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

Finweek English Edition - - ENTREPRENEUR -

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,

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 ruby­ 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., 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, (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.


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