F-U-N-D-E-D: Silicon Valley bets $100M that computers can help you look good
Beauty and fashion startups hope to edge out the local mall by creating software that learns and anticipates what people want to wear.
What if Siri could give you beauty tips?
Silicon Valley got a step closer Monday when venture capitalists wrote a $100 million check to a startup called Ipsy to build the next-generation, global beauty brand.
Ipsy's doing it with a $10-a-month subscription for a themed "Glam Bag," which is filled with five types of cosmetics like eye shadow, brow gel or lipstick. On the outside, Ipsy's bag looks the same, but that's where the similarities end for most Ipsy customers.
"A couple of months ago, the bag was themed around Bohemian Beauty...but the products are customized to the individual subscriber," said CEO and co-founder Marcelo Camberos. Ipsy customers receive one of 200 different combinations of cosmetics based on their answers to 12 questions that give the company's software a sense of what they like. "The products in the bag would be completely different for you as it would a young black woman or a white woman who's really into red lipstick."
Welcome to Silicon Valley's answer to the beauty industry. Startups like Ipsy believe the future is super-intelligent software that knows your tastes so well it will send products you're guaranteed to like.
It's not a new idea. Netflix and Pandora changed the movie and music industries by offering recommendations based on what their users watched and listened to. Now, the venture capitalists backing startups like Ipsy believe they can do the same thing to the mall's corner beauty store.
There's a large prize if they succeed. Worldwide revenue for beauty care products is expected to jump to $461 billion by 2018, up 21 percent from 2013. So far, San Francisco-based Ipsy has grabbed about $150 million of that total each year from its 1.5 million subscribers.
There are others, like NYC-based startup Birchbox and Berlin-based GlossyBox, that send out a monthly box of cosmetics products for men and women after they answer a questionnaire like Ipsy's.
The idea doesn't just apply to beauty. Le Tote, a San Francisco startup that's raised $12.5 million from venture backers, sends subscribers three garments and two accessories each month (in a tote bag, of course). Meanwhile Stitch Fix, a Le Tote competitor that has raised $47 million, saying the clothing and accessories it sends are gleaned from a "personal style quiz."
Last year, venture capitalists invested $765 million in beauty and fashion startups, according to venture research firm Pitchbook. By mid-September of this year, they had invested $712 million.
Expect the trend to continue, says Sonya Brown of Norwest Venture Partners whose investments include startups focused on women's beauty such as PCA Skin and Madison Reed. Brown said the technological change will push companies to try to personalize their products further, possibly including even the cosmetic giants.
Sephora, for example, is already feeling the heat. Last month, the French company said it would begin delivering a mixed bag of cosmetics to subscribers for $10 a month, just like Ipsy.
With $100 million in new cash and three years of profitability -- a rarity among Silicon Valley-backed startups -- it's hard to argue with Ipsy's algorithm. But a quick glance at some users' responses indicates Silicon Valley hasn't cracked the beauty code just yet.
"I'm a black woman but Ipsy constantly sends me skin products for white or light-skinned women," Phoebe M. wrote on a product review site earlier this month. "Ipsy is a fantastic lovely little surprise every month, but I really am tired of receiving all of the wrong skin and hair products."
Ipsy's Camberos acknowledged that there are still kinks to work out. "That's where the algorithm is not foolproof," he said.
F-U-N-D-E-D is a regular column looking -- and sometimes laughing -- at what Silicon Valley has backed in the last week.
Featured Video
Clockmaker Ahmed: I won't meet police chief without my lawyer
Technically Incorrect: After being arrested for making his own digital clock, the newest science celebrity shows humor during a press conference and an appearance on MSNBC. He says he's transferring schools.
Technically Incorrect offers a slightly twisted take on the tech that's taken over our lives.
If only everyone who was wrongfully arrested could enjoy an aftermath like this.
Wednesday proved to be a little different than Monday for 14-year-old Ahmed Mohamed.
Should you have been unaccountably living in one of Donald Trump's trouser legs for the last couple of days, you might not know that Mohamed made a digital clock to impress his teacher.
Instead, his school, MacArthur High in Irving, Texas, called the police on Monday. Five uniformed men arrested him and accused him of making a hoax bomb. Oh, and they handcuffed him. "For his own personal safety and that of his officers," as the police later told me.
The fact that he's dark skinned, has the last name Mohamed and is a Muslim must have moved the police toward additional safety precautions.
Once the police paused to consider the facts -- or, rather, once Mohamed and his family began talking to the media -- the young science buff became a symbol for progress. Everyone from President Barack Obama to our future President Zuckerberg invited him to visit.
But what about Ahmed himself? Not every nerdy teen could face the cameras of America's media. Yet here he was on Wednesday at a press conference, celebrating that the hoax-bomb charges had been dropped.
He was slightly nervous, certainly. Still, he began, "I'm the person who built a clock and got in a lot of trouble for it."
He said he really wants to go to MIT. He also revealed that he's thinking about transferring out of MacArthur High "to any other school." He was fulsome in his praise for everyone on Twitter and Facebook who had supported him. The #IStandWithAhmed hashtag has become a focus for those who believe he was ill-treated and that he's just a nerdy kid trying to make things.
His advice to anyone out there who has talents they'd like to explore? "Go for it. Don't let people change who you are. Even if you get consequence for it, I still suggest you show it to people, because you need to show them your talent."
The boy isn't without humor -- and a little street wisdom. Told that the Irving police chief wanted to meet with him, he was asked whether he would agree to such a meeting. He said, "Not without my lawyer."
His favorite invention so far? Bluetooth speakers. He's not keen on talking about his latest inventions, because he wants to get them patented first. Oh, and he wants to appear on "Shark Tank." We all have imperfections, especially at 14.
Once this was over, Mohamed appeared on MSNBC. There he said that the police, when they arrested him, didn't even let him contact his parents. He was interrogated for an hour and 25 minutes, he said.
And then MSNBC's Chris Hayes introduced Dr. Chanda Prescod-Weinstein from MIT. She told Ahmed he was her ideal student, but please could he think about switching to physics. Prescod-Weinstein is an astrophysicist. And of course she invited him to visit.
A spokeswoman for the Irving Independent School District said during a press conference that "the information that has been made public to this point has been very unbalanced," according to The Washington Post. She said all the school was doing was ensuring the safety of everyone on campus. If the information was unfair and unbalanced, perhaps at some point the school will perform a rebalancing act.
All the school seems to have ensured for now is that Ahmed Mohamed will have a very different life from the one he might have imagined a week ago.
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