Jessica Alba Reflects as Honest Company Hits $1 Billion: ‘My Needs Weren’t …

29 May 2015 | Author: | No comments yet »

Alba’s billion dollar company.

The 34-year-old actress turned businesswoman co-founded The Honest Company in 2012 and in a short span it has gained a valuation of $1 billion with the actress holding a 15 to 20 percent stake. With a billion-dollar company on her resume and a $200 million fortune to her name, Jessica Alba has landed on Forbes’ list of America’s Richest Self-Made Women.The 34-year-old actress-and-entrepreneur and her partner Chris Gavigan founded the venture in 2012 with the intention of providing toxin-free household goods and baby products. Jessica was just $50 million shy of cracking the magazine’s Top 50 list with Beyonce and Judge Judy tied at the 49th spot with estimated fortunes of $250 million. Jessica is the cover girl on the latest issue of Forbes magazine and her face is accompanied by a headline which dubs her as ‘America’s Richest Self-Made Woman’.

About 20 years after made her debut as a teen actress, the Sin City star is now a hugely successful businesswoman with a cover and a rapidly expanding company. Jessica was by no means resting on her laurels and was in Seoul, South Korea on Thursday to mark her company’s expansion of her products to the country. The company has skyrocketed from $10 million in revenue in 2012 to a predicted $250 million for 2015, and expanded their product line to include bath and body, vitamins, bags and more. “If we really want to make a difference in the world and people’s health, it’s billions and billions of dollars, not just one,” Alba, who owns between 15 and 20 percent of the company, told Forbes.

According to the publication, Jessica’s personal net worth is $200 million, which means she has amassed a greater fortune than her entertainer peers Rihanna, Katy Perry and Jennifer Lawrence. The detergent incident prompted Jessica to search out more natural and eco-friendly products and she even tried making her own cleaning products out of baking soda, vinegar and essential oils. ‘I felt like my needs weren’t being met as a modern person.

She discussed the obstacles she faced when she first ventured into the business realm, revealing that some people looked at her “cross-eyed.” “[People] usually thought of someone in my position as more of a spokesperson, someone that would sell beauty products,” she said. “Most of my advisors in entertainment thought I should do a perfume or something like that.” The health-focused company started with a focus on baby products and diapers that are produced with limited harmful chemicals, and are “unquestionably safe, eco-friendly, beautiful, convenient, and affordable.” Alba recalled her inspiration for the company in her Forbes interview, citing an allergic reaction she had to a baby detergent she used. Alba can go similarly deep on almost all of The Honest Company’s 120 products, whether the ingredients in a new organic beeswax sunscreen or the clever insulation pocket hidden inside a chic $170 vegan-leather diaper bag.

I kind of want them to be cute, and the natural diapers: Why do they have to look like your baby’s wearing a brown bag?” Alba, who shares her little girls with husband Cash Warren, was celebrated by her famous friends for her success. Alba laughs about how she once worked an 86-hour week as the star of James Cameron’s sci-fi TV series, Dark Angel — the series that launched her career.

Now, she says, she spends those 86 hours at a vintage teal blue desk, overseeing marketing and brand development for a company that feeds a growing demand for safe, nontoxic products, particularly among young helicopter parents who treat children — and what goes near or inside them — like porcelain. At a baby shower thrown by family and friends, she remembers her mother advising her to use baby detergent to prewash the piles of onesies she’d received as gifts. Raised on Air Force bases in such places as Biloxi, Miss. and Del Rio, Tex., Jessica’s bad allergies and chronic asthma made her predisposed to pneumonia, which she contracted about twice a year, often leading to two-week hospital stints. Now covered in hives again — and wary of having her baby relive her own experience — Alba spent late nights on Google and Wikipedia researching the contents not just of the offending detergent but also of everything in her bathroom cabinet and under her kitchen sink. “I was like, ‘How can this be safe for babies if I’m having this type of reaction?’” she says. So when she came across Christopher Gavigan, who for seven years led a nonprofit called Healthy Child Healthy World, she, like most new mothers, asked him what to buy. “They don’t want to be that investigatory weekend toxicologist,” says Gavigan. “They just want someone to hold their hand.” He explained that several companies with “green” credentials like Vermont-based Seventh Generation were doing good work across some product categories, but there was no one umbrella brand positioning itself as the go-to for all things eco-friendly, safe and nontoxic.

Pretty soon Alba and Gavigan were polishing off wine on nights and weekends, cooking up a business plan and buying up Web domain names with the word “honest” in them. Through her husband, she met Web entrepreneur Brian Lee, a trained attorney who had hit it big with LegalZoom.com, an online legal-documentation service he cofounded with Robert Shapiro of O.J.

Simpson infamy. “I made some introductions for her and said good luck,” says Lee, who looked at Alba’s 50-page PowerPoint in 2009 but didn’t bite. Meanwhile, Alba was busy with her Hollywood career, starring in the likes of Valentine’s Day, Little Fockers and Machete, all of which premiered in 2010. She was — and is — particularly focused on reforming the 1976 Toxic Substances Control Act, which has allowed more than 80,000 chemicals to remain in household products untested. Only five are regulated by the Environmental Protection Agency; just 11 are banned from consumer goods. (In Europe that figure is more than 1,300.) “Enough people have to get sick or die from a certain ingredient or chemical before it’s pulled from the marketplace,” says Alba. She jumped into it headfirst.” She went back to Brian Lee in 2011 armed with data on the rise of childhood diseases and a much more concise ten-page pitch deck.

Lee’s mind had changed — not coincidentally, he had recently become horrified when his young son was banned from bringing that classic, all-American lunch the PB&J sandwich to nursery school. Too many kids had severe nut allergies. “Autism, Tourette’s, chronic allergies and asthmas and celiac disease — all of this stuff is on the rise,” Lee says. “I almost had this moment of awakening. There’s one with a purple-and-green leopard print; there are juicy pink strawberries and a stars-and-stripes print perfect for baby’s first Fourth of July. Creating safe, chemical-free, nontoxic consumer goods from scratch without the infrastructure of, say, a Procter & Gamble or a Kimberly-Clark was a prospect that would cost way more than even the $6 million seed fund.

So they went looking to get venture capital into the diaper business. “That’s the only thing we pitched,” says Lee. “It was very strategic as we knew that was the way into your home.” Lee was a known quantity among the venture capital firms of Palo Alto. He also liked the subscription aspect of the business: It took much of the pain — and expense — out of acquiring new customers. “Assuming they like it, the big Super Bowl ads and stuff become less important,” he says. Stock in these mom-and-pop shops sold out so quickly that when Costco came calling in 2013 wanting to sell baby shampoo in family-size packs, the Honest team relented. Such a move provides a war chest, though that doesn’t seem to be an issue at present. “The company’s outperforming,” says General Catalyst’s Neil Sequeira. “They have pretty much unlimited access to capital and a very strong balance sheet.” Liquidity, then, would seem to be the key driver.

With a big payday in the offing, Alba remains an active presence, much to the delight of her venture capital backers, who had built-in celebrity endorsement from a cofounder. “I think they realized they got a lot of bang for their buck,” Lee says. In 2016 she’ll appear in a sequel to crime-caper mainstay Jason Statham’s The Mechanic. “It took ten days in November and ten days in January, and I got to be in a fun action movie,” she smiles.

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