TitleCo-Founder & CEO
CompanyBluemercury
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When most high school seniors were thinking about college applications and prom dates, Marla Malcolm Beck was thinking about business. Smart and athletic, Beck played volleyball and softball and she was accepted to the University of California at Berkeley. And in a taste of the entrepreneurial zeal that characterized her life’s journey, Beck already knew she wanted to start a company.
“I always knew business and the language of business,” Beck said. “And I always had the ability to gather people together and get them from one point to the next point. It was just my nature.”
As the founder and CEO of Bluemercury, the highly successful luxury cosmetics retailer, Beck has lived an entrepreneur’s dream. She started the company in 1999, just as the dot.com boom was at its zenith, and while everyone was aiming at Internet startups and writing obituaries for bricks and mortar retailers, Beck cut against the grain and decided to embrace both clicks and bricks. Bluemercury has a vast online clientele, but the brand’s larger revenue stream comes from its 60 retail outlets in 16 states around the country.
With her partner and husband Barry Beck, she built Bluemercury into a highly-regarded brand and a destination location. Seeking faster growth, Beck recently sold the company to Macy’s for $210 million but it was not an exit strategy. The Becks will continue to run Bluemercury as an independent business but with deeper pockets supporting it as it scales up.
Growing up in Oakland, California, Beck was inspired by her father, a self-made real estate developer with a laudable work ethic. He never went to college, Beck said, but he became a successful entrepreneur through discipline and desire. When she was in high school, Beck went to her father’s office to balance his books and got a hands-on sense of running a startup. She inherited her father’s drive and understood early on that she had leadership qualities. In high school, she became captain of the volleyball team and editor of the yearbook.
“I was always a leader,” she said. “It wasn’t a plan, I was just always asked to be a leader. I was never the best athlete or the best at anything. But I have always been a very quick learner and I was so reliable and I always knew where to go. I could see the vision and the strategy but I also know how to mobilize resources to get there.”
At Berkeley, Beck majored in political economy and was enthralled by comparative economics. After graduation in 1995, she joined McKinsey & Co. where her leadership qualities flourished. On one major engagement with an insurance client, the McKinsey team was made up of veterans from various disciplines and yet nobody wanted to take on the role of team leader. Beck raised her hand and volunteered and suddenly found herself leading a group whose members were all older and more experienced than she was at the time. One McKinsey partner turned to Beck and said, “You have this gift for leading people.” Such praise was inspirational for Beck who raised her sights and decided to pursue a joint degree program at Harvard’s Kennedy School of Government and HBS.
Arriving at HBS in the mid-90s, Beck had the serendipity to be thrust into the early days of the Internet when it was still unclear what impact the digital world was going to have on business.
“We were the first year that email addresses were given and the first year of the Internet at HBS,” Beck recalled. “And nobody used either.” But Jeff Bezos, the founder of Amazon, visited campus and gave a seminal speech that laid out his vision for the future of e-commerce, a moment that left Beck transfixed. At the same time, the nascent New Venture Competition was just being unveiled and Beck found herself at the intersection of entrepreneurism and the new online economy.
“It was a great time to be in graduate school,” she said. “Entrepreneurship, e-commerce, technology; everything was new. Private equity and venture capital were starting to grow.”
After graduation, Beck had an offer to return to McKinsey, but the firm, sensing her interest in new ventures, urged Beck to try her hand in private equity. She joined a private equity firm and quickly had an epiphany. In this new role, she felt too far removed from the strategy and operations of a business and her childhood urge to run her own show was rekindled. She knew it would be a very long time before the firm would parachute her into a CEO’s role and she did not want to wait. At the same time, she was meeting entrepreneurs every day. “I was thinking, they’re just regular people. They just took a different path than I did. I can do what they’ve done,” she said.
More than that, Beck has always had a talent for seeing opportunity where others miss it. She decided the time was right to start her own venture and spent the next six months casting for an idea. The Internet was awash in startup ventures, from the sublime to the ridiculous. The core of Beck’s success comes from her vision and an innate ability to see trends and understand shifting industries. Her husband calls her “a dream teller.”
After rejecting several ideas, Beck thought about her own lifelong passion for beauty products. “I grew up in California,” she said. “I had facials back when no one knew what facials were. When I was in Boston, I used to drive 45 minutes to get MAC lipstick.” The proverbial light bulb went on and Beck decided she could bring beauty products online. Bluemercury was born.
As every nascent entrepreneur quickly learns, reality often intrudes on great expectations. Determined to embrace e-commerce, Beck immediately encountered five or six competitors with the same idea. Everybody had similar levels of seed funding and it was clear that the marketplace would not support multiple winners. On top of that, the Internet in the late 1990s was not quite ready for prime time when it came to the retail shopping experience. Most people were still on dial-up Internet connections and interminable waits to finish a transaction created a significant barrier.
Beck was undaunted. “I realized that there was a bigger opportunity in front of me,” she recalled. At that time, drug stores or department stores were the only places to buy cosmetics. No specialty channel yet existed.
So Beck and her husband made a fateful choice: they went to Georgetown and purchased a beauty boutique and transformed it into the first Bluemercury retail shop. Though they encountered significant skepticism, they decided to roll the dice on a strategy that encompassed both online and bricks and mortar.
Despite not having full support of her board, Beck believed this was the right strategy. When the dot.com bubble burst six months later, Beck emerged as a hero. The Becks began opening successful Bluemercury boutiques around the country and when broadband access became cheap and ubiquitous, they ramped up the website. She created her own skin care line, called M-61—and jumped into the proprietary brand development business. In 2006, in order to recapitalize the business, they sold 70 percent of the company to the Invus Group, a private equity firm.
Going against the grain had always felt right to Beck. “I have always been a little bit of a revolutionary,” she said. “I listen to my own voice and try to be true to what I see and believe and not do what everybody else is doing. That’s been critical to our success and why our business has sustained through all this time.”
After 16 years, Beck still considers herself an entrepreneur. Always anxious to share her experiences, she remains connected to HBS as an entrepreneur-in-residence. Her advice to would-be entrepreneurs is what she calls DROOM “Don’t run out of money.” She and her husband stayed focused on revenue and profit and Beck believes that is the key to their success.
“We’ve built a great business that really is sustainable and has a reason for being,” she said. “If you run out of money, you don’t get the chance to do that.” The sale to Macy’s validates the fact that Beck shifted the industry and it offers Beck an opportunity to ramp up her company’s growth. The re-designed website is seeing 40 percent higher traffic and with Macy’s financial support, Beck foresees an opportunity to grow to 350 stores, a number she targeted prior to the sale.
“It’s a great time to start a business,” Beck said. “It reminds me of 1999, when I started Bluemercury. There is plenty of capital, a low cost of entry, low risk and a complete acceptance of trying something and failing.”