January 10, 2022 – On today’s podcast we welcome special guest, MANSCAPED Founder and CEO, Paul Tran. MANSCAPED is a leader and pioneer in men’s grooming that recently announced a going-public transaction at a $1 billion valuation.
On the show, Paul discusses:
- What inspired the founding of MANSCAPED
- How he launched a category creator
- Keys to success behind the company’s innovative marketing
- How they go about creating viral marketing campaigns
- And more
Subscribe: iTunes| Spotify | Google Play | Stitcher | Overcast | YouTube | Amazon
Transcript:
Welcome investors to The Absolute Return Podcast. Your source for stock market analysis, global macro musings and hedge fund investment strategies, your hosts, Julian Klymochko, and Michael Kesslering aim to bring you the knowledge and analysis you need to become a more intelligent and wealthier investor. This episode is brought to you by Accelerate Financial Technologies. Accelerate because performance matters. Find out more at accelerateshares.com.
Julian Klymochko: All right. We have Paul from Manscaped. I’m so excited for this podcast today, Paul, I really have been watching your company for quite a while. I’m a big UFC fan, and I know you for a while, you guys were a sponsor there and we kind of see this brand everywhere, and I’d like to thank you for making phenomenal products which going to get into today. It’s your products line is a lot more extensive than someone would expect who’s new to the company, but prior to getting into all things Manscaped, Paul, I did want to get just a quick overview of your background prior to launching the company in 2016. What were you up to?
Paul Tran: I’ve been an entrepreneur all my life. I started my first company when I was pretty young. My first company when I was 16. But, you know, I’ve always been fascinated by entrepreneurship. You know, this American dream of you know, building something and doing cool things. So, I’ve had a slew of businesses, you know, from small companies to large companies from software to, you know, real estate and eCommerce and you know and Manscaped has just been a rocket ship. So, it’s been a culmination of all that training and experience that has helped us get us here.
Julian Klymochko: Right. And what inspired you to launch Manscaped back in 2016? Was there a thesis that was underlying it? What were you looking to accomplish?
Paul Tran: I was looking to accomplish [laugh]. I wanted to help men not cut themselves. It’s found out of just an accident, self-need, you know, it was like one of those things where you know, I had an accident, but I looked at the market and I realized there was either white space or like no other dudes were even thinking about this stuff.
Julian Klymochko: There’s got to be a better way, right?
Paul Tran: Yeah. Yeah. There was no product on the market that specializes in growing for men. I mean, if you think abo of brands in the hair face category, right? You go down to the torso, you got a whole bunch of brands in deodorant, you know, and body wash and all that. When you get down to the groin area, there was nobody, there was white space. I mean, I would challenge anyone now to name a brand other than Manscaped in growing, right. So, it essentially at the time that we’ve started until now, we’ve captured this white space, we dominate the market, we’re the category leader, and we define it. Manscaped defines the category of landscaping. That was because of the white space and learning how to speak to men the right way, because this has always been a taboo topic, right? Dudes don’t stand around the water cooler and like, hey man, how’d you shave your balls last night. It’s like, how do you trim yourself? Because it’s not like not everyone wants to shave, you know, and if you want to be full on bush, all power to you, you know, but if you want to trim a little bit, then you know, let us give you the right tools for job. That’s how we look at it. We want to empower men to do whatever they want to do, but we want you to always use the right tools for the job. You know, you wouldn’t use the wrong screwdriver to get work done. So, we want you to use the right tools for the job. And that’s how we continue to grow.
Julian Klymochko: Right. And so, you created this category, this new category effectively focusing on men’s growing. However, from that you have moved into different verticals above and beyond the Manscaped Lawn Mower, which is, I assume, kind of the product that you started out with and now you moved into, and I’ve tried a lot of your product. The underwear, various lotions, like lip chat, nail care, et cetera, et cetera. Now becoming more of a lifestyle brand. Was that always the plan to continue to expand within different kind of men’s care verticals?
Paul Tran: Yeah, that’s a great question, Julian. And I guess, yes, absolutely. I mean, our ambition was to always be the next brand. The next multi-generational brand, we wanted to create a brand that defines this next generation of men and what masculinity means to men. And so, when we started, we knew that we didn’t want to be a hardware player or a soft goods player and hardware player are, you know, like the traditional brands that you see with oil shavers and things, you know, anything that has a battery in it and soft goods is all the consumable self, the soap, the shampoo. So, if one of the traditional hardware players came out with soap or shampoo, you wouldn’t really care, right. Because there’s no brand authority there.
Julian Klymochko: Right.
Paul Tran: So, you didn’t have the permission to cause consumer permission to go there. And same thing with wet goods. When the wet goods brand came out with a hardware device, you wouldn’t really have trust in that product either. But from day one, we knew that we wanted to play in both. And so, you know, we’ve sold millions of ball deodorant, because that was from day one, we created, and we thought about these hygiene behaviors as an entire routine. We just don’t think about hair removal. We’re going to help you shave, right. But what do you do after you shave? Right. What do you do before you shave? And so, we think about it as an entire routine. So, when you think about our products, especially now in growing, you know, you have the Lawn Mower after you’re done with that, you have the Crop Preserver, which is a phenomenal growing deodorant. And it actually has a utility. It goes on as a wet product, but it dries as a powder. As you’re active throughout the day, dudes, we have chaffing between our thighs. I mean, if you’ve gone jogging you know exactly what I’m talking about, you know, and that’s a pain point. So, our Crop Preserver is not only just a growing deodorant, but it serves up utility to keep that area dry and fresh for you all day long.
So, we’ve always wanted to be a company or brand that looks at the routine holistically, the interest Tibit is that, not many people know that we grew from a 3 million TTM to nearly 300 hundred, right. 3 million to nearly 300 hundred in just 36 months with only 23 million of capital raised while a massing, a million active paying subscribers. And not many people know that and is pretty deliberate because we wanted to focus on the business and not on funding rounds. Because we really didn’t have any funding rounds.
Julian Klymochko: Right.
Paul Tran: So that’s a little tidbit that we didn’t share until, you know, we started the process of taking the company public.
Julian Klymochko: And that’s a really good point, just the exceptional growth and success of the company over the past, just a handful of years, it’s still a very young, quick growing company. And there’s, you know, this massive new market that you created with the $70 billion global men’s grooming in industry, was wondering, how did you do it? Like, from my perspective, Manscaped is really just some of the most ingenious marketing that I’ve ever seen, like highly innovative marketing. Was that some of the keys to success in terms of selling products around a previously taboo subject?
Paul Tran: Yeah, another great question. I think our marketing team is exceptional. It’s second to none, but what we’ve uncovered is, the language to speak to this next generation of men, because in each generation, the nomenclature changes, the slang changes, the way you communicate with each other changes, you know, like with this new TikTok generation, you know, this commercial lives in your mind rent free, you know, this young generation will know exactly what I’m talking about.
Julian Klymochko: Yeah.
Paul Tran: The older generations, what does that mean?
Julian Klymochko: Right.
Paul Tran: So, we really uncovered how to speak to men in the authentic way. And really for this generation, it’s not about being sold to, which was, I think, 20, 30, 40 years ago.
Julian Klymochko: Right.
Paul Tran: You can see the ads were very different, you were being sold too. Now it’s all about authenticity. It’s showing that you really care. It’s showing that you’re passionate about what you’re doing, the products that you’re creating, and you’re trying to create the absolute very best. And that’s Manscape marketing. In essence, we use comedic content to break down the barriers and then we prove to you that we create amazingly high-quality products, because that’s all we focus on, and we don’t have a business for women. The name is Manscaped. So, we only focus on dudes and how to make the very best products for dudes.
Julian Klymochko: Right. And I find that, you know, marketing is generally this mysterious thing you spoke about utilizing humor, utilizing memes, but you guys have had some viral marketing campaigns and I’m not sure if there’s any formula to success, but if you could offer some tidbits and kind giving yourself the best chance to creating a viral market campaign, what sort of characteristics do you think you would have?
Paul Tran: I agree with you that in the startup community, and I’ve gone through many, many startups so I definitely speak with experience with success and failures. When you’re starting up, there is this mystique around marketing just because you don’t understand it yet. Even if you are a seasoned marketer, you don’t know what resonates you. What going to work on the market. So, it’s always a mystery. But m rule of thumb is, be authentic because if not authentic, you can only fake it so much and get so far. But if you are authentic and you’re true to your values and your mission either there is a market out there for it or there isn’t, right.
And you’d want to prove that very quickly because if there isn’t, then you got to move on, right. If you spent a lot of time and money, trying to prove that there is a market for this and it’s not working, you got to move on. But if there is, you’ll find traction, you’ll find that it resonates very quickly. And then you continue on your mission. That’s kind of my guidance, and of course, you know, there’s small things that you got to iterate through the marketing message, figure out what resonates and what doesn’t, but for us we built this moat for in terms of the brand voice, right. For us, it’s really interesting because we tested all the different types of messaging. The first type was like, it’s serious. It’s scientific guys, that area, it’s damp, it promotes bacterial growth. You should trim it, do selfcare. And we talked about the scientific, the technology like, how much technology we pack into this trimmer? Nobody gave a shit and then when just start relating to dudes like, yeah, guys, these are your challenges, right? We get it. So, we’re building the right tools for the job to help you with those challenges, that’s what really resonated. And that became our moat because anybody else that comes after that kind of grand voice, everybody already knows it, right.
Everybody knows that’s Manscaped, so they just become another poser, and it doesn’t work. So that becomes a huge [Inaudible 00:13:01], especially now that we’re actively deploying a hundred million in branding and marketing. And so, you can imagine just three years ago, from 3 million to 300 million and how excited we are on the prospect of the future. And we grew all that while being profitable, right? So, we only raised 23 million, but we were profitable the entire way. So that to us is something that we’re really, really proud of.
Michael Kesslering: So, part of relating and caring for your community and whatnot is the causes that you’ve been involved in. Can you speak to some of the causes that Manscapes has put forward and really kind of I guess greatened the voice of?
Paul Tran: We felt really passionate about something that really connects to us, which is this part of the male body that clearly defines that you are, you know, it clearly defines men. So, we work with the testicular cancer society. We have a really close partnership with them. And even in a campaign that we did, we put two golf balls into a blue balloon, and we taught men how to check themselves for testicular cancer. We worked with Steve O on it. It was a phenomenal campaign, because this is one of those things where if you guys just, you know, paid attention, and checked once in a while, it’s not a terminal diagnosis, right? So, you don’t have to die from it. It’s just about awareness. So, with our brand and our partnership with TCS, we’re able to amplify that message, that guys, once in a while, you know, just mess around down there, is there a lump? You know, and get it treated quickly. So that to us was kind of one of our core callings when it comes to kind of giving back. And we’re pretty proud of also.
Michael Kesslering: And then moving over a little bit to the financial side, we’ve talked about these really viral marketing campaigns and how efficiently you’ve been able to attract your customers. Can you go into a little bit more granular detail on the unit economics of your business?
Paul Tran: Yeah. So, what I can say is, you know, where we have a really fast cash conversion cycle. So, throughout our scale, and usually with typical startups is when you don’t have a large market, you don’t have a large addressable market. And we’ve now proven that we have a huge addressable market because we’ve sold 4 million trimmers. We’ve deployed 4 million trimmers into the market in just the last three years, 4 million in the last three years. But there are 43 million millennials in the U.S. There are 80 million men and worldwide, there are 900 million income adjusted men in our target demographic. So, it’s huge. And the way that we think about it is, guys, like you go out to get a haircut, right, by a professional, and you’re not going to go out for someone to trim your another region for you. So, like similar to a toothbrush, you’re not going to share this device. So, every dude out there is going to need one, right? So, for us, the total addressable market is huge because these guys don’t have a dedicated growing trigger. So, that’s one of our verticals, and we’re going to continue to dominate and grow and that vertical.
For us, what’s amazingly exciting is that because we started as a brand, that thought of hardware, and soft good, we’ve already expanded into the 70 billion existing male grooming market. We’ve deployed two in one conditioner and shampoo. We we’ve deploy a body wash, cologne, deodorant’s coming very soon, even Lip Balm. A simplicity of Lip Balm, right? You go off to the market right now, you pick up a lip balm, you put it on. And the first thing you’re going to know is you got shiny lips, man. Like when you live in cold climate, I don’t want chap lips. I don’t want like bloody lips, but I also don’t want to have shiny lips and that’s clearly just a dude problem, right.
Women want shiny lips, men don’t. So, our chaps that we formulated to not be shiny, and I believe we’re the only one on the market that gives you a really high quality lip balm without it being shiny. And so that’s how we focus on our core demographics of only men and that’s our mission. So, we’re seeing phenomenal, you know, phenomenal feedback from our customers. But going back to your question of unit economics. So, because of that, as soon as you purchased one of our products online, we’ve already recruited our cap, right. Even through the scale, because a lot of startups, you’ll get that at a small scale as you exhaust your core cohort, but as you start to grow, your cap starts to increase, right.
And then you’re like, oh my God, now my marketing is no longer paying for each of these sales. Luckily for us, we untapped a really huge market where even at this scale of over, you know, 300 million in revenue, as soon as you purchase one of our products online, you know, you already paid for yourself. So, our cash of conversion cycle is really quick. And then on top of that, 70%, seven out of those customers opt to becoming a subscriber. So, then we’re not stacking on longer lifetime value, right? If you’re able to convert your cap that quickly, and then convert people into consumables, such as soap and shampoo and conditioners, you you’re able to achieve a long lifetime value because, you know, those run out, right. When you’re done with your shampoo, you got to go buy another one. So, all of that leads to phenomenal unit economics for us and our ambition to build a very large enterprise.
Julian Klymochko: You mentioned another unique aspect about your products that differentiates them is attention to detail. You mentioned the lip balm and anti-shine aspect to it. Take, for example, the Lawn Mower, which actually comes with a bright light. Speaking of which, Manscaped recently announced a merger with a Special Purpose Acquisition Company called Bright Lights Acquisition, which in and of itself is pretty cool, but that’s being done at a $1 billion enterprise value. So, congrats on that. What can we expect from the brand going forward once you’re public?
Paul Tran: I think we’re going to finally give our members the ability to also be, you know, owners of the stock, owners of the company. I think that’s really special because we’re always trying to drive value. We’re continually thinking about how we can drive more value to our customers, and we’re always listening to our customers. Being public was the right decision that our customers can also be the owners of business, that excites us a lot. I think you can expect additional new products. I think if you’re thinking about from the hardware side, because you think about Manscaped, we think about it as three verticals.
We have the hardware business or consumables business, and this third column called lifestyle that we just kind of fell into, and I’ll give you a segue to a really quick story about that. We created one pair of man boxers for a content piece, for a video. When we ran that video, dude wrote it, where can we find Manscaped man boxers? And like, you know what? If dudes want boxers, let’s create the best boxers on the market. So, we created Manscaped boxers. It is like one skew, it’s black and it has Manscape on there. And we’re not an apparel brand, but we’ve sold over 2 million pairs of Manscaped boxers, 2 million pairs. And to us that, that’s really exciting because it shows us that we’re a lifestyle brand, right.
And that people and our customers are recognizing what we’re doing and they’re receptive to it. So, that’s how we think about those three businesses. There’s hardware, consumables, and lifestyle. I think from on the hardware side, you’re going to see phenomenal things. I think you’re going to see electrical shavers in the future. Both you guys, Julian and Michael, you guys both have beards. I think you’re going to see beard trimmers. You’re going to see really cool things on the hardware side. And on the consumable side, you’re going to see phenomenal products on your everyday hygiene needs from deodorant to, you know, to soap, shampoos, body wash, body spray. Give you a steep peak. Our body spray that we created, you know, body sprays on the market is just for set. You spray it on and smells good. We thought about it once, it’s a hydrating body spray. So, as you spray it on, it has a moisturizer. Because you know, when you think about putting moisturizer on your body and you imagine it from, you know, a gal, it’s a great but dudes putting lotion on themselves. It’s not enticing vision, you know, so we packaged it in one. So, the body spray, as you spray it on your body, it’s a great fragrance. It’s made from a refined cologne, but it it’s also moisturizing.
So, then you don’t have ashy feet without looking like, you know, putting on lotion on your legs all the time. So that how we think through challenges for men and why our products are differentiated. And in addition to that, the way that we think about creating products, we’re not a value brand. We’re not trying to create the cheapest products; we’re trying to create the best. And oftentimes the best isn’t the cheapest, right. So even our Lawn Mower is at a premium to its peers, its competitors in the same category. And that’s exactly what you’re going to see from our shampoo. It’s not going to be the cheapest, but it’s going to be the best because we don’t skimp out on ingredients. And that’s kind of our product philosophy.
Michael Kesslering: Yeah. And I absolutely love hearing about your product philosophy. It’s listening to what you customers actually want and delivering that and that’s absolutely fantastic. In terms of, when you’re deciding to go public, why did you choose a SPAC? Were you looking at other methods of going public? Such as an IPO, direct listing, usually direct listing wouldn’t really be an option. But as a consumer brand, you do have some very good brand awareness. How did you think about those different options?
Paul Tran: Yeah. We looked at all those options and what we said was. Traditionally, you go with a SPAC because it saves you time, right. And so, we said, all right, well, let’s look at all our different options and there’s three, right. There’s direct listing, there’s IPO, there’s SPAC. Like, like you said, Michael. When we looked at it, okay. We would only go with the SPAC if we find the perfect partner is what we said. So, we talked to SPAC. We talked to a whole bunch of different SPACs. And when I talked to Mike at Bright Lights it, it was a game changer because everyone had cash, right. Everyone had raised a SPAC. Everyone can write that check. And for us, I think we’ve proven it, that we’re a really unique asset. There are not many companies out there that grow from three to 300 in 36 months with being as capital efficient as we are in only raising 23 million in capital. And then having also a million subscribers and being omnichannel in 38 countries. So, we were a pretty attractive asset. But the reason that we partnered with Bright Light was because of their connection to celebrities in that world, right. Because we know that treasure and value are marketing efficiency, and we want to create and drive even better marketing efficiency. So, first time I spoke to Mike, I was like, hey, I can get you on the phone with David Beckham, you want to talk him? I was like, holy crap. Like, that is reach, you know, that’s the connection. So, we spoke to many different celebrities, and we ended up working with Channing Tatum, which I think is a great partner for Manscaped. And we developed a great strategy where we’ll have different celebrities in different geographical areas that will represent the brand, once again, a very authentic way. And we wouldn’t be able to do that through a direct listing or an IPO, you know, and that’s why we chose the SPAC route.
Julian Klymochko: So once you’re public, this is really going to, I assume, supercharge your growth. So, wondering if you could speak about the various growth initiatives. They were listed in your investor presentation, global expense, M&A acquisitions. What are your thoughts on future growth for the company?
Paul Tran: Yeah, I mean, borrowing redemption, you know, we could possibly have 200 million on the balance sheet while being debt free and profitable. So, we’re not like other assets, we’re raising money to cover burn. And we’re not burning we’re already profitable in the short amount of time. And so, you know, having that much liquidity allows us to be very flexible. It allows us to supercharge product development, where in 38 countries already. Allows us to invest more and grow those territories quicker. We still haven’t really hit Asia yet, so there’s still a lot of opportunity in Asia that we haven’t capitalized on. So, there’s a tremendous amount of growth. And in terms of the stock and this process, you know, once again, we didn’t raise that much money.
Other companies that have gone through to our size or scale, they raised a series D, series E, to get here, especially in consumer, right. For us, we barely raise an A, so we don’t have, you know, a series D or a series E investor that is really sensitive that you got to go out on this valuation or doesn’t work and cushion that, we didn’t have that. So, when we price at a billion, when we look at the concept, we are extremely attractive when compared to our peers. And that’s exactly how we want it to be. Because we want to win with all of our investors. And so, because of our capital efficiency, because of our efficiency in growth where we don’t have to force a crazy high evaluation, a loft evaluation, so that our investors can all jump in and win with us. So, if you look at our investor presentation. When you compare us to the concept, we’re really incredibly attractive.
Julian Klymochko: Yeah. I did notice that with respect to the valuation. Now from an investor standpoint, what can they expect from Manscape over the next five to 10 years?
Paul Tran: I can’t quote dollar amounts, right. Or revenue or dollar amounts, but what I can try to promise is innovation. I believe that we’re going to continue to innovate in this category, which has laid dormant for a very long time. And we’re going to continue to innovate, continue to grow. And I think you’re going to see increased revenue, of course, but more importantly, our goal is to build a global brand. I’m fairly confident because of the geography of U.S. and Canada. If you talk to men in Canada and it’s not just young men, they probably have heard [Inaudible 00:30:59]
And our goal is in five years, you know, probably three quarter, I mean, a third of the world would already know the brand Manscaped. And in 10 years, they’ll probably have three quarters of the world will know the brand Manscaped and know our mission. So that’s our goal. And by then we would still be, I wouldn’t say young anymore, because right now, we are incredibly young. But by then, we’ll probably eight years old, or you are talking 10 years, like 13, 14 years old. And that’s not that much time. I think if you can pull off a really large enterprise within a decade. That’s a big accomplishment.
Julian Klymochko: Right. So, if investors are interested in the story, Bright Lights, the SPAC that you’re merging with currently trading under the ticker symbol BLTS, when the deal closes expected in the first quarter this year, then your symbol will be man’s, MANS. A wonderful ticker there. And listeners, dudes, if you’re not going to buy the stock, then at least check with the products. There’s some really cool stuff happening here from Manscaped. So, Paul, thanks so much for coming on the show today, and we wish you all the best.
Paul Tran: It was a pleasure guys. It was great hanging out with you.
Julian Klymochko: All right. Thanks. Bye everybody.
Thanks for tuning in to the Absolute Return Podcast. This episode was brought to you by Accelerate Financial Technologies. Accelerate, because performance matters. Find out more at www.AccelerateShares.com. The views expressed in this podcast to the personal views of the participants and do not reflect the views of Accelerate. No aspect of this podcast constitutes investment legal or tax advice. Opinions expressed in this podcast should not be viewed as a recommendation or solicitation of an offer to buy or sell any securities or investment strategies. The information and opinions in this podcast are based on current market conditions and may fluctuate and change in the future. No representation or warranty expressed or implied is made on behalf of Accelerate as to the accuracy or completeness of the information contained in this podcast. Accelerate does not accept any liability for any direct indirect or consequential loss or damage suffered by any person as a result relying on all or any part of this podcast and any liability is expressly disclaimed.
