As reality television has shown us, the beauty world can be an ugly business. We talk to Shelley Barrett, the entrepreneur who kept her focus on enhancing beauty and turned a pet project into the global phenomenon we know as ModelCo.
Shelley Barrett has been in business since she was 21. Running her own modelling agencies for 10 years gave her the chance to get up close and personal with the sometimes ugly world of beauty. And when Barrett recognised a niche for quick-fix beauty products, she started ModelCo and took her career to a whole new level.
As an agent, she was working with women at the forefront of fashion and realised there was a gap in the market for innovative beauty products. “I was always listening to the girls talking about what they wished they had in their beauty regime that the luxury brands weren’t providing. Hence the reason for my first inspiration, Lash Wand heated eyelash curler.”
That first innovation in 2002 took just six months to go from concept to production, sold out in no time, and launched the ModelCo brand. But what kicked the brand into the stratosphere—in this case into some of the world’s most renowned fashion stores—came with the monster-hit, Tan Airbrush in a Can. “I had no idea that ModelCo would become the global cosmetics brand it is today—it was more of a pet project.”
Making the switch from agent to beauty entrepreneur wasn’t a big stretch. Instead of selling people, she decided to turn her hand to selling products. She was already in touch with models and makeup artists, and once the popularity of these two products grew, it wasn’t long before she had some very famous faces backing her brand (Kylie Minogue, Elle McPherson, Victoria Beckham have been linked to the brand).
It was sheer tenacity, Barrett says, that helped her establish the contacts needed to not only make it in the competitive industry, but to stand out. “I attended cosmetic and beauty fairs, I thought about the way in which women would like to—and need to—apply cosmetics, and went about creating devices and moulds and tools that enabled them to get what they needed.”
Today, she says, the inspiration for her products still comes from models, celebrities, and “what’s different in fashion”. Her point of difference from other cosmetics brands, is that she isn’t a makeup artist like Napoleon Perdis of Napoleon Cosmetics, instead she goes about creating “nifty” products.
Another selling point is the speed to market. In the beauty industry, where Barrett says it’s not uncommon for new products to take up to two years to hit the shelves, her first innovation took six months. “Why we’re so successful is our speed to market.”
The success is also due to her intellectual property (IP)–how ideas are developed, tested, and organised. “We have a well-structured product development lifecycle, which is a bit of IP that I created for our business. And it puts the products and their innovations through a snakes and ladders-style process where we check off all the different tools needed to bring a product to market. Instead of going through a lot of red tape, we cut a lot of that by being able to make decisions quickly. So that’s to do with safety, quality, whether anybody has [the product], the marketing and PR—we look at our product concept before we go any further, in all aspects, to see if it’s going to fit.”
Her role as CEO within the company is two-fold. As well as running the company, she also keeps herself quite involved in a number of departments. “I’m very much involved in the research and development department, and I also work quite closely with retail and marketing.
“Running a modelling agency, you’re looking after so many people, you’re multi-tasking and wearing six different hats at once. You’re a salesperson, you’re negotiating, you’re marketing, and the qualities I was using day-to-day in that business were brought forward to what I’m doing now.”
Thanks to her past life as a model agent, she is able to get close to modelling companies and makeup artists, to get the brand in front of them. She is also able to get honest feedback from a bevy of willing volunteers, and respects their criticisms and comments. Plus, the multitude of samples for some of the famous faces that have heaped praise on the various products is another big marketing tool.
As well as the organisational skills Barrett picked up while running her modelling agency, she was also able to take savings from that business to fund the startup of ModelCo. And as she proudly boasts, all growth has been organically funded by the business since then.
“All of the money globally that comes into the business is put back into research and development.
“We’ve grown to where we are because we have our point of difference and women look to us now for innovation. So when we go about creating a product, I think about where they fit within the product category, and then we think about what other cosmetics brands are doing, and we make sure we launch the right products at the right time and that we fit in with what’s going on in fashion.
“I’m a big believer in getting out there and giving things a try, because you can do all the university degrees and college courses but hitting the ground running and learning from your mistakes is the best learning of all.”
Barrett admits she has made plenty of mistakes along the way, partly due to the fast growth. “We grew so quickly and it was all ‘sell, sell, sell’, and all this money was coming in the door but then it became about knowing how much to spend again. We didn’t make huge mistakes, but we could have done things a little bit better, smarter and quicker if we’d had better systems in place.”
Now, with the business evolving over the last few years, Barrett gives more attention to getting the systems and procedures in place, complete with a five-year plan that she reviews on a regular basis. “We make sure we’ve got the right people in the right roles, that everyone’s got proper job descriptions with key performance indicators and everyone’s delivering on everything, which is the ultimate goal.”
Though thoughts beyond the business are in the back of her mind, she does have a succession plan. “I think any smart businessperson always looks at the exit strategy, and when we painted our five-year-plan we came up with a few possible exit strategies. If you run your business efficiently and you’re not too attached emotionally to it, then you understand that a business is something you are ultimately going to leave, and you can start to build the ‘data room’. From the very beginning we’ve been very strong with our agreements, with our IP. In some ways we’re a very small company but we run it like a public company.
“I knew that people weren’t going to be just buying the products, they were going to be buying the brand behind it, so we’ve been very savvy when it comes to the intellectual property side of the business.”
Barrett says the decision to position herself as the face of the brand was deliberate, but the fact she is young and married with two young children is what makes her appealing to the media and customers. “I’m certainly not out there creating the brand for myself. But I think cosmetics people want to believe in the brand, and know more about it, and getting to know me leads to the credibility of the brand.”
With 16 staff in the Australian operations, plus a handful in the New York and Hong Kong offices, managing staff, and staff expectations can be a challenge, Barrett admits. “But then again, I love my staff and they are the core of my business, so I like to put as much energy into the people who work for me as I do into the products on the shelf. But managing people and expectations can sometimes be difficult.”
To keep staff happy she implements staff bonus schemes, depending on their role, and she has also employed the services of a facilitation company to help motivate staff and help each department achieve their goals. “It’s important to give people support.” This is particularly important, she adds, for staff who have left large cosmetics houses to work at ModelCo, where there is a distinct change in culture and the way the business is run.
“We’ve gone from a family business to a small to medium business, to the point where I’ve had to change my management style.” The greatest change, she notes, is that the atmosphere is more structured and less relaxed than when she started out. “People who have been with us from day one have seen a difference in the last six months, knowing that things can’t be the way they were before because of a natural progression.” Far from being a problem, staff have embraced the changes.
“It’s not easy running a business, and I try to create a healthy work-life balance—while working with my husband and raising a newborn and 21-month-old—and it’s really hard running a business and having a family.”
Although she concedes that combining work and family life is not always an ideal situation —he runs the logistics side of the business—it works for her and her husband. “There’s not a lot of people who could do what we do, but he’s running his department and I’m doing my thing. And to be honest, over a week I probably speak to him for about an hour, and it works. Although I don’t recommend it!” she jokes.
Relationship issues aside, the beauty business is tough, she says, and can tend to get ugly. Barrett says to succeed she needs to really understand the industry, and understand retail. “You need to understand that it’s not just about beauty, it’s not just about the products. It’s also about retail.” And in the export side of the business, it’s important to be on top of all the regulatory issues and cultural shifts to make a success.
The overseas expansion came about by accident rather than design, but it didn’t take long until the brand was represented in 15 countries, in some 500 stores. And the brand has soared, with sales to Japan reaching $1 million in just eight weeks, and ModelCo became the first Australian cosmetics brand with a presence in Victoria’s Secret boutiques.
Despite the success, Barrett says it’s tough managing international markets, particularly with cultural differences, language barriers, and regulatory issues, so she has created a dedicated export team to look after international markets. “So we’ve basically built the business around the opportunities we’ve had.”
In most markets she uses distributors, but the Australian, US and UK distribution is handled in-house. “Choose your distributors wisely,” she says. “We took a lot of opportunities, and if I had my time again I would have scrutinised distributors before we took them on, because basically you’re going into a marriage with these people. So make sure you’re 100 percent certain they are going to deliver on your expectations, and make sure they understand the market.”
She also relies on her distributors to educate her on the cultural trends and differences in each market, such as preferences for different colour palettes for Asian markets.
Both here and abroad, the accolades she has been awarded are many—from Entrepreneur of the Year to industry awards for her products—and have added credibility to the business and her products, and have inspired respect for the brand in such a crowded market. Although her products tend to be unique, they are begging for shelf space in a pretty dense market.
Barrett attributes an “incredible” marketing and PR team to being able to not only compete against the big boys in the competitive beauty industry, but to come out on top. “They continue to stay true to the brand and create cult, cool events and marketing around the brand.” A big part of this comes by way of below-the-line advertising techniques to market the brand, leaving the multi-million dollar advertising campaigns to the competition.
“We also continue to innovate and be first to market with unique, quality, high-end innovations that the world hasn’t seen before.”
This includes the latest foray into skincare. When Erase Those Fine Lines, an anti-wrinkle serum, hit the shelves, it paved the way for more in the ModelCo range of skincare. “Our foundation has won foundation of the year over Dior and Mac, which is a huge coup for us, so that’s my new baby.
“And we will always be the pioneer with airbrush technology, we were the first company in the world to put products in a can, tan in a can, and now everyone in the world’s got it. We’ll definitely continue to pioneer new categories—so stay tuned!”
• Hire people skilled in areas that you’re not. Don’t try and hire people who are like you.
• Make sure the financial side of the business is robust.
• Make sure you have the right systems in place.
• As a growing business, don’t accept good, accept great.
• Have a strong business plan and long-term strategy in place from the start.