U Beauty’s Simple, Scientific, Viral Skincare
Insight by Oliver Chen
Tina Chen Craig, founder of U Beauty, joins Oliver Chen, Retail & Luxury Analyst to discuss how a modern beauty market filled with new ingredients, techniques, and experiences makes efficacy and education a key priority for brands.
They also discuss U Beauty’s customer and science-centric innovation, how they’re tackling cosmetic confusion through results-oriented, multi-tasking products and how to outperform in an increasingly competitive beauty industry. Topics also include the rise of “skintellectuals,” key digital vs. brick & mortar distribution considerations and marketing strategy.
U Beauty, founded in 2019, became famous for their hero product, their daily all-in-one Resurfacing Compound serum. Their SIREN Capsule Technology focuses treatment on specific skin areas and neutralizes free radicals.
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Transcript
Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Oliver Chen:
Simplified, science-backed skincare, streamlined luxury. Welcome to the Retail Visionary Podcast series, a podcast about visionary ideas and people. We’re also helping you glow ahead in the beauty industry as well. My name is Oliver Chen. I’m TD Cowen’s Retail and Luxury Analyst. In this episode, we’re exploring the growth of U Beauty, an innovative luxury American skincare brand based on science-based beauty founded in 2019. U Beauty was first known for its first product, the U Beauty resurfacing compound, a daily all-in-one serum, but has grown to include 11 products and a growing number of shades. Today we’re thrilled to feature Tina Chen Craig, the founder of U Beauty, and an expert in influencer marketing with over 250,000 followers on TikTok. Prior to founding U Beauty Tina was well-known for founding Bag Snob, a cult favorite internet fashion blog, in 2005. She started her career licensing after graduating from the University of Southern California. So Tina, can you tell us what makes U Beauty different and so successful? You have amazing iconic distribution as well.
Tina Chen Craig:
I think the singular thing that makes U Beauty so unique is our one-of-a-kind technology. It’s a double patent pending SIREN capsule technology, and it’s all about the delivery system. And it is the only innovation in the beauty industry that’s strictly activated in the presence of free radicals. Free radicals are like my soldiers. When I see someone with lots of pigmentation or a lot of damage to their skin, I’m like, “Come to me.” I just know all those free radicals are just going to activate all of our SIREN capsules. It was developed in our medical grade lab in Italy, and you’re not going to see this precision perfect delivery system in any other skincare. And it’s the reason products that I only dreamt of before are now in the market. I’ve worked in the skincare industry for almost 20 years as an ambassador, helping brands develop products, launching products, front of house.
I would do events, retail events. So this is unlike any other skincare I have ever worked with. And unlike other skincare that release actives all over the skin, our SIREN capsules lure damage causing free radicals to it, kind of like a magnet, because our capsule wall mimics a healthy skin cell and free radicals are attracted to that exact polyunsaturated fatty acid compound. By attracting only the compromised cells, these free radicals are attracted to us, the healthy cells are preserved, and while the capsules release age-reversing actives only on the free radicals. So basically it’s like this, Oliver. Our capsules mimic healthy skin cells. When we apply our U Beauty, I know camera is off, I’m just showing you, when you apply it’s going to bypass the healthy skin cells, whereas in the past, products we just spread harsh actives all over your face. Ours is only activated in the presence of free radicals because free radicals have to attack the capsules, penetrate through the capsule wall thinking they’re attacking healthy skin cell, thinking they’re going to steal a healthy electron.
Instead, like a Trojan horse, the capsule bursts open and releases all of the active ingredients that neutralize them and reverse the damage it’s done only on the damaged areas instead of all over your skins surface. That’s the easiest way I can explain it. And your skin gets nothing but benefits with faster working results minus the risk of irritation. I’ve always had really sensitive Asian skin. I could never use retinols and vitamin A’s before. And recently the Journal of Cosmetic Dermatology published a white paper classifying, I mean, I’m Chinese, you get it? I just wanted that validation that this is truly the most unique delivery system. And this white paper, peer-reviewed by five doctors, classified U Beauty’s, proprietary SIREN capsule technology as a results-driven breakthrough in the effective delivery of active ingredients to skin. To quote them, they said, “Our technology stands out as revolutionary advancement in skin care.”
So that’s why it’s so different and people see it the minute they put it on. People will tell me, “Oh, I can’t use retinols, I can’t use active ingredients.” And then I’m like, “Just try it. Trust me.” And they try it and they go, “Oh.” They’re like, “The next day I kept waiting for that ensuing rosacea that comes after vitamin…” I’m like, “I know, me too.” But that’s because we’re bypassing the healthy cells. We’re only going where the skin needs it because we’re allowing your skin… Your skin dictates where the active ingredients are released, basically where your free radicals are and everybody has some sort of amount of free radicals.
Oliver Chen:
Tina, how did you discover this and how important will free radicals be to your product line going forward?
Tina Chen Craig:
Well, it was really interesting because about seven years ago, I was burnt out. I had been working in the industry for a long time. I was launching brands, I was rebooting heritage brands, like the biggest brands in the world. If I named them, you’d be like, “Oh yeah.” You walk in any cosmetics store, they’re lined up and I’ve done it all and I was burnt out and I just knew that there was really not a lot of true innovation in the industry. And I was at dinner with a long-time friend and his wife Katie, and I knew they were in the beauty industry as behind-the-scenes product developers for about 20 years. And it was just friends catching up. We’d never worked together. I had just launched a talent agency. I was actually hustling them to get one of my talent on HSM, which they had a lot of connections there.
They had done private labeling for a lot of different brands. And we just started talking and they asked me about skincare and what I was doing, and I just said, “I’m really frustrated. There’s so much, my skin…” I was having I think some sort of rosacea on set, and I said, “My skin is just wreaking havoc.” I was in my mid forties and I said, I’m so sick of everything, this cosmetic confusion, no one knows what they’re supposed to use. And of course, I was always blamed for creating it because almost 20 years ago I wrote a blog post on Beauty Snob about the 13 step routine using 20 products a day. And so I said, I feel like I’m the one that has to end it, but I didn’t know how. And that’s when Katie told me about a technology that a medical grade lab in Italy had been developing but had not brought to life.
It didn’t even have a name. It was a brilliant scientist who was developing a capsule that mimics a healthy skin cell and that you could pack this capsule with anything you want and you can apply it and it will deliver active ingredients to your skin only where it needs. And I thought, “That sounds like sci-fi. I don’t believe it.” And I was on my way to Southern California to work with another brand, and it just so happened that the lab owners and the scientists were staying at my hotel, my exact hotel, the same 24 hours I was. And I just knew, I mean, I believe in destiny or good luck, whatever you want to call it.
And so we just sat down and for hours that day, I landed around 10:00 AM I think I got to the hotel by lunchtime. We sat down and for about six hours just discussed my dream products. And at that point I just thought, “I have the ears of one of the biggest medical grade labs in Europe. They’re going to develop one thing just from my skin.” I was super excited. Never at this point did I even think I would have a skincare brand. It was just making me a product because I couldn’t do laser resurfacing, super sensitive skin. It was just about making me the best product that I couldn’t find. It was all about Tina not aging anymore.
Oliver Chen:
Tina, the resurfacing compound is iconic. And that was your one product. How did you think about one product versus many over time?
Tina Chen Craig:
Product expansion was always on top of my mind, but at first I wanted to just create the best product I couldn’t find. And when this sold out in 21 days, we made enough for a year and it was just me thinking, I’ll just sell on my Instagram. I’ll buy a Birkin, Katie will go on her boat trip and just, we each had our day jobs and I was being paid very well as a beauty ambassador for some of the top brands in the world. And when we launched this and it sold out in 21 days on November 1st, 2019, we didn’t have an LLC until March 2020.
When people think, “Oh, she’s had this plan, she’s going to…” No, this was all about a journey of creating the best product I couldn’t find. And when it did so well, Katie and I thought maybe we should create an LLC. And then that’s when we thought, well, maybe we should expand into a really great moisturizer that hydrates and does what it says it’s going to do without having to rub too hard, doesn’t leave you feeling kind of slimy and sitting on top of the skin, but yet still protect the skin.
So expansion is always based on need and advancement. And I touch on every department, but I’m mainly focused on product development because I only care about what goes inside the bottle. Once I’m done with a product and I know it’s the best, and I’m psychotic, I literally will do multiple dozens of rounds of reformulating. And finally Katie was like, “You know, every time you reformulate, it costs money.” I’m like, “Oh, it does? I don’t care.” I mean I care, but I just want, to me, it wasn’t worth doing unless I could absolutely have the best. And so creating something concrete from an abstract idea, I want invisible Spanx from my arms for the skin on the back of my arms that is very susceptible to the effects of gravity. And it’s like the skin issue. It’s not about your size or your weight or working out. It was my skin.
And so that is so satisfying and my biggest motivator, because I would tell my chemist things like, “Oh, I want to recreate the same characteristics as immortal jellyfish.” Because I would get immortal jellyfish stem cell treatments by my Shanghainese grandmother when she would take me when I was back home in Asia. So that’s the kind of abstract, insane ideas I give to them. And initially they would say, “Tina, it’s not possible.” But finally with me, no one says no to Tina. So I just kept at it until, I always know how to get people to a yes. So now when I give them an insane idea, they’re like, “Okay, we try.” So it’s kind of like cooking for me where it’s just creating and having these ideas of what skincare should be because I’ve never been a product developer. I don’t have those confines and guardrails that some people might be like, “Well, science doesn’t work like that.”
And I’m like, “Why doesn’t science work like that? Why can’t we make science work like that?” So I really push their boundaries. And also no product gets released without U Beauty’s rigorous clinical testing and my approval, which I think, we test during the development. I think a lot of brands, they do their clinicals, they test in the lab and then they do the final testing once the product’s gone to market and consumer perception. With us, we test in vitro in the lab and in vivo during the development. And so it all comes from my desire for something that doesn’t exist yet or has to do something that’s never been done before. And that’s how I think of product extension. That’s was very like, people are like, “Wait, you have a compounded serum that replaces six to eight other things, then you have a hydrator and now you have an arm sculpt? Before face wash?”
And I say, “Well, the face wash isn’t ready.” So for me, unless it’s the best, I’m not coming out. And then the eye cream took forever. So we had all these other products before the eye cream came. And so to some people it might seem kind of haphazard and not make sense, but it makes absolute sense to us because we’re only going to launch things that are absolutely the best. And I’ll only ever launch multitasking products that give you what your skin needs and produce superior results. So you’ll never find a product in our line that mimics the effects of another formula that already exists because theres no reason to do that.
Oliver Chen:
Really authentic and real innovation and real results. Very customer-centric. Would love your thoughts on what is a skintellectual? We’re seeing much, much more robust education and consumer engagement. Second question, is BagSnob.com, thats an iconic luxury fashion blog? I think it’s really giving you an edge, but could you speak to these two topics?
Tina Chen Craig:
Of course. I think the U Beauty customer is the ultimate skintellectual. You should see these women who come to my personal appearances, the one I did in Valley Fair near Silicon Valley, so the woman who came, they were scientists I didn’t even know. They would sit down, I’m like, “Hi.” Do my thing and touch their skin. And they start asking me about ingredients and about safety and skintellectuals, they’re not the victims of marketing. They don’t think, “Oh, I want clean or I only want sustainable.” No, they’re like, “Tell me the science.” They want safe chemicals. They want to know how I formulated it. They want to know not only the percent, everyone now knows when you read a box, the top of the line is that it’s the biggest load of actives or whatever it is that you have. And you go down the list and they’ll say, “You call this a retinol product, but I see retinol palmitate is very low on the list, so that isn’t actually, that tells me it’s not a retinol based product.”
But that’s the thing. Because of our delivery system, we’re able to use a lower percentage of actives than any other products on the market, but yet we give similar results as if it was prescription. And I have dermatologists who test these products for me. At first they’re like, “Tina, this is more like a vitamin C. It’s not really a retinol.” But then they’ll use it and they’ll say, “Wait, it is giving targeted results.” And Dr. Dan Belkin even said, lasers can’t discern from your healthy or your damaged cells. And most products, over the counter products cannot either, but U Beauty’s SIREN capsule is able to track just the damage. So that to me was the biggest endorsement. And that’s what I think of as a skintellectual where they’re not just reading all the marketing jargon like, “Oh, it’s got to be organic and clean.”
Poison ivy is organic and clean, stick that on your face. So for our customer, it’s all about the science of it and truly knowledgeable and not just blindly saying, “Well, is this safe? Is it clean?” They just want to know about the safety and what rigorous testing that we’ve done before we took it to market. When I launched Beauty Snob right after Bag Snob, I’m going back to the other question. I had worked on just as many beauty campaigns. In fact, I’ve always thought beauty was my number one love because my grandmother was Shanghainese and growing up, my first memory, really, I’m not kidding, was her with this big huge plate of fish eyeballs and chicken feet and chicken butt. And I remember just crying and she telling me, “Give you good skin, good skin, pretty, pretty.” Everything I ate growing up, literally from the time I was born until she passed, it was always giving me things that’ll give me good skin, that calm the fire chi inside of me, the inflammation.
And so I had launched Beauty Snob shortly after Bag Snob because beauty like bags to me was a great equalizer. And if you noticed in department stores, beauty department, bag department, always on the same first floor because it didn’t require sizing. And anyone regardless of age, race, gender, skin type, socioeconomic status can have a great bag and can buy a great lipstick. And for me, I was always very small and going upstairs with friends to shop and the department store was always humiliating. They’d be like, have you gone through puberty yet? I mean now it’s worked to my advantage because I still get carded in my fifties. But at that, when I was younger, I remember loved spending time on the first floor, the beauty department, the bag department. And so U Beauty was conceived also with that as one of our central philosophies that beauty is for everyone.
Good skin is for everyone. And the reason I think ours is a success story that actually works is because it just works. The technology that drives the brand is the foundation upon which we’ve built U Beauty. And I do think our target audience has evolved though. We’re seeing a commonality. Skintellectuals are educated, they’re mindful consumers, they’re not swayed by the hype like I was saying because for a while there was always this thing, “I’m only using organic.” And then one of my friends opened her organic mask, by a huge brand by the way, and it was molded. And I said, well, it’s interesting. I buy organic foods, I use an organic shower gel and all that. But when it comes to the science, for me, science always trumps, I believe in science. I just want to know what the clinicals are.
I want to know what it’s doing on top of my skin and beneath the surface of my skin if it’s able to get there. And what is the long-term health of my skin? That’s what I’m really interested in. And that’s what I feel like, I am that customer and the skintellectuals are educated, they’re mindful, and I think that’s why we really resonate with them because when they come and speak to me, they realize, oh, she’s not just trying to sell me 5 million things. And I’m “Like, look, this works great for you.” Initially, I say resurfacing compound twice a day for the first two weeks. After that, if your skin is resurfaced and it’s exactly the way you want it, cut back to nighttime only to save you money, not me.
If you use it twice a day, it’s great. Even better, you’ll buy more. But for me, if it’s doing great after the first two weeks, then cut back. And then if it’s wreaking havoc and you’re going out a lot, having your cocktails then go back up to twice a day. So for me it’s all about how to achieve the healthiest skin possible and just preserving whatever healthy skin cells I’ve got left on my skin.
Oliver Chen:
So what about clean beauty versus science-backed beauty? What is the difference? What should consumers know? And clean beauty can be confusing to customers.
Tina Chen Craig:
I got into it for a while as well until I started developing products and learning the science of it and started taking cosmetic science classes online. And there’s no official definition of consciously clean in the cosmetic world. So we can only speak for ourselves. And for us, it really equates to prioritizing safety, efficacy while relying on science, ample clinical toxology testing included, and really making a concerted effort towards sustainability. For us, we don’t sit there and tell, “Oh, we’re sustainable.” Because that’s just who we are. I think if you can only talk about being clean and sustainable, then you have nothing else inside the bottle. And so for us, we really devote energy into educating the customer and leading with transparency, honesty, integrity, and what’s not in an ingredient list is just as important as what is. And with all of our formulas developed and produced in one single clinical-grade lab in Italy, we adhere to the European safety standards of laws or regulations as well as a strict exclusion of over 2000 ingredients that’s allowed by the FDA.
So we source raw materials that also align with our sustainability goals. We’re sustainable from literally, because I have a teenager who’s now 19, he was 12 and a half, 13, he’s going to be 20, he was 13 when we started this. Katie has four teenagers. She has a 22 year old now. So we were called boomers at Destroy the Planet. So for us from day one, we were like, “How do we make the best products in the most sustainable way?” Our lab is a hundred percent Co2 free. Every bottle of view beauty that you buy offsets a product from another that’s not Co2 free. And even our lights are kept on with green energy. And so we source the raw materials that align with our sustainability goals and we use fully traceable ingredients, tested and proven to be safe. We use recycled materials that are recyclable and we’re always testing final formulas.
And so we are really proud to say that we live up to the highest standards, safety standards in the industry. And for us, science and sustainability really do come first alongside efficacy and we have a zero waste goal. And I really can’t just justify creating products for the sake of it just to keep making money, especially in such a saturated industry and so much waste. And as a beauty influencer, we used to call it the beauty graveyard at the end of each month, the dozens of huge boxes I would get from these huge brands without regard to who I am, what my skin color was, I would just get the entire collection of foundation colors or I would get every, they would just send these huge things, trunks, I’m sure you’ve seen before. It’s insane. And I didn’t want to just create things just to create it.
So innovation, technology is our driving force, two of my greatest passions. And we’re minimizing the chaos and heralding a shift in the way that we take care of our skin. So these are my personal values, Katie’s values as well. And our brand will always reflect them. And because we’ve always been science-focused, formulating our products responsibly with evidence backed by the scientific research and supported by human trial. I don’t use lab rats. I use lab humans if you like, to volunteer, Oliver. And I adhere to regulatory limits that ensure the safety. So there are actually environmental benefits to using bio-engineered ingredients like not depleting the natural resources. When I wanted to recreate the characteristics of immortal jellyfish, because they’re the only organism on this planet that will not die unless you eat it. My grandmother used to say, you could slice it in half, it’ll grow another tentacle.
It’ll just keep growing its own cells. It’s able to literally take damaged adult cells back to nascent stage. There are immortal jellyfish that’ve been alive for millions of years. I’ve been obsessed with them my entire life. And so when I said that our biochemists were like, “What?” And I said, “No, just bio-engineer it. We don’t need to destroy any immortal jellyfish, but I want you to study those characteristics and see how we can take our own damaged cells and try to reverse-engineer and back and make it into more healthy nascent stage.” And so by not depleting natural resources, it takes pressure off supply chains to allow the natural regrowth, whereas natural ingredients require steps to remove impurities. When we bioengineer, we could just ensure that it’s very safe. So all U Beauty raw materials and packaging pass the science committee on consumer safety, and we have these toxology analysis or quality checks [inaudible 00:22:24].
Because we don’t use third-party labs, if anyone gets a reaction, if I notice something off with a cream, we can actually trace it. I remember when we were launching our multimodal defender SPF 30, it was all approved, it was beautiful, it was buttery. And then I got the final sample and I was with Katie, my partner and I flew back to Dallas and I said, “Something’s weird. It doesn’t feel… There’s something, it’s gritty.” And she’s like, “Doesn’t feel gritty to me.” So we asked, and [inaudible 00:22:50], we had an eight people team, and everyone’s like, “It doesn’t feel gritty to me. It feels smooth.” I’m like, “No, no, no, I feel it. There’s one little grit.” And I was like the princess that slept on a pea, I could feel it. So I kept asking the lab and she kept, and finally they came back and they said, well, we traced it back to when we filled it.
And you’re right, that machine, it was filled and then they clean it, dried it, and it wasn’t dried exactly. So there was a little bit of humidity, a little bit of water droplets. That combined with that specific capsule created this little bit of grit. And so I said, “Well, you got to dry it first.” They’re like, “Well, obviously.” So they kept doing it, but then they realized it was impossible to dry it in the way that it needed to be. So I said, well, you have to figure it out, because I’m not going to launch this product. So they spent, I think it was like 30 or 36 or 60,000 euros rebuilding a new filling machine just for my product. That’s how insane and how annoying I am. And so yeah, our products are sold internationally, so they comply with each region’s legislation and safety requirements, of course, we also follow all regulatory rules regarding ingredient processing, dosing methods, and again, there’s no universal definition for clean within the cosmetic industry, but our clean represents the highest level of safety and transparency standards.
And we have the butterfly mark and we went after that before any other luxury skincare brand. It was, the Positive Luxury in the UK was mostly geared towards fashion brands. So because I have a fashion background as well, I was like, “Oh, we should get this Positive Luxury butterfly mark.” And they vet out everything used from your supply chain to your channels of delivery. And so it’s like a vigorous three to six month process, even the water we use. So we’ve gotten that butterfly mark repeatedly and we just got it again. And now I see, now when I go on there, I see all these other beauty brands that have followed suit. We did this back in 2020. So staying true to these pillars will always remain at the forefront of our development. And clean doesn’t really mean anything to me, for me it’s safety, efficacy.
Oliver Chen:
Yeah, Tina amazing story. We’d love to hear about your growth journey ahead and how do you think about customers and customer lifetime value?
Tina Chen Craig:
We have an insane sticky rate. Our return rate, not return of products, but the customer return rate is some of the highest KPIs that anyone’s ever seen when I talk to experts in the area and they get an inside look at our KPIs, when we were going through our first, we went through our round of investments we went in with PE. So I think our growth journey, the release of every product, especially given the fact that we devote years to their development. I mean the oil that just came out that took years, everyone fought me. Not everyone I would say, but a lot of it, on the team were like, “Do we really need an oil?” And I’m like, “Yes, we need an oil that’s not just an oil.” This is an oil gel hybrid that even the oiliest skin can, as you can see, and it just goes right into the skin.
So we devote years to their development. This was probably almost four and a half years perfecting these formulas over countless rounds. And not to mention I spent really an entire lifetime dreaming about these kind of products. I would go, “Oh, it would be so amazing if we could have this eye cream that glittered like diamonds on the top, but on the inside really rebuilt and strengthened your skin so that you can avoid the puffiness and the dark circles.” And so I think perfecting these formulas really mark milestones for us. And so our growth journey is still looking at a complete, we just did a complete rebrand, a subtle evolution of our brand system. And obstacles ahead, I guess just cutting through the noise because I know that it’s the best. Other people that have used it have told me, but there’s still so much noise right now and we’re just tinkering along.
We’re not very flashy, I should say. We’re just like the little engine that could, we just keep going, keep going. I just believe in this so much that years and years later now people go, “Wow, you were right. I should have tried this when you launched.” Some of my best friends. So not just me, people will be like, in the last six months I would say, I’ve had friends, family, cousins who are like, “Wow, this is really the best.” Hello? But I think when they know you, they just go, “What is she doing?” So for me, it’s just really staying clear on our path and staying the course. But at the same time, because Katie and I are moms, we’re very quick to recalibrate, pivot. So whenever we do get in front of an obstacle, we’re like, “Okay, this didn’t work. Let’s go. Let’s try this way.”
We’re not like that person, I’m not going to say male or female, who will refuse to ask for directions and just keeps going because that was the map that was charted. She and I are always quick to “Wait, let’s talk this through. How do we change this? How do we pivot? How do we recalibrate? All right, let’s try this way. Okay, okay, so this is going to delay the launch. It’s okay. So we’re not going to make our budget that month, it’s okay.” I’m like, “It’s fine. I’ll go on Instagram, I’ll do more lives. Whatever it takes, I’ll go on the road.” As long as that product is exactly the way it should be. I don’t allow myself to be held hostage by really any budgets because I know I can make it work. It’s like for me, I always say, “Yes, I’ll make it work.”
Oliver Chen:
Yeah, you have unrelenting standards. You have really strong relationships with great retailers. How are you thinking about distribution in terms of direct, wholesale, e-commerce, and physical and experiential?
Tina Chen Craig:
Because like I was saying, I’ve worked with some of the biggest retailers launching brands there. I’ve always had great relationships with retailers. And since our launch though, we’ve always been very digitally minded. Because I am a digital native, and of course we launched November of 2019, near months before a global pandemic. So that really galvanized us to really lean into our DTC more than perhaps we had planned because we had planned to launch at a huge New York retailer that spring. Of course, the world shut down, but we have a strong and continuously burgeoning brick and mortar presence, especially at Nordstrom, Bergdorf Goodman, Violet Gray. I always call Violet Gray the little engine that could, it’s just like this tiny beautifully curated store that an does immense amount of business. And now we’re at over 125 Blue Mercury locations in under a year, just to name a few, just great partners that believe in our vision.
And that’s the thing. We’ve had huge global retailers come to us from the beginning that wanted the resurfacing compound. I kept saying, I just don’t think your customer is right for us. Other than seeing this product being talked about by influencers and stuff, why do you really want this as part of your arsenal of brands? What do we bring that’s really different and can you really bring us that customer that’s going to resonate? So because we’re such a small brand, I just didn’t want to have to spend time unnecessarily on these huge marketing budgets when I just know I could take that money and keep using it in R&D and keep developing products because eventually it’s going to catch on. So our e-commerce partnerships are also vital. Net-a-Porter was our first e-commerce retailer, and it was because the beauty buyer was one of the test humans who she just changed her skin in three days.
And so she’s like, “Let us sell this.” And I’m like, “No, no, no. I’m just making this from my own Instagram. I’m not selling this to retailers.” So that was really the trigger. And when we sold out in 21 days, they were just, they just kept selling out. And it was like the Supreme drop. We would see our resurfacing compound sample packets on eBay back at the end of 2019. But that’s why I’m really glad though now to be able to be at retailers because I love in personal experiences and appearances, I was just in Bloomingdale’s in Tyson’s Corner near where I grew up in Potomac doing a Lunar New Year appearance. And that’s really important to me because just be able to talk to that customer whenever I have the opportunity to make… I love it. I love to talk to people, and I love, because that’s how I started my career was showing brands how we could do these in-person appearances and really make a difference in their top line.
Because once you’re talking to people and explain what it is, they really get it. And so I’m always like, the brand retailer wants me, I’m there in a second. Meeting customers in real life really energizes me and reminds me of why we’re doing this. I’m doing this so everyone can have great healthy skin. And it’s also a great way to gauge responses to what we’re putting out there. And so when I can’t make it there myself though in person, I have such a great team that represent, educate, our clients as well. Our team is growing. So we’re taking a really balanced approach to expansion. Back to your question, as we always have as a future minded brand, for me it’s all about homeostasis and everything balance in life, the very Zen way that I was raised. So understanding diversity when it comes to modes of retail and commerce is really key for us.
Oliver Chen:
Tina, what about your supply chain? All your products are made in Italy. How did you make that decision? What do you see as the future of your supply chain as you have a really great relationship with the science and factory?
Tina Chen Craig:
Well, we didn’t choose Italy just because it’s a beautiful romantic country or the best food, but it’s really because of the brilliant scientists that we work with that made that decision. Because at first I was like, well, we’re doing color for lip plasma because I didn’t want to do 5 million different types of lip products. I’m like, let’s just lean into a really great formulation and do an extension. Why don’t we add color to it? And they’re like, “Oh, Tina, that’s going to require color chemists, so we need to use a color lab.” So I was like, “Oh, you can’t just do it?” So all of that, and then we would look at it and we’re like, we really didn’t want to give up that technology to a third-party lab. And so we really wanted to control it. So the answer? Hire an in-house cosmetic chemist, but really this clinical-grade lab that for years helped us develop what is now known as our double patent pending SIREN capsule technology is the reason we are in Italy.
And that decision is so we could protect the technology and our chemists were able to build a completely new ingredient delivery system, which is now our proprietary encapsulation system that’s proven to deliver these skincare benefits unlike any other. And that was the driving force in deciding to stay with this lab. And unlike many brands, regardless of ingredients, they use most all use the same delivery system. And we make our own delivery system. That’s what sets us apart. And we also know that we want a lab that was Co2 free, like I said, kept our lights on with a hundred percent green energy. So all those check marks for us were like, okay, and also the most stringent ingredient regulations that are the best in Europe. So all of that just, okay, well this works, but we own the technology. We can take it and go elsewhere.
But for us, the lab that we work with is so amazing that we just don’t see a reason to. And there’s several benefits in being in Europe as well. They have a much more advanced way of looking at cosmetic ingredients, extremely careful when it comes to the kind of ingredients we put on our skin as well as the methodologies that we have in developing the products. So all of that, obviously I live in the US, it would’ve been a lot easier if we just went with a lab locally, which I would’ve done. But we just really, the EU standards were so much more stringent and this lab that we work with, and really it’s our brilliant lead biochemist. He is, I call him the dream maker.
Oliver Chen:
Tina, you’re a real innovator. What do you see happening with the future of the industry with respect to these large players and new smaller brands and U Beauty as well as what do you see happening in the future of technology in this convergence of efficacy and healthcare in medical and beauty?
Tina Chen Craig:
I think as the industry evolves and as customers become more educated themselves as TikToks and Instagram, social media and the internet, there’s so much information that I think that brands are being held accountable, which is a wonderful thing. And I think that science and technology first and foremost is going to be the great deciding factor. And competition obviously is, I love, I welcome and I’m very supportive of other founders in the beauty industry and fashion industry, but for us, I think it’s not even just a trend. I think that’s just where it’s going, the industry as a whole, because now not only do we have the white paper published in the Journal of Cosmetic Dermatology, but a medical journal is now studying it. The pillars of our brand happen to be both what differentiates us and what are emerging as trends, I kind of like to think kind of trailblazers.
And when I started Bag Snob almost 20 years ago, everyone I knew was like, “Don’t tell people you’re blogging. What is that? What is blog…” Blog was like a dirty four-letter word, and no one wanted to talk to us. My ex-husband was like, “Don’t tell people you’re doing this. Just do this for fun at home.” Because it kept me at home instead of traveling so much, but I just knew, I just felt it. It was intuitive. I am an immigrant. I moved to the US when I was eight and a half. I didn’t speak English. So for me, relying on my intuition was so strong and I really honed in on it. And with a Shanghainese grandmother always like, “How do you feel?” I’m like, “How did you make that dish?” She’d be like, “Taste it. How do you feel? What do you mean how do you make it?”
It’s like what? Chinese grandmothers make zero sense. So for me, I just knew this is the path I wanted to be on with the blog and then now with this, and I feel like we’re leading that trend, our pillars of our brand, talking about bio mimetic, we’ve been talking about this for years before it became the thing to talk about and what’s shaping the markets now, groundbreaking technology, increasing spotlight on smart science versus clean, organic, da da, da. Like all those things are great. That’s who you should be as a modern brand, we take a 360 degree approach to sustainability.
You can’t just constantly talking about, “This is clean, this is clean, this is organic, da da.” No, I want to know what it’s going to do for my face. Why am I spending $200 on something that I could just buy, just grab a bottle of something in my kitchen and just spread it on my face, which I’ve done in the past. My grandmother, she would eat her grapefruit and then she would put her grapefruit all over her face. That was AHA. This is way before that huge brand came out with the first AHAs in the nineties. So if you want to be organic and clean, just eat a grapefruit, put that on your face and have some chicken feet and go to bed. So for me, it has to be science technology, and I think that is the emerging trend, or it has been for a while, and I feel U Beauty is leading that.
Oliver Chen:
Tina, what do you think about this idea of wellness and the convergence of wellness and beauty? Another topic is exosomes and exosome [inaudible 00:37:43].
Tina Chen Craig:
Oh, yes. I went to Korea to study exosomes. I went to Korea last summer and I was really fascinated, I went to CHOM and then I called all my Korean supermodel friends and influencer friends. I’m like, “Please, I know you guys have secret doctors that no one knows about.” So they connected me with some, and one lady doesn’t even take any new patients without a direct introduction, and she does some of the most beautiful faces you’ve ever seen, hugest pop star bands and actresses. And so I was studying the exosomes, and I think it’s still something that’s being studied. And here the problem with exosomes, I think in the US it’s not being studied enough. And I have to say there are doctors when I hear they’re injecting it and doing things that the Koreans are like, “No, no, no, you have to test patch, you could have really bad reaction to exosome.”
And harvested fat, that’s what it is. Frozen, harvested fat from South Koreans. Anyway, I think, I’m really fascinated by the science of everything. I plan on going back to Seoul this coming summer. Well, now that my son’s in college, I don’t have to wait for summer to go overseas, but I want to take him with me. Yeah, I am very interested in it. The reason I created this was because I was reading about skin conditioning, injections, non-crossbinding, hyaluronic acids that aren’t like fillers, that don’t fill the face, but just condition the face, like Profilo, and there’s something in Korea that they use that’s called, it’s a skin conditioning injection. I was fascinated by it, but it was 2019, I was going to go to Asia to try it, and then the world shut down. So in my head, for about four and a half years, I’m like, I want to recreate that.
Also, I want to be able to use a product at night and then in the morning feel like I had skin conditioning. And I swear to God, when you use this, when you wake up in the morning, this morning I woke up and I’m like… You just feel like, I just want to redensify everyone’s skin. So I want to make it the healthiest possible. So for me, it’s all about redensifying the skin, making it the healthiest. And then I don’t do fillers. I do my Botox up here and in the back, this is what they’ll do here. But I don’t touch my face, just the profile, I don’t touch anything here. I’m blessed to have these chubby Chinese cheeks that I hated when I was growing up. I really am very careful when I do go and try things. I love machines. But as far as exosomes, I’ve not tried it because there’s so much controversy and I am very sensitive and I’m definitely not getting it injected.
Oliver Chen:
Tina, you have a really interesting background in fashion and luxury. How has that intersected with what you’re doing today and some core competencies that you learned previously?
Tina Chen Craig:
Oh God, everything. I think that luxury is luxury. Whether you’re buying furniture or a bag or a new outfit or beauty, you want to know that it’s the best that you can get. That’s the whole reason we do it. We want to know. Actually, I started in licensing first after graduating USC, I bought the rights to , for six territories in Asia. And he was the world’s greatest salesman. I don’t know if you know who he is. He owned Ronco, he was pocket fisherman, he was the godfather of infomercials. He literally invented direct-to-consumers. So he was a mentor of sorts of mine after college and really taught me how to sell and taught me how to connect with the consumer.
So when social media came two decades later, I immediately knew this is a lot like what I’ve always learned. So I think all those core competencies that I have about being super authentic and allowing people and that transparency, and then of course the fashion aesthetics that I have when it comes to marketing, but mainly I think it was my background growing up in this Shanghainese grandmother and this Chinese family where I wasn’t allowed to wear makeup. It was all about skincare. It was all about having good skin. To my grandmother, and you might relate to this, she would say, “You have great skin. I mean, you’re the shortest person here, but you have great skin. You have the best skin, so you should be the most confident. You have good skin, you can get into Harvard.”
I’m like, that makes no sense. Because to her, if you have good skin, she’s like putting your best face forward at school, looking at people, having that confidence. And she was right. I started watching people, people who maybe had acne and their eyes are down. They don’t want to look at you in the eyes. They don’t want you to look at their skin. So what she meant was you would have the confidence to do everything in life, including if you want to go to Harvard, you could go there, not because you have good skin, but because the confidence of that first key. And so that may seem very shallow. So I’ve always been skin-driven, beauty-driven, because of good skin growing up. And so taking care of my skin was super important. And I think all of these core competencies led me to U Beauty. My older brother used to say, “You’re like a big slot machine. All you do is keep putting money into your…” Because I would always get facials and beauty treatments and dah, dah, dah, dah. And now I look at him and I’m like, “It’s paid off, right?”
Oliver Chen:
But Tina, it’s been amazing to be with you. The innovation is so apparent, the efficacy, the science, the rigorous testing and your commitment to customers and quality is apparent too. Last question, what’s one thing that you want the audience to remember and any closing remarks?
Tina Chen Craig:
The one thing I want the audience to remember is that our products do exactly what they say they’re going to do. Period. I mean, I know a lot of customers, all I tell them about the science, unless they’re a scientists themselves, they go cross-eyed and they’re like, “All right, just tell me what it’s going to do for my skin.” And so I just let them know it’s going to do exactly what it says it’s going to do. And that’s why they keep coming back. Yeah, our products do exactly what they say they’re going to do. And another thing I wanted to mention when you said that about me caring about customers, when we were testing, even now when we test, if one person, because I had a pool about a hundred, I still do about a hundred test humans. I had dermatologists and the top estheticians in the world and beauty editor-in-chiefs of the biggest magazines and influencers and fashion models and all these different people that gave, and male models, that gave us really thoughtful feedback.
And if one person had a reaction, I would say, we got to work this out. And finally, my partner and our lab partners were like, “Some people are going to have a reaction.” I go, “No one, not one person is allowed, at least in the clinicals.” I’m like, “If they’re reacting, I want to know why is it?” And then we’ll figure it out. Oh, maybe they’re sensitive to witch hazel, they’re sensitive to aloe, they’re sensitive to nuts, whatever it is. So how do we encapsulate it and how do we reformulate so that we can bypass that sensitivity that’s on their healthy skin cells? So I really truly am, I’d rather not come out with a product than come out with something subpar that I know wasn’t ready. That’s why it takes so long for us to launch products. And it just, again, people feel like it’s so random how she launches products. One minute it’s her lip, one minute it’s the back of her arms, like her body. It’s not all together. Well because it wasn’t ready. To me, it makes total sense. This chaos makes total sense. It’s organized chaos.
Oliver Chen:
Yeah, clearly. It’s very authentic as well. Tina, it’s been great to spend time with you. Thank you.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.