Despite the COVID-19 pandemic (or maybe because of it), couples are still getting engaged. And, according to Olivia Landau, co-founder and CEO of custom engagement ring company The Clear Cut, couples are buying more engagement rings than ever.
Landau, who co-founded The Clear Cut with her husband, COO Kyle Simon, in 2017, wasn’t expecting the sudden increase in demand. The pandemic brought the closure of jewelry showrooms, a decrease in engagements, and a halt in diamond production. Despite that, engagements bounced back. The Clear Cut saw a 150% year-over-year increase in quarterly sales revenue in Q3, which Landau says occurred during the pandemic.
Landau recently spoke with the Business of Business about the sudden shift, which she says is a direct result of consumers gravitating towards online shopping as most showrooms remain closed.
BoB: What gave you the initial idea to found The Clear Cut?
Landau: I come from a long line of diamond cutters and dealers. My dad’s from Antwerp, Belgium, which used to be the diamond cutting capital of the world back in the day. And my mom and dad had their own antique jewelry business. So I always grew up in the jewelry industry, but not specifically doing what I’m doing now. But my parents always discouraged me from getting into it because they said it was a dying industry, that there was no future in it, but in reality it’s a very quickly and dramatically changing industry.
After I graduated college at NYU, I decided to enroll in GIA, the Gemological Institute of America. That’s where I fell in love with diamonds and gemstones. I also met my husband and co-founder, Kyle Simon, there at the same time. He comes from a very different background. He founded a fair trade diamond mine in Sierra Leone and then went to GIA to get a little more knowledge on diamonds, and returned to Africa until the Ebola epidemic. At the same time, I started my career at Tiffany’s on the engagement floor and then moved on to diamond wholesale. At the time that Kyle returned to the states, he enrolled in Columbia Business School. A lot of his friends at that time were thinking about getting engaged. They knew he had a background in the industry, so they would go to him and ask if he knew a guy that could help him get a good deal on a ring. So I was that guy. He would refer all of his classmates to me and I’d help educate them, select their diamonds and help create custom rings.
From there, I quickly realized that most people didn’t know the first thing about buying a diamond, so I decided to start The Clear Cut as an educational blog. It was targeted to our friends and Kyle’s classmates to help with the basic dos and don'ts before coming to work with me. And then I started posting some of the designs on Instagram. And that’s really where it took off. People started following the account, asking if I could help create their engagement rings, and it went from a hobby to a side hustle. Kyle had graduated from business school at this time, and we decided that now was the time to give it our all. In winter 2018 we got accepted into an accelerator program called Techstars in New York, and we quit our jobs and decided to pursue The Clear Cut full time. At that time it was just a bespoke diamond engagement company, which is still our bread and butter. A year later we launched our jewelry collection, which is a really fast growing part of our business. Now we have these two core parts of our business, the bespoke rings, and also our fine jewelry.
"a lot of our clientele are millennials that are more comfortable with buying things completely online unlike past generations, where they couldn’t imagine buying an engagement ring without going to a store and picking it out themselves" - Landau
Was there a moment where you knew your business would be a success?
I think it wasn’t one specific moment, but it was challenging because I was working full time as a gemologist and trying to balance The Clear Cut at the same time. I would run back and forth to the Diamond District, before or after work, during my lunch break. It really was unsustainable. I wasn’t doing a great job at The Clear Cut and I wasn’t doing a great job at my full time job. So it was a breaking point where I was at a crossroads and I had to choose which path I wanted to pursue.
What were the first steps you took to get The Clear Cut off the ground?
It’s unusual because it’s different than most startups. It was profitable from the beginning because I was making these rings for clients from the start, so I came in to Techstars unlike a lot of the other startups where I had a pretty decent sized clientele, a certain amount of profits from sales, but no real structure or idea of where I was going. So it was a bit of a different approach than a typical launch experience.
Why did your parents say the diamond industry was dying?
I think the way they've typically done business for generations is dying, and we're a new way of doing things. The diamond industry and jewelry industries have always had a reputation for being a bit opaque, not too forthcoming. The fact that you have to know a guy to get a good deal is already inherently a flawed system. So how we’ve been doing things — it’s in our name, The Clear Cut. We’re always offering educational materials, we’re completely transparent with quality, pricing, how our process works. Removing a little bit of opaqueness, making it more trustworthy — a lot of our clientele are millennials that are more comfortable with buying things completely online unlike past generations, where they couldn’t imagine buying an engagement ring without going to a store and picking it out themselves.
"I never wanted to be an entrepreneur...It just kind of happened. But I’m thankful that it’s happened" - Landau
How has the customer response been so far?
Even when I first started this company, it was mostly in person, and I never in a million years thought that people would have such a great response to buying remotely. There is just such a need for it. That’s why it’s happened so organically. In many parts of the country, there isn’t a lot of access to a quality engagement ring, tons of options, with fair expertise. You’re really left with a strip mall jeweler or a mom and pop shop, which has overpriced markups for retail, very few options. Or you can go to an online marketplace and sort through hundreds of thousands of options. We realized that a lot of people across the country were yearning for a really bespoke process. Everyone’s online. They know exactly what they’re looking for. We’re here to fill the demand. Even with our selection — that was just based on pure demand, people wanting to purchase engagement rings that I was designing for myself.
What goes into designing an engagement ring?
We work with our clients very closely. For the bespoke process, we always have an initial phone conversation with one of our gemologists, for the client to get a sense of their preferences, and then based on that, we will start with the diamond first. That’s the bulk of the investment. We then hand pick a selection of diamonds we think will work well for their preferences. All of them are evaluated by our team of GIA graduate gemologists. We send them over to the clients, then get feedback, and continue to narrow it down until we find the perfect. Whenever we find one they love and want to move forward with, then they provide a deposit, and then we create a completely handmade custom ring for that specific client. Once the ring’s complete, that’s when we select the box and overnight them their rings with their GIA certificate and insurance appraisal.
How has the COVID-19 pandemic affected the company and the diamond industry?
Even before COVID, about 70-75% of all of our bespoke engagement rings were done completely remotely, so we already knew that was a part of our business we really wanted to invest in and were growing in. At the beginning of the pandemic it was a little bit uneasy, not knowing what was going on, especially when the manufacturing in New York shut down. That was really tough. But once New York started reopening, we got such an influx of pent-up demand, and the following months have been our best months ever.
When you’re in quarantine with your significant other, then you know if you want to get married and spend the rest of your life with them or not.
“When you’re in quarantine with your significant other, then you know if you want to get married and spend the rest of your life with them or not” - Landau
Did you expect this kind of demand?
No, it was really unexpected. It was a nice surprise.
Do you think this is a long term shift?
I do. I think the pandemic did a lot to accelerate the existing trend. Even before COVID, we’ve already seen a shift towards virtual appointments and doing things remotely, and a shift away from traditional brick and mortar retail. I think the pandemic has accelerated this trend. More and more people are comfortable buying remotely and less comfortable visiting a showroom in person. I think that trend will continue.
What challenges did you face at the beginning when starting the company? How did you overcome them?
I think with every step of building a business you’re faced with a different set of challenges. When you’re first starting the business the challenge is, How am I going to get enough customers? How are we going to create trust in customers to give us their life savings to create a product for them? Now, our challenge is, How do we scale this in a manner where we can provide the same attention to detail to each of our clients, and how do we keep up with demand? There’s always going to be different challenges as the company grows and scales.
Did you always want to be an entrepreneur?
No, I never wanted to be an entrepreneur. I always wanted to have a good job, a very stable job, and to be a good employee. My parents are both self-employed and they always told me, “We’re investing in your education, get that safe corporate job and that stability. Definitely don’t go into selling diamonds.” That was never something that was in my plan. It just kind of happened. But I’m thankful that it’s happened.
Was Kyle part of that decision to start a business together?
Yes, of course. He’s a natural entrepreneur. He had started that business in Africa before I ever met him, then it failed. He did have the experience of going to business school and working a really stable corporate job as well, but he always has an entrepreneurial itch, so he saw the opportunity. He said, “When is a better time than now to try this scenario, if it doesn’t work out we can always get jobs again.” He was a very big push and motivator, especially because all of our parents were very much against it at the time. It’s good having that support system and someone to lean on when you’re taking the leap.
Is it true what they say, never to work with your spouse?
I was very concerned about it because my parents did work together and didn’t turn out so well. And that was a concern for me — at the time we weren’t even married, we were just boyfriend and girlfriend. I was a little unsure, but I think why it worked out so well is because of two things. We have very different skill sets, so what he’s good at, what he’s in charge of, I really lean back on him. And the product, the content, and the customer stuff that I deal with gives me a lot of autonomy. So we don’t step on each other’s toes a lot, and we have a lot of respect for each other in our roles, so I think that’s why this particular partnership works well. If he was telling me what designs to make, I feel like we would fight a lot more.
What does the future look like for The Clear Cut?
A really focus of ours is doubling down on our remote process. So right now, we’re currently working on building a platform that will help our remote customers have a better experience virtually, and also help scale our operations on the backend. Our goal is to be this particular generation’s jeweler for life. We always say the engagement ring is almost like the gateway drug for all of your fine jewelry purchases. After that trust and that amount of money the client gives to you, they usually come back for the wedding band, or the anniversary gift. So we’re trying to create this new way of purchasing fine jewelry.
What advice do you have for entrepreneurs or female founders out there?
A lot of women, or women of color, or first generation entrepreneurs come from a similar way of viewing the world, where you get that stable career and follow the rules of how to climb the ranks to become a doctor or lawyer, to help your parents, who struggled to get you an education. But I think that if you have an idea or something you’re really passionate about, just give it a try. A lot of people are like, “I have this great idea, I want to start a blog, but I’m too scared of what people will think.” Who cares what people think. The worst thing that can happen is that you failed at it. But at least you tried it and you can take those lessons, and apply them to the next project. I think it’s that finding that courage to take the next step is the biggest hurdle.
"if you have an idea or something you’re really passionate about, just give it a try...Who cares what people think" - Landau
Once you fully dedicate yourself to something that you’re passionate about, I feel like it’s very difficult to fail, because if it’s something that you truly care about, you’re going to do whatever it takes to at least make it work. Or at least learn from it and take those lessons and create something new.