236 | The Unusual Model of Selling Unusual Skincare Products | with Alex McIntosh

Alex McIntosh  

Don't be afraid to try things and then celebrate the learning. Ideally, everything works, but it usually doesn't. 

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating  real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host, Chase Clymer. And today, I'm welcoming to the show Alex McIntosh from Thrive Natural Care. 

Alex, welcome to the show. 

Alex McIntosh  

Chase, thanks for having me on. It's good to be with you. 

Chase Clymer  

Oh, I'm excited. So for those that are unaware of the brand, can you quickly talk about the types of products that you guys are bringing to the market?

Alex McIntosh  

Yeah. So my company, Thrive Natural Care, sells skincare products. 

The way I usually frame it for people, Chase, is Thrive regenerates your skin, our planet and local farmer communities. 

It's a very, very unusual business model that makes very unusual skincare products for men and women. What we're most known for is suncare.

Chase Clymer  

Awesome. Awesome. So take me back in time, when did you... 

Was it [because] you're passionate about the cause before the product or you just had an idea for the product that led to being passionate about the cause? What started this? 

Alex McIntosh  

Yeah, there are 2 seeds that produce the fruit here that became Thrive. 

One is the more typical entrepreneurs' [reason]: There was something I wanted to buy that didn't exist. And I'll talk about that. 

And then the second one is my heart/passion project. And it was creating a business model that I really thought would be a useful business model and something that the world would need. 

What ended up being really cool, is the second thing ended up really helping the first thing.  And I did not know the connection between those two until we got really deep into it. And so it'll be kind of fun for us to unpack. But the 2 seeds... 

The first seed is I'm half Scottish, half Norwegian. I have really sensitive skin. From the time I was a little kid, anytime I got any lotion, or sunscreen, or when I started shaving when I got into my teens, my skin would just get super irritated. 

Very red, very blotchy, lots of irritation and burning. And it was made a lot worse by most of the conventional synthetic products. 

The problem was when I got older, and I learned about natural products, they didn't all work very well, or as well as for some of the specific things that like, say, sunscreen is the more synthetic products. And the ones that did work were really, really expensive. 

So I saw a gap for basically creating truly healthy products that worked much better, particularly for people that were very active, had sensitive skin, and went through degrees of stress. 

So for any of your listeners who are already building or thinking about building or raising families or are just stressed at their job, I wanted to make products for people like that that were no trade off between healthy and effective. So that was one thread. One seed. 

And then the other one is, I like to joke and say that "I'm a tree hugger who believes in capitalism." 

And by that, I mean, I've been really fortunate to work on some pretty ambitious visionary projects with some really interesting organizations like The Nature Conservancy. 

And I'm really passionate about leaving the planet better off for our kids and grandkids than we had it. But I believe that business is an amazing engine to do that. 

And just because something is green doesn't mean people are going to want it or need it, it needs to solve a problem. 

And so the second seed really grew out of my time as an executive at Nestle where I was working on some pretty amazing stuff I was building out. 

And I became really obsessed with this idea of regenerative back in the early 2000s. And I ended up leaving Nestle to start this company called Thrive Natural Care. And it's basically the combination of these 2 things. And I can share Thrive's business model in a minute but that was the... 

The inspiration was basically a product that I wanted to buy for sensitive skin that was healthy, that works better than conventional products. 

And then this really strong desire to have not just a greener or more sustainable business, but something that would truly leave places better off, leave people better off. 

And this is the idea of a regenerative business. And so those two things came together during an amazing family trip in Costa Rica, which is where Thrive was born.

Chase Clymer  

That's amazing. So you've got an idea for the types of products. And you've got some... You've got the social impact element that you want to bring to it as well. 

Alex McIntosh  

Yeah. 

Chase Clymer  

What's next? Did you do any ideating on the actual products that you were going to sell? Did you do any market testing? 

I'm sure there's a bunch of listeners out there, they have a bunch of ideas. How did you know "This is the right thing to do. I'm gonna put my energy here."

Alex McIntosh  

Yeah. So the real honest answer is I actually did some smart things. But if I think back on it, I think it was really a justification for something I really wanted to do, if I'm being really honest about it. 

So I had access when I was at Nestle. And I have a lot of friends that were in finance and stuff. 

And they could get me all kinds of reports on "This market is growing, this market stinks. And here's what's coming up. And here's the latest on that." And I had all of that stuff. And it was really good. But I think in my head, I had become really... 

And I'm a fairly rational guy so I say this with a bit of a smile. I think back and I'm being really honest. 

I think I really believed in creating a skincare line for women and men that was based on this regenerative model... 

And I'll talk about why that's relevant to skincare, because it's sort of an odd sounding thing. But creating products with this model, I thought it was a really interesting and differentiated idea, and I thought it would do well. 

And so I did a ton of research. I started sketching out how this would work. I actually trademarked back in like 2012 the brand name of Thrive for skincare. And so there's a bunch of stuff that I did just set it up. 

And then the really fun part was going back down to Costa Rica but on a business trip --a series of business trips-- to start recruiting team members to start finding the farmers that would grow our products and stuff. 

And there's a concept that we can talk about that I have really tried to meld into my company called the Mini Piloto. And it's a shorthand way, the translation literally means like small pilot. But it's how we think about trying new things, how we think about risk, how we think about scaling. 

And I'll talk about that in a second because it's sort of the great example of how we built the business up. But essentially, the model was this: The model is to go to places that have really interesting natural resources. 

So in this case, Costa Rica, has won the highest biodiversity indexes in the world. Identified from a really long list of thousands of plants, the plants that would have really unique abilities to do something for your skin for, for a woman's skin, for my skin, that would replace a conventional synthetic equivalent. 

So the idea was to basically take something that was synthetic that probably did a good job at whatever you do, but had some side effects and irritation or things that would cause like I was experiencing and replace that with one of these plants. And then what we do is from this long list of plants, we chose 3. 

We commercialized them by going to farmers in Costa Rica and working with them to replant their farms with these native plants and then to grow them in a special way that would really turbocharge the potency and purity of the plant leaves' oils. 

So the things that we would take from the plants when we harvested the plants and we distilled them, the way we grow them makes them much more potent and pure for the skin. 

And so what we've got are these 3 new to market plants, no other skincare company in the world has them. We grow them in a special way; it turbocharges the potency and the purity. 

So an example of that is Vitamin E as an antioxidant. That's really good for your skin if you've been outside or you're stressed. Vitamin E is a typical one. 

Our super plants grown regeneratively deliver 17 times (17x) the amount of antioxidants to the skin that something like Vitamin E does. So there's this great skin benefit. 

So we grow the plants this way, we take the leaves, turn them into oil that has this really special skin benefit and that becomes the hero, the engine ingredient in our skincare. 

And then we wrap around them really great natural formulas that we designed; Whether it's a lotion, or the one we're really known for is our sun care like a sunblock. We were just recently chosen by the New York Times as “The Best Reef-Safe Sunscreen”. 

So my team is having a really fun time trying to keep everything in stock because we've been getting lots of orders from that. And so we then sell these products that have these unique ingredients with really good skin benefits. No one else in the world has them in there. 

And the benefit to people is that they can actually have better skin results. So back when I was younger and my skin was getting irritated, now it doesn't. People can get that. 

They can also use much healthier ingredients versus the synthetic things. There's no trade off. It's actually a plus to use this.

But then the really interesting thing for people that care about it is the regenerative farming we use, Chase, on those farms. We're doing this to restore the soil to increase the biodiversity and to improve the farmers' lives. 

So every time someone's buying Thrive, what it's doing is it's supporting a supply chain that literally, by itself... 

Not buy one, give one and not make money and give it back. The actual business model itself is restoring soil, bringing the land back to life, and then the farmers are not spraying or using herbicides, pesticides and fertilizers. 

And they're much healthier, they're not having to pay for all that stuff, and they're making much more money than they were when they started. So it's a real win. 

And so people really love it because they try Thrive and they're like, "This is great, works great for me in the sun. It's really effective. I don't look like a ghost. And it's really good for my skin. And it's having this really good effect on the planet and farmers." Great. So it's a win win. 

And so that's what we built out: The regenerative business model in Costa Rica. So foreign country, commercialized 3 plants, built a whole new product line and then figured out how to sell them in the marketplace. 

I think I had a few gray hairs.

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Chase Clymer  

We're going to get to how you sold them here in a second. I got 2 questions [that] I wrote down.

Alex McIntosh  

Yeah.

Chase Clymer  

As a first... This is less of a question but more of something that I really wanted to point out. You basically...

Alex McIntosh  

Yeah.

Chase Clymer  

...alluded to... You were more looking for proof that your idea was a good idea and less looking for reasons not to do it. Have you ever read the book "How to Lie [with] Statistics" by Darrell Huff?

Alex McIntosh  

No. But I probably should have read that before I started this. To be honest, the research did help me like a few categories and so forth. 

But more I think I probably got that from good advice from some advisors, I found. I think I should have read that book Chase before I started all that stuff. 

Chase Clymer  

Oh. It is a book that is either a good tool or a bad tool, depending on your moral compass. But it's a funny one. 

But then the second thing was: Launching a business that's almost vertically integrated from the get go... 

Alex McIntosh  

Yeah.

Chase Clymer  

...that doesn't sound cheap. So did you take funding when you launched this business? 

Alex McIntosh  

No. We bootstrapped. So for the first 3 or 4 years, I funded it myself. And I don't come from a lot of money. I had made a little bit of money when I was younger. 

We had a very particular philosophy for figuring stuff out and for growing and I'll explain that in a second. 

But it really wasn't until we actually went into the marketplace, we started officially selling, that I felt comfortable that this had some legs and I could go out to friends and family and eventually to some angels and invest. But the reality is, even... 

We've been doing this now for 9 years and we've only taken on a million and a half of outside money, which is a lot. I feel very fortunate to be able to have done that. But we really wanted to grow this intentionally and to build a great business. 

And we were less concerned about speed and more concerned about getting the product right and getting the business model right. There are some downsides to that definitely made it more challenging bootstrapping. 

But the concept that I want to go back to that may be useful for your  listeners is there's nothing that is earth shattering about what I'm going to share here. 

But I think it's a super useful philosophy for helping grow a business, particularly one where you're not looking to just put it on steroids and then flip it to the next buyer, which is something some of my friends have done. 

There's nothing wrong with that. That's just not how I wanted to build Thrive. 

So the concept that we use for growing that helped us do this on the cheap, as it were, it's this idea of the Mini Piloto, which means small pilot. And  I want you to imagine. 

Imagine you and I are standing at our first farm in Costa Rica back in 2013. And we know that we want to sell great skincare and have lots of people love it and use it and have it be a big deal. 

But here's what we have to figure out to get there standing on this farm in 2013. "If we plant these plants, these super plants in the soil here, can we grow them?" We didn't know if we could or not because they hadn't been commercialized. 

Second, "The farmer whose land this is, that we want to partner with and we propose to be doing this with for decades, is that someone we can work with?" Is he going to be consistent? Is he gonna be there? Is he gonna like us? Are we gonna get along? We didn't know. 

Third, "Once we grew the plants and worked with the farmer, once it came time to harvest them, could we harvest the plants and get the leaves and turn them into an oil or an extract successfully?" 

"And if we could do that, could that oil and extract have the skin properties that we were hoping it would have that would sort of outperform the conventional ones?" 

"And once we got those oils and we could say it outperforms conventional skincare benefits, could we take those plant oils and wrap around them really great formulas that we designed ourselves that turned it into a lotion or a shaving oil, or a deodorant, or a sunblock?" 

"And once we did that, could we convince the retailer to carry it and sell it to someone?" 

"And once we did that, would people buy it?" 

"Would they say 'This is a good idea. I'll use this instead of 8 billion other options I got.'" 

"And once they did that, would they like it enough to buy it again?"

We didn't know any of those things.

So the Mini Piloto is we literally started with 25 plants 2 5 plants that we planted in Costa Rica. Not a whole plantation, not thousands. And it was so we can figure all of this stuff out step-by-step-by-step. 

So we started really small and the emphasis has been on: Starting small, have a hypothesis, figure out how it's tracking versus that hypothesis, and course correct as you go along. 

And today we've got hundreds of thousands of plants, we've got almost 250 farmers we're working with in Costa Rica, we've got hundreds of hectares that are being regenerated and turning into these amazing plant oils. 

We got 16 products and we're a top 1% seller on Amazon. And we're now launching into several different channels. But what we still use and it's on our website is one of our key values is this idea of the Mini Piloto. 

And that is to start small, have this hypothesis, don't be afraid to try things, and then celebrate the learning. 

Ideally, everything works, but it usually doesn't. What we try to figure out for each of our team members is "What am I learning from this thing? And how does that help me go forward faster next time?" 

And we really celebrate that it's almost a race to see who can own the "mistake" faster, as long as you're pairing that with the learning. 

And that's really helped us I think, to grow a really interesting, beautiful business without a whole lot of outside funding is this idea of the Mini Piloto over and over. 

We use this with our Shopify site, we use it with our new product development, we use it with our social strategy. It's used again and again and again. And there's nothing earth shattering. 

But it's a really interesting way to look at it if you're trying to grow a business without taking on tons of outside capital in the early days.

Chase Clymer  

That's fantastic. Let's talk about that pilot test. 

Once you had the products to sell, and you were taking them in the market, what was your first channel that you guys tackled? 

Was it Amazon? Did you go direct-to-consumer? Were you going retail first? 

Alex McIntosh  

Yeah, we had a website. It was not a very good website. This was... We were actually not smart enough yet to be on Shopify. We were on Squarespace. 

And one of my friends kept telling me to get on Shopify, which we eventually did. It was much better. Really, our first challenge that we got some motion in was Whole Foods. They gave us a shot. This is back before Amazon bought them. 

And they put us in a couple of different regions. And there were amazing people to work with. The problem was their business model really started to change. 

The economics really went south, Chase, and it became very expensive. And I started looking at the writing on the wall back in 2016/2015. 

And I said, "I love being in Whole Foods, I love... These are great shoppers for us. But the business model is changing. People are increasingly buying online." 

Whole Foods is really pulling back its discovery of investment they were making and doing demos and supporting local brands and stuff. And I still love Whole Foods but it just was not a place that I saw a lot of profitable growth. 

And so we doubled down with Amazon and Amazon made us a poster child for small business success. Literally, we were in a couple of programs that we helped launch there, what became Launchpad. 

We were in the beta class of 20 brands. And we just zoomed up on there. We got our legs under us on Amazon. We have a good profitable business. 

And so today we've got a good direct-to-consumer, but we're really investing more in that now and that's on Shopify. And there's a lot. We've had some really good growth over the last 5 or 6 months. 

And then we're also looking at expanding more into brick and mortar. There's several different channels; natural, and beauty, and so forth. But we got our start with Whole Foods. And we got our legs with Amazon. 

Chase Clymer  

Absolutely. 

Now Alex, is there anything I didn't ask you about today that you think would resonate with our audience?

Alex McIntosh  

You cover a lot of really interesting topics. I think one of the themes, Chase, that you bring up is "What was difficult and what did you learn from it?" 

And entrepreneurship, aside from the stories that we all loved watching WeCrashed and the Theranos thing, it's fun/sad to watch these entrepreneurs go down in flames. 

I think for most entrepreneurs, what I'd say is, there's never a period of challenge or struggle. There's cycles of it. And what you really... What I found has really helped me go through several cycles is one, understanding that being an entrepreneur means as much about building your company as it does growing yourself. Doesn't matter whether you're religious or secular, whether you're really experienced or you're not, you're going to learn a ton by building a company. And if you build it into it, a lot of that is making you a stronger person, particularly by doing stuff and facing things that you're not as comfortable with. If you really learn from those things and you embrace it, it makes you a much better leader. And so that's one thing I'd say. The second [is] yes, have a big vision but really pay a lot of attention to the values that you use to build it. 

Because if you lead with good value... Look, there's a bunch of companies... 

I have friends that were there it's early days of Uber and stuff. And it was really exciting for them. But I think they all look back. 

And aside from the growth, there are a few people they like there but they speak of having left that even before things got crazy for Uber, because they wanted a different culture, different soil to grow in. 

And I think as a leader, if you can build a really good culture, and attract talent to it, it amplifies tremendously your original vision. 

Because other people who are smarter about whatever you've hired them to do, if you allow them to pour their passion in as an entrepreneur or as someone who's starting a business, and you give them good soil where they can make mistakes, where they can try things, they get credit for it, and you truly aim to value them as people and develop them, they will build great things, they'll teach you a lot, and you'll have a much, much better outcome than if you're trying to prescribe everything. 

Now, this is sometimes "Do as I say, not as I do." It's hard as an entrepreneur not to go in and helicopter in as a founder and tell everyone what this needs to look like on your website or what to do there. 

But if you really pay attention to those values and build good soil, you'll have amazing teams that can build truly outstanding things. And I think that's where a lot of the fun comes from. So that's the last thing I'd say, Chase. 

I would just add, because I've noticed that thread  in many of the conversations you've had about what did you learn and what are the important things about building something? And that's what I would share.

Chase Clymer  

Oh, thank you so much, Alex. Now, you said something just then that building your own business is like the ultimate... You're gonna learn so much. 

Would you agree that the best MBA is starting a business? 

Alex McIntosh  

Absolutely. Yes, I would. 

Chase Clymer  

Awesome, awesome, awesome. So if I'm an entrepreneur out there, but I am very interested about the products that you guys are selling, what's the best place for me to go buy and support Thrive?

Alex McIntosh  

Yeah, the best place is our website. It's thrivecare.co. T-H-R-I-V-E care.co. You'll learn a lot more about the brand. And we've got some pretty good deals on there. 

We also have a great presence on Amazon. That's a place that a lot of people like to find us and buy us. And it's also on our website, you can get in touch... 

If any of your listeners have questions for me or something that they want to propose in terms of a partnership. I'd be happy to read it.

Chase Clymer  

Awesome. Alex, thank you so much for coming on today. 

We can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

You can subscribe to the newsletter at honestecommerce.co to get each episode delivered right to your inbox. 

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Lastly, if you're a store owner looking for an amazing partner to help get your Shopify store to the next level, reach out to Electric Eye at electriceye.io/connect.