Episode 64 is an interview with Kayla Houlihan Founder of Tribe Skincare, and we timed this podcast to release in conjunction with Tribe’s first birthday celebrations at the end of August 2018.
Kayla is a fabulous young woman with amazing ‘get up and go’ – she has built her niche skincare business quickly with a terrific targeted social media strategy.
Kayla created a natural skincare solution with anti-inflammatories, that repairs and hydrates your skin. Since 2017, Tribe Skincare has Aussie women get their skin in its best health – reducing facial redness, minimising breakouts and saying goodbye to dry patches and eczema.
Kayla has also had some BIG learnings along the way with the establishment of Tribe, and she shares those with us on her podcast. One of those relates to signing a commercial release, one of my pet topics. She also went through a difficult trademark issue which she shares openly in the interview.
Kayla’s Social Media:
To listen to the full interview on iTunes click here.
You can listen to the full interview on Stitcher click here.
To listen right here on my website click here.
My guess is that you are here because you are curious about what it might be like to start your own business?
Perhaps you’ve been wondering if you have what it takes? If your idea will work or even how much it actually costs to build a successful business?
I’ve written a book that can answer pretty much all your questions “So You Want to Start a Business” and you can download the first 20 pages at www.thestartupsteps.com
15 years of experience working with start up businesses are condensed into the 7 steps in this book.
It’s your step by step guide to launch your business smarter and faster and I’m so excited to be sharing it with you and can’t wait to hear about your progress.
Here is the transcript of the podcast with Kayla:
Ingrid: Hello, good morning, and here we are with Kayla Houlihan. Good morning Kayla.
Kayla: Good morning. Thank you so much for having me.
Ingrid: Thank you so much for making time on this gorgeous winter morning. Now Kayla, tell us, what’s your business? What business are you in?
Kayla: I’m in the business of skincare for sensitive skin. That’s how we sum up everything that we do, and it’s a product-based eCommerce business. We’re selling mainly direct to customer. We do also sell business-to-business with the wholesale aspect of the business. But mainly selling online, so we do definitely consider ourselves an eCommerce business.
Kayla: Very much dependent, being a skincare business, we’re very dependent on our repeat customers and repeat clientele, so getting all the repeat customers and getting new customers as well.
Ingrid: We’ll come to how you do that in a moment. So tell me, and I know it’s not very long ago, but when did you start your business?
Kayla: Yep, so it was 11 months ago now.
Kayla: Yeah, four weeks until our first birthday which is very exciting. We’re having a bit of an online party, and taking the party into the homes of customers as well, so that’s all very-
Ingrid: That’ll be exciting.
Kayla: Yeah. Before that, I was actually in business for three years. I had a skin clinic in Geelong, and then there was about six month crossover between the skin clinic and starting up Tribe Skincare, and then now we’ve closed down the skin clinic, and I’m purely full time with Tribe Skincare now.
Ingrid: Oh, isn’t that fantastic? Tell me about this business. If you’ve been in business before, you knew what to expect from a business, but what did you want from this business from day one?
Kayla: I think I made all my mistakes with the first business, and definitely got on track with exactly what I was wanting to get out of this business. It was a lot clearer from the start. I guess what I wanted for the brand was for the skincare to become the go-to skincare for Aussie women with sensitive skin.
It’s really filling that gap in the market. For myself, I definitely wanted the lifestyle element of having your own business. It’s very true that instead of working 40 hours for someone else, you end up working 80 to 120 hours for yourself instead, but it’s doing what you love and I do love the lifestyle. I’m now working full time from home, so I’ve got a 20 second walk to my office, and yeah, it’s nice to be home and integrate work with my life, and have that flexibility around it all.
Ingrid: Yeah that sounds really lovely. We’re talking to each other from our home offices, and we’ve got a little glimpse of your home office behind you there with products and packaging, and it’s pretty exciting isn’t it, to have your business around you?
Ingrid: It’s pretty fabulous, isn’t it?
Kayla: Definitely. It’s all spilling out of the room now because it’s an office and warehouse in one, and now it’s going into the shed and I just keep outgrowing my spaces. But I guess that’s a very good problem to have.
Ingrid: It’s a very good problem to have right now. With this business, when did it feel real? You’d been in business before and so you knew what being in business was, but when did this business actually feel, “Okay, this is a business?”
Kayla: I think for the first six months, when I had the two businesses, it really felt like the skin clinic was the real business, because that was my full time job and Tribe was very much a side gig that I was trying to fit around the hours and fit around the clients.
I used to always say this thing to my boyfriend that I felt like I was on the cusp of greatness, and then as soon as I went full time with Tribe, which was just a couple of months ago, now it definitely feels like a real business. All day I’m surrounded by everything Tribe, and working on Tribe from the minute I wake up ’til the minute I go to bed, and yeah, now it definitely feels like a real business and I think that’s showing a lot more through our advertising and everything that we’ve got a lot more trust now.
Ingrid: Yeah, that’s so good, isn’t it? When you get that feeling and you just keep going with that. This is a very specific product and you had a skincare physical service business, and then you’ve developed a physical product. How did you know that people wanted this? How did you know there was a gap? You said you fill a gap. How did you know there was a gap? Where did this come from?
Kayla: Yep. It was definitely from feedback from customers at the skin clinic, and also having a skin clinic, we were in contact with a lot of owners of other skin clinics and they were seeing this same gap. Customers were coming in and we were all taught to sell this really active, anti-aging skincare, all medical grade cosmeceuticals that change people’s skin and will help reduce wrinkles.
But then people were finding their skin was always feeling really red and sensitive, people were getting eczema flare ups, and instead of benefiting their skin, it was almost taking their skin backwards and …
Kayla: … then when they started. That’s not for everyone, like a lot of people’s skin can handle active ingredients, but there’s a lot of people with sensitive skin as well, and they didn’t really feel that there was anything that worked. They were always saying, “Nothing works and I react to everything” so I thought we need to create a skincare brand that’s purely anti-inflammatory, so aloe vera, zinc, all the good things that your skin needs, and it’s all about rebuilding their skin.
I could definitely see from having the skin clinic that there was this market, and we couldn’t find any brand to get into the skin clinic to sell that was purely for sensitive skin.
Kayla: Created it instead.
Ingrid: Wow, that’s fantastic. It’s interesting, because as a consumer of, well not very many skin products, but my perception is that there’s numerous … I see ads for things that say for sensitive skin, so it’s interesting that from somebody in the industry that there actually aren’t truly sensitive skincare products.
Kayla: Yeah, there’s lots of skincare ranges will usually have a few products for sensitive skin, or a small range within their range for sensitive skin, but there was no brands that purely had products for sensitive skin.
Ingrid: That’s a huge distinction, isn’t it?
Ingrid: That’s a real distinction that you are only sensitive skin.
Kayla: Yep, definitely.
Ingrid: I’ll come back to that ’cause that’s an interesting point. Early days, how did you fund the business? Because clearly you had to buy packaging and product and make things, so how, you don’t have to go into nitty gritty detail but how did you fund that early days, and then how did you fund the expansion?
Kayla: Yep. So it was all started with savings. It was to the point of, “Do I use a house deposit to buy a house or do I start a second business?” I went down the way of starting a second business which seems crazy to spend a house deposit on it, but when you’ve got to do the manufacturing of your products, getting designers in, all that kind of thing, there’s a lot of expenses right at the start.
Kayla: And then since that initial capital, I haven’t actually had to put any more personal money into the business, so the business has been paying its own bills, and then the profits have been going back into the expansion, which the expansion is mainly just to do with that our stock levels have to get higher and higher as we sell more and more products.
Ingrid: To do order fulfilment, you need to have product … Yeah.
Kayla: Yep. We had a lot of trouble at the start where we were constantly out of stock and that’s just because it was growing so fast and we weren’t ordering, taking into account the expansion, and it was selling faster and faster, and we were always out of stock. But I think that created a bit of hype and scarcity that people were having trouble getting the products, so there was stockpiling, and it worked to our advantage in a way.
Ingrid: Yeah, but causing more problem if somebody was ordering three or five or more than they needed, then there wasn’t … Still kind of a nice problem to have, isn’t it? In a way.
Kayla: Yeah, can’t complain. Very stressful at the time.
Ingrid: At the time.
Kayla: I think we’ve got it all sorted out now.
Ingrid: That’s terrific. In those early days, how did people find you? How did you find new customers and how do you find new customers now?
Kayla: From the beginning, most of our customers have come through Instagram. Because the range isn’t anti-aging or anything, it’s mainly women in their 20s and 30s that are buying it, and Instagram is a platform that they’re all using daily. We’ve worked with a lot of Instagram influencers, as they’re called, which are Instagram accounts with really big followings, and we work with the beauty gurus.
They were all trying Tribe, posting about it, and then that just got us this huge exposure, that in just under a year, we’ve actually grown to 17,000 Instagram followers and that’s very sustainable now that when we’re posting, not 17,000 people are seeing it, but maybe 3 or 4000 every time we post, and that’s really driving all of our sales now.
Ingrid: Yeah. I have to admit to not being a devout Instagram person, but I am getting more and more sucked into it. I have to say, I loved some of your posts. There’s a lovely mixture of posts on your Instagram feed, so it’s not all, “Buy my stuff.” There’s lots of your personality in there as well.
Kayla: Yeah, definitely.
Ingrid: And some really good evidence of the before and after, so people can really see the impact that your product has.
Kayla: Definitely. We did a survey with the customers recently asking them what kind of persuaded them to try the brand, and they were all saying the before and after results from the other customers is what swayed them towards the brand.
Ingrid: See, so that, if you know that’s working, then wow, you just do more of it, don’t you?
Kayla: Exactly. It’s so great because the customers are actually generating that content for us and it’s very genuine, and we’re just putting it out there, and it’s attracting more and more customers.
Ingrid: That’s fantastic. Congratulations.
Kayla: Thank you.
Ingrid: Okay so pricing, you’ve been in business before, so you knew what cosmetic, the beauty industry, you knew about pricing in there. How did you choose a pricing strategy? Just going forward, you don’t have to tell us again, how much each product costs, but what’s your philosophy about pricing, Kayla?
Kayla: I use the generic pricing strategy that is I guess suggested for product based eCommerce businesses. And that is your cost of manufacturing times two becomes your wholesale price, and then double that again, so cost of manufacturing times four becomes the price that you’re selling it to the end consumer. That’s a generic calculation that can be used across all products. It gives you enough of a margin that when you’re taking into account all your advertising, all your other expenses, that you still can have a profit margin for yourself in there as well.
Ingrid: Yeah, so that you can pay yourself and then you have profit to actually put back into the business to develop new products, and to go into new markets and yeah, terrific. Now, exit strategy. Maybe you’ve thought about it? You’re not even a year old, but did you start this business with an idea of what your exit strategy would be?
Kayla: I honestly hadn’t really thought about it. I was thinking about it just this week when I was listening to your podcast, and some of the other guests were talking about their exit strategy. I thought, “I really don’t have one ’cause I’ve never considered that I would ever sell Tribe.” I feel like this is going to be my whole journey and that I will always be the director of the brand.
I know they say everything’s for sale for the right price, but I really can’t imagine ever seeing the right price, that I would sell it, because it is my whole life now. But in saying that, I have been going through and automizing a lot of the processes. I’ve just got a new staff member onboard, so I was writing down things as I go with her. It’s not so much an exit strategy, but it just means I can step away from the business a little bit in the future.
If I do need to employ people to manage it, or yeah, get more employees onboard to free up my time, I’ve got a bit of a strategy of how I can step away. But I think I will always be the director.
Ingrid: I think it sounds like you will. Can I just ask you, and this is a question without notice, so see how you go. When you were writing down those procedures or how you do things, what was one of the things that you discovered in trying to communicate how to do something to someone else?
Kayla: I think keeping things as simple as possible is the best way to do it. When I’m training someone else, I have to think they have to do it 60% of how I would do it myself, because I do everything in my own business to absolute perfection, because I know what needs to be done, and I have that care for the brand.
But if someone else is doing something for me, I can’t expect they’re ever going to do it quite as well. Not saying they’re incapable, but just because they may not have the time or dedication, so I’m mapping out the steps, but in a much more simple way than what I would do it myself.
Ingrid: And that also then leaves them room to add their personality, or to add … ‘Cause they may even have ideas about how to do things a little bit differently that’s not necessarily better, it’s just different sometimes, isn’t it?
Ingrid: Yeah, I think that’s a really … Sorry?
Kayla: The staff member I’ve got, she’s already come in. She’s only been here a few weeks and she’s already thinking of great ideas for the brand and it’s good to have someone to brainstorm with and get very valid ideas for the business as well.
Ingrid: That’s really terrific to have found someone like that, isn’t it?
Ingrid: I think to give them 60% really does allow them to have that creative scope as well. Terrific. Okay, let’s have a little bit of reflection. What do you wish, and I know you said you learned your mistakes from the previous business, but is there anything that you wish you’d done differently at the beginning of this business?
Kayla: Yes, there’s one thing that I didn’t do and it caused me a lot of trouble down the track. Right at the start, I didn’t trademark my brand. We were originally called Lifesaver Skincare. About two months into the brand, so we’d already paid the graphic designers to do all the labels, we had launched, we’d done everything under the name Lifesaver Skincare, and then we received a trademark infringement from a lawyer, and it said we had 24 hours to cease trading under that name.
That was a very chaotic time. We had to take the brand off the market and completely rebrand under the name Tribe Skincare. For anyone that is starting a business, make sure you get a trademark. It doesn’t matter if nobody else is using that word or that brand name, you just need to trademark to save yourself the trouble in the future.
It only costs between $300 and $700 to trademark, so it’s very worthwhile money that you can spend at the start. It’s a lot cheaper than rebranding down the track.
Ingrid: Down the track. Did you just jump on the ASIC website and do that yourself with the branding?
Kayla: I ended up getting a trademark lawyer to do it for me. It was something I wanted to outsource to make sure that I got it correct.
Ingrid: Particularly when you’d had “the letter”.
Kayla: Yes, exactly. She had to help me with all that side of it, as well. I needed advice on that, and then advice moving forward, so yeah, had a trademark lawyer, but you can also do it yourself on the website.
Ingrid: You can. I think it’s such a good point you make, that the cost of that was significantly less than having to rebrand, that the cost of having to have new logos and new website and everything. When you say Lifesaver, that was because Lifesaver belongs to the life savers, or Life Savers the sweets?
Kayla: It was another big skincare brand. They had just trademarked the word lifesaver. They weren’t actually using the word but for me to fight that it was a non-used trademark would have been just as costly as doing a whole re-brand.
Ingrid: I have to say, given the way language is being used, maybe Tribe is going to work for you better anyway, because of the way that word is now being used as a community, a tribe, like it’s very colloquial now as a group of people who belong in the same demographic.
Kayla: Definitely. It’s a very inclusive word, and yeah, I think it really does suit the brand alot better. I think the rebrand was almost the best thing that could have happened to the brand, even though it was stressful and costly at the time. I can-
Ingrid: I cannot imagine.
Kayla: In hindsight, I’m glad it happened.
Ingrid: Yeah, sometimes things happen for a reason, don’t they?
Ingrid: Okay, so slightly different question, what do you wish you’d known from the start?
Kayla: I think when I was reflecting on this, I was reflecting more on the skin clinic that we had. We signed straight into a $50,000 a year lease, thinking that we were going to be able to pay it. Then, I wish I had have known how exhausted and how broke I was going to be. That went on for 12 months at least.
People do say it, that your first 12 to 24 months of business, you’re not going to make money, but when you’re stuck in that, it is so, so difficult to not get yourself in a rut, and look forward to the future. Yeah, definitely wish I had have known about that, or wish I had have taken the advice of other people. It really is about putting those procedures in place before you start the business.
In hindsight, I should have built up a client base before going and signing a $50,000 a year lease that I had to pay, so yeah, just evolving your business slowly, rather than just going from zero to 100 all at once, and then getting yourself really thrown in the deep end.
Ingrid: And Kayla, thank you for that. One of the very first webinars that I ever ran was around commercial leases and about the things to avoid and things to … If anybody’s listening and they’re in Australia, most of the points will actually still apply to anybody else. There’s a link on my website to the webinar about the commercial leases, because it talks about just how you can get caught in something that could last three to five years, depending on how long you’re signed up for. The only money you’re making is going straight to paying for that $50,000 lease.
Ingrid: It’s a lot of money to cover, it’s a lot of facial treatments, it’s a lot sales of skincare products when you actually try to calculate how much it costs. It’s a huge learning, isn’t it?
Kayla: Yeah, and we really were, to the point, we were paying our lease through the customers we had, but we had our mum and dad who were paying both mine and my sister’s rent, and yeah, it was really, really full on.
Ingrid: Pretty tough time for everybody. Thank goodness you had family to support you.
Kayla: Yeah, and not to put people off doing that, but just putting the procedures in place and doing it slowly rather than taking that huge leap, because yeah, commercial leases really are huge.
Ingrid: And I think people just don’t realise how many clients they have to see, or how many items they have to sell in order to pay that every week.
Kayla: Yes, definitely.
Ingrid: Terrific, thank you so much for being so honest with that. That’s a huge learning and I appreciate for our listeners that you were so honest, so thank you. Now, you’ve mentioned your mum and dad and your sister, but who apart from yourself has been the greatest assistance to you and to your business? Now, you can name names or you can talk in philosophical way.
Kayla: Yeah, so there’s been a few. My boyfriend’s definitely one. He helped me pack orders and stuff, back in the early days. He’s a professional writer, so he helped me with a lot of the copy and when I was doing blog posts and all that, he was able to assist with all of that, and basically just running the household while I was just busy all the time, so had to do the washing, the cleaning, cooking, everything. He was huge assistance and of course, emotional support as well.
Influencers that I’ve worked with on Instagram. I do have to mention that they have been a huge help to growing the business. Whether it’s them posting for products or paid collaborations, I really feel that a lot of them went above and beyond to give the brand the most exposure they could.
Ingrid: That’s really lovely. That’s really lovely.
Kayla: And then I think the other main one would just be in general, other business owners. I find it really beneficial to talk to and connect with other business owners through Facebook groups and that kind of thing, and get different ideas, bounce ideas off each other and brainstorm.
Ingrid: Lovely. Lots of different people that you get assistance, and you’re open to having that assistance I can tell by how you’re talking, because we do it need, don’t we?
Ingrid: Where do you get good feedback from? Who gives you good feedback?
Kayla: The customers. All of our feedback comes straight from them, mainly through reviews on the website. We’re constantly getting feedback. We’re about to reformulate our SPF moisturiser, because the feedback has been that it’s too liquidy for what the customer wants, so we’re looking at using different thickeners to fix that problem for them.
They tell us everything. They tell us whether they like the smell of something, whether they think that a product’s too big or too small, whether they want to see mini versions, whether they want bigger versions. They just give us all the feedback that we possibly could need, and we’re constantly in touch with them asking for feedback on certain things, and that’s just really driving the brand in whatever direction it needs to go, to keep the customers happy.
Ingrid: Fantastic. That’s just terrific to hear. Someone comes to you and says, “I’m thinking about starting a business. I’ve got this idea.” What do you say to them?
Kayla: I say definitely do it. I think that nearly every business owner would tell someone else to do it, because it is a very rewarding journey, and exciting. You have your ups and your downs and everything. The main thing I would want to tell them is that they really do need to find a niche and find an audience, and everyone always says it to you. I know before having a business, I didn’t really understand what a niche was, and I thought it was best to be something for everyone.
Because I thought if I’m selling to everyone, I’ll have more customers. But the thing is, if you’re talking to everyone, you’re not talking to anyone, so you’re much better off to pick a very specific audience and just be the perfect product or the perfect brand for that small niche audience.
Ingrid: Thank you. I think that comes back to what you talked about earlier when you said about how there is no other product on the market that is just for sensitive skin. It’s such a good example of what you’ve just said. And those businesses that try to do ‘sensitive’ inside their cosmetic products aren’t getting it right completely, are they?
Kayla: That’s right. They’re not getting it right and they’re just not getting the same information out there, ’cause they’re trying to appeal to people with oily skin, dry skin, all different people, and give out all this information whereas I’m very, very focused on giving out information on sensitive skin and how we can fix that problem for the customer.
Ingrid: Yeah, so just these people. If it works for anyone else that’s great, and it’s a bonus, yeah. What are the three key characteristics that you think you have, that makes you successful in your business?
Kayla: I think you definitely have to have passion for what you do in every possible way. You need to live and breathe your industry, live and breathe your product, and have a passion for business as well as the product, because when you become a small business owner, you end up doing every single role in that business, and you need to yeah, love wearing all the different hats and learning all the different things.
Resilience is a really important one, especially at the beginning of a business. I know a lot of people struggle with a startup, they look at already established brands and businesses and that’s where they want to be, and they feel like it’s such a long journey to get there.
So, you really do need that resilience at the start to just keep trying and trying and try different things, work out what works for you, and then scale it from there. Being level-headed is another really important one. So, I just think I have to have a business brain rather than an emotional brain.
When I’m making a decision, I’m making the decision based on what the business needs, rather than what I emotionally feel the business needs, if that makes sense.
Ingrid: That’s a terrific … I don’t know that I’ve ever had, in all the interviews I’ve done, I’m not sure anyone’s actually expressed that the way you just have, about being level-headed and making the decision from a business brain, instead of the emotional, what you think the business would want…..It’s a really astute observation about a characteristic of yours. Probably one that most people have, but they wouldn’t think to express it quite the way you just did. Thank you for that.
Kayla: That’s okay.
Ingrid: They’re your characteristics. So, somebody getting started, what do you think are the characteristics they need?
Kayla: You have to be unique and authentic in the way that you do things. Don’t bother trying to be someone that you’re not, or trying to be a business that you’re not. Just be really authentic and show exactly who you are. It’s really important to connect with people and not always be yeah, advertising to them and selling to them. You’re so much better off to give back to those people, help them figure out what they need, and connecting with them through face-to-face or through social media, however you do it. But really getting to know your audience.
You have to have very strong business values, so we’re very clear that we’re Australian made, vegan, cruelty free, and all natural. We always will be. Every single product we bring out, the customers know that it will fall under those four categories, and we’re very, very clear on what those business values are, and we stick to them like glue.
I always just think with a business, your business, someone once said this to me but I really liked it, that your business is a bus and you’re the bus driver, and then you’re driving that bus and you get to choose who comes on and off the bus with you, and who rides the bus with you.
Ingrid: That’s nice. And it’s yours. That’s lovely. Thank you so much today, and I know that there’s been some tremendous value in your wisdom. Is there anything else, ’cause our audience are people who are either thinking about starting a business, or they’re in those early days, or maybe a year or two in. Is there anything we haven’t covered that you’d like to add?
Kayla: We’ve definitely covered a lot of different topics. That’s good. One important thing that I always say to other business owners is all the information that you want is out there. There’s not some secret to business that nobody’s telling you. It’s all on the internet, it’s all on Google, it’s on podcasts, however you go about getting that information. Whatever you need to know, someone has covered it somewhere, and you can find that information for yourself.
Ingrid: And there’s no issue or problem in any business that hasn’t been tackled by someone.
Ingrid: Absolutely. Look, thank you so much Kayla for your time today, and all the very best. I can only just imagine that this business of yours is just going to get bigger and more dynamic and a broader audience. Do you ship overseas? Have you got overseas customers?
Kayla: Yeah, we’ve just opened up shipping to New Zealand and the US, so….
Ingrid: Isn’t that fantastic? Well, congratulations to you. I look forward to being part of your online party. I’m not quite sure what an online party is, but I shall look forward to that-
Kayla: You’ll find out.
Ingrid: … in four week’s time.
Kayla: Yes, thank you so much for having me.
Ingrid: Thank you.