Subtle Innovation: Rachel Reid's Growth as She Redefines the Beauty Industry
Roughly six months into developing her beauty startup, Rachel Reid got a phone call that almost ground the whole project to a halt. A team member who ran the company’s social media alerted her to a business that had just launched in the UK with a product design almost identical to Subtl Beauty, her own company. After months of dedicating all her free time outside her day job to this project — waking up at 6:30 am to cram in an hour and a half before work; spending all her nights and weekends pouring over development details — it felt like another company beating her to the launch had rendered all her time, effort, and money pointless. Reid was driving around Pittsburgh’s Southside when she got the call and, panicking, immediately ordered her partner to stop the car.
“It’s like when you when you hear something awful… and you get that feeling where that wave of heat washes over you; that flushed feeling. Your stomach drops and you’re like, oh my god, the world is ending.” Reid said, describing her reaction to the call. “…I had been spending every waking hour working on this. It felt like this big waste of time.”
It took her an hour to bounce back. She went for a walk. She “felt all her feelings”. She ran errands at Giant Eagle. And then, while pumping gas, Reid made the deliberate choice to take Subtl Beauty forward with renewed and redoubled effort. Capital was what she needed most to grow effectively, and that — the fundraising element of startups — was the challenge she dreaded most. To truly bring this project to life, she knew that raising money would be her Herculean task. So, while filling her tank, she called family members and friends and left messages asking for help to raise the funds.
“I had this moment where it was like, what are your options? You’re either going to not do it, which is ‘okay’, or you’re going to do it and not give a shit about somebody else having a similar idea,” Reid said. “Truthfully, the idea of not pursuing it was just so much more devastating than pursuing it anyways and just trying to launch even though this other business party exists.”
Subtl Beauty (pronounced ‘subtle’) is a product borne out of necessity and a company pursued out of passion. At its core, Subtl Beauty is a compact makeup stack that holds a customizable suite of products a consumer might typically use. While the makeup quality is carefully formulated, its portable, clean design is the highlight. The model came out of Reid’s experience in 2016, when she was both starting a new relationship and frequently commuting to Washington DC for work. Between the two activities, she was spending many nights away from home for undetermined lengths. The instability of these spontaneous plans left her unprepared to get ready in the morning if she didn’t have her products on hand. Reid wanted to maintain a self-composed aura within her new relationship, (“when I would stay with him overnight, I wasn’t going to be presumptuous about it and bring everything and pop the trunk [of my car to take bags out], you know,”), but also wanted to compose herself for the next day with her familiar daily routines (“not washing my face was as bad as having a hangover”).
After an online search for skincare and makeup kits that would be small enough to carry in a purse came up empty, Reid turned to DIY projects. She started by putting some of her facial cleansers and makeup products into small contact lens cases as an alternative to carrying an unwieldy set of containers and called it her Hoe on the Go kit.
When Reid explains this to me, in a self-mocking drawl, she immediately begins laughing. Later, when I ask her if she’s comfortable with me using the name, she nods emphatically. “At first I was like no one is going to know about this, but… I think there was a point where I just stopped giving a fuck. This is our brand and it’s not going to be for everyone, but that’s okay. If you’re trying to be something to everyone, isn’t it like you’re nothing to no one, or something?””
Hoe on the Go was quickly established as a daily staple that Reid brought on dates and work trips to DC. But it wasn’t until a few months had passed and she heard about contract manufacturing — a form of outsourcing where an entrepreneur can design an item that another company assembles, tests, and delivers for you — when she realized this kit could be turned into an actual product.
Reid, 27, is a Pittsburgh transplant, having emigrated from New Zealand when she was fifteen-years-old. Growing up, she watched multiple members of her family quit high school to pursue a variety of business ventures. Her grandparents started a construction company among, by her count, about eight other enterprises. Her mom runs a skincare business; her aunt is an artist who also owns a hair salon. Reid’s first job was labeling bottles for her mom’s skincare line. She is no stranger to the distinctly un-glamorous side of entrepreneurship, describing her introduction to the pursuit of self-employment and small businesses as a bloody, sweaty, and gritty experience. At the same time, she is now stimulated by the hustling that once intimidated her, and feeds off of the challenge of navigating the business scene. Reid defines an entrepreneur as someone who “paves their own way [and doesn’t] work for someone else.” It took no prompting for her to refer to herself as a ‘workaholic’, though she conceded that it was “fine”, considering how in love she was with the process.
After completing her undergraduate degree at Duquesne University in digital media arts and web development, Reid pitched her first startup idea (a platform to connect students to part-time work opportunities) during a startup conference. It was a budding idea and her first attempt at entrepreneurship, and she imagined it as the start of an empire.
In retrospect, she knows how her pitch could have been better: more focused on problem solving and less on selling the idea of who she was. But at the time, her performance was disappointing enough to drive herself “into hiding”, as she puts it. It wasn’t until garnering more work experience that she gained the confidence and felt the frustration enough to try again. Though Reid has expressly chosen employment opportunities she is excited about and invested in, she has also felt her effort in various workplaces go undervalued and disrespected. While watching her senior colleagues make decisions that she personally opined as inefficient, she realized that her knowledge and set of skills, which Reid had previously thought of as insufficient, were enough to create a different work life for herself.
“You’re always going to be capped when you’re working for someone else. There’s still that level of structure when you’re working for someone else where every year you have a review and you get told if you were good enough or not, or if you’re worthy of a three percent raise, and I think that’s horseshit,” Reid said. “Whoever is leading you, you can only get as far as their vision and I think I wanted to control it a little bit more; have a little bit more control over what I was doing and my destiny and what I was able to achieve.”
The Subtl Beauty makeup stack is aptly named both for its understated compactness and in how it captures attention with its unique design — it is a similarly original, physical manifestation of its deliberately misspelled name. The stack can hold anywhere from two to five (or more, if you combine full stacks) thin canisters, a few centimeters thick, of the user’s choice of concealer, lip/cheek color, bronzer, highlighter, and shine control powder. The container for each type of product has its own tone variant off of blush pink, creating a gradient from creamy ivory to a deep mauve when the products are all stacked. All together, the stack is no taller than a tube of lipstick and about as wide as a flat cotton pad. It hits all the checkmarks of portable, customizable, and Instagrammable; Reid knows her demographic of millennial women on-the-go very, very well.
When I ask her to explain the process behind product development, she pauses and asks a follow up: “The steps needed, or the steps that I took?”
“Are they different?” I ask.
“I think they are,” she laughs, and then continues. “Had you asked me that [before I started], I would’ve said ‘shit, I don’t know’ and just Googled it.”
The final product — which ended up being the tenth version of the iterative process — officially took eighteen months to settle. When Reid initially tested out the idea, her first demo example was a stack of small spice jars she screwed together and then filled with melted Rite Aid makeup that she decanted into the jars. It was enough to serve as her proof of concept and what she showed an old advisor, who encouraged her to pursue the project. Though Reid did have a moment where her commitment to Subtl Beauty was solidified, at a gas station no less, the work throughout the whole product development process was where the real grit was demonstrated.
She spent months figuring out the formulations for the make up with contract manufacturers, trying to make it kind to sensitive skin and vegan-friendly. She finessed her way through countless details — deciding to go from skincare and makeup in a stack to only carrying makeup; adjusting diameter of the containers to determine whether a brush could be used or if it should be a solely cream-based product; interviewing women to identify the best combination of highlighter or bronzer or shine control powder or other products, just to list a few. She dedicated time to deliberately choose five shades that would be as inclusive as possible to women of different ethnic backgrounds, and, as she champions inclusive beauty and sees it as an obvious default for the beauty industry, is planning to expand the options available. (Getting closer to Rihanna’s Fenty 40 — a suite of forty foundations shades established with the product line Fenty Beauty to promote inclusivity in makeup — is one of Reid’s goals.) She built up a web presence, a team, and a marketing brand.
It took Reid from March 2017, when she officially began working on the company, to February 2018 to ultimately chose her makeup formulation manufacturer and then her packaging manufacturer in April 2018. Finding a formulation company was an arduous process. Because Subtl Beauty was in such a nascent development phase (read: small) as she negotiated with manufacturers, very few people would talk to her. Reid quickly learned to reframe her language to appear more knowledgeable and established. Instead of opening with questions about minimum order quantities and set budget boundaries, she explained that Subtl Beauty was in the market for a new formulation company — which was technically true — and if they could please tell her how to obtain a lip/cheek sample. In these conversations, she would even introduce herself with made-up titles, depending on the product research she was conducting.
“I wouldn’t address myself as the founder,” Reid said. “I’ve been a packaging director, and mostly I’ve been in product development. I’ve also been the marketing manager. I felt a lot more confident being that role and representing the company that way. We looked small shop if I’m reaching out as the founder of this company.” She smiles as she talks, and seems to relish the covert and savvy techniques she adapted.
After the product design was closer to being finalized, Reid began a 14-week training period in April 2018 with the Founder Institute, an entrepreneurial accelerator program. The program, which is globally run, has a rigorous curriculum with deeply involved weekly assignments, topic lectures ranging from customer development to revenue sourcing to branding and design to legal work and equity, and graded pitch presentations. The intensive nature of the program rapidly enhanced Reid’s business acumen and challenged participants to work and innovate around their ideas; what began as a 25-student cohort was winnowed down to eight graduates by the end. Reid grew close to three other colleagues who completed the program and they continue to meet weekly as a support group, mentoring each other through their individual startup experiences.
Curtis Wadsworth, one of the quartet and founder of Three 10 Consulting, deeply values the fellowship their group has created. It is difficult, he explains, for people not attuned to the startup scene to fully understand the industry’s challenges, and so a support group of likeminded people allows them to commiserate with and then counsel each other.
“We push each other. I wouldn’t have gotten as far along on my idea if I hadn’t seen them work on their ideas,” Wadsworth said.
Throughout the Founder Institute and then this peer group meet up, Wadsworth has seen Reid adapt her skill set to the myriad challenges in front of her.
“Rachel is very determined to make it work,” Wadsworth said. “...She has gotten more confident. It was interesting — when she started to work on Subtl Beauty full time, you could see she was worried about it, but now she’s settled into it more.”
Reid’s approach to Subtl Beauty, and entrepreneurial work in general, champions a blend of functional design and creative aesthetics. This is informed by her academic background in web development and e-commerce, experience in digital marketing and technical skills, and creative arts interest. But as we talk, it is clear that all of these skills are enabled by her eye for design, concern for her customers, and ability to execute.
“Honestly, ideas are a dime a dozen,” Reid said. “It’s all about execution. That’s what makes you different — being able to take an idea and turn it into a business. That’s where the gold is.”
The second time I meet Reid, it’s outside of AlphaLab in East Liberty on a rainy morning in mid-September. She moved into the accelerator just a week or so prior to our interview, and her desk is bare save for what she carries in with her: a purse, a pile of notebooks, and a monkey mug with an adhesive mustache attached to it. Reid, a CEO constantly on the move, falls precisely in her own target demographic group; she rocks a no-makeup-makeup look that is at once minimalistic and flattering. As we settle into our chairs, she sniffles and, with a shrug and a grin, admits to feeling slightly under the weather. It’s poor timing as she has her kickstarter launch happening in three days time from our meeting, but an hour deep into our conversation, a female colleague arrives, bearing a box of raspberry Emergen-C, a vitamin supplement. Reid exclaims in relief and immediately pours the powder into a water bottle.
“There should be enough water,” she murmurs as we collectively watch the water turn a dark pink before she drinks it.
AlphaLab hosts several women, but for some reason this morning, the entire duration of the interview, Reid and I are the only women in the space until her colleague arrives.
Reid’s experience as a female entrepreneur is complex. On the one hand, she is new to the business scene in Pittsburgh, and has had many female and male colleagues support her work. The network she has benefitted from has made, on the day-to-day, no obvious distinction to her being a woman. At the same time, her experiences have often led her to question her role as a female directing a beauty brand as well as lament the difficulty of pitching to male investors and generating capital.
“Definitely any time I introduce the idea I feel like a cliche,” Reid said. “You go to these networking events and there’s a majority of men. I’m the only female and I feel like I’m reinforcing all their assumptions — like females have their lane, and maybe I’m projecting, but I can’t be like, I’m creating the first robotic leg. [I’m not doing] anything groundbreaking.
Often, Reid fielded questions during pitching that her male counterparts did not get, and had to straddle the line of responding graciously in order to communicate her ideas while also standing up for herself and her product. Experience taught her that many of the male investors would run her idea by the women they knew — wives and daughters — meaning that she had to convey a vocabulary and context that would enable men to properly explain the product to women. Her pitches were delivered to one room and yet tailored to accommodate multiple, if sometimes invisible, audiences.
“Every man that I talked to would go ask their daughters and wives about the product, and if they weren’t in my demo — if the wife is 54-years-old and found her favorite Estee Lauder lipstick in 1994, she didn’t see the problem [I was addressing],” Reid said. “And then [male investors] come back and they say they don’t think it’s a problem. If he explains it poorly [to the women he knows], I lose [him as an investor and her as a customer].”
Bill Kim, another colleague from the Founder Institute and Founder & CEO at Edlitics, Inc., noticed the difference in Reid’s experience at the Founder Institute compared to his own, and that of the other male participants. He also found that the mentors in the space, in addition to investors, were male, suggesting that it was easier for him to connect with the industry’s role models.
“I would help her by trying to look at [Subtl Beauty] from a male’s point of view and think about, ‘how do I connect with that audience?’ ... In some cases, there were some people who immediately saw makeup and stopped listening. ...She’s got way more challenges than we do,” Kim said. “It’s just the startup space — it’s still a male dominated area. Rach was awesome, in every way. She’s super confident, she’s super outgoing, and she carries herself well in a room. And she’s already got an uphill battle. The investors are all male. I feel like in the startup space, women aren’t given the same fair shake as men on the first look. They have to prove themselves whereas I feel like a lot of times men can just come in with an idea and [investors will say] ‘oh that’s a good idea’. Women have to actually prove that idea is viable.”
In the Founder Institute pitching weekly exercise, Reid won the highest number of points cumulatively over the 14 weeks. She tells me this detail with a smile after discussing some of the gender-based challenges she has faced; her competitive edge and drive certainly pulled her through. As we talk though, it feels like, in order to be seen as a successful woman, she not only had to be good, she had to perform as the best.
Reid continues, and lists some of the questions she’s gotten during pitches: Are women just disorganized, is that what you’re saying? Why are women having a hard time getting ready in the morning?
“You can’t be a dick to them when you’re standing up there,” Reid said, remembering the pressure of composure while presenting. “You can’t be like, ‘are you kidding me?’ You have to say, good point, let me take that back.”
I watch her face as she shrugs, sighs, and then turns the situation back on herself.
“The critical side of me is like, you’re part of the problem, you’re not explaining the problem correctly. I spend more time on clearly defining the problem than my male counterparts do. ...If you’re introducing a foreign product to a market, you have to explain it and be able to bring people in.”
The Harvard Business Review examined how biases among investors and venture capitalists inform what questions they ask male and female entrepreneurs. For men, 67 percent of the questions are promotion-oriented, and focused on what they hope to achieve. For women, 66 percent of the questions are prevention-oriented, asking about safety, responsibility, and security. Overall, female entrepreneurs tended to raise less money. This difficulty that women have in generating capital is similar to what Reid has experienced, and has similar traces all throughout the startup space and beauty industry.
Subtl Beauty is one company arising in a recent wave of female-owned beauty startups, joining brands like Glossier, Ipsy, and Birchbox. Though the multi-billion dollar beauty industry has a primarily female consumer base, the biggest companies are run by men. LedBetter, a research database that showcases how many women hold leadership positions at consumer brands and companies worldwide, reports that overall, women occupy 34 percent of board seats and 24 percent of executive positions at personal care companies. This ratio outperforms other industries, but is still far below gender parity. The leadership teams of Revlon, Bath and Body Works, and LVMH (which owns brands such as Make Up For Ever, Fresh, and Benefit Cosmetics) are predominantly male. Coty, which owns brands such as Covergirl, Sally Hansen, OPI and Philosophy, had no women on its board until recently and was previously led by an all-male executive team. Estee Lauder’s board is nearly balanced, though the company has only a few women in executive positions.
Female representation in entrepreneurship is growing, certainly. In January 2017, there were 11.6 million women-owned businesses in the US, which is a 114 percent increase from 1997. These businesses employ 9 million people and generate 1.7 trillion in revenue. Nationally, 46 percent of women-owned businesses are owned by minorities and 71 percent of the new women-owned businesses launched each day are owned by women of color. (Some of the reasons cited for women of color starting firms at such a high rate look at higher unemployment rates and greater pay gaps faced by these women.) This slow tide of change is impactful and important, and throws into sharp relief the areas where gender equity is lagging.
Across industries, companies with at least one female founder grew from 9 percent in 2009 to 17 percent in 2012, and didn’t develop past that figure through 2017. According to PitchBook, there is at least one female founder at 17 percent of healthcare startups and 16 percent of information technology startups. Among beauty companies, 19 percent of startups were led entirely by women. Additionally, the average earning of female sole proprietors is 56K per year, while the average earning of males is 76K per year. While it may be true that women often start companies in lower paid professions, such as house cleaning, catering, or child care, the earning gap persists even when comparing male and female business owners in the same industries.
Bringing the issue back to a local lens, the Dell Women Entrepreneur Cities Index ranked Pittsburgh as No. 23 out of 50 cities around the world in 2017. The study measured a city’s ability to attract and support high potential women entrepreneurs based on five metrics: how the market, capital, and talent pool engendered female-owned businesses to operate, and how the culture and technology enabled an environment for female entrepreneurs. One of the main analyses showed that capital is critical for scaling and that, globally, it can be a limiting factor for women as they face unique challenges in raising capital. Among the 50 cities, Pittsburgh ranked 40th for access to capital. However, there is correlation between the presence of accelerators, strong entrepreneurial networks, and successful female role models and the access to capital. Pittsburgh scored well in having successful female role models.
Rebecca Harris, Executive Director of Chatham University’s Center for Women’s Entrepreneurship (CWE), has high hopes for the female leadership in Pittsburgh. The CWE was established in 2005 to create economic opportunities for women through entrepreneurial education and training, mentoring, and networking. The Center houses several distinct programs designed to help women entrepreneurs succeed, including Chatham’s Women’s Business Center, a Prototyping and Design Lab program, and IncubateHER, a incubation program for female entrepreneurs. As an active stakeholder in shaping the female-owned business landscape, Harris hopes to see Pittsburgh adopt more initiatives that prioritize economic inclusion as part of the support offered to female entrepreneurs. Economic inclusion projects can include investment in manufacturing, retail, and infrastructure sectors that create pathways into jobs for young people, women and those in underdeveloped regions; providing skills based training; and offering credit lines and business counseling for women entrepreneurs.
“Economic inclusion, the opening up of economic opportunities to underserved social groups, is integral to achieving a transition towards sustainable market economies,” Harris wrote in a follow up email. “An inclusive market economy ensures that anyone regardless of their gender, place of birth, family background, age or other circumstances, over which they have no control, has full and fair access to labor markets, finance and entrepreneurship and, more generally, economic opportunity. Inclusion is thus an intrinsic element of a sustainable market economy.”
Pittsburgh offers a variety of resources for new entrepreneurs. Harris values the talent pool the universities bring to the city, the rich variety of training spaces and accelerator programs for those looking to grow a business, and the capital from nonprofits and foundations to provide support, through programs and loans, to female entrepreneurs. Wadsworth agrees, and says that over his many years in Pittsburgh, the availability of training programs has grown quickly and has noticeably impacted the community.
“It’s empowering for the community in general,” Wadsworth said. “It empowers the younger generation to get out there and do business and not just follow the lead of whoever’s already doing it, which is just wonderful. There’s a lot of people running businesses that don’t do a good job. Shaking things up is always a good idea.”
On Thursday, September 20th, Reid launched Subtl Beauty on Kickstarter. Her goal was to hit 30 percent of the $10,000 goal within the first day.
She hit it in the first hour.
“If you hit 30 percent on first day, then typically people say you'll have a successful campaign overall,” Reid said. “I was so focused on that goal and when we surpassed it in the first hour, it was incredible. It was so beyond anything I expected that it was insane to me. We hadn’t planned for that.”
Now, Reid is focused on analyzing the data that came from the campaign and producing content that better matches the expectations of her followers. In a few weeks, she’ll begin thinking about importing the products, shipping them out, and navigating how to account the taxes for everything. And as the to do list inevitably grows, Reid intends to see Subtl Beauty engender the principles she started with, operating as a company that champions women designing products for women, innovates in creative and indispensable user design, and prioritizes its customers: women who use makeup as a self-empowering tool in their busy day.
“It kind of goes back to a female being in charge,” Reid said. “There are a couple of brands coming up led by women and I think that’s what I want to see — more leaders in the industry designing products for women in skincare and makeup. I want to challenge the bigger brands that I think got lazy, that had a packaging design in the 90s and changed a couple of colors throughout the years but never really innovated in the way we needed innovation. I hope, if our brand can get big enough, can challenge the status quo of how we expect products to be designed.”
She pauses to think about her customer base and the importance of Subtl Beauty being driven by the women who use it. “This is already not mine. I had the problem in the beginning, but all these other women share this problem and they finally have a product I can give them. I’m just going to be the facilitator from now on. They’re going to tell me what they need, and I’ll produce it.”
And she’s just getting started.