How I Built This with Guy Raz: Hero Cosmetics – Ju Ru and Dwight Lee

Episode Release Date: December 30, 2024

In this compelling episode of How I Built This, host Guy Raz delves into the inspiring journey of Ju Ru and Dwight Lee, co-founders of Hero Cosmetics. This episode unpacks the challenges, innovations, and strategic decisions that propelled Hero Cosmetics from a simple idea to a $630 million acquisition within five years.

1. Ju Ru’s Background

Early Life and Education

Ju Ru, born in Korea in the late 1970s, moved to Seattle at the age of three. Her father worked as a log broker, managing the intricate process of sourcing and transporting logs for construction projects back in Korea.

[07:31] Ju Ru: "My dad is a log broker, so he's working in the log industry... He started his own log broker business."

Growing up in a Korean household, Ju was deeply immersed in Korean culture, often spending summers in Korea and maintaining strong ties with her heritage.

Despite her parents' expectations for her to pursue a traditional and stable career, Ju gravitated towards creative and analytical fields. She graduated from Brown University with majors in History and International Relations and later earned an MBA from Columbia. Her educational path was unconventional, blending creativity with business acumen.

Early Career

After college, Ju spent a summer volunteering in Kenya, reflecting her desire to give back to the community. She then worked at Epiphany School, a nonprofit, where she handled fundraising efforts. This role planted the seed for her entrepreneurial aspirations, leading her to pursue an MBA to better leverage business skills for societal impact.

Ju's corporate journey continued at Kraft Foods (now Mondelez) in the snacks division, where she gained valuable brand management experience. This role honed her skills in marketing, consumer behavior, and retail strategies.

2. Discovering the Pimple Patch

Experiences in Korea

While working at Samsung’s credit card division in Korea, Ju observed young Koreans wearing hydrocolloid patches on their faces to treat acne—a practice not widely known in the US at the time.

[23:08] Ju Ru: "I just noticed a lot of people walking around with these patches on their faces."

Hydrocolloid technology, traditionally used for wound healing, was ingeniously repurposed in Korea for acne treatment. Ju, battling her own sensitive skin, experimented with these patches and was amazed by their effectiveness.

Initial Idea and Attempt

Recognizing a gap in the US market, Ju saw an opportunity to introduce these patches as a dedicated skincare product rather than a DIY solution with ordinary band-aids. She began researching manufacturers to create a branded product tailored for the American audience. Despite her initial efforts around 2013-2014, financial constraints and self-doubt led her to chicken out from launching her idea at that time.

[31:59] Ju Ru: "I chickened out, got cold feet."

3. Founding Hero Cosmetics

Meeting Dwight and Andy Lee

In 2017, while consulting for Peach and Lily, a Korean beauty startup, Ju met Dwight Lee and his brother Andy, who were running a digital agency called Division of. Their collaborative projects sparked an entrepreneurial synergy.

[39:05] Dwight Lee: "We were just always building things in the agency. But the Acme patches seemed like a really good product."

Together, the trio decided to pursue Ju's pimple patch idea, combining Ju's marketing expertise with Dwight's technical skills and Andy's creative prowess.

Launching the Product

Hero Cosmetics officially launched Mighty Patch on Amazon in September 2017 with an initial investment of $50,000. Their strategic approach included:

• Standout Packaging: Designed to resemble medical OTC products with a playful twist, making them appealing and trustworthy.

• Influencer Marketing and Press: Securing a feature in Into the Gloss significantly boosted visibility and sales.

[49:25] Ju Ru: "We gonna do a lot of updates to the product... set us up for bigger retailers later."

The product resonated quickly, selling out their initial inventory within 90 days, validating the market demand.

4. Growth and Expansion

Retail Breakthrough with Anthropologie

In early 2018, Hero Cosmetics secured a pivotal retail partnership with Anthropologie, a respected lifestyle brand. They introduced a special $7 sampler SKU in approximately 700 stores, which facilitated widespread product adoption.

[52:30] Ju Ru: "The first retailer to say yes was Anthropologie."

This move not only increased sales but also established Hero as a credible brand in the beauty sector.

Strategic Marketing and Sampling

Hero’s growth strategy heavily relied on:

• Sampling Programs: Distributing samples through college ambassadors and beauty box subscriptions to generate word-of-mouth buzz.

• Social Media Engagement: Leveraging platforms like TikTok and Instagram to normalize acne and promote the patches as a self-care essential.

[58:36] Dwight Lee: "The key with this product is that once you get it in someone's hand and they try a patch and it works, that person is a customer for life."

5. Overcoming Challenges and Scaling the Business

Navigating COVID-19

Despite the global pandemic, Hero Cosmetics thrived by:

• Maintaining Essential Retail Partnerships: Continued sales through Amazon and Target ensured steady revenue streams.

• Inventory Management: Implemented a strategy to stockpile inventory, ensuring they never went out of stock despite supply chain disruptions.

[73:17] Ju Ru: "The main strategy was just never going out of stock."

Seeking Investment and Acquisition

By 2020, Hero Cosmetics achieved $6.5 million in revenue. Facing cash flow challenges due to rapid growth, they explored investment options. Despite receiving term sheets during the pandemic, unfavorable terms led them to decline offers.

In 2022, after reaching over $100 million in sales, Hero began acquisition talks, ultimately partnering with Church & Dwight for $630 million. This acquisition ensured the brand’s longevity and allowed Ju and Dwight to transition into evolving roles within the larger company.

[78:45] Ju Ru: "We felt like Church and Dwight was the best place for it."

6. Reflections on Success: Work vs. Luck

Both founders attribute their success to a blend of hard work and fortunate circumstances. Ju emphasizes the importance of being a category creator and timing their market entry perfectly, while Dwight highlights the critical role of teamwork and serendipitous opportunities.

[80:22] Ju Ru: "There are a lot of happy accidents that I attribute to luck."

Conclusion

Ju Ru and Dwight Lee's story with Hero Cosmetics is a testament to innovative thinking, strategic marketing, and resilience. From recognizing a niche product opportunity in Korea to scaling a global brand and achieving a significant exit, their journey encapsulates the essence of entrepreneurial success.

[79:58] Dwight Lee: "Work is the baseline for any sort of success... but also, I think we're all just floating or being carried really in a river of randomness that sometimes we call luck."

Their experience underscores the delicate balance between dedication and opportunity, offering valuable insights for aspiring entrepreneurs aiming to build impactful and lasting brands.

Notable Quotes:

• Ju Ru on Initial Doubts:

  “I chickened out, got cold feet.”
  [31:59]

• Dwight Lee on Partnership:

  “When you're starting a business, finding a good partner is sort of like 90% of the battle.”
  [43:06]

• Ju Ru on Brand Philosophy:

  “We are a category creator in the US... normalized acne.”
  [60:09]

• Reflection on Success:

  “Work is the baseline for any sort of success... but also, I think we're all just floating or being carried really in a river of randomness that sometimes we call luck.”
  [80:22] Dwight Lee
  “...I think we were so lucky in many, many instances.”
  [81:01] Ju Ru

This detailed summary captures the essence of Ju Ru and Dwight Lee's entrepreneurial journey with Hero Cosmetics, illustrating the pivotal moments and strategic decisions that led to their remarkable success.