this week on case studies with the biz
doc its Kylie cosmetics founded by and
run by Kylie Jenner one of the
kardashian-jenner girls there’s a lot of
fanfare and there’s a lot of naysayers
out there some say she’s a billionaire
some say she’s not I’m gonna tell you
why I think she absolutely is
let’s do three things this week one take
a little tour of the company second take
a little tour of the history of
celebrities trying to build companies
off of their fame and their brand
platform and third I’m gonna give you a
lesson on valuation versus revenue this
week on case studies Kylie cosmetics
founded by Kylie Jenner well what do you
do if you’re a fashion icon you’re
beautiful you’re carrying yourself with
a lot of class and you have these
gorgeous perfectly plump lips that are
on the cover of magazines I’ll tell you
what you do you have an idea and a
vision just like most entrepreneurs and
you take 250 thousand dollars of your
own money which is very very healthy
money to start a company with that’s not
bootstrapping or seed that’s a first
investment in yourself and you bought
15,000 of Kylie Jenner
Kylie cosmetic lip kits beautiful lip
gloss with instructions and how to do
these things it was really a hit as the
legend has it it sold out in a matter of
hours or a minute depending on you
believe it doesn’t matter if you move
that much in a week you’re doing
something with your first product so
whether it was a minutes or it was a day
doesn’t really matter to me that is a
successful product launch as successful
as anything I’ve had a privilege to look
at now she had a platform because she’s
a member of the Jenner Kardashian clan
but she had also built up her own
following she’s almost a hundred and
eleven million followers on Instagram
and she was the number one at least for
a time I think she may still be
celebrity that was on snapchat from that
platform she promoted this to girls that
really enjoyed what she had to say about
beauty and makeup and they wanted that
lip kit for themselves and so it goes
they sold so let’s take a look at the
economics and the start of the company
she takes two hundred and fifty thousand
dollars of her own money and buys
fifteen
of these lip kits now she was very
careful about the manufacturers she
selected she went and found a vegan
manufacturer that did not do any animal
testing I applaud her for that because
so many cosmetic companies today are
still doing animal testing nonetheless
that means that she paid probably $16
1667 is the exact number if the entire
250,000 was spent on those lip kits
well she sold them at $29 retail which
means that they would have brought in
retail four hundred and thirty-five
thousand dollars personally I don’t care
what you think whether it was one day
one week or one month when you look at
15,000 units sold in a very short time
of your very first product running a 42%
margin there’s only one word for that
financially speaking and it is damn that
is phenomenal performance net is a great
launch of a new brand now from the
hundred and eighty-five thousand you
would subtract marketing cost marketing
cost for Kylie Jenner consists of
putting a great picture up on snapchat
and putting it out or putting it up on
Instagram and putting it out and all of
her fan base this goes Wow look at that
new color look at that new shade and
they love it
now take a company like Lancome Lancome
has to sit there and puts those women
that are beautiful very nicely made up
in those lab coats sitting in front of
Bloomingdale’s Macy’s big-box retailers
some of which no longer exist which is a
whole another case study and they’re out
there to greet the women that are
walking in would you like to know about
Lancome and our hypoallergenic makeup
products that is a marketing cost that
Kylie cosmetics does not have that she
has a wonderful fan base and a huge
celebrity platform one that I don’t
think she has to apologize for from
which to market those products now let’s
go take a look at the revenue a little
bit and it especially some interviews
and some statements have been made by
Kris Jenner
she has pointed out to Women’s Wear
Daily and she provided some statistics
and some reports and everything that
indicate that Kylie amazingly so in the
first 18 months generated 420 million
dollars of gross revenue and that would
be the $29 times however many lip kits
and the other prices of the other
products and there’s a full product line
up which leads me to believe that this
is a very possible number especially
when you go back and you think about
that first day being 400,000
whether you think that’s a first week or
first month impressive as hell as I
pointed out previously so as we go here
and we think that’s there we compare it
to some brands that have been in beauty
there is Tom Ford Tom Ford got into
makeup in addition to the other fashion
products and a huge huge mogul like
existence at Tom Ford have actually it’s
not mogul like he was a mogul it was 500
million for the makeup products after 10
years Bobby Brown the makeup brand was a
billion dollars after 25 years so for
Kylie to come out of literally nowhere
with the power of modern social media
look at the comparison to the history in
fashion trying to build brands to come
out on the strength of a previous
marketing platform to make that point
here’s a biz doc mini-lesson on
valuation versus revenue valuation is
what your company is worth and if you
are the only owner of a company then the
worth is all yours as we take a look at
snapchat Twitter and Estee louder first
of all what is their valuation well
guess what they’re public and on the
stock market so we can look up their
valuation every day and as we sit here
in July of 2018 snapchats around 17
billion Twitter about thirty two point
seven billion and Estee Lauder about 51
point eight billion that’s their
valuation well what’s their revenue and
let’s see if we can correlate the
revenue to the value well snapchat is at
nine hundred million last year just
about to cross a billion dollars in
12-month revenue that means that they
are 17 X value to revenue so 17 times
their revenue is their value that’s a
simple formula how you do it we go to
Twitter 2.6 billion dollars in revenue
for the last 12 months and 30 2.7
billion in valuation means that they’re
trading at about twelve point six X so
twelve point six times revenue is their
value now let’s get to something that
very closely aligns with Kylie Jenner a
fashion brand fashion brand 51 point
eight billion Estee Lauder thirteen
point three billion in revenue so about
3.9 x so that fashion brands don’t get
nearly the multi
pull that the internet gurus do now
let’s compare it if we take that 3.9
basically 4x and apply it to 420 that’s
1.6 billion in company valuation today
and even if you discount that back to
say 300 million because there’s people
saying oh Kris Jenner is inflating
figures well who are you to say that
what proof do you have
but even if she was down it’d say 300
million well 3 times 3.9 is still 1.2
billion so I believe that Kylie
cosmetics today based on the multiples
and evaluations that we can look at the
stock market I believe this company even
if you were to discount this
significantly is a billion dollar
valuation company today now I’m gonna
tell you in the last part of this case
study why Kylie has no apology to make
that she was born into a family that
gave her a platform she still needs to
do it whatever it is be a successful
model be a successful businessperson you
still have to pull it off and as I’m
about to tell you in the celebrity fail
roll call there have been a lot of
celebrities that have flamed out there
will also be naysayers along the way oh
well she’s got all this money she
doesn’t really care let me tell you I
think that’s a mistaken statement many
people that sit at home don’t understand
the spirit of competitive juice it
doesn’t matter if you’re trying to make
your first dollar or your millionth
dollar people that have a heart for
entrepreneurship and are trying hard
have that competitive juice flowing
through their veins every day and so she
has in my view no apology to make that
she was on a platform because she
demonstrated at least so far that she
can make something of it
second point a platform a launch a
product but it takes a lot more than
that to build a full effort that
establishes a company and I think she’s
done that she started out with the
lipgloss product that basically brought
in $435,000 but now look at the broad
product line she’s establishing the
company as a very rivaled fashion brand
that majors that are out there like
Estee Lauder are looking at with envy
because of the way that she’s able to
market using the modern platform of
social media
remember she may have had a platform on
the family brand but she had to build up
her own following on snapchat and on
Instagram now was it easier for her to
do than it would be for you or me or
someone starting from point 0 sure but
again she had to pull it off which
brings me to the big Doc’s celebrity
Phil were caught there have been a lot
of celebrities that have used their fame
as a platform to start some other
business or two and they have failed and
I’m going to take you through the list
restaurants have been very popular with
celebrities Britney Spears started nyla
in yla standing for New York in
Louisiana which she really liked both
locations it failed
Planet Hollywood remember an Arnold
Sylvester and Bruce Willis got together
and started a restaurant chain it Dale
fashioned cafe claudia schiffer
elle macpherson Naomi Campbell there’s a
handful of beauty well they started
fashion cafe and it failed then ours
Jennifer Lopez who strolled out to
Pasadena California among the Spanish
architecture and started marvelous
restaurant it failed then Eva Longoria
she said I’ll take you up one level and
I’ll start a restaurant and a nightclub
beso failed
lastly getting completely away from
restaurants was brother-in-law Kanye
West
he started the pastel clothing line and
unfortunately that fit and lastly the
granddaddy of them all the ESPN phone
that’s right five channels of TV the
ESPN mag ESPN SportsCenter locations
around the United States restaurants and
key locations but we’re gonna go one
more we’re gonna have a mobile phone
well they sold 30,000 of them and the
phone died an ugly death after millions
and millions and millions and millions
of dollars of unprofitable investment
hey for more on that you should go back
to Tom Ellsworth calm because I wrote a
blog about that in 2014 you can see how
standing on the platform of one brand is
no success of making a hit on the other
so while the debate rages around us
cover of national magazines is she or is
she not a billionaire I think that I’ve
shown that the math clearly shows that
if these numbers are even close to being
correct she is a billionaire and whether
that’s the youngest billionaire the
youngest
female billionaire the youngest member
of the Forbes billionaire Club
I don’t really care I happen to think
that she has pulled it off and she
deserves the credit that goes with it
that’s what I think but what do you
think leave your comments down below and
let us know weigh in on this topic you
can also follow me on Facebook Twitter
and Instagram let me know what you think
and tell me what key studies you want to
see because I’m listening to you please
subscribe along the way because we at
value teaming are driving toward a
million subscribers and when we get
there the first annual value tainment
conference featuring Patrick Beth David
yours truly the biz doc and other
experts to make you better your company
better and the people around you that
you touch better still until then
I’m Tom Ellsworth the biz doc and I hope I left you better than I found you
doc its Kylie cosmetics founded by and
run by Kylie Jenner one of the
kardashian-jenner girls there’s a lot of
fanfare and there’s a lot of naysayers
out there some say she’s a billionaire
some say she’s not I’m gonna tell you
why I think she absolutely is
let’s do three things this week one take
a little tour of the company second take
a little tour of the history of
celebrities trying to build companies
off of their fame and their brand
platform and third I’m gonna give you a
lesson on valuation versus revenue this
week on case studies Kylie cosmetics
founded by Kylie Jenner well what do you
do if you’re a fashion icon you’re
beautiful you’re carrying yourself with
a lot of class and you have these
gorgeous perfectly plump lips that are
on the cover of magazines I’ll tell you
what you do you have an idea and a
vision just like most entrepreneurs and
you take 250 thousand dollars of your
own money which is very very healthy
money to start a company with that’s not
bootstrapping or seed that’s a first
investment in yourself and you bought
15,000 of Kylie Jenner
Kylie cosmetic lip kits beautiful lip
gloss with instructions and how to do
these things it was really a hit as the
legend has it it sold out in a matter of
hours or a minute depending on you
believe it doesn’t matter if you move
that much in a week you’re doing
something with your first product so
whether it was a minutes or it was a day
doesn’t really matter to me that is a
successful product launch as successful
as anything I’ve had a privilege to look
at now she had a platform because she’s
a member of the Jenner Kardashian clan
but she had also built up her own
following she’s almost a hundred and
eleven million followers on Instagram
and she was the number one at least for
a time I think she may still be
celebrity that was on snapchat from that
platform she promoted this to girls that
really enjoyed what she had to say about
beauty and makeup and they wanted that
lip kit for themselves and so it goes
they sold so let’s take a look at the
economics and the start of the company
she takes two hundred and fifty thousand
dollars of her own money and buys
fifteen
of these lip kits now she was very
careful about the manufacturers she
selected she went and found a vegan
manufacturer that did not do any animal
testing I applaud her for that because
so many cosmetic companies today are
still doing animal testing nonetheless
that means that she paid probably $16
1667 is the exact number if the entire
250,000 was spent on those lip kits
well she sold them at $29 retail which
means that they would have brought in
retail four hundred and thirty-five
thousand dollars personally I don’t care
what you think whether it was one day
one week or one month when you look at
15,000 units sold in a very short time
of your very first product running a 42%
margin there’s only one word for that
financially speaking and it is damn that
is phenomenal performance net is a great
launch of a new brand now from the
hundred and eighty-five thousand you
would subtract marketing cost marketing
cost for Kylie Jenner consists of
putting a great picture up on snapchat
and putting it out or putting it up on
Instagram and putting it out and all of
her fan base this goes Wow look at that
new color look at that new shade and
they love it
now take a company like Lancome Lancome
has to sit there and puts those women
that are beautiful very nicely made up
in those lab coats sitting in front of
Bloomingdale’s Macy’s big-box retailers
some of which no longer exist which is a
whole another case study and they’re out
there to greet the women that are
walking in would you like to know about
Lancome and our hypoallergenic makeup
products that is a marketing cost that
Kylie cosmetics does not have that she
has a wonderful fan base and a huge
celebrity platform one that I don’t
think she has to apologize for from
which to market those products now let’s
go take a look at the revenue a little
bit and it especially some interviews
and some statements have been made by
Kris Jenner
she has pointed out to Women’s Wear
Daily and she provided some statistics
and some reports and everything that
indicate that Kylie amazingly so in the
first 18 months generated 420 million
dollars of gross revenue and that would
be the $29 times however many lip kits
and the other prices of the other
products and there’s a full product line
up which leads me to believe that this
is a very possible number especially
when you go back and you think about
that first day being 400,000
whether you think that’s a first week or
first month impressive as hell as I
pointed out previously so as we go here
and we think that’s there we compare it
to some brands that have been in beauty
there is Tom Ford Tom Ford got into
makeup in addition to the other fashion
products and a huge huge mogul like
existence at Tom Ford have actually it’s
not mogul like he was a mogul it was 500
million for the makeup products after 10
years Bobby Brown the makeup brand was a
billion dollars after 25 years so for
Kylie to come out of literally nowhere
with the power of modern social media
look at the comparison to the history in
fashion trying to build brands to come
out on the strength of a previous
marketing platform to make that point
here’s a biz doc mini-lesson on
valuation versus revenue valuation is
what your company is worth and if you
are the only owner of a company then the
worth is all yours as we take a look at
snapchat Twitter and Estee louder first
of all what is their valuation well
guess what they’re public and on the
stock market so we can look up their
valuation every day and as we sit here
in July of 2018 snapchats around 17
billion Twitter about thirty two point
seven billion and Estee Lauder about 51
point eight billion that’s their
valuation well what’s their revenue and
let’s see if we can correlate the
revenue to the value well snapchat is at
nine hundred million last year just
about to cross a billion dollars in
12-month revenue that means that they
are 17 X value to revenue so 17 times
their revenue is their value that’s a
simple formula how you do it we go to
Twitter 2.6 billion dollars in revenue
for the last 12 months and 30 2.7
billion in valuation means that they’re
trading at about twelve point six X so
twelve point six times revenue is their
value now let’s get to something that
very closely aligns with Kylie Jenner a
fashion brand fashion brand 51 point
eight billion Estee Lauder thirteen
point three billion in revenue so about
3.9 x so that fashion brands don’t get
nearly the multi
pull that the internet gurus do now
let’s compare it if we take that 3.9
basically 4x and apply it to 420 that’s
1.6 billion in company valuation today
and even if you discount that back to
say 300 million because there’s people
saying oh Kris Jenner is inflating
figures well who are you to say that
what proof do you have
but even if she was down it’d say 300
million well 3 times 3.9 is still 1.2
billion so I believe that Kylie
cosmetics today based on the multiples
and evaluations that we can look at the
stock market I believe this company even
if you were to discount this
significantly is a billion dollar
valuation company today now I’m gonna
tell you in the last part of this case
study why Kylie has no apology to make
that she was born into a family that
gave her a platform she still needs to
do it whatever it is be a successful
model be a successful businessperson you
still have to pull it off and as I’m
about to tell you in the celebrity fail
roll call there have been a lot of
celebrities that have flamed out there
will also be naysayers along the way oh
well she’s got all this money she
doesn’t really care let me tell you I
think that’s a mistaken statement many
people that sit at home don’t understand
the spirit of competitive juice it
doesn’t matter if you’re trying to make
your first dollar or your millionth
dollar people that have a heart for
entrepreneurship and are trying hard
have that competitive juice flowing
through their veins every day and so she
has in my view no apology to make that
she was on a platform because she
demonstrated at least so far that she
can make something of it
second point a platform a launch a
product but it takes a lot more than
that to build a full effort that
establishes a company and I think she’s
done that she started out with the
lipgloss product that basically brought
in $435,000 but now look at the broad
product line she’s establishing the
company as a very rivaled fashion brand
that majors that are out there like
Estee Lauder are looking at with envy
because of the way that she’s able to
market using the modern platform of
social media
remember she may have had a platform on
the family brand but she had to build up
her own following on snapchat and on
Instagram now was it easier for her to
do than it would be for you or me or
someone starting from point 0 sure but
again she had to pull it off which
brings me to the big Doc’s celebrity
Phil were caught there have been a lot
of celebrities that have used their fame
as a platform to start some other
business or two and they have failed and
I’m going to take you through the list
restaurants have been very popular with
celebrities Britney Spears started nyla
in yla standing for New York in
Louisiana which she really liked both
locations it failed
Planet Hollywood remember an Arnold
Sylvester and Bruce Willis got together
and started a restaurant chain it Dale
fashioned cafe claudia schiffer
elle macpherson Naomi Campbell there’s a
handful of beauty well they started
fashion cafe and it failed then ours
Jennifer Lopez who strolled out to
Pasadena California among the Spanish
architecture and started marvelous
restaurant it failed then Eva Longoria
she said I’ll take you up one level and
I’ll start a restaurant and a nightclub
beso failed
lastly getting completely away from
restaurants was brother-in-law Kanye
West
he started the pastel clothing line and
unfortunately that fit and lastly the
granddaddy of them all the ESPN phone
that’s right five channels of TV the
ESPN mag ESPN SportsCenter locations
around the United States restaurants and
key locations but we’re gonna go one
more we’re gonna have a mobile phone
well they sold 30,000 of them and the
phone died an ugly death after millions
and millions and millions and millions
of dollars of unprofitable investment
hey for more on that you should go back
to Tom Ellsworth calm because I wrote a
blog about that in 2014 you can see how
standing on the platform of one brand is
no success of making a hit on the other
so while the debate rages around us
cover of national magazines is she or is
she not a billionaire I think that I’ve
shown that the math clearly shows that
if these numbers are even close to being
correct she is a billionaire and whether
that’s the youngest billionaire the
youngest
female billionaire the youngest member
of the Forbes billionaire Club
I don’t really care I happen to think
that she has pulled it off and she
deserves the credit that goes with it
that’s what I think but what do you
think leave your comments down below and
let us know weigh in on this topic you
can also follow me on Facebook Twitter
and Instagram let me know what you think
and tell me what key studies you want to
see because I’m listening to you please
subscribe along the way because we at
value teaming are driving toward a
million subscribers and when we get
there the first annual value tainment
conference featuring Patrick Beth David
yours truly the biz doc and other
experts to make you better your company
better and the people around you that
you touch better still until then
I’m Tom Ellsworth the biz doc and I hope I left you better than I found you
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