COMPANY:Love Your Melon
2018 INC. 5000 RANK: 106
HEADQUARTERS: Minneapolis, MN
YEAR FOUNDED: 2012
2017 REVENUE: $31.5 million
3-YEAR GROWTH: 3,537%
Zachary Quinn, 26, and Brian Keller, 25, co-founded Love Your Melon as a college project. Six years later virtually every child with cancer in the United States has received one of the hat-and-apparel company's knit beanies; the Minneapolis-based company previously donated one with every sale. Now it donates 50 percent of profits to nonprofit partners fighting pediatric cancer. The mission has struck an obvious chord. In 2017 Melon's annual revenue reached $31.5 million, helping it land at No. 106 on this year's Inc. 5000. Here Quinn explains why his business gives and gets so much love. --As told to Leigh Buchanan
My social conscience comes from my parents. They owned a couple of restaurants in St. Paul, Minnesota, where they served Thanksgiving and Christmas meals to the homeless. My mom cooked for nonprofits like Feed My Starving Children and Kid's Café. In high school my friends and I would make peanut-butter-and-jelly and turkey-and-cheese sandwiches and bring them to people living on the street.
I met Brian on the second day of an entrepreneurship class at University of St. Thomas. Our class project was to start a business that made a profit by the end of the semester. We decided to do beanies because it's cold in Minnesota and there's not much in the way of fashionable headwear. You were only supposed to spend $750, but we raised $3,500 in small loans from friends and family.
At the time I was reading Blake Mycoskie's book about the founding of Toms Shoes, and I loved the concept of buy-one-product, donate-one-product. We ordered 400 beanies, based on my design, from a knitting mill in Portland, Oregon. We also hired a local embroidery business to make Love Your Melon patches to sew on the front. Over the Thanksgiving weekend we sold 200 from a table outside one of my parents' restaurants. In December we distributed 200 to oncology patients at the local children's hospital.
One of the first kids we gave a hat to was Zach Sobiech, who was battling bone cancer. He was 18 years old and had grown up in my neighborhood. By the time we met him, he knew he had six months to live. He was an amazing musician; a song he wrote hit No. 1 on iTunes around the time he died. When I looked at him, I saw myself. That could have been me.
In 2013 I took what I thought would be a gap year to work on the business. Brian stayed in school but was still very involved. I set up tables on campus and around town, worked fundraisers and golf tournaments. We also sold through a web site and began advertising on Facebook, which remains a big focus. A billboard we did on Interstate 94 got a huge response. One lady who saw it got so excited that she put up a second Love Your Melon billboard for free.
In January 2014, while Brian was on break, we bought a tour bus for $10,000 from a hockey team in Philadelphia, fitted it with bunk beds, wrapped it in vinyl with our logo, and set out with a photographer and videographer. We drove to New York, then down south, then back through the Midwest, stopping at college campuses along the way. We sold beanies and also distributed them at local children's hospitals. Students we met came along on those deliveries.
That was the beginning of our college ambassador program. Today roughly 13,000 students at 850 schools personally deliver beanies to kids battling cancer. They also buy food and cook for families at Ronald McDonald Houses and take kids out on adventures, like helicopter rides and amusement park trips. It's a good way to scale the personal touch.
The bus tour landed us on Good Morning America and Today. We were also going strong on social media--one Facebook ad returned 44 times our investment. But we did not have the manufacturing capacity to meet demand. We would have 10,000 people wanting to buy hats and only 2,500 to sell. The original beanies were made on 150-year-old equipment, and when the Portland mill wouldn't ramp up production we had to work with new vendors--all in the U.S.--to replicate those machines. In retrospect the constraints on supply were probably helpful. They prevented us growing too fast and flooding the market.
Along the way we've borrowed money from friends and family--the most was $500,000--and always paid it back within months. Starting in 2016 we've worked with banks: J.P. Morgan financed our inventory growth this year. Otherwise we've operated on cash flow.
After about a year and a half we had given beanies to virtually all the 45,000 kids in this country battling cancer. We began donating 50 percent of profits to nonprofit partners fighting pediatric cancer and working with families. This year we created the Love Your Melon Fund to support our charitable partners and pay for the campus ambassador program (including the superhero costumes our volunteers wear on hospital visits). We still give beanies to the 15,000 kids newly diagnosed with cancer each year. To cover periods when students aren't around to deliver them, we've begun installing beanie vending machines in children's hospitals, operated by cards passed out by doctors.
We're not just a beanie maker anymore: we sell blankets, scarves, mittens, pillows and other lines. Eighty percent of our business is e-commerce, but we also do custom work for organizations including Facebook and Ernst & Young, as well as sell through boutiques and large retailers like Dick's Sporting Goods and Von Maur. Our first corporate store opens in a few weeks, in the North Loop neighborhood of Minneapolis.
Six years in, the biggest thing for me is still the kids. In 2013 we met Dawson Parker, then age 12, when he traveled from his home in the south to our local children's hospital for treatment. He loved planes--his hospital room was full of models--so we took him out on some old World War II training planes. Dawson got well enough to go home, and we visited him there while on a bus tour. We drove into Wetumpka, Alabama, picked him up and drove him to his first day back at school. All the kids were waiting outside. And they were cheering for him.