19 Dec 2019 | 01.52 pm
Party Mad Sisters Pivot To Beauty App
Beauty Buddy raises €300,000 from private investors
19 Dec 2019 | 01.52 pm
Wendy and Tracy Slattery turned business failure into hard ambition for their beauty app startup, writes Carissa Casey
Beauty Buddy is a new beauty app developed by sisters Wendy and Tracy Slattery. The venture has raised around €300,000 from private investors and €250,000 taxpayer funding came from Enterprise Ireland. Experts believe the Slatterys could be onto something, as Beauty Buddy saw off competition recently from 80 other companies in AIB’s Women in Enterprise Programme.
What the founders have definitely proved so far is resilience. Their first venture, Party Mad, was a supplier of balloons, party supplies and costumes for children’s parties, corporate and themed events. Established in 2006, Party Mad grew from a sitting-room venture to occupy three retail premises, as well as an online and wholesale division.
By 2016, Party Mad was employing nine people and had plans to recruit 12 more. However, the business was liquidated in January 2017. Accounts for the operating company in 2015, when the business was incorporated, showed losses of €97,000, total liabilities of €210,000 and a debtor book value of just €1,700.
The Slattery sisters didn’t let Party Mad’s demise quench their entrepreneurial ambition, though they pivoted out of bricks and mortar. Beauty Buddy is a mobile application that enables consumers to review beauty products much in the way that TripAdvisor allows users to review hotels and restaurants.
The reviews are available to other users and accessible by scanning a product bar code into the app. The business plan envisages revenue coming in from providing beauty brands with data analytics and trend reporting.
A former corporate account manager at Eircom, Wendy Slattery always planned to open her own shop. Sister Tracy was working at National Australia Bank in Scotland when the pair decided to set up Party Mad, selling party wares both online and in-store.
The company traded well until 2016, when cashflow issues sank the enterprise. Its owners put the problems down to Party Mad’s exuberance. The company had taken on a Disney distribution license and opened a new shop. “It was a terrible experience,” Wendy Slattery recalls. “At the time I thought it was the worst thing to ever happen to me.”
Having been burnt by retail, the sisters decided their next venture would be in the digital space and have global reach. They began looking around for an everyday problem in need of a simple solution. The breakthrough came when they were out shopping for a make-up brush.
As most women will testify, the range of beauty products is vast, with high-end and mass market brands launching new collections each season, and new brands capitalising on trends such as natural ingredients, gender neutral, and personalised colour matching.
In the make-up brush sector, different styles of specialist brushes are available, either with synthetic or natural hairs, bone or plastic handles, for applying blusher, foundation, concealer, eyeshadow, eyeliner, eyebrow products, lipsticks, highlighter and contouring, to name just the most popular.
“All I wanted was a good brush that would last,” says Wendy. “There were so many to choose from and even after a Google search I was no wiser.”
The two sisters hit on the idea of creating a peer review app for beauty products. They began to research the market, and trained a group of transition year students to run focus groups. The results showed that women use a multiplicity of sources for beauty recommendations and reviews – WhatsApp groups, social media, bloggers, and websites. With no obvious single trusted source, the entrepreneurs believed they had proof of concept, and applied for the Enterprise Ireland New Frontiers programme.
“We didn’t look for supports with our previous business, and because this time we were going big from the start we decided to take whatever was on offer,” says Wendy. Over a few weekends, the sisters met with various mentors and experts who largely validated their concept. They were accepted on the next stage of the New Frontier programme, which provided funding of €15,000.
In October 2017, the pair set up in Maynooth Works, a business innovation centre in Co Kildare. Tracy, who studied computer programming at college, got to work building the first prototype, concentrating largely on the app’s look, feel and potential functionality.
The initial idea had been to focus the app entirely around consumers. With the beauty industry largely driven by sentiment and subject to the whims of ever-changing fashion trends, the data the app generated — on what consumers were thinking, saying and buying — was potentially far more valuable. Wendy began contacting major brands in the sector to see if they would be willing to pay for such data, and the feedback she received was promising.
The next step was to build a web-based test version of the app, both for consumer and big brand feedback. Without the funds to build this in-house, the sisters sought the assistance of the NDRC (formerly the National Digital Research Centre), which provided them with €30,000 in cash and €20,000 in services, as well as advice on who to partner with for the app build.
As well as meeting with the app developers and some of their clients, the sisters recruited the assistance of the technology director of a company also based at Maynooth Works to sit in on the last stage of the selection process. They eventually selected Drogheda-based Mor Digital.
As part of the NDRC programme, the sisters moved for three months to the agency’s startup accelerator programme based in the Portershed on Eyre Square in Galway. “It was fantastic,” says Wendy. “The people there were so supportive. They opened doors and introduced us to senior technology people with amazing experience who stopped us from making mistakes.”
While Tracy Slattery oversaw the test app’s development, sister Wendy continued her campaign to build relationships in the beauty sector. “I contacted one senior executive at L’Oreal and she agreed to meet me for coffee. It turned out she was based in New York.” Wendy headed across the Atlantic where, with the help of the local Enterprise Ireland office, she also met with potential investors.
The sisters were targeting €250,000 in funding from the state agency’s Innovative fund, which would commit them to creating 10 jobs and making €1m sales within three years. To qualify, they had to match the state investment with €300,000 of funding of their own.
According to Wendy Slattery: “The thing nobody tells you is that if you have global ambitions then you have to spend at least 60% of your time on fundraising. I don’t know how much time I’ve spent meeting people for coffee.”
Vote 0f Confidence
The first €100,000 of private funding came from Dan Ryan, head of commercial trading at the Selfridges Group. Wendy had been meeting him on a regular basis as part of an outreach initiative to significant retailers in the beauty sector. Alongside the investment, Ryan joined the company as commercial director. “It was a huge vote of confidence from someone who’s been on the journey with you,” says Wendy.
She eventually found another five investors for the remaining €200,000. “We specifically targeted people who filled gaps in our knowledge, people who have scaled companies, people with financial expertise and global experience.”
Those investors include French Cosmetics Group (€50,000), the Dublin-based beauty products distributor owned by Oonagh Clarke. Maynooth investors John and Bernadette Daly provided €50,000, as did Patrick Gavigan in Leixlip. Galway-based Patrick McDermott, who owns consultancy business BaxnMax, invested €25,000, while another €25,000 came from the Marie Ainsworth Pension Trust. “We also met a lot of investors who we were just too small for. But once we meet our milestones we’ll be back to them,” Wendy adds.
The sizeable private and EI funding enabled Beauty Buddy to bring development of the final app in-house. They recruited two front-end developers, a back-end developer, a user experience designer, a data analytics expert and a marketing person, bringing the total head-count to nine. The sisters also signed 42 beauty brands on to subscription deals, providing them with access to a dashboard they can use to pull trend reports and real-time data. The payments won’t kick in until there is enough information provided by the app, so the business financials depends on persuading women to download and use the app – and that costs money too.
Beauty Buddy is aiming to get one million downloads in the first year across Ireland and the UK. For that, the Slatterys have earmarked a marketing spend of €120,000.
“Nearly all our target consumers are on Instagram, so even marketing spend in the real world such as events involving influencers track back to Instagram updates,” Wendy explains.
If Ireland and UK traction can be achieved, the blue sky upside is introducing Beauty Buddy to American women, in line with the sisters’ global ambitions for their new business venture.
Photo: Wendy and Tracy Slattery (front, centre) with members of the Beuty Buddt team