How this mom turned a $2,000 loan from her mother into a $260 million fortune

Jessica Iclisoy, California Baby CEO and founder.
David A. Grogan | CNBC
This mom turned a $2,000 loan from her mother into a $260 million fortune
This mom turned a $2,000 loan from her mother into a $260 million fortune

The first retailer that sold Jessica Iclisoy's natural shampoo for children was Whole Foods. Asked to reflect on how she got her product onto those shelves when her company, California Baby, was still tiny and the idea of natural products was new, she's pretty matter of fact.

"I just walked in," says Iclisoy, speaking at the Iconic Tour in Los Angeles. "I had my bottle and I talked to the lady on the aisle and I said, 'I have got this shampoo. And I made it.'"

Iclisoy was pointed to the Whole Foods body-care buyer, who agreed to give her a chance.

"Okay, I will carry it on my shelf, but then you need to do demos and you need to educate the consumer," Iclisoy recalls her saying. Iclisoy had to explain why her shampoo was different and better and worth the higher price point.

"And I did that. For the first eight years, I was a demo girl — you know the girl who stands at the end of the aisle and says, 'Could you try my product?'"

Iclisoy had launched California Baby in 1995 because as a new mom, she was horrified by the ingredients in run-of-the-mill baby shampoos. She wanted something healthier for her child. So she started the business with a $2,000 loan from her mother (which she was able to pay back in five years, though her mom didn't expect to be repaid.)

In the early years, the demos kept Iclisoy on the road a lot. "I was hitting stores all the time but I never took a vacation for pleasure," she says. She went nearly a decade without one, she says.

Part of the slow liftoff was the novelty of natural products at the time — though she admits Californians were a good bunch to start with since they were eager early adopters and obsessed with their health.

"[W]e were ahead of our time," says Iclisoy. "Back then, the naturals and organics was in its infancy, so I had to just talk to people and educate them about organic, not even about my product, just what organic meant. The product itself was different, it was a low-foamer [shampoo]. You know, we were raised on the commercial of a big head-full of bubbles, so I needed to explain that.

"There was a lot, I had to bring the consumer up, I had to raise them," she says.

Since then, Iclisoy's perseverance paid off. In 2016, California Baby had revenue of $80 million. Iclisoy herself, now 51, is worth $260 million, according to Forbes. California Baby products are sold in more than 10,000 stores across the country, including both large retailers like Whole Foods, Wal-Mart and Target and smaller independent specialty shops and boutiques.

The products are not cheap, ranging in price from $14.29 for 13 ounces of Calendula bubble bath to $20.99 for 19 ounces of fragrance-free Super Sensitive shampoo and body wash to $11.79 for 2.9 ounces of Calming diaper-rash ointment.

But Iclisoy is hyper-obsessed with quality, a lesson she learned working for the French designer, Azzedine Alaïa, before she started California Baby.

"He was very technically specific and he wouldn't be rushed," Iclisoy said at Iconic. "If the product isn't ready, it isn't ready and it doesn't even matter. He would be late for shows all the time because the product wasn't ready, and I learned that."

When Iclisoy set out to produce her own recipes, she struggled to find a manufacturer who would make the products the way she created them. Most wanted to simplify the recipes, she says. She did find one custom-manufacturing house that would produce according to her standards, but several years after launching, Iclisoy started to manufacture her own products.

Similarly, she contracted with small organic farmers to get the flowers and herbs that go into her products, but eventually increased demand was more than they could supply. Iclisoy started growing calendula on her own certified organic farm in Santa Barbara County, Calif., in 2011. In 2016, California Baby planted its own French lavender for the first time.

Building her own highly automated manufacturing facility and growing herbs is not a quick solution. But Iclisoy has always taken her time building the business. She's also never taken on outside investment. She owns the entire company, even now, 22 years later.

"I didn't want to be working on somebody else's timetable. I wanted to have complete control of the process and sometimes, by taking money from others, you lose control. It was a slower growth but, for me, slow and steady wins the race," Iclisoy says to CNBC Make It.

Being committed to working at her own pace also meant saying "no" when big retailers came knocking. Iclisoy says Target tried to get her to sell California Baby products on their shelves for three years before she finally decided its customer was ready for her product.

"If I say 'yes' and it doesn't work out, well, I am kinda screwed because you really only have one chance. Target is not going to bring you in again," says Iclisoy. "It needs to be a slam dunk."

At this point, many slam dunks and a couple of decades on, Iclisoy is working to make impact beyond just her own company. She has launched a non-profit, Natural Advisory Council, dedicated to advocating for consumer protection legislation for natural products.

Currently, it's easy for brands to "greenwash" their products, meaning marketing them as more organic and natural than their ingredients actually are.

"Ultimately what I would like to do is put legislation on the books so when you buy organic broccoli, for instance, it is highly regulated. It is a federal law. If the organic farmer doesn't follow that, there are real penalties," says Iclisoy. "In the natural skin care and organic skin care space, that doesn't exist."

See also:

How this mom turned $775 into a $65 million company in only 5 years

This mom launched a business to save her daughter from bullies; it's now worth $65 million
This mom launched a business to save her daughter from bullies; it's now worth $65 million