Joining me on the show today is Nina Zilka, Co-Founder of natural skincare brand Alder New York.
Alder New York is a queer and woman-owned independent skincare brand that makes products designed to work for all skin types, no matter your age, gender, or ethnicity. Their vegan line is formulated with the best plant-powered extracts and clean, dermatologist-approved ingredients for healthy skin.
In this episode we’re talking about how Nina and her co-founder David started their first brand in fashion back in 2008 and have since gone on to create a wildly successful skincare company - started through self made formulations in her kitchen.
We cover how they’ve funded the business to date and what it really means to do a friends and family round, how they’ve grown by making their way into hundreds of super cool retail stores around the US and the 3 things they do that set them apart from the rest on the top shelf.
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
Yeah, absolutely. Um Well, we very much started out as not at all a business, David and I met at Pratt Institute in Brooklyn, which is where we are based still. Um and we met us as a fashion design students are my freshman year, his software year. Um and almost immediately we had this uh really crazy creative connection where we just got each other and felt motivated when we were working together. And by junior year of college, we and a third, a 3rd. 3rd friend at the time had created a clothing line and, you know, it was all very new york fashioning and this was, you know, early, early, like 2000 and eight, kind of that time, a little bit pre internet, like where we were like, like the internet existed. Uh but it was just a little bit before, it was like a thing. And so it was very D I Y and we had a lot of little boutique that had started carrying us.
00:04:48 So when we graduated, we really were like, let's just keep doing this. Um We had gotten a grant, essentially a grant to have a studio space in the Brooklyn Navy yard through Pratt. Um So like our coffee, it was very low and we truly had no idea what we were doing. If we had, we probably wouldn't have done it because I don't know if I recommend fashion and like, having a clothing line with no money is the way to get started in any industry, but that's what we did. And then our third business partner ended up leaving to do his own thing. We closed that clothing line, kind of started with much more of a business sense to create The next closing line we did. Um and then Dave and I did that for about 4-5 years, and that company was actually called older boutique. So we did that. And then basically what happened is that during all this time I had become really passionate about skincare. Um Again, this was in 2010, a book called No More Dirty Looks had come out and I had read it and it was all about the lack of FDA regulation and skin care and hair care and cosmetics, and I was I was shocked. And so at home for fun.
00:05:50 Again, as a creative person, I started making my own stuff and very much in my kitchen like mixing powders together. Um nothing that involves chemistry, It was all physical mixing, but people really liked it. I made a dry shampoo and my roommate wanted it and then her mom wanted it. And So in 2012, David was like, let's design a little bottle and put it online with our clothing for the holidays. And urban outfitters ended up stumbling on it and after they could carry it. Um and then it kind of took on a life of its own. And so we definitely did not be like, we weren't like, this is our business, we were very much like we have a fashion line, but this other thing that we made for fun is doing really well. Um And then by 2015, I really had been burnt out on fashion and I really could not on the side find a skincare line that met my queen standards. I've learned a lot about what it meant to have a clean product. Um but that wasn't just like crunchy granola at that time, it felt like there still wasn't these really high end effective formulas that were also clean. Um And most of all David and I, as people who had always designed together have the exact same taste.
00:06:54 Um and even when we had our clothing line, we're really kind of designing with sort of a gender fluidity. We could not find products that were not marketed as super hyper feminine or hyper masculine. That meant those means. So we were like at that point I was like, I think I want to close the clothing line and really do this right, Like really figure out how much money it takes to run a business and do the stream of skincare line. And David was like, let's do it. So that is uh we closed the clothing line in 2015, took about a year to really develop the concept of formulas um R and D. And launched at the end of 2016 with all the new york, wow. We so exciting what a story you got to dig into, you mentioned, you know, you have to figure out how much it was going to cost to get started. You had to have a proper business plan. I'm sure you had so many lessons and learnings from launching your first two clothing lines that you were bringing forward into this new skincare line. What was like, what was the plan? What was the things that you had learned and what was the kind of money that you needed to get started? Yeah, so part of it was, again, David, I had really learned how to be very scrappy because we really have had a clothing line where, I mean at the time David was teaching, we both were teaching part time at Pratt.
00:08:07 I was doing accounting for another company. I mean, we really were kind of just not surviving financially at all on our clothing line, but had Sort of really figured out how to make things work with very little. So we kind of figured out what is the minimum amount of money we could do to really create the formulas, we need to get them into production and really just start with a small amount of product and pay ourselves very little but a living wage. Um, and and we settled on the number 200,000. And, and, you know, I have talked to investors later and they were like, you know, sounds like we would have needed a lot more. And it was like, yeah, we didn't, we don't come from a super financial background, we didn't have that sort of connection. So even if we needed more, I mean 200,000 felt super unattainable to us. So we ended up doing 200,000. We did a very, very friends and family around, which really was like our immediate family and then their network of people outside of that. And, you know, we had met some people being in the fashion industry through Pratt through the Brooklyn fashion and design and color, which was the incubator. We've been a part of with our clothing line. Um, so that was the networks that we access to raise that capital and we really planned out, okay, like how much it really comes down to, how many units do we think you can sell a month at this price And what does that look like and what does the cash flow?
00:09:19 And then um, a lot of times you'll hear the term runway when it comes to funding. And it's sort of like how long can you make that money left? And you know, can you turn a profit before you run out of that money or will you need to seek further investment? So Dave and I were really not interested speaking further investment. And we kind of were like, we'll make that $200,000 work. Um and we have so, so that's that's the other part is like, can you make, can you make it work or will you need to get more money? And so how long was the runway for you guys when you got that? 200,000? What was the time period that you gave yourself to start making money back? I mean it was about It was about eight months. Okay. Yeah. And um, and I remember my dad actually because uh he, my dad was wonderful in his NPR and so he didn't really know the fundraising world. But he kept me like, well what happens if you run out before them? And it was such a funny question to me because I had spent my entire young adult life just not having any money and always like babysitting when I needed more cash or like picking up a teaching gig here or there and I was kind of like we'll just figure it out.
00:10:23 It was like I had I didn't quite understand, it was like sort of like I don't understand that question. Like we will figure out a way to make it work when we if and when we run out of money. Um And that is something that we just like learned time and time again. I think David maybe start, I really believe in that too. And I definitely struggled more with feeling some panic around cash flow and you know, definitely around like february 20 18 which was sort of that eight month period. I was like we might actually run out. And he was like, well I guess we need to go out there and sell some products. Then he was very just like okay then let's let's make it happen, like we can't just let your panicking, what are we going to do to sell that product? Um I mean it's scary but that's what we did totally with That $200,000, what was the split between, you know, formulations and getting the actual products, you know, into your warehouse or office or whatever. And what was the split of like, hey we put this behind marketing and go out and you know sell products mm That's a good question. Um So it ended up being mostly inventory and R. And D. And that and that and that is something I really advocate for.
00:11:24 Um I think if there's like one thing I think is worth spending your money on it, that inventory because that is the thing you can sell. Right. And so that was sort of comforting to me when we were really at that low bank number, you know, at those eight months of like well we're still sitting on product. So like you know worst case scenario if it all goes on to whistle products that we can solve um that will turn into money that will translate to more money than we put into it. So we really chose to put the majority of it was really like what is the bare minimum? We can pay ourselves. And it really was like the bare minimum. But I refuse to that because I have been my life up until that point and how much money can be put into creating and having the product on hand and and how long will that inventory last us marketing. We actually didn't even start paying for until a lot later in the game. So a lot of it. Um David, I had a very clear strategy with Alder that I think has proven to be successful which was really focusing, you know, we had our online TPP space um which I think is an invaluable you're gonna make your most money direct to customer because that's where your margins are going to be the highest.
00:12:28 Um And it's where you can really create a customer connection, but it's hard as a small brand who doesn't have a ton of money to put into marketing and advertising to get that new customers. So we were like let's get into every cool boutique in every city in every state. So like I want to be in that one cool boutique that's in Arkansas, I want to be in the cool boutique that is in Alabama. Um And I and so we did that. I mean I really would like, I would be like Alabama, what's the cool store there, you know and that I would contact them and from the product and we've ended up being about 200 stores throughout the country and I think of them as some of the coolest stores throughout the country, you know? Um And that included Goop but it also which is a little bit of a larger store, but that that also includes included Club Do Cat, which is based in the south. And the new york times had written them as like buck school store to be in in Alabama. So that is where I really focused my time and energy. So that was great because they had a built in customer there, a loyal customer if they liked the product um then they would sell the product and generally when we sent people products they liked it and it's a really good products. You try it, you're kind of hooked, You try or like how I got this country, like my skin has never felt so soft, I have good taste.
00:13:32 It looks amazing on myself. So I really felt like when we got it into people's hands it would solve. So that was really our strategy, it was a lot of in person um and then doing a lot of pop up like a lot of different like trade shows and a lot of different opportunities to interact directly with a customer. So like were sold at the public hotel in new york the minute that they placed that order, I was like, hey we would love to do an event at the public hotel with you, we'd love to get a chance to meet your customers and most of the time stores want to do that, it's good for them to have people coming in it, they don't pay off anything, it's like free marketing for them. So it was really a win win. So we didn't start paying for marketing and even though we pay very little for advertising for months, like I mean like it is like 5% of our budget goes towards marketing. I'm not sure that that is the strategy for everyone, but as a small brand that has really been what we have found to be worthwhile is those more in person and direct experiences. Yeah. And something that we talk about a lot on the show is when you have, you know, word of mouth inherently built into your product and you know, that is your free marketing going around different networks of friendship groups and different relationships.
00:14:41 That's just key to to a successful brand. So I totally, totally get that. And what you're saying, what did you think you were doing that set yourself apart from other brands in the natural skin, skin, skin, skin, skin care space? Um that made those retailers interested in specifically what you were doing with elder. Yeah, I think, I think a cup, I think three big things and they were really important to us. The first thing is aesthetic. I think as designers, David and I, that's the easiest part for us is like, you know, how to make something look good and we really wanted it to be something that was beautiful and simple on a shelf. And definitely the time when we launched, I didn't see that, I think that that has happened a little bit more as, you know, I thought trend has built, but at the time it really was like, wow, this doesn't have like writing all over it. It's not flashy Jared garish colors. Um, so, and because I was very much reaching out to the stores that would get that, it was stores that I personally liked that felt inherent. They were like, I love how it looks. The second thing is the product had to work and our formulas, I feel very confident saying or something about formulas out there, um, you know, it wasn't just that I wanted them to be clean.
00:15:48 I wanted them to really work. So I go back to our cleanser, but it is just a cold favorite. It's like people try it, they get hooked. I really just have to send it to them and they're like, I don't even know how this, how this could be so good. And it is, it's like, it's like folic acid. It's c botanicals, it's this really clean uh, coconut formulas, hope. Um, so those formulas really speak for themselves, you can send someone something, but if they don't like the product, they're not going to use it. And then the third thing, which has been, I think the hardest thing for us to achieve. But the thing I'm most proud of is our price point and keeping that accessible. Um, and like I said, when we launched, it was definitely at a time when I feel like we were still very much in the group phase of things and I love you. But like I said, they've been, they've supported us, you know, we love them, but they generally have a higher price point and it was a sort of idea that like nice clean safe products were only for wealthy white women and I really had a problem with that. It just felt so inherently classist and and wrong that only rich people get to have safe working products.
00:16:51 Um So we really from the beginning where like I want our price point to be accessible to the majority of people. Um I still think because we should go lower uh as a small business, we will always struggle with not being able to go as low as I'd like us to go. You know, it's just we have, we have to buy things at a certain scale that doesn't allow us to go as low as I'd like. But I think that price point made it really a safe bet for people for customers to take that risk because it just wasn't a lot of money to throw down to try a product and once they tried it, they loved it totally When you were doing the, you know, the retail wholesalers strategy and building up those lists and getting those 200 stores involved and then, you know, focusing on the pop ups, what's involved with your marketing now and what do you see works for you at the moment with acquiring new customers and kind of scaling to that next level. Yeah. So we're in a really weird time. I don't know if you noticed as I record from my bedroom, right? So that is a challenge. I think, you know, this is a great lesson in business, but like plan always make a plan and then just expect you'll throw it out the window and that has just been from day one, the thing?
00:18:01 So at the beginning of this year, we were like, things are going so well, this is going to be our trajectory for the year. And our plan was to do a million in sport about, we were like, we're gonna get plane tickets, we're going to find this place. That was actually our strategy was like, we are going to go, so I. R. L. Is going to be crazy, you're going to get sick of meeting us and then the pandemic happened and everything shifted to online. So our marketing strategy has really had to shift. Um So, you know, some of the things that we're doing right now is really trying to focus on partnering with businesses that we really like to do giveaways or different types of um you know, purchasing experiences where we're working together on things. So there's some discovery between, oh, you like this brand, here's with other brands. Um and uh so that's been a big one. We've really focused on growing our affiliate program, which again, is bringing in people who really get the brand who we feel aligned with our values to them, share it with their friends and their family and their community. And, and then of course, we're also looking into things like Tiktok um and things like that. And I don't have one clear answer. I think this is a little bit the wild West for everybody.
00:19:05 Um is just in this only digital world, how do you market and how do people, how are you not fatiguing customers who have spent all day on the computer? So I don't have a clear answer. It's sort of like, yeah, we're just kind of throwing things at the wall right now and trying trying different ways to engage with people in the digital space. Um so I don't have a clear answer, I think we're trying a lot of different things right now. Yeah, totally, I get that and I think it's like one of those years where of course we'll look back and be like, well we did our best, we tried all of the things and like let's hope for 2021 to you know, to smooth things out because my goal has been a weird year. That's for sure we heard here, it's been a weird, yeah. Um on the back of marketing and because it's very relevant at the moment, we've got black friday that's just happened last week and you know, cyber monday which was today, what were you doing to participate in those kind of global phenomenon if you if you did participate and do you have any learnings that you can share with us that made it a successful plan that you look to continue to do in the future.
00:20:09 Yeah. Yeah, I think it was very, it was successful for us um and and we do participate in black friday, I really respect brands that choose not to. Um and I completely understand their reasoning that it's, you know, it's a corporate thing and I totally got it for us. I find what I view black friday as is a chance to gain new customers who are may be hesitant to try the brand again because the price point, because it's only online, which that's something we can talk about is how hard it is to sell, skins are only online right now. It's a product that inherently is lends itself to someone wanting to try it before they buy it. Um so, you know, for black friday, we it's the only time of year, we do our 25% off sale. We've done it the last uh three years. It's the only time we mark things down that much, and we do it from the beginning, black friday through Tuesday, which is kind of um like cyber monday onto Tuesday. Um and what we find is that it's when we gain a lot of customers who have maybe, you know, you can you can see a lot about your customer and maybe they've been looking at us for 3 to 4 months and this is the chance that they try it.
00:21:12 So we um RPR make sure that we see information about the giveaways. You know, we were an alert, we were in harper's bazaar, We were in basically every publication, the cut vogue about this, about not not about the good way about the sale. So we were in all these magazines, talking about the sale or online, talking about the sale, so that people know about it and that they are able to try it. And the rest has been a really successful strategy because like I said, the customer acquisition is the hard part, but I feel very confident and alter new york product once people try them, they tend to be hooked. We have a really great repeat rate, so getting all those new customers is worthwhile for us to take a little bit of a hit in margin, so that we get this returning customer. Um and the other thing we're going to do now is okay, we have all these new customers. So now we're working on a really great newsletter for this week to kind of welcome them in as welcome new customers, you know, here's some exciting things about all the new york, and of course we always do that with new customers, but we're really trying to make them excited in the sort of black friday bonanza. Yeah, totally make them feel loved and welcomed into the community, especially now with everyone needing extra community, you know, looking to different things for just a bit of solace and a bit of a break from the from the daily grind, I guess when you said you were doing lots of pr and working with those big media brands, Is that through a pr agency or were you finding that you were doing this kind of thing yourself?
00:22:33 So, for the first year and a half I did it myself, um and was kind of surprised, you know, I was pretty it was all new for me and I think I really came again from our scrappy background where I was like, I can do this. And it was a lot of cold calls. But remember I emailed Vogue, and the Editor of vogue said, yeah, let's do a death side. And David, I showed up like, just the two of us and looking back and like maybe we should be looking a little dinky, like maybe we should have had a pr agency, but it was just uh just emailing um and getting to meet the, you know, the top of the editor at the time, which I kind of couldn't believe happened. Um So we did that for a while and then um and then and we were really hesitant about partnering with a PR agency in general. I think you have to be very careful when you have your own business about who you work with and who you partner with, because for the most part, no one is ever going to work as hard as you are on your brand and that's kind of just the nature of when you own something. So I think it took us a long time to find the right fit, but when we found our pr agency, we really felt aligned and I felt like, oh, these are people I would trust to represent older when I'm not there.
00:23:37 Um and so for the last year, yeah, little, it's a little bit over a year now, they've been doing our pr and it is so great. Trust people to do things. I mean when you can delegate it as a founder, it is a life changing experience. 100%. So just knowing that they're doing all that feels great. Yes. And so, like, you know, it was great to wake up on a friday morning and have um alloys are pr person emailing me, hey, here's all the people that wrote about your black friday sales, like, wow, all this stuff was getting done while I was doing the 30 other things on my end, I needed to do. So totally Yeah, that's great. Really incredible. I'm curious to know what your email was like to the, to the vogue editor, what do you think got their attention? I don't know, I I always wondered about this. Um I, I asked one of the stores, right? Because they, I I think I mentioned they had been in the new york times, and so that's how I found them and they said when we, when we met, they were like, you know, we got a million emails, but yours really caught our eye. Um and I and I think they said like one thing I thought I was a real person, it's like a real email. I think something I didn't do is just sort of send the same form email to everybody when I emailed, I would really like research who I was talking to, you know, so I looked up who is the beauty editor, I think this beauty director at vogue and like what do they look like, what do they seem like they're interested in one of their past experiences then?
00:24:53 And then I really cater that emails, sort of saying like, hi, I'm I mean it's like, I'm the ceo at all the new york, here's what we're about and maybe it changes, you know, if it's a men's lifestyle company, maybe it's the focus on, like, you know, we have some great, you know, grooming, you know, we use the word grooming kind of catered to them and if it's a cool woman with a, with a customer base is a little more, I don't know, digital savvy, be like, I'm having a hard time coming up with the perfect Yeah, and the other thing I would do That I really recommend people do is put deck together. Um so have a media kit, that's what they'll call it, but it's just, it's really just a pds of the that just tells people quickly about your brand. So it's going to have maybe a page with images of your products, um it's gonna have a little bit about the founders and it's just like a 3-5 pages. That's just I get your brand and it's quick and if I have an editor, I can look at it and be like, I guess I got that, this is who you are. And again, maybe you're editing that back slightly for your men's lifestyle and slightly for your women's publications and your mother's public.
00:25:56 You know, it's all different. But that's, that's something we found that I think is is crucial to just really saving you want to make it really easy for the person you're emailing to get you and not have to put any work, do it, make all the work on your end. So that for them, it's just looking at it. Yeah, absolutely. I totally get that great advice. Something you mentioned earlier that I wanted to circle back to was you said that you did a friends and family around and you hadn't raised since you were able to make that money work in those situations where you don't plan to fundraise further? What is the expectation of the friends and family involved? Like do they, are they just like happy that they supported you in the beginning or are they still like, yeah, we're still hoping for you to sell and for us to get it back or is it kind of like a loan situation where you're just going to pay them back. So that's a great question. So we did something called a convertible note. Um, and it actually, it's very, very common in the startup space. Um, and then people can google it just to get an understanding of what it is, but it's literally both of those options. The first thing is no, I don't think anyone is just like, here's a guess.
00:26:58 No one we knew which is like, here's the money enjoy. I think they're either, they're sort of throughout one is that and the convertible note is literally convert. So it's like, it can be a couple of different things depending on different stipulations that you and your lawyers work out in that contract, but it can become alone where they're going to make interest money, you know, money back on their investment or it can become that they eventually profit from the sale. Um, and I think something that is going to happen more and more is, you know, alder may not end up needing to do a fundraiser very soon. Although I would never say we're not doing another race that maybe something down the line we decide we want to do, we just don't need it right now. Um, but something that I think it's highly likely is that we choose to sell the company in 7 to 8 years when we've grown into a point where I think, oh, someone who is much better equipped to do this should be handling it. You know, all there is my baby and I want my baby to have the best possible mentorship that can, so right now is a scrappy startup, I think that I am well equipped to do this, probably the best person for the job, but I do think all there will grow to a point where I think somebody with more experience in, you know, a larger mass case should be helming the brand, uh, maybe you know, these are all these are all possibilities, in which case the investors will profit hugely from that sale.
00:28:17 So, uh, no, they definitely have an incentive that is beyond just wanting you to succeed in investing in your company. Um, and that is called a convertible note that, that I think is really valuable when you're trying to raise at that level. Yeah, totally, absolutely great insights there into that process. I was like what does happen in that situation? Uh what does the future look like for older, what happens, you know, next year, are you bringing out new products, new partnerships, what does the future look like all of the above? Um, we are going to have some new products are extremely excited about, it's hard not to spill the beans, but um really, really, really exciting. So keep here, I am on us for january because we'll have the first launch of that of that group, I would call it. So we have that happening. So we're always um, I think again, it's like these like designers and creators. Product creation is sort of like what gets me going. It's definitely my favorite part of this business. So we will always have new products coming out in a really thoughtful way, but we have like the whole two years next year's not out in that way.
00:29:24 Um and then I'm dying to get back to physically interacting with people, can't wait for that vaccine. So I think that's really where we're looking forward to like again, going back to those physical spaces and I think when we get that vaccine, it's going to be a bit like roaring twenties and people are going to go crazy and I want to be a part. I want older to be a part of that. I can't wait to get to interact with customers again. So I think that's really, I think I think the beginning of the year will be all about our product lunch and again continuing to engage with customers and our digital space. And then the minute we can all get together, it's really going to be figuring out more physical spaces where we can have that community, whether that means that all there has its own store or we're just showing up in a lot of other people's stores. I think it's going to be all about really getting to talk to our customers directly for the next year or two. Where would be the first like ideal pop up