s story really paints the picture of how someone can leverage their corporate career to build their own business. Ju’s career includes experience with big-box retail and direct-to-consumer experience. Both channel strategies she now employs with Hero Cosmetics.
Her journey is one of perseverance. Ju tried to bring Hero Cosmetics to market in 2013, but found herself overwhelmed with the cost to do so; so she tabled the idea. Does that resonate with you? Does the weight of what it will take to execute on your idea cause you to not execute? Well, then you are going to find some tremendous value in today’s conversation. This is Ju Rhyu’s startup story.
“Fundamentally everyone can be an entrepreneur, but not everyone will have the ability to withstand the hardships that come with it.” – Ju Rhyu, Hero Cosmetics
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Hero Cosmetics: https://www.herocosmetics.us/
Hero Cosmetics on Instagram: https://www.instagram.com/herocosmetics/
Ju Rhyu on LinkedIn: https://www.linkedin.com/in/jurhyu/
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Special Guest: Ju Rhyu.
The Startup Story - Ju Rhyu
Ju Rhyu: Hi this is Ju Rhyu, cofounder and CEO of Hero Cosmetics, and this is MY startup story.
Every wildfire began with a spark. Every superhero has an origin story. And every single startup has a moment that they point to as their beginning. And every founder has a purpose that drove them in the midst of all obstacles. THAT is The Startup Story.
James McKinney: Before we jump into this week's episode, I want to say thank you to the team at Fuse Dynamic Workspace for allowing me to use their podcast studio to record this episode. If you ever find yourself in the Dallas, Texas area make sure to visit workatfuse.com.
And also, we've got a couple of cool things for you here as a startup founder. First, if you're looking for a funding solution for your startup, make sure to listen through the entire episode for a special offer from our partners at Brex. It could absolutely be a game changer for you. Also, if you'd like to advertise your startup on the show for free, then just make sure you plug your business when you leave a written review in Apple Podcast. If you leave a written review, I'll read it in an episode so if you do plug your brand, URL, or even your Instagram account you're basically receiving a free add in an episode that will last for a very, very long time. It's just my way of saying thank you for leaving that written review. Don't get me wrong, I love seeing a new five star rating appear in our show listing on Apple Podcast, but the written reviews have a significant impact as it relates to being discovered within the new Apple Podcast platform. Climbing the charts on Apple Podcast is not just about listeners, but it's about engagement. Listening is one way Apple measures engagement, but written reviews have a multiplying effect. So please leave those written reviews. And now, let's jump into this week's episode.
Our guest this week is Ju Rhyu, cofounder of Hero Cosmetics. Hero Cosmetics is a new acne care 2.0 brand. You might be thinking what does acne care 2.0 even mean, James? Well, let me tell you. Back in the day, acne care was pretty basic. Basic and harsh. You go to the grocery store and buy some harsh chemical based product. In my day, it was Oxy Pads. It's kind of a one size fits all kind of treatment when it came to acne care. Everything kind of smelled the same, used the same, all wipe based, maybe some kind of creams. But it all just kind of assumed all skin was the same. Now, don't even get me started on what acne care was like in the Marine Corps. Oh man, was that harsh. Well, in case you were not aware, there are numerous brands out there today that have created a solution that is better for the skin and the person. Hero Cosmetics is one of those brands.
Hero started out with the Mighty Patch, an acne patch that absorbs and sucks out puss and fluids from white… No, I'm sure you probably wanted to hear all this first thing in the morning on your commute to work, huh? Well, that's just the reality of it, right? It's a really cool product that takes care of the blemishes on our faces, especially in the case of emergencies. In fact, when I mentioned to my 14 year old daughter that I was interviewing the founder of the Mighty Patch, she knew exactly what it was.
Ju's story is a great one because it really paints the picture of how someone can leverage a corporate career to build their own business. Ju's career includes experience with big box retail and direct to consumer experience. Both channel strategies she employees with Hero Cosmetics. What I also love about Ju's story is that she tried to bring Hero Cosmetics to market before this go round we see today, but she found herself overwhelmed with the cost to do so, so she tabled the idea completely. Does that resonate with you? Does the weight of what it will take to execute on your idea cause you to just not execute? Well, then you're going to find some tremendous value in our time with Ju today. With that said, let's go back to the beginning and hear how it all started.
Ju Rhyu: I'm Korean American by background. I was born in Korea. We moved to the states because of my dad and his job, and he was actually working for a corporate Korean company back then. Then he moved to Seattle as an ex-pat. So he was there on an ex-pat assignment, but he knew that he had more of a future in the US rather than in Korea, so he actually quit his job and then…. He had a lot of relationships. He was working as a log broker, or he was working in the logging industry. That's why he was in Seattle. Then, he quit his job, took his relationships and started his own company.
James McKinney: His own logging company?
Ju Rhyu: Yeah, logs. He was a log broker so a lot of his customers and clients are in Korea, and then he sources from suppliers. Usually they're in Canada and Washington. That's why he lived in the Pacific Northwest. So he started a company called Wood Resources. That's my sort of entrepreneurial influence I guess is watching my dad. He worked from our house, never really had an office. He managed his own schedule. I mean, he travelled a lot. He travels as much, actually probably more than I do even now. He's like 71 now.
James McKinney: Oh my goodness.
Ju Rhyu: But yeah, so I grew up with an entrepreneurial father.
James McKinney: Was that something that was attractive to you? Or during your childhood obviously there were hard seasons that your dad went through, just like every entrepreneur goes through. So was it attractive or was it something you just said I don't want that life?
Ju Rhyu: To me, it was attractive because I liked how he owned his own schedule and so when we were planning vacations, he always went with us or could go with us because he didn't have to get approval from someone or watch his schedule as much. He had a lot of ownership over his own schedule, and that was the kind of lifestyle that I thought seemed great.
James McKinney: That's awesome. So are you an only child? Or you one of-
Ju Rhyu: I have a younger brother.
James McKinney: So you're the oldest, which means your parents learned on you.
Ju Rhyu: Yes, yeah. And I was the responsible one. Always did well in school.
James McKinney: There's always that mix, and that's what I love about just the general sibling story. Maybe the sibling story would be a whole separate podcast, but I love just the differences in kids and what that does to the parenting, and the influences it creates. So as you're going through your childhood and you're seeing your dad with his business, I assume there were some hardships in your upbringing within his entrepreneurial space, because again just from the nature of owning a business, there are high seasons and there are low seasons. Was there any low season during your childhood within his business?
Ju Rhyu: I do remember when I was younger. I didn't ask so I don't know if it was because his business wasn't doing well, but he was… he was very stressed, had a short temper, and it definitely affected sort of family dynamics at home. It was probably I don't know exactly how long, but there was a period like that. But again, I never really asked him if it was because his business was struggling or if there was something going on. But I do remember there being kind of a tense atmosphere.
James McKinney: So when you were coming to the end of your high school years, what were you thinking you wanted to do? What was that next step? Obviously, high school being a natural end of a chapter into a new one, what were your thoughts on what that next one was?
Ju Rhyu: I actually thought I wanted to be a doctor. I guess, I don't know, as like sort of every Asian parent… it's funny because a lot of Asian parents, they want their kids to be lawyers or doctors, and so when I wrote my college essays I wrote about wanting to be a doctor, although my parents did not want me to be a doctor. They persuaded me to not go that route.
James McKinney: Did they say why?
Ju Rhyu: Well, they thought it was just going to be too hard. Actually looking back, I'm glad I'm not a doctor. I have friends who are doctors and it is, it's a rough lifestyle. Just the years of training. You go to undergrad, then go to med school, then do residency. It just sort of… yeah, I think it's tough. I think they didn't want me to have that kind of hard lifestyle due to all the training. So they didn't want me to become a doctor, which is different from a lot of Asian parents. If I wasn't going to be a doctor, I mean I didn't really know. I really had no idea. Even well into college, I really struggled with what I wanted to do.
James McKinney: Was there any pressure? Actually, before I get into your college years, you talk about your parents talking you out of being a doctor. I reflect back on one of our earlier episodes with Tiffany Sorya, the founder of Novel Education Group. Her parents immigrated over here to the US so she's US born, and one of the things that she said was the expectations for her were different than for her brother. Was that similar in your family?
Ju Rhyu: No, I don't think so. Actually, if I would say maybe expectations of me were higher just because I did better in school, I was the oldest, and so I think yeah, they probably had higher expectations of me.
James McKinney: So you're in college, you're not quite sure it is what you want to do. What was your major? I'm assuming business or what was it?
Ju Rhyu: I went to Brown, so very liberal arts. I had a dual major. I studied history and international relations. I don't know, I just like struggled with what I wanted to do. There were a lot of people who did consulting or banking, or more of those kind of traditional routes. I did an internship and then there came a point where I was like you know what, I think I want to go into marketing. I think that's what I could be good at, and I think that's what I would be good at. I wanted to do something kind of creative so I wanted whatever I did to have a creative element to it. But then I wasn't really a designer. So I thought marketing would have been a good way to express creativity, but still have some built in business skills.
James McKinney: Now looking back within the framework of your upbringing, was there any signs that creativity was a passion of yours in any way, shape, or form?
Ju Rhyu: I always loved making things, so I was always working with my hands. I loved to bake. I loved to knit. I just remember a long time ago, there were these little I forgot, it's like plastic or something and you like color them, and you put them in the oven and they would shrink.
James McKinney: Oh yeah, yeah.
Ju Rhyu: Remember those things? Yeah.
James McKinney: Those little tiny circles you would put in there and it would become an object as they melted together, yeah.
Ju Rhyu: Right. They were stuff like that. I was just really like handy and hand crafty. I loved doing things like that. I used to draw. So I had a lot of sort of creative hobbies.
James McKinney: Got it, okay. So obviously, getting back to these bread crumbs of life, we can see that creativity was definitely part of your childhood as it is many, but there's a leaning that's stronger for others than most. So you have an internship with who? Who's your internship with?
Ju Rhyu: It was a publisher. I actually can't remember their name.
James McKinney: No worries.
Ju Rhyu: But it was a publisher in Boston, and you know what I can't even remember exactly what I did.
James McKinney: That's fine. But there is where you discovered marketing as something you were interested in.
Ju Rhyu: Yes.
James McKinney: So you finish, I'm assuming and correct me if I'm wrong, but I'm assuming you finish up your undergrad with the idea that you're going to intern in marketing. So again your major was in what?
Ju Rhyu: International relations and history.
James McKinney: International relations and history, both of which, maybe international relations I can see playing well into marketing but history I don't see the link. But obviously it worked for you. You mentioned a few times that you wrestled with not knowing what you wanted to do in college. Was that because again you went to Brown, which high level institution. I'm assuming many people went to Brown already kind of knowing what they wanted to do, so was that part of the tension for you is that you were surrounded by people that kind of had a vision for what they wanted to do already?
Ju Rhyu: I don't know if it was as much that, but it's a very unstructured education. So there's no core curriculum. They really leave you to design your own education. It's a very sort of free place, and for people perhaps like I needed more structure than I thought, but I know other people who looking back they were like it probably wasn't the right school for me because I definitely needed the structure. But when you're sort of left in that kind of environment where it's like hey, the world is your oyster you can do whatever you want, you tend to get kind of lost. If you don't have a really clear passion or direction, you could be like I could do this, or I could do that, or maybe I should do this. Then you can end up just wasting a lot of time.
So I think it was an environment where I probably had too much freedom and too much time to sort of dwell on what should I do, do I want to do this. Then, you know, there was always that idea of oh, you should follow your passion, do something you're passionate about. But then that also becomes a very tall order like what is that passion that I'm going to turn into a life career. I think it was a very open place with not a lot of structure, and then for someone like me I just sort of got kind of lost in the unstructuredness.
James McKinney: That's interesting. So I definitely I want to table that thought for when we get to your journey into Hero because entrepreneurship doesn't always have a lot of structure. Kind of want to bookmark that thought as we continue on for when we talk later. So as you complete your time with Brown, what was your first step?
Ju Rhyu: I worked for a startup called Compete. So this was back when it was like data analytics based off of IP and sort of web browsing analytics. They had a lot of panel data. This was like 2001 or 2002, so I worked there. I was an analyst there, analyzing a lot of our data for clients. So our clients were like an automotive vertical, a retail vertical, so it was a lot of web analytic data analysis. It was that type of company.
James McKinney: But what drew you there, being that you wanted to be in marketing?
Ju Rhyu: Well honestly, I didn't have a lot of choice because I was just going to say that I graduated basically during the recession.
James McKinney: Oh, okay.
Ju Rhyu: So I graduated in 2001, so remember I graduated like June 2001. I moved to Boston. I graduated without a job. The plan was I was going to move to Boston and look for a job. So that summer I was looking, and then September 11 happened, and then the whole world sort of everything just kind of collapsed. Then it became even harder to look for a job. I just remember I had other like friends who they had graduated with job offers, and then the companies had delayed them for like nine months or maybe didn't even honor those job offers. I didn't have a lot of choice. I couldn't be picky at that moment. I applied to a lot of jobs and this was the offer that I got, so I took it.
James McKinney: Awesome. So how long were you with compete?
Ju Rhyu: I was there for about I want to say two years or so.
James McKinney: Two years. And then what was your next move? Because again, as of right now the mindset is that you want to be in marketing, but now you're an analyst for a big data company. Did your focus shift at that point or was your next move to fulfill what you ultimately wanted to do?
Ju Rhyu: Okay. So my next job was at a nonprofit. I think you'll see from my career path like a lot of self exploration, trying to find that answer. So I got this first job because honestly that's all I could get at that time during this economic crisis. Then I kind of had this desire to do something for the social good. I wanted to make more of a positive impact on society, and there was an opportunity. It was a private school for low income students. It was called Epiphany School and the position was in development. It's basically fundraising, which is basically marketing for a nonprofit so it's a lot of telling the story of the school and the programs, and then talking to potential donors and prospects to get them to donate to the school. I was there for three years. Actually quite enjoyed that job. It was a good job. I learned a lot from them.
James McKinney: What did you enjoy most about that? I can see the correlation to marketing. Obviously, the social good, I can see a lot of things that would fulfill you in that regard but you're not there now so there's a reason you left. So what is it that you loved about it and why did you end up leaving?
Ju Rhyu: I really liked the relationship aspect of it. I loved talking to people, building relationship with donors and people in the community. What I didn't like about it, it was just sort of after three years I was doing the same thing every year. I didn't really feel like there was a lot of room for growth. I just wanted to go back into business. I felt the nonprofit world was great, but I actually thought that I could make more of an impact in business just because I thought there could be a bigger audience or just more opportunity. So that's when I started thinking about business school. Actually the woman who I replaced, she worked there… she worked at this nonprofit and then she went to business school. So when that happened I remember thinking oh, that would be interesting next step for myself after spending some time here. Maybe that's something I should consider.
James McKinney: So you were there for three years, you were for the previous Compete for two years. So we're talking now we're at 2006 or 2007. What was your next step after Epiphany?
Ju Rhyu: So I did apply to business school, and then I went to Columbia business school. That's how I ended up in New York.
James McKinney: Okay. So that's how you end up in New York. What was going on in your time at Columbia? Because one of the great things about graduate schools is the networking. We can have all kinds of dialog about whether or not in today's day and age if higher education is necessary, but one of the things that is not something we can argue is the value within the networking, and Columbia being a great school. But what were some of the things that were taking place in your life and in your thought processes for the future while you were at Columbia?
Ju Rhyu: For me, it was a strategic move. I wanted to go back from working at a nonprofit to going into business. I knew I lacked a lot of the business skills because I didn't have a traditional sort of business background, so I went there to learn a lot of the foundational aspects of business and then segue myself into a more corporate job in additional to meeting great people, which I did. I was able to accomplish that. I did my summer internship at Kraft Foods in brand management, which back then brand management was that's where they groomed the future CMOs and CEOs. I don't know if that's any longer the case, but yeah, so I got my internship there and then I ended up going back fulltime.
James McKinney: So what year did you graduate Columbia?
Ju Rhyu: 2008.
James McKinney: 2008, so 11 years ago. So up until 2008, was there anything on your radar, now looking back, was there anything on your radar that thought you might end up starting your own thing?
Ju Rhyu: Yeah. I'd say like back then it was always sort of something eventually I wanted to try or do, but for me at that moment I definitely wanted a more corporate job just to have sort of that resume validity or kind of that validation. So it wasn't for me at that moment, but I knew in the back of my mind that perhaps one day I might start something.
James McKinney: Got it, okay. So 2001 you finish your undergrad in a season of economic downturn. 2008-
Ju Rhyu: I know. I graduated into two recession.
James McKinney: I was just going to say, you finished Columbia in arguably the worst recession we've ever had in the history of the United States, but it sounds like your story is a little bit different where now you're doing something within Kraft Foods that you wanted to be doing, so that was incredibly fortunate. But your timing is impeccable. So inside of Kraft what is it that you were doing, and how long were you there for?
Ju Rhyu: I was working there as an assistant brand manager, or associate brand manager. So back then, a lot of the big CPG companies, that was where you went to get your marketing training. They had a very sort of what they say is classically trained in CPG marketing, and it's really about consumer research, consumer insights, the distribution models really around retail. So back then they never sold anything D to C. I started out in the Planters brand, so Planters Peanuts. I worked on that. The first year was really all about analytics and forecasting. That was really the base of your training there, and then you'd have one off projects like launching new products or changing packaging.
I moved onto another brand called Back to Nature, partly because my manager on Planters… I mean Planters was a billion dollar brand. It was almost like a corporate environment within Kraft Foods because it was such a big brand, and then for my second assignment my Planters manager recommended me for a smaller brand called Back to Nature which was like a $30 million brand because she knew I was very entrepreneurial.
James McKinney: How did she know that? What signs were being given at that time?
Ju Rhyu: I don't know. I can't remember, but probably I expressed wanting to do things related to new products. That was the part that I really liked. Ideating and brainstorming, and thinking about the future. I think that was probably a hint. Honestly, I don't quite know but yeah.
James McKinney: And I ask that question because I truly believe in every season, there's a grooming that takes place for the next season. Obviously, in your time at Kraft and just hearing you talk about your time in the Planters brand, I can see how all of that really set you up well for what became Hero Cosmetics, just from the knowledge you were gaining, the understanding of big box retail and how brands connected with consumers, even though they didn't do direct to consumer for Planters.
I also believe too that entrepreneurs can sometimes be groomed as an intra- preneur. There's things that within large organizations and that's where as we understand those types of breadcrumbs, like for the listeners that have a 9 to 5, that are falling into this idea that entrepreneurs of a set identity, like no sometimes it starts as an intra-preneur and your employer becomes kind of your first investor as you're learning the foundational things in order to do your own thing at some point.
Ju Rhyu: I totally agree, and actually I remember I considered myself more of an intra-preneur because even at Kraft Foods the things that I liked to do were very entrepreneurial. Again, launch new products or launch new brands, thinking about those types of things. Then the next job after that was at American Express and that was working on a new product launch at the company. Those were the types of jobs that I really enjoyed. I was also very frustrated because being a sort of intra-preneur within a bigger company, it's tough because you… it's not quite an entrepreneurial environment. You still have so many approvals to get or legal has to sign off, or you still have to fight for resources because there's like 50 other business units. Yeah, it was still kind of challenging.
James McKinney: I love that every time, across all the interviews I've done, anytime someone mentions legal there's this posture that just changes. It's like legal has to get involved… all the time. I have to believe if you're an attorney, you just know you're the buzz kill of the company. Like I have to believe it.
James McKinney: Look, as a startup we know that legal concerns are necessary but oftentimes we table their importance because attorneys can be a challenge to work with and be so friggin' expensive, especially when it comes to IP work. All of us know that it's important to protect our brand. I mean, past guests we've had on the show even shared about some of their challenges as it relates to brand protection because they didn't prioritize it when they were getting started. In some cases, that misstep cost them hundreds of thousands of dollars.
All that to say, if you are a startup or an international brand, reach out the team at Creedon. They get all the challenges all of us face when we're starting a business from scratch, and that is why they're giving a 30 minute brand consult to all of The Startup Story listeners as well as a $200 discount on a US trademark application. Just Creedenpllc.com/startupstory. Now that's Creedonpllc.com/startupstory to schedule your consult today. Again, creedenpllc.com/startupstory. We'll also include a link in our show notes. But don't delay protecting your brand. I'm telling you, they're the ideal legal partners you want as you build your business and brand.
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James McKinney: So, you're with Planters. Again, because you can start seeing all these puzzle pieces fall into shape. Your first venture was with a startup at Compete, then you went into doing business development for a nonprofit, and then you went back to business school and you're now with Planters and you're working with this massive brand, doing a ton of incredible research around the brand and consumer aspects. Then you move into a smaller brand within a large organization, and then you jump to Amex for an entirely new product launch which is, other than the fact that there's a much larger pocketbook, that is very much, even inside… I worked at Disney and was part of a brand new initiative and so there is a startup like atmosphere in that space. It's still very different, but it's a lot like it. So you started seeing these things. I can see how we're now getting to Hero, but what was that product launch at Amex and was that opportunity the reason you left Kraft or was there another reason you left Kraft?
Ju Rhyu: The other reason I left Kraft, I think CPGs or at least Kraft at that moment, they were just so slow to embrace digital. So back then, that's when Facebook was sort of being looked at more, more for the social network aspect and less for the ad buying. Instagram didn't even exist. Then like my brother actually joined Facebook at that time and we would talk shop. I knew that the future was in digital and I got really frustrated with how slow the company was to embrace digital. So I went to Amex because the business I worked on, the product I worked on, was a digital product. Also, it's slightly different because a place like Amex, they actually own the relationship with the customer so you can send direct emails, and talk with your customers directly. But then at place like Kraft, you rarely own the consumer relationship because you always go through a retailer. The end buyer of your product usually buys it from Target or Walmart, so it's actually their customer. It's like kind of a nuance but it made a really big difference in terms of marketing and how you market. That's definitely something I wanted to learn more of, having the direct relationship.
James McKinney: Those two types of interactions that you experienced with Kraft, not having that direct relationship with the consumer and then Amex, having that direct relationship with the consumer, did that impact how you developed Hero Cosmetics when it came to that point?
Ju Rhyu: Yes. Yeah, because at Hero we via our D to C channel, we have the relationship with our end customer or end consumer. It'll be interesting. We'll probably get there but I do feel like it kind of comes full circle because I have the direct relationship with the consumer, but then we also sell via retail which reminds me a lot of my time at Kraft. Sometimes I'm in these meetings, I'm like oh my gosh, I'm having flashbacks to my time at Kraft Foods.
James McKinney: Well, at least they're flashbacks and not sweats, so we're good. There's no PTSD in your time dealing with big box. So you're at Amex. You're launching digital product. Can you share what that product was? Is it still in existence or is it no longer?
Ju Rhyu: No, they killed it. It was a web… what did we call it? A browser plug-in called Insight. So it was a piece of software that you downloaded onto your browser, kind of like an add on. What it would do is it would scour the internet for sites where you had membership rewards offers. So for example, if you were looking for sneakers and you Googled sneakers, and your search results would populate it would have a little symbol, like a little Amex symbol, next to all the sites where you were able to get 3X MR points, or 2X membership rewards points, or free shipping. So it was sort of like a shopping helper.
James McKinney: Okay. Now, just out of curiosity, for Amex users, how important is the membership side of Amex versus just the utility of a card?
Ju Rhyu: Oh, it's really important. For me, and I definitely know people who are points gamers, the points aspect is a really important part of having an Amex card for sure.
James McKinney: Okay, awesome. So how long were you with Amex for?
Ju Rhyu: I was there I want to say for two or three years.
James McKinney: So this brings us to 2012 if my math is right as we go through your timeline. It's around 2012 that you're leaving Amex. What was your next step out of Amex?
Ju Rhyu: I moved to Korea for two years as an ex-Pat for Samsung. So Samsung, their credit card division because they saw that I was of Korean heritage, they saw I worked at Amex and they had an ex-pat program where they wanted more Americans to work in Korea so that they could knowledge share and really help grow their business. So I moved to Seoul for two years.
James McKinney: What was that experience like?
Ju Rhyu: Personally, it was really hard. I think the work environment was really weird and foreign to me. I kind of joked that working for Samsung is kind of like working for North Korea. So many rules. I mean, it's like… it's crazy how many rules they have. They're very strict.
James McKinney: I've heard Samsung is really hard to work for.
Ju Rhyu: Like here we have a really flexible work culture and I was just telling someone that when I was working at Samsung they had a rule where you had to be in your seat by 8 am and you would badge in so HR would pull your badge ins. Even if you were late by one second you would get like a demerit. Then they had something called Samsung morning TV. You had to be in your seat with your eyes on the TV, because they had people walking up and down the aisles with a clipboard.
James McKinney: Oh my goodness.
Ju Rhyu: If you were looking away at your phone because you got a text message or maybe you were t your computer sending a really quick email and they caught you, you would get called out.
James McKinney: That's fascinating to me that Samsung would desire Americans to come over, because that is so different than any corporate culture in the United States, I mean I guess other than industrial line on the assembly line worker. That is so different. Yeah, I can imagine how hard that was for you to adapt to. How long were you at Samsung for?
Ju Rhyu: It was a two year contract, so I was there for two years.
James McKinney: Oh my goodness. That must have aged you. You must have been like it was two years there, but it felt like seven.
Ju Rhyu: Yeah. I mean, and that's where I actually discovered the Mighty Patch product. So Korea in general in terms of skincare and beauty is very ahead of the curve. So back then, I was struggling from breakouts and I think it was because of the different lifestyle, and stress, and not being very happy there. So I was breaking out. And I saw all these Korean people walking around with these stickers on their faces. I got really curious. I was like what are these things? And I realized they were acne patches. I went to a drugstore, I bought one, I tried it, and I was just blown away at how well they worked. That's when I started thinking about like oh, if maybe I could bring this to the US, maybe I should launch this. If I launch this in the US I think it could do really well. So I started thinking about that around 2013.
James McKinney: So 2013, and again there's a reason you ended up in Seoul Korea, and it's for Hero Cosmetics. So in 2013 you started thinking about this Mighty Patch product that you discovered. At what point did you start actually really start moving on this idea to create something, and what were those steps like? Was it while you were working with Samsung? Did you just cut bait with Samsung entirely to build it? Now we're in that season where you're employed life starts meshing with your entrepreneurial life. How did that transition happen?
Ju Rhyu: I did start working on it fairly seriously. I came up with the brand name, I hired a designer, I had packaging. I found a supplier, and then I stopped because I started running the numbers and I was like oh, this is kind of a lot of money like the first MOQ and just everything needed to get up and running, because I wanted to self fund. Yeah, I got very intimidated so I actually stopped. But in retrospect, I think everything happens for a reason I guess. I'm glad I didn't pursue t his at that time, because I do think the US market needed time to sort of mature and be ready for this type of product idea. I think if I had launched back then, I don't think I would have had the success that we have right now.
James McKinney: What were you seeing in the US market that had to be ready? What was it you were looking for in order for Mighty Patch to make sense?
Ju Rhyu: I didn't know that at that time, because I stopped working on it more because of the costs. I didn't stop working on it because I don't think it's the right time, but in retrospect I don't think it was the right time. Because it's an entirely new product category and Americans didn't know what it was, which meant that I would have had to do a lot more education, probably required a lot more money to do more marketing. But what happened between 2013 and 2017 when we launched is that K Beauty, which is short for Korean Beauty, really took off during those years. As Korean Beauty really took off, Korean brands and other kind of US based Korean retailers were introducing acne patches as a Korean invention, you've got to try this it's so great. And so it still was niche at that time, but the market already was being educated about this product category. So when we launched in 2017, people were well primed.
James McKinney: Got it. So now as we jump into the Hero Cosmetics story, can you unpack for our listeners all that Hero Cosmetics is?
Ju Rhyu: Hero Cosmetics, we are an acne care 2.0 brand. What that means is we want to bring innovation and newness to the acne care category. We want to be the new Proactive, the new Clearasil, and we want to bring gentle solutions to acne care wherever consumers want to buy them.
James McKinney: Awesome. So in 2017, while you were working on it before in 2013, 2017 is what you consider your launch.
Ju Rhyu: Yes.
James McKinney: Okay. So in 2017 is your launch and I'm sure you probably know the exact month and date and all that good stuff, but leading up to it there's your pre-launch stuff. So obviously your minimum order quantity, you've got your inventory. What was your go to market strategy? Because you come from direct to consumer as well as big box, so now because of your experience, I have to believe your go to market strategy was well seasoned if you will.
Ju Rhyu: Well, actually the strategy was to launch on Amazon just to sort of product market fit and to test out the hypothesis which was if I take this product, really give it the right branding and then position it as a product for the western consumer, I think it could do well. We launched with one product which is called Mighty Patch, and it's a type of… technically it's a bandage. So it's made out of something called hydrocolloid and what it does, it sucks out all the pus from your pimple, but the origins are that it started out for bed sores and skin ulcers.
James McKinney: Oh, okay.
Ju Rhyu: So it actually started out as a kind of bandage. So what people were doing is this product actually existed in a Walgreens but in the band aid aisle. So the idea was I want to pull it out of the band aid aisle. I want to brand it as a beauty product, and I think it should be sold in the acne care section. That was the hypothesis. I thought if I can rebrand this product, I can get it out of band aids, into acne care, and I could probably sell it at a Sephora or Ulta. The idea was let's start with one product and let's test out this hypothesis, let's see if it's true.
So we launched on Amazon just because you have access to hundreds of millions of customers right off the bat. It's a great place to test out product concepts. It was easier too. You didn't have to build a full site. I didn't have to get a separate 3PO. It's like create an account. We did all the fulfillment in the beginning as well, so it was basically put up a page, threw up some ads, and then let's see what happens. Within three months, we basically sold out of our first MOQ order.
James McKinney: And what's the volume? What was the MOQ on that?
Ju Rhyu: It was 10,000 units.
James McKinney: Three months to sell 10,000 units. What did you realize in that three months that set you up for your next iteration?
Ju Rhyu: So we launched it… I mean, I knew pretty quickly we had something. We launched in September. I started pitching to retailers actually.
James McKinney: After three months?
Ju Rhyu: I started pitching I think around November or December. So the pitch was hey, we're introducing this new product for acne. It's a hydrocolloid acne patch called Mighty Patch. We're selling really, really well on Amazon. Would you be interested? And then Anthropologie was the first retailer to say yes.
James McKinney: Wow.
Ju Rhyu: Yeah. It was really fast.
James McKinney: They're clothing. If I'm not mistaken, they're a clothing company.
Ju Rhyu: Yes. Well, I would say they're lifestyle because they have home, they have fashion, and then they also have beauty. So they were the first retailer to say yes. They wanted us for January so we were in 80 stores. They have 200 stores. They wanted to do a test of 80 stores and then within a week of being in those 80 stores, the buyer emailed me. She said the sell through is really, really strong, we want to launch you nationally. So that was where I was like okay, we definitely have some really good momentum here.
James McKinney: That's incredible. That was January of 2018, right?
Ju Rhyu: Yes.
James McKinney: Unbelievable, unbelievable. So you're at the two and a half year mark of Hero Cosmetics. In 2018, Anthropologie wants to launch you nationally. I'm assuming you're still selling on Amazon direct to consumer, right?
Ju Rhyu: Yep.
James McKinney: So you are now becoming an established brand. One of the things that I want to ask about has to do with intellectual property, because I think a lot of entrepreneurs, they don't do the due diligence sometimes, or they just forget about it entirely, or they just don't care. They think it's irrelevant, I'll wait until I'm big, they just put things on the side burner. In fact, a past episode with John Wilson of Stance Socks, almost a billion dollar company, they sell globally, their story is they didn't do enough due diligence on the front side. They had to redo their logo post launch. It was a big debacle, huge thing. They're please with where they're at now, but it is an IP story. So from Hero Cosmetics side, what was your IP journey as it related to brand, your territories in which you can bring them to market? What was your IP story around Hero Cosmetics?
Ju Rhyu: It's evolving. It's hard because IP, it can get costly. So when you're small-
James McKinney: Yes, because lawyers.
Ju Rhyu: Yeah, exactly. I've been at these conferences where people are like you need to have a global, you need to protect your trademark. If you don't have trademark protection in China, file it now. But I learned quickly having global trademark costs $50-60,000 so for a business of our size, I have to decide between a global trademark or our next PO. I choose our next PO. So it's hard because yeah, it's an investment but it is really important. We had some issues around our name. We came up with our name, Hero Cosmetics. We went out to market with it. We did a lot of our IP stuff later, and then when we were filing our trademark for Hero Cosmetics there was a brand called Hero Wipes. They filed a claim against our trademark and then we had to go back to our lawyers and sort of figure out what we were going to do. Yeah, we had some IP issues. We had a new strategy. We re-filed and then I think we're sort of in that waiting period, that three month waiting period, where we're waiting for other people to file their responses. But I think we're going to be okay.
James McKinney: Awesome. From a capital perspective, you had mentioned 2013 it was costly because you wanted to self fund. So you came to market in 2017. From 2017 to now, are you still self funded or is there venture capital somewhere in there?
Ju Rhyu: No, we're self funded. We bootstrapped. I have two business partners now. It's actually that also made a big difference because not just from the cost perspective but in terms of work load, we kind of block and tackle. But we're, yeah, we're bootstrapped. We haven't raised any money, although we're preparing for a raise right now.
James McKinney: Part of that story, obviously, is your footprint inside of stores but also it's the barriers to market entry. It's the intellectual property, and sometimes a lot of people think from an IP perspective, they think technology, they think manufacturing, but intellectual property can sometimes be exclusivity. One of your IP points is that you have exclusivity within certain markets, one of them being the United States I assume.
Ju Rhyu: Yes.
James McKinney: Awesome, wonderful. So as you're now in Anthropologie, how has the big box business grown and how has the direct to consumer business grown? What pace are they both running at and which one are you most excited about?
Ju Rhyu: 2018 was a year of launching in a lot of specialty retail. So we did Anthropologie, we were in Riley Rose which has now filed for bankruptcy. We got into Urban Outfitters, Free People, Neiman Marcus, Goop. We had a lot of luck with retail. I was kind of surprised that they were sort of on the higher end side. I didn't think our product would ever… I never really envisioned it at Neiman Marcus, but it sells quite well there. Then we launched D to C in June of 2018. So we did kind of the reverse of what a lot of D to C brands do. We actually launched our D to C site after we launched a lot of retail, and after we launched Amazon.
Then this year, we launched in Target so Target was our first mass retailer. In terms of growth, Target… it's just, it's funny because we only have one SKU in Target, but we're in a lot of stores. We're in almost 1600 doors, they have 1800.
James McKinney: That's awesome.
Ju Rhyu: But even with that one SKU… Yeah. Even with that one SKU, just because of their scale and reach, they will bring in I want to say not quite 20% but like call it 15% of the revenue this year just in six months actually.
James McKinney: Yeah, that's incredible.
Ju Rhyu: Yeah. It's just interesting to see how scale really matters. And our D to C site is growing really rapidly as well. We'll have a really strong year. I don't have the year over year numbers off the top of my head.
James McKinney: One of the things you mentioned, and it kind of gave me cause for pause if you will because it's a different story than I've heard on other brand launches. So you test on Amazon, it does well. You take that information and bring it to Anthropologie, right? And I assume it was Anthropologie… you probably pitched a few different brands on the idea. But from a test on Amazon, you went big box. Most stories I have heard is that they build the brand, they leverage obviously the social media presence and all those things to sell direct to consumer, and as they succeed or do well with direct to consumer they then go to big box. How did you one, I guess I should ask what caused you to think differently in that regard? And then two, was the Anthropologie story what helped get into we'll say Target? What was the story that helped you get into Target? Because obviously a lot of people, when they think of building brands, they look at the Targets as like the top of the mountain. If I can get Target, it'll be amazing. Depending on what it is, the Costco's, any massive footprint they just think that's the heyday right there. I've heard stories where it can be challenging as well to get into those big stores. What caused you to think differently as you approached bringing Hero to market, because you went big fast?
Ju Rhyu: So yeah, Amazon really was sort of just to test. I mean, it's funny because we took a really different approach but when I think about it in retrospect, it helped us a lot because Amazon is great for generating cash. You get paid out every 15 days. Retail is harder because you get paid maybe like every 30. Target is net 65 which has been a little bit tough. So Amazon was great for cash generation which we then reinvested back into the company, and put towards our website. So that's why we've been able to stay private and just bootstrap this whole way, just because we had a channel that was generating cash pretty quickly, and then we used that to really build up our D to C site. D to C sites, it can be quite costly. You have to do the design, you have to do the dev, you have to find a 3PL. There's definitely a lot of upfront costs, so that sort of how it all worked out.
James McKinney: What's been the biggest surprise for you? As our time is coming to an end, I want to ask a couple questions before our usual two questions to wrap up. But what has been the biggest surprise for you in a space that technically you've been in since 2009 I think is when you graduated Columbia and went to Kraft. So you've been in this for over a decade, whether it be through Kraft or Amex or Samsung. You've been in this industry for some time, so what has been the biggest surprise for you as an entrepreneur in this space, versus being within a Fortune 100 company?
Ju Rhyu: There was a period… I feel like now is kind of the tail end of it where everyone was talking about D to C, and even consumer brands, now tech companies. And they just sort of spun it in a way where they could get VC dollars. But as I build this business, I'm just so reminded of my time at Kraft that I realize I think the fundamentals are still the same, but to me D to C is a channel. It's not an entire business strategy, and we do embrace wholesale and retail relationships because it's still where 80% of commerce still happens. So it's just funny because I feel like people talk about oh, disruption and everything is like tech and consumer brands are now tech, and D to C is our business. But I still think fundamentally things are still very similar to how they were 10 years ago. But of course, there are things that are very different like social media. D to C I think is a lot more important than it was 10 years ago. So I guess my whole thing is it's funny how much things are still the same, despite how everyone claims to be so different.
James McKinney: If you were mentoring someone who had a product, and in fact now that I think about we had Mia Plesic on a couple episodes ago where she had a direct to consumer brand that she discovered… She's in Australia. She discovered something in either Australia or Singapore, I forget where she was when she discovered it, and she build this brand, direct to consumer. She didn't go big box, she didn't go Amazon, she didn't do anything, she just built it all via the web. She built it pretty fast. She's now a Shopify guru, but she's done it a few times. So if you're sitting with someone brand new who has a consumer product idea, they found something overseas, they have exclusivity in the US, there's something they want to bring to market, would you suggest a similar route to what you did or is there some different guidance you would give now that you're two and a half years in and you've taken a few lumps along the way?
Ju Rhyu: Yeah. I would say start small. Tell people, well I tell people the most important thing is to start because there are a lot of people who have ideas. I have friends who are like, "Oh, I want to do this and I want to do that," and then they just, they don't end up doing it. The way to get around that is to start small. Just create a prototype, create 10 of them, see if you can sell those 10, and then see where you'll go from there just because… I mean, I think that's how we started and you'll get data and feedback really quickly. You'll know that there's a market for it, or you'll know that there's not and then you can move on and do something different. Otherwise, I think people I guess because of media and a lot of the stories that are out there it's like oh if I want to be an entrepreneur I have to raise $10 million and go to all these VCs, and how am I going to do that, I have to quit my job. But yeah, that's not the case. That's not how we started. You don't have to do it that way. You can start small and still have a lot of success. Actually, I think it's a great strategy that people don't really talk about.
James McKinney: That's awesome. You know, one question that my wife asked me in the episode of my story that has just stuck with me, and I want to continue asking it to all my founder guests, is she asked me and I'm going to ask you, do you believe that anyone has the potential to be an entrepreneur? Or is it something you are born with?
Ju Rhyu: That's a really good q.
James McKinney: It put me on my heels when she asked me that. It is a good q.
Ju Rhyu: I think not everybody can be an entrepreneur. Well, okay, I'll phrase it differently. I guess not everyone has the desire or the passion to be an entrepreneur. I guess fundamentally everyone could do it. It's a hard job but it's not impossible, so in theory anyone can do it. But yeah, I think not everyone has that gut desire to be one which I think you kind of need in order to get started, push through those hard times, grow really big. You need that sort of inner passion I think and that probably not everyone has.
James McKinney: Agreed. I love that. Awesome.
Ju Rhyu: What was your answer to that? I'm curious.
James McKinney: You know what, so my answer was I do believe that anyone has the ability to be an entrepreneur. I think one of the things that our media and culture has created is that entrepreneur is an identity. The reality is it is a job title, like you said. It is one of the hardest jobs in the known universe, next to parenting, and it's one that most people are ill equipped for regardless of what you do. You're going to fail but never the less, I believe anyone can but to your point, to do it successfully not everyone has the wherewithal to withstand it. I had one founder share with me entrepreneurship is a game of attrition. People are going to constantly fall to the wayside, and the ones that can withstand are the ones that win. I do believe that anyone has the ability to be an entrepreneur. The successful ones are the one, to your point, are willing to carry the weight that comes with the job, and the passion. I mean passion we speak about all the time. That is what carries us through those challenges, through those times when we don't have enough cash for payroll.
One of my favorite stories is Neely Powell with Charleston Shoe Company. In her early days of building her company and her retail stories, she was defrauded by $300,000 and she had no money for payroll, so she went on a road show to sell her shoes, and all these road shows, and she did not come back until she had money for payroll. It's just that sheer determination and passion that a person has to keep their business afloat when stuff like that happens, even those are rare. It's that mindset. Needless to say she came back and Amex, to Amex's credit they found the fraud and they credited back the money that was defrauded her, but the idea that just well I'm not coming back until I have payroll. I don't think everyone has the wherewithal for that, but I do believe anyone has the potential to be an entrepreneur. But why I love The Startup Story is I want to bring the real stories of entrepreneurship to the surface so that should someone have a book full of dreams and want to be an entrepreneur, they now have a real idea of what that looks like, not just what they read online. So I love it as well. I'm so glad my wife brought that question to me in my episode.
So our final two questions as our time comes to an end. The first one is about gratitude. I truly believe that if we forget all the people that poured into us to get to where we are today, with Hero Cosmetics, that if we begin to think that we did this all on our own we will isolate ourselves and ultimately that leads to our failure. So when you look back on your entire journey, who are the people that you point to with incredible gratitude for their contribution to where you are today with Hero Cosmetics?
Ju Rhyu: The Hero team. We had a little lunch today and we were going around, talking about what we were thankful for, and I definitely talked about our team. We have a really great team. We have one person who started out with us as an intern and she was our first employee. Very thankful for her, for believing in us and sticking around as a fulltime person. But it's true. I think building a startup, it takes a village. You cannot do it by yourself. It takes not only a tem but it takes really good retail partners. It takes good brokers. It takes great mentors.
I know you had her as a guest, but I'm really grateful to Jamie Schmidt because the way that we met, I actually pitched her because I knew that she had started a private equity fund, an investment fund. So we got connected that way and she became a little familiar with our business. Then, for an Ink Magazine founders and mentoring issue, she had chosen me to mentor for this issue. I'm super grateful because that was how I got into this national magazine. Then I also credit her because that opportunity I got included in the Ink 100 female founders list. I definitely, I think about her and just how she gave me the opportunity, and how that opportunity has really paid off multiple times.
I'm grateful to… I don't know, there's just so many like my PR firm who has helped me a lot. Our manufacturers. Even my family, just because when we were starting out on Amazon and we needed people to buy our product, they would buy it and they would go to an Anthropologie and send me pictures. There's been a lot of support from my family, from my friends. There are a lot of people to thank.
James McKinney: That is awesome, I love that. And I ask that question all the time, and if that was the only question I got to ask, if I only had five minutes with a founder that one would never get cut. I love that question so much. So the last question as our time comes to an end, we've been talking to tens of thousands of listeners, and I believe that The Startup Story is a digital mentor for people.
I want to bring the conversation down to just a coffee talk with you and one person. Whether that person is the defeated entrepreneur who has tried time and time again but continues to fail and is about ready to just quit pursuing entrepreneurship. Or that want-repreneur who has a 9 to 5 and a book full of dreams and ideas and just hesitant to move forward because maybe they have a mortgage or they're the only income in the house, or they're 60 years old and they think they're too old. Whatever the excuses are, they just have some reluctance to move forward. Or maybe it's the frustrated entrepreneur who has been doing it for some time and just don't have the traction or success that Hero Cosmetics is having, and they're just thinking that they're an imposter in the woods and they shouldn't be an entrepreneur, and they're ready to just call it quits or whatever the case may be. As we bring it from the masses to the one, who would you like to speak to and what do you have to say to that person?
Ju Rhyu: I'd like to talk to the person who has a book full of dreams but has other responsibilities and feels like they can't pursue them. What I'd like to say to you is you should just start, and you should start small. You can totally start small and see where that goes. You're never too old, you're never too young. I think the most important thing is just to turn your ideas into action, and then see where that takes you.
James McKinney: Please, hit me up on LinkedIn or Instagram and let me know what the most impactful thing you received from Ju's story. For me, it was how she put her venture on hold out of fear of how much it would cost to actually execute, and then when she came back to it, it took off like an absolute rocket. What I also love about Ju's growth is how she walked us through exactly how she built her business, starting with Amazon and then taking that success story to retailers for market proof. Think about that. She delayed bringing her product to market out of concern for how much it would cost, and then when she finally brings it to market she's on the shelves of 200 plus stores within three months, and continues to grow at an incredible pace.
To echo Ju's advice, the most important thing you can do is to just start. You have no idea what will happen once you do, but you don't need to figure that out until you actually start and see where it goes. Stop thinking about the end game first, focus on the step in front of you.
I hope you found some real value in Ju's Startup Story episode. If you've been around The Startup Story for any length of time, then you know how much emphasis I put on the idea that entrepreneurs support other entrepreneurs. For that reason, please help Ju's startup and visit herocosmetics.us and buy a box of the Mighty Patch. If you have a product or service, then you know how important it is to get the word out. So also make sure to connect with them on Instagram @HeroCosmetics and tell a friend about them, and also about Ju's startup story. Let's show up for Ju Rhyu in a big way by connecting with them online and buying a box of Mighty Patch. We will include a link in the show notes to their website and social accounts for easy access. Entrepreneurs support other entrepreneurs. And now, for my personal ask.
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