Tim Draper’s resume is so “Silicon Valley” that it borders on caricature: The Stanford and Harvard graduate is a third-generation venture capitalist who invested in Hotmail, Skype, Tesla and Theranos, in addition to a large batch of bitcoin recovered from the Silk Road marketplace. Now, he’s the “headmaster” of Draper University, a for-profit entrepreneurship school, and he’s investing in a proposal to split the State of California into three separate states.
But in a somewhat unlikely move, he’s also a player in Silicon Valley’s first independent beauty-focused accelerator. Called SVBeautyTech, it’s an intensive three-week program designed to help beauty company founders grow their businesses through technology and venture capital.
Draper University (in San Mateo, a small town between San Francisco and San Jose) hosted the nine participating startups — who graduated from the program on July 12 after a “pitch day,” in startup parlance — to a crowd of investors, industry experts and other students.
Draper’s support of SVBeautyTech was partly a conscious effort to include more women in entrepreneurship and partly an acknowledgement that beauty is an important global market.
“Most entrepreneurs have been men, and men have gone after certain things and markets, but as women are becoming entrepreneurs, the men haven’t understood what the women wanted,” Draper said. “This is the beginning of a big wave.”
He admitted that during the entrepreneurs’ pitches, he felt like he was on another planet. “But I do understand that these are big, exciting markets and there are interesting things you can do with it,” he said.
The first-of-its-kind program was designed and led by Claire Chang, who was looking for founders with a working prototype who could scale a business through tech — not, in other words, strictly tech companies with a capital “T.” She also didn’t want to take on pure beauty product companies unless there was some science behind the formulations.
“I realized these companies — the founders — many have not been privy to the whole startup ecosystem that we are used to in Silicon Valley,” Chang said. “There are things we thought they already knew, but it became apparent it was the first time they were going through anything like this.”
Chang didn’t want the program to be tied to any specific company, in the way the L’Oréal and Sephora labs are. Sephora, for example, “is very product-focused, with a specific agenda. I wanted this to be independent and to focus on leveraging tech for scalability,” she said.
Many of the companies chosen for the first class of SVBeautyTech focused on personalization and accessibility, such as BeautyVise, a “Spotify of the beauty world” that connects users with curated brands and influencers; Cosme Hunt, a platform that brings Japanese beauty brands to the U.S. market; Fifteen Degrees, which has patented a skin-care delivery method that uses topical films; and Bay Biotech, which has developed an intelligent skin diagnosis device.
The program, which was free to the startups, followed a template similar to most accelerators, with a hyper-focus on developing a go-to-market strategy and mentorship from industry experts. Speakers included veteran beauty influencer Michelle Phan, former Lancôme CEO Odile Roujol and Christina Stensvaag, a former Sephora vp who oversaw the brand’s website and apps.
“[Founders] want everyone to use [the product], but they needed to develop a clear picture of who their customers are to develop a strong, compelling brand,” Chang said. “Unlike any other industry, beauty is so personal, the ability to be able to connect to their consumers is so critical.”
It was also important for the companies to prepare a pitch that would be compelling to potential investors. “Given that the majority of tech investors tend to be male, how do you start a conversation about beauty tech? Part of the education is to help [investors] understand why this market is so exciting, and not to pigeon-hole beauty,” Chang said.
Chang is the founder of igniteXL, an accelerator and seed fund that helps international startups become global. She’s worked with multiple beauty startups and wanted to marry the type of innovations she saw in K-Beauty with technology. Startups accepted into SVBeautyTech paid “a small equity” for the program, housing, co-working space and six months of continuous post-program mentoring, Chang said.
Elsi Skin Health founder Elsa Jungman is a scientist who was head of skin delivery at L’Oréal in Paris before beginning her clean beauty startup. “My company is not a tech company, but being here, I realized I have been restraining myself. They push you to think bigger,” she said. “Why can’t I be a game-changer for the industry? I realized that adding a tech component would be a huge value.” She added, “I think you have to be very open-minded and ready to adapt your strategy. Here, investors are not interested in pure retail brands. They want to know about AI, blockchain and machine learning.”
Phelena Jean, who is based in Qatar, founded Madam Indigo to provide ethnic hair-care products to women who live overseas, especially women in the military. She explained that even though the military has lifted its ban on “natural hair” for people of color, it doesn’t provide the products required for grooming protocols. She said that SVBeautyTech has inspired her to think more broadly.
Madam Indigo also provides entrepreneurship to women through a social selling model in the vein of Rodan & Fields; former Rodan & Fields CEO Lori Bush, it turns out, was among the investors in the audience.
During the presentation, Draper was candid about his unfamiliarity with the industry. “How do you get your hair so straight?” he asked Jean. “It’s a long process,” she replied. During an earlier presentation, he’d questioned why someone would want to return to a makeup tutorial site.
Julia French, who is the managing director of investment firm Golden Seeds, said that one of her favorite companies in the pitch session was YesPlz, which has developed software that uses image recognition and machine learning to help shoppers find products online. “It was admirable that Draper recognized the huge market opportunity of an industry he has no knowledge of,” French said.
Entrepreneur Patricia Dassios has been to a number of tech conferences, and she found it beneficial to take a deeper dive with a community that was almost purely focused on beauty. Her company, La Mienne, is a platform that connects freelance beauty artists, like makeup and hair stylists, with clients, including in-app payments and scheduling — somewhat like OpenTable.
When she first started talking to investors, she said, “They didn’t understand what a blowout was. And it’s not their fault — they want to see a mirror across the table.”
But after the pitch session, Dassios was encouraged. “The evening was a wonderful opportunity for beauty-tech founders to bring attention to the ways technology can disrupt the industry, as well as take advantage of the growing market opportunity in the beauty sector,” she said.