It's Not Easy Being Green
Jeffrey Hollender and Alan Newman disagreed about strategy, fought bitterly -- and created two successful companies. They'd set out to change the world, but what they really changed was each other.
Published November 2004
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COMMENT ON THIS ARTICLEJeffrey Hollender was clearly enjoying himself. It was a misty evening in January, and he was the guest of honor at a tony Manhattan party, thrown to mark the release of his new book, What Matters Most. The setting was the "sky terrace" of the Galleria, an exclusive residential tower on the city's Upper East Side. Dashing and handsome in a dark jacket and tie, Hollender moved through the crowd with characteristic ease, stopping every so often to marvel at the glittering views of the Midtown skyline. In What Matters Most, Hollender, 49, tells how he and his company, Seventh Generation, a manufacturer of environmentally friendly household products based in Burlington, Vt., fell in with the likes of Anita Roddick of the Body Shop, Ben Cohen of Ben & Jerry's, and other civic-minded businesspeople -- entrepreneurs determined to prove that a progressive, values-based company can make a difference. Early reviews were glowing. "Reading this book may help you look at how your company affects the world," noted a Harvard Business School report. An official reviewer for Amazon.com called Seventh Generation a "poster child for corporate conscience." After the party, Hollender began a nationwide speaking tour, with stops at the Haas School at Berkeley and Northwestern's Kellogg School of Management.
But not everyone was impressed. In fact, Alan Newman, the man who had founded Seventh Generation in 1988, was somewhere near irate. A few weeks before the book party, Newman, now CEO of Magic Hat Brewing Co., a craft beer maker in Burlington, sat at the desk in his cluttered office, bearded and barefoot as usual, and composed an e-mail to Hollender:
"I've been aware that you've been referring to yourself as the founder of Seventh Generation for some time now. Frankly, [I] have been ignoring it. That part of my life is long over and I am happily onto the next phase. But it is a problem for me when reporters show up to discuss Seventh Generation, which happened recently, and they are surprised that: (a) I clearly was the founder, and (b) you were not around or involved until well after the name change to Seventh Generation, the positioning, the product direction, and (multiple versions of) the first catalog had been produced and mailed." He went on: "While we may always have a different point of view about what happened at the end of our relationship, the founding of the company is a matter of record and not subject to 'personal perspectives.' I only hope you do not take this opportunity to present yourself as being the founder of Seventh Generation....It just isn't so and can only lead to embarrassment for both of us."
Hollender responded immediately, changing passages in his book and editing Seventh Generation's marketing and press materials. But that did little to ease tensions that had been simmering for years. Newman had been one of the original wave of radical Vermont entrepreneurs (see "What Is It About Vermont?" page 116), a dreamer who went into business less to make money than to change the world. Seventh Generation was his baby, and he had infused it with all his hippy sensibilities. Hollender, a New York City businessman who had founded two previous ventures, joined Seventh Generation later, bringing new levels of marketing and financial sophistication -- as well as ambition -- to the company. Together, Newman and Hollender, with their lofty goals and unusual business culture, enjoyed a white-hot growth streak -- until those same values collided head-on with the brutal realities of running a business. The partnership unraveled amid circumstances that remain murky and contentious even today, and the company appeared to be doomed as well, teetering on the brink of bankruptcy. But somehow, Seventh Generation managed not only to survive but to thrive, as have the two entrepreneurs -- although the beliefs of both men, and their philosophies about entrepreneurship in general and socially responsible businesses in particular, have changed in ways neither would have thought possible.
Alan Newman, 57, is something of a local celebrity around Burlington. He has a Santa Claus-like beard and often wears vintage leather motorcycle gear. When it's warm out, he rips around town on a bad-ass Kawasaki, his beard flapping in the wind. When he sits at an outdoor table in downtown Burlington at lunchtime, a stream of passersby call out his name, stop by and squeeze his arm, or shout hello from their Volvos.
Though not a native Vermonter, Newman might make an excellent state mascot. After living on a commune in Oregon, he and his wife, Judy, moved to Burlington in 1970, joining so many other back-to-the-landers looking to flee their harried urban existences. He became an entrepreneur because he had nothing better to do. An environmental activist with no business training and a resume that was little more than a string of odd jobs, he was drawn to the idea of running a business with a strong social mission. In 1983, he helped launch a retailer called Gardener's Supply with his friend Will Raap, who still runs the place today. The driving idea was that gardening and sustainable agricultural and environmental practices improve communities and can save the planet. Running a business was a blast, Newman found, and three years later, he launched a new venture -- Niche Marketing, which advertised and distributed products for progressive companies and nonprofit groups, such as a militant left-wing T-shirt maker and a manufacturer of water-saving showerheads.
