In 1996, Mazdack Rassi (above) started Milk, a photography studio rental business, with two real estate investors. Over the years, Rassi expanded Milk to include, among other things, a production studio, a casting agency, and, most recently, a makeup line. But lipstick was not an easy sell to his two partners. Rassi explains how he convinced them.
-- As told to Lindsay Blakely
We never set out to be a consumer business. We rented empty spaces to photographers and eventually built some related services. Since my partners were in real estate, this made sense to them.
But we've always been linked to fashion, so a consumer venture was not a stretch for Milk. We created our own Fashion Week event, we've hosted concerts, we have a fashion and culture blog, and we're at Coachella every year. Finally, I told my partners, "We have a new business: our brand--and we need to think about making a product for our customers." They didn't get it. But this is something that Virgin's Richard Branson has done well.
We knew the Milk audience was about 70 percent female. What do these cool girls want? Makeup. I was pretty sure my partners wouldn't have the stomach for such a cash-intensive idea. So I broke up my pitch into three pieces.
I said, "Why not risk a little money--about $100,000--to research who is this Milk girl?" They said yes because it wasn't a huge ask--and it was a useful internal exercise regardless of where it led.
Six months later, I gave them a full report: This generation is on the move. They don't want brushes and extra tools. They need durable packaging. They want fun products that are good for the skin. So then I said, "Do you want to take about $600,000 to develop some formulas?"
This was when my partners pushed back. "What do we know about creating real products? And working with factories?" I laid out the supply chain for them, showing them that I knew how it worked. They gave it a green light--cautiously.
Another six months later, I came back with 20 samples. Finally, holding real products in their hands, they got it. I whipped out a business plan because my partners are P&L guys. We needed at least $3 million to go into production. And, I added, Sephora likes the samples and will give us purchase orders up front. They were sold.
We're now in Sephora, Urban Outfitters, and Birchbox with about 85 SKUs--really unique products like lipsticks that look like Sharpies and blotting papers that turn into cigarette rolling papers. Of course, it's still very early. But we've already nailed down probably the most important part: earning one another's trust.