Jeffrey Hollender is the dean of green. Just as natural foods were inching into the mainstream, Seventh Generation--which he co-founded with Alan Newman in 1988--spread virtuous consumption to the household cleaning aisle. In time, the company developed plant-based, ethically made versions of virtually every cleaning and paper product found in a kitchen or bathroom.
Seventh Generation had $150 million in sales by 2010, the year Hollender was fired, after he'd stepped down as CEO, amid widespread gnashing of teeth in the environmental community. Let's just say doing well and doing good--Hollender's priority--don't always co-exist easily. Seventh Generation was sold to Unilever in 2016, and Hollender was later welcomed back to the board.
His next act included launching a sustainable women's health care business, Sustain Natural, with daughter Meika and wife Sheila, and leading the American Sustainable Business Council, of which he is co-founder.
Sarah Paiji Yoo is chasing a similar vision. She is a co-founder and the CEO of Blueland, a 14-employee seller of nontoxic household products, based in New York City. A serial entrepreneur, Paiji Yoo became an environmental missionary when she discovered to her horror that the water--bottled or tap--she mixed into her infant son's formula contained tiny pieces of plastic, largely formed by the breakdown of single-use packaging.
In 2019, Paiji Yoo and former Harvard classmate John Mascari launched Blueland as a DTC startup, its first offering a cleaning product in tablet form and a reusable "forever" bottle in which to mix the tablet with water.
Blueland has since added hand, dish, and laundry soap to its line. It has raised $3 million led by Global Founders Capital and Comcast Ventures and landed an investment from Shark Tank's Kevin O'Leary, who now appears in Blueland's ads. Paiji Yoo, whom Inc. has included among this year's Female Founders 100, won't release sales data but says Blueland books several million dollars a month. It remains largely DTC, with a presence on sites like Goop.com and Nordstrom.com. As Paiji Yoo mulls new channels, her CEO role, and how to balance sustainability with growth, she turned to Hollender for insights.
Hollender: In the past year, you've really brought this idea to fruition, and the website looks terrific. It's a very timely concept, which has pluses and minuses. The plus is that it's the right thing at the right time. The minus is that it has attracted a range of competitors already. I know you're wondering about retail distribution. What is your thinking there?
Paiji Yoo: Traditional retail distribution has to be a meaningful part of our future if we want to maximize our environmental impact. We've found that more than 80 percent of consumers still want to buy these categories where they do their regular shopping. But with a product that requires some education, it's been nice to have a direct relationship with consumers, to test the messaging and see what matters most to them. Also, Covid has accelerated the growth of our business but not the size of our team. So direct-to-consumer has been going very well for us at a time when we have a lot going on.
Hollender: I would not rush into retail. It is a very different business. In the early days at Seventh Generation, we made little money at retail with many products, because they typically don't have huge margins. How are you doing on your gross margins?
Paiji Yoo: We've been extremely focused on that from a goals perspective. Our goal was to get to 40 percent but now we want to do better.
Hollender: I would want to be at 50 percent before I went into retail. There are lots of expenses, a hundred different ways the retailers will put money back into their own pockets.
Paiji Yoo: Optically, retail just seems so much more exciting. Like, oh, we're going to be in CVS! That is amazing! But it is a big undertaking and would be a big risk going in, so we are not taking it lightly. When the time comes for retail, how do we decide who the right partners are?
Hollender: Very few retailers are great at helping launch and build brands. If Target gets excited about a brand, it can make it a success pretty much overnight. But to do that, you need a Target-specific broker who knows every buyer and is great at building partnerships. There are some high-end grocery stores, like Fred Meyer out in the Pacific Northwest. We found them to be a terrific partner.
If you find a retailer that is really going to build the brand, I would give them a six-to-12-month exclusive. You want to come in on an end cap rather than in-aisle, and you are not going to get that unless they are excited about the product. At Seventh Generation, we would always go after P&G, because Tide had way too much space.
Paiji Yoo: How should we prioritize Amazon? Will it add to or detract from our e-commerce business?
Hollender: At Sustain, we resisted Amazon and then came to the conclusion that that was a mistake. There are people we can reach through Amazon who we couldn't reach through our own site.
Paiji Yoo: There are a lot of people in our target demographic who are just Amazon people.
Hollender: Have you tested letting people on your site check out with Amazon? That way they don't have to enter their information, and it makes the process quicker.
Paiji Yoo: That's a great idea, because so much of our traffic is on mobile.
I also want to talk about my own role and how that should be evolving. I enjoy being in the weeds and hands-on with everything. But we are at about the same team size while our business has very quickly tripled. I have a toddler at home, and we don't have child care because of Covid. And I'm pregnant.
Hollender: You have to consider where you add the most value. I took my schedule for a week and rated how I was spending my time. Is it adding a lot of value? Is it adding medium value? Or little value? I found that maybe 20 percent of my time was in the high-value category. That's why I was working 12 or 14 hours a day. That is not sustainable or healthy, especially in your current environment.
Paiji Yoo: That sounds like a helpful exercise. Being a founder, there are some things only I can do, like press interviews. But I should look at those through the same lens of, am I adding value versus am I doing this because I am the only person who can do this?
Hollender: Also, if you are looking over people's shoulders, they are not going to learn and make mistakes and grow.
Paiji Yoo: As you were scaling Seventh Generation, did you face challenges in maintaining sustainability standards?
Hollender: You are always going to make sacrifices. I never found any product that was perfect. One thing Seventh Generation was known for was its transparency and willingness to be self-critical, which is one of the best ways to build trust. Consumers know products aren't perfect.
Paiji Yoo: I have such respect for how Seventh Generation and Patagonia come right out and say this is what it is and these are some shortcomings but we are trying our best.
Hollender: Good. How are you doing with your board?
Paiji Yoo: We just have our lead investor, so it's pretty limited in its dimensionality.
Hollender: That would be a good place to broaden. It would be great to have a leading green chemist or--this might sound crazy--even someone from Greenpeace who was active in the campaign to fight single-use plastics.
Paiji Yoo: This is something we need to do. We are already a year in, and the business is getting to a pretty decent scale. We need to stop acting like a small company.
Hollender: I also think the mission and purpose need to expand beyond single-use plastics. There are too many people getting into that space. Sooner rather than later, you need a bigger purpose. It could evolve into how do you lighten your footprint on the planet? Being less bad is not good enough.