How did WOW Skin Science, a home-grown direct-to-consumer (D2C) business, become a global top-selling brand? Here’s their growth story and some valuable lessons.
How it started and how it’s going
WOW was founded in 2014 by two brother duos who wanted to make their mark in the beauty & personal care industry. Fast-forward to 2021 and their nature-powered, affordable products are fast gaining popularity in Indian and American markets.
But it was not always a bed of roses for the founders. Before starting up WOW, they had incurred losses of almost $1 million in their retail electronics business. However, this did not discourage them from choosing entrepreneurship again. They pumped in their savings, maintained a lean team, and focused on building quality products with a consumer-first approach.
At present, they have 100+ well-researched and creatively formulated products. They rely heavily on data to guide their process of innovation and create new products based on consumer behaviour, not gut feeling. Their use of natural ingredients has propelled them to the top and made them a best-selling brand on Amazon. The company now rakes in revenues of over Rs. 350 crore and is a global favourite.
And this brings us to the most interesting bit – WOW achieved phenomenal success without venture capital or debt funding. They started as a bootstrapped company and kept it that way throughout their journey. There are some great entrepreneurship lessons that their journey can teach us. Let’s dive into this.
What can founders learn from WOW’s journey?
1) It’s perfectly fine to stay bootstrapped
If you’re a bootstrapped business, there’s nothing wrong with keeping it that way. It’s a fantastic way to hold the reins and grow on your terms. You’re free to make your rules and script your story. If your business is generating enough revenues to sustain and grow, maybe you don’t need to raise capital from external sources.
2) The best source of funds is your own revenues
There are several issues with traditional models of financing like equity and debt, especially for new-age businesses such as WOW. Venture capital firms take away a significant chunk of equity and controlling power. This turns out to be a very expensive way to fund your growth, especially if you deploy most of it in marketing and working capital. Banks ask for personal guarantees, collaterals, look for multiple years of profitability, and also take time. These conditions are not very founder-friendly.
For most of its journey, WOW used its own revenues to sustain and grow its business. Revenue-based financing streamlines this further by providing you an option to tap into your future revenues today itself. It is a non-dilutive and collateral-free way to raise capital. You can read more about it here.
3) Data is truly the new oil
WOW Skin owes its success significantly to its data-backed approach. The Internet is a powerhouse of information. Social media has made access to this information even easier. As a result, customers are more aware than ever about what’s good for them and what isn’t.
WOW leveraged this data to put their customers at the center of their innovations. It gave them insights into consumer behaviour across regions. So, while affordability turned out to be the most-loved proposition in India, natural ingredients won hearts in America.
This is proof that data is a game-changer. Founders should let data be their guiding light and make informed business decisions.
4) The way forward is digital
Being a bootstrapped venture, it made more sense for WOW to be an internet-first brand. They sold their products on e-marketplaces such as Amazon and relied on social media to tell them how their products were being received.
Founders must realize and leverage the potential of an online presence. It is a cost-effective way to reach people without investing in a brick-and-mortar outlet. Also, you get the option to target and reach audiences across the globe. Achieving this with an offline process would require oodles of capital.
5) The globe is yours
Another noteworthy point is how quickly WOW was able to launch in the US. Their internet-first approach made this possible. Selling in the US certainly leads to higher pricing and better margins, making it an attractive market for bootstrapped brands.
This is another great takeaway for founders. If you are an online business with good profit margins, the Internet will make it easier for you to expand.
6) Never lose hope
Building your empire is not going to be a cakewalk. The founders of WOW did wow us with their perseverance. Their story has an important lesson for entrepreneurs. Never let your lows discourage you. Instead, use them as inspiration to get back up stronger.
We hope you found this article interesting. If you have any questions, drop a comment and we’ll be happy to answer them.
Velocity provides revenue-based financing of up to Rs. 2 crore to online Indian businesses. We currently cater to direct-to-consumer (D2C) and e-commerce brands. To grow your business with us, apply now and get funded within 7 days.