Vicky Tsai: Founder & CEO of TATCHA

VickyTsai.jpg

Vicky Tsai is the founder and CEO of TATCHA, a major beauty brand whose products are both insanely gorgeous and incredibly effective. In everything she creates, she’s inspired by her time spent with geishas, whose philosophy is that less is more. Read below to learn more about what life is like as the CEO of a large company, her journey to starting TATCHA, and how she handles a job that requires her to travel up to 90% of the time.

I know that you majored in Econ in undergrad and then went to Harvard Business School (HBS). Did you know that business school was the next step for you?
No, I had no idea I’d be going to business school. I thought I would make a career in Wall Street. I ended up becoming a credit derivatives trader when I graduated, at an investment bank called Merrill Lynch. My husband and I were actually both working at Merrill Lynch near Ground Zero on 9/11. We worked in one of the World Financial Centers which linked the towers [...] and we were in the office when the planes hit.

We were in our early 20s. It was a huge wake up call because I think until that point, I spent my entire academic career and the beginning of my work career thinking about how to make my parents proud, how to build a good resume, how to earn money. And then after that, I just started thinking really, really differently about life - like, “Oh my goodness! Life is precious.” I realized that if work is how I’ll spend the waking hours of my day, then to have meaning in my life, I also needed meaning in my work. I have to find work that fulfills those instincts.

Wow. So then you decided to go back to business school to decide what you wanted to do next?
So both my husband and I realized after a few years of working in finance that the New York finance lifestyle can be quite unhealthy. And he also developed an autoimmune disease after 9/11 that lasted for a few years, so we also knew that we had to make some really significant life changes if we were going to have sustainable careers. But investment banking and derivatives trading, those are very specialized skillsets and they don’t really set you up easily to do a lot of things from there. So for us, business school was a very [...] necessary way to broaden our skill sets and also learn about what other opportunities were out there. It’s kind of a scary feeling to have gone through college, gone through your first career choice, and then be like. “I still don’t know what I want to do when I grow up.”

And after business school you founded Tatcha? How did you make that happen? I read that you worked four jobs and sold your car to do so.
I had no intentions of being an entrepreneur. During business school I worked at Procter & Gamble and learned a bit of classical marketing. After that I went to Starbucks and I launched their consumer products business in China. I had to learn a little bit of everything from R&D (Research and Development) to supply chain, consumer research, marketing, creative, finance, tech, intellectual property.  And then I got recruited out to Silicon Valley to head up marketing for an internet startup. That was an incredible crash course in supply chain, sustainability issues around personal care, and what you do with the internet and data. It was after that that I woke up one day and I said, “I choose happiness.” And I just quit—with no plan. I started traveling and ended up in Japan, spending time with geishas, healing my skin, healing my soul, and realizing: “That’s what I am supposed to do.” I don’t think you have to go to business school to start a company [...or] have 15 years of a meandering career—like I did— to start a company. But I do think that having a way to pick up those experiences quickly helps you know how to ask the right questions when you get started.

Geishas.jpg

To your question about how did I handle it logistically, I chose to self-fund the company in the beginning. First, nobody wanted to fund beauty e-commerce at that point. It was ahead of its time in that sense. Second, I didn’t know if it was going to work, so I certainly didn’t want to risk anybody else’s money. The only way I could do it was spend out my savings, tap out my credit cards, and then work as many jobs as I could just to keep the cash flow going.

None of them were full time jobs, although some of them were very time-intensive. [I rented] out apartments for my landlord [...and was] the super of my building. The other things that I did were to build a skillset and network. There’s a beautiful beauty retailer called Space NK and I developed a skincare line for them. I also did some consulting for a big beauty company called Beiersdorf. They own NIVEA, Aquaphor, La Prairie. So there was strategy work, there was product development work, and there was just like, cash work. And I was pregnant, so assuming you’re not pregnant when you start a company; you’re way ahead of me!

Have you gained or sought out investors since then?
I self funded for as long as I could, then my parents started kicking in money. Then I partnered up with a guy from business school named Brad, who became one of my co-founders and operators. He came from the private equity world and was really, really, really great at raising money. We started just with friends, family, and previous co-workers. Only in the last little bit did we start going out to true angel investors [...who could] help us really move the ball forward in terms of operating the company.

Tatcha has been in business for over 8 years, which is an amazing feat! Your line has expanded quite a bit - and your products are not only effective, but also really beautiful! How did you find manufacturers for your goods?
When I was in business school, I listened to a talk by Tory Burch, and somebody asked her advice on starting a brand, and one of the things she said was hire a professional designer. Luckily, one of my best friends was the global head of creative for Starbucks. And then, we worked with this amazing guy—he’s a great Japanese designer. [He] definitely brought a Japanese eye, and my best friend from Starbucks, Stanley Hainsworth, brought in that really well thought out, high-design factor that works in the US. I had the vision in my head, but I’m not a designer, so I had to sort of use them to make the vision come to life.

MakingFormulas.jpg

And we try to always do custom packaging, we always do custom formulas: they’re built from scratch, like a couture dress. Most beauty brands go to a contract manufacturer, they pull out a portfolio of stock formulas, you pick a formula, sprinkle some fairy dust in it, put your name on it, and you’re off to the races. We found some of the top scientists in Japan who [know] how to isolate raw materials, develop really beautiful but pure actives, and we started just building from scratch. So, I’ve actually been working on the brand since 2008, but we didn’t launch the skincare until a few years after that because we were in R&D for so long. If you love your products more than anyone else, and if you love your clients more than anyone else, and you’re not in a rush…then you have the foundation for something that actually matters. I think people deserve things that are really special like they are.

How did you get your products into Sephora? That’s huge!
Sephora is a complete game changer, and we feel so lucky to work with them. They have their finger on the pulse of the market, so they are the ones who reached out to us as soon as we launched the blotting papers, years ago. The people that we’ve had the opportunity to work with there are visionary, they’re amazing partners, they care about the company as well as the collection. We didn’t launch with them for five years, even though we loved them, because when you launch with a retail partner you want to make sure you are well-set up to be a good partner to them. The retailer wanting you is not enough, because when you launch, you want to exceed their expectations and requirements for productivity.

As founder and CEO, what’s been one thing you didn’t expect that you’d have to do, but you do?
I would say the role is completely different than what I expected, and not only that, but it constantly changes. When you grow quickly, the role is evolves with the needs of the company. One thing that I am constantly asking myself is, in all honesty, “What am I supposed to be doing right now?” The urgent stuff is just the stuff on your to-do list—your emails, your appointments— and you always have to get that done. And then there’s the work that is important, the strategic stuff. It’s the stuff that’s really game changing for the brand or the organization. Like setting the vision for the company and making the big changes to move it that way. I have the personality type [that gets] bored easily, and so I can tell you: I have never been bored. Often learning new things as quickly as I can, but never bored.

Scientists.jpg

Least and most favorite part of your job?
I love my team. As you get bigger, a few dynamics change, but I just feel so lucky that my squad is so good. Seeing the people on my team grow, and develop, and take on new challenges is one of my greatest joys. I [also] love our clients. I know it’s kind of weird for a CEO of a company my size, but I don’t care—I spend at least an hour, if not more, a day interacting with clients, reading their feedback, giving them advice. And product development…it’s so fun! You get to dream of things [... and] get to make them come to life with people who are geniuses. And then you get to give them to customers [who] tell you that it really, really changed how they felt about themselves and you find out that you’ve sent girls to school for over a million days and counting (Tatcha’s philanthropic effort funds a day of school for girls in Africa and Asia through the Room to Read’s Girls’ Education program). It’s just a beautiful, virtuous cycle that I feel blessed to be a part of.

My least favorite parts…while I feel very lucky to be able to travel the world because it opens my mind and opens my heart, it takes me away from my daughter. It’s hard to be the kind of mom that I want to be from the road. Luckily, my daughter is seven, and she understands and considers the company her family. I still feel like I am missing out. I think that’s a struggle for all working moms. So there’s that. And while we’ve built a large wonderful team, we haven’t always gotten the hiring right. Culture’s so important with a small growing company—the wrong people in an organization can turn into a cancer. You have to keep an eye on that and manage that quickly and efficiently. That’s not something that I enjoy, but it’s an important part of leadership.

GiveBackToSchools.jpg

Are you willing to share your salary?
Oh, absolutely, I have no shame. For the first six years, I made zero dollars. And then for the last two to three years I made $12,000/year. I am proud to be the lowest paid person in my company. If you take institutional financing early or you can get profitable really early and choose to pay yourself instead of putting it back into the company—and that’s neither good nor bad, it’s just a choice—you can take a salary early on. We didn’t take that route. So, how do I manage expenses?

I’m almost forty. I never bought back my engagement ring, which I sold to start Tatcha. In fact, I don’t own any fine jewelry. I don’t own a nice purse. All the things you might spend your money on, we just don’t spend money on. I inherited two used cars from my mom. The cassette tape in my car has been broken, and so my big major splurge recently was that I upgraded it to a CD player. We don’t have a nanny or babysitters for our kids because childcare is really expensive, so we do it ourselves. I’ve never felt though like I’m missing out and that I need anything. Also I have a husband who made a salary before he joined us, so he was kind to contribute all of his salary to pay for school and rent. Now my husband works for us, and he gets a salary. As a group, the co-founders still have ultimate control over the company, but it comes at a cost [...] we’re willing to pay because it’s important to us, but it’s not right for everybody. 

If you know nothing about skincare, and you don’t even wash your face (!), where do you start?
Wash your face, please! Please wash your face. When you are a baby, you’re constantly shedding and making new skin. It’s called the rate of desquamation and the rate of synthesis. When you get older, the turnover cycle of your skin slows dramatically. Yours is still quite high (early 20s). It’s in your 30s that it starts dropping off. But everything that you notice in your skin, especially as a young person, can come down to how you’re taking care of that top layer of your skin. So breakouts, clogged pores, whiteheads, blackheads, and then very dry skin. If you just wash your face the right way everyday, which includes exfoliation—but gentle exfoliation, usually with a very, very light enzyme—that will keep all of the debris coming off of your skin so pretty new skin coming through.

It also means if you have dry skin and you put moisturizer on, it can penetrate through the skin instead of being stuck on top. And makeup is wonderful, but it is not meant to go in the skin and it’s not meant to stay on top the skin: you must, must wash your makeup off. And then, finally, SPF broad spectrum because there’s one type of ray that causes burns, [and] there’s another type that causes photo-aging. You don’t notice it until it’s too late, and once it’s too late, it’s really hard to fix. At your age, everything is about preventing accelerated aging and taking care of beautiful skin you already have.

Okay, but what do you do? Please answer as if you're explaining to your ten-year-old self. 

VickyTsaiNotecard.jpg

Thank you so much, Vicky! You shared so many professional and personal stories, all of which were immensely helpful in having us understand the life of a CEO of a growing company. Readers, come back next week for Vicky’s helpful advice about starting off in the business world.