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Stowaway co-founders want to recolor $60 billion beauty industry

February 10, 2015, 12:00 PM UTC
Julie and Chelsa
Courtesy of Stowaway Cosmetics

At first blush, Stowaway might seem like a niche e-commerce site geared toward world travelers or trial-size beauty product junkies. But the new direct-to-consumer cosmetics startup, which launched today, also aims to wipe away several smudges on the beauty industry blueprint.

The brainchild of co-founders Chelsa Crowley and Julie Fredrickson, Stowaway sells luxurious, portable beauty products that are both easier to tuck and transport, but will also be a safer alternative to giant containers of cosmetics no normal human could possibly use up before the expiration date.

Rather than trial or travel—because Stowaway products aren’t necessarily either—Fredrickson and Crowley call the smaller-by-volume products “right-size.” Available in several color variations, the initial six-item collection includes mascara, BB cream, and pot rouge. Products range in price from $10 to $22 each, with a six-item kit bundled together for $75.

By now, there are very few multi-billion-dollar industries that haven’t been disrupted. When distribution went digital, the music industry was suddenly very out of tune with its customers. Television executives took their eyes off the screen for a second, and viewers had changed how and when they wanted to record and stream their favorite sitcoms.

Stowaway is poised to solve a few problems plaguing the sometimes rather ugly $60 billion beauty industry, of which 70% is controlled by 10 conglomerates including LVMH and L’Oreal. Many major brands still spend major money to sell through brick-and-mortar stores, while startups like Stowaway save big by doing away with retail overhead and selling direct to consumers.

Stowaway Cosmetics
Courtesy of Stowaway Cosmetics

While makeup hasn’t changed much since the 1950s, women’s lives are dramatically different. Constantly on the move, juggling work and family, Crowley explains that contemporary women need cosmetics compatible with an active lifestyle. Fredrickson adds that the existing conglomerates are simply not providing the variety of size options most women want.

Then there’s the question of waste and safety. Even the savviest consumers are often surprised to discover that the U.S. Food and Drug Administration is not required and thus does not regulate cosmetic products or ingredients. The Environmental Protection Agency oversees some chemical safety standards under the Toxic Substances Control Act (TSCA) of 1976. But unless the 2013 bipartisan Chemical Safety Improvement Act gains enough support in Congress, TSCA will roll into its fourth decade on the books without any major overhaul. In the meantime, household products and personal care items have increasingly contained chemicals linked to various cancers and early onset puberty in girls.

This is more than a skin-deep problem for the Stowaway founders. Crowley promises that to ensure the highest quality, all Stowaway products will be formulated without endocrine-disrupting chemicals like parabens and will be compliant with European Union consumer safety standards.

“Most women don’t know about expiration dates on products,” she adds. Often, cosmetics expire three to 12 months after purchase. Most consumers can’t afford or don’t want to purchase a replacement when there’s still plenty of product left in the bottle. Selling a useable amount should therefore be safer for consumers. The only waste reduction aspect the Stowaway founders haven’t figured out is how to cut down on and recycle packaging.

It’s also surprising how uselessly oversized beauty products have become the default, while ultimately being a waste of money. Fredrickson says, “Consumers would be up in arms if other industries operated this way.” She points to food, and the fact that no one buys in bulk with the assumption half of the product will spoil. “Cosmetics are Costco size, and consumers are smart,” she adds. “They know they aren’t getting the best value.”

Stowaway investors, which include Dave Morin and Kevin Colleran’s Slow Ventures, know they’re backing two women who understand their target market. “We joke that we’re the yin to each other’s yang,” Crowley says. The makeup and fashion stylist’s resume includes stints at Estee Lauder, Clinique, and Bobbi Brown. In the past decade, Fredrickson co-founded several startups and worked in e-commerce, branding, and marketing at Ann Taylor and Equinox. “We know the [Stowaway] customers very well, and that’s a compelling proposition for investors,” Fredrickson says. “They’re hungry for the same growth we are.”

Fredrickson adds, “I have a friend who always says, ‘There’s a lot of money to be made in taking women seriously.’”

That goes for appealing to consumers, but betting on Crowley and Fredrickson’s right-sized business plan seems like an equally wise choice.