Conventional wisdom says cleaner, greener products are complicated to produce and expensive to make. So how do you run a sustainable business based on eco-friendly products and environmentally sustainable practices?
Here's another in my series where I pick a topic and connect with someone a lot smarter than me. (There's a list of previous installments at the end of this article.)
This time I talked with Christopher Gavigan, Chief Product Officer and co-founder (along with Jessica Alba) of The Honest Company, which makes non-toxic and eco-friendly products like diapers, wipes, bath and skin care, and home cleaning. Prior to that Chris was the CEO of Healthy Child Healthy World, a nonprofit that helps parents protect their children from toxic risks.
So yeah, he knows a little about the business of creating a healthier, nontoxic environment.
Let's pretend I'm a small business owner in my 50s. (Wait, that's not pretending.) I get the need to focus on the environment, so to speak... but hey, come on, I'm trying to make a living here.
Yes, it is expensive. If you're just starting out it's easier, but if you're shifting your strategy, it's hard to shift from low to high.
Say you're planning to start a business. You get to decide whether your brand stands for better, safer, more premium--or whether you'll be the low cost provider delivering value and convenience.
But I think that is a choice entrepreneurs increasingly will not be allowed to make in the future. We're evolving as consumers and as a society and we expect a deeper level of commitment from businesses to do more than just make money. We increasingly expect businesses to help create positive change in the world.
It makes sense: Governments can't do it, regulatory efficiencies simply aren't there, and the nonprofit world has an equally hard time.
In time, the businesses that don't focus on making safer and healthier products will be left with the consumers that focus solely on cost without considering the impact, and that population is steadily shrinking.
I think there's always been a segment of the population that was environmentally conscious, but you feel that trend is growing.
Millennials, the newest up and coming purchasers, are extremely aware of businesses that exist more as a foundation of values and intent to do good in the world as opposed to only operating for gain. And new parents are hyper-activated to contribute to society via their purchasing behaviors.
If you offer a product that solves a need for those groups, there's a ton of research that shows--given a similar service or product offering--behavioral buying patterns of milllenials and new consumers will shift towards those products and service offerings that intend to do good.
It's in those consumers' DNA to have a positive impact--both in their lives and through their purchases.
It's also in your DNA. You came from a non-profit background, so isn't founding a for-profit company a bit of a shift?
The overall approach is still the same, though. We started this company to create positive change and to educate and empower people to make smarter choices in everyday life.
Look at companies like Tom's Shoes, Warby Parker, Patagonia. What I love about Patagonia is they don't even talk about making products in their mission statement. They talk about making a positive impact.
The Honest Company is the same way. We exist because we want to create a healthier, more sustainable future for our children. For us that means creating outstanding products. And we're also here to educate parents on how to find and use better and safer products that build a better life for their kids.
Mission-based companies also fill a basic need. We all want to do good, and one way is to do business with charitable companies and service organizations.
So from a product point of view, how did you decide where to start?
We're a small group focused on making a deep impact, so we like to say our focus is an inch wide and a mile deep: We want to do a few things extremely well.
So we started in three categories: cleaning, personal care, and diapers. In each we're making products that keep our kids healthier and safer and contribute to a safer, more sustainable non-toxic future. In our opinion we deliver products that really matter.
Once they find us, our customers feel this sense of relief because there's a brand that is being very authentic and real: We're not the perfect company, but we are the honest company, and with you, together we can make the world a little better.
Success creates pressure to expand your offerings, which is a good problem to have, but still a challenge.
Often customers say, "Please create more products, because I outsource my trust to you." I love the idea they outsource their trust to us. When customers trust you, that's huge--and incredibly gratifying.
We deliver a peace of mind concept: Come to us and you're comforted by the promise of better, safer, healthier... and more stylish.
But your products still must perform. There's this perception that green means compromise: Give more money and get less performance.
Done correctly, that's simply not true.
How will you decide when it's time to go, say, an inch and a half wide?
Good question. What's great about this start-up is that at times we are so focused on optimizing all the small details that sometimes the larger strategic questions don't get answered.
Sometimes that can be a problem, and sometimes that is a benefit. Our finger's on the pulse and we are monitoring it in a hypersensitive, very particular way. I'm often called particular, which is a nice way of saying "you're a fanatic," and I think that's a compliment. We really want to get it right.
We're really focused on our core consumer. As our bonfire gets brighter, more people gather around.
And it's fun doing it.
Check out other articles in this series:
- Is it better to train or hire great talent?
- The keys to maximizing your return on sponsoring events
- The ins and outs of franchising with Noodles CEO Kevin Reddy
- How Ashley Madison's founder built a business everyone loves to hate
- Julia Allison on building a great personal brand
- Eric Ripert on how to build a classic brand