Hair on Fire

Forbes - - Entrepreneurs - BY CHLOE SORVINO

In­spired by per­sonal tragedy and her fam­ily’s home­made beauty con­coc­tions, Nancy Twine went from trad­ing com­modi­ties on Wall Street to build­ing a fast-grow­ing lux­ury hair-care brand.

Achar­coal and co­conut-oil sham­poo that smells like mint cook­ies ows into dozens of 8-ounce tubs at a con­tract lab in sub­ur­ban New Jersey. Sur­vey­ing the tubs is 33-year-old Nancy Twine, who cre­ated the sham­poo, a scalp-ex­fo­li­at­ing for­mula that re­tails for nine times the cost of mass-mar­ket sham­poos like Head & Shoul­ders. “ is was a big one for us,” says Twine, founder of the hair-care com­pany Bri­o­geo.

In re­cent years, as more and more beauty prod­ucts are man­u­fac­tured at in­de­pen­dent labs, dozens of women have launched their own brands, from makeup artists turned blog­gers like Huda Kat­tan to celebri­ties like Kylie Jen­ner. But Twine says her seven years at Gold­man Sachs have given her a leg up, prep­ping her to price am­bi­tiously, source in­gre­di­ents di­rectly, com­bine orders to save money on pro­duc­tion runs and build re­la­tion­ships with part­ners. On re­tail shelves for just four years, Bri­o­geo has been pro ta­ble ev­ery year of its ex­is­tence and brings in more than $10 mil­lion in an­nual rev­enue from sales at Sephora, Nord­strom, Forever 21’s Ri­ley Rose and sam­ple services like Birch­box and Ipsy. “From the start,” Twine says, “I wanted to make sure that our mar­gins were good, so that not only could we rein­vest back in the brand but so that down the line we never had to com­pro­mise.”

Twine, who identi es as African-amer­i­can, is at­tempt­ing to ap­peal to all women. Un­like many brands, Bri­o­geo tar­gets cus­tomers by hair tex­ture (wavy, coily, dry, thin) rather than by eth­nic­ity. “I re­mem­ber go­ing to CVS back in the day, and it was al­ways very seg­re­gated,” she says. In ad­di­tion, Bri­o­geo for­mu­lates its nat­u­rally de­rived prod­ucts with­out sul­fates (linked to skin ir­ri­ta­tion), sil­i­cones (may dry and thin hair), ph­tha­lates (po­ten­tially toxic in high con­cen­tra­tions), parabens (banned in the Euro­pean Union; binds to es­tro­gen re­cep­tors), DEA (also a skin ir­ri­tant) and arti cial dyes. “Peo­ple were lit­er­ally telling me you can’t do this with­out sil­i­cones,” Twine says. “I had to do my own re­search and tell chemists what they needed to be blend­ing in or­der to get it to work bet­ter.”

Even though so-called clean beauty is one of the fastest-grow­ing seg­ments of the beauty in­dus­try, there are few non­toxic hair lines in gen­eral and even fewer for tex­tured hair. at gap has cre­ated a big op­por­tu­nity. Black cus­tomers pur­chased al­most $500 mil­lion worth of sham­poo last year, ac­cord­ing to the re­search rm Min­tel, and are the fastest­grow­ing seg­ment of the $13 bil­lion U.S. hair-care mar­ket, ac­cord­ing to Euromon­i­tor. Most Bri­o­geo prod­ucts are priced slightly below other pre­mium hair brands, a point of pride for Twine. e com­pet­i­tive price helped Twine con­vince re­tail­ers that

her prod­ucts could hit a new, hard-to-reach con­sumer: one who wants to buy a high-end, non­toxic prod­uct but at the lower end of the lux­ury range. “I love her price point be­cause it says she’s taken the time to do her home­work,” says Dana White, the African-amer­i­can owner of Par­alee Boyd, a bud­ding Detroit chain of walk-in sa­lons that cater to curly and tex­tured hair. “We have money to spend.”

e event that spurred Twine to start her busi­ness was a tragedy that struck in 2010, three years into her stint at Gold­man Sachs. at was when her mother, a doc­tor turned chemist who had just nished cre­at­ing a nat­u­ral face cream she hoped to take to mar­ket, was hit by a car.

Her mother’s death was life-chang­ing for Twine, who says she re­al­ized that work­ing on Wall Street was “not how I should be liv­ing life.”

In­spired by both her mother and her grand­mother, who taught her how to make prod­ucts with nat­u­ral in­gre­di­ents, Twine started de­vot­ing nights and week­ends to re­search­ing the beauty busi­ness. At New York City’s small-busi­ness li­brary, she spot­ted re­ports of a shi to­ward nat­u­ral skin care but saw lit­tle if any­thing sug­gest­ing a sim­i­lar shi in­volv­ing hair. And noth­ing she saw in the re­ports fo­cused on the lux­ury end of the clean hair mar­ket.

On her own time, while work­ing at Gold­man, Twine spent more than a year search­ing for a lab and chemist with the abil­ity to cre­ate non­toxic prod­ucts. It took an­other year to test hun­dreds of for­mu­las. Twine named her startup Bri­o­geo, blend­ing the Ital­ian word for “live­li­ness” with the Greek word for “earth.” By 2013 she had four for­mu­las. “It’s the com­bi­na­tion of clean beauty with iden­ti­fy­ing a speci c con­sumer seg­ment with a speci c need,” says Marla Beck, the CEO and co­founder of the beauty re­tailer Blue­mer­cury. “She saw that re­ally, re­ally early, so ku­dos to her for hav­ing vi­sion for where the in­dus­try was go­ing.”

Early on, Twine boot­strapped the busi­ness with her sav­ings while look­ing for an in­vestor. But she was pitch­ing mostly to an­gel in­vestors who spe­cial­ized in tech and weren’t in­ter­ested in beauty’s lat­est gold rush. Even­tu­ally, at a Long Is­land An­gel Net­work event in 2012, Twine met Philip Palmedo, who liked her pre­sen­ta­tion but ac­knowl­edged he knew noth­ing about hair care. Early the next year he gave her $150,000 for a small stake. Twine’s only out­side backer, Palmedo says the de­ci­sion vi­o­lated ev­ery­thing he’s learned about investing—but has been one of his most suc­cess­ful. “De­ci­sions like this are in­tu­itive,” he says. “Believing in the per­son.”

Bri­o­geo’s rst two orders—from Ur­ban Out tters and the buzzy L.A. bou­tique Fred Se­gal—came later that sum­mer a er Twine had taken va­ca­tion time to at­tend Cos­mo­prof, a Las Ve­gas trade show. It was there that she met Sephora’s buy­ers. In Jan­uary 2014 the chain agreed to launch Bri­o­geo on its web­site in the U.S. and Canada. e next week, Twine gave no­tice at Gold­man. To­day Bri­o­geo is the fastest-grow­ing hair-care brand on Sephora’s site. “She brings some of the most in­no­va­tive and ex­cit­ing prod­ucts that we have seen in hair care to the ta­ble, truly,” says Artemis Pa­trick, Sephora’s chief mer­chan­dis­ing o cer.

To se­lect pack­ag­ing, Twine vis­ited Sephora lo­ca­tions and turned bot­tles over to check the man­u­fac­turer. To source in­gre­di­ents, she called up sup­pli­ers and asked if they would deal with her di­rectly. “From the com­modi­ties and lo­gis­tics busi­ness,” she says, “I al­ways felt com­fort­able deal­ing with man­u­fac­tur­ers. Some of my founder friends have a con­sul­tant do a lot of that work for them. It eats into your mar­gins be­cause they’re mark­ing up the prices.”

Bri­o­geo is now ex­pand­ing into Sephora stores in the Mid­dle East, Europe and South­east Asia. A new line avail­able at Sephora and else­where fea­tures a sham­poo and a con­di­tioner made with nu­tri­ent-rich su­per­foods like ap­ple, kale and matcha ex­tract. In

July, the com­pany also launched a sham­poo and con­di­tioner in a large “back bar” size for sa­lons to use while wash­ing clients’ hair. Twine ex­pects rev­enue to top $15 mil­lion this year. “Gold­man al­ways had a client- rst men­tal­ity,” she says. “Re­la­tion­ships are ev­ery­thing. at’s the same thing that I’ve ap­plied here.”

“We make ev­ery­thing from our own orig­i­nal prod­uct briefs, our own ideas, our own mar­ket re­search. We never go and se­lect from some o€-the-shelf for­mula,” says Bri­o­geo founder Nancy Twine from her o…ce in Man­hat­tan’s Nomad neigh­bor­hood.

HOW TO PLAY ITBY WIL­LIAM BALD­WINYou can make gobs of money in hair care—if you pick just the right com­pany and get in when it’s small. Shares of Helen of Troy are up 226,000% over the past 40 years. Investing to­day, you’ll prob­a­bly wind up with some­thing less ex­cit­ing, since per­sonal-care brands tend to be folded into very di­verse prod­uct lines. Thus, at Helen of Troy you now get, along­side cologne and sham­poo, mops and dish racks. Clorox has Burt’s Bees but also bleach. Hain Ce­les­tial sells tooth­paste and tea, Church & Dwight vi­bra­tors and cat lit­ter. Solid com­pa­nies all, but not fu­ture jack­pots.Wil­liam Bald­win is Forbes’ In­vest­ment Strate­gies colum­nist.

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