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Update on "the process" - Part I

Aragorn

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Jul 1, 2018
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Europe
Hi folks

My last post here dates back to August 2018. I haven't returned ever since, not because I deemed this forum a waste of time, but because I had to get things done. I very much want to get my business up and running, but experienced a ton of obstacles I had to overcome. None of them was worth big screen drama. Yet, all of them required resilience, some smarts, and a lot of time to deal with. And sometimes cash to solve them.

I want to share with you what happened in these 11 months. Maybe it serves someone who is on a similar mission. When posting this document I noticed that my report was far too long. I'll post the rest tomorrow.

Background:
I founded a hair care company starting as a side project. Why hair care? Aren't there enough big players around who dominate the market? Yes. But there is a niche I am attacking. Most hair care products are utter crap! If you read and understand the encrypted list of chemical ingredients you would vomit and at the same time wonder why you still have hair. Uh, you're in the process of losing them? Well, it may have to do with the silicones in your shampoo - and the crap you eat day in, day out. Your scalp is itching? Blame your hair care products. Do you really need a shampoo or hair serum that smells "soooo" good? Ever thought of these fragrances as being allergenic? You get the picture. This is my niche.

This business didn't start as a business idea in the first place. My wife kept nagging at me for months that her scalp was itching badly and that I, being a chemist by training, should do something about it. I frankly admit that first I didn't want to get my a$$ up from the couch. I reasoned that if big players with huge R&D departments flood the market with their products there surely would already be a product out that would serve my wife's needs. One day she held one of these bottles in front of my nose and demanded: "READ the list of ingredients!" Being a good husband I did as told and started reading the minuscule white letters on light blue background - and was SHOCKED!!! This was the moment when I got my slow lane a$$ moving and started to change.

I researched a bunch of similar products and decided that this was all bullshit. Cheap or expensive, it didn't matter. None of the hair serums on the market was suitable for my wife. I then decided to come up with my own recipe. Being a chemist helped big time, since I knew what to look for and chemical calculations are daily business. I soon ordered a few chemicals, mixed the stuff together and tried it on my less sensitive scalp myself. Good! I then handed it over to my wife who by then was desperate for a cure. What happened then was remarkable. She applied the hair remedy, went to bed, and the next morning her itching had almost disappeared. I changed the recipe slightly to serve her hypersensitive needs and seamlessly our second product was born.

We still didn't think of starting a business, though. My wife applied the remedy and kept on with her life like I kept on with mine. Professionally she interacts mostly with women and soon she came home asking if I had a bottle to spare for one of her colleagues. This colleague had noticed that my wife's hair had changed. It looked "fuller" and "healthier". I had no clue what this meant. Anyway, I had done a small batch of the remedy pretty much to win back my slow lane life and so I handed her one of the bottles. But it wouldn't be long and all the bottles were gone and women I didn't know were asking for more.

This was the moment when we decided to turn this home brew into a business. It was the beginning of a journey I am still enjoying.

The process:
It is one thing to come up with the solution for a family problem. I easily ordered a few chemicals, mixed them in the basement, poured the result into unlabelled bottles, and distributed the stuff for self-cost price among friends and colleagues. It is a totally different story to develop a prototype into a marketable product. Here's what we had to do in the past 18 months. The process as MJ calls it:
  • Founding a company. Actually, we founded two. We live in Switzerland, which is a lovely place to live (and a good place to start a business). But Switzerland is small (8 million inhabitants). And Switzerland is not part of the European Union. It is kind of part of the single market. But whenever you want to benefit from the single market there is a legal obstacle like customs. I immediately realized that in order to sell enough units we needed to include the EU-market with its 450 million people into our calculations and strategy. This, however, required a second company we founded right behind the border in Germany. Time spent: close to zip. Costs: peanuts.
  • Protecting IP and securing claims. I hired a lawyer to get this done . I wanted to protect our IP as good as possible. And I wanted to make sure that our claims wouldn't lead us directly to court. This was a back and forth process that took almost six months to complete. It cost us coconuts, almost 8'000 Swiss Francs. But it was worth it. I feel much safer knowing that one of the experts in the field has looked over the stuff. I almost forgot the artist from Croatia I had hired on upwork to design our company logo. A splendid person! Time spent: 2 weeks. Costs: 300 Swiss Francs.
  • Securing product quality. Our products (we are simultaneously launching three products on the market) needed to be tested for shelf-life and microbiological safety. As a result we received three reports that took ages to complete (at least six months) and cost us ca. 2'000 Euros. I only later learned that as a chemist I would have been entitled to write them myself. I wasn't pissed off by the money spent. I was pissed off by the time lost. But there's something good to this as well: I received templates for future reports I will DEFINITELY write myself.
  • Web site and web shop. I am an old fart for most of you guys here on the forum (I did some web programming back in the 90's). Back then, I had decided to pursue a scientific career rather than continuing this path. When I looked into the subject again I realized that this was too much to learn while working and doing all the other tasks required for the company. I hired some digital nomads who did a good job according to what I could tell them. But there was the problem. I was so incompetent that I could only tell them some basic ideas. The result for 3'000 Euros was okayish, but I wasn't happy. I then started reading books in my sparse spare time and caught up with the state of the art in web design, but still didn't find time to solve the problems myself. A few weeks back I received an email from a young man who was interested in our products and in the same mail told me that our website sucked. I agreed and a few mails later I had hired him to solve our most pressing problems. We are still working together, but the website is a blast now as compared to what it was a couple of weeks ago. Time spent: 4 weeks. Costs so far: When we will be done probably another 2'000 CHF. Like our security reports another case of "idiot's tax" paid (as I call it).
  • Labelling and packaging. While it was okay to provide our close ones with unlabelled bottles of our hair remedies it is required to properly label units and provide decently designed packaging. Labelling and packaging requires two skills: Arts and legal. Holy cow, I totally underestimated the legal part of this! I read a lot and after a couple of months came up with a decent design that almost satisfied legal requirements. Almost? Well, our manufacturer later told me that I had forgotten some information. We fixed this with a sticker... Time: ca. three months. Printing costs: 5'000 Euros. Note: Our contact at the printing company didn't move his a$$. Our order was delayed, further delayed, and even further delayed. One fine day my wife was so mad that she called the owner. The poor lady hadn't even heard of our contract. Four days later labels and boxes were shipped. Did I write three months? Make it five!
  • Manufacturing I. Not surprisingly, our basement does not satisfy hygiene and manufacturing standards for cosmetic products. So, we had to find a manufacturer who would be willing to do small batches of maybe 800 bottles for a small company like ours. This is not a trivial task! You can choose from manufacturers if you need 50'000 units upwards. But small batches for start-ups like us? I looked for several weeks and finally found a family business in the middle of nowhere in Germany who were interested in taking us as customers. They also could identify with our philosophy. Gosh golly! The lady running the show helped us with a lot of things. We learned from her and could steer our ship (well, it rather is a boat still) around a couple of nasty rocks. We discussed ordering ingredients. She ordered one or two and I ordered the rest as well as bottles. We also shipped them labels and boxes. One ingredient came from the US and landed in some god-forsaken customs office in Germany. We received a note that if the stuff wouldn't be picked up within x days the package would be returned to the US. Our manufacturer called them telling them that on day x I would come by and pick it up. The plan was that I would pick everything up, drive to our manufacturer, deliver the goods and chat with them about how to proceed. It was a great plan. It didn't work that way. After fighting my way for 500 miles through heavy traffic I arrived at the customs office where the clerk told me that the package had already been picked up to be returned to the US. I was close to a heart attack. I was 20 minutes late, although it was promised that they would keep the package for another day. I worked hard to keep my calm and not bite the poor man's head off. He was really helpful when he heard my story and we made a deal that eventually worked out. Two days later, our chemicals arrived at our manufacturer's. Slightly damaged. But I blame this on US and German postal mail services. Another lesson learned. Never use postal mail services for international shipments. Time for ordering and delivering chemicals and bottles: 4-6 weeks. Money spent: 2'500 Euros. Nerves spent: Uncountable.
  • Manufacturing II. The actual process of manufacturing was smooth. I like family-owned businesses! They stick to their word and collaborate with you on an almost familiar basis. Time spent: 3 weeks (there was a waiting list). Money spent: 5'000 Euros.
End of part I.

Thanks heaps to MJ for his inspiring books and work!
Thank you very much if you stuck with me till the end.

I'll be glad to read from you!
 

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