Tatcha Founder Takes This Strategy from Starbucks and Builds Multimillion-Dollar Company
Tatcha, a $500 million skincare company, has origins that can be traced to Starbucks. As different as both lines of business are, the founder’s experience in the coffee-making behemoth, prepared her for the future. This was a future founder Vicky Tsai, who quite easily scaled, thanks to hands-on experience with Starbucks.
Tatcha – Starbucks Origins
Tsai’s yearning for business success was a key ingredient in her decision to attend the Harvard Business School. Leaving for Shanghai almost immediately after graduation, she began a corporate job at Starbucks in Shanghai just a few days late.
Speaking to CNBC Make It, Tsai explains that joining Starbucks back in 2006 was part of the company’s plan to grow its Chinese market. However, even as a corporate person, she had to begin with making coffee, a not-so-enjoyable experience for her.
“It’s really, really stressful to make coffee for people when you don’t know how – they get angry! So [Starbucks] lets you spend some time on the line, but mostly you take out garbage and wash dishes…I spent most of my day either disappointing customers or washing dishes.”
The experience gave Tsai a better understanding of the conditions the workers face daily. This knowledge helped pitch and successfully execute Starbucks’ plan to dive into consumer products. In 2008 just before the Beijing Olympics, the company began selling its bottled Frappuccino. Tsai says the experience helped her “understand the experience of our baristas” a little better.
She took this to Tatcha.
Tatcha Still Uses the Same Strategy
In 2009, Tsai founded her own company Tatcha. The luxury skincare company eventually became so successful that it pulled in sales worth $70 million back in 2018. Its growth and success were also noticed by consumer goods giant Unilever spurring the latter to acquire the brand for an estimated $500 million. However, the two parties didn’t reveal much about the terms of the acquisition.
Tsai took the experience from Starbucks and implemented it in Tatcha. She insists that all new employees at the company must first begin at the warehouse. According to her:
“The closer you are to the client, the more you understand what’s working and not working. The second you get too far away from the client, you start making weird mistakes.”
New executives including a chief operating officer (COO), chief executive officer (CEO) and a creative director, recently joined the company. The three new employees began their time with Tatcha at the warehouse and also with the company service team, extending the Starbucks strategy.
Today, Tatcha has catered to customers like popular reality TV star Kim Kardashian and also Meghan Markle, the Duchess of Sussex.
Direct Involvement with Customer Service
Tsai also told CNBC that she pays personal attention to feedback from the public. She said even though she doesn’t use emails much, she still reads “every single question, complaint suggestion, compliment” that gets sent to email@example.com. This helps her ensure that the company improves as much as the consumers want.