When Ty McLaren started a summer office job six years ago, he had no idea his future co-founder was just a cubicle away.
McLaren met Hiro Shinn in 2014 when the two worked as summer analysts at investment bank Rothschild. The couple bonded over their shared connections to Hawaii and their “hapa” life. a Hawaiian word used to describe someone of part Asian or Pacific descent.
In fact, the friends were so sympathetic that they founded a company to honor this legacy. In August 2019, McLaren and Shinn launched sustainable skincare brand Koa.
Today, Koa products are sold at Urban Outfitters and The RealReal in the United States, and the company is looking to expand retail into Canada and Japan.
But it all started with Hawaii.
“The soul of the company is in Hawaii,” Shinn tells CNBC Make It.
The “hapa” connection
On her first day as a summer analyst at Rothschild, Shinn talked about McLaren and said he was from Honolulu, where Shinn spent most summers as a child, traveling between New York and Japan.
McLaren, who is Japanese and Irish, remembers that apart from Shinn, who is also Japanese and Irish, there were not many Asian colleagues at the bank. They talked about their similar childhoods, had lunch together and spent time together every weekend.
“You immediately get the vibe of someone who kind of understands the same things you do,” says Shinn, 28. “It’s kind of indescribable: There are some references that you just get, and it’s easier to get along.”
Both men also wanted to start their own business.
At first it was tempting to “feel like we had more control over our work lives,” says McLaren, 29. And Shinn says he felt “constricted” working at a bank, and that he and McLaren “are probably a little more willing to take risks than the average person who follows the corporate path in some ways.”
When they launched the idea in 2015, it was also just after the direct-to-consumer startup boom and they took inspiration from brands like Warby Parker, Casper and Away.
“All of these now blue-chip, publicly traded companies inspired everyone in their teenage years to think, ‘There’s this whole ecosystem of products that we could just make better by offering them on the internet to an audience that cares about us and thinks that way.’ like us.’ ‘,” Shinn says.
So the friends – who were working in different jobs at the time – met for regular brainstorming sessions in New York bars, restaurants and cafes to come up with brand ideas.
It was another shared experience — “terrible skin-care experiences,” Shinn says, growing up — that led them to start a skin-care brand. (At 18, Shinn was afraid of melanoma, and McLaren took “pretty aggressive” prescription acne medication in high school, which caused him to easily sunburn.)
Koa, a sustainable, gender-neutral and affordable skincare line was born.
Introducing a brand with Hawaiian values
“Koa” means “brave or courageous warrior” in the Native Hawaiian language, says McLaren, and koa wood is very important in Native Hawaiian culture—it is used to make traveling canoes, weapons, and sacred everyday objects, often called Heirlooms are passed on, he says.
“We like the name because it was simple and represented that cultural significance in Hawaii,” McLaren says.
The co-founders also wanted to “reflect our own values in what we built,” they told Forbes, “which is why Koa values sustainability and thoughtfulness in everything we do.”
Growing up in Hawaii’s diverse ecosystem, they were always taught to be “good stewards of the earth,” Shinn says.
“The world doesn’t necessarily need more stuff, so we want to make our products as harmful as possible,” says McLaren.
In fact, they wanted to find manufacturers that shared their values around environmental protection to ensure their supply chain was as sustainable as possible. Koa product packaging is fully recyclable and shipped in boxes made from 100% recycled paper. The company also donates a portion of proceeds to organizations that focus on ocean conservation initiatives.
The line includes four products: cleanser, moisturizer, toner and sunscreen, priced between $18 and $27. The best-seller is the tinted sunscreen, which also comes in a clear formula and is considered “reef safe,” meaning it does not contain oxybenzone and octinoxate, ingredients proven to be harmful to coral reefs and marine animals. (In 2018, Hawaii became the first state to pass a law banning sunscreens containing these ingredients.)
Taking the plunge and quitting corporate jobs
Even as they began developing the product line, McLaren and Shinn continued to work their day jobs for a year to restart the company, working “nights and weekends on product and brand development,” McLaren says.
They spent a lot of time reading “hardcore white papers and peer-reviewed research” about ingredients in popular skincare products and scouring beauty blogs, McLaren says. After deciding on the products, McLaren was introduced to a cosmetic chemist who had previously worked at L’Oreal Group to advise him on the initial formulations.
McLaren and Shinn also hired another friend from Hawaii, Kapono Chung, as co-founder and creative director to develop Koa’s aesthetic and branding. Chung, who also runs the Chinatown-based design consultancy Combo (which has clients including Away, Target and Spotify), is of Korean, Hawaiian and Scottish descent.
In 2018, McLaren and Shinn realized that Koa needed all of their energy, “so we decided to take the plunge and quit our jobs entirely. That was a bit scary,” says McLaren. As young people with no children and families of their own, it seemed like the right time to do something new, says McLaren.
When Koa came onto the market, they remained cautious. “We turned on the website and prayed that people would come,” Shinn says.
“There’s this joke: When you start your business, the first day of sales says nothing about your performance because all these people are just buying your stuff,” says Shinn. “But (customers) keep coming back, which is great.”
Of course, McLaren and Shinn had no idea a pandemic was imminent.
During the Corona crisis, their supply chain “completely exploded” as manufacturers switched to producing personal protective equipment. Lead times have become longer and some of their partners have closed shop, McLaren says. And as more brands prioritize online commerce, digital advertising is becoming more competitive and expensive.
Even now, over a year later, they are still dealing with delayed response times for deliveries they need to produce more products. “To be honest, I’m really happy that we did it and are doing well,” says McLaren.
Koa declined to disclose the company’s revenue or sales figures for specific products, but McLaren says Koa’s year-to-date sales are up 100% compared to the same period last year.
What it means to be an AAPI-led brand
With Hawaiian and Hapa heritage at the core of Koa and the identity of its founders, the recent rise in hate crimes against members of the Asian American and Pacific Islander community has “relaxed the view of people who look like me in America,” says Shinn.
As a biracial person, Shinn says he has been “exposed to two sets of ideals” throughout his life, which has broadened his perspective on the world. “When you’re mixed-race, you automatically get into a situation where you kind of have to be open-minded and not really subscribe to any dogma,” Shinn says.
McLaren grew up in Honolulu and says, “The vast majority of my peers and people I interacted with were mixed race or Asian.” It wasn’t until he moved to the continental U.S. to study that he encountered situations in which people asked him, what ethnicity he was, or that he was the only Asian person in a room.
(In 2019, 37.6% of Hawaii’s population was Asian and 24.2% of the population was multiracial, according to the U.S. Census.)
McLaren says being biracial has also given him privileges that many Asian Americans don’t have.
“In the situation of being Asian in this country, I definitely benefit from being partially Caucasian, not having moved here as a first-generation immigrant, being born into families with resources, and not participating in parts of the economy “We are more susceptible to more of these racist incidents,” he says.
That’s why Koa has diversified its returns program for the month of May, allowing customers to donate up to 20% of the proceeds from their purchase to Stop AAPI Hate, which helps respond to and prosecute hate crimes against AAPI communities.
“We’re doing our best to take a stand and make people understand that we’re an Asian-owned brand, and we’re proud to do that,” McLaren says.
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