Mohajer, Dineh

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Mohajer, Dineh

(1972-)
Hard Candy Cosmetics

Overview

Dineh Mohajer founded Hard Candy Cosmetics, Inc., a line of cosmetics that targets teens and young adults. Starting the business with her sister and her boyfriend after receiving positive comments on a nail polish she had created to match a pair of sandals she wore shopping, Mohajer, just 22 years old at the time, suddenly found herself at the helm of a multi–million dollar business.

Personal Life

Dineh Mohajer (pronounced mo–HA–zher) was born on September 2, 1972 and grew up in Bloomfield Hills, Michigan, a wealthy suburb of Detroit. She has one older sister, Pooneh. Her parents, Reza and Shahnaz Mohajer, immigrated to the United States from Iran before Mohajer was born. Her father was a gynecologist specializing in cancer research, and was the first single practitioner in Michigan to offer on–premise outpatient surgical services. Mohajer observed her father's determination and how hard he worked to overcome people's suspicion of a foreigner from the Middle East. He had to convince people that in spite of his heavy accent, he was good at his job. Mohajer's mother worked as the office manager of her husband's practice. She told Forbes, "I never allowed my daughters to set up a lemonade stand, and my husband didn't even allow them to babysit. In Iran, where we come from, it is utterly inappropriate for teenage girls to work." But no matter, said Mohajer's mother, Dineh "wasn't into working, she was into spending money."

Mohajer's parents had high hopes for their daughters. Older sister Pooneh became an entertainment lawyer in California. With the financial ability to offer her excellent educational opportunities, Mohajer's parents enrolled her in an elite private school. Eventually, she transferred to the Interlochen Arts Academy, located in northern Michigan and famous for its fine arts program and its long list of famous alumni including actress Meredith Baxter, musician Peter Yarrow, and 60 Minutes veteran Mike Wallace.

During her time at Interlochen, Mohajer met boyfriend Benjamin Einstein, who was also a student at the academy. Upon graduation, the two moved to Boston and enrolled in Boston University. Mohajer decided to pursue a career in medicine like her father: she planned on becoming a plastic surgeon, a decision that her father considered a mixed blessing. Although pleased with his daughter's interest in medicine, he did not feel that surgery should be performed for purely cosmetic reasons. Mohajer told Time, "My dad does not believe medicine should be used for high–class fashion—it puts patients at risk. But I think it's O.K. to use surgery to feel better about yourself."

After just one year in Boston, Einstein transferred to the University of Southern California and Mohajer followed suit. Lured by the beautiful weather and the beautiful people, Mohajer loved her new environment, which played well with her love of fashion. She enrolled as a pre–med student and Einstein took up his musical studies. Although she enjoyed science, Mohajer was drawn to fashion and even landed a job at the boutique of super–chic Los Angeles clothier Fred Segal during the summer of 1992. She found she had little in common with her pre–med classmates, most of whom she considered consummate nerds. She told USA Weekend, "I'd think, 'Hey, wash your hair! Put on some lipstick!'"

Career Details

Early in the summer of 1995, Mohajer accidentally stumbled into a new career. She had planned to spend her break from school kicking back and taking it easy. "I had decided that summer to blow everything off and do a very unpremed–like thing and just relax before I had to go off to medical school and never have another chance to be a kid," she told Entrepreneur. Preparing for a day of shopping at the fashionable boutiques with her sister, Mohajer couldn't find a nail polish that matched her pale blue sandals so she decided to concoct her own. Mixing a bit of blue dye with white polish in her kitchen, she came up with the baby–blue color she wanted, painted it on, and went shopping. Dozens of passersby noticed the unique shade, and many asked where she got it. When the sales staff at Charles David became enthralled with Mohajer's polish because it was a perfect match for the upscale shoe designer's spring line, Mohajer and her sister decided they were onto something. Deciding that they could sell Mohajer's concoctions, the two sisters went to lunch, came up with a product name, developed a plan to pitch their product to local boutiques, and sketched out some basic packaging designs.

Thinking that perhaps she could make a couple hundred dollars, Mohajer returned to her kitchen and created prototypes of four shades: sky (pale blue), sunshine (yellow), mint (green), and violet (lavendar). Mohajer and Einstein took the samples to Fred Segal in Santa Monica, but at first the store's owner was not overly excited about Mohajer's offbeat colors. However, a teenager, who had been dining in the adjacent cafe, wandered over to check out the polish and altered the course of Mohajer's future. She re–created the scene for Entrepreneur, "We were talking about how much we would sell it to [the owner] for, and how much the store would have to sell it for, and then this girl, who was, like 16 came running over and said, 'Oh my God, I love these! I have to buy these. How much are they?' We didn't know, but a salesgirl immediately said $18 a bottle. The girl's mother's eyeballs practically dropped out of her head, but the daughter was having a fit and the mother bought them.... The owner turned to me and said, "OK, bring me 200 more tomorrow.'" From that moment, Mohajer had no time to pursue her medical studies.

Chronology: Dineh Mohajer

1972: Born.

1992: Spent a summer working for clothier Fred Segal.

1995: Started Hard Candy Cosmetics, Inc.

1998: Revenues reached close to $10 million.

1999: Sold Hard Candy to LVMH; retained position of creative director.

Although Mohajer had an eye for trendy fashions, she had absolutely no business experience. Delighted with the sale, she quickly realized that she had no plan for production, packaging, or distribution. Nonetheless, she was up for the challenge. After stopping off at beauty supply stores to purchase hundreds of bottles of white polish and then to a pigment supplier for dyes, Mohajer and Einstein drove back to Mohajer's apartment and went to work mixing. At break–neck pace, Mohajer managed to deliver the 200 bottles within two days. When the order sold out, the owner called for more; other boutiques, solicited by Einstein, also came on board. Mohajer enlisted the help of her friends to keep up with production orders. Mohajer's apartment became production central, with polish production going on in every room. As orders increased Mohajer continued to add phone lines until she had seven. At one point, Mohajer had a dozen friends producing polish from a two–bedroom guest house located behind Mohajer's apartment.

Business continued to pick up steam, and Mohajer's life was extremely hectic but manageable for a while. Then with a suddenness that astonished almost everyone, the top blew off sales. Orders skyrocketed quickly after such superstars as Alicia Silverston and Drew Barrymore started showing off Hard Candy colors. Hollywood was hooked. Pamela Lee Anderson, Tori Spelling, and Courtney Love all wore Hard Candy polish. Dennis Rodman painted his nails with Mohajer's specialty line of men's polish. By the end of the summer, Hard Candy had garnered national attention from such publications as Seventeen, Vogue, and Elle, and the company was producing 10,000 bottles of polish a month and bringing in gross revenues of $70,000.

Mohajer's sudden success was overwhelming, literally. Orders were coming in faster than could be filled, and Mohajer was spending every waking moment trying to keep up. Although she had an innate sense of fashion, Mohajer's self–admitted major weakness lay in her lack of business knowledge and experience. The company was growing so fast that she had no chance to learn along the way. She soon found herself over her head and sinking fast. Silvia Sansoni noted in Forbes, "[Mohajer] had never seen a balance sheet or a financial statement, and she kept no record of inventory, orders, sales, or invoices. Predictably, Mohajer began to lose control of distribution. Hard Candy polish started popping up on the not–too–exclusive shelves of drugstores and tattoo shops.... Making [the polish] was a groovy pastime, but having to deal with the nuts and bolts of running a real company was not for her."

The first person to come to Mohajer's rescue was her mother, who flew out to California to help. Using her experience as an office manager, she was able to organize the business, straighten out the paperwork, and establish an operational system. Pooneh was put in charge of riding herd over the daily operations. Mohajer's parents also put up $50,000 to facilitate the relocation of the company to an actual commercial site in Beverly Hills. Although Mohajer credits her mother with saving her from throwing in the towel, Mohajer slipped further and further into depression and exhaustion, eventually landing in the hospital with what was diagnosed as adrenal exhaustion. Her hospital stay became a turning point; Mohajer decided to seek outside assistance.

Knowing she needed assistance with the business end, Mohajer did not let her ego stand in the way. She hired William Botts as Hard Candy's chief executive officer. In his early sixties, Botts had been educated as a nuclear engineer. Ending his engineering career in 1978, Botts had started a software company, which he later sold. He then worked with several start–up companies. In the midst of his experiences was assisting in the sale of Creative Nail Design, a maker of artificial nails, to Revlon for $30 million. Once on board, Botts set about quickly to clean house: he employed suppliers to streamline production cost and time, he established a sales force, and he computerized the company's bookkeeping records. While Botts put things in order, Mohajer took the opportunity to step back a bit and relax. However, she soon found herself ready to be back at the helm and released Botts in the spring of 1997. "My goal is to expand into a cutting–edge, full cosmetics company," she told Time. "I want to dominate." In the first step toward that reality, Hard Candy developed a line of lipsticks to complement the polish.

By 1999 Hard Candy was being distributed throughout the United States—including to Bloomingdale's, Nordstrom, and Neiman Marcus—and had expanded into Japan and France. The company had 40 employees, and annual revenues topped $10 million. On May 12, 1999 Mohajer announced that she had accepted a buyout offer from Louis Vuitton Moet Hennessy (LVMH). She explained her decision to Donald van de Mark on CNNfn's show "Entrepreneurs Only:" "Basically the business just became too much for me to handle. I mean, I just couldn't attain the potential of the business that I wanted. It just wasn't, it wasn't running the way I wanted it. And I tried for four years. I built up something that was really kind of, like, it created a brand. There was a lot of brand equity. There just was so to speak, the back office was just not up to par." After the sale, both Mohajer and Einstein retained positions within the company as creative directors.

Social and Economic Impact

Mohajer considers herself an accidental entrepreneur. She had no idea that day she mixed up a bottle of baby–blue polish that it would so radically alter her life's path. She was able to create a hip, Generation X trend–setting cosmetic line simply because she herself was a hip Gen–Xer. Mohajer expresses those generational traits in her offbeat colors, packaging, and eye–catching names. Her original four colors—sky, sunshine, lime, and violet—have been followed by such on–the–edge names as Dork, Sissy, Pimp, Pussy Cat, Porno, Trailer Trash, and Jailbait Vagas. The men's polishes bear such names as Super Man, Testosterone, and Dog. Referring to her just–for–fun specialty line for men called Candy Man, she told PBS, "[T]his is not about makeup. This is about fashion. It's about fun!" Names are chosen by Mojaher and Einstein, with the help of brainstorming sessions with friends. Mojaher told Los Angeles Magazine that she selects names for her products "based on what I interpret as cool or hip right now. It's more kitschy and funky."

Mohajer's success reflects the power of social trends. Her polish wholesales for $9 a bottle, up to three times as much as other polish distributors, and retails for $12 a bottle. Yet Mohajer can sell her product because she has developed an image that comes along with that small bottle with the cheap plastic red heart–shaped rings on the cap. She has encountered criticism for her outlandish names, considered by some to be tacky, if not offensive—especially since her target audience is 12 to 25. Some wonder how responsible it is to sell polish named Pimp and Porno to teenagers. In Time Mohajer explained how she responded to such accusations in the past: "I thought, 'O.K. You're taking yourself wa–a–ay too seriously.' Like, pimp is slang for cool. As in 'Oh, my God, that's so pimp!'" And she smirks at the longstanding cosmetics companies trying to keep up with trends, "Their ads are, like, 'We'll tell you what's hip.' I'm, like, 'O.K., Grandma, tell me about it!'"