Entrepreneur Eric Malka shares lessons from The Art of Shaving: starting, growing, and selling The Art of Shaving company.

Eric shared his inspirational entrepreneurial journey, including co-founding, growing and exiting The Art of Shaving, a men’s shaving and skincare brand, and highlights from his new book “On the Razor’s Edge”.

Eric Malka, co-founder of The Art of Shaving and managing partner of Strategic Brand Investments, is a serial entrepreneur, investor, coach, author, and natural health advocate. Under his leadership as CEO, Eric is credited for pioneering the luxury men’s grooming and barbering industry.

The Art of Shaving is a men’s shaving and skincare brand that offers products and services to help you achieve a close, comfortable shave. They offer a variety of shaving products, including shaving creams, soaps, beard care products, and pre-shave oils. Their products are made with botanicals and essential oils, and are designed to be dermatologist-approved and irritation-free.

Eric recently released his book, “On the Razor’s Edge,” which offers insight into his journey and actionable advice for business owners.

Eric lives in Miami Beach, Florida

Lessons from The Art of Shaving:

Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.

Resources:

Books mentioned in this episode:
[We receive commissions for purchases made through these links (more info)].

• On the Razor’s Edge by Eric Malka
• The 80/20 Principle: The Secret to Achieving More with Less by Richard Koch

Other Podcast Episodes:

You can find other episodes of The How of Business podcast, the best small business podcast, on our Archives page.

Transcript:

The following is a full transcript of this episode. This transcript was produced by an automated system and may contain some typos.

Henry Lopez (00:16):

Welcome to this episode of The How of Business. This is Henry Lopez and my guest today is Eric Malka. Eric, welcome to the show.

Eric Malka (00:23):

Thank you, Henry. Thanks for having me.

Henry Lopez (00:25):

Absolutely. Eric Malka is with me today to share his inspirational entrepreneur journey, including co-founding, growing and exiting the Art of Shaving. The Artist of Shaving is a men’s shaving and skincare brand. Get a little bit more into what they do and also he has a new book titled On the Razor’s Edge. You can find all of the Howa business resources, including the show notes page for this episode. And to learn more about my coaching programs, please visit the howa business.com. I also invite you to please consider supporting this podcast on Patreon, and I encourage you to subscribe wherever you might be listening so you don’t miss any new episodes. Lemme tell you a little bit more about Eric. Eric Malka, as I mentioned, is the co-founder of the Art of Shaving and currently managing partner of Strategic Brand Investments. He’s a serial entrepreneur, an investor, a coach, an author, and a natural health advocate.

Henry Lopez (01:24):

Under his leadership as CEO, Eric is credited for pioneering the luxury men’s grooming and barbering industry. The artist shaving is, as I mentioned, an men’s shaving and skincare brand that offers products and services to help you achieve a close comfortable shave. They offer a variety of shaving products, including shaving creams, soaps, beard care products, and pre-shave oils. The products are made with botanicals and essential oils and are designed to be dermatologists approved and irritation free. So that’s where they focus. Eric recently released his book, as I mentioned, on the Razor’s Edge, which offers insights into his journey and actionable, which is what we’re all about here on this episode, on this podcast. Rather, actionable advice for business owners. Eric lives at Miami Beach about two hours south of where I am on I 95. And so once again, Eric Malco, welcome to the show.

Eric Malka (02:22):

Thank you. Thank you.

Henry Lopez (02:23):

How did you end up at Miami Beach?

Eric Malka (02:27):

Funny enough, I moved to Puerto Rico in 1988. And after living there for five years, I wanted to come back to the US mainland, but New York City felt like a non-starter for me weather wise. And I came to a seminar in Miami Beach in 93 and it was like a light bulb. I was like, this is the perfect, perfect compromise between Puerto Rico and New York.

Henry Lopez (02:58):

And of course you got plenty of New Yorkers in case you need some of that.

Eric Malka (03:02):

Yeah, they’ve all got the memo now, a few days late,

Henry Lopez (03:07):

No doubt. And where did you grow up?

Eric Malka (03:12):

So I was born in Morocco in Casablanca, and my family migrated to Canada when I was 10 years old. So I basically grew up between those two places.

Henry Lopez (03:24):

Got I got to, could detect an accent, but I can’t place it. But thanks for sharing that.

Eric Malka (03:29):

It’s all over the place.

Henry Lopez (03:30):

It’s all over the place. Yeah, you’re from all over and now Miami Beach. So you have such a mix of people in the part of what makes it fantastic. Well great. Well let’s get into, so tell me the brief story. As I was trying to do the research on LinkedIn, it only goes back so far. What were you doing before you launched the Art of Shaving?

Eric Malka (03:50):

So the Art of Shaving was my fourth entrepreneurial project. I started my first company when I was 19 years old in Puerto Rico actually. I was selling surf wear on the island. I had access to manufacturing and I would sell anything somebody wanted to make me to make and surf wear became kind of my niche. And eventually, believe it or not, one out of three people on the island were wearing my bathing suits on the beaches. Wow. It was kind of fun. Then I went completely the other direction. My manufacturer asked me to join them because they were awarded huge contract by the US government during the first Gulf War Operation Desert Shield in 1991. So I, that was really my master’s degree in business during those years. We grew the business dramatically in a short period of time. That was a great school for me. And then my third company is where I lost everything I had made with the first two. Interesting. I was trying to distribute music through the use of mail. Unfortunately, the internet was not there yet, so the business failed and I lost everything. That was in 93 and 94 in Miami after I moved here. And from there I met my wife and we moved to New York City in 1995 to seek opportunities in the Big Apple. Back then Miami was limiting

Eric Malka (05:40):

In the sense of entrepreneurial, not like it is today, but back then we felt that New York would provide more opportunities and it did

Henry Lopez (05:51):

Even after that failure, which for a lot of people it’s kind of like, all right, I business, let me go the more traditional, get myself a job. What is it about you and since when has this been instilled in you that you had to be an entrepreneur?

Eric Malka (06:10):

Well, it was a combination of circumstances. Don’t forget, I arrived in, I arrived in New York City at the age of 17 years old on a Greyhound bus from Montreal with a hundred dollars in my pocket. I was undocumented immigrant and I had dropped out of my first semester of college. So my prospects for getting a great career was non-existence. I’m not very employable, as you can tell already. So as an illegal alien in Puerto Rico, actually I couldn’t get a job, but I was told that I could own a corporation and take profits from it, and that’s how I became an entrepreneur. So after my big failure of 94, I was really demoralized as an aspiring entrepreneur with huge aspirations. I was very demoralized. I was a bit traumatized by I’m how much I screwed up. So I got a job in New York City and it just so happened to be for a distributor of men’s grooming products from the UK and that was my introduction to the category.

Eric Malka (07:24):

In parallel, my wife was studying her passions for natural medicine, AMA therapy, herbalism, and those two things kind of came together. She was also very entrepreneurial and ambitious. We had a very common goal to develop a business. I was a little skittish because I had no money to invest and insecure because I felt that I was not a good entrepreneur having failed miserably before. And that really was the foundation to my philosophy to think big, but start small. It was actually by having limited resources. In 1995 when I moved to New York, when we decided to open a business, we said, what business can we start with $15,000 or less? Because I knew that’s all I could really get from selling my car.

Eric Malka (08:29):

And we really thought maybe a small little store that sells shaving products. My wife is Parisian and we love these small specialty stores, the cheese shop and the meat butcher and the perfumery. It’s a world of, we come from a world of specialty stores. So we thought, why don’t we just be completely specialized in shaving? We have seen concepts this in my travels to London for my job, and we felt this could work in the United States. Nobody really has brought that concept here. So that’s how we basically started with a very small budget that allowed us to start in a tiny, tiny way and scale it to become what it became in a relatively short period of time. I mean 12 years from kitchen table to strategic acquisition is really not a long time to build a global brand. So

Henry Lopez (09:33):

Quite an experience. I want to interrupt because this is such a key point that you’re making here, Eric, about, I often have mentioned this and others have mentioned it as guests, that if you had had a million dollars to spend, that wouldn’t have made it necessarily any better. That constraint of limited resources forces you to think in a different way, forces you to start small but think big. Right. So that limitation actually can be beneficial, can’t it?

Eric Malka (10:04):

I believe wholeheartedly that it was the secret to my success initially. I can tell you that I just closed the company I started four years ago and having a lot more resources with that project worked against us, I believe. So you don’t have to think big, having a small mom and pop business, there’s nothing wrong with having a small business if that’s what you want. But if you aspire to go far and high, your best, best is to start small. And another methodology that I developed because of that is the concept of crawling, walking, running, and then flying. A lot of businesses I coach that get into trouble is because they try to run before they could walk or fly even before they could walk. And that could be the kiss of death. You really want to front load your success in the beginning of your journey to really create a foundation that you can build on. We build the art of shaving for nine years to a 10 million revenue, and then we went to a hundred million dollars in nine years after that. So that J curve really requires some early discipline and it’s really a marathon. And if you get to the marathon start line with a sprint like mentality, you’re not going to finish the race or you’re going to lose it.

Henry Lopez (11:40):

Agreed. But you took the time again out of necessity, but also understanding that that was the best way to do to build that foundation. And then the growth seemed exponential, but only after you had invested the time and effort in building that solid foundation. So I suspect that you had a very strong working model business model. The systems were in place, all of that was .

Henry Lopez (12:04):

There before you expanded.

Eric Malka (12:07):

We expanded once the business model was finalized and scalable and proven. It was a proven scalable business model, then it was easy to find financing. Believe it or not, it shouldn’t be that hard to get investors. They want to be part of that journey. You just have to bring them in when you’re ready, not when you have a dream. So yeah, that’s exactly how it happened. And I think one of the other methodologies and mindset that I teach entrepreneurs is the concept of prudence. And I think I was very lucky to be both aggressive with my company, but also prudent in my decision making. I never tried to run faster than I could. I never tried to jump higher than I was able to.

Eric Malka (13:03):

We took the right steps at the right time to scale the company and when we were ready. The analogy I use in my book is the rocket ship. It takes 10 years to build a rocket ship and only four days to launch it to the moon.

Eric Malka (13:20):

I think a startup is like that. I mean, technology has changed things. If you’re a tech company, it’s possible for you to scale much more rapidly. But I’m talking about luxury consumer goods and consumer goods. Creating a brand is really my niche and that’s really what I’m referring to. And to create a brand, there are no shortcuts,

Henry Lopez (13:43):

Right? Yeah. Similar to continue with the rocket analogy, it takes, most of the energy is expended just lifting off and getting out of the atmosphere in that initial stage to get that momentum is where the energy is. But that finding that prudence has kind of be a challenge because it’s so easy to get caught up in the shiny object or we get offered something or somebody comes to us to expand or whatever the case might be. Is there kind of a formula just at a high level that you apply to decide that we’re not ready for that even as enticing as it might be?

Eric Malka (14:19):

Is there formula again, it’s prudence is wise decision making. I remember I was being offered a million dollar check in cash to buy merchandise that I knew. I knew 99.9% would end up in the gray market and that would damage our brand image.

Henry Lopez (14:39):

I’m sorry. So explain that to me again. Who was offering you this money?

Eric Malka (14:43):

This company came out of nowhere once and offered us a million dollars to buy our products.

Henry Lopez (14:48):

Okay. They would buy your products for them to

Eric Malka (14:52):

Resell, and they told us they would resell them here or there, but we knew that wasn’t true because in our world, products end up in the gray market, Costco or other types of, and that would’ve been very detrimental to our brand at that stage of the evolution,

Henry Lopez (15:08):

Even though a million dollars in the bank would’ve been really nice to have. Right.

Eric Malka (15:12):

It was more than nice to have at that point, but we had to say no because we knew that our compass, our compass was about building a brand, not about making money. So we had to stay true to our strategy. And every situation is different, every business is different, but prudence is really time tested by wise decision making process is

Henry Lopez (15:42):

How you had your wife at the time. It seemed like you guys were on the same page. Were there others in a close circle that you also went to get help with that to seek some wisdom?

Eric Malka (15:52):

I wish I did.

Henry Lopez (15:55):

You didn’t have a coach at the time or anybody else that mentored

Eric Malka (15:58):

You. These things were not common. They weren’t even all the books I read today, every time I read a book, I’m like, where was this book

Eric Malka (16:08):

In 1999? I mean, I would’ve loved, I feel like I had to reinvent sliced bread and then I had to invent the wheel. It was like, I wish I had the tools that entrepreneurs have today, but some of the tools that entrepreneurs have today, and this really my purpose is to change the conversation I think we’ve been having with the next generation of entrepreneurs in the last 10 years of scaling fast, of failing, fast of going. I think we’ve seen some extraordinary successes in the last decade, and a lot of entrepreneurs think it’s a lot easier to be successful than it really is. And I think the real conversation should be about what it really takes. What are the principles and elements to achieve long-term success. I’m not talking about making a few bucks here and there, but really developing a company that stands the test of time. And you can look at even Amazon was started in a garage 20 years ago. These things don’t happen.

Henry Lopez (17:13):

And many years of toiling away selling books and selling I selling books.

Eric Malka (17:19):

So be ready to be on a, I call entrepreneurs treasure hunters because our business plan is kind of the map, but then we go off onto our journey and get clues how to get to our treasure. And then we have obstacles and challenges, sometimes even challenges that can be fatal.

Henry Lopez (17:42):

Right. I got to think that a part of this grow fast, fail fast comes from the tech startups that have been so influential have gotten a lot of press.

Eric Malka (17:53):

A hundred percent. And when I talk to tech entrepreneurs, I don’t tell them the same things I tell consumers,

Henry Lopez (18:00):

No, it’s a different animal.

Eric Malka (18:02):

If you’re not moving super fast and taking super high risk, you’re going to get the rug pulled from under your feet. And that’s why you see so many investors invest in seed rounds and just a glimpse of an app. It’s a whole different world, and that world is unique to

Henry Lopez (18:18):

Itself. Agreed. Agreed. How much do you think that luck plays into it, if at all, in your opinion and experience?

Eric Malka (18:28):

Luck is extremely important. Extremely important. And we can spend hours talking about how to create luck. But I can tell you that for me, luck is the difference between being successful and being extremely successful.

Eric Malka (18:46):

It’s not whether you’re going to make it or not. Luck is the turbo factor, the multiplier factor. The 10 x factor is the luck along the way, being at the right place at the right time. And there are ways to luck is not going to find you on the couch watching tv. We all know that we have to create our own luck, but it’s not guaranteed at the same time. In my case, luck was essential throughout my journey with the art of shame from day one to the last day of my company. I can point to a dozen example where luck was smiling in my direction and was a game changer. Just the fact that we rode the metrosexual wave was extremely timely.

Henry Lopez (19:37):

Well said. Thank you for saying that. That whole snippet there, I will be sharing with a lot of people because I think it’s so spot on and I do believe we put ourselves in a position to get lucky, but then we need those breaks, like you said, for us to get to that next level. Speaking of, you mentioned the metrosexual, the urban, that evolvement that happened in cities like New York City is fine for me at that point in time. When you got started, the landscape for a men’s grooming, what did that look like in New York City?

Eric Malka (20:08):

Well, my employer was selling these products to high-end retailers, but they were buying it for Father’s Day and Christmas. It was an afterthought. It was a gifty item instead of socks and pies for your dad. So it was a real sleepy category, and that’s why we were motivated to open a store because we felt that that’s how we could create that lane. And with good instincts more than foresight, we created a distribution channel for the category that didn’t exist.

Henry Lopez (20:54):

And this location, was it just a retail location or could also get a shave there? I’m not clear on

Eric Malka (21:01):

That. No. The first location was a tiny store, 200 square feet that only sold products. And the only reason we rented that space is because it was in the upper East side of Manhattan where all the affluent consumers lived, and it was a location where seven businesses failed before us for lack of traffic. So they didn’t even check, they couldn’t rent it for their lives. So that was our lucky break again. And then our second store, we included barber services. That’s when we introduced the whole idea of the barber spas, and that was on Madison Avenue. 10 months after opening our first tour, we opened a second store on Madison Avenue. Now see,

Henry Lopez (21:46):

That’s an example of having the boldness, the guts, because I don’t know how prudent that is to have opened a second location after only 10 months. Yeah,

Eric Malka (21:57):

We were not prudent, but at the same time it wasn’t a risk because we had no plan B. And don’t forget, we were young and the younger you are, the more risk you should take.

Henry Lopez (22:10):

Agreed. I think the less you know about business sometimes the better it is, isn’t it?

Eric Malka (22:14):

Oh, a hundred percent. And we started looking for the Madison Avenue location before we had the money to pay for it, talk about shooting and asking questions later.

Henry Lopez (22:26):

But you had confidence. You had confidence in what you had built and what you could do here next with this brand.

Eric Malka (22:33):

Three months into the first store, it was December and we sold $37,000 and we thought we had struck gold. So we started looking for a location on Madison Avenue where we could have more profits. It wasn’t until three months after in March that the New York Times did a two page article on our tiny little store in the Sunday metro section of the paper. Wow. Now in 1997, that was it.

Henry Lopez (23:09):

Everybody was reading the times, right?

Eric Malka (23:11):

Like going viral on TikTok. And the next morning my wife and I were married at City Hall, came back to the store, naively not thinking anything, and there was a line of people waiting outside the door and the phone was ringing from all over the country.

Henry Lopez (23:32):

So you immediately knew this 200 square feet, we’re going to lose an opportunity here if we get stuck in this 200 square feet.

Eric Malka (23:39):

I don’t know what we were thinking. We were just going for it. You were

Henry Lopez (23:44):

EU Fork just married and all this immediate success as that was.

Eric Malka (23:48):

But that was so lucky. I mean, the luck of, we found the location on Madison Avenue, and by the time we needed the money to sign the lease and pay and pay the contractors money just showered on us from that article. I mean, we started selling every day what we used to sell every month for a period of two to three months. It was almost like angels were protecting us in some way.

Henry Lopez (24:19):

So to clarify there, that second location was still self-funded, is that what I’m understanding?

Eric Malka (24:24):

A hundred percent. It was self-funded. It was still a small budget, but I think we spent $75,000 and we were lucky we rented this great space. We pulled the carpet that was moldy from the 1970s and found pristine wood floors throughout. Oh my goodness.

Henry Lopez (24:43):

Perfect.

Eric Malka (24:44):

These are things that you can’t plan for,

Henry Lopez (24:50):

But again, as we talked about luck, luck has two sides to it. You took the bold move and there it presented itself. Yeah, it could have been a nightmare. Could have been. It was all rotted, but there it was. And so you took advantage of it. This is Henry Lopez briefly pausing this episode to invite you to schedule a free coaching consultation with me. I welcome the opportunity to chat with you about your business plans and offer the guidance and accountability that we all need to achieve success. As an experienced small business owner myself, I understand the challenges you’re experiencing and often it’s about helping you ask the right questions to help you make progress towards achieving your goals. Whether it’s getting started with your first business or growing and maybe exiting your existing small business, I can help you get there. To find out more about my business coaching services and to schedule your free coaching consultation, please visit the how of business.com. Take that next step today towards finally realizing your business ownership dreams. I look forward to speaking with you soon. I want to go back to the product, Eric, and just briefly tell me this product that you were selling, was it your own product? Was it white labeled? Was it a combination? Where did this product come from?

Eric Malka (26:06):

So the first product we sold in our store were from the brand I sold at my job,

Eric Malka (26:14):

And I kept my day job, by the way, for six months until that article came out. I needed to support our family with my job, and my wife was the store manager. When my boss at the time saw how successful our tiny little store was, he was in business 10 years and he wasn’t as successful as we were. He basically said, I want to be your partner 50 50 or no more products. And that’s when the light bulb came on that we had to control our own destiny by first sourcing other brands to sell. So we wouldn’t depend on one vendor. And immediately after that, use the money we make from the two stores to create our own brand of products. I see. And I wasn’t confident that the name on the outside the store, the Art of shaving, would translate to a shaving cream package. So we decided to test the thesis with three products, three core products that we designed. My wife would give me design direction at home and on our home computer, we made the labels and had somebody fill three products for us. And we slapped the labels on and the stores and put it on the shelf. And the products did extremely well right off the bat.

Eric Malka (27:47):

So that gave us the confidence to really go full speed ahead and create a full line. That’s when I decided in my mind, we need this entire store to have products that we make with our brand on it.

Henry Lopez (28:03):

Interesting.

Eric Malka (28:04):

It took us, go ahead. I’m sorry. Yes.

Henry Lopez (28:06):

No, no, go ahead.

Eric Malka (28:07):

We launched 37 products in 1998, but we were selling 200 products in our stores. So we continue to be a multi-brand retailers with 80% of ourselves coming from 20% of the products, which were ours. And by 2003, we went bold branded products in our store. So it took six years to get there.

Henry Lopez (28:35):

Yeah. Well, I can imagine the formulation process and then sourcing all of that. Was all that stateside or where did

Eric Malka (28:43):

No, it was all over the place. We went to the best manufacturers, and my wife, by the way, I didn’t know this when I met her, but she became one of the top formulators in our industry.

Henry Lopez (28:53):

Really? Okay.

Eric Malka (28:55):

And she’s really the one that was on the frontline of product development. So when it came to shaving cream, we went to the best manufacturer in the UK to make our own shaving soaps were made in Italy. We had some products made in Florida, some products made in New Jersey. We went where the quality was

Henry Lopez (29:20):

And who was doing all of that while still managing these two locations?

Eric Malka (29:25):

Oh, you’re talking to him?

Henry Lopez (29:26):

Yeah. And so your wife would run the show there. Did you keep the original location or did that one get shut down and then moved? Or did

Eric Malka (29:35):

You have No, we kept it. It was a beautiful

Henry Lopez (29:37):

Little, so she was managing both locations and you’re out traveling the world?

Eric Malka (29:41):

Oh no. She was managing one location that was managing the Madison Avenue location, and we were building this whole thing in between customers.

Henry Lopez (29:52):

Wow. Crazy.

Eric Malka (29:53):

It’s not until 1990, I think it was the end of 1998 where we left the stores and open In 99, we opened an office and we left the stores.

Henry Lopez (30:08):

Wow. Alright. I want to go back to, because there’s a point here that I think is very powerful. When you start out, you had been selling these products that you had been selling through the company that you worked for. All of a sudden these products explode because of the branding and the environment within which you were selling them. Is that fair?

Eric Malka (30:30):

Yes, of course.

Henry Lopez (30:31):

So that’s the point you make about the branding that you created. That environment is what presented these products in a different light. Is that fair?

Eric Malka (30:43):

Yeah, a hundred percent. It was the shaving concept that drove the sale of that product line. Yes.

Henry Lopez (30:52):

It was something here. This is what’s unique, very, very interesting about this product. Especially once you opened the second location, you essentially could demonstrate it, right? So let us show you what this experience feels like.

Eric Malka (31:04):

Not to mention that because we opened on 46th Street in Madison Avenue, which is the mecca of men. I mean, we had,

Henry Lopez (31:15):

I mean, that’s madman area, right? I mean, that’s

Eric Malka (31:17):

A madman, but you have half a million guys coming out of Grand Central and going to their offices all over midtown and many of them are coming right past our store. So that was a huge success,

Henry Lopez (31:32):

Tremendous location.

Eric Malka (31:32):

That was a tremendous location across from Brooks Brothers and Paul Stewarts and all the great men’s stores of Midtown.

Henry Lopez (31:41):

Alright, I want to fast forward now to deciding to exit. First of all, define, because I’m not clear as to whether you still retain an ownership piece or not. Can you explain that?

Eric Malka (31:50):

No, I don’t. I’ve sold the company outright and I actually now I’m partners with another concept like the art of shaving called Barberino.

Henry Lopez (32:02):

I see.

Eric Malka (32:04):

Trying to continue the job. We started with the art of shading. Got

Henry Lopez (32:08):

It. Most of expired long a time ago

Eric Malka (32:12):

With Procter and Gamble. Yes. Those are very hard to enforce anyway.

Henry Lopez (32:15):

Yeah, they are Proctor and Gamble. I mean, that has to have been, we’re not going to bad mouth anybody here, but I got to think they were the opposite of what your brand was to some extent. Maybe I just don’t know enough about Proctor and Gamble. We talking about large consumer package, good manufacturer, huge corporation. So it was obviously a good fit for them. But why did that happen? Why did you sell to them?

Eric Malka (32:40):

Well, I knew I wanted to scale and exit the business early on. I knew that

Henry Lopez (32:45):

You knew that from early days.

Eric Malka (32:47):

Well, I knew that. I mean, it was clear to me six, seven years before the acquisition, it was very clear my target timeframe and price points was clear in my mind. I knew what I was going after, but who was going to buy a luxury shaving brand? And that was really an enigma to me because in our industry, the big conglomerates like LVMH and Estee Lauder, L’Oreal, they’re more interested in women’s brand than men’s brands. Interesting. But in 2005, again, talk about luck in 2005, p and g goes and acquires Gillette and all of their portfolio of brands, including Venus and Braun and Old Spice. And overnight, this consumer giant p and g becomes the number one player in men’s grooming worldwide with 28% of the men’s grooming market. So what that did to p and g management is blow their minds

Henry Lopez (33:57):

And open their eyes. Wait a minute, hold on.

Eric Malka (33:59):

Yeah, we are a hundred billion dollars company and we’ve never ever sold products for men until today. Now Gillette was the largest acquisition consumer goods history at 57 billion. The day that happened. The art of shaving and p and g were on a strategic collision course p and g internally declared winning with men as their priority.

Eric Malka (34:29):

And the art of shaving was the number one men’s luxury brand in the us. Amazing. So immediately I think I was on CNN talking about the fusion blade before it came out. Our PR team and their PR team got into in touch. We wanted to get our hands on the razor before our competitors did, but it was high secrecy. It was the first launch PG Gillette would have under the PG umbrella. And they said, we’re not going to give you a razor, but if you want to come, we’ll have you test it and you can speak your opinions on CNN because I think people were skeptical about how many blades you need on a razor to get a good shape. I think they were up to five at that point. So I did that. And who was watching CNN? The president of PG men’s grooming. Wow. Who is this guy? What’s this company about? He sends a couple of his executives to meet with me in Miami. Next thing you know, I take a license of the Gillette brand for the premium and we collaborate on a razor launch that was extremely successful and which led to the acquisition of the Art of Shaving. Amazing. Amazing. That’s a little bit what happened.

Henry Lopez (35:50):

Yeah. So, so much there that we could talk for hours about that led to that eventual purchase. I know you talked about this in the book. What else do you think that you did at a high level that small business owners can learn from to prepare your business for a successful exit?

Eric Malka (36:08):

I think we were focused more on branding than anything else. We wanted to create a jewel. A 10 carat diamond can be worth more than a truckload of basic jewelry, right?

Eric Malka (36:25):

So we wanted to create a gem, and it was always about branding. It was always about being excellent. I think it was an exercise in AM mastery of brand. We wanted to create the most beautiful brand that we could create. And behind that was all the IPs, the proprietary products, the trademark, the relationship between that brand and the consumer, that emotional connection. And then in the later years, our growth, we scaled the business later on and we scaled it in order to increase our sales price at Exit. Not because that’s what we wanted to do with the business, but because we knew that the higher the sales were, the higher the sales price would be. But we really focused our energy on creating the most beautiful brand.

Henry Lopez (37:25):

That was the key. And that’s such a key point because if you look at a giant like p and g, if all you had was, oh, you’ve got all these locations around the country or you’ve got distribution, that’s great, but they’ve got that. They can squash you in a moment if they wanted to. But the brand they know that has value, they know that takes years to build and they may not even know how to build it.

Eric Malka (37:51):

Well. Yeah, the failure rate, the odd of building a global brand is so low. They’d rather overspend to buy one that’s already proven to be successful and scale it. And 95% of our purchase price, by the way, was for Goodwill. For Goodwill. It was allocated to the brand. They couldn’t care less about our assets.

Henry Lopez (38:13):

No. Yeah, because they could replicate that in a flash. Right. The book on the Razor’s Edge, why did you write it? Who is it for ideally?

Eric Malka (38:25):

Look, I’ve been wanting to write this book for a long time. A lot of people have asked me to write a book because I have a cool story to tell. But I didn’t want this to be just a storybook. I wanted it to be a business book, a book that really brings value to the reader. And my target audience are aspiring entrepreneurs or what I call tomorrow’s entrepreneurs. So that’s why I wrote it. I really wrote it to share the lessons I’ve learned in my career, both with successes and failures, which people hopefully will take and use to their benefit. Because we all know that being an entrepreneur is not easy and the failure rate is extremely hot. If this book can increase your odds of winning at the game of startups, then my contribution is satisfying.

Henry Lopez (39:26):

Yeah, it’s fantastic. I had made the quip earlier that sometimes knowing too much is detrimental. And I meant that in context that sometimes if we know too much, we can overthink and talk ourselves out of something. But the reality is that what you share in this book are those avoidable mistakes that we can learn from somebody like you that increases our probability of success tremendously. That’s exactly right. So you’ve got the books, but what’s next for you? What are you focused on next? Especially with strategic brand investments,

Eric Malka (40:03):

Everything I’m focused on right now is to support and empower tomorrow’s entrepreneurs. So being on this podcast or speaking to live audiences, writing my book, investing in early stage companies, coaching clients, these are all the activities. I’ve been very fortunate. I don’t have to worry about putting foot on the food on the table every day. So that freedom allows me to choose how I want to spend my time. And as I get older, and maybe you’re experiencing some of that, I feel a need to serve to be useful in this society. I’ve spent most of my life just taking, and I was lucky enough to get what I wanted to take, and now I feel like it’s time to give back.

Henry Lopez (40:58):

Yeah, that’s wonderful. That’s wonderful. So as you alluded to, I know you take on very select few coaching clients. What does an ideal coaching client typically look like for you?

Eric Malka (41:09):

Look, it has to be somebody that I enjoy spending time with and the business that I can help with. So at the end of the day, some of my skills can apply to other that I’m not part of. There’s some fundamentals, but I like people that are within my world. I can help most on luxury retail, consumer goods of some sort. But today I was coaching a young entrepreneur who’s in the meat business, a commodity business, and that was cool. I was still excited about it because business is business, the end business is business. And if you’re dealing with principles instead of details and situations, you can apply things to anything.

Henry Lopez (42:10):

Agreed, agreed. And if we’re interested, if somebody listening is interesting, what’s the best site to go to online to find out more?

Eric Malka (42:18):

An easy way to find me is eric malka.com or strategic brand investments.com.

Henry Lopez (42:25):

Perfect. And we’ll have links to that on the show notes page as well in case you’re somewhere where you can’t write that down. Alright. The book again is on the Razor’s Edge. I found that on Amazon. You can find it anywhere, but I’m always looking for book recommendations. I know you’re a big reader. Is there one of those books that you’ve recently read or in the past that you would recommend to us?

Eric Malka (42:45):

Yeah, I read so many books. I could recommend probably a hundred of them, but

Henry Lopez (42:52):

How many books a year do you read? Do you keep track of it?

Eric Malka (42:56):

Yeah, since I wrote my book, I read less books because I’ve been so busy with other things. But I try to hit at least 10 to 20 books a year. Got it. I love learning and it’s been something that I really dedicate a lot of my success to. Here’s a book I really loved, 80 20 Principle by Richard Koch, I think is a great book. I would highly recommend that There’s so many books. I mean, it’s hard to say one, it’s like a favorite song.

Henry Lopez (43:33):

Exactly. Well, excellent. That’s a great recommendation. I don’t believe I’ve read that, so I’ll put it on my list as well. So thank you for that recommendation. I’ll have that as a link as well on the show notes page. All right. Let’s wrap it up. Because of time, Eric, you and I could talk for hours about business. Thank you for allowing me all these questions. But what’s one thing you want us either as aspiring entrepreneurs or as existing small business owners, what’s one thing you want to stick away from this conversation that we had?

Eric Malka (44:01):

I think if you’re going to learn one thing from me, right, is that brands are more valuable than companies and IP is the most valuable aspect of your brand. So there you go.

Henry Lopez (44:17):

Love it. Very well said. I was writing that down. Excellent. Very concise to the point, extremely on point based on my experience as well. Tell us again where to go online to learn more.

Eric Malka (44:28):

Eric malka.com or strategic investment.com.

Henry Lopez (44:33):

And Malka is M-A-L-K-A. Eric Malka,

Eric Malka (44:38):

Yeah. E-R-I-C-M-A-L-K-A.com.

Henry Lopez (44:41):

Perfect. Eric, this has been a truly great conversation. I’ve learned a lot. Thanks so much for taking the time to share of your knowledge of being so transparent and for being with me today.

Eric Malka (44:55):

You’re very welcome. Thanks for having me.

Henry Lopez (44:58):

This is Henry Lopez, and thanks for joining us for this episode of The Help of Business. My guest today again is Eric Malka. I release new episodes every Monday morning, and you can find the show anywhere you listen to podcasts, including the How of Business, YouTube channel, and my website, the how of business.com. Thanks again for listening.