Though they serve wildly different markets, the tech companies Brian Lee has co-founded – LegalZoom, ShoeDazzle, and Honest Co. – share a reliance on celebrity cachet, a branding strategy that has become Lee’s calling card. After itching to get away from his work as a lawyer – he was a partner at Skadden Arps Slate Meagher & Flom – Lee formed LegalZoom in 1999 with attorney Robert Shapiro. The company sold a controlling stake to private equity firm Permira in 2014 for $200 million in a deal that valued the provider of online legal documents at $425 million. Lee then formed shoe-subscription service ShoeDazzle, later acquired by JustFab for $30 million, with Kim Kardashian. But Lee’s biggest breakthrough has been Honest Co., an e-retailer co-founded with actress Jessica Alba. The company, which sells eco-friendly household products, has raised more than $220 million and is valued at about $1.7 billion.
NAME: Brian Lee
HOMETOWN: Huntington Beach
COMPANY: Honest Co.
TITLE: Founder and chief executive
How did celebrity branding become your hallmark?
For LegalZoom, it was really a matter of bringing trust to the forefront. (After the O.J. Simpson trial), Robert Shapiro was the most recognized attorney in the world. Every time he went onto CNN or the “Today” show and talked about LegalZoom we would get orders. So I knew that the influencer model, celebrity model, worked in terms of getting traction.
And the same celebrity branding strategy worked with ShoeDazzle?
You saw the same thing with Kim tweeting about it, talking to her social media fans about it. We gained instant traction.
You give these celebrity partners equity in the businesses. Do they understand what it takes to build a company?
There is definitely an education process in terms of starting a business. It is very different than starring in a TV show or a film, but I tend to choose partners that are very smart. Jessica Alba was no exception; neither was Kim or Robert Shapiro.
Do you enjoy letting someone else be the star of the show?
Yeah, it’s pretty natural for me. I’ve never enjoyed the limelight. I like operating. I like executing. I like building businesses.
Honest Co. just opened its first retail location. Why do a brick-and-mortar store?
Beauty is a product women like to touch, like to feel. They like to sample, which is why if you walk into a department store the beauty counters are on the first-floor entrance. The exciting part is that north of 30 percent of the transactions at that store are subscribing to the service.
The store is a lead-generation tool?
Absolutely. We look at the world holistically: online, offline, mobile, catalogs, whatever it takes to get into your home.
What surprised you about that?
I’ve never sold through an offline channel, no one at our company has. People were telling me about retail conflicts, pricing conflicts – these were all things that we had to learn as we went. I had no idea Target and Walmart were competitors and did not like each other.
How serious is the litigation Honest Co. is facing over claims about its organic ingredients?
Our formula is the subject of one of the lawsuits. The party that sued us (Organic Consumers Association) really sued us for their own agenda, to get more publicity for their own organization. They have issue with the (U.S. Department of Agriculture) and basically picked a fight with us to get more following with what they believe in, which is that everyone should grow their own food.
So this is more about publicity?
We live in a world of clicks. Anytime you put Jessica Alba in a headline you are going to get clicks. I think a lot of these lawyers have figured that out.
There’s been a lot of talk about an exit for Honest Co. What’s going on?
Right now it’s just heads down and focused, and everything else is just rumor because we’ve never confirmed anything.
What other industries intrigue you?
I think self-driving cars are coming quickly, but I’m also excited about human drones; drones which will transport people. I saw some exciting technology coming out of Germany, where a drone can actually transport a full person about 50 feet. That 50 feet will become 500 feet, which will become five miles within the next 10 years, and if that’s the case there’s no need for self-driving cars.
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