Be Pretty
Alvaro Alarnaaga identified a critical gap in the Latin American market: beauty services were fragmented and poorly organized. When a 29-year-old woman wanted to book a spa appointment, she had no easy way to find information, check availability, or book online. Existing salons operated independently without modern tools to manage their businesses. This massive, underserved market of "small businesses with really bad organized" information inspired Alvaro to launch Be Pretty in 2015.
Rather than launch a consumer app and hope salons would join, Alvaro took a different approach. He visited the top 200 salons in Chile in person and built close relationships with 20 of them. These became VIP clients where Be Pretty tailored the software specifically to their needs. The product included CRM tools for customer management, loyalty programs, and business intelligence dashboards showing peak booking hours and pricing optimization opportunities.
Once the 20 VIP salons were engaged and using the platform, growth happened organically. Alvaro convinced these salon owners to email their past customers and promote the app. Word-of-mouth from actual salon customers drove adoption. The strategy worked: by doubling down on VIP clients, then expanding to 40 highly engaged salons, Be Pretty created a network effect. Women used the app because their favorite salons were on it. Salons kept using it because it generated customer traffic and provided business tools they lacked.
The salon side proved to be a clean, predictable business. Be Pretty charges approximately $80–$90 per month per salon (roughly 8–9% of the revenue they drive). With a customer acquisition cost of $125 and a two-month payback period, unit economics on the salon side are excellent. The 18% annual churn is primarily due to salon closures, not dissatisfaction—many beauty salons open and close frequently due to poor business management.
The challenge lies on the consumer marketplace side. While salons naturally promote the app to their existing customers, retention of individual consumers remains a hurdle. Be Pretty only charges fees on bookings they generate, so improving consumer cohort retention is critical to maximizing lifetime value.
With 3,500 paying salons across Latin America, Be Pretty generates $280,000 in monthly revenue—a 3x increase from $95,000 a year prior. The company employs 57 people across four countries, with its largest presence still in Chile (where it's already break-even) but aggressively expanding into Mexico. Although the company burns approximately $100,000 per month overall, Alvaro has raised $4 million and is negotiating a final $5 million round at a $20–$25 million valuation to fund expansion into additional markets before achieving full profitability.
- •By personally visiting top salons and building 20 deeply customized relationships first, Alvaro created passionate advocates who naturally promoted the platform to their customers, generating organic word-of-mouth growth that required minimal marketing spend.
- •The two-sided marketplace worked because he solved a real operational pain for salon owners (CRM, loyalty programs, business intelligence) while simultaneously making it easier for their customers to book, creating a self-reinforcing network effect.
- •The B2B2C unit economics on the salon side are exceptionally strong ($125 CAC, two-month payback, 18% churn driven by business closures rather than dissatisfaction), which allowed him to scale predictably across Latin America without unsustainable customer acquisition costs.
- •By identifying a massive geographic market gap (Latin America) with fragmented, poorly digitized beauty services rather than competing in saturated markets, Alvaro captured pricing power and expansion room that venture capital would fund.
- 1.Identify the top 20-50 accounts in your target market segment and visit them in person to deeply understand their specific operational pain points, then build a customized version of your product for them before launching broadly.
- 2.Design your monetization to extract value from the party with the most direct economic benefit (salons gaining customer traffic and business tools) rather than from end consumers, ensuring your unit economics support sustainable customer acquisition.
- 3.Leverage your initial power users to distribute to their existing customer base via email and word-of-mouth by making it extremely easy for them to promote (e.g., pre-written emails, referral incentives), rather than spending heavily on direct consumer marketing.
- 4.Validate that churn is driven by external factors (business closures, market conditions) rather than product dissatisfaction before scaling, as this indicates you have a fundamentally sound offering worth expanding geographically.
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