Reading: Hair Repair: New Solutions from the Lab

Winston-Salem, North Carolina, is hardly a hotbed for the beauty industry.

But this former tobacco town is an emerging biotech center, and this field helped launch Virtue Labs, a new and effective hair care collection that is making waves — well, frizz-free waves. Virtue uses a form of human protein, dubbed Alpha Keratin 60ku, which is derived from ethically sourced human hair. It is obtained through an extraction technique pioneered by regenerative medicine specialist Dr.Luke Burnett, a retired army colonel whose lab developed the methodology working with the Wake Forest Institute for Regenerative Medicine at that university’s School of Medicine.

From Healing Burn Wounds to Healing Hair

His lab in Winston-Salem is devoted to treating traumatic war injuries and uses this form of keratin to help heal burn wounds and regrow tissue. By accident, members of his team discovered that this keratin can repair hair, and Virtue was born (thanks to a serendipitous meeting between beauty industry veteran Melisse Shaban and the scientist).

This human protein in Virtue is the ingredient that sets this hair care line apart from the rest of the industry, says Shaban. When other brands list keratin as an ingredient, it is generally a hydrolyzed form sourced from animals. Virtue Labs claims that because Alpha Keratin 60ku is human protein, our bodies recognize it as our own. As such, the brand explains on its website, it can bind “directly to the areas of damage and fill them in.” Virtue says that after four uses people can expect a 67 percent reduction in frizz and after five applications, a 95 percent reduction in split-ends.

This writer — with coarse wavy hair that is damaged from color, keratin straightening treatments, and general blow drying — has been using Virtue for five months. The differences noted include a smoother, softer texture when hair is not styled; shorter blow-drying-styling time; and the ability for hair to stay smooth after styling with or without hair spray. Virtue is not cheap, with prices such as $38 for an 8 oz. bottle of the Recovery Shampoo and $40 for a 6.7 oz tube of Recovery Conditioner. But one needs to use very little per shampoo because a little dollop of the product suds up generously. As one North Carolinian convert said: “A game-changer.”

A Second Act for a Beauty Veteran

Shaban, 58, started her career at Revlon, which she considers almost a family company since her father, Greg Shaban, worked there in sales for 30 years. After Revlon, she held top executive roles at entrepreneurial beauty companies The Body Shop and Aveda. Shaban joined L Catterton (the largest private equity firm devoted to consumer products) and worked on the acquisition of Fekkai, the hair care line from renowned French stylist Frédéric Fekkai. Shaban was named CEO and formed a management team to grow Fekkai’s business.

She then established Chrysallis, a management company and vehicle to keep that management team together and leverage their skills as additional businesses were acquired. Chrysallis, independent from L Catterton, allowed this management team to co-invest in brands including StriVectin and Niadyne, which she also ran, alongside Catterton.

Shaban and her team at Chrysallis have worked together for nearly 20 years. Virtue Labs is the first company and brand the group has created. The actual lab is in Winton-Salem, NC, and Shaban runs the business from Raleigh, NC, where she lives with her partner, Jane Phillips, a top IBM executive, and their two young kids. Here, Shaban discusses her career and how she went from employee to manager-investor to entrepreneur.

When the Beauty Business is in Your Blood

TheCovey: You’ve spent your entire career in beauty and skin care, with a little science thrown in. What drew you to these industries?

Melisse Shaban: My dad worked for Revlon for 30 years and I grew up in the business. I loved my dad and his work. I remember being five or six years old and going to the Revlon offices of the General Motors building and being gobsmacked — they had the top four floors and Estée Lauder was there, too.

I grew up around product, sat at the dining table with my parents and my father’s coworkers. He intermingled his personal life and business life.

I didn’t have a fondness for a particular [beauty] category. I was, and still am, curious about why people consume what they consume. At a young age I was interested in what we now consider “data.”

I started my career behind the counter at Revlon in Macy’s Herald Square. I would go in and out of the office with my dad, drive to the city from Greenwich [CT]. We’d have coffee in the morning and occasionally a scotch at the Sherry Netherland at night. It was a great experience.

TheCovey: You ran the Revlon business at Macy’s and then you were an account executive. What was your take away?

Melisse Shaban:  There is no better interface than actually physically having to stand in front of someone and make your case. The business in Macy’s required me to think about stock and sales plans. That’s the part that [fascinated me]: What is selling? How is it merchandised? The relationship between the sale and consumer.

Back then cosmetics and beauty companies were groundbreakers. Many cosmetics businesses, often where women had senior roles, were catalysts in dragging women out of the 50s and into the 70s and the workforce. This shaped my perspective.

Learning at the Knees of Famous Entrepreneurs

TheCovey: After working at Revlon, a large corporation, you worked for two beauty entrepreneurs — Horst Rechelbacher who founded Aveda and Anita Roddick, creator of The Body Shop. How did they influence you?

Melisse Shaban: Years ago, I was running [Aveda] at the time, we were doing a stand for a trade show at the Javits center. We worked on it for a year and it was spectacular. We were finishing up and at 3 am in the morning, I saw Horst come up the escalator with a look on his face as if he’s looking for something. He asked if I saw that the carpet behind the counter didn’t marry to the wall. I said: “Nobody can see that.” He told me: “You didn’t see it.” And as silly as that was, it stuck with me. The point is always look for and find what’s wrong, what’s not perfect. If you see it, you can choose to park it in the parking lot and do nothing about it — but you saw it. This shaped how we look at things. We anticipate bad things happening and then we are ready.

At The Body Shop, I ran North America. At a young age, the opportunity to work for a strong woman was so interesting and exciting to me. [Roddick] doesn’t get the credit for what she deserves. She was a pioneer in cause marketing and that came from her guts; it was not a marketing ploy or play.

Via the franchise model, she created wealth for people around the [world] who would buy into a franchise and build their business. She was one of the first people to do branded freestanding retail. She also knocked the [beauty] industry for creating images of women that were unachievable and told consumers that they were paying for misleading advertising, and [goods] where the outside of the product was more important than its ingredients.

But I probably knew what was happening to that business sooner than [Anita and her husband] were willing to accept. I was very close to franchise networks and Les Wexner, who launched [competitor] Bath & Body Works, was eating their lunch. Try telling someone who built a billion-dollar business that the barn was on fire and that they have to get out of the franchises because margins were not sustainable. It’s like telling someone that their child is bad.

My lesson is I could have done a better, more thoughtful job working with her to frame problems and solutions. You need to really use data and put yourself in someone’s shoes before you deliver messaging that isn’t what they want to hear.  

Building the Right Beauty Team

TheCovey: What was the impetus to found Chrysallis?

Melisse Shaban: When I was at L Catterton, the largest consumer product private equity group, a few executive employees and I wanted a vehicle in which we could invest alongside [the fund] and stay together. The challenge in private equity is that you buy and sell companies and when a company sells, the team splits up. Half the battle in [business] is to keep your management team together. And Chrysallis gave me a mechanism post the sale of Fekkai or StriVectin to keep the team together and acquire other companies.

There are 20 of us who have been working together for 20 years. We collectively can be dropped into an organization and be valuable, whether we are helping somebody or running something.

We have been working on Virtue Labs for eight years. We are solicited by other entities but we are 100% focused on Virtue and platform technology.

TheCovey: How did you meet Dr. Burnett?

Melisse Shaban: I have a good friend in banking business Shawn Westfall. He’s an investor of mine. He called me for a favor [asking me to meet] a client that has game-changing technology for skin and hair care developed in Winston-Salem by scientists at Wake Forest. I’ve heard this a million times but was like ‘OK’.

After some digging, it turns out that this guy, Bill Hawkins, the former CEO of Medtronics, is my nextdoor neighbor at the beach. We connect. I realize he’s not a yahoo and I met Dr. Burnett who is a joy and inspiration. Their novel invention stems from the basic premise [that] if they could mirror human keratin, they would have that protein work to enhance and advance regenerative medicine, tissue and nerve regeneration.

Burnett has done two tours in Iraq. He came back from those experiences to improve the quality of life for those suffering from post-traumatic injury. War has changed dramatically: most injuries were by-products of bullet wounds but now it’s explosive injuries. People are horribly burned and this medicine is helping.

A young woman working on her PhD in [Burnett’s] lab had a mother who is a hairdresser. Her hunch was that this keratin should help hair, skin, and nails the same way it can help muscle and bone because the body sees it at like a real substance. And it does naturally bind to the hair. The lab, however, saw this as a distraction from their competencies and that’s where we came in. This product has a 10-year innovation pipeline. We’ve licensed out the rights to make skin care. It’s powerful and can do so many things.

Creating a More Ethical Business Model

TheCovey: Ownership in companies you work for is something you value, and you’ve brought that to the employees of Virtue. Why is ownership important?

Melisse Shaban: There’s no one in the company that doesn’t have equity, including the people at the plant. It doesn’t cost you much to be inclusive. We sold Fekkai for a lot and it was terrific to give someone a check for $100,000 who never thought they would see that [kind of] money in their lives.

Start-ups are hard, and there is inherently more risk than security. Part of the risk-reward equation is equity.  In the case of Virtue, I can tell you, there is not one member of the team, no matter how “junior,” that at some point has not been absolutely critical to the brand’s success, and that contribution should be acknowledged and rewarded.

TheCovey: How is being an entrepreneur who launched a company and a brand different from being an employee or manager-stakeholder?

Melisse Shaban: I would say the emotional attachment is something that is born out of you and the team. The challenge is to moderate your own vision of possibility with reality. You’re not always objective; you see what you want [your brand] to become.

It’s not hard to build a business. It’s hard to build a brand in this business that has lasting power. We believe so deeply in Virtue but we have to get in a helicopter and see it from above the trees.