From Startup to Success: How Three Ships Beauty Reached $1 Million and Beyond

Table of Contents

1. Key Highlights:
2. Introduction
3. Understanding the Problem
4. The Power of Partnership
5. Engaging with Customers
6. Embracing Change
7. Strategic Distribution
8. The Reality of Slow Growth
9. Building a Community
10. Grit and Resilience
11. Future Aspirations

Key Highlights:

• Three Ships Beauty, founded by Laura Thompson and Connie Lo, achieved a remarkable $1 million in revenue by focusing on customer needs and strategic pivots.
• The duo emphasizes the importance of a strong partnership, customer engagement, and slow, calculated growth for sustainable success.
• With projected revenues of $8.5 million and plans to double in 2025, Three Ships sets a compelling example for aspiring entrepreneurs.

Introduction

In the competitive world of beauty and skincare, the journey from concept to success can be daunting. Laura Thompson and Connie Lo, the co-founders of Three Ships Beauty, embarked on this journey armed with little more than passion and a modest budget of $4,000. Their venture into natural skincare began without a formal business plan or market research, yet today, they have cultivated an impressive brand projected to reach $8.5 million in revenue by 2025. Their story is not just one of financial achievement; it encompasses resilience, strategic thinking, and a deep understanding of consumer needs.

In this article, we delve into the key principles and strategies that propelled Three Ships Beauty to its first million and continue to drive its growth. Through their experiences, we aim to provide actionable insights for aspiring entrepreneurs looking to navigate the complexities of building a successful brand.

Understanding the Problem

Laura Thompson's journey into the world of natural skincare was motivated by a personal frustration with existing products. With a background in chemical engineering, she recognized that the term "natural" was often misused in the industry, leading consumers to feel deceived by big corporations. “I felt like I was being lied to by these big multinational companies,” Laura reflects. This realization became the cornerstone of Three Ships’ value proposition: to offer effective, accessible, and genuinely natural skincare solutions.

This commitment to authenticity resonated with consumers who were equally frustrated by the lack of transparency in the market. Laura and Connie leveraged this understanding of consumer pain points to craft a brand that not only addressed these issues but also built a loyal customer base.

The Power of Partnership

A significant factor in Three Ships’ success is the strong partnership between Laura and Connie. Their meeting over dinner in 2019 marked the beginning of a collaboration that would lead to shared success. Their complementary skills—Laura’s analytical mindset and Connie’s people-centric approach—allowed them to tackle challenges from multiple angles. Laura describes their relationship as a balance of strengths: “I’m an introvert. She’s an extrovert. I’m a numbers person. She’s a people person.”

The decision to split equity equally, despite reservations from advisors, laid a strong foundation for accountability and commitment. This partnership exemplifies the importance of finding a true collaborator, not just a co-founder, to navigate the tumultuous waters of entrepreneurship.

Engaging with Customers

Without the luxury of a marketing budget, Thompson and Lo turned to grassroots strategies to connect with their audience. Selling products at farmers' markets not only helped them generate revenue—ranging from $1,500 to $2,000 in a single day—but also provided invaluable customer insights. Engaging directly with consumers allowed them to observe preferences and behaviors that would inform product development.

Laura recalls, “We could see how they were engaging with the product. After every single person applies this to their hand, they’re smelling their hand instantly. Clearly, scent is a really important thing.” This direct feedback loop led to strategic decisions about product formulation, such as avoiding polarizing ingredients like lavender.

Embracing Change

The ability to pivot is crucial in the dynamic landscape of business. For Three Ships, one of the most significant turning points came with their rebranding from the original name, Niu Body. Early assumptions about their target demographic proved inaccurate; the youthful branding did not resonate with an older audience. Recognizing this misalignment, they transitioned to Three Ships, resulting in renewed interest and alignment with their evolving customer base.

Laura emphasizes the importance of adaptability: “I’d say the key turning point was transitioning to the new brand, Three Ships.” This rebranding not only rejuvenated their marketing but also solidified their identity in a crowded marketplace.

Strategic Distribution

Three Ships’ approach to scaling distribution has been methodical and intentional. Their journey into retail began serendipitously when Connie met a national buyer for Whole Foods at a trade show. Rather than rush into a nationwide rollout, they opted for a measured strategy, starting with just 13 stores in Southern California. This gradual approach allowed them to refine operations and build brand recognition organically.

Laura advises entrepreneurs against the temptation to scale too quickly: “A lot of entrepreneurs are chomping at the bit. They want to launch into all 600 or 500 stores from day one.” This cautious expansion helped them solidify their market presence before venturing into larger partnerships.

However, not all partnerships were successful. Their experience with Target serves as a cautionary tale. After launching in 800 stores, they realized that their products were not moving as anticipated. This prompted a courageous decision to withdraw from the partnership, underscoring the importance of product-channel fit. “We could see the writing on the wall,” Laura explains. “We didn’t have nearly enough brand recognition within the US to support a rollout of this size.”

The Reality of Slow Growth

Three Ships’ revenue growth trajectory illustrates the reality of slow, steady progress in building a sustainable business. In their inaugural year, they generated $40,000 in revenue, and while they were profitable, they faced several years of challenges before reaching the $1 million mark. The subsequent years saw growth to $100,000 and then $500,000, culminating in over $1 million in their fourth year.

This gradual ascent highlights the importance of maintaining momentum and focus through the challenging middle stages of growth. “Sustainable revenue growth takes time,” Laura asserts. Their emphasis on customer acquisition during the early years laid the foundation for long-term retention and loyalty.

Building a Community

Community engagement has been a cornerstone of Three Ships’ strategy. With an email list of 150,000 subscribers, the brand has leveraged email marketing to foster customer loyalty, accounting for 30% to 35% of their revenue. Laura notes, “Email is such an underrated channel,” emphasizing the effectiveness of long-form content that connects customers to the brand’s narrative.

By sharing insights and updates through founder notes, they humanize the brand and create a sense of belonging among their audience. This approach not only drives sales but also cultivates a community around shared values and experiences.

Grit and Resilience

Laura’s reflections on the early days of Three Ships reveal the grit required to succeed. Even while appearing on platforms like Dragons’ Den, the founders were still hand-making products, dispelling the myth that entrepreneurship is glamorous. “It’s often very, very gritty,” she states. This raw determination, coupled with strategic planning and a genuine focus on customer needs, distinguishes the small percentage of founders who reach significant revenue milestones from those who do not.

Future Aspirations

Looking ahead, Three Ships aims to double its revenue by 2025, further solidifying its position in the natural skincare market. The strategies that propelled them to their first million will continue to guide their expansion, with an emphasis on authenticity, customer engagement, and calculated growth.

FAQ

What inspired Laura Thompson to start Three Ships?

Laura was motivated by frustration with the lack of genuinely natural skincare options in the market, leading her to create a brand that prioritizes transparency and effectiveness.

How did Laura and Connie meet?

Laura and Connie met over dinner in 2019 and discovered their complementary strengths and shared values, which laid the foundation for their partnership.

What was the significance of the rebranding?

The rebranding from Niu Body to Three Ships was pivotal in aligning the brand with its evolving customer base, enhancing market resonance and brand identity.

How important is customer feedback in building a brand?

Customer feedback is crucial for understanding preferences and making informed product decisions, as demonstrated by Three Ships’ early sales at farmers' markets.

What does Three Ships attribute to its slow growth?

The founders emphasize that sustainable growth takes time, and maintaining momentum through challenging phases is essential for long-term success.

Through their journey, Laura Thompson and Connie Lo exemplify how passion, strategic thinking, and a commitment to authenticity can create a thriving brand in a competitive environment. Their story serves as an inspiration for entrepreneurs everywhere, illustrating that success is not merely about rapid growth but rather about building a resilient and customer-focused business.