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It's a Matter Of... Precision

Innovation and Embracing the Unexpected with Paul Peros

April 20, 2021 BeautyMatter
April 20, 2021

Innovation and disruption are concepts that get thrown around a lot. Disruption is the byproduct of true innovation. Real innovators disrupt by long-term thinking and imagining the impossible–they don’t peddle in quick fixes and gimmicks. Paul Peros, CEO of the Perth-based high-tech company Wellfully and his latest brainchild the new beauty tech innovation RÉDUIT, sits down with Kelly. It quickly becomes clear that innovation isn’t a nebulous concept for him; it’s been his reason for being for three decades and it’s his unique superpower.

Kelly Kovack [00:00:07]:               This episode is presented by The Woods & Co., a fully-integrated marketing and communications firm with niche expertise in beauty, health, wellness and fitness.

Paul Peros [00:00:25]:                    Hi, my name is Paul Peros. I’m the CEO of Reduit, and to me, it’s a matter of precision.

Kelly Kovack [00:00:35]:               Innovation and disruption are concepts that get thrown around a lot. I’m Kelly Kovack, founder of BeautyMatter. At the end of the day, in my opinion, there is very little innovation and disruption in the true sense of the word; the kind that stops you in your tracks, changing the context of the market, consumer, and competitive space a business operates. Disruption is the byproduct of true innovation; disruption for disruption’s sake is just noise. Real innovators disrupt by long-term thinking and imagining the impossible. They don’t peddle in quick fixes and gimmicks. Paul Peros is the CEO of Perth-based high-tech company Wellfully, and the new beauty tech innovation, Reduit. Innovation isn’t a nebulus concept for Paul, it’s been his reason for being for three decades, and it’s his unique super power.

                                                            Paul, thank you so much for joining us today. I have to say, in sort of prepping – I mean, I know a little bit about you, and we never sort of do pre-calls for these podcasts, because I love for it to be sort of as if we’re meeting for the first time, or picking up on a conversation so there’s an organic quality. But, I came across this interview on Medium that you did, and it was so insightful and so smart, and now I have that in the back of my head, where I’m like, this has to be as smart and good as that interview. I don’t know if you know the one I’m talking about, but I was blown away. So, I tried to tap into some of those answers, because they’re so insightful and kind of outside the normal beauty thinking. So, I just wanted to kind of give you an idea of where I’m at.

Paul Peros [00:02:37]:                    Thanks. Thanks for having me on the show, and I’m happy to talk through any of these ones, plus a number of the new things we’ve been doing recently. The world has changed quite a bit the last year and a half, and we all get not only older, but wiser, or different in a way.

Kelly Kovack [00:03:03]:               For sure. But, I think that’s a good way to start, before we dive into the conversation, maybe you can share a little bit about your backstory and career path that led you to you role at the beauty tech company, Foreo, which you were there from I believe the launch until 2018, and definitely share with us your latest venture, because it’s really fascinating.

Paul Peros [00:03:28]:                    Sure, happily. Before Foreo, I did over ten years of management consulting, and some initial stints in physics laboratories in and around university times then. I think what you mentioned before, that there’s a bit of a different approach to beauty, was made possible to a large extent by the nature of Foreo itself, both as an organization, as a focus, but was also, I think, impacted quite a bit personally and professionally by the projects that I’ve grown up with. They have been creating innovation across a multitude of industry and market categories, oftentimes facing incumbent companies that have been in the business for tens of years, generations at times, facing a status quo and having to challenge it over and over again, to the point that it becomes sort of a reflex to keep asking questions that people do not, anymore in this case. Foreo, I think was different because it was the name of the game to try to think through solutions in a different manner, anywhere from the very applications to what is behind it, how do we look at the architecture, how do we look at the technology, and now with Reduit, it’s probably a second stage of that in terms of thinking across complete application systems, not only devices, but finally integrating the topic of dimensions in the innovation work.

Kelly Kovack [00:05:49]:               The Foreo is such a great story of innovation, design, and growth. Can you share a little bit about what you’re doing now in the parent company, I think it’s Wellfully, and the launch of the Reduit brand, which you previewed at CES last year, but it just launched in May, so kind of mid-pandemic.

Paul Peros [00:06:13]:                    Correct. I mean, we set up everything to be flexible, but I’ve never had anything like this before. We really had to push it, and I’m happy to share a few examples of that. But, first, a few words about Wellfully and the story behind it. It started now 20 years ago with a pure tech, an indie company, which was Wellfully from Perth, Australia that has been focusing on advanced drug delivery technologies. By this, I mean getting the actives where you really need them: in skin, in hair, on various surfaces, as per the application, an aspect of delivery that, especially in beauty, has been not always in the first place when talking about products.

Kelly Kovack [00:07:20]:               Yeah, people have kind of played around it, but no one’s really sort of harnessed it.

Paul Peros [00:07:28]:                    It has been impacted greatly by the starting position, which is the topic we’re also talking about: creams, serums, hair products, various as we know them today, originated effectively at the beginning of the 20th century. This is when L’Oréal and Estee Lauder were starting, and they had to draw from the technology inventory that was available at that time. So, I’m not talking about just the packaging and the plastic, but these were product architectures, formulations, ways to apply products, mainly manually, maximum with a pump that dictated the very way that those formulations were constructed, and had to rely on emulsifiers, on thickeners, in order to be able to be delivered. That has, yes, advanced greatly in terms of materials and ingredients, but at the end of the day, this is how we still do most of the products.

Kelly Kovack [00:08:50]:               And so you have really sort of taken that and deconstructed it, and pushed sort of delivery through a completely separate lens, through using technology.

Paul Peros [00:09:00]:                    Yes, step-by-step, so it’s almost like reverse engineering and application. So, you start from the ending point: I want hyaluronic acid in this concentration, at this depth, in this layer of the skin. How do we get there? And constructing the rest of the product from this very, very basic starting position, being completely open in terms of engineering, what needs to happen to be able to do so in the most effective way. One dimension that keeps coming back is sustainability or efficiency, that also can be viewed through many lenses: the application, the usage itself, the materials, the logistics behind it, a bit of a surprise – more than one. At the end of the day, it was not only the packaging, the hair position, the skin position we have today. But, even the way of formulating the product, especially in the light of the last year, and all of the constraints that it brought. It’s something that led to solutions that were surprises for ourselves, from the ability to formulate without these secondary ingredients, to the fact that then once we are in such a, what we call a light-source environment, we see ingredients that traditionally have not been active, actually contribute to desired effects, or lead to additional benefits, something that they have not been able to do in traditional formulations so far. So, there have been a lot of discoveries, some of them engineered or bland, but many of them accidental, and it’s learning as you go, is in my opinion, personally, one of the truly interesting and engaging things, the discoveries you make as you go along.

A lot of it starts with real problems, and there were many last year. I mean, to give you an example, we were ready to basically outsource the formulation work, initially; we wanted to be able to focus purely on the structures. COVID came in March, just as we were getting ready to sample seriously, and as chance would have it, our formulators were in the area of Italy that was first and hardest hit in Europe. As that was happening, I did less than 24-hours turnaround from Hong Kong to our center in [unclear 00:12:12] in order to hand-carry, literally, all of the equipment that was needed back down to Australia in order to be able to continue work. Similarly, without the formulators, we were faced with either delay for a year, or try to figure out a solution that ended up being doing our own lab in the only place where it was possible to work for most of last year, which was China. And that, itself, is now the blueprint we’re working on with the Swiss lab operation. Honestly, I think especially if we’re talking the specifics of high-active concentrations of certain viscosity without the secondary, so light [unclear 00:13:05] formulations, we have done more learning than probably any other established laboratory or formulator could be offering these days. And I’m happy to be bringing it into an arena, such as southern Switzerland in this case, that is really close to the industrial centers of Milano and [unclear 00:13:32], we’re talking Intercostal, Varese, it’s not just cosmetics, it’s also pharma, as well as the rest of Switzerland, with many, let’s say chemical and specialty producers and formulators around. And it’s not just the companies, it’s the people, it’s the sourcing abilities that I expect we will be finding a lot of interesting things for future products and projects.

Kelly Kovack [00:14:02]:               You know, one of the things that I find really interesting is innovation and disruption are words that get thrown around a lot, and very often, the people and brands that are claiming to be innovative and disruptive are anything but, but you seem to have kind of put yourself in the middle of these incredibly innovative companies, and I can’t imagine it happens by accident. So, how do you build a culture that embraces innovation, and sort of what you were just talking about, sort of allowing for the surprises and the surprises to take you down a path you didn’t expect, but yet still moving forward to develop a product and launch a product? So there’s kind of an art form to that, and I would imagine building a team and a culture that allows for that.

Paul Peros [00:14:59]:                    Well, correct. I think the first step is to ensure that you’re working with the right envelope. As a matter of fact, the invitation I got straight from Australia back in the days was to help transform Wellfully, which was a pure R&D company that was licensing its technologies to large players such as P&G and Johnson & Johnson and various, was the help Wellfully integrate downstream to capture more value by designing their own products developed based on their technologies, as well as transforming these into brands and distribution channels and communications and engagement with consumers. That, in itself, was sort of a bit – the right answer, or the trigger in my case, that interested me, especially after finding the origins of technology in Perth with the original Wellfully is something that has been incubated for many years, and a lot of which I didn’t think that these large multi-national companies were able to use to the fullest potential that was actually there.

Kelly Kovack [00:16:32]:               What do you look for in a team to put together – that understands kind of the power of innovation, almost at an intuitive level? Because I don’t think it’s something you can teach, right? I think people have to be – I think it’s one part curiosity and discipline, but how do you harness all of that?

Paul Peros [00:16:56]:                    Well, in addition to what I’m describing, which is this vertical integration, that the coverage of the system and technically, it’s the degrees of freedom of a system, all the levers that you can act on. A typical example in beauty tech is the brand that goes out and outsources the design in one place, and then the sourcing of the device in another place sends a contract for X containers per month, and off they go. Now, in the economics of innovation, it’s game over as far as I’m concerned, because in such a constellation, any improvement based on feedback from consumers is virtually in nobody’s interest and a very unlikely outcome, because the OEM is happy where they are, and we’ll make sure that any changes or inefficiencies are negotiated as rough as possible. Ultimately, the consumer will be stuck with something that in itself is not really evolving or developing. Venturing out into completely new ways of dealing with applications in beauty, or anything for that matter, you have to be ready in the sense that you have to have the flexibility needed in order to climb the learning curve as is required, to plan for it in the way you design the organization and in the way you put the team together.

A specific case that we had last year, even non-COVID related, was between electronics teams in Australia and in China with the first being more of a traditional western school, so we’re talking Texas Instruments and various, and the second being able to work on shifts where you don’t find instructions or any examples on the web, in English, with, on top, the engineers not talking Chinese between, so impossible to communicate between themselves, and everything ultimately finishing in writing a translator program that will take the firmware from the first to the second independently of English and Chinese between the two, in itself, an asset I’m pretty sure does not exist in any company in beauty for sure, but in general, easily possible. So, being able to expose yourself to a situation that might require solutions that have never been sought before, and being confident that you will find one in terms of assisting people, because at the end of the day, none of this was groundbreaking, it was a typical situation in a traditional company that would automatically lead to a complete stalemate where the company would then escalate the problem to the point that it would be a senior decision of working with one or the other, and this is again where the perimeter systematically, just by the nature of the beast, gets reduced in traditional companies, and we are not talking about employing extraordinary, unique talent or engineers. I, myself, for starters am not one of these, but it’s more on how we work together, with each other, that can lead to limitations or unleash completely novel things, just in the way we solve problems we face in every day work.

Kelly Kovack [00:21:09]:               Well, it’s interesting, because even in these very large companies, they have innovation departments and really smart, creative people working in them, but then this innovation gets pushed through kind of a traditional decision-making process, and it falls apart because you can’t quantify it, it’s new, and it kind of dies on the vine.

Paul Peros [00:21:38]:                    What are you telling to the rest of the organization the moment you say, “This is the innovation department”?

Kelly Kovack [00:21:43]:               True, true. That’s the problem, right?

Paul Peros [00:21:46]:                    Everybody else is like, “Okay, feel free to turn off your innovation lights.” That’s exactly it. I think while still possible, because with organization size and complexity, there will be constraints, and I don’t think it’s an absolute rule, but for small companies, innovation needs to be part of HR and admin and the supply chain and engineering and everything. At the end of the day, this is where the ideas come from, and this is all game, and these are people who are thinking about the company and about the consumers, about what do we do and how do we do all of the time, and should be able to contribute, should be put in a position to be able to contribute, in this case.

Kelly Kovack [00:22:39]:               Yeah, I think one of the interesting things about the past ten months is there’s this window of opportunity where anything is possible and people had these clean sheet moments where there was the freedom to rethink things out of necessity, and I’m curious to see whether some of that will stick, or we’re going to go back to the same decision-making paradigms pre-COVID.

Paul Peros [00:23:11]:                    Yes, definitely, I agree. A lot of the – especially looking at consumer and consumer communications, we have seen a soberness that hasn’t been around for a long time. The lack of distraction and impulse, the quality of time and attention has changed quite a bit over the last year. But I see also possible pitfalls in this, if we are talking about the organization itself. With early December, we have – campus is a big word, it’s basically a big house and offices, but finally a place where we can use to jolt ourselves out of this soberness for a moment to put a little bit of pressure on creative concepts, on deciding on how we’re going to go and do about certain things that do require a bit more momentum and energy and engagement to really hammer them through. So, myself and the team are taking turns quarantining before arrival, taking COVID tests, but then spending two-to-three weeks in various configurations at this house in Switzerland, flying in from all over the world in order to be able to work together, even at home in pajamas, but not on Zoom, because you continue to talk while you’re making coffee, cooking dinner together, or even messaging each other from room to room on certain things. That is a little bit something that I miss, and looking at the future, I hope we manage to learn and involve both of these extremes: the sobriety of isolation and the more energetic or overly energetic or distracting life as we knew it before 2020.

Kelly Kovack [00:25:47]:               As a brand, the relationships you brand with top tier media and influencers is an integral part to a brand’s success. Growing brand awareness and garnering strategic partnerships can open doors to retail opportunities and endorsement from decision makers. The Woods & Co. is a fully integrated marketing and communications firm with niche expertise in beauty, health, wellness, and fitness. Their full-time, in-house team works with brands from ideation of strategy to execution, while nurturing long-term, meaningful, strategic relationships. For more information, visit www.thewoodsandco.com for their services and a list of clients.

                                                            One of the things that’s also sort of very interesting, it was definitely with Foreo, and it seems with what you’re building now, when you reinvent sort of something like how products are delivered or what they look like, it also comes with an obligation to educate, because it’s not immediate obvious what it is you’ve put out into the world, and it also requires consumers to rethink how they engage with these products. And one of the things built was an entire platform to support brand ambassadors, and the language on the website, which I found – I love it, because it’s such a big statement, is that you also want to assume a role of responsible industry leadership, and to actively assist in the development of future best practices in communication and distribution across beauty and health. I mean, just building the platform is kind of a big investment, but it’s also sort of you’ve put it out there, a big promise, and I’m totally intrigued with what you built and why you built it. So, can you share a little bit about that platform and the importance of it, and kind of the intent behind it?

Paul Peros [00:27:56]:                    Sure, sure. I think it’s also a good example of sort of problem-solving and learning on the go. True, the more you innovate, the more you’re likely to have to communicate from the fact that we can engineer and we do engineer for simplicity in terms of the whole product and system of the applicators and the hair products and skin products being completely plug-and-play, economics and others. Still, you end up with something that nobody’s ever tried to sell, and nobody’s ever tried to buy. The newer – the more of a new pattern you’re presenting, you need to connect it with the context, the landscape of today or yesterday, in this case. It is the absence of traditional channels, such as travel retail, such as brick-and-mortar, it’s the consultants in the shops, it’s the training sessions, it’s the learnings from those that are really, really important for a new product. You do innovate in the lab, but a lot of the innovation is on the communication level, in terms of how it makes sense it what situation, in terms of presentation, explanation, and education. At the end of the day, all channels have not really been up and running, and especially for us, a new company, gambles that were tough to make with the number of retailers in generally more difficult situations, and overall efficiencies in terms of transactions and footfall and exposure and the economics behind it. And then while, there was a lot of good results and a lot of praise on the digital channels this past year, still, the nature of this is largely transactional and better-suited for products that already have a certain level of awareness and education and so on, which was sort of the starting point for our thinking. So, what do we have, and how do we make this work in the digital world? And this was the call of the ambassadors, the third part of the equation that led us to actually define the program was also the competitive assets in terms of talent that was unfortunately, probably the hardest hit within the industry, which were the professionals, the beauty advisors, the people that were a little bit left behind. And that, on the other hand, are key to the solution in terms of having the time, the motivation, the knowledge to engage with consumers, but we’re missing the infrastructure, the infrastructure in terms of the old world retail, and this is where the ambassador program was born, to look into ways to engage together with industry talent in reaching out to consumers, in learning more about the products, understanding and starting to basically remap a little bit the landscape. Before, it’s like, what will it mean, the way we work, sobriety and so on for the future? And yes, it is a big topic, but what will it mean for some of the channeling for structures we had in the past, and how will these evolve? So, will brick-and-mortar rebound as time goes on? Will digital be the same but bigger? No. What will happen to the high-bandwidth channels? Will they migrate to digital? Yes. Will digital be as it is today? No, I don’t think so. The channels, overall, will get shorter with this intermediation that we’ve seen on this simple transactional level before happening now on possibly the more content-intensive, the more relationships-oriented one in digital format.

Kelly Kovack [00:32:49]:               You know, it’s interesting you say that, because there’s so much focus right now on kind of technology and technology adoption and online sales and sort of the growth and is retail dead, and I think what is very often overlooked is yes, there’s these great strides happening, but the moment that we’re living in, to me, is really about human beings and how we communicate with each other, and how are we going to be there for each other, and it’s kind of that human connection, I think, that is the opportunity right now, and the technology, yes, that’s going to happen, but I think people are losing sight of the fact that this is a very human moment right now, and it seems that you have kind of tapped into that and are unlocking it.

Paul Peros [00:33:44]:                    Yes, yes. To make ourselves, as mentioned before with the organization, an alternative to Zoom calls, spending most of my time here, I’m a little bit also the housekeeper, in charge of the daily shopping and so on, the only one that is allowed to leave, and I’m amazed for a place that is normally very, let’s say disciplined and quiet, how much interactions I’ve found around grocery stores at nine o’clock in the morning, with people sort of longing to interact with each other. How interesting even networking activities, online, have changed from the one too many, let’s say configurations, so presentations on Zoom to various audiences and conferences, to threads, to one-to-one discussions, to a combination of professional and private contact. Yes, yes, it is the human element that is becoming much more prominent than, let’s say, the content or the dryness of your everyday Amazon page or shop.

Kelly Kovack [00:35:28]:               Yeah. You know, so I think, and I’m curious because you are such sort of a future thinker and definitely sort of think – I mean, I hate the description “outside the box” because it’s so overused, but you’re not defined by sort of where everyone else is going. We’re living in such a time of disruption, but I also think it’s so full of possibilities, and we definitely have a rough road ahead of us, I think there’s a lot of green shoots, but we are still dealing with the pandemic, we have economic issues, especially in the U.S., that we’re dealing with, political, cultural, it’s kind of this confluence of big problems, if you will. But I still am so hopeful about what’s on the other side, and I’m inspired every day by creative people like you who are rethinking their businesses. But I’m curious to hear what your thoughts are about the future of beauty and wellness and what it might look like, sort of like three, five years in the future, which seems like a difficult thing to even contemplate, because everyone’s thinking post-COVID, but I’m thinking beyond that. What does the landscape look like to you?

Paul Peros [00:36:50]:                    Well, I hope we will be able to take some of these sober learnings from this past and probably few more years to come with us into now there’s more and more talk about the “roaring ‘20s,” so not to let the pendulum swing completely to the other side without taking some of it with us. In particular, sort of self-care and some of the elements that for me, personally, are important in beauty, that is about self-perception and care for oneself, getting closer to wellness and health, could bring, or pull, the industry all together in a much more interesting dimension, away from the purely flashy, from this perspective now of possibly superficial, away from accepting things that when one does really think about, don’t necessarily make sense. We have time to do that now, and I think this will continue. It is something that I think I have seen over the last years also with some of the, let’s say new market consumers, as opposed to us, that sometimes I refer to as sleepwalker consumers, that are buying, buying, buying, a reflex, stocking the fridges the same way our grandparents used to do, something that I’ve been seeing primarily in Asia, a bandwidth, an openness to really put one’s needs in perspective with the various benefits of completely new products or completely new products categories, etcetera, and thinking through will make for markets that should ultimately become a lot more progressive. Now, I’m describing this as a positive development for the sense it makes, but it will undoubtedly bring a lot of challenges to the organizations in the industry, but I trust that this is doable. I mean, we’re not only about science fiction things. If you look at the levels of digitalization from five years ago to now, incredible work has been done even by the most traditional companies that you can imagine. So, I’m pretty sure we will see some of the old guys in some completely new and exciting formats as well, not just the arrival of novel players and new companies and completely new solutions.

Kelly Kovack [00:40:19]:               Well, Paul, I like your vision of the future, so I’m all for it. Thank you so much for taking the time today, and I’m so excited to kind of watch what you’re building, because it really is true innovation. I mean, I saw it previewed at CES, and like I said, people throw around technology, innovation, disruption, but rarely does something sort of stop you in your tracks, and you’re like, “Wow, that really makes me think about everything differently,” and you’re doing that. So, I’m really excited to sort of see where it goes.

Paul Peros [00:41:00]:                    Thank you, Kelly. Thank you. I mean, we’re trying to do our best, and it’s strange times.

Kelly Kovack [00:41:11]:               Definitely.

Paul Peros [00:41:13]:                    Still, the world keeps on spinning.

Kelly Kovack [00:41:15]:               Yeah. Well, thank you, Paul, and definitely keep us in the loop on what you’re doing, because it’s super exciting.

Paul Peros [00:41:25]:                    Thank you. Thank you, Kelly.

Kelly Kovack [00:41:30]:               For Paul, it’s a matter of precision. While there’s a general consensus by business leaders on the importance of innovation, many remain stumped by how to achieve it, resulting in investments of big bets with little commercial pay-off. Breakthrough ideas that are incrementally executed result in commercial failure. Successful innovation requires a resilient, long-term strategy, precise execution, and constant evolution. Paul Peros is a charismatic, big thinker whose excitement for life and the unexpected is palpable and contagious. For him, innovation doesn’t reside in a department, he believes to be successful, it must be the foundation of a brand’s culture. His ability to not only conceptualize this, but to build a business that supports the constant search for true, meaningful innovation and embracing the unexpected is his recipe for success. He believes true innovation isn’t just incremental, it is without compromise, and it tackles every single dimension of design. It’s also meaningful, in the sense that it addresses real concerns of consumers and provides for relevant improvements. So, in the end, it’s a matter of precision. I’m Kelly Kovack, see you next time.

Paul Peros [00:42:56]:                    Hi, my name is Paul Peros, and for me, it’s a matter of precision - precision in the sense of doing things right, and precision in thinking things through.

Kelly Kovack [00:43:13]:               It’s A Matter Of is a production of BeautyMatter LLC. You can find more content and insights on www.beautymatter.com and follow us on social media @BeautyMatterOfficial.

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