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A conversation with the co-founders of (Malin+Goetz).

Question: What is your advice for aspiring entrepreneurs? 

Matthewrn Malin: [NYU's Stern School of Business] had approached us to use rnour business model as a thesis for one of their semesters and I had rnworked with them sort of on a weekly basis talking about our business rnand it was really interesting because we have a very, sort of, rnnon-traditional business model in terms of how we’ve gone after businessrn from a niche perspective. And as an entrepreneur, you know, we didn’t rnset out in, I think, a manner from which many entrepreneurs do. It rnwasn’t this "Okay, well, we’re going to start a business and here it is rnand we know we’re going to do this." It really just was a very simple rnextension of things we already were doing and we knew and we loved and rnit felt good because… 

Andrew Goetz: And that we were veryrn passionate about and I think that was definitely … You have to really rnbe willing to roll up your sleeves and you become a jack-of-all-trades, rnso to speak. And in many ways that is a great education because even as rnyour business grows and you start delineating responsibility to other rnthings, you know how to do every single job in an organization. 

Matthewrn Malin: But even in talking to MBA students, there is this sort of, rnwell, "When is there a time when you don’t need to get an MBA because rnyou have so much experience in your business that it doesn’t really rnmatter? It’s not going to take you to the next level." I think that the rntime for starting this business was then, like we didn’t need to have inrn my opinion for what we were doing. We didn’t necessarily feel we neededrn to have the MBA to get us to be here. It was just really sort of rnnatural at that point, so experience for me... one of the things that I rnalways talk about is having that level of experience on so many rndifferent directions was really what I think helped us be to get to rnwhere we are today. 

Andrew Goetz: And you have to be rntenacious. There is no question about it. 

Question: rnHow is your business model untraditional? 

Andrew Goetz: Well,rn first of all we’re partners in life. I mean although I guess that’s notrn totally untraditional. No, I mean families and couples have done that rntogether. 

Matthew Malin: But I mean more specifically thern model itself, like having written a business plan, which we had had rnsome dear friends who had started quite a successful business in rnAustralia... I used their business model, their business plan to write arn business plan, which took me probably about six months after I had leftrn Prada and then another year in development from start to finish when wern launched. And the business itself is sort of a nontraditional aspect ofrn how to go after business and what we’ve done is we had setup sort of rnthis idea of a freestanding store sort of being everything for us. It rnwas the store. It was the showroom. It was our opportunity to create rnsales. It was our distribution center, everything to the brand, so we rnwere sort of sitting in the store waiting on customers, packing boxes rnthat were being shipped to London. It was everything, all encompassing, rnand it sort of grew organically from there. We didn’t take investors. Wern are self-funded. We have grown only organically. The business has been rnprofitable since its first year and it has been operational since its rnfirst day, so while we put in an initial capital investment to the rncompany, we haven’t invested any more of our own money since then. We’vern only allowed it to grow naturally in its own direction. 

Andrewrn Goetz: Yeah, I think that’s actually the thing that is the most rnuntraditional is that we haven’t had a very slick marketing world, that rneverything has grown organically and that we don’t actually go after rnbusiness in a traditional way. As a matter of fact we have never rnsolicited any of our accounts, so everything has sort of come to us and Irn think that’s unique. 

Matthew Malin: But it’s left us rnvery exclusive and having had these backgrounds where we were taking rnexperience we had... I had many beauty editors who knew who I was and rnwhat I was doing and Andrew had design editors and so we already had rnsort of a built in platform with those. I had had experience doing rnretail distribution, so there were a certain number of retailers who rnalready knew me and would talk to us about our brand, so in all respectsrn we had sort of set the stage in sort of a nontraditional manner with rnbasically no money. 

Question: What’s the story behind rn(Malin+Goetz)? 

Andrew Goetz: I was the ultimate rnminimalist. I washed my face, body, hair and shaved with a bar of rnNeutrogena. You know, a very clean rectangle square. 

Matthew rnMalin: Yes, and I was a beauty buyer for Barney’s when it was a rnfamily-owned and -operated business, so I had thousands of things rnavailable to me that I couldn’t use and I’d bring them home. We knew rneach other maybe for two years at this point and eventually Andrew rnstarted to see that something more than just a bar of Neutrogena soap rnmade a difference. And sometimes—when he would sort of vet the various rndifferent items—I would be able then to try something as it was my job rnto evaluate in the first place that might in fact be appropriate for my rnparticular skin type.  

Andrew Goetz: I think what I rnlearned is, or my evolution was that it doesn’t necessarily have to be rnmore expensive, but there are definitely differences in quality and you rnuse a better product, you have better results. But I also found from rnjust a design perspective it was baroque out there. There were so many rnsteps. It was very intimidating and I’m a firm believer of less is more,rn not only in architecture and design, but also in your whole lifestyle rnthat you don’t need to do 150 different things just to get out the door.rn The fact of the matter is we live in New York and our customers live inrn urban centers. They don’t have time for ritualistic ten step programs, rnwhich aren’t even efficacious anyway. 

Matthew Malin: But rnmost interestingly Andrew is quite oily and his skin is fairly rnresilient. Mine is dry and quite sensitive. I had suffered from several rndifferent existing conditions and what we found through the years was rnthat in fact there were only a few things that were really effective forrn both of us and it wasn’t a complicated understanding of these expansivern ideas of skincare. It was really a great cleanser and a great rnmoisturizer. And when you started to then look at Neutrogena as a rncompany and you start to look at three-step Clinique and these very rnsimple ideas; if you can create sort of the best cleanser and the best rnmoisturizer, you’ve really established the core of what you need. 

Andrewrn Goetz: Yeah, you don’t need a tertiary product if you already have rnthe best. 

Matthew Malin: Yes, so those were the real rnvoids that we saw in the marketplace and I think that we’ve hit home in rnmost of them. 

Andrew Goetz: Yeah and also there was a rnvoid... There were very few unisex brands, you know most people, so it rnwas an amazing opportunity to literally add 50 percent to your market byrn being unisex and the fact of the matter is whether you’re a man or rnwoman or whatever your ethnicity is, we’re all basically biologically rnthe same. So this whole idea of marketing that you’re from here, you’re rnfrom there and you’re masculine, you’re feminine... is sort of rnmarketing. 

Matthew Malin: It really came down to the idearn of how a modern couple could shop for and use products together. rnSomebody with oily, resilient skin, somebody with dry, sensitive skin rnand it didn’t matter what your sex was or your race or et cetera, et rncetera, that you could share these products and that they would be rnreally effective and really great. 

Andrew Goetz: And evenrn your skin type, whether the pendulum skews one way or the other, most rnpeople are somewhere in between and have a combination of different skinrn conditions on their face, which can change with hormones, with age, rnwith weather, with seasons. It’s always a moving target, so... and we rntry to address all those things in a way that other companies haven’t rndone. 

Question: Did you notice a big difference after rnyou stopped using the Neutrogena bar? 

Andrew Goetz: rnYeah. I did as a matter of fact. 

Matthew Malin: Doesn’t rnhe look great? He is like 80 years old. 

Andrew Goetz: rnAlmost, but not quite. Thank you very much. Sometimes I feel like I’m rn80, but yeah, no, you do notice it and you feel better. 

Question:rn What’s the secret to a successful brand? 

Matthew Malin:rn I think that there is a lot of passion behind the brand in terms of howrn it connects with the consumer. That it’s real. It’s not just another rncorporation creating a brand for the sake of marketing. We really tried rnto do something that was special and unique and fill a void in the rnmarketplace and to do something from a family-owned and -operated rnapproach, something that was local and interesting and specific to our rncustomer base. 

Andrew Goetz: And I think also what makes rnthe brand so strong is that we really put so much energy into creating rnreally superior or great products. And people, when they experience somern that efficacious, they come back and they tell other people. So while rnwe’re not advertising and having great marketing campaigns, we have thisrn great guerilla or word-of-mouth campaign because people use everything rnand they love it so much and we’re also really true to the brand. We rndon’t develop things because the season is saying this is in vogue now rnor this is in vogue tomorrow. We develop products that we really believern the market needs or that we would actually use. I mean, most of the rnproducts were developed around our own lifestyle to a certain extent. 

Matthewrn Malin: I was going to say the same. I was going to say the same. rnThat we in fact, in terms of filling voids, part of it was addressing rnour own specific lifestyle in terms of those particular voids, so most rnof the products and the brand itself really speaks to how we live our rnlives every single day. And those experiences from Andrew’s design rnbackground and those experiences from my beauty background, and how we rncould create something really wonderful and unique and fill these sort rnof marketplace voids that made a difference in a way that we would use rnthem ourselves because we needed or we wanted them. 

Question:rn How has beauty technology changed since you went into business? 

Andrewrn Goetz: Like everything else, technology keeps on rolling on. rnSometimes there are benefits to new technology and sometimes there are rnthings that don’t work out so well. So for instance what we try to do isrn we always try to take the best of Mother Nature and combine it with thern best of technology. We find that union works really, really well and wern try to stay away from anything experimental or unproven and go back to rnbasics. Technology also is unfortunately faddish in the same way that rnsometimes we see this with food: no fat, low fat, high carbs, high rnprotein. You know it’s "What are you supposed to eat?" and people tend rnto jump on a bandwagon that is generated by the press, so one day an rningredient, whether it could be a very efficacious good ingredient, but rnif it’s fallen out of favor out it goes and then the technology has to rnchange to compensate for that. But on the other hand you know technologyrn does bring advances. You know there are advances in anti-aging and sun rnprotection, so things that are very legitimate, but the knife cuts both rnways, I guess. 

Matthew Malin: Yeah, I can’t think of any rnreal specific technologies, like dramatically different technologies rnthat have come into play, maybe sunscreen since we’ve started our rnbusiness. 

Andrew Goetz: Yeah, I mean the biggest thing rnwould be oil-free moisturizing, which would probably have been in the rnlast 20 years or something. 

Matthew Malin: Well I think rnthere would be more fads like what you’re saying. Organic had become a rnreal big thing over the past few years and it’s sort of died down a lot rnlately. That was never a bandwagon we jumped on and as Andrew was rnsaying, we utilize gentle technologies that are tried, true and trusted rnalong with those natural ingredients, similarly tried, true and trusted rnin the most gentle, efficacious manner, so that you’re never finding rnirritation and hopefully getting the very best performance. So we’re notrn necessarily looking for what the newest technology is. If we can rnincorporate something that is trustful into the brand, it’s better. 

Andrewrn Goetz: We don’t need to reinvent the wheel every single season and rnthen again we’re not against organic ingredients and the problem is thatrn they’ve been so misrepresented to the customer saying "This is rnorganic," But you look and then you read the ingredients and it’s one rningredient, which is .02 percent of the product and then the customer rnfinally figures this out and is disappointed and then they have to ship rnthis organic ingredient halfway from around the world, so the carbon rnfootprint that it produces is so bad for the planet, so… 

Matthewrn Malin: And was it really organic? Was it grown indoors? Was there rnacid rain? 

Andrew Goetz: Right, so organic isn’t rnnecessarily better always. I mean what we try to do is always … 

Matthewrn Malin: Or possible in many cases. 

Andrew Goetz: … rnlocally and use natural when we can and organic if it’s available, but rnwe don’t use that as the litmus test because there are many more rnimportant things that go into the full formula.

Question: What’s the rnbiggest mistake you’ve made so far? 

Andrew Goetz: We rnhired somebody to help us with the business that was just. You know whenrn you say you should listen to your instincts? We were feeling like we rnwere, I don’t want to say overwhelmed, but we needed a consultant for rnsomething and knew we needed a consultant, but we weren’t really sure rnhow to address it. And somebody had recommended somebody and we both rnfelt... you know there was something off and then it turned out to be very,rn very off. I’ll look at it that it was a learning experience and it rncould have been a lot worse and you know we caught it at the beginning rnand now it’s almost done, but… 

Matthew Malin: It’s the rnnewest mistake. I guess maybe it is the biggest. 

Andrew Goetz:rn I think it was the worst mistake. 

Matthew Malin: I rnguess, maybe. 

Andrew Goetz: Yeah, because he was toxic. Irn mean that was the worst. It was just someone who lied and cheated and... rnit happens. I mean, it’s human nature and … 

Matthew Malin:rn We’ve made a lot of mistakes, but nothing big or bad. 

Andrewrn Goetz: Yeah, I mean we usually catch them. The good news is when rnyou’re relatively small all your mistakes are relatively small as well, rnand when you’re big they can be colossal. And so as a young, very supple rncompany we can recover from them. But everyone makes mistakes. I think rnthe real question is do you make the same mistake twice?  

Question:rn What’s the secret to hiring? 

Andrew Goetz: I think rnyour gut is important. 

Matthew Malin: No, I don’t think rnso. 

Andrew Goetz: I think we probably should have done rnmore due diligence. I think it was just we were the business was moving rnvery, very fast and frantically. We know we needed somebody and we were rnlike all right, "Let’s just do it."

Matthew Malin: We’ve rnhad hires that have been sort of gut responses, which have been great rnand others that have not. And we’ve had other hires that weren’t rnnecessarily a gut response, but they were hired nonetheless and again, rnterrific ones; where we weren’t necessarily it wasn’t the first choice. 

Andrewrn Goetz: The lesson is after two, three weeks we probably should havern reacted more quickly than we actually did. 

Matthew Malin:rn For a company of our size the thing that I think is most crucial in rnterms of what we do is hiring somebody that culturally is a good fit andrn if they’re smart and they fill the position in a manner for which they rnhave experience or we feel is appropriate, et cetera, et cetera. Having rnthe cultural fit and the passion for the business is probably the rnbiggest hurdle because we’re only 20 people of which 10 of those are rnworking sort of right out of our office in New York City. I think that’srn the most crucial aspect of where we are for this size today. 
Recordedrn on March 19, 2010