This Curly Haircare Brand Is Making $1M A Month—And It’s Just Getting Started
Four years ago, Sahar Saidi was at a professional crossroads. She’d received two business degrees, but her untraditional resume before then in sales, marketing and business development consulting after dropping out of college wasn’t valued by by-the-book hiring types.
“I had 15 years of work experience, and I couldn’t land a job because I didn’t have the linear career path that Canadian companies look for. It was frustrating,” says Toronto-based Saidi. Her job challenges weren’t her only frustration. When it came to her curly hair, Saidi was stumped by the countless haircare products on the market that were complicated and never quite right.
“The brands out there have consumers believing that we need five to seven different products to control frizz. I was in a beauty supply store trying to pick out a product and thought, ‘This is ridiculous,’” she recalls. Simultaneously, Saidi says, “I saw what was happening in the tech space and companies raising a ton of money, and I wanted to prove that, with less than $100,000, you could build a profitable and fast-growing company.”
She decided to pour $75,000 from a line of student credit she had into launching a brand for women with textured hair. Saidi plunged into making the brand in November 2015 and, in January 2017, LUS Brands officially premiered with a three-step system to achieving healthy curls consisting of Gentle & Moisturizing Shampoo, Ultra Hydrating & Detangling Conditioner, and the repair, hydrate and style product All-in-One.
In its first month, LUS Brands sold 126 units of the 25,000 units it produced. Nine months in, though, it had sold out of its initial inventory and broken into the black. Today, the profitable company generates more than $1 million in monthly revenue, and its sales have spiked 750% this year. LUS Brands has also drawn roughly $1.2 million from Ashton Kutcher’s and Guy Oseary’s venture capital vehicle Sound Ventures, Marine Layer Investments, Kaktus Capital, Comcast Ventures and Y Combinator, among other investors. It was part of accelerator Y Combinator’s winter 2018 startup class.
“I wanted to prove that, with less than $100,000, you could build a profitable and fast-growing company.”
To make LUS Brands’ initial five stockkeeping units, Saidi contacted over 40 cosmetic chemists and laboratories across North America. Ultimately, she commissioned four to formulate products. She spent 11 months applying formulations on her hair and washing them out to find ones delivering manageable ringlets without requiring an onerous routine. Saidi enlisted her friends and family members to test formulations, too.
“Everyone’s hair is different, and hair is particularly difficult in beauty to create innovative products for because there are so many things that can affect the end result from hormonal changes to your diet and hydration levels. Taking the average of all these people’s responses was important in figuring out how to please the majority of our customers,” says Saidi, stressing, “The differentiating factor for LUS Brands is we have simplified haircare. Someone can wash, condition and style their hair easily, cut down their styling time, and extend the time between their wash cycles.”
The brand offers its three-step system in curly, wavy and coily varieties, and $45 three-item kits are bestsellers. Under the LUS Brands umbrella, the assortment can branch beyond haircare to skincare and cosmetics. The acronym “LUS” in LUS Brands stands for “love ur self.” However, haircare gives the company plenty of opportunity for product expansion. Kid’s and men’s haircare lines are possibilities. Recent releases include Deep Condition & Repair and Elixir Oil, a blend of seven oils plus vitamin E. LUS Brands is candid that it doesn’t market its products as natural. Instead, it emphasizes effective formulas avoiding ingredients like silicones and sulfates that it concludes are detrimental for textured hair.
LUS Brands’ curly-haired customers, who are principally aged 25 to 45, spread the word about its products. The company has 105,000 Instagram followers and nearly 167,000 Facebook fans. “We don’t have a referral or loyalty program, but referrals make up 50% of our sales,” said Saidi. “This consumer has been burned so many times, and they don’t trust products, but, when the find products that work, they tell everyone about them.”
“The differentiating factor for LUS Brands is we have simplified haircare.”
LUS Brands has relied on a direct-to-consumer model, and it’s not moving away from it, although it’s dabbling in offline efforts as the cost to acquire customers digitally rises. Saidi estimates 10% of its advertising budget is being committed to non-digital campaigns this year. LUS Brands experimented with Toronto transit advertising in the summer when the city was beaming with pride following the Raptor’s NBA championship win. The brand is stretching into physical environments with salons as well. Its merchandise is available in around 10 salons. Pop-ups are under consideration for the future.
Saidi points to improved DTC infrastructure as LUS Brands’ main objective. She’s confident the company can increase its international customer base if it better facilitates international shipping. Currently, the United States accounts for 90% of its sales. New COO B. James Bottoms is tasked with addressing LUS Brands’ global supply chain and logistics capabilities to accelerate its international reach. A loyalty program is another initiative in the offing.
LUS Brands is planning to add to its team, which now amounts to 18 people, and Saidi says she’s hunting for a VP of finance and CFO. She’s seeking guidance in the event her company fundraises again. “If I take $10 million, $20 million, $30 million, what am I really going to do?” she asks, not that she’s anxious to reel in big investment. “When I started the company, I thought, ‘If I can build a company worth $100 million in five years, then I’d have a real platform,’ but we hit that valuation early on. So, as a founder, you stop thinking about valuations and think about building a company for the sake of building a company,” says Saidi. “My entire focus is on continuing to build the company and, whatever happens, happens”