I NEVER THOUGHT MUCH about my eyebrows before I stumbled into a little store that specialized in making them perfect. In a tiny cubbyhole called Lilibeth, there were little pots of brown powder sharing a shelf with pencils, razors and brushes. There was also Lilibeth herself, full name Lilibeth Zamora-Asencio, the poised 31-year-old eyebrow artist and founder—and a saleswoman persuasive enough to convince me to pay $29 for personal grooming that I generally do at home, free. (And it’s not just me: The first two times I wandered by her kiosk in an upscale Manhattan mall, I couldn’t get in because it was so crowded.)

I’m naturally skeptical about start-up businesses, but I had to assume Zamora-Asencio was doing something right. And over the past few months, I’ve submitted the store to the Smart Ideas smell test, to see if other businesses could learn from her experience. Does Lilibeth have a winning product? The right kind of financial support? A plan for the future? In other words, are those out-the-door lines a matter of luck or, uh, pluck?

Let’s start with the product. Lilibeth works on eyebrows—just eyebrows. For $29, customers get a grooming, a five-step brow-shaping lesson and a Lilibeth-designed, razor-like tool called a brow shaper. Zamora-Asencio may be building a business around two patches of hair that have almost no physiological function, but she’s also filling a niche that nobody else appears to be filling in her neighborhood. A buzz through the rosters of New York City beauty salons suggests that while dozens will offer a brow waxing or threading alongside a host of other services, none appear to focus exclusively on plucking, coloring, shaping and education. A business with very little competition—every entrepreneur’s dream. Check.

Lilibeth also appears to benefit from the lipstick theory, which says that in tough times, people defer big buys but splurge on small luxuries. We always crave the feeling of privilege and satisfaction that buying gives us, says Seth Godin, author of Permission Marketing and All Marketers Are Liars. But when the economy downshifts, we’d rather pay less, so Saks fades and Wal-Mart blooms. Guys will forgo fine wine but pay the extra bucks for a premium brew. And as for me, while it might have seemed wrong or even unpatriotic this past year to blow a hundred bucks or more on a facial or massage, an eyebrow work-over for $29 was a deal.

Of course, I’ve shaped my own eyebrows countless times. And usually, given a choice, people won’t pay for something they can get free. But they will pay for something new. Take bottled water. People who bought it “were paying for portability, hipness, purity,” says Godin. “Perrier and Evian...sold a story that was worth a dollar.” These days Craig Zucker, another New York entrepreneur, unashamedly sells free New York City tap water, Tapd’NY, for a buck.

He’s selling novelty, a souvenir, a tongue-in-cheek jab at other bottled water makers. And in Lilibeth’s case, I must admit I was mostly drawn to the novelty—I leave my apartment most mornings feeling perfectly fine about my eyebrows. Novelty plus “affordable luxury” equals a savvy marketing angle. Check.

Tapping a Brain Trust

It can be tricky to launch a business when your product is breaking new ground. Bo Fishback, of the Kauffman Foundation, a group dedicated to supporting entrepreneurs, breaks the process down into three steps. First, entrepreneurs should sit down with 10 potential customers and talk to them about the problem their business will untangle, to see whether they respond positively. “This is a heartbreak saver,” he says. Second, he recommends assembling a wish list of 10 people who could make you successful—professional investors, role models with successful businesses or potential partners—and contacting them for tangible support. Third, put together an advisory board of people who have been down a similar path. “Most are surprisingly willing to help if it’s something they are passionate about,” says Fishback. And all those steps are worthwhile, even for kiosk-size businesses.

Here, Zamora-Asencio appears to have gotten by without knowing the rules of thumb. The idea for the eyebrows-only store was born from her experience working for high-end cosmetic companies like Elizabeth Arden. She felt the major companies didn’t fully understand the impact of eyebrows, and her experience working with customers suggested her concept might work. So she didn’t do market research or consult industry insiders. But she had one thing many other entrepreneurs with proper business plans do not: amazing luck. A mutual friend who knew of her ambitions to open the Lilibeth stores introduced her in 2008 to several investors who had experience in backing start-ups, though not in the beauty business. Voilà—she had equity partners and the cash to open within eight months. But it’s not exactly a big network. When it comes to organizational support, I’d have to report “needs more work.”

What about a plan for the future? Since she opened, a year ago, Zamora-Asencio has already moved from the kiosk into a storefront location a few blocks away; a few months ago, she opened her second store in a downtown office mall. She claims most of her customers are now repeat customers and that others are coming through word of mouth, something that gives her great pleasure—hopeful signs for any entrepreneur, say the experts. A customer came in from London, she says, having heard buzz about her store. “It was so gratifying,” gushes Zamora-Ascenio, bringing her hands to her chest. “It keeps me going.” She says she’s on schedule to open two to three more stores, outside of Manhattan, by the end of 2010 and to turn a profit three years down the road.

Is Expansion Always Good?

Sometime after my first visit to the kiosk, I wandered by Lilibeth’s new storefront location on a lunch break. I recognized the name of the store, but something else caught my eye. Printed clearly on the window were the words: “Beautiful Brows and Eyes” (emphasis mine). The store was now expanding into the whole world of eye makeup—mascara, liner, eye shadow—which made it less unique. What was the boss thinking? “I was worried if we deviated from just brows we would become just another boutique,” she says, “but our customers asked for it.” Zamora-Ascenio claims the primary focus will still be on brows. I wasn’t entirely convinced. Competitive advantage forfeited? Not sure, but in truth I bought several of her new, nonbrow products myself.

At Lilibeth’s stage of growth, says Godin, the owners have to decide clearly what they want. In his lexicon, there are freelancers—people who dabble in businesses—and there are entrepreneurs. “It’s painful to hear, but people who have two stores are freelancers,” he says. Entrepreneurs use other’s people money to grow something bigger than themselves; they don’t squander their time fussing over the details of each customer’s stray hairs, the way Zamora-Asencio does with her clients. “If she’s an entrepreneur,” he says, “she should be doing everything except working with eyebrows.”

Zamora-Asencio, quietly composed, mulls this advice before dismissing it. Quality control is so important, she argues, that she’ll work in every store until she’s certain her techniques are passed on correctly. “This is critical,” she says. As to whether she’s a freelancer or entrepreneur? There’s no doubt in her mind it’s the latter. “I know in my heart of hearts this will work.” Final grade? Incomplete.

Here, Zamora-Asencio appears to have gotten by without knowing the rules of thumb. The idea for the eyebrows-only store was born from her experience working for high-end cosmetic companies like Elizabeth Arden. She felt the major companies didn’t fully understand the impact of eyebrows, and her experience working with customers suggested her concept might work. So she didn’t do market research or consult industry insiders. But she had one thing many other entrepreneurs with proper business plans do not: amazing luck. A mutual friend who knew of her ambitions to open the Lilibeth stores introduced her in 2008 to several investors who had experience in backing start-ups, though not in the beauty business. Voilà—she had equity partners and the cash to open within eight months. But it’s not exactly a big network. When it comes to organizational support, I’d have to report “needs more work.”

What about a plan for the future? Since she opened, a year ago, Zamora-Asencio has already moved from the kiosk into a storefront location a few blocks away; a few months ago, she opened her second store in a downtown office mall. She claims most of her customers are now repeat customers and that others are coming through word of mouth, something that gives her great pleasure—hopeful signs for any entrepreneur, say the experts. A customer came in from London, she says, having heard buzz about her store. “It was so gratifying,” gushes Zamora-Ascenio, bringing her hands to her chest. “It keeps me going.” She says she’s on schedule to open two to three more stores, outside of Manhattan, by the end of 2010 and to turn a profit three years down the road.
Is Expansion Always Good?

Sometime after my first visit to the kiosk, I wandered by Lilibeth’s new storefront location on a lunch break. I recognized the name of the store, but something else caught my eye. Printed clearly on the window were the words: “Beautiful Brows and Eyes” (emphasis mine). The store was now expanding into the whole world of eye makeup—mascara, liner, eye shadow—which made it less unique. What was the boss thinking? “I was worried if we deviated from just brows we would become just another boutique,” she says, “but our customers asked for it.” Zamora-Ascenio claims the primary focus will still be on brows. I wasn’t entirely convinced. Competitive advantage forfeited? Not sure, but in truth I bought several of her new, nonbrow products myself.

At Lilibeth’s stage of growth, says Godin, the owners have to decide clearly what they want. In his lexicon, there are freelancers—people who dabble in businesses—and there are entrepreneurs. “It’s painful to hear, but people who have two stores are freelancers,” he says. Entrepreneurs use other’s people money to grow something bigger than themselves; they don’t squander their time fussing over the details of each customer’s stray hairs, the way Zamora-Asencio does with her clients. “If she’s an entrepreneur,” he says, “she should be doing everything except working with eyebrows.”

Zamora-Asencio, quietly composed, mulls this advice before dismissing it. Quality control is so important, she argues, that she’ll work in every store until she’s certain her techniques are passed on correctly. “This is critical,” she says. As to whether she’s a freelancer or entrepreneur? There’s no doubt in her mind it’s the latter. “I know in my heart of hearts this will work.” Final grade? Incomplete.

The Niche-Business Road Map

Some tips for launching an innovative start-up:

Screen Your Ideas: Meet with potential customers to see whether they get excited about your idea or whether it needs more fine-tuning.

Build a Support Network: Cultivate ties with investors and entrepreneurs; even those who don’t back you financially can offer advice.

Leverage “Lipstick”: The lipstick theory says that consumers will splurge on small luxuries when the economy is bad. That could create an opening for an entrepreneur with a niche business plan.