From Cosmetics To Beauty Incubators: Toni Ko’s 3 Pillars To Launching A Successful Company

Toni Ko, a serial entrepreneur, continues to develop, build and launch global brands. Since the sale of her first company, NYX Cosmetics (NYX), to L’Oreal for a reported $500 million in 2014, she remains aggressive in launching and investing in companies. After her non-compete with L’Oreal ended in July 2019, she quickly launched Bespoke Beauty Brands, a beauty incubator company that accelerates, incubates and launches niche beauty brands associated with influencers.

“We partner with either influencers or celebrities,” Ko comments. “They could be entrepreneurs or fashion designers. We partner with people and we launch a brand that is specifically curated for their organic narrative.” The first brand that the incubator launched was in collaboration with Kim Chi, the larger than life drag-queen persona from RuPaul’s Drag Race season eight.

In 1999, she launched her first cosmetic company, NYX, from a 600ft showroom in California. She created affordable cosmetics for consumers. Early on in her business, she had the foresight to understand the trend of social media. She recruited influencers to market her products. “I knew the most valuable marketing was word-of-mouth marketing,” Ko states. “How do you do word-of-mouth marketing? By selling great products that deliver value to customers; by selling better products that are lower priced. This formula never goes out of business. Word of mouth was very important. That’s how we grew.” 

Throughout her 15-year stint operating the company, NYX became a global brand earning Ko Entrepreneur of the Year from the Asian Business Association, the 2015 Leadership Award from NAWBO LA and the Lifetime Achievement Award by the Beauty Bus Foundation in 2013. Additionally, in 2013, NYX was the WWD Beauty Inc. pick for Brand of the Year. Most recently, Ko has graced the cover of Forbes America’s Richest Self-Made Women issue in 2016 and appeared on that list for the third time in 2019. 

After selling the company, she found herself unsure of her next venture, especially with a five-year non-compete clause in the contract. “I’m a serial entrepreneur,” Ko explains. “I sold the company to retire actually, but immediately after exiting out of the business, I didn’t know what to do with myself. I felt depressed. I felt like I lost my self-identity. I felt like I no longer had a goal in life. So, I immediately started another business.”  

Her non-compete not only prohibited her from starting another cosmetics line, but it also prohibited her from investing, advising, or becoming a board member of a cosmetic brand. She had to look outside the industry and decided to launch a sunglass company. The launch of the company was as a sponsor for Coachella. Ko devised an aggressive business plan, which included opening 145 retail stores in five years. However, she eventually shut down all the retail stores and focused on e-commerce. 

“Financially, it was unsuccessful,” Ko humbly shares, “but it was one of the best learning experiences that I have had in my life. I almost don’t even care how much money I lost because of what I have learned and walked away from this experience was the most precious in my life.”

Ko shares that there are three pillars to launching a successful business:

Understand the production of the product. Research and study the nuances of detail of the process; become the expert on how the product is produced. Research the best types of manufactures that are needed to successfully and efficiently produce a quality product.

Know the sales channels. Immerse in learning about the product’s market, growth margins and why and how other companies have exited the industry. Carefully define the target audience. Who’s the biggest competitor in the industry? 

Be able to operate a company. Find quality distributors. Look at the trends in the industry and the forecasted trends. Know how to create a team that supports the company’s vision and mission. What about customer acquisition? 

“If you know less than two-thirds of it,” she shares, “you are in a little bit of trouble. Going into the sunglass business, I thought I was a know-it-all. Now, I know that I knew nothing, which is very humbling. I knew how to operate a company, but I had no idea about the sales channel of this industry. I really had very little idea of how to make a really quality product. I was missing two out of the three, and that was my biggest failure.”

In addition to launching the sunglass company, Ko started a foundation that provides education to young girls in underdeveloped countries, where she recently helped build a school in Madagascar. A second pillar to her vision was a fund, Butter Ventures. It invests in female-owned companies, including #HashtagGirls, Enplug and Good Dye Young. The fund is for companies that are looking for capital and trusted partners. 

“The most important thing,” Ko concludes, “if you’re at a critical moment in your life where you need to pivot, is find peace with the decision. You need to go into it, knowing that not everything will play out. You have to be able to pivot from the pivot because it’s not going to be textbook style. You need to be flexible.”

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