Inside Goop, Gwyneth Paltrow's Growing Empire

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Over on a shady spot of grass, two 20-something women from the photo and social team are perfecting an Instagram shot for a gut cleanse giveaway. Moments later, they make room for the lifestyle site's head of beauty, Blair Lawson, who sits down at a large farm table and begins to brainstorm a new strategy for imagery of the products Goop sells.

"The photography needs to be consistent throughout, and we probably need more detail shots—people want to see the packaging, the texture, the variety of colors a product has," Lawson tells the meeting attendees. The group pores over her laptop, studying Estée Lauder's website for examples of product shots. Eventually they turn their attention to a spreadsheet, where a photography budget must be accounted for.

Once the meeting comes to a close, everyone makes their way back inside Goop HQ, a barn owned by Gwyneth Paltrow, the award-winning actress-turned-wellness mogul who founded Goop as a newsletter in 2008. The barn, complete with soaring ceilings and rustic wood floors, is tucked away from the canyon's main road, nestled among blooming hydrangea bushes. Inside, there's a bookshelf with volumes arranged by color, as well as a whimsical spiral staircase and a small nook of an attic that holds racks of designer clothing; the whole place smells like essential oils.

Paltrow hosted a dinner to celebrate Goop's DVF collaboration at her Hamptons home last summer. Photo: Goop

"It's a lot of family time here," says Elise Loehnen, Goop's editorial director. A dozen people work at the company's LA office, where the creative and editorial teams are located, with another dozen spread among New York (where the corporate team sits) and London. Sitting barefoot on some cushions set next to the barn, she describes the staff's dynamic with Paltrow, or "GP," as they affectionately refer to her.

"Everything is pretty much signed off by GP," Loehnen says. "She's not repackaging stories or doing any heavy lifting, but we're recipe-testing in her kitchen, going over the issue on Tuesdays." Paltrow also gives her final approval before the massively popular Goop newsletter is sent out each week. "The brand is inextricably tied to her, but I think that she can't wait for the day when people will associate Goop with other people."

Loehnen has been with Goop full-time for a little over 18 months. A smart and strategic editor, she previously worked at Lucky under founding editor-in-chief Kim France, as well as Time Out, Shopzilla, and Beautycounter. She met Paltrow while consulting on a book for personal trainer Tracy Anderson in 2013 when Paltrow, who owns a partial stake in Anderson's fitness business, was looking for talent to help scale Goop.

Though the brand has been around for almost seven years, it's only just begun to build itself out as a full-service media company. Goop originated as a newsletter detailing Paltrow's favorite things to eat, buy, and do; today, the newsletter has close to a million subscribers and sits adjacent to a lifestyle site that offers up fashion roundups, city guides, and recipe suggestions. In addition, Goop has moved into the e-commerce space, selling a curated selection of items like Carven dresses and Phillip Lim boots, as well as exclusive collaborations with brands like Stella McCartney.

Currently, Goop is in the process of evolving past the digital realm: It rolled out a pop-up shop concept last year in LA, Dallas, and Chicago, with other locations planned for the future. In January, Goop will be launching its own beauty line.

The offerings at Goop's Chicago pop-up shop. Photo: Goop

Having just raised an undisclosed sum during a Series A round, the company is now faced with the challenge of deciding exactly which direction it wants to take the brand and just how large it wants to expand. With actresses like Blake Lively and Reese Witherspoon starting their own web ventures, the novelty of celebrity-endorsed sites has worn thin. E-commerce, similarly, is ubiquitous.

This doesn't bother the Goop team though. They aren't in it for world, or even market, domination—they just want to build a viable business, espousing the benefits of colonics, aerial yoga, and raw coconut cream along the way.

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It's hard to fully describe just how intensely people hate Gwyneth Paltrow. In fact, she's been voted the most-hated celebrity in Hollywood. She hasn't been caught cheating on a significant other or exhibited generally objectionable behavior. No, people love to hate Paltrow because of the organic-luxe lifestyle she promotes, calling it (and her) "pretentious," "tone-deaf," and  "utterly obnoxious." The Daily Beast admitted the 42-year-old actress is "the media's punching bag."

And yet, Gwyneth and Goop (taken from a family nickname of Paltrow's) have amassed a cult following by delivering all things GP-endorsed, like roundups of expensive cotton tees and suggestions for achieving mindfulness. Despite the internet's "desire to bring Gwyneth down to her knees," as Loehnen puts it, it also can't get enough of her. Have you seen how many "I tried Goop's diet/detox/routine/tips" are published on a regular basis?

Loehnen dismisses the idea that Paltrow's personal brand, and by extension Goop, centers around exclusivity: "She has access to all these interesting people and just naturally wants to share. She's not the type of person who wouldn't tell you where she got her hair cut."

Paltrow, who did not provide comment for this story, told the Times last year that she "never thought [Goop] would be a commercial venture," but rather "a place to have some freedom." As per a recent interview with Bloomberg, Paltrow "wanted it to be its own thing that my children could run one day if they wanted to."

In October 2008, a few weeks after the first newsletter was sent, the New York Observer wrote that Goop "quietly plopped onto the Internet" without so much as a press release. From the beginning, it promised to be a place for Paltrow's "collection of experiences" with the tagline "Nourish the Inner Aspect." Goop's first issues detailed the leggings Paltrow wore on Oprah, her favorite places in London, and simple exercise advice ("don't be lazy").

Paltrow at the opening of the Chicago pop-up. Photo: Goop

The Observer pointed out that as early as a month in, Goop was met with criticism, thanks to the fact that Paltrow had been labeled both an "irritant and idol to New York for well over a decade." A New York Times columnist lamented, "I feel undernourished already." Joy of Cooking editor Beth Wareham mused, "Does the world really need another banana muffin recipe? I think someone like Gwyneth Paltrow would be better at telling people what not to eat."

Even with all the negative attention, subscriber numbers began to climb; many compared Goop's devoted reader base to that of the beloved (and since shuttered) newsletter DailyCandy. Goop never advertised, growing solely by word of mouth, which was nonetheless sped along by the Paltrow's involvement. By 2013, Businessweek admitted "its appeal begins to wash over you like the warm ocean off Santa Barbara...and after a while you stop laughing at those $935 leather-and-gunmetal pants from Rag & Bone—instead, you want to own them."

Goop set the stage for the golden age of the newsletter, paving the way for similarly successful operations like The Skimm. Just last week, Lena Dunham announced she is rolling out a feminist newsletter with Jenni Konner that will include a commerce component, citing Goop as her inspiration. "We love Goop," Dunham told Buzzfeed. "Jenni and I have always been obsessed with Goop. We feel strongly that even if some of it is aspirational, it's aspirations like, ‘I want to know how to take care of my body and soufflé something."

Goop's readership is, unsurprisingly, mostly female, and predominantly in the 25 to 45 age range. According to Bloomberg, most of the site's readers are well-educated women who earn more than $60,000 a year; Business of Fashion reports that Goop gets about 1 million unique visitors a month. While many jump to liken Paltrow's efforts to that of Martha Stewart, Goop's chief revenue officer Alison Koplar Wyatt quipped to Ad Age in February that the Goop audience "wants to have that gorgeous arrangement Martha would make, but they don't have time to DIY it, so they want to know the best place to buy it."

But Loehnen acknowledges it's not easy working for a brand that comes with so much baggage. It's not uncommon to attend a party, she says, and have to listen to strangers go off about Paltrow when she tells them where she works. And yet, while Paltrow and Goop are criticized for being out of touch, that's exactly what keeps people coming back.

"I think the idea of making it more relatable is what gets people in trouble," Loehnen posits. "We can only just be ourselves."

Loehnen also points out that many things Paltrow has been criticized for promoting are actually becoming the norm: "Goop is good at pushing things to the mainstream, whether it's yoga, or acupuncture, all of these healing modalities. I think the mentality is changing from wanting to be like Gwyneth to realizing that she has good taste. People think, ‘If it's good enough for her, it's good enough for me.'"

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Goop's early years were (relatively) scrappy. The business was funded by Paltrow, along with some family and friends, and day-to-day operations were run out of the actress's kitchen in the London home she shared with her then-husband, Coldplay's Chris Martin. Eventually, Goop made some big hires, bringing on Seb Bishop (the former CEO of Red, Bono's AIDS charity) in 2011. Bishop left Goop last year, when it moved its operations from the UK to the US in June. This came shortly after Paltrow's announcement that she and Martin were in the process of consciously uncoupling, an announcement, of course, that came via Goop.

Bishop was soon replaced by Lisa Gersh, a former Martha Stewart executive who co-founded the Oxygen Network. Sitting in Goop's New York outpost near Bryant Park, Gersh is all business. She is nothing if not blunt when it comes to discussing Goop's ambitions.

"We know who our audience is," Gersh says. "For some people, [our content] is actually how they live, for others it's more aspirational. We try to mix it up on the site. People who actually go on the site will see that there are products they can afford, and then there's also some very aspirational stuff that only a very small portion of our audience can buy, but our other audience members still like to see it."

Lisa Gersh in New York City. Photo by Driely S. for Racked

Gersh was brought on "to build out the brand with the right team" and is also tasked with growing Goop's e-commerce business, which brought in a reported $1.5 million during 2012, its first year of operation. Partnerships with brands like Diane von Furstenberg, Band of Outsiders, Loeffler Randall, and Michael Kors are the real selling point of Goop's e-comm offerings.

Brittany Weinstein, Goop's head of collaborations and special projects, says that each season the company puts together a list of brands they want to work. Ideas are then presented to and approved by Paltrow, and executed by Goop's buying director, Patrick Devlin.

"It's all about curation," says Weinstein. "Our audience doesn't have to dig through pages of merchandise, with unlimited choices to make. I think people subscribe to the work we are doing because we simplify transactions and limit the options."

E-commerce, though exceedingly pervasive in the media sphere, is not an easy undertaking. Things can get murky when editorial and commerce mix, and nobody has quite figured out how to do it successfully.

"Some brands think contextual commerce means they just write about the product they're selling," Gersh says. "To me, that's a catalog. It's about the ability to create an environment, a lifestyle. You have to be authentic and write about things that you actually know and care about, things you believe in and have authority in. A lot of blogs are just writing about product, but contextual commerce is done through imagery, through content. It makes you read something, close the screen, but then come back to buy it."

Goop's Los Angeles pop-up. Photo: Goop

The next phase of e-comm growth is the Goop beauty line slated to hit the site in January. The six-piece all-natural skincare collection will be a project with Juice Beauty, which the multi-hyphenate Paltrow serves as creative director for and which has invested money in Goop.

Blair Lawson, who was hired by Goop from Beautycounter (a site whose "mission is to get safe products into the hands of everyone" and where Loehnen also spent time) to fully realize the site's beauty content as a ramp-up to the launch, says venturing into skincare and makeup is an obvious move for the brand because "people naturally expect it from us anyway." It's easy to draw a comparison to Into the Gloss and its new Glossier product line, but Lawson says Goop will offer something different.

"We're trying to position Goop as an authority in the clean beauty space," she explains. "The way we paved the way for organic food, we are paving the way for non-toxic beauty products. We're also trying to create more content that educates the consumer. It's what Goop does best: our content demystifies things."

But Loehnen's cautious about growing Goop too quickly: "Right now we need to figure out our strategy and focus. That's our biggest challenge. There are a lot of places we can take the brand—we can do food, we can do beauty. We'd love to do it all, but we have limited people and resources."

The company's small size also means Goop has a relatively restrained publishing schedule, which can be a hindrance to audience growth; Goop only publishes six stories a week to supplement its newsletter. (For context, Racked publishes about 15 times a day.)

"Sure, we want to grow our daily traffic, but to what end?" Loehnen asks. "Do we change our patterns and start a larger push-out? We only publish the newsletter four times a month, so we could be doing more content, but we also constantly get emails that readers love that the brand is not too overwhelming. We have a huge list of subscribers, but a list is just a list. How are we going to engage with them? We can't just put anything out for an audience we've spent the past seven years building. We aren't trying to turn a gazillion pageviews."

Photo: Goop

Then there's the bottom line to consider. Last year, reports from Goop's corporate SEC filings unearthed that the brand had racked up $1.6 million in debt.

"I think it will take us a few years to turn into a profit," says Loehnen. "As you can imagine, it takes money to make money and we are not an inexpensive company to run. It will be a while before we make a profit, but we are still driving revenue. We aren't Lululemon, but we are selling."

Gersh puts it this way: "Building a great business is always difficult. If it were easy, everyone would build a great business."

While Goop's lack of profit isn't terribly surprising for a media experiment that's just now kicking into high-gear, the gap between its finances and its million dedicated subscribers signal that changes need to be made. Paltrow confirmed to Time last month that she's put acting on hold for 2015 so she can focus all her attention on Goop.

Gersh says Goop will eventually expand into selling home goods and kitchenware, as well as its own fashion line. Weinstein adds that the Goop team will also soon consider opening up brick-and-mortar locations, since its pop-ups were so successful. "We think it would fill a certain audience need," she says. "Shoppers like to touch and feel, and there's something very special about going into a store and stepping into the brand. Nothing's set in stone, but we do talk about what a permanent store could look like."

For the Goop team, the worst thing would be to dilute the very specific, GP-approved brand that it's built. "We know who we are," the "What's Goop" page reads. "We test the waters so that you don't have to. We will never recommend something that we don't love, and think worthy of your wallets and your time. We value your trust above all things."

As Loehnen echoes, "We are just trying to take care of the people we have, and grow our customer base while giving people what they actually want. It's not a quantity play, it's a quality play."

Editor: Julia Rubin