Friends Foster Korean Face Mask Frenzy

This transcript was generated from the episode audio and may contain minor errors.

[Music]

[Speaking in foreign language] Hey, what's up? Welcome to Citusle School. This is Chris Guillebeau. Let's talk about Korean face masks. In case you are unaware, Korean face masks are a thing.

There are 31 million Google results for the phrase all over YouTube and Instagram, and there are many, many, many different kinds of them. So naturally, someone out there had to go and turn this into a subscription box, and not just any subscription box, but a very successful one. Now, we have talked about subscription boxes before on the program, a few different episodes, episode 105, one of my favorites, subscription box service delivers candy from Japan, if you want to get some crazy Japanese candy every month arriving in the mail. Episode 333, business analyst turns weight loss problem into $130,000 solution. And more recently, episode 678, nature loving neighbors create kids subscription box.

Well, today we're gonna focus on those Korean face masks. And the team I'm gonna tell you about today, they're experiencing tremendous growth, something like 3,600% since starting. Like I said, it is a craze, a trend, a face mask frenzy. So let's get hydrated and get paid. Oh, and also, if you don't know what a face mask is yet, well, just stay tuned.

[Music]

Daniel Yee is no stranger to the world of subscription box services. For eight years, he worked at Loot Crate as the director of digital analytics. While he loved working for them, the more business skills he learned, the more Daniel had an itch to start a subscription box of his own. One day, he and a friend were chatting at lunch and they started to ask themselves, why can't we do this? Soon they brought in two other colleagues into the mix and formed the ultimate power team.

All of them together were familiar with the ins and outs of successful subscriptions. They now had a team and a business model, but no product. Luckily, right after that lunch, Daniel embarked on his annual trip to Korea. There, he realized that Korean beauty was the next big global trend, especially Korean face masks. There was a craze for it.

Now, in case you are not familiar, Korean face masks or sheet masks are single use pads that have been soaked in hydrating, skin rejuvenating ingredients. There are lots of different kinds, hundreds of different kinds, ranging from aloe to kiwi to lavender, many other options, even including snail. I'm not too sure about putting essence of snail on my face, but all the others sound good. And these face masks are affordable. One pack of 10 costs an average of 10,000 Korean won, or just under 10 US dollars.

The problem is, even though people have been talking about these face masks all over YouTube and Instagram elsewhere, getting a range of authentic Korean products in the US isn't the easiest thing to do for most people. If Daniel could make them more accessible, he could really be onto something. So as soon as he got back to the United States, he started working with the team on their new business. They decided to name it Pebu, after the Korean word for skin. They held a pre-launch of their business, then eventually fully launched through their Facebook and Instagram accounts.

Each member of the team invested $2,000. It was clear that they were willing to put skin in the game. They spent the money mostly on inventory and marketing. Daniel made connections with both US and Korean suppliers. Once they built up a little momentum, a few publications reached out to them.

They got exposure on more popular websites. They decided to reinvest their profits back into paid advertising to increase their subscriber base even further. And to do this, they focused mostly on paid search. In other words, they were paying to acquire new customers. And the team chose to price their boxes competitively.

To subscribe for an entire year just costs $18 a month. If you want to buy an individual box, it costs $20. Now this is paid off because Pebu is reaching a huge number of people each month. They have more than 900 active subscribers. That adds up to about $20,000 a month in recurring revenue so far.

But it hasn't all been easy. All the other original partners left the business except Daniel. He then brought on a new team member who has more experience in the beauty industry. And for now, he's choosing to not take any profits for himself. Instead, he's been investing everything he makes back into Pebu to make it even better.

He's talking to distributors to get better pricing on their products, which will lead to a better profit margin. And he's hoping to expand into an international company. Right now they ship only to the US, but they're hoping to change that. Daniel knows that there is a global market for Korean beauty products, especially with the rise of Korean boy band BTS. What's up, BTS fans?

Shout out. Pebu is also looking to partner with influencers and beauty enthusiasts. This is a common and often successful way to grow a subscription box business. Now as for advice, what if you're out there and you're like, "I wanna do something like this." Daniel stresses that it's important to feel passionate about the product you're selling, especially when it comes to a side hustle. He already has a full-time job and he also has a family.

So to work on something else on top of that requires some enthusiasm. Daniel says that for him, Pebu is exciting because he is Korean American. To see elements of his culture sweeping the globe and for him to be able to share it with other people in the US is incredibly rewarding. Maybe the lesson is sometimes it pays to think inside the box. [Music]

All right, some quick comments here.

Well, first of all, first comment is, I just went and purchased one of these myself. I didn't sign up for a whole year, but I did purchase a sample box for $20. So I'm excited to see what will arrive in the mail. Hopefully no snails, but everything else sounds great. I also took a peek at their website, like I tend to do, and I think it's a really great website overall.

Very simple and intuitive, very much focused on getting people to sign up for the subscription, which is the goal. Lots of good photos. One challenge with subscription boxes is the excitement and the challenge is you don't know what you're gonna get from month to month. So they do a really good job of showing what is in previous month's boxes to give you a really good idea of what to expect. My only constructive comment, and you might see this if you take a look at the website, which of course we'll link up in the show notes.

Maybe you wanna buy a box for yourself too. My only constructive comment is they have a blog on the site and there's not really a clear purpose for it. Like the rest of the site is, as I said, simple, intuitive, makes perfect sense. They have this blog and it seems like it's not necessary. It doesn't really match the professionalism of the rest of the site.

To me, it kind of looks like, oh, you know, we needed to have a blog, so we put a blog here. And my suggestion is if you don't have a good reason to have a blog or anything else really, if you don't have a good reason to have any particular social media profile or whatever other element, then don't do it. 'Cause there are plenty of other things you can focus on. As I said, just one constructive comment there, overall really amazing success. 900 active subscribers is no small thing.

It's a big, big success in the subscription box industry. And it seems like Daniel and his team are poised to go further. All right, that's it for today's story. Ask yourself, what can you take away from this? What can you learn?

Maybe there's a trend or a craze or something that you can follow up on. Maybe you're interested in a subscription box. Maybe there's something from your culture perhaps that you could serve as a sort of translator for. Or maybe something else entirely. Maybe that comment about a blog.

Like if you have a blog and you don't need a blog, you don't like blogging, then don't have a blog. Same thing with any social media profile or whatever else. All right, those show notes are at sidehustleschool.com/705. As always, inspiration is good, but inspiration with action is so much better. Thank you so much for listening.

You are a rock star. My name is Chris Guillebeau. This is "Side Hustle School." [Music]