Painting the town

Entrepreneur,  Feb, 1997  by Gayle Sato Stodder

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On the day Dineh Mohajer painted her toe-nails baby blue and went out shoe shopping, starting a business was the last thing on her mind. Mohajer, then 22 years old, was just your basic University of Southern California premed student escaping to Beverly Hills for a mindless summer afternoon of retail therapy with her sister Pooneh.

She wasn't looking for new challenges. Au contraire, says Mohajer, "I had decided that summer [in 1995] 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 envisioned a summer of partying and kicking back with her boyfriend. What she got was something else. On the day Mohajer went shopping - sporting a shade of baby-blue nail polish she had mixed herself - she was accosted by dozens of passersby who simply had to know where she got that polish. A saleswoman at Charles David practically begged Mohajer to reveal her source: The baby blue perfectly complemented Charles David's spring line of shoes.

"That was it," Pooneh recalls. "I told Dineh, 'We're going to lunch and put together a business plan and start selling this stuff.'"

The plan they developed over lunch - and financed with a meager $200 - didn't seem as if it would interfere too seriously with Dineh's leisure plans . . . until an excited teenager bought Dineh's stock of prototypes from her while she was pitching upscale specialty store Fred Segal. Until Seventeen and Elle magazines put the editorial spotlight on Mohajer's offbeat pastel colors. Until Nordstrom and then Bloomingdale's and then Saks called in orders. In a matter of months, Hard Candy, the Beverly Hills, California, company Dineh, now 24, Pooneh, 31, and Dineh's boyfriend, Benjamin Einstein, 24, founded, was pushing $10 million in sales. So much for a leisurely summer.

Runaway success proved to be more than a minor crimp in Dineh's relaxation program. Setting up suppliers, distribution networks, accounting systems and corporate structure while managing breakneck growth was like trying to put out a fire with a wildly gushing firehose: There was no catching it. Youthful energy was an advantage, but inexperience was not. Nor did it help that suppliers and accounts lacked respect for the young entrepreneurs. Finally, even 22-year-olds run out of steam. Nine months after starting the company, Dineh nearly ended up hospitalized from exhaustion.

Fortunately, the story doesn't end there. This is the tale of a young, hip entrepreneur who inadvertently lit a firecracker. But it's also about how the same fresh thinking that created an initial spark also enabled this young company to grow into its potential.

* COUNTER REVOLUTION

Today, the Dineh Mohajer who speaks to you from her Beverly Hills office is the picture of poise. She isn't frazzled. She isn't scattered. And, despite a much-publicized tendency to speak like the Generation X-er she is (I mean, totally), she definitely isn't clueless.

But then, Dineh's been through the crash course. In 18 months, she's seen the concept she originally conceived of go from a hectic, homebased concern to a serious contender in the competitive world of cosmetics.

Hard Candy's beginnings were fairy tale enough. At that fateful lunch, the sisters came up with a company name, a strategy (hit the local boutiques), and some rudimentary ideas on packaging. Dineh made up sample bottles of her four signature shades: Sky (pale blue), Sunshine (yellow), Mint (green), and Violet (lavender). She had been blending the colors using ready-made polish (in decidedly uncool shades like dark blue and white) and adding thinner to create the right consistency. "It's not hard to mix nail polish," says Dineh. "I learned how in my bathroom."

Dineh and Einstein took the prototypes to the ultratrendy Fred Segal store in Santa Monica, California. They were in the process of presenting their wares to the owner at the cosmetics counter when a teenager dining in the adjacent cafe came over to check out the goods.

"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?'" Dineh recalls. "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. Four of them cost, like, $75. The owner turned to me and said, 'OK, bring me 200 more tomorrow.'"

Dineh and Einstein left the store elated and more than a little panicky. They had no inventory and no production facilities. They didn't even have adequate supplies. "We bought bottles [of polish] at beauty supply stores, went home and started mixing," Dineh says. "It was just crazy."

Early retail sales were brisk. Einstein began venturing out on sales calls to some of Los Angeles' hipper boutiques, and many signed on as consignment accounts. For a few glorious weeks, everything was groovy.