101 – From Startup to Success | Rohit Banota on Profitable Growth in Beauty and Wellness

Marcus: 0:00

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Vic: 0:17

Welcome to Health Further. We have a guest episode today. Rohit Banota. Uh, Rohit, thanks for joining. So, uh, as we get started, why don't, uh, maybe give a quick background. You have a really interesting background out of Procter Gamble and now really helping, uh, women led entrepreneurs. So talk about your personal background.

Rohit Banota: 0:35

Perfect. So I grew up in, uh, India in a small town called Sundar Nagar on the foothills of Himalayas. Uh, and in the morning my folks would send me to get freshly baked bread and I would see the big giant radiant ball of sun rising from behind the mountains. And that was my first rendezvous with beauty. Now a cherished memory. What a sight it was. That's how I got in. You know, like I knew that something about beauty, about patterns appeals to me. That's how it all started. Post my engineering from one of the best engineering schools in India, I started working with AB in BIF. I worked in sales and trade marketing and then moved to P& G and worked in beauty and grooming for over five years. I was promoted three times in a span of four years. Uh, I managed brands like Olay. I also managed professional brands. And from there, I came to do my international MBA from Queens at Queens in Canada. Uh, there was a marketing project, an industrial natural cleaning brand aspired to launch a pan in North America, consumer brand. And they gave the product to the entire class. I presented, they offered me the job on the spot with the some bonus, which I spent during my MBA itself. So I had no choice, but to go and join the startup, right? So I started with R and D, everything. Right from conception to launch, we launched the brand across 1, 000 stores in Canada. And there I used to meet when I would go to these shows, I would meet these beautiful women launching health and beauty brands and shows. They started giving me these small projects here and there. And I understood the big gap between, you know, P& G. Then with the startup, I worked with still had some money because they had a setup. And then, you know, let's say an indie beauty founder, or, you know, somebody who had no backing, uh, you know, and then I, I would contrast, and that is how I started developing my frameworks as to what, how can these people succeed? That's when I launched Jump Accelerator. It's, you know, it's Toronto based. Uh, we are focused on women led early stage beauty brands. We offer profitable growth, fundraise and network, and the profitable growth solutions are zero risk, 10x ROI, short term and long term and 100 percent doable. So everything that is a challenge for the startup founder, most of them are bootstrapped, right? So the, whatever we provide to them works independent of whether they have the money or not. The speed might change, you know, might vary. So, yeah. You have money, you can do it faster, but there are certain fundamentals for an innovation to diffuse into the market and if you work on those sooner or later, you will succeed. The extent can vary, you know, the, the extent to which you will succeed can vary, but you will move in the right direction. Yeah, that's, uh, that's all about me.

Vic: 3:21

Yeah. Yeah. Excellent. So that's one of the reasons I wanted to have you on is that I think, um, in, in beauty and wellness, and we see it a lot in healthcare, often there's a, there's a founder or an entrepreneur that, that sees a need and they haven't really started their whole life trying to do, uh, you know, a new startup to make a lot of money. They see a need and they really want to solve a problem out there. And so they jump in and often they have to learn a lot along the way. a lot of the lessons you teach, a lot of the service that you offer through Jump Accelerator, well, you have customized them to beauty and wellness, uh, for the CPG, uh, market. A lot of them are applicable across many different types of startups, really kind of getting that, uh. product designed for the customer, but also getting awareness, getting known, getting the customers to understand you. So talk about like what the ideal ideal entrepreneur looks like when you meet with them. And what's the first thing that you try to help them with? Where do you start?

Rohit Banota: 4:25

That's a brilliant question, you know, I'll come to what, who is the ideal entrepreneur before that I'll just answer the second question that you asked. What is the first thing I tell them is this, I asked them, Hey, your customers love your product. They say yes. And I say, why aren't you a hundred million beauty brand then? And they say, yeah, that's what I think about every, every morning, every night, people who try to love it. Right. Then why aren't I becoming bigger? I'm succeeding. That's it. So there are two elements to a startup success. One is the innovation relative advantage you have over the others. Founders can, you know, overplay the advantage that they have. Uh, I can go into detail, but there's a spectrum of problems. Like either you're offering just higher quality, what's the existing solution. That's a very tough game because you have to constantly communicate to acquire new consumers, or you have a new solution for the same problem. Not that, you know, at least you attract those consumers easily who are fit with that solution. And the last is disruptive, which is like an unsolved problem, right? So that is where the need thing comes. The second is, which was in, in the message that I give to the con, the, you know, the founders when I speak to them, the problem is they don't have awareness. So their funnel doesn't have top, you know, the awareness is not there. But that's not the solution because getting awareness, you have to spend millions and millions and millions of dollars. It's a top down funnel. It will never work out. Even the VC led brands make that mistake. So all three growth engines have to fire, you know, new consumer acquisition, whether it's organic or paid, your loyalty and the advocacy. That's how you can create a healthy marketing funnel and that's the gap. Once you fix the relative advantage, the only thing that is between you and your success, do you, can you create a profitable funnel? So you shouldn't start at top of the funnel. You should try to start as much as possible at trial, uh, you know, like you can get the product directly in the hands of the consumer, for example, so short on your funnel. There are seven steps, awareness, consideration, you know, purchase, repurchase, uh, you know, loyalty and advocacy. I missed trial in between. Uh, and there are leaks. Glossier, a beauty brand, which is like over a hundred million dollars in 2020, it was. And it has still not gone way beyond 120. That's another topic. They had only 9 percent awareness in 2020. Imagine PNG's Olay has 80 percent awareness. And you will see 100 ads in, you know, maybe in two hours. You know, if you look at all the, you know, you're following any TV series or something. So no matter how much money you spend, that's a losing game. This is what the founders don't get. So you've got to, you've got to find six, six profitable superfans so that you have the margin of the money to invest back into the funnel. And you've got to shorten that funnel. I think that's the secret of that. Founders miss.

Vic: 7:12

So they start with their, their, um, maybe people that want to try it and then become customers and then advocates. You said something that went by quickly, like start with a certain number of superfans and build from there. Is that right?

Rohit Banota: 7:26

Yeah, that's you're right. So, uh, you know, they, most of them can be early adopters. They can be mainstream consumers. So six, six profitable superfans. So I'll go to Y Combinator as line, but they have distilled it down to, you know, the perfect four or five words. that a startup founder should only be obsessed with make something that people want. Everybody's trying to give consumers what they need. You know, that's a, that's a fundamental mistake people make. So I'm talking right now about the innovation. So there are two things, innovation or the brand or the product and the funnel. So let's start with innovation. They try to, but consumer needs this too. They need that too, right? They never try to figure out what is it the consumer wants. People don't buy what they need. You know, I need to get up at 6 a. m. I need to do meditation. I need to take a cold shower. I need to do, I won't do all of that. There's certain things. So the route to need solving a need is through what people want. So that is the first, if you don't do that, you cannot even go to trials or, you know, you cannot attack the funnel. You got to first make your product desirable. So, you know, because educating consumer and changing consumer behavior is very, very, very tough. And we have a limited time. People run out of time. Entrepreneurs, founders, VCs, et cetera. So that's the first thing. And then once you have that, then you can create a story. Then you can find a channel to access those six profitable superfans. Problem with marketing agencies is they will say your target consumer is 50 plus 40 plus 25 plus and 100 million women in America. But where do I find those first 1000 or 10, 000? Where does she live? Where does she, where can I meet her in the evening and give her my product and tell her my story? Right? So we have to find out which, who are those six ex profitable potential super fans. Where can you access them? First, you got to identify them. Then you want to be able to access them and tell them a story very intimately or get them to try your product, right? So that's what I mean. So you start from there, use them as an ambassadors, and then you build from there instead of just, you know, throwing spaghetti on the wall with the traditional top down marketing funnel.

Vic: 9:31

Yeah. Because that's going to, you'll end up spending. Millions of dollars and not getting the results that your marketing group told you they might be able to get just, it's a hard game, right?

Rohit Banota: 9:44

It's a very hard game. And you, so for example, I speak to every month, I speak to 10 to 12 founders who have been to the biggest beauty retailers are present in their wellness, beauty health, and they all would have told me at some point or the other, you know, you don't make money in retail in the first one year, you make it in the second year. And then they call me in the second year, they're still not making money. So what will happen eventually? They will fail, they will get delisted, right? Why not, why not start from the end game? Why not see can, so the, the best way to go to that end game is which VCs don't, not all VCs would agree, especially when they identify the brands. Is to be have a profitable business and use the money to speed it up. So, you know, I see VCs coming in, you know, no disrespect. I love a lot of VCs. I absolutely love them. And in their criteria, they always go on stage and say, you know what, we're not worried if you are profitable or not. See, you are not worried, but they should be worried. What if they don't get funded? If they don't get funded, you know, what will happen to their business, right? So, uh, I think this now there's a bit of consensus, you know, as a category has evolved that we need to have sustainable, profitable ventures, right?

Vic: 10:59

Yeah, I think that makes a lot of sense. And I think Marcus and I will both agree with you that it is, uh, it's really important for the founder to have his or her own like, uh, autonomy. And the best way to do that is to generate more cash than you spend on a daily, weekly, monthly, annual basis. There are VC firms, usually ones that have much bigger fund than my 8 million fund that really don't mind if you're burning cash, because that just means you need the VCs more and more all the time, but for the entrepreneur, it's empowering to, Maybe you want to raise money to grow your business faster, but you don't have to raise money. And that's really an empowering position to put yourself in. And it starts with, it starts with the first profitable customer. Right. And then the second one and sort of, uh, talk about a little more of the want versus need, because I think that is really strikes me as true and in health care. A lot of times I'm thinking about solving a patient problem or a physician or nurse or someone, um, but I'm not sure I get into their like motivation or like what they're hoping to achieve today. And I may fall into that trap myself. So talk a little bit more about that need versus want.

Rohit Banota: 12:16

That's a great, uh, you know, I think you have honed down on the perfect, uh, you know, issue that the founders face in the startup space, they're not able to distinguish between need versus want. So. You know, let's say you have not interviewed or you have, you have not been in the shoes of the consumer. More than 60 percent of the brand startups fail, the Harvard research study says, just because they never identified the right need. And by that, I mean, the consumers did not want the product, right? So the problem is people, this, this whole thing of, I needed this product for myself. Right. So, for example, uh, the number one reason people stay loyal to a brand or a product is when it delivers results. That's obvious. But the number one reason to get to deliver for someone to get results from a product, people don't talk about that. There's only one thing and that is how to use the product. It applies across categories, beauty, MacBook, you know, iPhone, whatever, if you know exactly how to use it, you will get the desired results because the, who created the product was not an idiot. Right? The only thing is you did not make it so simple and amazing. To use which aligned with the way consumers would want to use it. That's what Steve Jobs did with iPhone, for example, right? It's so intuitive. So you're not, you cannot play against what the consumer wants. You know, for example, if you, if, if you want to open a convenient store, if you want to be a convenient brand, you need to be present in convenient store. You cannot say that I'm a brand that is convenient to buy, and then you're not present in convenience stores. For example, you might choose some other channel. That's so obvious, but you'll be surprised. A lot of brands will do that. The, the gap they've seen pricing is totally based on the brands that are found very conveniently, but then they go and place it in channels which are not that convenient, right? So the consumer won't even find it. But the underlying, the, the core is they don't understand the consumer. They never give the product into the hands of the consumers and ask them questions. You don't have to ask. The Steve Jobs fallacy is, uh, I know I, you know, slightly move from one, one, one sentence to the other. Steve Jobs fallacy is one of the reasons that people are not able to distinguish between need and want. They think consumer does not know. I know what she needs. First of all, Steve Jobs was Steve Jobs, right? Just because we have used iPhone, we have seen his movies, doesn't mean that we are Steve Jobs. You might not have a number on your car plate, doesn't mean, you know, you're going to become Steve Jobs, right? So, you know, you, when Steve Jobs says all of this, He never said that I do not interact with the consumer. He did. He would speak to the consumers. He would try to think like a consumer. So you'll be surprised beauty found as a woman. She has a makeup product. She has been there in the business for 10 years using makeup for 30 years. I am a man, I know nothing about makeup, but we do the consumer interviews, the surveys, deep dives, question, you know, deliberate on strategy. And then she gets to know something she had never known because she never thought from the way consumer is. So there's brand soul, your intent or your product or innovation, why you created something is your soul. But there is a brand reputation, meaning how the consumer is using it, what she thinks about it, what it means to her, right? How she's using it, what kind of results she's getting, the features she loves, what she doesn't love, etc. You have to understand all of that and then get deeper into her psyche. I have a process which comes from PNG where you get into the emotional, you know, enemies that haunt that consumer. If that makes sense. That is taking a slight towards brand from product, but you can at least do it at the level of the product. You can try to understand, for example, everybody says, you know, and this is, this is the biggest problem I see in beauty right now. Okay. I launched, I launched six products and I want to launch four more because the consumer needs it. Otherwise they won't get the perfect results. Otherwise it doesn't deliver results. But the problem is she's not going to use it. It doesn't want 10 products. Right. So she, you have to give that many number of products, such a routine that she would want to do rather than what you think she needs. Like, you know what I mean?

Vic: 16:37

No, no. So keep going. Keep going. I want to really hear your process about how you build what I would call is build empathy with the potential customer and really try to see the world from their point of view. It seems like you maybe have a process to help with that, that I'm interested in learning more about.

Rohit Banota: 16:53

Yeah. So I, we usually do deep dive interviews focused on, so you need to do 360 degree research. So whether it's surveys, then, you know, the reviews, testimonials, then you do interviews, then you go deeper into those interviews. You can divide the interviews into two different tiers, like the first level, and then you select certain to go deeper in those interviews. You don't say you don't, you don't make the typical mistakes. Right. Okay. You just ask questions. So the typical entrepreneurial problem is, and the solution to that is slow on strategy, fast on execution, but entrepreneurs always do it in reverse. When it comes to strategy, they decide in one hour, when it comes to execution, they take one year, right? So you need to slow down. So I would ask a consumer. So tell me, when do you use this product? Why do you use it at this time? How do you use it? What were you before? Like you just try to ask them quick and go one. Why, why is this? Why not this? And of course, you should try to avoid too many whys because they might start creating answers, right? You don't want them to design answers on the spot, but you ask for their behavior, their thought process. You will slowly start getting to that insight that you're looking for. So insight is a connection point. Where the consumer looks at something and says, you know what, this product, this brand gets me, I thought I was the only one who thought like this. So that's, you must have seen certain ads or certain content piece, piece that just writes here, right? That is the understanding that you need to have of the consumer from consumer side, not from your side. Not from why you created that product or the need you identified, but how, what is the connection point with the consumer? So that in your interviews, you go to keep honing, keep digging till the time you arrive at a certain insight. And you, that's like an aha, you know, it has an intersection with purchase. It'll have an intersection with consumption, with loyalty. It will have an intersection with their lifestyle, their stages. What does a consumer think from morning till night? She's not thinking about. Uh, Botox or fillers or, you know, uh, this, uh, oxy, you know, some, uh, ingredient or clean ingredient. She's not thinking about all this. She's not thinking about some retailer. She's thinking about my life, my success, my marriage, my relationship, my kids, my skin attention I get, right?

Vic: 19:07

Yeah. She might mean I'm not, I'm not maybe graded. Channeling a woman with beauty products, but she may be more interested in like how she looks or how she presents to her friends or her husband or family. And then these products are sort of contributing to that, but that's not the end goal. That's what that's what you mean. Is that right?

Rohit Banota: 19:27

Yeah, that's not the end goal because she's not thinking about us, you know, chemical. Which has like 35 letters in it, and you are every day coming and talking about that ingredient. So there is a, so with educate, so see what was the core problem? The core problem is not conversion for startups usually, because if they give, let's say there was a stadium, we invited 1 million, exactly the target consumers that the product is for, which has a big relative advantage over what they use. If I get them in a stadium, a million of them, if you give them all, each one of them samples, they use it, they will love it. They will buy. My job is done. Or the same. I give it to Rihanna. You know, she has 300 million followers. The funnel will work. In the end, certain will buy. Some others will repeat by my job is done. So with content that is focused on our marketing that is focused on education, it's good for conversion, but it will not get you reach. See the core problem is reach, right? Like I said, so you've got to reverse it. So you got to educate, but you've got to get reach out of it too. That is only possible. If you then morph the product into brand, I am speaking more to B2C now than B2B because you need to, uh, B2B there's much more engagement. You have one on one with the buyer, with direct to consumer or business to consumer. You cannot speak one on one with consumers. You know, you have to have one to many as simple as that, right? So you need to find scalable way of educating. So I always say education. I just use the word entertainment just because, you know, E plus E goes well. But education plus something that resonance with consumers. I call it moment of resonance. You need to identify, uh, and I'm going towards marketing a little bit towards content. Uh, but your education should be, uh, in, you know, about those situations that mean to the consumer. So let's say there's an acne brand, uh, So one, what does an acne consume if somebody like I have had acne since my childhood, you can still see I'm 47, but I still get what is the first thing she will do when she gets up in the morning, you know, she will go and look in the mirror. That's an insight. That's a resonance. So let's say you are planning content for Halloween. If you're not able to do trials straight away. You could come up with a campaign like ghosts of morning stress, for example. So now you are, you are demonstrating, uh, you know, it's like a hook. You're demonstrating an understanding of my life. That is what will make me stop and want to find out more about it, which is about content. I always say, don't start with content much. Use it for conversion. But start from trials, but just to answer your question, you were asking me, like, what is that need and desire, right? So getting in one, you will only understand desire if you get inside their lives and understand what do they want in their life and build that as a connection point with your product. If that makes sense.

Vic: 22:20

Yeah. Yeah. So I, I want to go back. Cause I mean, one of the most amazing things that, that any guest has said in a while was that. Uh, you should really take your time on the strategy. Really understand the strategic, um, necessities, and then be fast in execution. I probably butchered that, but, um, but as you are gathering information on the customer, learning about her, in this case with Beauty Brands, how do you know when you're finished? Like, does it begin to be that you start to, um, hear the same questions, or how do you know when you have the The full understanding, or maybe you never do. Is there a way to know you're finished with that process?

Rohit Banota: 23:00

That's a brilliant question. So two part answer. One is you will do multiple interviews and you will come up with multiple insights. You so with that's how you'll keep your options still open, right? So it's not that you only went to one or two That is one and second is once you do it over and over again, you will know It'll come to you understand when you've hit the you know jackpot So like I said insight has four, you know, uh, you can you can have more defining parameters It has to overlap with purchase It has to be unique. It has to touch an emotional cord not just at the level of surface You It has to do with consumption too. So this is the framework and plus it should not be something that somebody else is doing. So you would have finished your competitive analysis before all of this, you know, before doing all of this, ideally so that you are not. And then if you have a range of options of insights, you will at least have some to work with. And in strategy, there's also one more thing. Strategy is not a sequential or linear process. Even though we go from one stage to other, you do go back and forth. This also people don't realize. So you, it's not that you, you know, you do competitive analysis and you go to consumer interviews. Uh, and that's it. You don't want to have to do competitive analysis again. No, you might have to then, if you're still not sure if you have three insights, you might have to do a survey to see if this insight is scalable, you know, to see what is the quant, what is the feedback I'm getting on quant for this particular insight, right? So there is, but it also, there is gut feel to like, I'll be very honest, like in strategy, you've got to, you've got to get it. You know what I mean?

Vic: 24:37

Yeah. It seems like it's a combination of kind of putting in the work, the analysis work, the interviewing, really spending time with enough customers. But then there also is a, um, an intuition or a gut, a gut feeling where Okay. I feel like I now have enough of an ability to understand this customer that I can move on. And you probably always are cycling back and learning more.

Rohit Banota: 25:01

Absolutely. Absolutely. I'll give you an example from a brand that I work with. It was a makeup brand. It's called Besame Cosmetics. It was in Sephora. They had an issue. She took the products back and she was pretty retro. So I worked with them to transform the entire brand and make it more relevant to current times. Thank you. And of course, you need to work with the founder a lot, right? Founder can be one of the major blocks, as we all know. Uh, their strength can become, uh, the biggest block. And when I interviewed all her consumers, we did focus groups. You know, the insight was so beautiful. So she, she offers a pulled together look, not a glam look. And there's a no makeup, makeup look. So first I thought it's no makeup, makeup look like natural, but one line that everybody in this survey said, it shocked me and they have a lot of other insights too. If they were like 700 people responded, there were two surveys, 700 each. I think everybody had that line and that was what's the point of no makeup makeup look if it takes more time than makeup, you know, so no makeup makeup look takes more time than makeup. Why the hell would I spend more time to look without makeup? And that was such a great insight. And then of course we worked with that insight and we, you know, we create a, uh, evolve the brand. But if you know there's another brand called nude sticks in Toronto, their claim to fame was this, it's a very well doing makeup brand. That's all they wrote. No makeup, makeup, look, comma, instantly. Now they identify this as a problem. They hit the gap, they develop the products and it succeeded because that's what people wanted. Right? So, I mean, like you said, you, uh, you know, you will know it. If a lot of people are speaking about it, you know, and it's, if the competition is not talking about it, but the consumers feel it and it touches a deeper nerve, then you can build on it.

Marcus: 26:56

So Rory, that's a pretty good segue for just a general question that I have about. And maybe how you've seen it evolve over the course of your career, having worked in, you know, some of the largest companies in, in, in the United States and in, in, in Europe, but now you're working with much, much smaller brands, but we're in a much more niche, smaller brand world today. And, uh, you know, when I think about how beauty has evolved, I mean, this could be a very naive Perspective on it, but it feels like when I was younger and we're, we're close to the same age. So, you know, hopefully generationally this will all, you know, make some sense. It feels like when I was growing up and adolescence, young adulthood, like beauty was associated with sacrifice and pain. You know what I mean? Like, um, like beauty kills and you have to sort of work really hard to be beautiful. You, you know, women may have to, you know, squeeze their feet into really uncomfortable shoes. And that's just kind of the price of it. And it feels like we're. We're in a very different world today, where obviously everyone still wants to look and feel their best out there in the world. But there are these conventions that are no longer sort of generationally, uh, prominent anymore. Right. And so you just, I think even the, the concept of no makeup makeup is not necessarily like an old concept that feels like it's more of a, you know, a newer concept that has come about as conventions have changed. You know, how When you're talking about insights, um, and even in terms of product and want, how much does the, um, how much does well being wellness, mental health, um, self perception, behavioral health, how much does that factor into, uh, product positioning, um, Uh, the identifying with your key persona, um, as opposed to when you started in your career, like I would love to kind of hear about that progression and how beauty may, you know, has become more of a wellness, um, a true wellness industry.

Rohit Banota: 28:55

That's a brilliant question. That's an amazing question. And you're absolutely right. Uh, initially we were all chasing one, you know, standard of beauty. That's what the, because it was also the time of mass media. So whatever was portrayed as beautiful by those very few players with vested interests, And they paid everybody and I'm talking to the likes of PNGs, CPG world, right? Or the other bigger beauty brands. That was like, everybody was chasing that one idea. So, which is now, uh, so it has done two things. One is you're absolutely right. It has caused a lot of mental stress on. Women like just the just the pressure to look that one way and like you said, ready to do anything to look like that and not accepting yourself at all. And then social media came and people started seeing others who were fed up with all of this and they said, my mental health is more important. I'm happy the way I am. And slowly, you know, that started catching on. And if you see, I've not done, I don't have any data on this. Yeah. The 30 years back, the number of stars, or if you would, if you were to ask any kid, we're very limited people that we follow. Nowadays, you know, the, the, I, if even if I have a best friend, I might not know who he idolizes or she idolizes because there's so much democratization the leaders or influencers. So wellness has become extremely, extremely important, especially with coming together of social media too, because we are constantly bombarded by. Uh, you know, what is happening in other people's life. Ultimately, people have realized, you know what, my health, my calm, my mental wellness or my overall wellness is way more important. Then somebody else telling me to change the agenda they have set, uh, and especially in America, like I love how in America, in America, I think it's the only country on the planet where, you know, everybody has an agenda. I mean, forget about mass media now. Nobody, nobody likes to watch them, but it's an extremely agenda driven. Uh, you know, uh, if I can call economy, of course, capitalism drives it. Uh, what is anybody like people won't share an objective opinion. They won't give you pros and cons. Everybody's trying to prove their own harm in a marketing show to say, right. So in that time, that is, I think the only, if I do, there might be many more good points about social media. I personally feel wellness has been brought about by, you know, uh, the stress and the pressure and chasing that ideal of beauty, because we're talking in the context of beauty. By social media, I took it to a peak initially, and then everybody realized, no way, this is not done. And you know, my, my body, my rules or stuff like that, right? Like my beauty, I decide. So you're absolutely right. Now, I think everybody has realized that even though in America, which is, you know, the, it is a role model, and it's the best system that we have in the world right now, there's no better system. Nobody denies that. But people have realized that, you know, I'm not going to sacrifice, you know, my wellness for my success. So I think if success was the word of the 20th century for 21st, it's going to be wellness.

Vic: 32:03

Yeah. Interesting. So that really kind of maybe to stitch this together, that builds on where you were with really getting insights into the customer and their wants and desires and how that might fit with what your brand identity is going to be, because how we define beauty and wellness and my inner beauty and my true self Those are now more, there's more optionality. There's more choice for people. And I want you to sort of take that idea and then build on your sort of advocacy, the tribe for advocacy, uh, thing that I've seen in other podcasts where you really try to help entrepreneurs pull in advocates that are super fans or, or really a tribe. That's probably butchering the different phrases that you use, but how do you get your biggest supporters to then go tell the story and try to bring in others that might really find wellness, find beauty through these products.

Rohit Banota: 32:59

Perfect. Perfect. So it starts with how do you identify and work on the problem? Ultimately, it's the problem you're solving. So people who feel that problem most intensely, most frequently, Are willing to pay the most are your potential 6x profitable superfans. So because they will be so invested, so you can call it early adopters, you know, and you know, there are definitions that overlap, et cetera, but ultimately it comes down to somebody who the problem that you solve, he feels or she feels it's so intentional, intentionally so frequently. So the consumption is there, the touch point with your product and brand is very high and it is going to make a big difference in her life, right? So the impact of the problem in the consumer's life. And mathematically also you can translate that you should be able to translate that mathematically into a dollar figure. Those are the people that are your potential success profitable because they will talk about it. They will use it. Even if you offer them a little bit incentive here and there, they would love to meet with others who are, you know, who also suffer from the same problem very intensely. So you think about this. Somebody. is diagnosed with cancer. And suddenly you will see her coming on social media, talking about it, trying to raise awareness, participating with us earlier. She wouldn't have felt comfortable talking on, you know, to her relatives or passes by about how bad cancer is or donate to it. Right. So it's, those are the people who can become your six, six problems. Then you can add layers to it. You can brandify it, you know, you can, uh, slightly, you know, glamorize your tribe, et cetera. Uh, which will happen with your brand and in which ways, but that's the core. So you have to, and that is like identifying. Well, I

Vic: 34:44

was going to say, it seems like that might be the natural way to, to think about social media influencers. Like I love a product. And so I want to tell Marcus about it. I want to tell you about it. I'm not really doing it for the spiff for the for the fee I'm getting. It just has been really impactful for me. And I want to tell people that I care about that maybe is the most natural, most organic way to do influence. And then can you leverage that and sort of maybe you end up paying those people. But but it really is it starts with they're passionate about the product.

Rohit Banota: 35:16

Absolutely. And that is the biggest validation of your products, eventual purpose, like, is it solving the problem so well. You know, for somebody who feels it so badly that she's ready to buy you in bulk, consume you very frequently and also tell others, right? That's it shortens your entire testing cycle. Are

Marcus: 35:36

there, are there, um, are there trends around, uh, women athletes? You know, that that is sort of a scene that is sort of coming on so strong over the last five or so years. And this year, I think is really like having, having a really, really big moment here in the United States between Caitlin Clark. And then, you know, the Olympics, I think Olympics years are always sort of great years for women, uh, women in athletics, but then like, we're seeing something where, um, Alona Marr, who is, uh, she, she's like the star of the USA rugby team. And she's also great on social media. Like she. Her star rose and she has this maybe very non typical sort of, uh, beauty ideal woman body, but she is like she she's very, very attractive and super strong. She's got this, like, very, very, you know, strong. And, you know, the two big wins that have happened around her is one, she became the cover for sports illustrated swimsuit edition, but now she's on dancing with the stars. And it's like, I know I follow her because she's like really funny, but I noticed something really interesting in the comments. There'll be all these women who will be like, who will comment on her posts and they'll say, you know, it's all joking, but they'll be like, you know, please stop posting. I'm trying to stay straight with my husband. Right. You know what I mean? But it's, it's like women finding other women to be sort of, uh, an example of. of how they want to see beauty, how they want to see women from a perspective of beauty. And I'm seeing athletes becoming a more prominent part of that in, in, in jump. Do you have any companies that are overlapping beauty with athleticism?

Rohit Banota: 37:20

I do. And you're absolutely right. That is an upcoming category. There are quite a few in so in athletics plus beauty intersection. Now there are different categories that are evolving. Athleisure is also one of those categories like which goes beyond sports people. And, uh, you know, the, the best part about this is that, like I say, target segment identification is so easy. Accessibility of that segment is so easy. You know, where that leads will be. If you have to go and find them and do trials, right? It's so damn easy versus a housewife, which is aged and going through some mental issues. Like how do, how do you find that, you know, in terms of shortening your funnel. So you're absolutely right. You know, and the, the, it's also something that men have imposed on women, the standard, because men were controlling all those schools and colleges and universities and the sports organizations. You need to dress like this. You need to, if your nails like this, blah, blah, blah. But slowly women are coming out, you know, they're saying, no, you know, I would have my nails. I saw Simone Biles, you know, her nails. What a point of discussion throughout the home because everybody loved the way she did a nail paint. Right. Uh, and we've been wanting to express, they don't want to be told to do things, you know, certain way by men so that it's already repressed. Right. So it has. So this category is going to go up no matter what. That's cool.

Vic: 38:35

Excellent. So, um, maybe let's shift a little bit. You spend a lot of time talking about alternate funding sources. Of course, we, we manage venture funds, but there's lots of different funding sources that are maybe less well known. And so maybe let's just talk a minute about the different sources that you help your entrepreneurs with. Like, so for instance, I think like government funds, they're, they're angel investors. There's, um, I don't know, universities have different programs. So right now what

Rohit Banota: 39:03

dumpers, the fundraising platform I have has VCs and angel investors mainly, you know, from pre seed to early stage, uh, those founders who fund beauty and wellness brands, they might fund tech brands also, but we have them organized like ranked in the order of what is the beauty fund of fit. Okay. Depending on how many beauty brands they're funded in total in the last year, uh, you know, then how inclusive they're, et cetera, et cetera. And it's the only platform which on one page itself, you get the complete information about the investor, their mission, their vision, their criteria, their portfolio, their terms, the funding amount, and how do you approach them. So that's the basic. The other stuff I speak about funds, et cetera, we don't have them right now on Jumpbox, but we do plan to. Uh, and the reason I did the reason for that is like the reason that I recommend them is. Uh, that there's a purpose that every kind of investor, you know, uh, helps you with you. Everybody's saying, I need VCs. Why VCs only? What do you need the money for? You only need VCs when you want speed of growth. Uh, of course, you know, VCs like yourself would work with the founders. You will not blatantly chase, you know, speed of scale, but typically, you know, uh, angels versus VCs, you can classify them by amounts, et cetera, stage. And also network and you know, because you will have all those resources, you can help them grow faster than they otherwise would. And there are certain categories that fit that, you know, that need better than the others. The advantage of the other kinds of funds is that they won't come with all of that pressure. And plus there are many of them, right? And the criteria is not as rigorous. Because all they are trying to do, like government funds, they want to promote entrepreneurship as a whole. If they want to promote women entrepreneurship as a whole, they're not worried about getting that money back or 10x or 100x return within a certain finite, finite amount of time is what I meant. Because every founder who comes and meets me or speaks to me, like you'd be surprised every accelerator in US. I'm not talking about Y Combinators and all, even though I've had, I won't name, you know, quite a few founders who have been there, funded and are struggling big time. But usually if you meet any founder who has attended an accelerator program and say, come and talk to me. They only ask for money. All they are looking for is money, money, money, money, money, and that to VCs, VCs, VCs. So just to spread that, you know, the desire that they have and they have more options is why I say that, Hey, why don't you try that stuff too? Why that? But we don't have a database of government funds or university as of now.

Vic: 41:39

Yeah. So let's, let's talk about JumpPurse because I think, um, it's a, one, it's a really interesting, Database and two, it's a service that I haven't seen out there in any other domain, any other industry, you happen to focus on brute beauty, but it seems like an incredibly valuable. resource for your clients, but talk about how it came about. How did you think to put this together? How did you gather it all together? And then what, what is in there? How do you distinguish between the different investors?

Rohit Banota: 42:09

So make something that people want is how I started thinking about jumpers. Like if everybody's coming to me or sending me emails and asking, how can I get money? How can I get money? I thought, you know what, this is what people want. It has become an amazing lead. It starts my pipeline. I don't have to do any outreach, even content, et cetera. It fills my mind because that's what people want, right? They don't need this because they don't know how to create a pitch deck properly. They have not done, they have not thought through you know, their venture, et cetera. But at least I catch them young. So that was my whole objective. Yeah.

Vic: 42:50

You're taking your, you're taking your own advice. They can't use it, but that's what they want. So they, uh, going back to where we started. Yeah.

Rohit Banota: 42:58

I mean, it's not that they cannot use it. I tell them, use it as a fundraising for your fundraising journey. Uh, to develop, you know, to, uh, develop a list of probable investors that are fit with you instead of randomly shooting emails like this platform will save them 304 per month if they have to go to different sites and collect that information and not to mention, you know, hundreds of hours of time. So the only thing is it's a journey, like you see what is out there, what kind of brands they are funding, why they are funding, study them, right, their mission, their idea, you might not need 1 million. Maybe you would not see, maybe you would need half a million. So see who are the investors who do that, right? When do they invest or stuff like that. So be slightly prepared. Uh, and the second is the reason I said they might not need it because Then venture might not be funding ready. So one of the services that jumpers right now has plus we are also started. We are working with AI now to create, uh, I shouldn't say it, but you know, like that is, it's an insight. I will create FOMO amongst investors. By showing which are the brand pitches that are getting more likes from, you know, the investors are seeing what percentage of pitches they completed, where they requested an introduction, right? All of that stuff. So because I know investor investment also works on, it's like, it's like a proxy validation for somebody's pitch. Okay. If these 10 investors have seen it and they're showing interest, there must be something there, right? So I think the quality of the pitch or the quality of the pitch is not that great. And that can, that can become a template, not to pitch to investors, but to plan your venture success. So we have a pitch deck, one page deck template on jumpers. And now if you just read the headings, anyone can do that problem, solution, unique insight, blah, blah, blah. But the whole, every time somebody comes, like I'm working with a few dozen right now, when they enter that information, that is no way closer to a funding ready venture. So that template can be used with deliberation to improve their venture. Right. So for example, I asked for the numbers, their cap, their loyalty, et cetera, et cetera. And when those numbers, some of them don't even know how to calculate the loyalty percentage. Shopify will give you just the repurchase rate, average order value, right? So we do all those calculations, look at the trends and that gets them thinking that, Hey, I tell them if your loyalty is 15%, I can tell by How long the venture has been in the market and what is the revenue I can tell all the metrics without asking them, like, I would know what the loyalty would be, what the cat would be just because you've worked with so many brands, right? You get to, when we put all of those metrics, then I ask them, do you, you know, you need to be over 30 percent in loyalty, at least my friend. I give them examples, I quote, you know, what successful ventures that went to a hundred million dollars in three years, four years, five years, seven years. What was the loyalty percentage like? That might not be an absolute truth, but combining CAC, loyalty and advocacy, you can kind of frame the picture, right? So that is how they see their business first time, like, you know, whether it is investable or not, whether it is scalable or not, whether it's funding ready or not. That's the real advantage of jumpers along with the other stuff, if that makes sense.

Marcus: 46:11

In, in a lot of industries right now, m and a has, uh, been in winter. Um, it, it, it is getting better. You know, you talk to investment bankers, they'll tell you yes, deals are sort of happening again, which is great for all of us, but it's been kind of a rough two years, uh, in, in m and a landscape. I, I'm interested to hear in the beauty world, you know, uh, our, are acquisitions, uh, have they slowed at all? Are they, are they accelerating? What are, what are you seeing in terms of. You know, larger, uh, big established companies purchasing some of these more niche, uh, brands.

Rohit Banota: 46:41

Good question. So, yeah, uh, the first half was absolutely done. Now we've started to see, you know, the, I'm not recollecting, but Unilever just bought a brand. Uh, PNG bought PNG or Kimberly Clark bought another brand, a beauty brand. K18 was bought by Unilever for close to a billion dollars. That was in March or something. So now there are two things that have happened earlier. The corporate corporate did not have their corporate VCs. They did not have a corporate VC fund. Now, these PNGs, Unilevers, and the CPG, you know, L'Oreal of the world, they have started having their own VC funds. So, and the objective is, a lot of us mistake that it is to, you know, eventually bring the brand and distribute it across the globe. That is not the only thing. They are also looking at exits. So, plus they get so much knowledge and understanding, right? They're understanding the alternative channels that are, they've slowly realized that we cannot just be acquirers of brands that are, you know, like crossing a certain threshold. We should participate in that phase too. And we cannot do so just with our existing setup. So I'm pretty sure you must have heard of Clayton Christensen. He passed away. Of course. Yeah. Yeah. Thank you. Yes, he set up the first innovation factory in PNG, which was totally different from the rest of the operations, right? So that model now, uh, of course they didn't have the fund at that time, like PNG was funding, you know, on a need basis. Now it has become like a proper, they have all the big CPGs. They are, You know, they have funds and they started looking at, you know, acquiring a founder that much earlier stage is what I meant. Like Unilever can, you know, look at a brand that is doing 1 million, 2 million, 3 million, 5 million and say, because they are bringing it to their fund rather than to Unilever. You know what I mean?

Vic: 48:29

Okay. Excellent. Well, um, so maybe, uh, give a handoff to folks that are listening. Where, where can they find you? I know you have a podcast of your own. You of course have the jump accelerator. Where's the best place to locate you if people want to get involved?

Rohit Banota: 48:44

Sure. So they can go to my LinkedIn, uh, just my name, Rohit Banota or type jump accelerator, uh, or they can go to my site, jump accelerator. com on the site. They will find my podcast, my blog. Uh, now I'm rolling out, you know, courses, et cetera. And just to announce. We will start with portfolios now. Like we'll start having portfolio brands. We are not gonna invest money. So the, what is the biggest dis what distinguishes jump accelerator? The biggest, apart from the fact that we are fundraising platform, apart from the fact that my solutions are based on first principles, and they're a hundred percent doable for any founder with or without money. But the biggest, the, the biggest differentiator now is. We have around 50 solutions. Another problem startups have is they, they say, what is that one thing I need? They need everything, but of course they need to work in sequence or need a strategy. So what we, what I'm trying to do now is I'll have two tiers of portfolios. If somebody goes for, let's say portfolio tier one, they get one short term. They have to pay for one short term solution. That might be around 10 grants. They will get 40, 000 worth of other solutions free. Absolutely. Free. And we'll work with them for two to three years purely on commission basis, because I know after some time they start making incremental money with the work we are doing with them. Right? So it's a win win. Second tier is like the slightly elevated tier where they will go for one short term, one long term solution and all fundamental ones, no gimmicks, no shiny social media stuff, uh, for around about 20, 000 and they'll get everything. Like over 100, 000 worth of stuff that they would need because that is fundamental to their success. Right. Uh, and we will work with them for two to three years, absolutely without cost. I have not raised, we, we're not going to raise our fund, but we'll work with all the investors and through this filter, we'll bring brands. You know, for pitches to investors, like there will be one pitch day two for jumpers right now, it's going to be online to like, you, if anybody's like, well, and for investors, it is free. If anybody wants to be an investor, like a lot of people are, they will get every month one pager with like 10. You know, summaries of pitches, hey, and if you say interested, you just see that pitch. If you like it, great. If you don't, it's okay. Nobody gets to know. Like, it's like the middle man.

Vic: 50:58

Yeah. Excellent. Well, we'll put some of these links in the show notes so people can find you. And that's a really interesting point. I, I wanted to showcase Jump because I think you're really empowering women entrepreneurs. to build great new beauty products and companies and brands. And we see a lot of women entrepreneurs in health and wellness, just because they naturally are usually the decision maker in health care. And I love that you mean it. I think it's better that you don't have your own fund because it positions you to be able to really truly align with the entrepreneurs and empower them. And if you're deciding who to invest in and who not to, It's hard to be sort of helping everyone. But that's a great point too, because we have a lot of, uh, in our audience, there's a decent number of investors. And so the investors, can they see on your website too, like how they might sign up to see deal flow?

Rohit Banota: 51:48

Yeah, I'm going to set it up pretty soon where investors can sign up right now. It's like we approach them or sometimes we build their page and then we send them the logging password. I thought that was better. It's better to build and then ask for permission rather than do it the other way around. Yeah, yeah, yeah. It was way faster. None of them don't mind, right? Who minds if their information is showcased and they can get to see a few pitches. So that's why I just want to add something to your point about women empowerment. So the solution, that's why we are giving this 70%, 80 percent and this commitment to work, but not for everybody. Like they will go through our process. Uh, as you know, that the founder has to be a fit, you know, the biggest block is like, if somebody tells me, Oh, I, I don't have time for this. I cannot work hard. I don't like going on social media. This is not tight. You know, I'm not that kind of person, you know, Uh, and everybody has treated me till date. I know that, you know, I don't think we'll get along very well. So it's also really, really for these solutions, really choose women, uh, and some of solutions are like short term enemy, like 10 X, 10 X, uh, uh, results. So for example, in healthcare, if somebody has medical devices, as an example, right? Or even if it's a beauty brand, uh, they will get the entire money back on the day of the launch that has been, like, if they want to approach a professional channel, they will Uh, the professional services are done every brand that we have partnered with on the day of the launch, they get entire money that they pay us. And like the other way is more than 10 X in the first few months itself. So, and that brings them profit and cash. So the way we structure our solutions is how do you go to market? So you build your cash and profits, which you can use. You invest and take the right steps to succeed for your brand, solving the problem only you are solving versus what everybody else or people with a lot of money are doing. Yeah. So I just wanted to add that. Yeah. Yeah. I

Vic: 53:43

think that's great that it really teaches the founders, entrepreneurs to build their own product, build their own brand. And, and then if there, if an exit comes along. Maybe that can give them more exposure, get the brand. But also they're building, they're building their revenue. They're building their earnings. They're building their cash. Independent of the exit markets.

Rohit Banota: 54:03

Absolutely. Absolutely. Like I, on my podcast, I don't know if you know, there was a brand called male in strong skin. You should check that brand out in LA. What a woman, like I have not seen a founder in my life. She tells me, I need a marketing person. I don't know marketing. And I told her I've not seen a better marketer than you to might not know that. Absolute genius. Three hour episode we did together. We spoke for five hours. We had discussed before and the way she tells stories, Oh my God. And I worked with her and like, how are we going to do the podcast? The podcast ended. I, you know, I edited everything. I sent it, she emailed it. She got a phone call from the kind of investor that she wanted. She was an eight figure brand. She never took money. And the brand is such that other people talk about growth marketing. She cannot send an email. She has to check with an inventor before sending an email. Such an amazing, amazing, what a genius woman. She got funded the way she wanted to get funded. So I use my podcast also towards that medium to help her out because it's the storytelling that matters, right?

Vic: 55:08

Oh, yeah, definitely. Well, thanks for doing this. Really enjoyed it. And I'm sure we'll continue to talk and maybe do some deals together at the intersection of beauty, health, and wellness.

Rohit Banota: 55:18

Of course. Thank you so much for having me. A pleasure. Thanks, Vic. And thanks, Marcus. Take care.

Marcus: 55:23

A pleasure. Thank you. Rohit.