In The Mix

Initial Struggles

Smith: What sparked the idea for the company?

Legatos: In June 1998, Amy and I started talking about how women were being empowered by the Internet and how we could serve that market. We looked at various opportunities and decided to focus on personal care and health products because we knew how big the industry was and believed that women were still underserved. At a barbecue that summer, one of the founders of iVillage told us, "If you don't do this, someone else will." It was an "Aha!" moment and we never looked back.

Smith: How did you get people to join what was in the beginning just a dream?

Legatos: We would work at each other's apartments after we got off work at iVillage around 10 p.m. every night and on weekends. We knew what we didn't know, which is critical, so we began approaching people with expertise in those areas, like product development and accounting. It took about five months to pull the initial team together. In the beginning People thought our enthusiasm was infectious, saw the opportunity, and we persuaded them about our vision of what we thought was about to happen in the market. They were willing to join us without having to be paid before we launched. Amy had a college buddy who helped us with the legal work.

We met most of the main people through various referrals. As important as finding them and raising money, our network provided us with a lot of mentoring.

Smith: How did you pick the name and in what ways did you decide you would differentiate yourself from the competition?

Legatos: We had secured 50 names before we thought of this one. Someone owned it, but we made an offer the same night and it was our first investment, a signal to investors that we were serious.

We wanted a name that conveyed the idea of natural ingredients of health and beauty, scents which have benefits that have been traditionally recognized. In 1995, aromatherapy, which is what we decided to specialize in, was only familiar to 26 percent of adults, but three years later, 45 percent knew about it. We didn't want to get into medical claims, just the idea of providing a place where people could easily order fragrances that were most in demand with benefits that were backed up by information. We think the associated properties can be transferred to other products and believe there are private-label wholesale opportunities. Advertising on our site isn't part in our model now.

Hardly anyone was offering any products for consumers exclusive to the Web when we began working on this, and that's what we wanted, and so we've been pioneers. There haven't been any models for us to follow. We do our own formulations and manufacturing. We have also packaged and marketed these in playful, aesthetically pleasing ways and tried to make the shopping experience fun. We pay attention to what other companies are doing on and off the Web, but I learned it can be crippling to obsess over potential competition.

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This article was originally published in the May 2000 print edition of Entrepreneur with the headline: In The Mix.

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