How Jessica Alba Built A $1 Billion Company, And $200 Million Fortune, Selling Parents Peace Of Mind

Forbes - It’s Kombucha Thursday at the Santa Monica headquarters of The Honest Company, which means that groups of young, stylish workers gather at communal tables in a converted toy factory to slurp fashionable fermented tea. Jessica Alba, Hollywood star and company cofounder, sits in the adjacent room. She’ll join her troops shortly, but for now she’s transfixed by a box of tampons that looks more like it holds an expensive candle than Kotex. “Dope!” she declares, approvingly.

“We’re using all-organic cotton and plant-based polymer and a bio-plastic applicator,” says the 34-year-old actress earnestly, contrasting that with the plastic content of drugstore tampons and their effect on hormones. Honest’s new feminine care line launches in July.

Alba can go similarly deep on almost all of The Honest Company’s 120 products, whether the ingredients in a new organic beeswax sunscreen or the clever insulation pocket hidden inside a chic $170 vegan-leather diaper bag. Yes, she has a pretty face — it seems as if every men’s magazine has named her the most beautiful woman in the world at some point — but it’s the details from which great fortunes stem.

Details and hard work. Alba laughs about how she once worked an 86-hour week as the star of James Cameron’s sci-fi TV series, Dark Angel — the series that launched her career. Now, she says, she spends those 86 hours at a vintage teal blue desk, overseeing marketing and brand development for a company that feeds a growing demand for safe, nontoxic products, particularly among young helicopter parents who treat children — and what goes near or inside them — like porcelain.

Safety sells. The Honest Company has experienced an absurd level of growth. In 2012, its first year selling products, it hit $10 million in revenue. By last year it was $150 million, and industry insiders are predicting over $250 million this year. The company is focused on growth over profits, boasting a current valuation to match: $1 billion.

That figure means Alba, who owns between 15% and 20% of the company, according to a source with knowledge of her investment, is sitting on a fortune of $200 million. She’s on her way to earning a spot on FORBES’ new ranking of America’s Richest Self-Made Women, just $50 million shy of Beyoncé and Judge Judy, who are tied at number 49. The only other two celebrities to make the inaugural list are Oprah and Madonna. The difference is that foursome made their money in their core field, media and music. Alba, at a young age, has done it in a completely unrelated industry. But ask Alba and she’ll tell you she and Honest are just getting started. “If we really want to make a difference in the world and people’s health, it’s billions and billions of dollars, not just one,” she says, surveying the open-plan company floor from a conference room above its wooden rafters.

Like most great ideas, The Honest Company was inspired by a need that wasn’t being filled. In 2008 Alba was newly engaged to Internet entrepreneur Cash Warren and pregnant with their first child. At a baby shower thrown by family and friends, she remembers her mother advising her to use baby detergent to prewash the piles of onesies she’d received as gifts. She used a mainstream brand and immediately broke out into ugly red welts, harkening back to a childhood spent in and out of emergency rooms and doctors’ offices.

“She was the most sensitive child,” remembers her mother, Cathy Alba, who wasn’t referring to her daughter’s emotional well-being. Raised on Air Force bases in such places as Biloxi, Miss. and Del Rio, Tex., Jessica’s bad allergies and chronic asthma made her predisposed to pneumonia, which she contracted about twice a year, often leading to two-week hospital stints.

Now covered in hives again — and wary of having her baby relive her own experience — Alba spent late nights on Google and Wikipedia researching the contents not just of the offending detergent but also of everything in her bathroom cabinet and under her kitchen sink. “I was like, ‘How can this be safe for babies if I’m having this type of reaction?’” she says. What she found terrified her: petrochemicals, formaldehydes and flame retardants in everyday household products from floor cleaners to mattresses. Some were listed on the ingredients label plain as day, with others disguised under the catchall of “fragrance,” which is entirely legal.

Armed with Internet printouts and fear for the health of her unborn child, Alba first tried to shop around the problem but grew irritated trying to find natural and eco-friendly products that weren’t either extortionate or seemingly designed for yurt-dwelling vegan yogis. Or both. “I felt like my needs weren’t being met as a modern person,” she says. “I want beautiful design like everybody else. But it shouldn’t be premium-priced, and it should, of course, be safe.”

She tried making her own cleaning products out of baking soda, vinegar and essential oils but wound up with something closer to salad dressing. So when she came across Christopher Gavigan, who for seven years led a nonprofit called Healthy Child Healthy World, she, like most new mothers, asked him what to buy.

“They don’t want to be that investigatory weekend toxicologist,” says Gavigan. “They just want someone to hold their hand.” He explained that several companies with “green” credentials like Vermont-based Seventh Generation were doing good work across some product categories, but there was no one umbrella brand positioning itself as the go-to for all things eco-friendly, safe and nontoxic.

A lightbulb went off for both of them. Pretty soon Alba and Gavigan were polishing off wine on nights and weekends, cooking up a business plan and buying up Web domain names with the word “honest” in them. Through her husband, she met Web entrepreneur Brian Lee, a trained attorney who had hit it big with LegalZoom.com, an online legal-documentation service he cofounded with Robert Shapiro of O.J. Simpson infamy.

“I made some introductions for her and said good luck,” says Lee, who looked at Alba’s 50-page PowerPoint in 2009 but didn’t bite. He says now he was simply tied up launching subscription shoe site ShoeDazzle.com with then partner Kim Kardashian.

Meanwhile, Alba was busy with her Hollywood career, starring in the likes ofValentine’s Day, Little Fockers and Machete, all of which premiered in 2010.

Alba kept Gavigan on her payroll as a consultant. By 2011 she had turned herself into an expert on consumer products and traveled to Washington, D.C. to lobby for updated legislation. She was — and is — particularly focused on reforming the 1976 Toxic Substances Control Act, which has allowed more than 80,000 chemicals to remain in household products untested. Only five are regulated by the Environmental Protection Agency; just 11 are banned from consumer goods. (In Europe that figure is more than 1,300.) “Enough people have to get sick or die from a certain ingredient or chemical before it’s pulled from the marketplace,” says Alba.

For Alba’s husband, Cash Warren, it was a lesson in climbing a steep learning curve. “I didn’t know much about all the chemicals that were in our consumer products, so she educated me on this epidemic,” he says. “It felt massive, so I was a little reserved at first. She jumped into it headfirst.”

She went back to Brian Lee in 2011 armed with data on the rise of childhood diseases and a much more concise ten-page pitch deck. Lee’s mind had changed — not coincidentally, he had recently become horrified when his young son was banned from bringing that classic, all-American lunch the PB&J sandwich to nursery school. Too many kids had severe nut allergies. “Autism, Tourette’s, chronic allergies and asthmas and celiac disease — all of this stuff is on the rise,” Lee says. “I almost had this moment of awakening. Why aren’t we doing something about this?”

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