With Restorsea And Restorsea Pro, Patti Pao Offers Clean Skincare Backed By Science
Like the salmon on which her products’ proprietary ingredients are based, Restorsea founder Patti Pao has had an upstream swim to get her patented, nontoxic skincare lines to market. A Harvard Business School grad and beauty industry veteran, it was not until a chance hike in the picturesque fjords of Norway that she was inspired to launch Restorsea in 2011. Since then, Pao’s brand has entered and exited Bergdorf Goodman, worked and stopped working with Gwyneth Paltrow and sued its Nordic ingredient provider — a lawsuit it technically won, but Pao notes, “Nobody ever wins in a lawsuit, except for your lawyers.” Beauty Independent talked with Pao about all of these hiccups as well as the salmon-y science behind her brand’s clinically-proven results, having the godfathers of skincare as her colleagues early in her career, and her plans to bring Restorsea and Restorsea Pro to key U.S. retail partners this year.
What were you doing before you launched Restorsea?
I’ve been in the beauty business for over 30 years. I graduated from Harvard Business School, but I also got into Harvard Medical School. I’m one of those girls who always liked math and science. I only applied to medical school because I liked creating new things. When I applied, they were like, “Why do you want to be a doctor?” I said, “I don’t. I would never be presumptuous to say that I could find the cure for cancer, but I like finding new things and new technologies.” They were like, “Why don’t you just get your PhD?” I said, “Because I think to be a great researcher, you have to actually go to medical school because it’s a different kind of training.” They were like, “We understand.”
That’s how I [got] in, but I ended up going to the business school. I always wanted to be in the beauty business. My job search was completely self-initiated and self-funded because 30 years ago nobody was hiring a Harvard MBA to go into the beauty business. I ended up taking a job with Avon. I was very fortunate, Avon has an incredible R&D group and their group adopted me as well as their dermatologist consultants. I was fortunate to have been mentored by three of the greatest dermatologists of the 20th century: Sheldon Pinell, who went on to found Skinceuticals, Al Kligman, the father of vitamin A who created Renova, and a man named Jim Leyden, who at that time ran the Center for Human Appearance at the University of Pennsylvania.
They taught me everything about skin, and they introduced me to their friends. One of the friends they introduced me to had a patent for the cosmetic use of a molecule that was derived from sugarcane. It was very interesting in that it had the same effects as Retin-A, but with half the irritation. That molecule ended up being glycolic acid. So, Avon was the first to commercialize glycolic acid. It was great for Avon and great for Dr. Eugene Van Scott. To this day, Avon Anew is still a billion-dollar brand. What I learned from that is I’m really good at finding new technologies and, since then, I’ve been able to create and launch over 400 beauty products.
What led you to launch Restorsea?
I had no desire to start my own company because it’s really hard. It’s very competitive. But, in 2010, I found the greatest ingredient I’d seen in my entire history of being in the beauty business. The reason why this ingredient was so great is that it provides the exact same effects as a retinol, but without any irritation. No redness, no thinning skin, no flakiness, no dryness.
I had a consulting firm and from 2008 to 2010. I visited Oslo, Norway, 48 times and never saw outside of Oslo. Just to give you perspective, it’d be like coming to the United States 48 times and never seeing New York City. One of my clients was so offended that they offered to take me on a three-day hike in western Norway. They’re like, “You have to see the fjords, the water, mountains. We’re going to take you on a three-day hike.” I didn’t have the heart to tell them that I’m Chinese, I’m genetically programmed to not like nature, and I’m not athletic. They are the reverse. After day one, I couldn’t even walk, let alone hike, so I was desperately looking to get out of it. I looked down from the hill that we were driving to, and I see this really cute outcrop of buildings on a Fjord.
I asked what it was, and they said that it was Norway’s largest salmon hatchery and that they were very famous because they were the only hatchery in the world that practices synchronized hatching. Synchronized hatching is where they hatch [the eggs] simultaneously over a three-hour period, [up] to 200,000 salmon eggs. The reason they do that is, if [every egg hatches] at the same time, [the fish] come out the same size, so they practice synchronized hatching because they wanted uniformity in the size of the fish. So, I’m like, “I want to see that.”
I got to tour the hatchery. I saw the hatching process. The worker’s hands were in the water herding the little salmon fry. When they’re born they look like tadpoles with big orange sacks because it takes them two months to feed off of their egg sac before they turn into fish. They have to stay in the hatchery for two months, turn into little fish, and then they get big enough where they’re trucked into the fjord via tug boat and they live their lives in this beautiful fjord.
The worker’s hands were in the water, herding the salmon into another tank, other workers were picking out the unhatched eggs and the eggshells, but everybody’s hands were submerged in this post-hatching water. I looked down and their hands looked like they were 20 and their faces looked much older. When I asked why, they introduced me to Professor Burt Walther, the person who created the synchronized hatching method. He saw this phenomenon, but it took him 30 years to figure out why everyone’s hands look so good. The reason why is that the eggshell is extremely rubbery. As a result, the only way the baby salmon can be born is if they release this enzyme. So, when they’re ready to be born, they release this enzyme, the enzyme dissolves the eggshell membrane, and it creates an opening that they can swim out of unharmed.
The worker’s hands looked so good [because] this enzyme, when applied to human skin, was very unique. It digested all of the dead skin cells, but it left the living cells untouched, so the workers were getting continuous exfoliation. Plus, there’s an anti-inflammatory component to our enzyme, so their hands were getting continuously exfoliated without the thinning skin or redness or irritation.
This enzyme is completely sustainable. It’s cruelty-free. We don’t test on animals. We don’t harm animals at all. All we do is take the water after the baby salmon are herded into another tank, we clean the water and, then, filter the enzyme out of the water through the professor’s proprietary and patented process. This enzyme is always hungry and programmed to only digest dead skin cells because, if it ate the living cells, it would hurt the baby salmon. When it attaches itself to human skin, it sits at the top two layers of skin and digests the dead skin cells. So, unlike every other exfoliant, which works by burning through layers of living and dead skin, ours sits at the top two layers, digesting the dead skin cells.
The professor gave me a kilo of this ingredient, and I went to my lab, because I formulated this line myself, and set about trying to figure out how to formulate with this enzyme without denaturing it. The professor discovered this enzyme in 1998. I met him in 2010. The reason nothing had been done with this enzyme is enzymes are notoriously finicky. They’re very difficult to formulate with. We were able to figure out how to formulate in any cosmetic system with this enzyme while still keeping it alive, without denaturing it. As a result, we have, as of today, 34 issued patents of our own.
Restorsea was in Bergdorf Goodman, but you soon pulled the line out. Why?
I met the professor in 2010. By 2011, I had two products, the Rejuvenating Day Cream and the Revitalizing Eye Cream. They were lab samples with little batch numbers type written on them and, for fun, I sent them to the buyer and GMM at Bergdorf Goodman, Pat Saxby. She called me a month later and said, “I’m going to take your line.” So, we launched in Bergdorf Goodman in The Lab. It was very successful, but the problem is that we weren’t making any money. It’s very hard for small brands make money in that channel.
We pulled out in 2014 and decided to go to a direct-to-consumer model using Gwyneth Paltrow as our spokesperson. That was tremendously successful in building awareness, credibility and public relations, but the problem is that, when you manage an A-list celebrity like Gwyneth, it’s very expensive. I had to hire like 10 people. We had to invest in SEO, SEM, different programs, advertising. While having her as our spokesperson tripled our sales, in order to pay out all the spend, our sales would have to grow by 20 times. That wasn’t really going to work for us. What we did then was shut that all down, and decided to pivot and take a year and reformulate a professional line that we would sell exclusively to physicians.
Why create two different lines?
We were getting a lot of calls from dermatologists saying [our] product is very interesting, very unique. There is no medical-grade line that is natural and completely free of toxins that is based on this very unique enzyme. But, [they were telling me,] you need to create a stronger line, and you need to create a line that sold just through physicians.
That’s what we did from 2014 to 2015. At the end of 2015, I went to go sell the pro line and, after four months, I saw the light at the end of the tunnel. Finally, we found a route to market. [Most] brands today couldn’t enter into the physician channel. They don’t have the published studies in medical journals. The clinicals have to be published in a peer reviewed medical journal. They have to be published. A lot of people have clinicals, but they don’t have them published in major medical journals.
The medical channel is very competitive as well, but there’s no one like us in this channel because there are no natural products that have proven efficacy. We have established ourselves in a very nice segment in the medical channel. We have about 120 doctors. Most of these doctors are leading dermatologists. They’re called key opinion leaders, KOLs. We were able to build a really great channel of KOLs based on the strength of our product without paying them because I didn’t have any money.
Both lines are sold in the medical channel. The professional line will stay in the doctor channel, but we are looking to break the non-pro items into the retail channel. The market has really shifted and retailers are now looking at what I’m calling the mature millennial. These are girls who are 30-plus who actually have money to spend on skincare. [They’re] still interested in natural products, but they want products with proven clinical efficacy. They’re looking for brands that really work. We’ve gotten retailer interest because of this mature millennial. They’re interested in bringing on medical grade brands that are sold in physician offices. It’s like the perfect storm.
What is your retail strategy for the non-pro line?
I would like to deal with more founder-friendly retailers like Credo, Detox Market, retailers that will work with us and not bankrupt us. It’s very flattering to want to be considered by the biggies like Sephora, but they can, honestly, bankrupt a small company.
Is Restorsea selling mostly on its website at this time?
Since 2013, the retail line has sold on our website and through doctors. The pro line was very small, about nine SKUs. After a doctor had taken our line for about a year, they started looking on our website to figure out what else they could carry, and that was really driven by their patients. The patient would not only come back to buy the product that the doctor recommended, but he or she would be like, “What else do you have for this line?” Over the course of a year, everyone pretty much had taken all nine items in the pro line and, on their own, they started doing research on my website of the retail line. That’s how the retail line ended up migrating into the doctors’ offices. Pretty much eight out of the nine items are sold in doctors’ offices. The doctors know that anything that’s not pro will most likely end up in another form of distribution, and they’re OK with that.
What are the different price points for each line?
I priced the pro line equivalent to the retail line because I honestly believe my product is very high end. It goes anywhere $35 to $195. I just don’t think people need a $300 skincare cream. I have nine products in the pro line and 10 products in the retail line, and they’re all different.
At a retailer like Credo, how would you handle the training component?
I will do a lot of the training myself because I do it anyway with 120 doctors. So, I’m going to do the same strategy of doing all the trainings for the staff, giving the staff all the products to try because it’s very important that they use it so that they can talk about it. They don’t have to like it, but they have to be able to answer questions. The worst answer is I don’t know. You have to be able to go, “I love it because or it’s not for me because.” They have to be able to use it and they have to be trained to it. [Also] we are putting money into our digital media, primarily to Instagram and Facebook so we can actually talk to the consumer via those two social media outlets. That’s going to start [this month]. We will then bring back our PR firm, Poke PR. She’s primed and ready to go.
How much did it cost you to launch Restorsea initially?
We spent a lot because our brand is completely based on science. I paid $25 million for the ingredient. I spent $10 million on IP. I spent $5 million because I had to sue my ingredient company because they tried to repackage my ingredient and sell it to Perricone.
What happened with your ingredient company?
I paid them the $25 million for the 20-year rights [to the ingredient]. They then turned around and repackaged my ingredient and tried to sell it as another name. I’m a chemist, and I was able to figure it out. I actually had to create antibodies to prove that their formulation was my formulation. They didn’t believe me. I honestly believe in their heart of hearts they thought they created something different. They didn’t.
Nobody believed me because I’m a girl. Everyone’s like, “You couldn’t possibly be right.” It took me eight months to get all the data. I presented it to my attorneys. They talked to my business partner. Then, we tried to talk to the ingredient company and they stonewalled us for four months, which is why we had to sue them. They finally settled because they never bothered to ask the professor, the man who created this ingredient. They finally asked him after a year, and he’s like, “Patti’s right, you need to settle right away.” Within three days, their chairman had flown to Chicago to work out a deal with my business partner.
Was the professor thinking of creating skincare with the ingredient before you went into the hatchery?
He tried. He couldn’t formulate without denaturing the enzyme. This is how you know you’re not denaturing the enzyme: Every year, we take random samples out of our warehouse, we concentrate it down, we then isolate the enzyme, feed it a substrate and watch it excrete. If it’s not excreting, it’s not alive. It was really a technical issue because it’s very difficult to formulate with this enzyme, which is why we have our own patents.