As part of our Founders + Funders NYC 2019 summit, held on November 8th and co-organized with Seneca VC and SheWorx, we brought together an exciting group of startup founders and investors for a day of learning, networking and growth.
KJ Miller, CEO and Co-Founder of Mented, led us through her fundraising process, getting investors on board, fine tuning product, and more. The conversation was led by Kate Ward, Digital Consultant + Founding Editor-in-Chief at Bustle Media Group.
KJ has launched seven product lines and has also secured $4M in funding, so she knows her way around fundraising. So we’re going to start there. What do you know now about fundraising that you wish you knew when you went through your first raise?
Fundraising actually takes a long time and people are prone to – I won’t say lie – but people are prone to pretend as if they’ve all had this really seamless, streamlined process in their raise, like, “Yeah. I went out with my pitch deck. And it was about a two-month process, and then we closed the round. We got $2M.”
It’s not how it ever works. It’s literally not how it ever works. 1 in 50 people wrap up a round from start to finish in two months, right? Some of us might do that on your second or third raise because then you know people, you’ve got a real business.
But if it’s your first raise, the reality more than likely will be that it takes you four to eight months to close a round, and you’re raising while you’re running the business. And you might raise a little bit and then say, “All right. I need a break from raising.” Then you might go back out and raise a bit more and say, “Now I need another break from raising.”
Not only is that okay, it’s very, very normal. I wish I had known that because when I was going through that process, I felt like, “Are we doing it wrong? Is our business really shitty?” No. We had a great business, a great idea, a great founding team, but it takes the time it takes.
I just hope if any of you are in your first raise and that’s been your experience, you don’t think, “Oh, I’m doing something wrong,” because there are people telling you it should be this really short, fast-paced thing. It almost never is.
Something that any founder here has dealt with is entering into a room full of CEOs that are white men. You and your cofounder Amanda E Johnson were the 15th and 16th black women to raise over $1M in funding. Walking into that room where you’re different than everybody around you, what do you find helpful to be able to get the most out of those experiences?
We have a lot of white men on our cap table.
A couple of things. First, the reality is if you can get your objectives to be aligned with your investor’s objectives, it doesn’t really matter what you look like or what they understand or don’t understand about the beauty industry or whatever your industry is, because they understand money, right? Lead with the fact that we want every woman to be able to find herself in the world of beauty.
Second is that women of color outspend on beauty compared to their white counterparts by upwards of 80%? Even if you don’t care about beauty, you care about dollars. Now you’re in my camp, you get it, and you’re interested. “Oh. Okay. This is a $60B market, and you’re telling me the demographic you’re going after spends more money on beauty? Say more.” Right?
So for me, it was always about quickly getting to the numbers. Yes, I want to inspire you with the story and with the idea and with the gumption behind the founders and everything else, but then I want to get to the numbers because I know you understand numbers.
Money talks, I guess, right?
Let’s talk about your product. You started by launching a lipstick. You’d never made lipstick before, so you had to troubleshoot yourself. How did you know when your product was ready and this was the exact formula that you wanted?
Amanda and I taught ourselves how to make lipstick. We went on YouTube. We watched the videos. We bought the mold and the dyes and the everything and set out to make lipstick.
What we had in our mind wasn’t necessarily to create the world’s best lipstick. I don’t even know what that means, right, because different women want different things out of a formula. What we set out to do was create nude and neutral shades that worked for deeper skin tones because we just couldn’t find them. And we tried everything. Before we even sat down to make a lipstick, we tried to find lipstick that worked. It’s hard business starting a startup, so if someone’s already doing it, let’s not do it. But we couldn’t find it. Every single nude shade out there looked crazy on us.
We said, “All right. Can we create something that looks good on us, that looks good on our Hispanic friends, that looks good on our Middle Eastern friends, that looks good on our Asian friends? Can we create those shades?” And we did.
We started iterating, and we started making the shades, and then we would invite our friends over and say, “Do you like this? Does this work for you?” and created the collection from there. But it wasn’t like, “Can we create the world’s best lipstick?” It was, “Can we create a product that works for this specific customer?”
So testing it, you created your own crew of people to tell you whether it was actually a good product or not.
Totally. We started with just our friends, and eventually we sent the lipsticks out to influencers. That was really important to us because we wanted a way to get as much feedback as possible. The good thing about influencers is if you’re an influencer who has 10,000 followers or 20,000 followers or however many, once I get your approval, I’m also getting your followers’ approval because you’re posting it and they’re liking it. I’m getting more than just one opinion by getting that one person. That was really important to us as well.
You have a great product, but then you have to have people find out about it. What was particularly successful for you in terms of marketing and branding? Were there any efforts that you made that didn’t actually work as well as you thought they would?
In the beginning, we knew social media was going to be huge. We’re also really bullish about PR.
On the social media side, we sent out our samples. These were literally our handmade samples, okay? Couldn’t sell them. No preservatives, so they would have disintegrated in two months. But they were very pretty, and we sent those out to influencers because we wanted to get their feedback and we wanted to get them on board with the brand before we launched.
We hadn’t launched at that point. We’ve continued this throughout. Now we have active relationships with close to 300 different influencers from 10,000 followers up to millions of followers. That’s been super important to us because, again, a lot of these women have built up real trust with their communities. When they talk about our products, people feel like they want to try it. That was the first thing.
The second thing was PR. We invested in a publicist really early. A lot of people will tell you that it is not worth it to get a publicist. A lot of people who have been burned by PR firms.
This is not me saying you should definitely do it. This is me saying we felt it was important for us, and it ended up being that. We got a lot of really great press articles early in the life of the company, and that did help. We actually literally saw the boost in revenue, the boost in traffic every time we got a really great article. So for us, it was important, and it was worth the investment.
But the real takeaway is that we had to test. We had to figure that out. Don’t do anything because someone says it’s the thing to do, but do be willing to test different marketing tactics.
Something we tried that a lot of others said worked was direct mail. Direct mail didn’t do anything for us. It was a waste of however many thousand dollars we spent on it. It didn’t move the needle at all. But for some people, direct mail has been amazing.
For us, we realized early influencers matter. We realized early press really matters. And we realized early social matters. Now we do a big paid digital business. A lot of the things we tried along the way didn’t work, but we tried them.
For us, I’m really, really, really ornery that, when we do a test, it has to actually be a test, right? We have to have a goal. We have to have metrics we’re looking at. A test is not, “I’m going to put some money over here and see how it does.” That’s not a test.
A test is, “My goal for this program is to get $10,000 in monthly revenue,” or, “My goal is to get this many email addresses,” or, “My goal was to get this many impressions.” But you have to have a goal for it to be a test, because you have to know if the thing performed well or didn’t perform well so that you have a way of making a decision about whether to move forward with it. So often I’ve had people be like, “Yeah. We sort of tested this.” Tell me what you mean by test? What were the actual metrics you were looking at on a daily basis to understand if this was something you wanted to continue doing?
Every time we test a new marketing channel, we’re really prescriptive about what our goals are so we can make an informed decision about whether to move forward with it.
Influencers get pitched plenty of things every day. You’ve mentioned they were really successful for you. How did you stand out when you were pitching them?
In the very beginning, we were super honest and sincere. We didn’t have a team. It was just me and Amanda. We would DM them, we would email them, and we’d say, “Hey, we’re just two black girls with a dream out here, and we’ve got these lipsticks, and we’d love if you would try them. We’re big fans of yours, but no pressure. If you don’t want to, it’s all good.” We were really just honest about the fact that we’ve just got a dream and we’d love it if they’d participated.
People responded to that and the fact that, when they reached out to us, we always responded. We never treated a single influencer just like a commodity. It was, “Thank you so much.”
Our holiday cards that we’re sending out this year feature our influencers. Some of them are going to get the card, and they’re going to see their face. That matters to them, right? We’re not a big brand, but we’re a brand. We’re doing a few million dollars. It matters to them that, as a brand, we’ve decided to say, “We care about you enough to feature you on this thing we’re sending out to thousands of people.”
In the beginning, it was really genuine, honest communication. But ever since then, it’s been the fact that we follow up, we always respond, and we treat them like people. A lot of brands make the mistake of treating influencers like commodities.
You also use them on The Ment as well. How has The Ment been helpful in driving consumers?
The Ment is our blog. We post new content on the blog at least four times a week. What we found since the very beginning is that women who come to our site and also go to our blog spend a lot of time on the site. And the more time she spends on the site, the more money she spends. So the blog is really driving real revenue for us, because it’s going to bring up her AOV since she’s seeing different people use different products in different ways.
By the time she’s going back to shop, she’s like, “You know what, I was just here for a lipstick, and I’ll throw a blush in because I watched that video of the girl putting on the blush.” So for us, it’s a great way to drive up AOV and also a great way to help her understand how to use the products.
A lot of our customers are new to beauty, and consider themselves to be novices. Those people are going straight to the blog and clicking on tutorials. She’s watching three or four different videos because she really wants to understand before she makes this investment in the product.
How do you get feedback from those consumers?
We have a couple of ways we try to get feedback.
The first is a quarterly survey we send out to our whole email list. We usually get 1,000 – 2,000 people to respond. We’ve done it where we give them an incentive – a discount if they take the survey – and where we don’t give them one. People still want to take the survey.
The survey is where we ask them things. Not just, “How satisfied are you with the brand, and how likely are you to recommend us?”. But we also ask, “What’s missing from your makeup bag? What do you want us to do next?” We might give them five different things we’re thinking about putting in product development and say, “Rank them one to five. Which one’s the most important to you?” So we’re always soliciting feedback on what makes the most sense.
We’re also always getting feedback on social media. You have to respond when people are reaching out to you on social media. I mean, it’s one of the few advantages you have as an indie brand over the big guys – that people really feel connected to you as a brand. This matters a lot. If L’Oréal doesn’t respond to you on Instagram, no one cares. You aren’t expecting a response from L’Oréal on Instagram. But you’re expecting a response from Mented. So we respond to everything. People will really let you know how they feel.
The third way is hosting a lot of events. It’s a really great way to understand where your customer is coming from, what she’s thinking about, how she uses the product, if she even understands how to use the product.
Those are the three most important ways we get feedback.
You’ve launched seven product lines already. So how do you know when it’s time to launch a new product?
We’ve launched a lot of products! In beauty, that’s sort of the expectation. Most brands are launching new products almost every season. They’re launching in spring, in summer and in fall, and a lot of people are also launching in the holidays as well. Because that’s the norm in beauty, it’s hard to not participate in that cycle.
We’ve made the decision to participate, for now at least. Just about every season we’ve launched a new product. What’s tough about that for us is, every time we launch a new product, it’s not just a product, it’s a full category. A lot of brands can launch two new lipstick shades and have that be a moment because they’ve already got 80 lipstick shades.
What was our last lip thing? We did matte lips. That was 12 different SKUs. And that’s a lot for us. It’s a lot to launch 12 different SKUs because you’ve got to buy 5,000 of every single one of them. It’s not a small thing.
The operational complexity of adding new product lines is something I lose a lot of sleep over. But the expectation in beauty is to have continued newness. For now, we’ve decided to play in that rat race. I don’t know if we always will, but it’s something I think a lot about.
What excites you most about your business today?
The most exciting thing is that we still get to do this and we live to see another day. In startup world, you don’t take any single day for granted because you might not have the next day. You could run out of cash. Happens all the time.
The fact that we still get to do this and there are so many customers who DM us – they DM me personally saying, “I love this. I love what you guys are doing. I love Dope Taupe. It’s my favorite shade in the world,” – it means a lot that we have created a brand that matters to people and that we get to live to see another day.