Transcript

The Honest Company’s Jessica Alba: Make your customer the star

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In just a moment, we'll be talking with entrepreneur and movie star. Jessica Alba, about scaling the honest company. But first, we're gonna start with a story to set up our theory for this episode. The room was surrounded in black. The stage itself was slats of wood, like you'd see on an old ship.

And there were six Square Chambers on a large wall behind me. and each one contained a different object or scene of sorts that I would interact with over the course of the performance. the top left.

There was an automaton with a gold head. And a wolf's head in another box. A broken window with a brick smashed through it in another box. And a bottle of booze. That sleight of hand artist.

Derek Delgadio Describing the set for a stage show in and of itself. I'm not gonna spoil the show by giving any more details. You really need to see it yourself. But I will say that the surreal setup Derek just described is aimed at building a very real and lasting connection with his audience. Judging by the emotional responses from those who've seen the show and the critical acclaim it's won,

Derek succeeded. It's nice to know that something that you've made resonates with people. In a meaningful way, as an artist, it's probably the most rewarding thing to know that the thing you tried to say was heard. And it made some impact. For Derek, the real magic is making art that stays with his audience.

long after the curtain closes. Magic works because you know that it's happening in real time right in front of you. And the more that you can verify those circumstances, that this is actually happening right here and now. The more effective that moment of astonishment is.

Creating a transcendent moment. for someone or for a group of people can be done. With anything, I believe, you just need to Have that be your aim and if that intention is pure hearted and it is really genuinely trying to point to something

Greater. than what we're able to necessarily see or hear. Then I'm all for it. And it boils down to It has to be true and it has to be honest. Derek emphasizes the importance of the real.

Lived experience in creating the wonder of a magic show. I couldn't agree more. And it's a perfect example of why I believe the more you understand the in real life experiences of your customers, the more magical your product will be.

You gotta have incredible talent at every position. Huge push. There are fires burning when you're going out. Can you believe it? Such an idiot. And then you go back to this is totally gonna be amazing. There are so many easy ways. Sorry, we made a mistake. But you have to time it right. Not all ten years later but that's just how you do it. We haven't made it just how you do it. This is masters of scale.

I'm Reed Hoffman, co-founder of LinkedIn, partner at Greylock. And your host. And I believe the more you understand the in real life experiences of your customers, the more magical. Your product will be You may have heard about Silicon Valley's current obsession with the idea of creating a metaverse.

An immersive virtual three D world in which we can interact with each other in real time. Now I'm a tech optimist. Which is why I believe There's a strong upside to the metaverse. As long as we maintain our connection to the real people.

and real lives that underpin the system. In short. It will be essential to make sure that the virtual world doesn't eclipse our IRL world. This term. I R L.

Or in real life. is also an important one to keep in mind as an entrepreneur. It will help you avoid a classic mistake of entrepreneurship. Falling in love with a product or service that you imagine will be a huge success without taking account. Of what it will do for your users.

In real life. It was an exchange that I had with Jessica Alba. During our interview that got me thinking more about the term IRL and specifically how important it is for entrepreneurs to maintain focus on the IRL needs of their customers. A lot of these ideas come from what do I wish that I had to optimize the life experience. And then how can we do it?

Jessica gave a disinfecting spray as an example of this approach. Usually when you're disinfecting, you'd have to like open all the windows and clear out, you know,'cause it's such a strong scent. Ours is basically odorless. And it's super neutral, it's really safe, but it still kills all the germs. So it's like

You get to do both. So a lot of it just comes from IRL is what I call it in real life. Yes, yes. It's a very good gig term. I asked the team, I'm like, okay, so what's the IRL version of this? I wanted to talk to Jessica about finding the IRL version of your product because as a hugely successful entrepreneur, And film star. She knows all about the importance of cutting through fantasy and To get to reality.

It's something that Jessica continues to do to great effect as co-founder of the Honest Company, which she built around her passion to make child care and household products that are safe. And eco friendly. Remember, we just heard Jessica say that she asked her team what's the IRL version of this. It's a question you need to be asking yourself and your team constantly in order to make a product.

That will enhance your customers' everyday lives. Jessica's reality when she was growing up. was a constant struggle with ill health. I had a lot of terrible health issues, asthma and allergies. I had several surgeries. I had cysts removed and kidney issues and my tonsils, my appendix. I was learning to grasp.

Оранже, строберії. Anything outside trees Dust. Hay Animals. But Jessica was determined to put herself out into the world.

I was the kid with the breathing machine. I literally would like we had a breathing machine in my car when I would play sports, but I was very competitive. I wanted to play with the boys. I wanted to be better than the boys. They were my competition. At the age of eleven. Jessica persuaded her mom to let her enter an acting competition. She won the top prize. Free acting classes.

Within a year she was signed with an agent and booking roles. What remains a wild fantasy for many became a reality for Jessica. But as the jobs came in. Jessica soon noticed an ugly side to this reality. Just how ingrained

Typecasting was. So I looked around and I was like, okay, I'm this Mexican girl and no leading lady looks like me here. But I know that a lot of people in America and a lot of people in the world look like me, even though Hollywood was so white. And had this idea also of like what it is to be a hero and to be strong and to be noble and all of these things and white men were the only ones that got to Potray these things. Superheroes.

Always white dudes. And I was like, gosh, I wanted to be an action hero. I wanted to do comedy. And I felt like there was a place for someone that looked like me. I asked the agents in Hollywood, like, why men and why this? And they always said it comes down to money. They put asses in seats.

You know you're gonna get that box office. And so the fans are showing up for them. And I was like, Okay, so I just need to get the fans on my side. And my strategy was to do as much PR as possible and to reach out and connect with the fans as much as possible. Jessica wanted to help make the silver screen less monotone.

And more reflective of the real life experiences of people, whatever their background. So she bypassed the Hollywood machine and reached out to the fans herself. Remember. This was the early two thousands, a time before social media had made direct contact with fans. The norm.

So I would travel to Japan and Germany, which were the two other biggest territories. Japan was sort of like the hub at the time to appeal to the Asian market. and Germany was sort of the hub to appeal to the European market. And then obviously North America. Hollywood had created a self-reinforcing bubble that quashed diversity and ignored the IRL experiences of audiences and marginalized performers. And the execs in charge had no vested interest in changing it, as long as the tickets kept selling.

Jessica's innovative thinking and grit helped her escape this bubble. And as she became more successful, she was able to choose the kind of roles that interested her. My whole late teams, early twenties. I only wanted to do global distributed projects. I only wanted to be the lead. And if it was written.

in any way that made my character uh A damsel in distress or a victim, I would always request to Alter the role to have her come out as a hero. Anyone who knew Jessica before she achieved stardom wouldn't be surprised by her refusal to let the system dictate her path.

I always questioned the way things are done. I always felt things could be more efficient. Things could be connected better and optimized. And I just felt like there was so much of the world was built for this white guy. I mean, I hate to say it, but you just didn't see a lot of power in the hands of young girls that were brown. And so for me, I was just like, I matter, I have a voice, and there's so many others that are like me, whether it's someone that looks like me or others. that feel sort of disenfranchised.

And I didn't want luck to just happen, I wanted to create my own luck. Jessica rose to fame with the TV series Dark Angel and movies such as Sin City, Fantastic Four, and Some Kind of Beautiful. But before the success, she experienced something that is common to founders and actors alike. A string of setbacks.

I have the advantage of experiencing rejection Because As an actress, when I was twelve years old, I had a thousand no's before I got my one job where I played the girl in the background and I got my one line and got paid five hundred bucks that day. Right, and I'm putting in

thirteen hours of work. So that is My experience that brought me to the place that I'm at and how I tackle challenges, how I Think through innovation. My process, right, my thought process.

As an actor, Jessica's understanding of what her fans wanted helped her overcome those setbacks and rapidly rise to stardom. Meanwhile, her childhood struggles with health and allergies made her particularly vigilant of what was in the product she consumed. When Jessica became a parent herself, this concern became even stronger. the thing that really landed when I became a mom was just that people, human beings, everyone is exposed to

Toxic chemicals and Passively, right? You don't even know it. And there's so many cancers, learning disabilities, obesity Early on set dementia, чи соміні іщу. that can happen autoimmune.

that happened to people because we're all exposed to all of these chemicals. They're all really derived from These chemicals that aren't tested for safety before they're put into consumer products. They're testing on us whether we're gonna get sick or die. And usually there is a long tailwind. It doesn't just happen overnight.

And I was like, I don't want to be tested on and I don't want my kid to be tested on. And it's not right that anybody's tested on. Jessica became involved in advocating for stricter laws on consumer safety. And while she was able to bring along the audience she'd cultivated for so many years, she found the politicians in Washington to be quite a different challenge. I remember lobbying Mm-hmm.

and sitting down with various people who can get behind this legislation and vote on it. And really like they got down to those brass tacks of. Is this gonna help me? Get into office.

The next time my election term is up. And so It was just really sad because Human health shouldn't obviously be politicize like that.

So Jessica decided to take a different approach. One that made the most of her skills to make a real life connection with her audience. I was like, all right, cool. You know, I'm fortunate enough to live in a country where You can have an idea.

And you can surround yourself with the right people. And you can try it out. And even though I don't have a formal education in this space and even though I've never tried it to go to business school. I have this idea and I have access to the global community online.

So I leverage social media to be sort of like my sounding board and to build community. And I wanted to create this destination for people with my website that people can Get educated on issues, but also they can buy the alternative. Jessica set about refining the idea, talking it over with her husband, producer, and serial entrepreneur Cash Warren. I was like I eventually wanna have retail partners, but I wanna be able to

own and have that relationship with the consumer'cause that's what's important to me. And he was like, God, this idea's way too big. It's way too big. Make it simple, make it simple. So I was like, What is the one thing that you hate doing in the middle of the night? I was like when we run out of diapers, you always blame me. I blame you, we're always irritated at each other. And I was like, okay, so we're gonna do a subscription with diaper so no parent has to go through this again. Note how they were taking a very real life scenario.

From their own lives that was not just particular to them. It was just the kind of simple idea that could be scaled to other products. And I was like, and what is the other thing that's so annoying? And I was like, when we run out of like shampoo or laundry detergent or any of that stuff. So we're gonna do a subscription around that stuff too. And I was like We're gonna do a subscription model online because it's a predictable online ecom. And it's the stuff that really matters is around you and is touching you and your body and your space and your baby every single day.

It's worth noting here that Jessica didn't invent the concept of the subscription model. But what she did do was take that model and apply it to the IRL experiences of millions of people. Parents. Diaper subscriptions were available. But none combine the reach and mission that Jessica envisioned for the honest company.

Identifying the IRL needs and concerns of parents. helped identify a gap in the market. Also Notice how one of the key reasons Jessica wanted to keep the idea simple was so she could have a direct relationship with her customers. Often.

We talk about the minimum viable product and how it helps us get to market as quickly as possible. But launching an MVP also helps us start building our IRL relationships with our customers as quickly as possible. This will help you learn. What they like. What they need.

What turns them off? And if you do this in a really smart way. As Jessica has, you'll make your customers feel like valued partners. And this in turn will make them more willing to give you a window into their IRL experiences. When you've built substantial wealth through your business, it's often tied up in a single equity position.

The upside is real, but so is the risk, and knowing when to act isn't always obvious. Creative planning works with business owners to build a strategy around concentrated equity. When to diversify, how to manage tax risk, and how to protect what you've spent years building. Creative planning where wealth works together. Learn more at creative planning dot com slash masters of scale.

Hey listeners, Bob here. If you listen to Rapid Response on Masters of Scale, you may be missing half the show because every Friday we release a second Rapid Response exclusively in the Rapid Response feed. The guests and topics are just as compelling and timely for From Ford CEO to NASA's administrator to the lessons from The Devil Wears Prada. It takes about 10 seconds to find, just search Rapid Response wherever you listen to podcasts and hit follow to make sure you never miss an episode. I hope to see you there. Humans will never be more intelligent than AI. There can be two types of companies.

Those were great at AI and those that went out of business because they weren't. How do we build a future. That is human centered. I'm Rana El Calyubi. And on my podcast, Pioneers of AI, we answer that question and so many more. As an AI scientist, entrepreneur, and investor, I know what it takes to build AI that works for everyone.

Every week, I sit down with the pioneers shaping our future. And we take you behind the scenes of the AI that's transforming our lives. Find pioneers of AI wherever you tune in. We're back. With Jessica Alba. Co-founder of The Honest Company.

If you're enjoying this episode and want to share it with friends, send them the link masterthescale.com slash alba. That's A-L-B A. And to hear my complete interview with Jessica Alba, become a Masters of Scale member at masterscale dot com slash membership. Before the break, Jessica had developed her idea for the Honest Company as a way to give people daily use products that they could trust were free of harmful chemicals. Jessica pitched the idea to shoe dazzle co-founder Brian Lee, who initially turned her down.

And then he had his first kid, and I re pitched the idea. It was pretty much the same idea. But maybe I did it instead of in like an hour long conversation I did in fifteen minutes. And then Brian jumped on board because he saw his wife change all of her habits and throw out everything in their house. When she learned about how chemicals are hidden in everything, certain nasty chemicals. And he's like, Maybe there's something here.

Sometimes the people you're pitching to won't understand your idea. They need a little help in understanding your IRL experience. It's really interesting'cause like all of my initial VC meetings, everyone was like, I'm gonna go home and ask my wife if this is something that she likes. Literally every single one of them. I don't even know if there was like a women's bathroom in some of those offices. I was it's like always awkward when you're like eight seven months pregnant. I was like going around pitching the dick and you're pregnant and you're like you see a urinal. You're like, Yes, this is this is the light.

But you know, it's just the reality of what it was like ten years ago. Eventually, Jessica secured the funding. It took me three years to go from the idea. And people basically giving me every reason up. Down left.

Right, why it shouldn't happen. And I actually think that's good. I think it prepares you for what it's like to run a business because Running a business Isn't rainbows and clouds and fairies. It's friggin' impossible.

Because there's nothing but challenges and complexities. And you're gonna get hit left and right with every reason why you shouldn't exist. And so I think for me that three years of pushback Just sort of gave me the armor I needed to start the business. Jessica's right.

Running a business is hard. And starting one. Is even harder. Which is why it's so vital to have a deep understanding of the real life experiences of your customers. Which means you need to know their concerns.

I'm thinking of the exhausted, sleep deprived parent. So how can I Giv ease piece of mind. To that person. The soon to be parent has a different saying.

Mm-hmm. They have nothing but time. And research. And so the way that you communicate to them is different than the tired, sleep deprived.

New parent. And then you have the Person who's just like woke. Who's like in the world. Read the news.

Is on social media and cares about stuff. Notice how Jessica divides her potential customers into different cohorts. By doing this, you can often cover surprising insights. About how customers interact with your product in their everyday lives. And the more fine grained you can get about these cohorts and their IRL experiences.

The more you can fine tune your strategy to scale. For an example of this, we spoke with Greg Stelton Pole. Founder and CEO of Calafia Farms. Maker of plant based dairy free drinks. Sadly.

Greg passed away shortly after we recorded this interview. Greg did a lot of good in his life. And will be truly missed. Our producers were laid to me. How kind.

Generous and full of joy. Greg was when they spoke to him. We know that Greg loved helping others by sharing his experiences. And I think every entrepreneur We'll learn from Greg's story.

Greg founded Calafia in two thousand and ten. originally as a juice company with a mission to reduce food waste. He soon pivoted to almond milk. And then expanded to other beverages. In twenty twenty.

The company raised two hundred and twenty five million dollars in its series D funding. Greg wasn't just a hugely successful serial entrepreneur. He was also an early visionary. Про бизнес каначі вide scale good in society. And he could find opportunities for doing that in the unlikeliest of places.

For example. your refrigerator. One thing we learned is that Things have to look good in the fridge nowadays. I mean, I don't want to trivialize like I've just heard it. Fed back to me so many times.

Like Greg. It makes my fridge look better. I get happy when I open the door. I like the way they they meaning if I get a few of them they line up. And so I don't know, there's just an aspect to Design. There's a very good reason.

Greg avoided trivializing this kind of observation. Because it gives you an insight in the IRL experience of your current And potential customers. Gathering many of these observations is essential, particularly when you're making that tricky transition from appealing to niche first adopters to mass market customers. The listening has to get

in my mind actually even better and better as you go up that scale curve. So the last thing is just Don't think about ingredients and attributes so much. As

Experience and Transformation. So What I mean by that is What I find is that most entrepreneurs When they start out, a lot of them

have a product or an idea and they want to sell that idea. So They don't tend to Focus as much. On

What happens actually if you project yourself into the future and you imagine the case of It being accepted. by the mass of believers. Like what is that? Feel like Rather than

Oh, it's just this cool thing first. You know, yes, first you have to be cruel. But if that's all you care about, many times the world passes you by and someone else takes all that other big share, right? So the sort of sitting in the future and saying What is it like? What is it that people really want? Do they really care? Do they really want almonds or do they really want oats? What is it? The big point I'm trying to make

is that Many times the reasons your early adopters got in are the very things you cannot tout about it. when you want to make a much more universal belief system. So the ultimate good is to get people drinking oat milk, not tell them that it's better for the environment. Like the environment will get better.

Buy them. Drinking it. So it's the old adage, don't let my selling get in the way you're buying, right? So it's sort of a truism, but it is true. This is one of the key strengths. And knowing the IRL uses of your product.

It lets you build an early, rapid, and genuine connection with your customers. But it's something you need to keep working at. As Greg knew so well. The IRL use cases among your early adopters. May be very different when it comes to your next

wider group of customers. Jessica's sharp focus at the Honest Company on the IRL experiences and needs of her customers allows her to build accurate hypotheses about their behavior. Like I'm here for you as well. And here's how I'm gonna show up to make your life better and give you peace of mind. and give you a better quality of life. So thinking through those cohorts is important.

There is infinite nuance when it comes to the IRL needs of your customers. And there are many ways to uncover them. And it's important you make use of as many of these as possible. One method is psychographics. Described here by data journalist and author Alexander Samuel.

So In the olden days, market researchers would rely on demographics to help segment audiences. And demographic are really useful, right? What age is somebody, what gender Ethnicity, where do people live, those are very useful data points, particularly, you know, in understanding how consumers evolve over the course of lifetime. But as we all know, not all aged white ladies in the suburbs think the same way. And That's where Psychographics come in is in understanding the differences in how people think. The virtue of psychographics is that it allows to ask attitudinal questions so that you can segment your audience, segment your customers. based on their kind of mental models and their psychological orientations, and that may allow you to develop the messaging and strategies that you just can't get from behavioral patterns alone.

One example that many teams have been grappling with is navigating the transition from remote work to Back to the office. At first when I started doing this research on who likes doing remote work and who is eager to go back to the office I assumed that the people who would be most enthusiastic about remote work would be people with kids because who doesn't want to have the flexibility to be able to work more from home. But it actually turned out that some of the people who were most eager to return to the office are people with young kids because it's super annoying to try and get your work done. When the kids are pestering you. This has been an issue for me personally during this time. When you look at the psychographics and you understand that actually those parents are often very eager g to go back to the office, it starts to look like actually it's a better bet to market your remote

infrastructure to people with older kids or people with no kids,'cause those are the folks who have actually been successful at making remote work sustainable. Even when you have a deep appreciation of the IRL needs and fears of your customers, your partners may not. And this Can be fatal. This is exactly the problem Jessica faced in two thousand sixteen when the company ran into issues around the quality control of some of its products.

We couldn't get that. Transparency And that trust from our lab partners because They're in the business of let's use the cheapest stuff. and throw it together and try to make the most amount of money off of this because they have their margins, right? They're trying to achieve.

And they're not thinking through what is the human health ramification here. They're that far away from the consumer. It was a valuable lesson. A chain is only as strong as its weakest link. If you've spent time. Forging a relationship with your customers, you also need to make sure your partners are just as invested.

If you can't be sure. You should consider removing that partner. From the equation. Honest learned from this experience, overcame the controversy, and went public in spring twenty twenty one at a one point four billion dollar valuation. So we have our own regulatory team, supply and operations team that

doesn't just do fulfillment. And find the best in class partners, but also we source raw ingredients. We buy them in bulk. We know From a supply chain perspective, where things are coming from, how they're sourced.

And then we can Batch them at our manufacturing partners. Space. We spend time teaching their team how to do it. We'll even spend weeks at a time doing it if we need to to get it right. And then we do consistent checks.

So just having that rigor is super important. It was a bold. An expensive move, but well worth it. If there's no honesty, there's nowhere to even begin. So I just feel like having that honesty and there's

values around honesty that are ethical, and I just felt like Tosh there's so much trickery and thievery and greediness and People were just Honest about stuff. Like if you walk into the store and if the company says we are

Poisoning? You and you may experience X, Y, and Z Because we need to make two percent more money this quarter than last year. So we're gonna give you this aerosol room spray and it's gonna smell amazing. But You may have less brain cells, you might get cancer.

Be honest about it. Just be honest. And then people can say, Yeah, I want it. I don't care. Smells great. Give it to me. Or not. It may seem obvious.

That people crave honesty and clarity in their real lives. But this is also easy to lose sight of. You need to be proactive in reaching out to your customers. Understanding their needs, their fears, their Their hopes.

And then figuring out. How you can address them. Which is why it's so important to keep asking yourself that question that guides Jessica and her team. What is the IRL version of this? I'm Reed Hoffman.

Thank you for listening. Masters of Scale is a Wakewhat original. Our executive producers are June Cohen and Darren Triff. Our senior producer, Jordan McLeod. Our supervising producer is Jave Kunjabi. Our producers are Adam Skuse, Catherine Clark Gray, Hiley Bondi, Marie McCoy Thompson, and Christina Gonzalez. Our editor at large is Bob Safian. Our music director is Ryan Holliday. Original Music and Sound Design by Eduardo Rivera. Audio Editing by Keith J. Nelson, Steven Davies, Andrew Naught, and Mike Gallagher. Mixing and Mastering by Brian Pugh.

Special thanks to Chris Y, Elisa Schreiber, David Sanford, Saida Sapieva, Greg Biotto. Adam Heiner Emily McManus, Kelsey Capitano. Tim Cronin. Anna Pizzano, Ben Richardson, Mina Kurosawa, Sarah Tarter, Charlie Menessis, Chaneme Ezequena, and Colin Howard.

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