Grooming Startup Culture
Barry Beck ’90, chief operating officer and founder of Bluemercury, Inc., returned to Ithaca Friday with a mission to inspire a new generation of ILR entrepreneurs.
“We’re celebrating our sweet 16, we’ve opened our 72nd location and we’ve hired our 600th team member,” Beck said during “Getting to Startup: How to Start a Company, Build a Brand, and Raise Private Equity.”
“We are gearing up for rapid growth and will have more than 120 locations by next year and more than 1,000 employees,” he said during the ILR Alumni Association-sponsored talk in Ives Hall.
A self-described “serial entrepreneur,” Beck has been founding companies since high school.
He and his wife, Marla, founded Bluemercury. It is the largest and fastest growing luxury beauty products and retail spa chain in America, Beck told an audience of about 100 students, faculty, staff and alumni.
Taking a “safe” way was not Beck’s career plan. Rather than applying to law school, business school or a job through campus recruiting, he partnered with his brother to grow a company started in Beck’s dorm room.
“During those years, I learned the language of business and we ultimately built a large facilities management company,” Beck said.
Despite success, “it was boring, boring, boring,” he said.
In the process of selling the company, he met his wife, who was working at a private equity fund. She, too, was ready for a new challenge.
An independent beauty boutique by their home in Washington, D.C., inspired them to consider starting the business that became Bluemercury.
“I would say it was like a lightbulb went off in my head, but it was more like fireworks,” Beck said.
Beck knew from his mother and sister that the cosmetic customer experience needed improvement.
“They found the department store staff to be a little snobby, looking you up and down, checking out your shoes and handbag before they would decide to help you,” Beck said.
In 1999, Beck raised millions of dollars in two weeks with the Bluemercury concept.
“We had 40 employees before we even had our first sale,” Beck said. “Sixty days after incorporating the company, we realized there were three other competitors, each with at least 10 million dollars in funding, 10 times our war chest.”
The company was not making money yet, and had a high cash burn rate, he said.
“Soon, we were down to our last $150,000 in the bank, the company was in trouble and we needed a plan, fast. I decided we were going to buy that beauty boutique in Georgetown.”
The business began to takeoff by expanding regionally and forming an exceptional reputation.
“We got up to 10 stores. Although we were a small company with only 10 stores, our reputation had grown as something of ‘the new Starbucks of Cosmetics’ and Bluemercury was in the news on a regular basis,” Beck said.
Goldman Sachs was hired to help sell the company and in March, it was sold to Macy’s for $210 million in cash.
Beck offered eight start-up tips:
- Get in the game
- Solve a problem
- DROOM (Don’t run out of money)
- The first year is the hardest
- Investment “angels” are your friends
- Do something you love
- Nothing’s good forever
- You can have it all.
The presentation finished on a humorous note. In his final words of advice about making the decision to start a company, Beck quoted “Star Wars” character Yoda: “No try, only do or not do.”