Looking For Liquidity

What It Means to Be ‘Cash-Poor, Equity-Rich’

Ju Rhyu’s Korean-inspired acne patch is taking the beauty world by storm—but that doesn't mean the brand or its founder are living on easy street.

Welcome to The Leap, where women (and nonbinary) entrepreneurs open up about what it took to get to where they are now. In 2018, women founders received just 2.2% of the $130 billion in venture money invested in the United States. Given these odds, it’s time to get real about what it’s really like to be a woman founder. From raising capital to imposter syndrome, we explore what it takes for women to enter the world of entrepreneurship.

Today we chat with Ju Rhyu, the founder of Hero Cosmetics, an acne-care brand that makes products for the entire lifecycle of a pimple. Originally, Ju worked in marketing at some of the world's largest companies, including Kraft Foods, American Express. Then she moved to Seoul.

Ju discovered the acne patch when she found herself struggling with acne in South Korea. Realizing its effectiveness—and wondering why it was noticeably missing in the U.S. market—she decided to start her own brand. Having recently launched in Target, Ju opens up about the road to Hero’s success, how she manages personal financial stability as a founder, and what it’s like to prepare for her first fundraising round.


What were you doing before work before starting your company? Tell us about your career path before becoming an entrepreneur.

My career path to starting this business was very non-linear—as is usually the case for a lot of entrepreneurs. I’m a marketer by background. I went to business school at Columbia and after getting my MBA I worked in consumer packaged goods (CPG) at Kraft Foods.

Back then, CPG companies like Procter & Gamble, Unilever, Kraft Foods, General Mills were the golden standard for consumer-based marketing and managerial training. I learned a ton at Kraft but then left to get more digital training at American Express. There was a big difference in that experience because at a place like Kraft you don’t interact with the consumer directly. At American Express, I learned how marketing is different when you actually own the consumer relationship. After American Express, I worked for Samsung for two years as an expat in Seoul, South Korea.

How did you first get the idea for Hero Cosmetics?

I was struggling from breakouts while I was living in Seoul. I think it was due to the change in lifestyle, different environment, air quality, stress—or a combination of all these things—and I noticed Korean people walking around with acne patches in public. I went to a pharmacy and bought one to try myself and was blown away by how well it worked. My immediate question was, why am I learning about this product now and why wasn’t it more known or available in the U.S.? That’s where I saw an opportunity.

What did the transition from your previous career to launching this company look like?

It was pretty smooth. I used a lot of the things that I learned from previous jobs and poured it all into Hero. Things like: starting with consumer needs and adapting our messaging to fit what people were looking for, to knowing how critical good packaging was to stand out on the shelf to email drip campaigns; this is all knowledge I brought to Hero when launching. I worked on Hero as a side hustle to see if my hypothesis that the American market would recognize the need for acne patches would prove to be true. After we launched in September 2017, we quickly proved product market fit and got into retail. I started working on Hero full-time in February 2018.

"I noticed Korean people walking around with acne patches in public. I went to a pharmacy and bought one to try myself and was blown away by how well it worked. My immediate question was, why am I learning about this product now and why wasn’t it more known or available in the U.S.?"

Letting go of a steady paycheck is terrifying for most people, did you have a financial safety net or a back-up plan? If so, how much did you save?

I left my corporate job when Hero had already proven there was product market fit and when I knew I’d be taking a salary soon. Even now, I don’t take a large salary so the personal finance topic is definitely a big subject to consider. I did have savings and had some consulting projects on the side to help with any gaps.

As an entrepreneur, you will feel “cash poor, equity rich” for a while. I’ve realized that if you’re starting something, you definitely need either a cushion and runway in your personal finances or you need to raise money. Even if you raise money, until the company really starts taking off, your salary will probably be minimal. If you are part of a couple, married or otherwise, it can help if the other person has a steady paycheck. My husband is also an entrepreneur so we’re both still in investment mode for our businesses.

How have your conceptions of financial stability changed since starting your own company?

I don’t doubt that Hero will be successful. Actually, I’d say it already is. The question is how successful can it be and what is the right strategy and planning to ensure that my own personal financial stability is secure. There can be a lot of benefits to being a business owner. If most of your wealth and earnings is in stock and capital gains, you pay a lower tax rate than ordinary income. Also, your net worth is tied to your company, so if your company is doing well, you can have a high net worth.

The downside is the “cash poor, equity rich” part. It’s not always easy to get your company stocks liquid. You need liquidity moments—either outside investment where you take money off the table or an acquisition. You need to translate your stock in your company to actual dollars because, at the end of the day, that’s how you will pay bills.

"As an entrepreneur, you will feel “cash poor, equity rich” for a while."

What’s been your plan to profitability—have you been raising capital? How are you financing your brand?

We bootstrapped our brand and still have not raised money. That will change in the near future. Our business has been profitable since day one and we’ve re-invested into the company for inventory, hiring, and marketing.

Have you faced any obstacles as a woman entrepreneur?

I think it’s a great time to be a female entrepreneur. The amount of support systems out there is really incredible. Even Supermaker and this column is an example of that. People want to support female founders to help change the ratio out there and I’ve only experienced tailwinds since starting this business.

A down side I mentioned to someone is if being a non-white, female founder becomes an “angle” for investors or companies. I started to worry that investors needed good PR and were actively hunting for people who fit a non-white, non-male quota rather than truly appreciating and valuing their business. But this person also said: “Hey, whatever angle we can get will help,” which is also true.

What’s currently your biggest business challenge?

Getting together a capital raise and making our 2020 plans concrete.

What’s been your company’s biggest victory so far?

Probably launching in over 1,500 Target stores!

What does your self-care routine currently look like?

I make sure to have off-time or mental space to think. If you’re working too much, you don’t give yourself the freedom to ponder, wonder, ideate, and brainstorm. I go on frequent walks and sometimes during those walks I’ll think of great ideas.

I work and live in Paris and with the time difference (6 hours ahead of NYC where the team is) it’s easy to work weird hours. But I try to be disciplined with a “no meetings or calls after 8 p.m. Paris time” rule. After 8 p.m. is time for dinner with my husband, relaxing with a good show, and sleeping.

I have a pretty sedentary life when I’m in Paris since I work from home. There are days when I don’t leave the house. So I try to do something active at least three times a week, even if it’s only for 15 minutes.

"I make sure to have off-time or mental space to think. If you’re working too much, you don’t give yourself the freedom to ponder, wonder, ideate, and brainstorm. I go on frequent walks and sometimes during those walks I’ll think of great ideas."

What are some resources that have helped you on your journey?

I love [the podcast] Pivot by Kara Swisher and Scott Galloway. I learn a lot about what not to do or what not to be. I also love How I Built This with Guy Raz.

As for books, I’m reading Never Split the Difference: Negotiating As If Your Life Depended On It to improve my negotiation skills. I also really enjoyed the Steve Jobs biography by Walter Isaacson.

What’s your advice to someone who is considering taking “the leap”?

The biggest hurdle is just starting. I have so many people who come to me saying they want to start something. Only a small fraction of those people actually do. Starting is the biggest part. Once you get going you’ll find your way and learn as you go. There is no guarantee of success—but neither is there in corporate America.

I’ve personally found the entrepreneur life so rewarding. I’ve met tons of amazing people who I never would have met otherwise. I’ve learned so much in two years and am constantly challenged to get to the next level. We didn’t get here overnight. It’s a series of small steps that leads you to where you are, so I encourage anyone who’s interested in starting something to start small. Get a prototype made. Get ten people to buy it. See if it works. See if people want it. Then you grow and iterate.

Have you ever used an acne patch?

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