This week, L’Oréal revealed that it will begin work with start-up incubator Founders Factory, becoming its partner for investments in beauty tech as the cosmetics business looks to setup the right arm’s length approach to innovation.
L’Oréal and Founders Factory will invest and grow five early stage startups and co-create two new companies from scratch every year. The Drum caught up with Lubomira Rochet, chief digital officer and member of L’Oréal’s executive committee, to find out more about how the brand arrived at the partnership.
Why choose Founders Factory over other accelerator schemes?
It was really the ambition of the project. They [Founders Factory] have the right level of ambition to accelerate our own digital programme. And secondly the team; they share two traits with L’Oreal – they are as passionate as we are about innovation and we are entrepreneurs. Innovating is in the culture of L’Oreal and we feel like we're a bunch of entrepreneurs doing something cool. The combination of this a passion for innovation and entrepreneurship really told us [the partnership] was right. We reviewed many other propositions. [Founders Factory] are more suited to our culture
What is the innovation culture like in the beauty sector as a whole?
It’s a pity – if you take digital and beauty it’s a perfect match. It’s one of the most digitised categories. You have 45 billion views on YouTube per year on beauty. It's the third most searched for category on Google. It creates a lot of excitement on Facebook and Snapchat. Why? Because it’s very visual and very advice driven. It’s about 'how and from who am I going to get help to choose the right product for me, my skin, where I live?'. So there’s a lot around personalisation and contextualisation which digital technology has helped enormously with.
What challenges are you looking to address that have historically mired corporates and start-ups working collaboratively together - for example payment schedules?
For me, it’s more a question of culture than process. I think that the first thing is really to get connected to the broadest ecosystem possible. [Founders Factory] are based in London but have a truly global reach. All the [L'Oreal] executive committee members see themselves as entrepreneurs so that helps us start from a very good ground. They know how to go fast. We have a tech incubator in San Francisco where we’ve already developed some cool products such as 'Make Up Genius'. So we get it. We have internal agility that allows us to have the right conversations.
How is L'Oreal set-up internally to work with start-ups?
Globally we have the support of the board and three executives of L’Oreal who are part of the journey and are reviewing and getting involved with the start-ups. It will also be a great way of fostering internal innovation and creativity and getting new ideas.
Why shouldn’t corporates treat innovation the same way as a product launch?
Our chief executive has a vision for us to become a product and services company. Of course we’ll still deliver amazing products but we want to complement these products with services that will help our consumers be inspired and get advice. This is really the direction we want to go and being plugged into an ecosystem of start-ups will give us the agility and speed to market. We want to leverage the strength of the Founders Factory because we believe that is the best way is to tap into an ecosystem rather than internalising it.
Did you ever consider internalising it?
The strategy was open. We discussed it. But at CES this year there was a big booth for beauty tech. It’s something happening right now, in the market, and we want to get to the best traction and best connection to that environment.
What about the retail partners you work with – do you involve them from the start?
This is absolutely open. What we feel is that by becoming a platform company we really want to create cool services that can be embedded into the experiences where are consumers are. If we create something like 'Make Up Genius' then the end game is to embed it into all of our retail partners. We need to enhance the consumer experience wherever they are at every touchpoint.
Why is it important to get the CEO's backing?
Our chief executive is absolutely convinced that digital is cool, sexy and that he is going to change our operating model. He’s been absolutely behind it and all the digital transformation we’re driving in L’Oreal.