Painting The Town
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In the day Dineh Mohajer painted her toenails baby blue and went out shoe shopping, starting a business was the last thing on her mind. Mohajer, then 22 years old, was just your basic University of Southern California premed student escaping to Beverly Hills for a mindless summer afternoon of retail therapy with her sister Pooneh.
She wasn't looking for new challenges. Au contraire, says Mohajer, "I had decided that summer [in 1995] to blow everything off and do a very unpremed-like thing and just relax before I had to go off to medical school and never have another chance to be a kid."
She envisioned a summer of partying and kicking back with her boyfriend. What she got was something else. On the day Mohajer went shopping--sporting a shade of baby-blue nail polish she had mixed herself--she was accosted by dozens of passersby who simply had to know where she got that polish. A saleswoman at Charles David practically begged Mohajer to reveal her source: The baby blue perfectly complemented Charles David's spring line of shoes.
"That was it," Pooneh recalls. "I told Dineh, `We're going to lunch and put together a business plan and start selling this stuff.' "
The plan they developed over lunch--and financed with a meager $200--didn't seem as if it would interfere too seriously with Dineh's leisure plans . . . until an excited teenager bought Dineh's stock of prototypes from her while she was pitching upscale specialty store Fred Segal. Until Seventeen and Elle magazines put the editorial spotlight on Mohajer's offbeat pastel colors. Until Nordstrom and then Bloomingdale's and then Saks called in orders.
In a matter of months, Hard Candy, the Beverly Hills, California, company Dineh, now 24, Pooneh, 31, and Dineh's boyfriend, Benjamin Einstein, 24, founded, was pushing $10 million in sales. So much for a leisurely summer.
Runaway success proved to be more than a minor crimp in Dineh's relaxation program. Setting up suppliers, distribution networks, accounting systems and corporate structure while managing breakneck growth was like trying to put out a fire with a wildly gushing firehose: There was no catching it. Youthful energy was an advantage, but inexperience was not. Nor did it help that suppliers and accounts lacked respect for the young entrepreneurs. Finally, even 22-year-olds run out of steam. Nine months after starting the company, Dineh nearly ended up hospitalized from exhaustion.
Fortunately, the story doesn't end there. This is the tale of a young, hip entrepreneur who inadvertently lit a firecracker. But it's also about how the same fresh thinking that created an initial spark also enabled this young company to grow into its potential.
Today, the Dineh Mohajer who speaks to you from her Beverly Hills office is the picture of poise. She isn't frazzled. She isn't scattered. And, despite a much-publicized tendency to speak like the Generation X-er she is (I mean, totally), she definitely isn't clueless.
But then, Dineh's been through the crash course. In 18 months, she's seen the concept she originally conceived of go from a hectic, homebased concern to a serious contender in the competitive world of cosmetics.
Hard Candy's beginnings were fairy tale enough. At that fateful lunch, the sisters came up with a company name, a strategy (hit the local boutiques), and some rudimentary ideas on packaging. Dineh made up sample bottles of her four signature shades: Sky (pale blue), Sunshine (yellow), Mint (green), and Violet (lavender). She had been blending the colors using ready-made polish (in decidedly uncool shades like dark blue and white) and adding thinner to create the right consistency. "It's not hard to mix nail polish," says Dineh. "I learned how in my bathroom."
Dineh and Einstein took the prototypes to the ultratrendy Fred Segal store in Santa Monica, California. They were in the process of presenting their wares to the owner at the cosmetics counter when a teenager dining in the adjacent cafe came over to check out the goods.
"We were talking about how much we would sell it to [the owner] for, and how much the store would have to sell it for, and then this girl who was, like, 16 came running over and said, `Oh my God, I love these! I have to buy these. How much are they?' " Dineh recalls. "We didn't know, but a salesgirl immediately said $18 a bottle. The girl's mother's eyeballs practically dropped out of her head, but the daughter was having a fit and the mother bought them. Four of them cost, like, $75. The owner turned to me and said, `OK, bring me 200 more tomorrow.' "
Dineh and Einstein left the store elated and more than a little panicky. They had no inventory and no production facilities. They didn't even have adequate supplies. "We bought bottles [of polish] at beauty supply stores, went home and started mixing," Dineh says. "It was just crazy."
Early retail sales were brisk. Einstein began venturing out on sales calls to some of Los Angeles' hipper boutiques, and many signed on as consignment accounts. For a few glorious weeks, everything was groovy.
And then it broke loose. Hard Candy had one of the shortest fuses in the history of explosive products. Celebrities were among the first to bite. Before long, actresses Alicia Silverstone and Drew Barrymore were flashing Hard Candy polishes. Then came the fashion press. "Before the end of the summer, Seventeen, Elle and Vogue were writing about our stuff," Dineh says. "It gave us national exposure, but we were not prepared for the response."
"Suddenly people were ordering more than we could possibly make," says Einstein. "We got our friends involved. At one point, we had 12 people working out of a two-room guest house" (behind the apartment Dineh and Einstein lived in).
Hard Candy became the creature that ate its founders' personal lives. "Every room in the house was polluted with this stuff," says Dineh. Not only was the business physically overwhelming, but it was also a mental challenge of Olympian proportions. "I didn't know anything about business," Dineh explains. "I didn't have any computers, except for this Macintosh with Quickbooks on it. I was overwhelmed and burned out."
In came Mom to save the day. Dineh and Pooneh's mother, Shahnaz, wasn't a Fortune 500 executive, but she had run their father's medical offices for years. Sensing that her daughters were a little taxed, Shahnaz flew in from Michigan and got to work. "She set up our Visa machine so we could accept orders over the phone. She helped us get a real manufacturer. She handled invoices," says Dineh. "She was so crucial in this business. I know we wouldn't be here today if it weren't for her help."
That help also took the form of an investment from Mom and Dad. Dineh won't disclose the actual amount, but she readily acknowledges that it was substantial--in the six-figure range. The money also enabled the partners to move the company to a commercial office in Beverly Hills in 1995.
But even the strongest parental support wasn't enough to keep Hard Candy from cracking. The exponential growth continued, and as it did, Dineh's exhaustion multiplied. Things got out of hand. Hard Candy simply couldn't keep pace with demand. The pressure mounted.
"I didn't sleep. I didn't eat. I was a working fool," Dineh confesses. "My learning curve could not keep up with the [company's] growth curve--there was no way." She reached the point where she didn't care about turning a profit or building an empire. Dineh was literally on the brink of collapse when she did what just might be the smartest possible thing: She let go.
Nailing It Down
It was time for the big guns. It was time for a guy who owned neckties and read spreadsheets and spoke the lingo of mergers and acquisitions. "I said, `I'm hiring a CEO,' " says Dineh. " `I'm going to pay him a fat sum of money--all the money I would have made--and let him run everything while I get a massage.' "
With the help of a major consulting firm, Dineh located William Botts, a former cosmetics-industry executive with what Dineh calls "tons of business experience." Botts had, in fact, recently helped another nail polish company through an acquisition by Revlon. "He had technical experience, and he knew how to fix what was going on," says Dineh. "But what I really loved was that he understood my vision and was genuinely excited about it. He was a perfect fit."
Botts did indeed whip Hard Candy into shape, doing everything from cleaning house to bringing accounts on line. It's his expertise and structure that allow Hard Candy to function like the multimillion-dollar company it is. Given the circumstances, hiring a CEO was clearly an intelligent move. But it's also one that many other entrepreneurs have resisted for fear of losing control.
Here, Dineh's youth may have worked in her favor. She is unburdened by ego; she has nothing to prove. Getting help wasn't a sign of weakness but a matter of practicality. Likewise, retaining creative control of the company isn't a complex psychological issue. It's simple. "You just say what you want," Dineh explains. "Bill is a strong-minded person. He has his own opinions and a lot of experience, and I respect what he says. But I also understand that if I don't say what I want, I will lose control. I came to terms with that very quickly."
Today, the Hard Candy team appears to be a happy little ecosystem. Pooneh, who is a lawyer, handles contracts, administration and financials. "Dineh and I are very different, but that works out fine," says Pooneh. "She's very creative, and I tend to be focused on the business side of things."
Einstein and Dineh, on the other hand, tend to think alike. A musician in the few free hours he has, Einstein is a creative powerhouse in his own right. Though he gives Dineh full credit for being the brains behind Hard Candy's success, he's an important piece of the puzzle--an equal partner in brainstorming sessions and an equal pair of hands when the hard work begins.
And if Dineh herself isn't exactly limp with relaxation these days, she is energetic and focused instead of fried. Having a CEO in place has enabled her to concentrate on her true calling: spinning out the style that's made Hard Candy famous.
It isn't easy being hip. Because Hard Candy positioned itself on the cutting edge from the start, it can't simply follow fashion. It has to be out in front. Although Hard Candy's initial colors--which were heavy on the pastels--vaulted the company into the major leagues, the pressure is constantly on to create still newer, hipper colors. Other creations include "Porno," a deep metallic red, "Heist," a nonmetallic chartreuse, and "Trailer Trash," a metallic silver.
How does she know whether metallic silver will actually work? For Dineh, it's a question of following her gut. "Ever since I've known Dineh, she's been able to look at things and say `That's cool' or `That's cheese,' " says Einstein. "Even in [high] school, she'd do something that everyone would say was stupid, then six months later they were all [copying her]. She was six months ahead of everyone else, which is a huge advantage now."
In fact, that creative eye is everything--and keeping it tuned is exactly why Dineh needs the space to lead a life outside the business (although that doesn't include medical school, which Dineh has put on hold for now). She reads fashion magazines and tracks trends. But more important, she lives the life of her target market. She appeals to 12-to-25-year-old women because she is a 12-to-25-year-old woman. She likes to hang out with friends and go to movies. She follows the music scene.
In the future, Dineh envisions a more complete line of Hard Candy cosmetics. Already, the company has 16 shades of lipstick to complement its nail colors. Says Pooneh: "I think clothing is something Dineh could do really well, and who knows what else? I don't limit what Hard Candy can do."
As well she shouldn't. Like its founders, Hard Candy is still young enough to grow and inspire and even change directions if necessary. Already, it's weathered more trials and triumphs than the average start-up. Success has been sweet, but it hasn't been easy. Apparently, they don't call it Hard Candy for nothing.
Hard Candy, (310) 275-8099, fax: (310) 275-6449.