GARY: Next on Start Up, we head to Miami, Florida, to meet up with Alex and Silvana, the founders of QRxLabs, a cosmetics company on a mission to revolutionize skincare.

All of this and more is next on Start Up.

ANNOUNCER: The first time you made a sale online with GoDaddy was also the first time you heard of a town named Dinosaur, Colorado.

MAN: We just got an order from Dinosaur, Colorado.

ANNOUNCER: Build a website to help reach more customers.

WOMAN: Wait, wait, wait, wait, wait, one more.

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AMANDA: I call myself, like a feel-good beauty company.

After 20 years, I'm still doing this because I love what I do.

ANNOUNCER: More than 60% of sales in Amazon's store come from independent sellers like Amanda at Mojo Spa.

Amazon, a proud supporter of Start Up.

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The FSU Jim Moran College of Entrepreneurship offers bachelor's and master's programs taught by entrepreneurs willing to share their knowledge and connections.

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♪ GARY: My name is Gary Bredow.

I'm a documentary filmmaker and an entrepreneur.

As the country continues to recover from extraordinary challenges, small business owners are showing us why they are the backbone of the American economy.

We've set out for our 11th consecutive season, talking with a wide range of diverse business owners to better understand how they've learned to adapt, innovate, and even completely reinvent themselves.

♪ This is Start Up.

♪ The US skincare industry is a thriving market with a wide range of products catering to different skin types and concerns.

The industry is expected to continue to grow due to an increasing awareness of the importance of skincare and growing trends towards using natural and organic products.

The industry's highly competitive, with many established brands and new entrants vying for market share.

Some of the more popular skincare products in the US include moisturizers, cleansers, serums and sunscreens.

The industry is also witnessing a shift toward personalized skincare solutions with use of technology and data analytics to create customized products for individual consumers.

Today we're traveling to Miami, Florida to meet up with Alex and Silvana, the founders of QRxLabs, the cosmetics company on a mission to revolutionize skincare.

From what I know, Alex and Silvana started researching the industry in 2016, and after learning about hundreds of products, they decided to create their own skincare company that could bridge the gap between pure natural, organic and big corporate skincare.

I don't know much about cosmetics or the skincare industry, but I'm incredibly excited to learn more about their story and the fascinating business that they've created.

Take me back to the origination.

ALEX: My partner Silvana, who used to be my wife, who used to be married actually.

So we're now divorced, but we started that business really with her working from home and selling items over the internet, you know, on eBay, originally.

Purchasing, you know, items wholesale, reselling them online and having a small business.

And that business eventually with the right products at the right time, just kind of took off to the point where... GARY: Mm-hmm.

ALEX: We had to rent a warehouse.

You know, we had to hire an employee.

GARY: Oh my gosh.

ALEX: Yeah, so it started becoming a real business, right?

It wasn't really just a small home business anymore.

GARY: Yeah.

ALEX: It started turning into a real physical, you know, business with a warehouse.

GARY: What were some of the products that you were selling with your store?

SILVANA: Well, actually we were selling corsets.

GARY: Corsets?

SILVANA: Yes.

Corsets.

GARY: Interesting.

SILVANA: Waist cinchers.

GARY: Yeah.

SILVANA: Yeah, that was a product.

For some reason at that moment was- it became really hot.

So we were one of the biggest eBay sellers at the moment for the waist cinchers.

GARY: It's fascinating that you just sort of stumbled upon this and did it.

Were you shocked and surprised as it kept growing and growing and, and selling so fast?

SILVANA: When he said "Warehouse," I was like, "Oh my God.

A warehouse?

Are you serious?"

GARY: Excited?

SILVANA: Yes.

GARY: Yeah.

SILVANA: Yes, because I couldn't believe it.

I couldn't believe we were growing like that.

ALEX: The success of the products that were being sold kind of peaked, right, and I said, okay, we need to decide.

Either we liquidate everything we have, right?

We had a lot of merchandise at that point.

Or we need to come up with a new concept, come up... GARY: Sure.

ALEX: With something else.

Transform.

GARY: You're just hitting a ceiling, like.

ALEX: Yeah, just hitting a ceiling.

And I thought we need to transform the company.

And we had learned some lessons over these initial like three years.

Very difficult to be a reseller of a product where you don't control the source of your product.

You don't control who it's sold to.

And so, like you're being a middleman today is difficult.

Understanding that and realizing that, we thought it would be great to have our own brand and to control our destiny, GARY: Sure.

ALEX: To control our products and our pricing and everything.

And so started, you know, doing a lot of brainstorming around that... and I thought the beauty... GARY: Mm-hmm.

ALEX: Vertical was really interesting.

Smaller form products, high margins, easy to ship, no sizing issues, low returns in general.

A lot of- a lot of advantages, you know selling beauty products online.

And so we decided to go in that direction.

Within the beauty category, we chose skin care because skin care is very interesting where you can build a product that's gonna work, and if a product works, GARY: Mm-hmm.

ALEX: It can last for decades.

GARY: Yeah.

ALEX: And you see today in the drugstore, you see brands that existed 30, 40 years ago.

They've never even changed the packaging.

And they still sell, right?

GARY: Yep.

100%.

ALEX: So a great segment to build a brand.

GARY: Cosmetics in general, it's a very crowded space.

Correct?

What are some of the key things that you would say separate your brand, your products, from everything else that's out there?

ALEX: It's a space where there's thousands of brands.

There's new brands literally every day that pop up.

So it's a very, very... GARY: Right.

ALEX: Competitive segment to be in.

And when we entered that market, we looked at what was out there and what we realized is that it was a very, very polarized market.

So either you had a bunch of companies that were on the 100% natural, organic, green side, right?

GARY: Yep.

Mm-hmm.

ALEX: Or you had the more larger classic, you know, laboratories, the L'Oréals and Neutrogena and all that.

GARY: Yep.

ALEX: All very scientific, you know, very chemical, right?

You look at the ingredient list and you almost can't pronounce any of the ingredients in the product and you know, you're not sure what they are.

And so we looked at it as outsiders and thought, why?

Like, why having that kind of polarization, why not take like all these great natural products, you know, add some of the active ingredients sometimes that are, you know, synthetic and that come from science.

GARY: Mm-hmm.

ALEX: And create a product that's mostly natural and that's still like, very effective, right?

Everybody wants something natural, but at the same time, everybody who's spending their hard-earned money on skincare products, they want to have the benefits.

They want to have the results, right?

GARY: Yeah.

ALEX: So like we thought, why not try to create something that's in the middle right?

And bring these two worlds together.

We were not industry insiders.

GARY: Yeah.

ALEX: Of the beauty industry.

GARY: Mm-hmm.

ALEX: We didn't know how to make products yet, right.

And so we looked for third party labs to produce, you know, products in large quantities, in bulk quantities.

And we focused on packaging, labeling, branding, products and building a brand from scratch basically.

And in the first year, I mean, I had a number of people who told me, you know, this is crazy.

Don't go into beauty industry, it's over competitive.

GARY: Yeah, crowded.

ALEX: You need millions of dollars to advertise.

It's almost impossible.

GARY: Yeah.

ALEX: We kind of ignored that, you know?

I don't know if that was being aggressive or being naive or you know, or being visionaries.

GARY: Naivety helps a lot in the beginning.

ALEX: Yes, yes it does indeed.

And so we moved forward.

GARY: Yeah.

ALEX: We move forward carefully, launched one product originally, a serum that we still sell today that's still successful today.

Launched that product and started learning, right?

Learning about the industry, learning how to position these products, learning about how to sell these products, and then started building the product line, you know?

GARY: Yeah.

ALEX: To the point today where we have over 35 products and continue to launch new products.

GARY: Talk about when you first started selling the product.

Like how did it go?

What were you doing?

SILVANA: It was difficult.

I remember I was scared also of... GARY: You're like, "Oh no, did we do the right decision?"

SILVANA: Yeah.

Because you see, you go to the website and then you see the clicks and all this information and you see maybe one click, two clicks, but nobody buys.

GARY: Oh, no.

SILVANA: And then you have to pay the marketing.

GARY: Yeah.

SILVANA: And then you are spending more in marketing than whatever you're selling.

Yeah, it's at the very, very beginning, it scares.

Yeah.

GARY: Expense, expense, expense and no revenue.

SILVANA: Yes.

Correct, correct.

GARY: How long did that go for?

SILVANA: Couple of months, but then slowly start going up, GARY: Up and up and up.

SILVANA: Because the product was good.

GARY: Yeah.

SILVANA: So people start buying and with something is good, people keep buying.

ALEX: Once we were able to launch another couple of product, increase the advertising, improve, you know, some of our listings and all that... GARY: Yeah.

ALEX: We started seeing the traction, we started seeing the sales, you know, just pick up and grow month to month.

GARY: Something you just said I think is incredibly important.

It's not to go all in with a big product like at first.

ALEX: Yes.

GARY: Learn about the industry, learn about the market.

ALEX: There's a methodology in terms of startups, you know, that's called "Fail Fast."

We try to apply that even today still, right?

GARY: Mm-hmm.

ALEX: We launch products fast.

GARY: Doesn't work?

Pull it.

ALEX: We don't wanna work yeah, designing a product for three years to then find out that nobody wants that product, right?

GARY: Yeah.

ALEX: So I'd rather launch a product very quickly and find out like if people want it.

If it's gonna be successful, I can still invest more time and more effort in improving the products or evolving the products or deriving other products from that product, right?

But I wanna know fast whether my product is gonna be successful, whether it's gonna be accepted by the market, whether it's gonna have the demand.

GARY: Yeah.

Very smart.

ALEX: So, that's what we'll do.

♪ ♪ GARY: There's a lot of couples, you know, that have a hard time, you know, being married, working together... SILVANA: Yes.

GARY: Let alone being divorced... SILVANA: Yes.

GARY: 'Cause you guys are divorced, correct?

SILVANA: Yes.

GARY: So does that get weird at all?

Or is it good?

SILVANA: No, no, no.

GARY: Talk to me about that.

I think a lot of people will be interested in this subject.

SILVANA: If it didn't work in the personal level, doesn't mean that it's not gonna work in the professional level.

GARY: Sure.

SILVANA: So it is working for us.

We've been in the company together for the last 10 years.

GARY: Mm-hmm.

SILVANA: We've been divorced for maybe eight years.

GARY: Oh.

Okay, so it's a long time, yeah.

SILVANA: It's been such a long time.

And yeah, we have a great relationship.

We co-parent the two boys greatly.

GARY: Awesome.

SILVANA: It's perfect.

So I wish everybody's like this because I know some stories, some people have big issues.

GARY: Yeah.

SILVANA: But for us, it's been amazing.

Yeah, we have a really great, good relationship.

ALEX: The business we're doing well, we didn't have any problems, you know, running the business together.

Our functions are well defined, you know, within the business.

GARY: Yeah.

ALEX: She's really focused on operations.

I'm really focused on the strategy, sales, finance, you know, part of the business.

And so, yeah.

So, we continued on that path and it worked out, right?

'Cause we're here today, you know, years later GARY: Yeah.

ALEX: And still, you know, operating this business and this brand together.

GARY: What was your mentality and your emotional approach?

ALEX: No, I mean, I think keeping everything that had to do with the company and the business, you know, completely separate.

GARY: Separate, yeah.

ALEX: Right, and I think as long as people are mature and they're responsible and they're professional, you know, I think that can work.

Actually I think it may be harder to run a business together and be married.

GARY: And be married yeah.

ALEX: And live together, because then you're all the time, you know.

GARY: That's what I'm thinking.

ALEX: It never stops, right.

There's no clear boundary between the two things.

GARY: Yeah.

♪ GARY: Let's walk through the process here of what you're doing.

ALEX: So it really starts from, you know, raw material, right?

GARY: Okay.

ALEX: So we receive raw material by freight trucks.

A lot of them in drums, some of them in pails, some of 'em in other types of containers depending on the type of material or the ingredient.

Gary: Mm-hmm.

ALEX: Get to the production area where they're literally making products.

So, you know, mixing these ingredients, following our formularies very carefully.

GARY: Mm-hmm.

ALEX: Weighing all the ingredients, mixing them to create a product, to make a product.

By the time they finish making a product, they typically will transfer that product into containers, usually like pails or drums where they accumulate that finished product in bulk, so that then this product eventually can move to our packaging area, which is all the way in the back.

GARY: Start time from finish to end, manufacturing through to packaging.

What's- how long is that process?

ALEX: Oh, I mean, it can be as short as happening within the same day.

GARY: Mm-hmm ALEX: Or as long as, you know, happening over two or three days.

Our products are made in our facility in the US by our own employees.

GARY: Got it.

ALEX: Which is not the case for all beauty brands.

A lot of beauty brands are actually outsourced in terms of production.

♪ GARY: Did you go out and get a loan or an investor?

Like how did you fund this?

ALEX: To this date, we are 100% self-funded.

GARY: Wow.

ALEX: So no investors, no loans, nothing.

For the first couple of years and allowed us to build some capital through operating that reselling business, right.

Once we had that capital, we had enough capital also to be able to make the small investments that were required to create a brand, launch a brand.

GARY: Have you always sort of handled the marketing internally or do you have an agency?

ALEX: I actually personally like ran ads and all that for over a year originally.

GARY: Okay.

ALEX: It's very time consuming and the more you grow and the more time consuming it is, because you have more ads and more, you know, search terms and keywords.

GARY: More to manage.

ALEX: To manage and just a lot more.

So eventually we hired an agency to completely outsource, you know, all of that management.

GARY: What does it cost to hire an ad agency?

ALEX: I think that it starts making sense to hire an agency, probably once you're spending ten to $15,000 a month on advertising.

My advice for people who are maybe starting is that, you know, from zero to ten or 15,000 of ad spend a month, I think you're better off doing it yourself.

Not just because it's cheaper, but just because you're gonna learn, right?

GARY: Yeah.

ALEX: And the thing is like when you hire an agency, how are you gonna do it if they're doing a good job, if you don't know how to do the job, right.

I mean, and that's always also the challenge.

So when you start you're jack of all trades, but there's an advantage to that is that you learn everything.

♪ GARY: So let's talk about your employees, okay?

SILVANA: Yeah.

GARY: How many employees do you have right now?

SILVANA: At this moment we have 16 people working in the company.

We are family.

For me, it's really important that the people that work here have that kind of thinking.

Most of the women here are moms.

They have families and sometimes something happens in school.

GARY: Yeah.

SILVANA: The kids get sick or something.

And I understand that.

I- we arrange here.

We figure it out for the day.

GARY: Yeah.

SILVANA: While the person takes care of their family issues.

Which is really important because as I always say, we are not robots.

We are people.

GARY: Yeah.

SILVANA: We come to work of course, we enjoy working in a nice environment, but also we have families and we have to think about that.

We cannot just be working, working, working, working all day.

GARY: Not robots.

You have to be, you know, understanding.

SILVANA: Yes.

GARY: And compassionate.

SILVANA: Correct.

GARY: Yeah.

SILVANA: Yeah, and that's really important for me.

GARY: Tell me about Silvana and Alex.

Like what type of people are they?

DARISBEL: Well, I think they are amazing people.

GARY: Okay.

DARISBEL: Yeah, they're very kind for me.

I'm a mother of two children GARY: Mm-hmm.

DARISBEL: And, you know, they're in daycare and it's complicated and they always understand everything 'cause something comes up, you know?

GARY: Yeah.

Things come up.

DARISBEL: That's life.

But Alex and Silvana yeah, they they always are kind and very lovely people.

GARY: Are there FDA regulations?

Are there health regulations?

Like what sort of standards and parameters apply to the product you're selling.

ALEX: For cosmetic products, there is FDA regulation.

The FDA does not force you or does not register cosmetics product, does not, you know, do inspections of cosmetic manufacturers automatically.

GARY: Really?

ALEX: They can.

GARY: Okay.

ALEX: They can, but it's not systematic, right.

GARY: Got it.

ALEX: So they establish what the rules are.

GARY: Mm-hmm.

ALEX: They tell you, you're responsible to follow these rules.

GARY: Yep.

ALEX: And if they start hearing that you're not following the rules.

GARY: That's a red flag that they investigate.

But it's not like a restaurant, where the health department has to come and stamp.

ALEX: Exactly.

It's very different.

It's very different.

GARY: Okay.

ALEX: So we do safety testing.

It's like a clinical trial.

It's almost like what they would do for a medical product, right?

And so we send that to a third party lab.

They choose a panel of users.

Patients basically.

GARY: Yeah.

ALEX: Who apply the product over weeks.

And they have dermatologists who are monitoring all their skincare reactions and documenting all of that.

GARY: Sure.

ALEX: And at the end of that whole trial, they document all of that and they document what their conclusion is, right.

Whether the product is safe or not.

GARY: Yeah.

ALEX: Whether it's been dermatologically tested and approved.

And they deliver that to us.

So we pay these labs to... GARY: So you did go above and beyond to get clinical trials?

ALEX: Yes.

GARY: Oh, that's fantastic.

♪ GARY: What is important to you when it comes to a skincare product?

JODY ANN: For me, it had to do with, does it actually do what it says it's gonna do?

And the texture of it.

GARY: Mm.

Yeah.

JODY ANN: Believe it or not, like if it's really thick and heavy, I don't want to use it.

GARY: Tell me about the process of acquiring the product.

JODY ANN: So I went on, it was, you know, very easy, put your credit card order and I think they said something like three to five business days or something like that.

But it arrived the next afternoon.

I love it when they under promise and overdeliver.

GARY: Yeah.

JODY ANN: So that was the first thing.

And then of course I tried the products and I was compelled to reach out to Alex after about five or six days and tell him how impressed I was with the service.

GARY: Mm-hmm.

JODY ANN: The ease of using the website, and the texture of the product 'cause it matters to me.

(laughs) GARY: Scored on all marks.

JODY ANN: And I mean, he scored across the board.

GARY: Have you recommended the product to anybody else 'cause... JODY ANN: I have recommended it.

GARY: Referrals are huge.

JODY ANN: Yeah, I have recommended it.

GARY: Yeah.

JODY ANN: I would not go and look other places for a product anymore because of the quality of the product.

GARY: Yeah.

JODY ANN: And the pricing of the product.

So then I can share that with people, especially when they tell me that I have great skin.

GARY: Yeah.

JODY ANN: And I tell 'em how old I am and then they go, what do you use?

GARY: Yeah.

Do you ever take time to sit back and acknowledge, you know, what you guys have built?

SILVANA: Yeah.

Sometimes when I think about it, it's crazy when I see everything from the very, very beginning when I bought this waist cincher on eBay (laughs).

GARY: Yeah.

SILVANA: Yeah.

GARY: Okay.

SILVANA: To this moment that we are here sitting together.

GARY: Yeah.

SILVANA: It's been an amazing journey.

I cannot describe that.

It's crazy.

Just, that's the word that comes to my mind.

GARY: Yeah.

SILVANA: It was a crazy but fulfilled journey.

GARY: How far do you want to take this company?

What is your dream for the future for this business?

SILVANA: My dream for the business?

To keep getting bigger.

(laughs) GARY: Okay.

SILVANA: Bigger.

I don't know if it's too much of a dream saying maybe become like a L'Oréal or something.

GARY: Yeah.

No, no dream is too big.

SLVANA: I don't know.

We never know.

We never know the future.

We never know what's gonna happen.

But yes, we like to become much bigger and be everywhere.

GARY: Are you happy?

ALEX: Yeah, I'm very happy.

I'm very happy with where we are today.

I'm- I find it incredible that we got to where we are today because when we started, everybody said, you know, it's impossible.

You're not gonna be able to grow a brand because it's overly competitive.

GARY: Yep ALEX: And you know, they're gonna drown you in ads.

And finally, you know, we found our path, right?

And we've made some of the right decisions, some of the wrong decisions along the way.

And we've corrected, you know, and we found a way to actually grow a brand because I worked for most of my career for very large IT companies.

GARY: Got it.

ALEX: So, you know, Tech 50 companies, IBM, Oracle.

And today it's a complete change of careers, right?

GARY: Yeah.

ALEX: So I spend most of my career in a very virtual world, right?

Where it's all about information.

GARY: Yep.

ALEX: It's all non-tangible.

And now I'm in a very physical world, right?

Where we have physical products and we have pallets of packaging material and we have machines, GARY: Right.

ALEX: So it's a very different industry and I love it.

GARY: Do you miss some of the aspects of working in sort of corporate America, in that environment?

ALEX: I worked with a lot of great people, so yeah, of course.

I miss some of it sometimes.

But having your own business also and being able to create not just the brand, but create products, GARY: Mm-hmm.

ALEX: That actually are bought and used by consumers.

And then seeing also like the feedback from these consumers, because it's not just about creating and selling products, it's about seeing, you know, what we hear back from our consumers.

GARY: Sure.

ALEX: "I had these "acne issues you know, and for five years "I tried everything and I "went to three dermatologists "and I spent, you know, "thousands of dollars on products "and nothing worked.

"And I can't believe it, but I took a chance.

I bought your pads and, and it's working."

It's great to read these stories and to know that not only are we creating products, and we're selling products and we're being successful from a business perspective, we're actually helping a lot of people.

GARY: Yeah.

ALEX: And there's a lot of people who are very happy with what we do and who love the brand and who love the company and who trust our products and who use our products on a daily basis.

So that's also very, very satisfying.

GARY: Any advice to somebody out there that just wants a change?

ALEX: Why not?

Do it, do it because you know, you have a limited amount of time right?

In your life where you can do things and you know, if you don't do it, you may always look back and have regrets.

If you do it, it may work, it may not work, okay.

But at least you won't have any regrets GARY: Right.

ALEX: Because you say, I did it.

You know, I tried.

GARY: Yep.

ALEX: In a lot of cases, people hesitate and they overthink it sometimes instead of maybe just taking the first step and just testing it, right.

Because like I said, today, you can do it without necessarily risking your home or risking, you know, your job.

GARY: Yeah.

ALEX: So, you know, I think there's a lot of opportunities for people to do things and try things and figure out what works and what doesn't and find new opportunities, new paths.

I think it's very doable.

GARY: I really enjoyed meeting Alex and Silvana and learning more about QRxLabs.

And we have featured lots of husband and wife teams over the years, but this is definitely the first time that we featured a formerly married couple that's also running a successful company together.

It's a testament to their commitment to both the company and to each other as individuals.

And this story says a lot about the importance of doing your research, learning about what's already out there in the marketplace, how things are being manufactured, and exposing gaps in even the most saturated markets like health and beauty.

And who knew that using natural ingredients and having a consideration for the environment would be so revolutionary, especially in an industry that's been around since 4,000 BC.

And Alex and Silvana understand that a company is nothing without a solid and dedicated team.

It seems that they've created a company culture that feels more like a family than a business.

They harness the strengths and talents of team members, and it creates a collaborative environment where everyone's contribution feels valued and cherished.

I'm incredibly excited to see what the future holds for Alex and Silvana and the rest of the team at QRxLabs.

For more information, visit our website and search episodes for QRxLabs.

Next time on Start Up, we head to Miami, Florida to meet up with Nathalie Valdez and family, the founders of Creations by Nathalie, a company that sells high quality DIY terrarium kits.

Be sure to join us next time on Start Up.

Would you like to learn more about the show or maybe nominate a business?

Visit our website at startup-usa.com and connect with us on social media.

GARY: (gasps) What happened?

PASCAL: I put the bird strikes on.

GARY: Oh!

WOMAN: Yay.

(laughs) GARY: Thank you so much.

WOMAN 2: You're welcome.

WOMAN 3: Next on Start Up.

(laughs) WOMAN 4: Gary Bredow, superstar.

Okay.

GARY: With no nose.

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