It’s been a formative time for salons. The boom of DIY bang trims and color, plus constantly fluctuating lockdown regulations, have elevated the importance of experiential and creative standards within the professional sector. Now the previously static foundations of a $124 billion industry are being shaken up as well.
Steady employment for industry newcomers was only viable through a company contract or, upon building a loyal fan base, opening up an independent space (which comes with huge financial commitments). House visits are another possibility, but lack the luxury of the salon experience. Enter ArtistOnGo, a company that allows hair and makeup artists to rent a chair in top salons in their city on an hourly, daily, and/or weekly basis for a small rental fee. For salons who have lost out on business due to the pandemic, it is a much-needed boost in earnings. The company claims that renting just 25% of unused space will cover a full rental expense, while artists who do their booking through the platform keep 75% of their client’s dollar. Given that artists drive 80% of repeat business, yet only receive 30% of revenue, ArtistOnGo is offering both partners in the situation attractive financial and personal advantages. Its founding team includes industry veterans who have held leadership positions at the likes of cryptocurrency exchange Gemini, Deutsche Bank, and L’Oréal.
Co-founders Dharmendra and Aarti Manwani talked to BeautyMatter about the journey of creating their platform, democratizing the industry, and empowering hair artists.
What inspired the founding of this platform?
Dharmendra Manwani: There’s a twofold story. Before this, I was running 350 salons which I co-founded, worldwide [Jean-Claude Biguine, Asia]. I was seeing three things happening. One was a lot of consumers were directly coming back for a specific artist. The brand recall was decreasing for the brands or physical store, but increasing tenfold for artists. This is a very high turnover industry—you find a lot of salon seats unutilized, because people change jobs for whatever reason and they move all their clients with them, which is a big financial stress for any salon owner.
The second thing I also realized was that all these artists, if you don’t allow them to work on their own, you are not doing justice with their creative freedom. These are artists, they don’t want to be 9-to-5 employees. The creative freedom or thought process has been subsidized. Why, if you have a lot of clients, can’t you just be independent? Why do you do work for my salon, when honestly, we don’t add value? That was the shocking fact, when they told me that if they want to go on their own, they need to either open their own space, which is half a million dollars, or they need to operate as a businessman, which they don’t like. That defocuses them from doing creative work, which is the most important cornerstone.
If we want to nourish the creativity of this industry, there are 100 things you can do, but most importantly, you want them to help them work on their own. Instagram has helped them to put together their portfolios and show their creativity. But still, they were very limited with working independently. We realized that’s the area where we can work. Everybody else is interested in product selling, but not giving them freedom. My co-founder and Chief Product Officer Aarti is a tech guru and has worked for multiple multibillion dollar marketplaces. I called her and explained that this is my vision: I want millions of artists to stand on their feet and not be restricted. How can we use technology [for that] and give them flexible options?
How did you fund the business and how did it all come together?
DM: I was one of the largest clients of L’Oréal, so I knew Pat [Parenty] from my past life. After Aarti and I discussed, we went to Pat and he’s like, “For 20 years, this is what we were looking for.” Because even when people have other options, they are not very good, like renting a $4,000 or $5,000 studio. Pat was on board from day one. Our other investors include VCs and people who have seen this beauty and retail game, like Alexandra Wilkis Wilson from Gilt Group, and Tom Lee from One Medical Group who has done the same thing in the primary healthcare services, and others.
When did you launch?
DM: We were already building a product before COVID and launched in October post-COVID.
It has been such an interesting time for professional beauty services overall. At the same time, this model goes beyond COVID restrictions. It’s about giving the artists that space and flexibility. When we shift out of the restrictions, how might the salon landscape change or adapt and what does that mean for your platform?
DM: People will continue to work in salons, but what we are seeing future forward is that this will emerge as one of the largest options because it offers them flexibility. The second thing they want is control of their creativity and in their life. This puts the control in their hands. I am not dependent on a salon owner. I have a client, I can rent a space any time, anywhere. And the third thing, it also gives them three times more income. From an artist perspective, it’s a triple win. There’s really no downside to it because they can also offer a great customer experience. A lot of artists who are already on this path of independence, they manage but crave the infrastructure because they’re doing house calls, or are working in a small room that compromises the experience. This was long overdue in the industry.
Aarti Manwani: When I first did my research, I was very surprised there are very few options for the consumer. We had coupon offerings like Groupon or Gilt, but we’re still calling the salon to make an appointment, we were still going through the front desk and didn’t have any flexibility on location or schedule. We were still not directly in touch with our artists. The salon hours are 11-6, how am I ever able to make an appointment if I am working a 9 to 5 job? Which most of us are. I can rent a car when I want (Uber), I can rent and live in someone’s home (Airbnb), I can get food and prescriptions delivered without ever stepping out of my home, but I still need to call a salon to make a hair appointment? At ArtistOnGo, we are using technology to bring the industry and the customer experience to the 21st century. As a consumer, I need to be able to work with the stylist and, first and foremost, the location has to be comfortable for everybody. Flexibility is a huge piece of it. It has to work for me, it has to work for the stylist who is working with me, and it has to make money for all sides. Looking at Airbnbs and Ubers, I was like, why is this not in the beauty industry?
Learning all that, we came up with this system, which was basically a marketplace that works both for the salon owners, as well as the artists. We were building this pre-COVID, but this model has been pushed to the forefront because of it. People are getting less hours behind the chair if they work in a traditional salon, but with ArtistOnGo, we don’t have that problem. Stylists now have an array of options. They have the flexibility to work from different salons at various locations. They can charge what they feel comfortable with and adjust based on the market conditions. Stylists get paid the same day, and get the majority of the revenue, and more importantly as a hairstylist, they are still helping all the salon owners because they are utilizing the unused inventory.
The capacity planning is done so beautifully with our technology. It’s amazing that the salon owner who was first making $0 on a chair is now making four times more revenue. So it’s a beautiful scenario for them. More importantly, none of this can be accomplished manually—you need technology behind it.
There are a couple of important things we do. We first match the artist to the salon owner. Every salon has its own vibe. We need to make sure the salon owner is welcoming of the artist, the artist feels comfortable, and their client feels comfortable. We do that matching with a million data points in the back, which are recognizing suitability. When we are doing capacity planning, we’re saying on average, this chair should yield you X amount of dollars. This is the number of artists that need to be occupied for this number of hours to yield you that kind of revenue. On the artist’s side, we are projecting it for the artists, saying, this is your spending pattern, projecting your patterns: you should be working 30 hours a week or 50 hours a week, this is what your customers tends to like, this is what you should be doing. All of that would not be possible without technology at that level of scale. I’m super excited that we built something that puts us in the forefront during COVID. We’ve seen the proof there. But more importantly, it really brings the industry into the 21st century, which was not there before.
Some salons have used online booking systems, but those are quite clunky. Or you can use treatment booking systems. But this puts more money in the pocket of the artist. Does the system suggest certain artists or salons or based on proximity? How does that work?
AM: The first thing, which I think is a big difference, is that a lot of the scheduling apps for consumers are isolated, they’re all sitting in their own little silos. We have a product that is a marketplace for both the artist and the salon owner, and the consumer can actually use it. It evens out the playing field. Not only that, it also brings synergy between everybody. Salons are listed on our website with the location and availability, so a consumer can say, “Hey, I noticed this salon is closer to me, are you willing to come here,” or the artists could do the same. It’s a professional space, it’s safe, all the regulations are being followed. Why don’t we do that instead of washing the hair in your kitchen sink?
One of the things that was really impressive about the platform was the increase in earnings for the artists. How does it work in terms of the split between the artist, the salon, and then your company? Is there a certain percentage that goes to the artists, then the salon and your company?
DM: Before, if a consumer spends $100, artists will get around $30 or $40, and the salon will keep $60. Now with us, artists will get $75 to $80. They will spend $20 on chair rental, we charge a small fee, and the rest we give to the salon owner.
What’s the feedback and reception been like?
DM: The consumers love it because they can have their cake and eat it too. It’s a blessing because now there’s flexibility on both sides. Before, there was no flexibility for the hairstylist, and if they went independent and did house calls, it was not a professional experience. A client is paying $250 bucks for color and is getting their hair washed in the kitchen sink, being asked to move their chair around, or getting color on their dress. It’s not a great experience. So I think for customers, this is amazing. For artists, it’s a no-brainer. From the salon perspective, first they were like, “Oh, it’s just $20 Are you serious?” And then we do the math: this $20 is $40,000 per chair per year. Rent is $80,000 a year, so if we give two chairs, that will pay your rent.
10 years back when the food delivery companies came in, people didn’t believe in it and now everybody does it. Most of the salon owners are giving us more chairs, and they don’t have to work at all. Everything is happening automatically: we manage their inventory, take the payments from the artists, send them a text notification, they can approve it or not approve it, and the money comes into their bank accounts. There is not a single minute of operational stuff that is required from them. They are making money off the existing infrastructure without additional cost or effort. It’s a no-brainer, there’s nothing to lose.
This is currently only available in the US. What expansions do you have planned?
DM: Right now we are piloting multiple cities. We have been approached by the top three beauty brands in the world. They see that this is a de facto model which has always been happening in a slow and steady way. People were leaving jobs at corporate salons and going into a private practice. But now they see that this is going to be the default option: to rent out. We are in talks with some companies to do a rollout across the globe, but we are still focused on the US market. Then we’ll jump onto markets like the UK and others very soon.
It is this interesting democratization that we’ve seen. Things don’t have to be so static and fixed. This was planned before pandemic, but especially now, it seems like such a crucial tool. Are there any other ways in which you see the industry developing from here on out?
DM: Renting is the first piece. But what is the biggest problem of the creator economy and beauty space? People may want to debate and say, how do you get them a new business or building. What I would say is a good hair stylist doesn’t struggle to get the new client. The biggest struggle is three things: they want a certain level of control on their creative freedom, their voice, and to have flexibility. These emotional needs were not fulfilled for the longest time—it’s like they were factory workers in a car manufacturing plant. We are not changing it by a WeWork model, we have a more advanced solution where you don’t even have to rent a month of a salon space. If you work only 40 hours, you rent only 40 hours from that salon. It’s fractional renting—that’s the biggest innovation. They want to have a balanced life, and that does give them an infrastructure for whenever they come into that creative mode.
Is there any vetting process for the artists that sign up?
DM: We kept this by invitation only. We have proper parameters: if you’re having enough clients, in this geographic location, your work culture meets that salon. We match that. If we cannot match you, there’s no sense in being on our platform. We have a heavy vetting process because we are letting these artists use half-million-dollar salons. So far, we are surprised that the working environment for artists and salon was so cohesive. They enjoy working in this setting because they have their own responsibilities, the salon or employer provides infrastructure, the artists can take care of their clients. We are a technology company, which is empowering how creatives will work in the beauty and wellness space, putting a lot of freedom and control in their hands. That’s our mission. We’re bringing both sides together, we’re giving salon owners other revenue streams so they can stay in business.
AM: Renting is just the start of it. The most positively impacted party from this phenomenon is ultimately going to be the consumer who gets a lot more control. Instead of buying products on Amazon, now I will have a subscription model where my artist sends me the products directly. In terms of the reorganization of the work structure, it’s going to have a much broader influence on the industry. The equation between the salon owners and the artist is going to change because of fractional renting. It fundamentally shifts the power.
DM: First we are solving the biggest need of a hairstylist. Amendment one and amendment two of the artist economy is the freedom of control of your schedule, and freedom of wherever you want to work. Once this is done, there’s a lot of other things, like where do I buy products? How do I sell products to my clients in this kind of setting? We already have a roadmap of providing all those tools to them. We are helping artists to also create their own brands, or helping them to buy the products that have more valuable pricing, whatever they prefer. Our vision is: if you’re a creator, you focus on your creativity. Everything else we will provide you, from product purchases and selling to insurance. We will be a one-stop technology shop.
