In the mind of Sylvia Gruber
Austrian-born entrepreneur Sylvia Gruber saw an opportunity in the South African beauty market and launched her own ingenious version of Birchbox (a try-before-you-buy monthly membership of curated beauty samples), which has a rumoured valuation of around
You founded your company shortly after Birchbox launched in the US. How much of Rubybox was inspired by the Birchbox business model?
Rubybox was 100% inspired by Birchbox – and we still are. Nevertheless, it’s very important to understand the market in which you operate and adapt models to suit the local consumer. There are many ways in which we operate differently from Birchbox, such as having our own Rubybox beauty label, as well as the way in which we execute our male version of the product, MANBOX.co.za.
How did Rubybox start and how did you get the company up and running?
The start was about building the financial model, which led us to the conclusion that this was an interesting business proposition for the SA market. After evaluating the complexities of the model and the manpower it would require – namely connecting to both brand partners as well as end consumers – we knew it would require a strong business partner to get it off the ground. I have a marketing background, so I could cover the end-consumer part. My business partner, former editor of Glamour magazine Margaux Knuppe, covered the brand component. I also had experience in tech, so I managed to work with a freelancer to create rubybox.co.za 1.0. It took us four months to launch, which we did at the end of August 2011.
Give us a brief rundown on Rubybox.
It’s a 360-degree try, discover, engage, buy model. We pride ourselves on building and engaging communities around subjects.
Customers sign up for R119/month (or less if they opt for a longer-term subscription) to receive a monthly surprise beauty box filled with targeted trial size beauty products that include makeup, fragrance, skincare and haircare products according to their personal beauty profile.
Our ‘rubies’ can then discover content about the sampled products and other beauty topics in our online beauty magazine and on the product pages as well as on our social media platforms. The trial, discovery and engagement ultimately results in a trusted purchase from our online shop.
Did you have any entrepreneurial experience prior to starting Rubybox?
I launched another e-commerce startup in the fashion industry in SA. The concept was all about making design made in Africa available to the world. The concept was strong and demand was high. Production as well as supply from local designers were problematic, as was my very basic understanding of how to create an e-commerce store. However, it did help me build the basis of knowledge required for rubybox. co.za, as e-commerce is ultimately a numbers game and highly analytical. Your back-end and processes need to be spot on and your business intelligence needs to be impeccable. It’s also important to evaluate every model by its potential to scale (i.e. are both supply and demand scalable enough?).
What major challenges have you faced during the Rubybox journey?
In order to succeed you have to move fast and quickly correct any wrong turns that were made, which sometimes means changing projects around completely and moving people from one task to another. Change management such as this is always quite tough as it requires motivating the relevant people to understand and want to act on change. Team management in a fastgrowing business (we are 21 employees now) is also interesting. It quickly goes from being an intimate group where sometimes ‘everyone does everything’ to a still ‘small’ but now structured approach with reporting lines. A lot of my time goes into management and HR matters: hiring, developing people’s skill sets further etc.
How did you secure funding? What advice do you have for aspiring entrepreneurs who are planning to pitch to investors?
We self-funded with very limited startup capital for the first year. We only had the subscription service and the online magazine up and running so this did not require funding to run the company. However, as per scale (the subscription service has a ceiling due to supply) we knew we wanted to launch into e-commerce/product sales and this required funding.
A year after launching in September 2012 we got Hasso Plattner Ventures on board as VC partner and, in the same deal, bought out our major competitor. A year later, 24.com (owned by Naspers*) acquired Hasso Plattner and invested further in our team.
Fundraising doesn’t usually come about easily, it requires a lot of energy, time and perseverance. Start the hunt six months prior to requiring funding and think wisely about why you really need the money and who the best partner would be, have a strong proof of concept, a sound financial model (ideally built by you) and know it intimately. Subsequently ‘investor relations’ are also very important to consider as the deal is not done once the investment is in the bank.