Glamsquad: An On-Demand, At-Home Beauty Service — A Startup Research Report by Aneri Patel
Since 2014, Glamsquad has pitched itself as an on-demand, luxury beauty service for working women. Whether at a hotel, in an office, or at home, Glamsquad’s app gives busy women the ability to get top-rated beauty services (such as a manicure, massage, or hairstyling) without the time it takes to travel to and from a salon. Glamsquad has completed a Series B round of funding, bringing its total investment to $24 million, mainly backed by SoftBank and New Enterprise Associates. Headquartered in New York City, Glamsquad currently has between 50 to 100 employees. To clarify, the beauticians who serve clients (called Beauty Pros) are technically consultants to the company and are not included in the employee count.
Glamsquad’s cofounder is Harvard graduate Alexandra Wilkis Wilson, who was previously a co-founder of Gilt Groupe and had made a name for herself in the e-commerce industry. She has a proven track record building and operating early-stage, fast-growing consumer businesses and building powerful brands. She joined Glamsquad preliminarily as an advisor, but later became increasingly invested in the company, deciding to take on the role of CEO in 2015 (leaving the position in 2016). Currently onboard as a strategic advisor, Wilson is focusing on business development and additional revenue streams for the company.
Jason Perri, co-founder and chairman of Glamsquad, was actually the one who convinced Wilson to come onboard the attempt to apply the “Uber model to beauty services”. He too graduated from Harvard University with a B.A. in Economics, later receiving an M.B.A from Columbia, and since then has been working in venture capital. He currently splits his time as Senior Portfolio Manager at Lightship Capital and as an advisor to Glamsquad.
David Goldweitz, Chief Strategy Officer and co-founder of Glamsquad, was also a friend of Perri and Wilson during their Harvard undergrad years. Of the three, he seems to be the only one still actively involved with the company. His focus in the last three years has been on expanding the company to different cities and finding areas for growth. His previous experience mainly consists of analyst positions at VC firms.
The current mastermind behind Glamsquad right now is Amy Shecter. She has been the CEO of Glamsquad since 2016. Previously, Shecter served as the CEO of CorePower Yoga, a chain of boutique yoga studios, and before that working with brands such as Cole Haan, DKNY, and Elle Tahari. While her expertise is in increasing brand recognition, she has worked in leadership positions in merchandising, operations, marketing, product development, and e-commerce. Shecter is known across the fashion and fitness community as clearly conveying and executing her visions and strategy, mentoring leadership, and fostering a collaborative environment where employees can thrive. Right now, her focus is on creating a strong executive team and a scalable, sustainable growth model for Glamsquad. From what has been written about her, she definitely seems like a Level 5 executive.
Currently, Glamsquad only has one way of generating revenue — taking a share of the profits that Beauty Pros earn from their services by providing these beauticians with a platform to obtain customers. Glamsquad has done a great job of making its service appealing both to Beauty Pros and to customers. The Beauty Pros get access to customers while they get to pick their own flexible work hours, and customers have the ease of receiving beauty services from the comfort of their own home, without having to spend time finding a beautician, an available appointment, or driving to a salon.
Headquartered in New York City, the first three years of the company focused on establishing a market and a name for themselves in the northeastern United States. The majority of their growth strategy has come from word-of-mouth and getting their company featured in fashion/lifestyle magazines. In their first year, Glamsquad was featured in Refinery29, Elle, and Vogue. In the last year, they have expanded their services to Miami, Washington DC, Boston, San Francisco, and Los Angeles.
In December of 2017, Shecter and Goldweitz stated to WWD that once they establish the trust between a client and their beautician, they hope to start selling the products that these beauticians use to the happy clients. Goldweitz believes that this can become 30–50% of the business.
The market size for Glamsquad is a bit difficult to calculate as this is a new category. As per the Department of Labor, there are 75M working women in America. It is safe to assume that 15% of the women are in a profession where they can afford to use these beauty services. This means Glamsquad’s addressable market is around 11M women. If they can address 5% of the market, they would be able to serve the needs of 550,000 women in the United States alone. Right now, as they are only in 6 major American cities, they are only able to reach a very small percentage of the 550,000 women.
There are no published numbers on how many appointments have been scheduled through Glamsquad or what percentage of these clients are returning customers.
Because of its early entry into the market, Glamsquad has been able to maintain its lead and its brand in a competitive market of cheap on-demand beauty services. With a quick scroll through the Play Store, you will find many other companies that provide the same at-home/at-work service, including Beautified, Stylisted, and Vensette.
Beautified is also an on-demand beauty app but has a different business model than Glamsquad. Beautified is an app that allows women the ability to book last-minute beauty appointments at high-end salons (when they have an opening) in New York City and LA. Think a Kayak for beauty salon appointments. They offer similar beauty services on demand such as mani-pedis, makeup, and hair appointments. It varies drastically in comparison to Glamsquad in that these services are still in salons, not at home or at the office. The extent to which they offer convenience is that these are last-minute appointments. However, I do think they are significant competition for Glamsquad in that they target the same audience — affluent, working women who need their makeup/hair done quickly. I also think that it is especially important to consider if these women would prefer to get their treatments done at the comfort and ease of a salon, rather than the office or home. If it’s the former, then I believe Glamsquad will have a smaller addressable market, a serious risk.
When going on Stylisted’s website, it seems to be almost a picture for picture copy of Glamsquad. They too pitch themselves as an in-home, on-demand beauty service. When looking at their range of services, Stylisted targets the makeup-for-events market (i.e. women getting makeup and hair done for their wedding). Meanwhile, Glamsquad focuses more on appealing to the working business woman, who doesn’t have the time to go to a salon. Stylisted is offered in fewer cities than Glamsquad, so I assume they have a smaller market share. That being said, they do serve the Chicago area, which Glamsquad doesn’t do.
Vensette is probably their biggest competitor in the on-demand beauty market. Founded in 2010, it had already made a name for itself in the business-women-community by the time Glamsquad entered. It too was advised by Wilson in its early stage. The biggest difference compared to Glamsquad is its average price point for hair services, with their average blowout cost at $200, which is quadruple of Glamsquad’s. However, Vensette argues that the price correlates directly to a better quality of treatment, marketing themselves as “premier beauty treatment”.
All these “app-based” services also compete with small salons and large chains like ULTA operate in a brick-and-mortar setup.
Currently, customers must book an appointment is through their website or through their iOS app. My first impression when I opened up Glamsquad was how clean, organized, and easy-to-use it seemed. Their landing page directs you to a “book-an-appointment” bar where you are supposed to enter in your location, the date, and time of your desired appointment. You are able to pick an appointment time anywhere from 1 hour from now to 3 months in advance, as long as it’s between the times of 6 AM and 9 PM. The website then directs you to a page where you can choose your service — hair, makeup, or nails. Currently, they have promotions on Halloween makeup and hair. Each service has a set price and a predesignated amount of time that the service will take. Personally, I think that this is extremely valuable to have. Most current salons will give you an estimate, but won’t tell you a price until after your appointment is done. Here, because the beauticians are technically contracted through Glamsquad, Glamsquad is able to fix prices. However, the services offered are meant to be high-end with a high profit margin. You would not be able to get your hair-straightened or curled for example. Instead the type of services you would see as a customer would be blowouts or braidings. Once you pick a service, the last step is detailing where you want the appointment to be held and special instructions for your beautician.
Starting in Spring of 2017, Glamsquad began developing an iOS app that included all the features of the website, but additionally would create profiles for the clients, where they could post pictures of what they have gotten done in the past and what they want for this next appointment. They are doing this in an effort to most efficiently match the best beautician to their ideal client. Otherwise, a customer would potentially have to try every single beautician approved by Glamsquad in their area to find which one they like best. While this may work in a salon-setting, if a patient isn’t satisfied with their Glamsquad appointment the first time, they may never book another appointment. This app seems to be a key factor for consumer retention.
One key weakness is that Glamsquad doesn’t have an Android app which greatly restricts their market reach.
Although Glamsquad hasn’t published their earnings, Forbes estimated their first-year earnings (2015–2016) at $8 million dollars. As of December 2017, they have yet to start making a profit. However, Goldweitz claims that they will start seeing a profit by December of 2019.
On Apple’s App Store, Glamsquad has 6,000 reviews, with an extremely high rating of 4.9/5.
Personally, I have my reservations about funding Glamsquad at this stage, without fully knowing their unit economics, their customer retention, and how much they make per client. While they have surely captured their market niche, capitalized on an interesting concept, and created a useful product, profit margins for on-demand services aren’t that great. I also have doubts on whether women would truly prefer to have services at their home/office. The information on market size for this product is clearly lacking. Additionally, their leadership has been changing about every year, and the CEO, while experienced in the field, hasn’t worked with the other cofounders and chief officers before. And while I admire their growth mindset, I have doubts on their ability to execute their plans. A red flag in my book is that they have been talking about selling products through Beauty Pros since 2017, and it still hasn’t come to fruition. Another question in my mind is what prevents a customer from bypassing Glamsquad completely and obtaining their recommended stylist’s number for their future stylist needs?
I think I will keep Glamsquad on my radar, but within this competitive on-demand beauty industry, I’ll definitely be on the lookout for other newcomers that have a twist on the classic on-demand model and a more diverse team with experience working together on marketplace business models.
Originally published October 2018.
More about Aneri: Aneri is a rising second-year at UCLA, majoring in Business Economics with minors in Entrepreneurship and Bioinformatics. Currently BV’s Co-Director of Marketing, Aneri is involved in all aspects of the club — from the club’s image, to recruitment, to social media engagement. In addition to her involvement in many entrepreneurship organizations on campus, she has interned at fin-tech companies, a boutique VC firm, and a journalism startup.
Disclaimer: All information in this report has been aggregated through numerous, public news reports/articles or Glamsquad’s website itself. Any misrepresentation of the company is purely accidental. BV is more than willing to correct any mistakes.