Julie Fredrickson cited the following statistic three times over the course of a 30-minute conversation: 70% of the $60 billion makeup market is controlled by 10 conglomerates. "Anytime an industry is that consolidated, that's when it's ready for a change," she told Fast Company. Enter Stowaway Cosmetics, a makeup company started by Fredrickson, who has a background in e-commerce and digital marketing, and her friend (and former makeup artist) Chelsa Crowley.
Stowaway hopes to disrupt—a word Fredrickson hesitates to use, but means—the very crowded beauty world by offering something women want but currently can't find: "right-sized" makeup. The company, which launched a month ago, raised $1.5 million and has so far seen "overwhelming" demand.
In the current makeup landscape, most beauty products come in two variants: too big and too small. Unfinished crusty tubes of mascara and blunted lipsticks clutter toiletry bags across the U.S. But the piddly sample sizes that come in makeup-of-the-month clubs, like Birchbox, last for only a few wears. Neither of those options fits the on-the-go lifestyles of Fredrickson, Crowley, or their beauty-forward friends. While Fredrickson tended to fill her bag with too-tiny packets of beauty enhancers, Crowley chose to lug around a backpack full of compacts, liners, glosses, and anything else she might need over the course of the day.
How come nothing in between exists? wondered Fredrickson. "Because I have an economist's mindset, I thought, Why, if there is demand, is there no supply?"
After doing some research, the two discovered that the form factor of our beauty products hasn't changed much since the 1950s, despite major shifts in women's lifestyles. Why not? Because Big Makeup doesn't have an incentive to make more-compact sizes. "It's a cost-of-goods issue," explained Fredrickson. "The main cost to the consumer is the packaging, not the formulation." Makeup companies get better margins on bigger products. Portable items would cost the same to make, and sell for less money. Samples, however, are a different story. A big brand views them as marketing, especially when sold through a retailer like Birchbox, that can track how often people size up. Fredrickson found that she and most of her friends rarely use those services for discovery, but for more-compact makeup.
That's when the two knew they had a potentially successful business. "Imagine if the food industry operated this way. What if you could only buy Costco-size food?" Costco, of course, is a very successful business. But Stowaway wants to have a more customer-focused model, counters Fredrickson. "This is the rub: The cosmetics companies are really successful, too, so they don't have to care about their customers."
"Right-sized" means the products are designed to be used before they expire. From her years working as a makeup artist and in house for Clinique, Crowley has an innate understanding of how much product people tend to use per application. From there, she calculated how much product would last until the expiration date; most makeup goes bad in the three- to 12-month range. Then the two tested and discarded different types of packaging before eventually landing on the appropriate dimensions that were both portable and included a "Goldilocks" amount.
For those ordering the products, prepare for dainty sizes that, at first glance, look more appropriate for kids playing dress-up: The mascara bottle feels so light, one almost wonders if it has any product inside. The sophisticated packaging, a smooth, matte gray, however, makes up for the miniature sticks and compacts.
The prices aren't super low: Lipstick costs $15; mascara $12—and remember, there is less product. You can get lipsticks for that or less at Sephora. But fancier products go for over $50 a stick. The major selling point of Stowaway is value: Use what you pay for. The products are also made without parabens, phthalates, or other preservatives that bigger products need to retain their shelf life, another bonus for an increasingly ingredient-conscious consumer. For now, the line consists of what Crowley describes as the "little black dress" of makeup: essentials like mascara and eyeliner. A spring line is already in the works.
Stowaway keeps its prices down(ish) in the manner of many startup retailers these days: vertical integration à la Warby Parker. "This is such a tech and dorky way of saying it: We are a full-stack company," says Fredrickson. "We verticalized the entire experience to make sure we had total control. We wanted everything to be completely integrated from the formulations and packaging to our website." Crowley (who's married to Foursquare's cofounder and CEO Dennis Crowley) and Fredrickson have direct relationships with manufacturers, with the products coming from Italy and South Korea. They don't have to mark up the makeup to sell in a third-party retailer like Sephora, Birchbox, or department stores.
Following the well-trod path of retailers like Warby Parker and Everlane, Stowaway is promising affordable prices, quality, and transparency. "We're all hungry for understanding what’s in our products—why are the expectations around the products what they are?" says Fredrickson. In fact, the two have been surprised by how much the purity of its products has resonated with buyers.
And that's the real leg up Stowaway thinks it has on its competitors: a dialogue with its customers. "Nobody is taking women consumers seriously," says Fredrickson. "It was a problem we couldn't unsee. It was discovering something you had taken for granted your whole life that is actually wrong—a standard size that is benefiting no one but the conglomerates. I think that was the moment we were like, there is money to be made here."