THEN

dermalytics™

data from your skin, trackable progress towards skin health 40% of people with skin care needs incorrectly describe their skin. introducing

state of the art technology to quantitatively analyze your skin, track progress and prevent damage before it occurs.

Brandon WilsonSoftwareSchool of

Engineering

Jennia N. RajaeiProduct School of Medicine

Siqi MouStrategy &

FinanceSchool of Business

Chloe JohnsonMarketingSchool of Business

NOWTotal Interviews:120

PORTRAY - personalized skincareOriginal idea

Understand customer’s skin with analysis machine

Use data to create a product formulation

1

2

Build custom skincare product based on analysis 3

DAY 1

We had lots of initial hypotheses about our customers

DAY 1

After talking to consumers, we realized many of our initial hypotheses were wrong.

IN RETROSPECT

DAY 1

Fundamentals

WRONG

DAY 1

Fundamentals

This is not an MVP Fundamentals

This is an MVP

This MVP enabled us to test multiple hypotheses rapidly and cheaply allowing us to quickly collect data and iterate if necessary.

Fundamentals

What do people want from their skincare products? HypothesisPeople prefer organic based products

ExperimentCustomer Interviews + A/B testing with product designs

Results

“I would put cow manure on my face if it worked”

Consumers generally don’t care what is in their products, as long as they see results!

“I don’t care if I’m putting shitloads of chemicals on my face as long as their effective”

% with strong preference

Value Proposition

Customer Segment Discoveries (29 interviews)

● Less likely to try new products● More skeptical that customized skincare

would work● Worried about undoing current progress

● More likely to try new products● Open to changing current regimen

Customer Segment

Product Development

Hydration Redness Pore size

????

How do you make a skincare product?ROADBLOCK

Product Development

Hydration Redness Pore size

????

How do you make a skincare product?ROADBLOCK

Core Value Proposition Learning After 300+ online respondents & 37 in person interviews

- 41% of respondents identified skin irritation as their most pressing skin concern

- 90% of interviewees stated that they did not believe that a customized skin care product would be effective in improving skin quality

- Coupling interview learnings with literature search on key measures of skin irritation

- The only skincare problem we know how to address via product formulation → HYDRATION

Value Proposition Learning

Major Pivot 1 - Core Value Proposition : Hydration + Customized Formula

-

Distributers: Direct to Consumer (through online platform), plan to grow with partnerships with traditional retailers to offer in person customization (Sephora, Peninsula beauty, Bloomingdales)

Magazines: InStyle, Women’s Health, Vogue, Porter

Suppliers: private label manufacturers, organic farms

What we can offer: revenue, branding, innovative offering

We use both facial analysis software (exists today) and interview to analyze what skin needs which generates an ingredient & product list customized. Activities: - Online platform management- Product recommendation and formulation -Manufacturing management through private labels-Inventory management

Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support, IP for custom formulations

Product sale• Individual orders • Subscription• Tiered pricing based on volume

ordered

• Fixed: salaries of permanent team members, private label contract fee, high-tech machine cost (imported from Korea), marketing cost

• R&D costs • Variable: unit cost for each product including

ingredients and mixing process

Pain point: Lack of customized hydration No over the counter skincare products are custom build, and working with dermatologists to develop a skin care routine is very expensive.

Value: Skincare products built to meet customers’ individualized needs, based on recommendations and our expertise. Meets skin sensitivities and helps balance treatments to their specific needs.

50% skincare purchases are made based on friends’ recs-Initial customers acquired through marketing and networks- Incentive programs for customers to post and share their skincare offerings (super-user and skincare celebrities)- Partnerships with retailers, eventually own brick and mortar stores

1. Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.

Customers want targeted interactions - Online - Directly with experts in

brick and mortar locations

Shifted to hydration with a much more

limited offering

People weren’t

Hydration device

23

Hydration MVP1Hypothesis

People want customized hydration productsExperiment26 customer interviews. “hydration” vs. “skin health”Results

● People do not care about “hydration”● “Skin health” had much better reception● What people WERE interested in, was the skin

health data

“My skin is dehydrated?? I’ll just drink more water!”

People weren’t

Hydration device

23

Hydration MVP1Hypothesis

People want customized hydration productsExperiment26 customer interviews. “hydration” vs. “skin health”Results

● People do not care about “hydration”● “Skin health” had much better reception● What people WERE interested in, was the skin

health data

“My skin is dehydrated?? I’ll just drink more water!”After talking to our mentors

and conducting 40 customer interviews, we decided to ditch product formulation all together.

-

Distributers: Direct to Consumer (through online platform), plan to grow with partnerships with traditional retailers to offer in person customization (Sephora, Peninsula beauty, Bloomingdales)

Magazines: InStyle, Women’s Health, Vogue, Porter

Suppliers: private label manufacturers, organic farms

What we can offer: revenue, branding, innovative offering

We use both facial analysis software (exists today) and interview to analyze what skin needs which generates an ingredient & product list customized. Activities: - Online platform management- Product recommendation and formulation -Manufacturing management through private labels-Inventory management

Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support, IP for custom formulations

Product sale• Individual orders • Subscription• Tiered pricing based on volume

ordered

• Fixed: salaries of permanent team members, private label contract fee, high-tech machine cost (imported from Korea), marketing cost

• R&D costs • Variable: unit cost for each product including

ingredients and mixing process

Pain point: No over the counter skincare products are custom build, and working with dermatologists to develop a skin care routine is very expensive.

Value: Skincare products built to meet customers’ individualized needs, based on recommendations and our expertise. Meets skin sensitivities and helps balance treatments to their specific needs.

50% skincare purchases are made based on friends’ recs-Initial customers acquired through marketing and networks- Incentive programs for customers to post and share their skincare offerings (super-user and skincare celebrities)- Partnerships with retailers, eventually own brick and mortar stores

1. Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.

2. Individuals with skin sensitivities and allergies to common skincare compounds (PEG) which often require personalization. Customers want targeted

interactions - Online - Directly with experts in

brick and mortar locations

We scrapped almost everything, but had

learned something very important!

Customers didn’t understand their skin or what products to

buy

Actually it looked more like this

We decided to turn to the data

And when customers were like…

Our path was clear...

Major Pivot 2 - Core Value Proposition : Skin Data Device & Analysis

MVP Testing (In Person Product Demos)

Test Test Test - Experiments - cheap and fast

- Most were done in powerpoint or with little coding

- Talk to people and analyze their reactions and comments

A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing

vs. vs

.

A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing

vs. vs

.

A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing

vs. vs

.

A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing

vs. vs

.

A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing

vs. vs

.

After 90+ customer interviews, we have finally identified what people want in our product

Demographics + Behavioral- Female - Ages 18-35- College educated - $75k+ income- Active on social

media - Online shopping - $100+/mo on

products- Subscription services

Attitudinal - Cares about appearance; watches

diet and exercise - Generally OK skin with occasional

blemish - Tries new products to balance out

minor issues (dry patches, blemish) - Interested in taking control of skin to

counter patchwork approach she has today

Hi I’m Lyla! I’m 28 and work for a marketing firm in LA. My appearance is important for work so I try to be careful. I try lots of skincare products but still have random zits and dry patches now and again. I’m still not sure what works for my skin.

Customer Archetype (after 120 interviews)

Key Partners : Decreasing CACName Media

PlatformFollowing Cost Purchase

rateCAC

BB1 YouTubeInstagramTwitterFacebookSnapchat

10-20k2.5k1k1k1.5k

867,879158,00030,90024,987N/A

BB2 YouTubeInstagramTwitterFacebook

1,487,625

72,600605,000

1,606,291

5.5%, 188k

$1.94

7.2%, 302k

35k $1.61

2.1%, 6.8k $31.694.5k

3.6%, 8.4k0.9%1.4%

1.3%1.8%

$8.28

Metrics That Matter

After 100+ interviews, we had 20 beta sign-ups!

$$$$

-

- Manufacturers (based in Shenzhen)

- Fulfillment center

- Brands / wholesalers

- YouTube channels and Beauty Bloggers

- Earned media, customer relationships

What we offer them - Payment for the

manufacturing and scale

- Access to innovative products

Offer a skincare device

Activities: - Device design and

design patent - Online platform- Data analysis - Product

recommendation

Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support

- Affiliate marketing 10-15% revenue from product sale

- Device sale for $150- Premium subscription for APP for $10 /

month

• Developer team for application (Front-end, UI, back-end engineer) ~ 160K per month

• BOM costs of 10-15 / device with 1000+ minimum • Office space and servers • CAC - $5 • Fulfillment costs of $5-6/product

Pain point: Many women can’t accurately describe their skin (40% out of those interviewed) and struggle to identify which products will work best for you

Value: Give you data on your skin’s health, enable you to track progress of your skin routine, provide recommendations and routine advice, allow you to purchase products that will best fit your skin

- Youtube advertising - Earned media with

expected CAC of $5 - Mix of online

advertising - Partnerships with

brands and retailers

Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.

→Transition point in life where they are starting to identify skin issues (35+)

→Middle to upper income

→Female →Well educated

professional - Direct to consumer - Partner in store

We’ve learned a

lot

But what does this really all mean?

Get OUT of the building!

If we had stuck with our BMC

- Women will buy bespoke skincare products for a 200% mark-up

- It will be cost effective to custom develop a product for each person based off of our own formulations

- Women want another skincare solution

Experiment ALL the time

Test Test Test

- Experiments should be cheap and fast

- Most were done in powerpoint or with little coding

- Talk to people and see how they react

Product market fit feels like this…

Oil + hydration

Wow!!!

We speak different languages!?❖ We are from different backgrounds (science vs business) and

therefore have different short and long term visions❖ It is important to be aware of them to manage difference and

create synergy

When we argue … We should have gone straight to customer interviews to validate one thought process vs. another

When we got yelled at… This is what we call… “Tough L ve”