By Ronald D. White
Los Angeles Times
WWR Article Summary (tl;dr) Simple Q&A with LA entrepreneur Toni Ko who sold her cosmetics brand NYX to Loreal in 2014 for nearly $500 million. Now she is back with a line of sunglasses called “Perverse.” Ko has some great, solid advice for women in business who are focused on entrepreneurship.
LOS ANGELES
The gig: Los Angeles entrepreneur Toni Ko, 43, was just 25 when she founded NYX Cosmetics. She started out small, with makeup pencils, but still had sales of $2 million in her first year. Ko sold the brand to L’Oreal in 2014, reportedly for nearly $500 million. Ko’s latest venture is called Perverse Sunglasses, a line of more than 400 shades that she unveiled at last month’s Coachella Valley Music and Arts Festival. She’s also the company’s chief creative officer.
No retirement: After the sale of NYX, Ko was bored. “I love work, but it’s more than that. It’s the race that is fun,” not the finish, she said. With Perverse, she’s riffing on the formula that made NYX a success, make it stylish but keep the extraneous costs to a minimum. That helps her keep Perverse sunglasses in the $30-to-$60 price range, between cheap throwaway sunglasses and name brands at $100 and up. Perverse is currently an e-commerce business with a team of 18, but Ko plans to open retail stores.
Success secrets: Knowing that many businesses fail in their first few years, Ko has always kept a tight rein on finances. “For three straight years I took zero money from the company,” Ko said of NYX. “I had no salary. I reinvested all of that revenue to help create a very strong financial foundation.” She hired one full-time employee in her second year and four more in the third. That frugality extended to her personal life too. “Don’t live like a rock star unless you are one,” Ko said.
Name equals attitude: Ko said she named her cosmetics company after Nyx, a lesser known but potent Greek goddess with such swagger that even Zeus was careful not to anger her. Ko said she picked Perverse for her next company because it indicated a stubborn desire to behave in a way that others might find unreasonable, despite the consequences.
“Entrepreneurs are a little bit more of the rebellious type, a little more adventurous, always trying to bend the rules and pushing boundaries,” Ko said. “Do not follow the norm. You have to have one helluva stubborn personality to do this.”
On the job training: Ko was 13 when her family emigrated from South Korea. “As soon as we got here my mom started a small retail business. That was selling perfume and cosmetics. I worked at my parents after school, weekends, some holidays. That’s just what we did. I went to school and then I went to work at the store.”
Grandfatherly advice: Ko Young Kyung was sometimes charged with looking after his granddaughter. “He was stuck with me, so he decided to impart a few wise concepts, like the power of word of mouth,” Ko said. “The best marketing strategy is the oldest marketing strategy. If your product is good and your price is good, people are going to naturally talk about it, and it spreads like wildfire.”
Fun is overrated: Ko wasn’t thrilled to see her friends having all of the fun. “As a teenager, I hated it,” Ko said. “My friends are out playing, at the beach. I’m working at the store all of the time. In hindsight, I realized that it was the best education I could ever have had for running a business. I was like a sponge soaking up every kind of information.”
Know your customers: “I was in front of the consumer all of the time,” Ko said, “and I really got to understand the behavior of customers, how to display merchandise.”
Maternal role model: Ko’s mother, Elaine, “was a fantastic businesswoman. That one location grew into multiple stores. When I was 20, the family decided to go into the wholesale distribution business. So now I was managing accounts, and I got to experience another side of business. Now, we were selling to the retailers, not to consumers. I learned how to introduce new merchandise. I learned how to convince a retailer to tweak up the display of your products, to make them more attractive to customers.”
Dream big: “I was always thinking,” Ko said, “if I was the brand owner, how would I make the displays more enticing for consumers. Which coloring would be more enhancing, visually, to encourage consumers to buy more merchandise? How do you make it pop?”
Find a niche: Inspiration came from primping with friends. “It was embarrassing. My friends are taking out the expensive department store cosmetics and I had the drugstore brands,” Ko said. Eventually she realized “there was no price point in the midrange between drugstore cosmetics and the really pricey celebrity-driven brands. It was my mission to fill that gap.”
Enough is enough: Ko recalled thinking that “this really isn’t working for me anymore. I’m going to go out and start my own business. I’m working in the family business, and my parents had never paid me. I was a 25-year-old on an allowance. They were like, ‘We give you a roof over your head. We give you food to eat. We give you a car. What more do you need?'”
Bank of Mom: “Surprisingly, the seed money came from my mother,” Ko said. “I walked her through the kind of business that I wanted to have. She wrote me a check for $250,000. She believed in me, I guess.”
Reality check: “You may think you have great stuff and a good price, but you might not have that. You have to look at it from a third-party perspective. I could step back and do that because I was a consumer of these products.”
Leadership advice: Present the right image, of one who can get through any day and come back just as strong, Ko said. “Think about the wildest roller coaster you have ever been on. Multiply that 100 times. That’s like running your own company. You are going to go through so many different emotions. There will be so many days when you feel like the entire world is crashing down on you. But you have to wake up the next day and do the same thing and do it over and over again.”
