Despite the widespread popularity of salon hair color, the process of dying hair is inefficient for hair salons. Hair color is expensive and difficult for hair stylists to mix precisely. Countless ounces of costly dye are washed down the drain, producing a lot of dye tube waste in the process.
CLICS — a KingsCrowd Deal to Watch — is a digital salon color mixing system designed to dispense the precise amount of hair dye needed for each salon client, reducing waste and maximizing profits for salon owners. We spoke to CLICS co-founder and CEO Charles Brown about the company’s flexible business model and how they help reduce salon waste.
Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.
Can you give us a brief elevator pitch for your company?
CLICS has developed a revolutionary service platform and hair color line that serves professional salons. The CLICS solution eliminates hair color waste equaling 30% of salon profits, automates hair color inventory management and allows salons to become cash flow positive by enabling them to pay for the hair color they use after they get paid by their clients. CLICS generates recurring revenue from its hair color sales.
What inspired you to take the leap and build this company?
The opportunity to solve a significant set of problems that undermine the success of stylists and salons, and to have the opportunity to help salons reduce the impact on the environment.
What past experiences prepared you to start, build, and lead your company?
This is the 7th platform business that I have developed. My background includes having helped build the Internet for the military (MILNET) and the first commercial email service (MCI Mail). I also co-invented the first Virtual Private Network Service, SafeNet, which was purchased for $630 million by a private equity firm. CLICS’ co-founder Leilani Macedo has 30 years of experience in the salon industry as a cosmetologist, barber, colorist, salon owner and hair color developer. CLICS’ solution is the result of her having experienced all of the issues CLICS addresses as a stylist and salon owner and attracting key technical and management talent to bring her idea to life.
What is your vision for the future of the industry you are operating in?
CLICS’ vision is an industry where salon professionals enjoy digital tools and the highest quality hair color that allows them to improve their skills and deliver exceptional service. At the same time, CLICS’ technology will substantially reduce the industry’s impact on the environment by eliminating hair color waste that enters our water systems and non-recyclable color tubes that go into our landfills by the millions.
Who is on your team and how did you come together?
My co-founder, Leilani Macedo, conceived the idea for CLICS from her firsthand experience as a salon owner, dealing with the waste, inventory management, and inefficiency in purchasing hair color. She began ideating with her brother, Jeff Macedo, a highly talented mechanical engineer and co-founder of CLICS. They conceptualized the machine design, and then Leilani recruited two more exceptional team members to build a prototype — Stu D’Alessandro, a full stack software developer and Chris Munz, roboticist.
With that completed, Leilani set out to find a CEO. She reasoned that most CEOs were men, and so she got her barber’s license with the idea that she could recruit one from behind the chair. As fate would have it, I sat in her chair and after learning of my background, she pitched her idea to me. I knew immediately that her vision was dynamic and that it could be transformative to the salon industry. After months of due diligence, I agreed to make the first $100,000 investment.
And some of our team members were investors before they joined us. Jeff had become an investor in CLICS with capital he earned developing products for another successful enterprise, ecoATM. He liked the business so much that he offered to help and has become a core part of CLICS’ management team. Our CFO, Greg Jasenovec, was also an early angel investor. Greg has enterprise level financial management experience and asked great questions during his due-diligence process. CLICS recruited him and he agreed to help. Since then, CLICS has recruited several talented staff, advisors, and strategic suppliers.
Do you have any competition, if so, how do you differentiate?
There are no current competitors for CLICS’ dispenser platform service. In the salon industry, CLICS sells its own hair color line and also services leading hair color companies. This gives us the ability to capture revenue regardless of which products the salons elect to purchase.
CLICS’ first direct product is a line of professional salon hair color called CLICS Colors®. It has two distinct features: it is the only mixable line of MEA based hair color and the only line designed for automated delivery and dispensing. MEA is a replacement for ammonia, the active ingredient in permanent hair color. MEA is an odorless (non-vaporous) ingredient that performs the same function as ammonia but eliminates the harsh ammonia smell. CLICS Colors mixability allows stylists to design any color they want using CLICS’ mobile app vs. the limited pre-designed colors offered by traditional manufacturers. Hair color competitors including the large beauty companies like L’Oréal, Henkel, and Paul Mitchell.
CLICS’ dispensing platform service fully automates inventory management, replenishment, purchasing and payments and enables precision formulation using mixable colors. CLICS’ first platform customer is one of the largest beauty companies in the world. Three key motivations in adopting CLICS’ platform service is a dramatic streamlining of their supply chain operations, the visibility of the products movement through each stage of the supply chain and the end customer buying activity. CLICS owns a fundamental patent for applying external pressure to a pressurized canister that dispenses dyes or pigments directly into a receptacle.
What does your business model look like?
CLICS’ business model is unique in the salon industry. CLICS’ is offering the first pay-after-dispense solution — allowing salons to go cash flow positive for their hair color. CLICS offers its hair color line and dispensers for a one-time setup fee of $500.00 and a small daily lease fee for the dispensers that is waived with minimal monthly purchases of $500.00 in hair color. In return, salons agree to link a bank account that CLICS can debit daily for the hair color dispensed. This allows CLICS to automatically refill the salon’s inventory without requiring permission, thus fully automating hair color inventory ordering, management, and payments. CLICS also offers volume discounts, motivating salons to consolidate their color purchases through CLICS’ platform.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
CLICS learned of the crowdfunding option from an advisor, who observed a successful raise from another startup on Wefunder. Many venture investors have pulled back from investing during this period, and crowdfunding represents a viable and attractive democratic alternative to institutional sources of investment capital.
The funds raised will be used to expand CLICS’ customer base, purchase additional hair color inventory, expand the software features of our platform and for general operations.
What do you want potential investors to know about you and/or your company?
The CLICS team is an accomplished, professional, dedicated team that is results-oriented and focused on serving our customers, employees, and shareholders. We believe that there is a direct relationship between the number of innovations for a given business solution and the probability of success. We have a unique, compelling, and patented offering that underpins the likelihood of our success. We have established criteria for success based on a set of criteria that adds to our potential success and the resulting projections of shareholder returns here:
- Large and fragmented market
- A disruptive solution
- A new category
- Clear customer pain
- First mover advantage
- Low capital needs
- Potential for rapid growth
- Clear exit strategy:
- 1-2 Years 4-6X
- 4-5 Years 12-16X
- Includes 20% dilution for $15 to $20 million in growth capital
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? have you set any future goals for the company?
CLICS has already been approached by leading beauty companies who are interested in acquiring the company. We are still early in the value creation process and just entering what will be a period of rapid growth. CLICS’ vision can be extended to most color cosmetics in the beauty industry and even to other industries, where large volumes of fluids are consumed on an ongoing basis. For example, nail salons buy volumes of nail polish products with similar opportunities to use fewer ingredients that can be mixed to offer wider color options. CLICS will evaluate potential markets for our service platform and partner or compete on a case-by-case basis.
We at KingsCrowd are excited to see where Charles and his team take the company. CLICS is currently raising on Wefunder.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.