Jessica Alba’s The Honest Company Goes From $1.5 Billion to $150 Million Because…

by Geoff Bright · October 30, 2023

…wait for it…

…are you ready?

Because…

…They Lied

Whoops.

Once upon a time in 2008, actress Jessica Alba stars in a movie called “The Eye” and has a baby.

Then she realizes that many baby products are full of petrochemicals and other harmful ingredients.

That’s when she decides to launch a company that is “truly honest about its line of products.” She names her company — The Honest Company.

Her goal is to create products spanning the baby sector, personal care, laundry, and more. Essentially, she delves into a market that no one would have even contemplated because it was dominated by giants like P&G, Nestle, and Unilever.

Surprisingly, she demonstrates to the world that she is more than capable of tackling this challenge, surpassing all expectations.

She secures an impressive $89 million during Series A funding, followed by $300 million in Series B. Next she gets a staggering $820 million in Series C, and a shocking $1.6 billion in Series D.

Holy cow that’s impressive!

But wait, there’s more – The Honest Company takes the monumental step of going public. This is a pinnacle moment that many entrepreneurs aspire to achieve, marking a significant milestone.

Jessica Alba is a remarkably successful entrepreneur, amassing a fortune exceeding $200 million from her company. Her endeavor revolves around a distinctive product that meets a genuine demand, setting it apart from industry norms.

But she’s competing with giants. Unilever makes $60 billion a year. P&G makes $80 billion. Nestle makes $90 billion.

Do they want new competition? Of course not. Might someone in one of those companies analyze the products from The Honest Company to see if they can find dirt on the company?

Oh yeah.

Mind you, I don’t know for certain that one of her competitors dug dirt on her and ratted her out. But it’s my hypothesis and I’m sticking to it. Because next thing you know, someone has told the Wall Street Journal that The Honest Company was using a significant amount of a certain bad chemical in their detergents.

Lawsuits followed.

The Honest Company claimed honesty, but here was a lie.

Those other big three companies get sued all the time. They probably deserve to be sued for their less than honest practices – Nestle especially. You can read about Nestle scandals here, and keep in mind it’s just the top 10. https://listverse.com/2018/01/03/10-outrageous-nestle-scandals/.

Nestle never claimed to be honest, but The Honest Company did.

The lesson might be, choose what you stand for carefully. Very carefully.

And then no matter what, make sure you live up to your own hype. Are you claiming to be the best? The fastest? The morally superior option? Then you better live up to that claim every day.

If you do, your business can grow like wildfire just as Jessica’s business did.

But if you don’t, your business can crash, too.