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July 4, 2011 12:25 am
Boob job, snake serum and bum lift are not the usual topics for business school case studies, but that may yet change. For Maria Hatzistefanis, who designs and markets a range of beauty products with just these names, had her first education in marketing and branding when she was a student at Columbia Business School in New York.
“At Columbia I learnt some good principles about marketing and I learnt about the basics of creating a brand and the analytic skills of what products to launch,” she says.
As founder and president of Rodial, the London-based company she set up with her husband and just £20,000 of initial investment in 1999, her product philosophy is straightforward. “The most important thing is that the product does exactly what it says. You know what you’re getting – but it’s exciting!”
Some products may seem tiresome rather than exciting – the “stretch-mark eraser” and “crash diet” to name just two. But her forthright approach to branding is paying off, with group turnover in the year to April 2011 standing at about £5m, according to Ms Hatzistefanis. And Rodial claims a host of celebrity users to boot – Sienna Miller, Beyoncé, Victoria Beckham and more.
Now Ms Hatzistefanis is seeking to expand her business. “This year we’re working towards a £15m target.” Central to these plans will be entry to the US and the success of Ms Hatzistefanis’s second company, which manufactures and markets a diffusion range for the mass market that launched six months ago called Nip + Fab. The range is on sale in the Boots chain in the UK and in stores in Canada. Ms Hatzistefanis plans a December launch in the US for the 19 face and body products, which sell in the UK for under £20 each.
Columbia Business School is known for its powerful Wall Street connections, but Maria Hatzistefanis is not the only female MBA graduate from the school to have chosen an unusual career path.
Yael Alkalay, a 1997 graduate, went straight into the beauty business on getting her MBA and now her company Red Flower sells about $10m of flower-based candles, bath products and teas to the top US beauty spas and hotel chains, including the Mandarin Oriental group. In December she is hoping to launch her products in the UK.
“I’ve always been interested in the idea of creating something,” says Ms Alkalay, who worked in the beauty business in Japan before her MBA and turned down the corporate world to start out on her own. At Columbia the two things she learnt that have most helped her, she says, is a working knowledge of the intricacies of finance and the knowledge that “the key to success isn’t the product or the money, it’s the management”.
Meanwhile, Andrea Wenner, who graduated in 2005, decided to set up a not-for-profit organisation, Out2play, with a very specific mission: to build a playground for every New York City elementary school. So successful has she been in running the public/private partnership that she will soon put herself out of a job. Indeed, there are only about 55 elementary schools that need playgrounds in the city.
So, what will Ms Wenner do next? Something entrepreneurial, she concludes.
The difference between the luxury Rodial brands – some of which sell for £100 or more – and the diffusion products is clearly defined, says their developer. The first combine a number of ingredients, the latter use single ingredients, but presentation also plays a part. “With Rodial the packaging is more luxurious. The margins are higher but the support is more expensive.”
Setting up in the UK has been particularly beneficial for the two companies, says their founder. “I think the UK in general is a great market for new brands; it’s the centre of new fashion and new design. It’s a great platform for anything creative.
“The high street stores are very good at giving you a chance. But once you’re in you have to make it or you’re out.”
All of which means the company is constantly introducing products. From 50 ideas, about 10 creams, potions, oils or supplements are launched each year. “In a way we operate like a fashion business,” she says. “We have a new range every season: you have to keep up with something new.”
The impeccably groomed Ms Hatzistefanis, now 40, is the first to acknowledge that she was not the traditional MBA candidate.
The Greek-born former fashion journalist went to business school when she was just 24 with no former corporate experience. And she applied to just two schools, Columbia and NYU Stern. “I wanted to study business. I was always interested in business and commerce, and I wanted to be formally educated. I wanted to go the US and be based in New York: it’s a fun city.”
Returning to Europe after graduation, she spent about a year travelling and visiting trade shows before deciding on her first partner laboratory and developing the first products. “The beginning is a little bit of a struggle,” she reflects. In reality she worked from 4 sq metres of office space in her home, visited stores on foot and packed and shipped the products herself. “The first five years I was doing everything,” she concedes, now sitting in her smart office in Chelsea, west London.
It was when she developed the snake serum products that the company really took off. “It was a huge success,” recalls Ms Hatzistefanis. “The theory behind the serum is that it imitates a snake bite [puffing up the skin and disguising wrinkles]. The products are alternatives to plastic surgery.” Now there are more than 60 of them across the Rodial and Nip + Fab brands, from frown fixers to leg smoothers and neck lifts to eye pens.
Although Ms Hatzistefanis’s career choices have not been that of a conventional MBA graduate, her path to creating her own company was far more so. She has worked in management consultancy and investment banking, for example.
She carried out her internship in 1995 at the consultancy Booz Allen Hamilton. “It was my first experience with business. I liked the strategic element of consulting,” she recalls.
On graduation Ms Hatzistefanis worked at Salomon Brothers for three years, specialising in mergers and acquisitions. It was, she says, “even better than business school at teaching about how to run a business and thinking strategically ... You had one week to learn about the industry and sound like an expert. That was one of the amazing skills I learnt while I was there.”
There are two other respects in which Ms Hatzistefanis is perhaps different from a traditional MBA graduate. One is money. It was only two years ago that she began to take a salary from the company. Second, she has no intention – for now at least – of selling on.
“Within a couple of years of running the business I realised this was my future. I’m not a serial entrepreneur. I know people who create a company and two years later can’t wait to sell. At this stage, I just want to grow the business.”
If Ms Hatzistefanis succeeds, Rodial might yet become the subject of a Columbia case study after all.
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