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How Jessica Alba is turning Honest Company into a billion-dollar baby

It’s easy to be skeptical when reading about actress Jessica Alba and her team preparing to take The Honest Company public for as much as $1 billion. In a world where Shaquille O’Neal makes millions pretending to stuff his 7’1”, 330 pound body into Buicks and where Elizabeth Taylor’s estate banks $25 million a year endorsing perfume despite the star passing away in 2011, most consumers are savvy enough to take endorsements with a grain of salt.

With famously great looks and an untainted reputation even after more than a decade of fame, Jessica Alba could probably make a decent living simply renting out her name to the highest bidder, but that’s not how she operates. In the attached clip she explains why she chose to ignore well-intended advice and pour her energy, and a whole bunch of money, into The Honest Company.

The Honest Company's website

Alba had the idea for creating a suite of non-toxic, safe, clean products for parents when she was pregnant with her daughter, Honor. Frustrated in her attempts to create a clean, safe environment for her baby, Alba realized she probably wasn’t alone. Seeing an opportunity, she poured herself into the process of developing a line of products parents could trust. It wasn’t easy.

“It took three years of me spending my own money, trying to figure out where to manufacture, what the product suite would be and what this lifestyle brand is all about,” Alba explains in the attached clip. “I did a lot of research and funded it with my own personal money. Everyone told me I was crazy. It’s not very sexy to make safe household cleaning products.”

Jessica Alba on the red carpet

Maybe not at first, but five years later investors are finding the Honest Company's numbers to be quite fetching. At just under 300 employees and $70 million in fresh capital sitting in the bank, Honest Company has grown out of its roots as an e-commerce play and become a full scale brand with partnerships at major retailers. The company reportedly raked in about $50 million in revenue in 2013 and is likely to more than triple that this year, according to the Wall Street Journal.

That kind of growth can be a mixed blessing for small companies. The reason there aren’t many brands with Honest Company's dedication to quality selling at mass merchants is that it’s not easy. More than one promising company has started strong only to fall apart after losing its grip on core values. Co-founder and CEO Brian Lee says that’s not going to happen on Alba’s watch.

“It’s all about the vision and the mission of the business,” explains Lee. “It started with Jessica’s passion for creating a non-toxic home and we’re always going to stay true to that. We have great retail partners in Target (TGT) and Costco (COST) and Nordstrom (JWN) and Buy Buy Baby. That’s where our mothers shop.”

In other words, the retailers are partnering with Alba, Lee and the rest of the Honest team because their customers associate the brand with quality. If Honest’s reputation slips, the brands and customers will go away.

Right now Honest is getting about 80% of its revenues from its online store where its easier to control the customer experience. Once products hit store shelves those retailers could hurt the brand if they don’t take proper care in selling Honest Company goods. Alba takes a no-nonsense, very much hands-on approach to making sure that doesn’t happen.

Jessica Alba

“I just went to Buy Buy Baby in Chelsea and I rearranged the shelf and took pictures of the display to send to my retail team,” laughs Alba, though she’s clearly not kidding. “Sometimes I micromanage just a tiny bit.”

Don’t be fooled. Jessica Alba micromanages a lot. There’s a good chance she spends more time rearranging product in one week than Shaq has spent in a Buick over the course of his entire life. The mother of two is intent on nursing Honest Company into a full-grown force to be reckoned with in the world of consumer products.

Bet against her at your peril.

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