Seventh Generation Founder Wants to Change the World With... Condoms?
Parents almost universally dread talking to their kids about the birds and the bees. Kids, definitely universally, dread it even more. Jeffrey and Meika Hollender, the father-daughter team behind a new fair trade condom start-up, are the exception.
You may know Jeffrey Hollender as the co-founder and former CEO of the eco-friendly cleaning product and personal care brand, Seventh Generation. Founded in 1988, Seventh Generation grew into a $150 million company under Hollender's watch. But in 2010, after stepping down as CEO to become Seventh Generation's chief inspiration officer, Hollender was, quite unceremoniously, fired by the board of directors and removed from the board altogether.
For Hollender, being ousted from the company he founded was the shock of a lifetime. "At first, I could see no good in the situation," he told me back in 2011. But within a few weeks it was Meika who opened his eyes to the upside of the ordeal. "Meika started talking about how this might open up new possibilities for me," he said at the time. "I couldn't see it, but I might spend 15 minutes a day thinking about something positive. After a month, it might be an hour. By the time four months had passed, I was spending more time thinking about exciting opportunities than feeling bad for myself."
The Second Act
Now, with Meika by his side, Jeffrey is on to his second act as an entrepreneur. With his new brand, Sustain, he wants to rid the condom industry of toxic chemicals, child labor, and male-dominated marketing, and create a new, eco-friendly, fair-trade brand of condoms marketed, first and foremost, to women. It's a tall order in a market as entrenched and taboo as condoms. If it's successful, Hollender, forever a socially conscious entrepreneur, believes Sustain could do even more good for the world than Seventh Generation did and serve as a model for other socially responsible companies around the world.
"Rather than creating products that are less bad," Hollender says, "we're thinking about how to create a model for business that does net good."
Building a Truly Responsible Business
Twenty long years ago, when Hollender was still running Seventh Generation, he trademarked the name Rainforest Rubbers, with the intention of someday creating a condom that was sustainably harvested in the Amazon. For years the idea lay dormant. It wasn't until Hollender recovered from his post-Seventh Generation slump that he revisited the concept and began thinking about how he could build a business with an even deeper social impact than Seventh Generation had.
"Even with all the progress corporate social responsibility has made, we're still heading in the wrong direction as a society by many metrics. Whether it's social inequality or climate change, things are still getting worse," he says. He wanted, instead, to create a "net positive" business. Hollender explains, "The goal is when you add everything up that the company does, it makes a net positive contribution to society."
Fair trade condoms fit the bill. Not only do they serve a social purpose by preventing sexually transmitted diseases and unwanted pregnancies, but these condoms target an industry that's rife with questionable business practices. Some research has shown that most condom brands currently contain nitrosamines, which are carcinogenic chemicals. Child labor is also frequently used on rubber plantations throughout the world.
"We looked at all of this and thought, 'This is really an opportunity to model what a net positive company looks like,'" Hollender says.
Now, Sustain condoms will be both sourced from and manufactured in a fair-trade facility in South India, which pays workers a living wage and provides them and their children with free education and free healthcare. Hollender says the team has also figured out a way to make the condoms nitrosamine-free, so they'll be less toxic than existing brands. Finally, Sustain will round out its social mission by donating 10 percent of its profits to improving female reproductive care in low-income communities around the country.
"We want people to think more broadly about how they choose a product and how companies make a product," Hollender says. "You have to think about the entire lifecycle and supply chain. Go to the source of where it starts and follow it all the way through."
Mastering the Marketing
Making a dent in an industry dominated by Trojan and Durex will be no easy feat, however. That's why Hollender brought his daughter on board to run Sustain's marketing. Having just earned her MBA from New York University, Meika Hollender, 26, cut her teeth as a brand strategist for Fortune 500 companies. Now, she's helping her father figure out how to talk about and market safe sex to women like her. Needless to say, maintaining clear boundaries in a family business as unique as this is critical.
"One of the first things one of my advisors told me was you should never call your parents mom and dad in meetings," Meika, who referred to her dad as Jeffrey throughout our interview, says. "Another thing we've struggled with is knowing that even though in our personal lives we've become friends, in business, he's still my boss. Sometimes I think I'm right, but at the end of the day, I have to concede."
Meika says the key to competing with such major brands is not taking them on head first. Instead, Sustain is deliberately targeting women, a neglected demographic among condom brands, despite the fact that women make nearly 40 percent of condom purchases in this country. To reach women, packaging will be more discreet than mainstream brands--"No woman wants a bright orange box of condoms in her purse," she says. And though Sustain doesn't have retail partnerships yet, the Hollenders are targeting distributors like Sephora and Whole Foods, instead of CVS and Walgreens.
"These are stores that women trust will do the homework for them," Meika says.
And while it's rare to turn on the TV without seeing a Trojan commercial, the Hollenders have decided not to invest in traditional advertising and to focus on public relations and social media instead.
"We built Seventh Generation into a $150 million brand without doing much advertising at all," Hollender says.
Learning a Lesson
This time around, Hollender is being extra cautious about the company's governance, careful not to lose control of his company ever again. Rather than taking venture capital or private equity money, Hollender raised funding for Sustain on CircleUp, a crowdfunding platform. The company also has an unusual governance structure, in which the founders will control the board in perpetuity. Employees will also be entitled to elect their own representatives to the board. "We did a lot of things that would make professional investors uncomfortable," says Hollender. "We wanted individuals who could make a commitment to this on a long term basis."
Going forward, Hollender knows that educating consumers and convincing them to trust this new brand will be Sustain's biggest hurdle. While Hollender is, undoubtedly, hoping for another major success with this company, he says his bigger goal is to ignite a paradigm shift in the industry as a whole.
"Our hope is that in five years, all condoms will be fair trade," he says. "If the goal is to make a better, safer product for women, we have to change the industry, because we can't do it alone."