- Geekmaster
- 2022-06-21 15:50:14
- 20 minute(s)
Top Business Lessons From Goop CEO Gwyneth Paltrow
When thinking about successful direct to consumer brands goop may not come to mind. But over more than a decade Gwyneth Paltrow’s lifestyle brand has grown from a weekly newsletter into an eCommerce, media and events empire valued at $250 million by 2018. So, what can you learn from Goop? This article will take a deep dive into the brand’s journey to success — as well as provide some tips you can use when building your own brand.
Love her or hate her, Gwyneth Paltrow bet big on her covetable taste by launching Goop and its carefully curated content.
In a landscape of bloodless lifestyle start-ups filling questionable niches, her discerning brand stands as a refreshing antidote, drawing a passionate response from fans and non-fans alike. Though celebrity is certainly a factor in her success, Gwyneth Paltrow is a master at exploiting our complicated feelings for her. She knows how to keep her loyal fans, and vocal detractors, talking about her. And she’s able to turn the attention into marketing and merchandising.
Goop’s success is due to Paltrow’s vision for what goop could be.
Tony Florence, a venture capitalist and goop’s first institutional investor has said: “Gwyneth was super sophisticated in how she thought about the market opportunity.” While Paltrow started with a newsletter she eventually monetized that following in ways that have proven to be hugely successful. If you are trying to build your own successful direct to consumer brand here are some of the cues you can take from goop’s success.
Early-days-Goop encouraged readers to “Nourish the Inner Aspect”, and each newsletter came with an editor’s note from Gwyneth herself, offering insight into her daily life and routines. People ate it up.
By 2011, Goop was incorporated — now with a website and an eCommerce angle. Over the next few years, Goop collaborated with exclusive fashion brands, launched pop-up shops, started a print magazine, and even hosted its own “wellness summit” — which customers could take part in for the meager price of $500.
Along the way, Gwyneth Paltrow learned few business lessons about giving birth to a new brand, and the challenges and advantages of having a celebrity for the CEO.
From Hollywood actress to growing a blog from her kitchen table into a $250 million lifestyle brand, Gwyneth Paltrow shows that monetizing your passions is possible. In a big way! How did she do it? Keep reading the business lessons we can all learn from Gwyneth Paltrow. Here are five takeaways from Paltrow for budding entrepreneurs and business people of all types!
Build a loyal following before you monetize
Top Business Lessons From Goop CEO Gwyneth Paltrow - Build a loyal following before you monetize
150,000 subscribers. That’s the number of subscribers Paltrow reached in year two. If you had that many subscribers wouldn’t you start monetizing them? Gwyneth Paltrow had different ideas, instead she continued to focus on content. While no one likes to wait and many think waiting years while building a following is unconscionable consider the alternative, trying to sell a product when you have limited or no brand awareness or equity.
The fact that someone as famous as Paltrow still felt she needed to build trust shows that for most startups you can’t put the cart before the horse no matter how much you want to.
Once she hit 400,000 newsletter subscribers, she decided to sell a $90 t-shirt. Yes, $90 for a t-shirt. A plain white one. It sold out. It’s an example of what’s possible when you cultivate a following and exclusivity. New visitors probably flocked to goop just to see the $90 t-shirt. Maybe they stuck around awhile and bought something else instead. Goop has earned trust “because we started out creating content without an eye to profitability,” says Paltrow.
Marketed as a new-age health and wellness brand, primarily for women, Goop has seen remarkable success, largely due to the way it builds a solid community around itself.
Goop has had no shortage of controversy in its relatively short life. Goop makes a point of releasing certain off-the-wall products which are designed to create buzz and conversation around the brand – such as the “This Smells Like My Vagina Candle”. Such products get discussed everywhere on social media which then bring people to the website out of curiosity. Once there, they are exposed to the products Goop actually wants to sell them–and the message of wellness and community is hammered home. In addition, Goop has created a specific reputation for itself by using its products to encourage discussion around female sexuality and sexual health.
Gwyneth Paltrow has saidEvery startup focuses on getting more customers. But it isn’t easy to convince these prospects to pay for a service that hasn’t proved itself in the market yet.
This is why having a community of potential customers is important. It creates a halo effect, which gives credibility to the product that you’re selling. Community is valuable. It brings like-minded people together, and often benefits everyone involved. However, building an online community that can be monetized is easier said than done. Communities are not transactional, tit-for-tat relationships. Every member should feel like you’re giving them a highly exclusive membership, completely free of cost.
What if your audience isn’t receptive to your new scaling and monetization efforts?
What if you’re afraid of losing your wholesome, personable persona? Isn’t that what helped you earn an audience in the first place? When you add scaling and monetization to your business, be honest about what you’re doing—and why you’re doing it. Money blogger Jordan Page, for example, tells her audience about how she monetizes her blog without losing her personal touch. She doesn’t hold back out of fear of looking inauthentic. She’s upfront with her readers about why her emails ask for a click on her website. She tells readers why she hosts advertisements on the website itself. It’s her way of scaling the business without asking readers for money.
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Find the white space
Top Business Lessons From Goop CEO Gwyneth Paltrow - Find the white space
One of the reasons goop is so popular is because it sets the trend instead of following it. A prime example of this is the current craze around gluten free diets. Back in 2013 Paltrow not only talked about eating gluten free foods she wrote a cookbook on the subject. Speaking about that time Paltrow has said: “I wrote a gluten free cookbook like eight years ago and people wrote that Child Services should be called on me because I was starving my children. That was a good one. And you know, now gluten free is mainstream.”
Gwyneth Paltrow has stated numerous times that she sees Goop as leading the culture in health and wellness.
When she first introduced gluten-free diets to the world, people pounced on her saying she was a bad mom and threatened to call CPS. This experience, along with others, has led Paltrow to see that she is usually one to two years ahead of the curve. As she grows Goop, she has learned to be comfortable with the fact that sometimes society has to catch up with the Goop culture. White space is a process and tool that allows us to look at the landscape up and down the value chain with a new lens. It can help uncover opportunities that are not obvious ; it can identify new openings untouched by competitors, or it can be considered part of what was traditionally deemed a remote, different industry or outside the boundaries of the firm.
Trying to figure out what the white space is within your industry? It’s easier said than done.
One of the ways goop generates novel ideas is by analyzing its website traffic. In 2015 goop published a post about beauty products without endocrine disrupters and formaldehyde that generated a lot of website traffic. That prompted Paltrow to launch goop’s first product line, a collection of beauty products without toxic ingredients in 2016. The line called goop by Juice Beauty quickly became a hit. Within a week after the line launched one of the more expensive lines within the skin care set, the Discovery Set, which retailed for $125, sold out.
In the fight to stay competitive in the tightly contested middle market, identifying the white space in the market is an essential component to building a successful brand and stimulating business growth.
Exploring the competitive landscape and identifying whitespace that your brand can own provides an opportunity to recalibrate your business focus, determine what makes your offering unique and valuable to customers, and strengthen your brand. A me-too strategy is detrimental to building a brand and stimulating revenue growth, as it’s inherently limited. It is a fairly common practice that lures many middle market companies into doing what they see their more successful competition doing. Following your competition, however, will only leave you in their wake, trailing behind to capture their leftovers. Instead, to break through all the noise in the market, you should uncover what your competition is not doing. Find white space in your market where you are exceptionally strong while others are ignoring the opportunity.
First and foremost, you will want to clarify what you sell.
This may seem like an obvious one, but so many companies fall at the first hurdle because they are unable to describe succinctly what they do in a single sentence. Whether you’re selling to consumers or other businesses, developing an effective proposition is the first step to persuading customers to part with their money. Try to be as specific as possible and incorporate detail such as geographical reach, your USP, and the market you wish to target. Recognize that the more specific you are with this, the greater chance you have of honing your marketing message to resonate with the right market.
Never back off when you're struggling
Top Business Lessons From Goop CEO Gwyneth Paltrow - Never back off when you're struggling
As we mentioned before, Gwyneth Paltrow had a stable career in Hollywood when she decided to make Goop a real business. Not many people believed in her. According to the Iron Man star, people accepted her as an actress but wanted to put her in a box, where she could not do anything else. Paltrow believes that women in general face “a lot of push-backs, especially if you’re successful and attractive.” However, it did not discourage her, and pursuing her new ideas was the best thing she could do for herself.
Sure. With a $250 million empire, Gwyneth can afford to fail.
She can also absorb penalties from the occasional legal snafu, constant criticism from gynecologists and alerts from truth-in-advertising watchdogs. Just because you don’t have that luxury, don’t be afraid to offer new products or ideas of your own. Not only does that create curiosity and drive traffic, sometimes they actually become the next big thing. Gwyneth’s been early to market before with great success, most notably with a gluten-free cookbook and a “clean” skin care line. But she’s also had her share of stinkers, most notably with her short-lived goop magazine.
Goop prospered because so many people ridiculed it.
The late-night talk show hosts barely stifled their sniggers as she extolled the virtues of jade eggs that are “recharged by moonlight” for intimate detoxing, home-delivery camel’s milk and US$244 toothpaste squeezers. The media lapped it up when Paltrow eulogized about how she steamed herself through the hole in a hand-crafted Baltic birch seat. To many, she became a laughing stock but they were missing the point. Now look: it’s a billions of dollars market. She doesn’t care about the haters. They are irrelevant to her. Haters don’t mean anything because they are not her people.
Gwyneth Paltrow has said
According to People, the Oscar winner was honest about the growth setback her company experienced in 2021.
As such, Gwyneth Paltrow decided not to dwell on the negativity. She chose to turn the unexpected slowdown into motivation for Goop to do better in 2022. The news was quite surprising as the brand grabbed multiple headlines, including her notorious vagina candle. But those headlines didn’t translate into a considerable profit for the company. Of course, all the news didn’t deter Gwyneth Paltrow from wanting to grow the lifestyle brand in 2022. Despite the financial hardships, Paltrow and Goop seem primed and ready to set the internet on fire with more quirky lifestyle items.
Nonetheless, although Goop is very successful, they also make some mistakes along the way.
Paltrow has been criticized for featuring some random subjects, like a medical medium giving nutritional advice. Paltrow also supported ideas that raised doubts among her public. Paltrow says that those moments taught her a lesson. “I have learned so much. And so much by making such grave mistakes that have cost millions of dollars,” she told CNBC. Let’s be honest: Things for Gwyneth Paltrow were much easier than most people, and she admitted that in multiple interviews. However, it doesn’t mean she takes the things for granted or that there are no efforts behind it.
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Focus on high-quality products
Top Business Lessons From Goop CEO Gwyneth Paltrow - Focus on high-quality products
Goop might be a success, but not everyone can afford it. Several people complain the products are overpriced, like when they announced a leather toiletry bag for $5,800. Gwyneth Paltrow was not happy about it and remarked that there were also cheap products for $8 and several things for under $100. The entrepreneur also says that “Goop focuses on quality, and sometimes it doesn’t come cheap. The ingredients are beautiful. You can’t get that at a lower price point. You can’t make these things mass-market,” she told the New York Times.
At first, your customers will appreciate quality. Then, as they tell more people about it and continue shopping, they’ll begin to expect such.
After expectation comes a demand for quality products. And if you don’t deliver, your customer will leave. When your company offers quality products every time, you can create a standard of satisfying customers in the retail spectrum. In return, you’ll receive loyalty and continued lead generation that allows your company to grow. Nike is a great example of a company that links its brand reputation with the quality of their products. They’ve built their company on great marketing and products that stand the test of time. People know they can trust Nike and are willing to pay more because their products provide the quality they’ve come to expect.
It’s no secret that people talk about your brand online. What they say can make you a hero or a villain.
By the way, any high quality product produces higher ROI (return on investment) as compared to any low quality one. Some brands and individual try to cut cost while developing a product, but, that’s a foolish move to make as people gonna pay for that product or service and if that service isn’t worth the price… Sorry mate! you just made a mistake. Improvements in performance, addition of newer (better) features, or increasing any other dimensions of quality lead to increased sales and also give a boost to the ROI.
A company that focuses more on its marketing campaigns than the service of its current clients is a company that won’t last very long.
While it’s true that businesses need to be active in growing their clientele, taking care of current clients is the best way to grow their marketing efforts. If the quality is there, clients will make sure that the business is getting out there. For example, say there’s a shop that opens up and focuses on delivering fast and efficient service for its customers. As long as the shop delivers on that promise, its clients will recommend it to all their family members and friends. Not only that, but they’ll also go online to write things such as online reviews, recommend the business on social media, etc. Word of mouth and online marketing will grow organically for businesses that focus on offering quality over all else. Your honesty and efficiency will not go overlooked to your clients.
If you feel like your product is not up to the standard expected; don’t stress; it means you have room to grow, which is not a bad thing.
Listen to the complaints and recommendations from your customers. Let them know that you value their satisfaction and input. As the quality improves, you are going to strengthen the relationship you have with your customer. When you show growth, the customer sees that you care more than just making money. Your brand is going to be more relatable and stronger. You are going to find ways of expanding to new audiences and new markets. This is going to be good for your company.
Consider multiple avenues for growth
Top Business Lessons From Goop CEO Gwyneth Paltrow - Consider multiple avenues for growth
To be successful and to have longevity you will need to reinvent yourself at some point. Is Amazon an eCommerce company or a cloud computing company or a media company? When most people think of Amazon they think of online shopping but Amazon makes most of its money through cloud computing. In the first nine months of 2021 Amazon’s cloud computing business, Amazon Web Services generated 61.8% of Amazon’s operating income while only generating 13.4% of Amazon’s revenues.
It would have been easy for goop to view itself as just a media company focused on blogs and newsletters.
It could have stuck with generating revenue through advertising but that would have limited the company’s growth. Instead a key part of goop’s success is Paltrow’s broader vision for what her company is and what it could be. Not content to be an online retailer goop went offline for the first time with a pop up store in 2014. To fund the costs of its pop ups goop partners with brands who front the operating costs ensuring that Goop’s pop ups are profitable ventures.
Goop started out peddling products and services from a variety of bespoke, luxury brands.
However, as time went on and the brand’s own success grew, new Goop-brand product lines began to emerge. From a partnership with Juice Beauty (Goop by Juice Beauty) to its own fashion line (Goop Label) to selling vitamins and supplements (Goop Wellness), Goop has been slowly and consistently expanding its product reach. Though the website still sells products of a similar nature from other brands, each new Goop product line was released and integrated in a strategic fashion. So, if you want to release your own product line, make sure you do so in an organized, well-thought-out manner. This way, you don’t overwhelm consumers and make them feel forced into buying from your brand — everyone likes choice.
Diversification can provide a path to fast growth as you develop new products and expand into new markets and it can also safeguard your company against becoming over-reliant on any one market or product.
Through diversification you can generate sales while increasing market share and finding new revenue streams but it also comes with development, sales, and marketing costs. It also requires additional resources, skills, and management. If the costs associated with diversification exceed the potential profits and gains, then your business could be at risk. In general, diversifying with similar products for a familiar market carries less risk than developing a brand new product for an unknown market. This allows you to create a safety net which allows you to recover if one of your products or services fails.
We all know that businesses diversify to increase their profit margins through the addition of new revenue streams.
Diversification also helps businesses to leverage their existing resources, competencies, brand image, and customer base while entering the new products or new markets which further helps to increase the profit margins of the company. For instance, and despite the need to mitigate risk, Starbucks also diversified into the food menu to grow its sales and profit margins. The new food range has become an important source of income for Starbucks as the food menu helps to increase the spending per customer in the store.
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Wrapping Up
At the end of the day, whether or not you like Goop doesn’t really matter — the brand has been incredibly successful. They know who their target audience is, what they want, and how to communicate with them. They also know how to spin criticism and media attention in order to deepen their connection with customers. And based on recent valuation, they aren’t going anywhere but up.
Hollywood was not enough for Gwyneth Paltrow, who wanted new challenges and created her own company from scratch.
Gwyneth Paltrow seemed to have it all. The 47-year-old actress was born in a wealthy family, which makes any start much more comfortable. She grew up in the middle of high-profile people and used to spend her holidays traveling on director Steven Spielberg’s boat. She even got an Oscar for Shakespeare in Love when she was in her 20s. But it wasn’t enough! Then, she redefined herself as an affectionately eccentric lifestyle guru and, much to the surprise of her detractors, proved herself to be an astute businesswoman, steering the company on instinct alone and attracting high-profile backers.
Goop has built a cult of eccentricity and luxury around their muse and leader — the “internet’s kooky rich aunt” — Gwyneth Paltrow.
While Paltrow started with a newsletter she eventually monetized that following in ways that have proven to be hugely successful. She’s beautiful, healthy, wealthy, and more than willing to share all her secrets to success. Whether or not a rose quartz yoni egg will also help you achieve your dreams is up to you. Goop will always lead with its heart, or in this case, its gut. The Goop story is only getting longer and more legitimate.
Love her or hate her, you’ve got to hand it to her: Gwyneth knows how to attract attention.
What’s the truth about Goop? Well, it isn’t always backed by science, it’s sometimes controversial, but — gosh — if it isn’t effective. She’s figured out how to keep people talking and buying. And she does it over and over again. Try a little bit of goop strategy for your online store and see if it increases traffic to your site.
If there’s one rule to starting a successful company, it is: Fill a personal need!
Goop embodies the extremes of wellness culture and pseudoscience permeating into mainstream adoption. Despite how much haters wanted to make fun of what Goop does and ‘predict’ its demise, they seem to be wrong. Goop is seemingly at the forefront of wellness brands as controversy only continues to feed the beast. What’s your take about Goop? Feel free to share your perspective in the comments below!
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This was really a great read. I have been following Gwyneth for a couple of years now, she is really inspiring. I was thinking of setting up a startup and that is when I saw her videos and the main thing I learnt is to not fear to take risks. Keep posting more.
Thank you for your feedback Elena 🙂
She does a great job and is an amazing entrepreneur, she’s one of the most influential of her generation when it comes to manage a business, regardless of the critics who rip her work off sometimes.
Fears are built onto limiting beliefs, we absolutely must take the driver’s seat and control ourselves instead of letting fears steer us.
True that! Well mentioned.
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Thank you for your feedback, really appreciate it!
thanks for your information of top business lesson . i read your article is very impressive top business lesson
very nice.