Many agencies have ideas for product lines – but how easy is the jump from agency to product business?
Jake Xu, co-founder at Shakeup Cosmetics, knows this learning curve all too well.
“We’d been working with cosmetics and beauty brands for over a decade and realised our true passion was in brand building,” he explains. “We wanted to create something tangible, rather than just a design service – we wanted to build our own brand.”
Having struggled to find cosmetics brands they could relate to since their teen years, they decided to create their own – but running a new business alongside an agency was tough.
“We had the full intention of running the businesses together,” admits Jake. “We threw ourselves into things, but it was clear both businesses were very time-consuming. We wouldn’t have been able to give our undivided attention to potential investors and would have also risked burnout.”
After struggling to juggle the two businesses, they decided to shut the agency down for good in 2019 – but not without first making sure their staff had extended pay to help them while finding new roles.
“We were presented with the cold, hard truth that the potential and scalability of Shakeup was much bigger than the agency we had run for 12 years,” says Jake.
This transition wasn’t without difficulty.
“If you look at the kind of clients we worked for, it doesn’t seem like much of a jump, but we had no prior exposure to product development, talking to suppliers and developing a supply chain,” he says. “We went from dealing with businesses to all of a sudden switching to dealing with consumers DIRECTLY. It was definitely a steep learning curve.”
This steep learning curve has definitely paid off: Shakeup is incredibly popular overseas and is now stocked at Harvey Nichols and Superdrug in the UK. And now, 18 months on, they’ve just received a second round of investment at a valuation of 4x the agency they closed.
Jake will be talking to us about making the jump from agency leader to product launch, and how to manoeuvre the stumbling blocks along the way.