One fortuitous opportunity led a local startup to pivot and profit.
Lemma Labs, at 701 Ellicott St., Buffalo, began in 2020 with the mission of selling directly to the consumer. In summer 2021, the company launched HairID, a kit that measures the damage level and thickness of a person’s hair. The idea was to inform the consumer about which optimal purchasing decisions to make.
But when the startup was offered the chance to do testing for a haircare brand based on the strength of its existing contact network, Lemma Labs took a leap about 18 months ago.
“We were initially leery of doing something in the B-to-B realm,” said COO Clare Plunkett, who runs the company with CEO Dalar Bansal. “At least initially, it felt like it could be a distraction, but I think the more we considered it, the more it turned out to be a very useful avenue for us to further explore.”
Based on that opportunity, the company pivoted to focusing on doing testing for beauty products, mostly in the haircare space.
Plunkett said she is not allowed to name client brands, but they are available in Sephora and multimillion-dollar top lines.
Since the shift, Lemma Labs has tripled revenue, though she did not give specific numbers.
The startup, which employs three, learned a lot from its initial business-to-consumer model but ultimately the company would have had to grown its hair kit customer base and then figure out a way to monetize that audience in order to scale the business enough to make it work.
“I think there just wasn’t an appetite on our end to throw money at paid social and to not have a firm grasp on the unit economics and consumer acquisition cost at that stage,” Plunkett said.
To shift to business-to-business, the startup invested in more equipment but largely was able to repurpose existing space and items. Besides funding from the UB Cultivator program, the co-founders bootstrapped the startup and don’t have plans to raise funding anytime soon.
This year’s focus is on business development and increasing the client roster. Lemma Labs has built up the customer base through its existing network, doing cold outreach and recently attending a trade show.
“Our existing network has been good to us,” Plunkett said. “We continue to nurture it and hopefully that will continue.”
