Patti Pao’s Significant Other, Child, and life: Restorsea
By Grace Ueng, Savvy Growth
Five years ago, as I was in the midst of my one year study of Positive Psychology, I had the chance to interview Patti Pao, the energetic CEO of beauty line Restorsea. She shared what she learned from her parents, corporate America and how those experiences taught her to leverage her strengths, focus on what she really wants, and to start her own consulting firm and ultimately Restorsea.
How were you inspired to leave corporate America to start your own consulting company?
I was always a great worker, but a terrible employee. The universe grants us one gift; mine was to figure out how to make money quickly for companies. If you make money for a company, they will put up with a lot. However, once you are done, you are done. One of my most favorite CEOs told me that he had to fire me because I was so disruptive. He told me that I couldn’t keep telling others that they were “lazy and dumb.” But he said that he found me a job which would pay me double and escorted me to my next job.
After twenty years of corporate America, I realized that I needed to figure out my next move. I realized that consulting was a great opportunity because 1) I loved to problem tackle and solve the “big hairy problems,” 2) the assignments were relatively short term and 3) I could work on multiple accounts simultaneously, so I was never bored. I also realized that I am a great salesperson. I was able to get clients because I figured out what their key problem was and gave them a solution. As a result, I wrote 47 letters to the CEOs of companies that I thought I could help and received 32 responses!
Had you always wanted to start a beauty / product company?
I actually had ZERO desire to start my own skincare company. While Restorsea is the BEST job I will ever have, The Pao Principle, my consulting firm, was the HAPPIEST job I ever had. This is because I worked only with people and projects that interested me. The reason why I started Restorsea is that I discovered the greatest ingredient I had seen in my over 25 years in the beauty business. This ingredient is novel because it is the only exfoliant that leaves the living cells intact.
You were successful in raising funding very fast. How long a period was it from your discovery in Norway to your being full time in your CEO role?
I discovered the ingredient in August 2010, spent a year in formulation and, for fun, sent lab samples in Ziploc® bags to the Bergdorf Goodman Divisional Merchandising Manager in August 2011. In September 2011, she called me and said that she wanted to take the line. I needed to raise money so I could create a line. By January 2012, we had written our business plan, raised our first round and founded Restorsea LLC. In February 2012, an investor from this round called and shared his faith in me when I said that I had found the greatest ingredient that I had ever seen. He said he would back me if I was able to get the global exclusive rights to the ingredient. When someone gives you your shot, you take it and run as fast and as hard as you can.
Six months later, I told him that I acquired twenty year global exclusive rights to the ingredient. The down payment was $10 million. He wired the ingredient company the funds immediately with ZERO paperwork. Knowing what I know now, I can’t believe I let him do this because if anything happened, he basically had ZERO recourse. But in my heart of hearts, I knew it was important to move fast, it would work out, and he completely trusted me. This trust has enabled us to be great business partners. Every day, I thank the universe that he is my co-founder.
Would you describe your upbringing in a 1st generation Chinese American household?
My parents were very hard on me. I was always told that I was ugly, fat, lazy and dumb. And as a grown woman, I realize that compared to them, I was. My father was a successful entrepreneur and a founding father of wind energy. He was fearless and not afraid to take risks. In 1970, when I was 9, my brother was 3 and my mom didn’t work, he announced that he was quitting his job to start his own company. He took his first company public in 1983.
As I get older, I am increasingly grateful and thankful to have been raised by my parents. They taught me how to be resilient and how to figure things out. People have told me many times what I can’t do, and my response has been to listen politely and think, “I’ll show you!”
You seem unafraid of failure. What have been your biggest learnings along the way?
- Just keep moving. I am a shark. If I stop moving, I will die.
- Don’t regret. I am very fortunate in that I never look back and say, “If only…”
- Just keep slugging it out. The first three years of Restorsea were particularly stressful as we were trying to figure out our route to market. Every day, I felt as if I was in a dark foggy forest with only my iPhone to provide light. I knew that our professional medical market strategy was going to work when one day, I literally saw a sliver of light. I realized that what I was seeing was the light at the end of the tunnel. While getting through the tunnel is messy and extremely hard work, neither myself nor any of my team members have every been afraid of hard work. As a result, every day the light becomes stronger…
How do you overcome fear?
This is a difficult question to answer because I lack the fear gene. I know it sounds odd. I trace it back to my two years at Harvard Business School which was the time when I was spectacularly unsuccessful. The experience was a huge culture shock and very intimidating. I vowed that I would do everything possible to never feel like that again.
How do you know when you’ve done the right analysis?
It’s difficult to do analysis in a startup. You basically look at the expense and figure out if it seems like a worthy investment. After the event occurs, we do subjective and quantitative analysis to figure out if this was worthwhile and worth repeating. It’s like pick up sticks. You basically create a hypothesis, test it and figure out if the results are GO or NO GO.
What have been the biggest challenges so far to build your brand?
Identifying the route to market. Our original business plan focused on consumer and did not includemedical. We emphasized selling in department stores because we were fortunate to secure distribution. We launched at Bergdorf Goodman in October 2012 but found that while we were successful selling there, we were on track to lose $80K per year.
So our next business plan was a direct to consumer strategy selling our products on the internet with Gwyneth Paltrow as our spokesperson. She helped us build awareness, credibility and tripled our sales. The issue was that in order to payout the added marketing expenditures, our sales would have to increase 20X.
So our next business plan was written to sell a professional line of products to dermatologists and plastic surgeons. We were approached by two dermatologists who said we should consider selling a professional line because of 1) our novel ingredient 2) proven mechanism of action 3) “impeccable” clinical studies 4) our natural/non-toxic ingredient positioning. They helped us to get our clinical studies peer-reviewed and published and then went with us to 18 conferences where they spoke about our technology. By the time we launched the professional line (Restorsea PRO) a year later, we had planted the seeds…
I realized that every successful beauty brand is one that is the first to realize channel potential. Estee Lauder did this with department stores, Bare Escentuals was the first to sell via QVC. We are the first to tap the potential of the medical channel.
You talk about your 25 year samurai journey. What have been the key events to date that have helped you enjoy what you are doing now?
- My HBS job search was self-initiated and self-funded. When I graduated in 1987, no one wanted to work in the beauty or fashion industry. I basically cold-called the CEO of every company that I wanted to work for. It taught me how to sell myself and go after what I really wanted.
- Being adopted by the Avon R&D group in 1988. This led me to discover the potential of glycolic acid and help Avon be the first to commercialize it by turning it into a billion dollar brand, Avon ANEW.
- Starting The Pao Principle. The seven years that I spent with The Pao Principle enabled me to meet more hip and cool people than working for 20 years in corporate America and it enabled me to start Restorsea. The Pao Principle took me to Norway where I discovered the ingredient and it enabled me to make friends with an incredible formulator, package/graphic designer, carton and packaging component suppliers and a contract manufacturer who generously gave me their efforts for free or at deeply discounted terms. They did this because I had given them opportunities to make money and never took a dime. All I wanted them to do was to give my clients top priority. I believe that you should help others and not expect anything in return.
Do you think that success has brought you happiness or that happiness has brought you success?
I don’t feel successful yet, but thanks…
I feel incredibly fortunate to be able to work on my dream. Restorsea is my significant other, child and life. I work pretty much all the time to first get the company to breakeven and then give our investors a 10X return on their investment so that the next time they encounter an entrepreneur with a business plan outside their investment philosophy or scope, they will say to themselves,
About the Author
Grace Ueng is CEO of Savvy Growth, a boutique management consultancy and leadership coaching firm founded in 2003, whose mission is to help companies and their leaders achieve their fullest potential.
Grace and Savvy’s Managing Director, Rich Chleboski, lead the development and implementation of strategies to support the growth of impact focused companies. Before starting Savvy, Grace held leadership roles at five high growth tech ventures that exited through acquisition or IPO. She started her career at Bain & Company and after graduating from Harvard Business School, worked in brand management at Clorox and General Mills.
Rich, her classmate from MIT, is a senior executive with three decades experience growing large and small technology firms. Throughout his career, Rich has combined technical, financial, strategy, operations, and business development skills to solve complex problems. He co-founded Evergreen Solar and as its CFO led the start-up through four rounds of VC funding, an IPO, several post-IPO financings and to a market cap of over $1 billion with more than $300 million in revenue.
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