Tuesday, January 24, 2012

Taking An Exit Doesn't Always Mean Good Bye

Leslie Blodgett at work
           Two years ago, when Leslie Blodgett, CEO of Bare Escentuals,  first received an acquisition offer of $1.7 billion from Shiseido, Japan’s  largest cosmetic company,  she was well aware that the deal hinged on her remaining in her role.  But she also knew that after 16 years as CEO, she wanted to pull back for awhile to focus again on the creative end of the business.  After convincing Shiseido executives that her COO could handily step into her shoes, she literally “pulled the title executive chairman out of a hat,” and the deal was signed; she reports to the COO of Global Business at Shiseido.
    After a career in product development at Neutrogena and Max Factor, Leslie Blodgett  became CEO of Bare Escentuals in 1994 when it was little more than a bath and body retailer in Northern California but with an unusual product—a mineral or powder based makeup line.  While Leslie liked the idea of mineral products—fine powder the consistency of confectioner’s sugar, she  quickly realized  the shades available  didn’t match real complexions. So she relaunched the line as bareMinerals, with eye shadows , blushes, foundations and brushes-- and started staying up nights worrying about how to market, racking up a lot of hours watching the shopping networks.
   Her late night rituals paid off. In 1997 she was offered a slot on the  QVC home shopping channel and quickly sold $45,000-- all of her inventory. Eventually she was  selling $1.4 million of product  an hour!  She quickly noticed from the feedback on her appearances that women had lots of questions about the product,  so she began to respond personally to letters and emails, and sometimes made house calls too. “What I realize,” Leslie says, “is when you touch a woman’s face a few minutes after you meet her, you form an emotional bond; it’s powerful stuff. You have to hire people who  love people,  and you have to take care of your customers. Sometimes they come to you after a bout of cancer or an emotional trauma, so what we do is not superficial kind of stuff that only helps  women look good for their husbands. We’re helping women feel good about themselves.” 
     Leslie also strengthened her distribution network. Instead of drug stores or traditional department stores, she sold through company boutiques, and in specialty cosmetics stores like Sephora and Ulta, and continued on QVC, the TV  shopping channel. In 2006, San Francisco-based Bare Escentuals went public shortly after its sales had jumped over 60% for the first half of the year.  But soon after  the IPO, Bare Escentuals felt the pressure of the economic crunch which capped consumer spending. “While we didn’t go looking for  Shiseido,” Leslie notes, “we were looking for better inroads into Asia. Shiseido has been in business in Asia for 130 years with distribution in 69 countries, so it makes perfect sense.”
     After 24-years of running the company, Leslie now is back to branding and product development, “ like I was doing 20 years ago.  What I like is that I finally have the time to spend more time with customers and employees. Now that I’m back where I started, I realize I’ve been missing some of the fun.” She also has more perspective.  Recently, while reviewing the photos for a new ad campaign, “something bothered me,” she admits.   What bothered her were that all the photos for the ads  were of models and  had been retouched. “They looked fake, and that’s not who we are,” Leslie concluded.   Naturally, the photo shoot was redone; so while Leslie Blodgett may no longer be CEO, she retains plenty of authority to call the shots about how the company she built appears to its consumers.
Shanna talks with her team
    Shanna Tellerman’s  move up and out was more rapid.  She laid the foundations for a company  while she was still a graduate student at Carnegie Mellon Technology Entertainment Center, applying gaming techniques to  real world use.  Soon she had a real world customer: following the 9/11  terrorist attacks, the New York Fire Department saw its ranks decimated but its responsibilities exploding.  Shanna and her colleagues developed a training program to allow Fire Department instructors, who were not tech savvy,  set up and control interactive video game scenarios. Fire department recruits then interact with the scenarios and respond to emergency situations, much like participating in a multiplayer video game. The program was so successful  that in 2006 Shanna spun her company, Sim Ops Studios,  out of Carnegie Mellon to commercialize the software for emergency responders.  Soon she realized the platform she had developed had broader applications and could allow anyone to create 3D interactive environments, for games, training education, and military simulations.
    In 2008, Shanna moved from Pittsburgh to Silicon Valley to be closer to investors and potential partners. By then her company, funded by $3.4 million from angel and venture capitalists, had changed names to Wild Pockets ; it offered a free,web-based game engine to “transform a process that used to be prohibitively expensive and limited to experts, into a platform that is easier, faster, and cheaper to use without the need for outside experts.”
    In 2010, when one of her  investors introduced her to the  director of engineering at  Auto Desk, a 3D computer-aided design  company,  Shanna remembers,  “we just clicked, even though at that point I had no thoughts of selling. We just talked about the possibilities of the 3D platform.”  But she admits that in those early conversations, “I realized  this is a company I would feel real good about joining.  They still have the same passion and enthusiasm I feel, even though they have 7000 employees.”  Later that year Autodesk bought Wild Pockets, but asked Shanna to join the company as Product Line Manager.
      In retrospect, 29-year old Shanna says she really “didn’t know what terms she could have asked for during the acquisition,” except that she insisted  her Wild Pockets team  be allowed to remain in Pittsburgh, though Shanna now works in  San Francisco headquarters.  So far, a corporate job suits her needs: “It’s much less bureaucratic than I thought.”  Plus, she adds, “the weight of the whole company is not on my shoulders anymore.  I don’t have that life and death feeling with every decision I make.  In a big company any product has the potential to be huge, but something else you don’t know about might be even bigger.”   On the other hand, Shanna muses, “I like running really fast so I still probably have another startup or two in me.”

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