It may not dominate the headlines the way that Grab’s public listing has, but this week The Honest Company, the brainchild of actress, mom, best-selling author and entrepreneur Jessica Alba, listed at a valuation of about USD 1.5 billion, with the stock jumping 44% on debut.

Not bad for a company that has not made a profit.

The story of this company is worth exploring for marketers, since it demonstrates how having a strong brand purpose and smart 21st century marketing can drive serious business value.

Here are 3 key takeaways:

AN ORIGIN STORY THAT GUIDES THE BRAND AND ITS PURPOSE:
Founder and Chairperson Alba says “I founded The Honest Company on this idea: Everything that touches you and your family–everything in your home–needs to be nontoxic, needs to be effective and beautiful to look at, and needs to be affordable.”

Alba had faced illnesses as a child herself, and when she was pregnant with her baby Honor, she received as gifts a bunch of baby clothes at her baby shower. When she washed those clothes with her mother’s baby laundry recommendations, she broke out in hives.

This freaked her out and she started researching only to discover that the USA only banned 13 chemicals in FMCGs, while Europe banned over 1300. Alba decided to act, creating products without harmful synthetic fragrances and petrochemicals, and The Honest Company took off.

Starting with baby products, the company has broadened its portfolio expanded to include makeup, sunscreen and cleaning supplies — all with the promise of transparency around its formulas. That pledge has made it a target of criticism in the past for failing to live up to that standard. But when products fail or fall short, the company apologizes and keeps improving. Her co-founders were skeptical at first, but then as they became parents they understood the dangers that lurk within a home, and became evangelists of her message.

FOCUS, FOCUS, FOCUS ON THE CORE CONSUMER SEGMENT
Alba is a world-famous identity. But her marketing skills and instinct are what set her apart, and can offer lessons to MBAs and career professionals.

When she was an young action-movie star, for every men’s magazine which wanted to feature her, she insisted her publicists also get her coverage in 3 women’s magazines.

She cultivated her audience, and built up her community: women who were environmentally conscious, socially aware, and concerned about the safety of the family within their own homes. She took carefully thought-out steps to maintain that credibility with her audience: she lobbied the US government against harmful chemicals, she hired diverse young people who believed in her cause, and she has used her celebrity to intertwine it with the company’s image.

Alba understood her audience and scrupulously avoided the “spray and pray” marketing approach. The Honest Company did no traditional media advertising for the first 5 years of its existence. Instead she performed the ultimate influencer marketing campaign, for her own brand. She carefully cultivated her community on social media, and today has 39 million social followers across platforms.

NICHE MARKETING CAN WORK
Focusing on profitable niches who understand your purpose and products is key to attracting investment and selling your story. The Honest Company has less than 5% share of the natural products market in the USA, and last year did USD 300 million in sales. It is still making a slight loss. It was a unicorn within 3 years of its founding, attracting VCs and becoming a Silicon Valley legend. As the company expands to Europe and Asia, it will find like-minded customers, similar to its North American fans.

Marketers could learn a lot from the Mexican-American kid who spent months in hospital before she turned 10, and grew up to do what many bigger Hollywood stars have not been able to: to use their image and fame to create a public listed Unicorn.

Sandeep Joseph is the CEO and co-founder of Ampersand Advisory, a strategic media and data-driven consultancy. The company’s mission is “business results now!” and it has won numerous local and international awards. The views expressed here are the author’s own: you can debate with him at [email protected]