Oscar: I’d like to welcome to the studio today, Lewis Farsedakis, the CEO of Blinc. Thank you so much for joining us today.
Lewis: My pleasure, it’s an honor to be here.
Oscar: On behalf of the Entrepreneurs Organization South Florida Chapter we’d really like to congratulate you for your ranking on the Inc 2014 list, being one of the fastest growing privately held companies in the U.S. Congratulations.
Lewis: Thank you, thank you so much.
Oscar: Tell us a little bit about Blinc.
Lewis: Blinc is a luxury brand. We are focused exclusively on the eyes. There’s three words that define the brand. One is performance, so all our products are really highly performing products meaning a woman can literally run a marathon and they’ll stay on. Sleep with it five days straight and it’ll stay on, so it’s that type of high, high, high type of performance because our core demographic demands it. They are the superwomen. I’m an athlete, I’m a mother, I’m a career woman, an executive, so I don’t want to … When I put it on in the morning I don’t want to think about it until I’m ready to take off my makeup.
That’s why performance is the core DNA of the brand. Innovation is another key word. Innovation because we invented two performing mascaras that change the landscape in the cosmetic industry. It was a very important innovation. We invented peelable eyeliners, so that’s how our brand claimed its name and its stake and space in the industry. We invent interesting technologies that move the industry forward. Then eyes, we make products exclusively for the eyes. We don’t make anything else, we don’t try to be everything to anybody, but we do try to understand and own the space, that space, the eyes.
Oscar: That’s great. What made you get into the business?
Lewis: That’s the funny story was actually just a discussion with my then girlfriend which thankfully turned out to be my wife and she was complaining about smearing, smudging, flaking, clumping, all the negative attributes of mascaras. In my former life I used to do a lot of interesting, high-tech type things, everything from selling Apache helicopters to retrofitting nuclear power plants, so I couldn’t imagine or fathom that we could put a man on the moon, but we can’t make a mascara that doesn’t run.
That’s really how it started, that conversation and then I challenged a couple of my chemist friends from my former life to come up with something that solved it. Yeah, they came up with something entirely different. I found out that the industry and the chemists working in the industry, although they were very bright people, kind of had blinders on and they lacked for lack of a better word a creative maestro to guide them into looking at other ways to approach a problem. Once we did the first product, the second product, the third product, we said you know what, these big companies which I assumed erroneously that they were doing the same thing or not, so that’s how we came about and that’s how we’ve been growing since day one.
Oscar: That’s so interesting. What is your ultimate vision for Blinc?
Lewis: Thankfully because of … This must be my 20 something business, so thankfully it wasn’t driven by just making money and being a one stop, one hit. It’s been driven … Our growth and our purpose has been driven by becoming an iconic brand, so we want to become an iconic brand. We want to be in the same breath as Chanel or an Hermes or Yves Saint Laurent and it’s a very specific path. It’s not obvious, you have to say no to a lot of big opportunities which we’ve done over and over and over if they’re not right for the brand. Of course, we are in business, the goal is to make money and we’ve been profitable and growing an average growth rate of 20% for 15 years in a row. Actually this year it’s more like 35, 40%. That’s never been a problem, we’re a very highly profitable brand and we’re growing, but we do it in a very managed way, a calculated way to become an iconic brand.
Oscar: You’re very analytical.
Lewis: Safe to say, yes.
Oscar: Did you launch with a very detailed business plan?
Lewis: No, other than doing a little bit of analysis from a business perspective of how to approach things. For example, we knew that we didn’t want to get into the ring and fight with the big boys and go direct to consumer because there was an education component. When we invent two performing mascaras that slide off your lashes somebody has to tell you that tubes will slide off your lashes at the end of the day. Otherwise you’ll think it’s your lashes and freak out which is what would have happened if we just went to mass, direct to consumer.
Plus we don’t have the dollars or didn’t have the dollars and time to compete with all the big advertising companies like the Revlons and the Loreals which hire Scarlett Johansson to become their spokesperson. Since we couldn’t do that there was no point in getting in that ring and fighting that fight we know we’re going to lose, so we chose … I didn’t like the other end of the spectrum working with distributors because distributors are sellers, they sell. There’s a few great distributors that know how to build brands, but in general they like to sell things and we need brand builders.
A brand builder is something very different than somebody who sells things. We chose to and elected to develop our own distribution, to become our own distributor in essence and we did 40, 50 tradeshows a year for the past 10, 15 years and amassed 10,000 retailers. By working directly with the retailers not only do we have a bigger margin, a better margin to work with, but also a closer tie to that very important and final consumer.
Oscar: When you launched … The concept when you launched your business, has it changed in the subsequent 15 years?
Lewis: No, not at all. The concept was we created a product that solved a problem which we thought everybody would have done, but no. Then we created another product that solved another problem and we still to this day I don’t understand why there hasn’t been 50 other companies that are doing what we’re doing because there’s clearly a niche that we’re taking over in terms of eye makeup, pushing the industry forward with just products, solutions that the consumers want. I really still don’t understand in all honesty, but we just keep doing it and so nothing’s changed. We know that we don’t want to be a me too and from day one we don’t want to be a me too brand, so that was one of the challenges that we faced early on.
There was many opportunities where large chains said look, we’ll give you space, but you need 30 products. My reply was we don’t have 30 amazing products, we have two. Like, well, just make 30. No because then you’re going to have 28 products, dilute the two great ones and you can’t be a great iconic brand by having 28 average products. You’re going to become an iconic brand by having 30 amazing products. We’re not on the marketing calendar, we’re in an innovation calendar. If it’s going to take me 50 years to come up with 50 products so be it. If that’s how long it takes to become an iconic brand so be it. That’s our approach.
Oscar: Fifteen years later are you responsible for new product development or someone on your team is responsible?
Lewis: Right, so we have someone who’s in charge of … That’s their role to push it along, but for … I don’t really know what you would call me, but yes, I’m responsible for product development on the creative side. I walk into a room full of chemists that know chemistry a lot better than I do, but for some reason they don’t see the picture of how to do something differently, right, because they’re so … When you’re so into your project you have your limitations, you kind of have blinders on. Sometimes you need … Just like physicists, they know physics, great, but they rely on philosophers for experimental and theoretical ideas to approach a problem in a different way. I’m kind of like the theoretical physicist of chemists in the cosmetic industry, I guess.
Oscar: What habits helped you to become successful as an entrepreneur?
Lewis: As an entrepreneur and actually I think I’d say in every aspect of my life, one word, obsession. If you’re going to do something obsess about it. I don’t think you could become a founder or a CEO of a business, or in my case I want to create an iconic brand, if your mind stops thinking about that. Some of my best ideas have come from reading a Scientific American magazine and something completely unrelated that I say wait a sec because that could not be applied towards … There’s a famous saying, to the hammer everything looks like a nail, so if you’re really in hammer mode and you take in everything that you see around you to what you do you’ll come up with just amazing ideas from sitting on the toilet to being in a great conference full of brilliant, other entrepreneurs.
Oscar: When you launched your company how did you initially finance your company?
Lewis: Because we didn’t have … Again it was kind of my wife to start the company kind of thing. I was still in a different career at that time, I was in telecom and so because we weren’t looking to make money per say, you know what I mean by that, of course, you’re making money when you have a business. We weren’t looking to just rush, we were looking to build something. Because of that making the right decisions were very important and one of the right decisions was to mitigate credit risk, to mitigate customer risk, to mitigate market risk. We knew that we had to self-finance otherwise at some point you’re going to sell your soul to the VCs and you lose that control.
To do that we identified early on what … I said to myself what margin will keep us self-sustaining. That magic number was 68, so 68% margin, gross margin was the key number to allow ourselves to grow, self-finance, your receivables, your inventory and allow you to have ‘x’ amount of money to put towards your product development. That has been our magic number for this particular business. Thankfully every now and then we’ve had a couple of problems, but we’ve stepped up and we’ve always generated enough cash thankfully to grow gradually.
Oscar: During the life of your business what was the most difficult decision you ever had to make?
Lewis: The most difficult decision was when … Thankfully, when the recession happened we weren’t affected, the industry was actually down 35% and we were up two percent. Nothing ever from an economic perspective has affected our business, but one thing that did happen is our major supplier who we had a very great relationship with and it’s a Japanese supplier. They got hit with a … the country, not just them, the country and all of the people there that suffered from a tsunami and an earthquake. I don’t know if you remember that a couple
of years back.
That put just a halt in supply and because our technologies I don’t patent them, right, and many people … You can go either way on that course, but in hindsight it’s turned to help us out by not patenting them, nobody’s been able to figure it out. They’ve come close, but nobody’s been able to figure out our technology. When you patent something you have to expose it the world. In some cases it makes sense to patent, in some cases it didn’t, so I didn’t feel it made sense in our mascara. The most difficult decision I had to make is here I am stuck without product and there’s nothing worse than customers saying here’s my money and you can’t take it.
I had to make the decision to give my formula to an American company, not just an American company, any company, but I chose somebody actually in Florida who my gut said if you’re going to take a chance take a chance on this guy. That was the most difficult decision, do you give something that nobody’s been able to figure out to someone else in this critical time that you need redundancies even though on paper you should have never needed them because they were actually prepared for an 8.5 and under, so they get hit with a 9.0 earthquake, a tsunami. It just goes to show there’s certain things business books are not going to … business school is not going to prepare you for. You have to be prepared for things that are going to happen regardless of how well prepared you are, right.
Oscar: If I were to make a $1 million investment into your company how would you deploy those funds?
Lewis: For us our constant challenge at this point is I’m obsessed with mitigating customer risk, so I do not want any one customer to own more … to represent more than 20% of my sales. Unfortunately, we’re at a point now where the big customers that we have, there’s no other bigger ones in North America, so we’re forced to look for equally larger customers overseas. Overseas they don’t operate the same way. Here I’ve been lucky enough to tell my customers you like my technologies, pay me upfront. Over there they’re like yeah, we don’t do that.
The problem with that is I would secure other bigger customers and use that for a lot of the upfront costs, so I’d use the million dollars for the upfront costs that opening a large new customer entails. If they have 450 stores and each store is $2,000 for the fixture and the testers, so you need to set it up, so they can be ready to sell your products. That would probably be reason number one and then number two … That would cover all of it. Yeah, there’s so many customers that want us, so we’re managing our growth. Product development is always another need as well.
Oscar: I’d like to give you some magical powers for just a few minutes.
Lewis: Sure.
Oscar: If you had the ability of going back, all the way back to day one of your company up till current and you had the ability of reversing a decision that you made what would you change?
Lewis: I don’t know if I would change anything really. I can’t think of … Every decision that was very difficult that we made ended up panning out perfectly just as we hoped even though it was difficult to make. I don’t know if I would change it because I’m scared of what the consequences would be. There’s one thing that comes to mind which I had to think about for one second which was a very large customer which is the example I gave before that gave us a lot of space and said just fill up … finish your skew count, I need ‘x’ amount of products.
I’m pretty sure that the end result of that would have been your customers would have … The way that I look at it and I could be wrong, but the way I look at it if I had 30 products and shelf space, I have 30 opportunities for somebody to pick a product and decide if they like us or don’t. If I have two amazing products then I have pretty much 100% chance that they’re going to get it and like it. I didn’t like the dilution. The possibility that the first product they chose, a new customer, was one of the average products. For all I know we could be $100 million brand now, but it wasn’t worth the risk then. Still today I would probably make the same decision, so I can’t really say I’d reverse anything.
Oscar: If you have nothing to change going in the past let’s look into this crystal ball. Tell me how the business climate over the next five years could affect your business.
Lewis: We’re a luxury brand and thankfully what we’ve learned over the past 15 years is people that fall into our demo usually are not going to give up their mascaras. A funny little tidbit about that, there used to be in the Great Depression, there was something that was called the lipstick effect and that was that no matter what ladies had to give up and put up with the one thing, the one item they just refused to not purchase was their lipstick that made them just, I guess, feel somewhat connected to their previous life prior to all this misery.
This past recession, that got actually replaced by the mascara effect. Women just refused to give up mascara, so irrespective effect that we already had a demo that is pretty high-income. Even if we weren’t nobody would give up their mascara, so I’m not really sure it worries me too much. Of course, a great economy is better than a non-great economy, but the only difference that we’ve seen is … The worst that we’ve ever done was up two percent as opposed to 20, so we’ve never really been negative.
Oscar: What one word describes you as an entrepreneur?
Lewis: I’d like to say creative, creative in my way of handling employees, creative in my way of handling solutions to problems, creative in the product development, so I think creativity is the most important, essential attribute that I think would make up Lewis.
Oscar: Do you think entrepreneurs are born or are they made?
Lewis: I think there’s aspects that could be made for sure and there’s aspects that are innate like in every athlete or every different profession. I’m a big believer in learning and I think the key in everything is really the effort. It’s all about can you make the effort. There’s a famous again saying, a philosophical saying, I cannot teach anybody anything, I can only make them think. If you’re not going to put the effort into becoming a great entrepreneur and becoming a great athlete or becoming whatever you want to become it’s not going to happen, so it’s really a matter in the degree of effort.
Oscar: As a leader how are you making a mark either in your industry, in your business, in your community?
Lewis: Thankfully, with respect to the business we’ve been already with our innovation, several innovations we’ve come up with, every brand that’s important in our space knows us, we’re on the map. Recently I was honored to be named as one of the five people in the cosmetics industry that’s moving industry forward through innovation and I was named with some very great companies, Estee Lauder, R&D, Guy, so it was some big names. It’s great to know that our peers know about us, acknowledge us, respect us. Personally, I’m a big believer in supporting all the charities that are important to us and our family, my family, so we’re very active in our community.
Oscar: Can you share with me something exceptionally fun or super cool that you did either personally or professionally.
Lewis: Sure, and I think this ties back to the creativity question a couple of seconds ago. We had just recently and this happened just fairly recently, so we have this big customer in France that decided to just take everything we have and put it in every single store and cover the entire country. They asked me to go and present. They wanted me specifically and present to their team. Here I have a vision, a perception of the French people being uptight or too serious and so I’m thinking how do I break this … How do I just shatter them and bring them over to my world?
My team came up with a very interesting video of this guy who was just dancing at a festival and this is just one single guy dancing up and down like a crazy man and to this very hip, current song, loud. I put that video loud and as the people were walking in they were just watching this video and you could see their faces, what is this, what does this have to do with this brand that we’re about to take on? They wanted to hear more serious things. Then I stopped the video, I gave our presentation. The entire presentation centered around starting a movement because what was interesting about the video that I played is the guy for the first five minutes was alone dancing like a lunatic. Then everybody started joining him and joining him and by the end of the video there was thousands and thousands of people jumping up and down dancing.
The point was at the end of my presentation was this is how you start a movement, people were saying we were crazy because of the tubes, but people came onboard because they saw that it really solved the problem. Then I asked who’s going to be first here and I started the video again, I said who’s going to be first to start the movement here? Sure enough one of these guys just got up on their chair and started clapping and dancing like that crazy man and then everybody in the room got up and started dancing and so that was a great moment to see, to shatter this. It was a phenomenal presentation and we’ve been doing phenomenally well in France as well.
Oscar: That’s fantastic, great story. Final question, if I say the words trust and respect, what does that mean to you?
Lewis: They’re words that I hold dearly and they’re words, unfortunately, that don’t exist, they’re not taken to what they really mean often enough. I’m a very big proponent of say and do what you’re going to say and what you’re going to do. It’s simple, treat people like human beings and if you’re not going to be able to do something that you thought you were going to be able to do then bring it up to the person. This goes to suppliers and customers, managing expectations. If our mascara is not huge in volume I don’t say it’s huge in volume.
What I found in time is that it develops a trust for your customer because if your customer doesn’t trust that what you’re saying is what is, when you come up with new products or you say something different they won’t believe you. It’s very important from the first day and it was very important for us to just tell it like it is. If the product does one, two, three, that’s all we say. We don’t say four, five, and six to over market it, so we’ve developed a phenomenal trust with our customers and I value that because when we do come up with other stuff right away they buy it. They don’t care because they know what we say is true and so yes, it’s very important to be able to say what you say and mean it and come true with it.
Oscar: I’ve had a great time listening.
Lewis: Thank you.
Oscar: You’re very inspiring, you’re an exceptional entrepreneur and we’re so
appreciative that you were able to join us today. Again congratulations on your ranking and thank you so much for continuing to foster the entrepreneurial spirit in South Florida. Thank you so much.
Lewis: Thank you so much, a great pleasure.