Well Made

Stuart Landesberg, Grove Collaborative: Prioritizing the Long Term – Well Made E104

January 1, 2020 · RSS · Apple Podcasts

It's not easy to get consumers to switch from the household brands they grew up using to more sustainable options, but Grove Collaborative has curated a collection to simplify the switch. 

To make Grove Collaborative a 100-year company, CEO and Co-founder, Stuart Landesberg, only looks far enough ahead to see the next milestone. He doesn't let perfection get in the way of progress. On this episode, Stuart talks to Stephan about how Grove made incremental progress to get where they are and how they plan to get where they're going.

“Folks need to know that their immediate needs are taken care of to be able to think long term. ”

 Stuart Landesberg, Grove Collaborative: Prioritizing the Long Term – Well Made E104
 Stuart Landesberg, Grove Collaborative: Prioritizing the Long Term – Well Made E104

In this episode, Stuart talks about why he always wanted to run Seventh Generation and how he looked up to Jeffrey Hollender (1:47). He shares how his past experience as an investor guided decisions that he makes for Grove (7:13). Stuart talks about the responsibility of being a B Corp (12:28) and Grove's priorities when choosing what companies to work with (15:28). He shares advice for companies having a hard time prioritizing sustainability (25:10) and outlines how to work with your team to make strategic decisions — even when you know that those decisions aren't 100% perfect. 

Stuart talks about backlash they received over their bamboo paper products and why he still feels like it was the right move (29:47). He shares what it means to him to be a 100-year company (35.18) and how capitalism can be a force for good (44:05). Full transcript below. 

Also mentioned on this episode: 

Stephan Ango: You're listening to Well Made, a podcast from Lumi about the people and ideas behind your favorite online brands. I'm your host Stephan Ango. Stu Landsberg, welcome to the show.

Stuart Landsberg: So, glad to be here. Thanks so much for having me.

Stephan: You are the founder of Grove Collaborative. How do you describe Grove these days?

Stuart: I described Grove a little bit differently every time, but Grove is a company whose mission is to help every family create a home that reflects the best of themselves. And the way we do that is through a commerce platform for natural home and personal care products that makes it really easy for every family to find products that are safer for their family and better for the environment. We curate the best third-party national brands and also have a portfolio of brands that we own and have developed ourselves. The business is split about 50/50 between third-party brands and brands we own ourselves and go to market directly to consumer, all all through e-commerce. And that allows us to do some things that are really unique in our space. And I think consumer friendly and also progressive from a sustainability perspective.

Stephan: I have to give a big up’s to Mika Hollander who's been on the show. She's the founder of Sustain. Her brother Jeff who is the founder of Seventh Generation, was also on the show in the past, 30 or so episodes you recently acquired Mika's company Sustain. First of all, how do you know Mika? Can you remember when you met her and what led up to you ending up acquiring her company?

Stuart: Yeah, well she didn't really stand out there. All these people who started condom companies with their dad and so it was quite-

Stephan: That's true.

Stuart: It's a funny story. So, I have always cared a lot about this category, but when I was a kid, my dream job was to be the CEO of Seventh Generation. I swear to God. That's true. I was like eight years old and I thought Seven Generation was the biggest company in the world and there's an eight year old, you're like, okay, well there's one skew from Coca Cola in your fridge and like one skew from Ford in your driveway and there's like 20 products from Seventh Generation. So that must be the biggest company in the world. And I was a very precocious eight year old. When I first got to meet Jeffrey, Mika's dad, the founder of Seventh Generation- Some people will get excited when they meet rock stars. I was like excited to meet Jeffrey and got to know Mika because-

Stephan: He is kind of a rock star.

Stuart: Totally rockstar. Inspired protagonist. Big fan of Jeffrey's. But when I first met Mika and she was just getting started with Sustain, we were just getting started with Grove. I have always had a connection to her as a conscientious entrepreneur and someone who wants to change the world for the better and have always had a lot of respect for both what she does and the way that she has built the Sustain company, not just the sustain brand, prioritizing. Not just what's going to sell, but what's going to be best for consumer and best for the environment every step of the way. Mika and I had known each other for gosh, half a decade before we ever talked about acquiring Sustain.

Stephan: I have two very different branching topics here. One is I want to take a detour quickly on what was your upbringing and your parents that led you all to have so many Seventh Generation products in the garage and in the home.

Stuart: Fair question. I think my parents were a little bit ahead of their time in terms of thinking about sustainability. I thought it was normal that paper towels were brown because back in the eighties and nineties, all recycled paper towels were brown and unbleached. And that every family had a compost bin in the backyard with several families of rats that would run around and you're like, go play near the compost bin. I thought that was just normal. And one of the things that caused me to start Grove actually is as I left the nest and went out into the cold real world, I saw that a lot of people were making decisions that were less in line with the conscientious values that I believe really everyone does hold. And certainly for me, I grew up in this atmosphere where I thought of myself as a good person, someone who cared about the environment, etcetera. And the products around me sort of reflected that. And then when I was working after college and sort of bought the products that were convenient, found myself having this terrible cognitive dissonance every time I washed my hands, did the dishes, did the laundry because the products that I was using didn't match the ones that were a part of my identity.

Stephan: Where was it that you grew up?

Stuart: I grew up in Northern Westchester County in New York.

Stephan: Gotcha. And what led your parents to be more ahead of their time in that sense?

Stuart: I should really ask them why they were so focused on it. I think they just grew up in the like seventies and sixties and were sort of coming of age at a time when it was cool to act on your beliefs. And you know, Seventh Generation was a catalog business in the early days and attracted a little bit more of that free thinking type I believe. I guess they got caught in it and kept using it and I'm grateful that it did, obviously.

Stephan: I'm fascinated by the transition from there to kind of your first career was mostly on the investment side before you started Grove. If I understand things correctly. How did that happen?

Stuart: So, I went to college and tried hard, got good grades, and didn't really know what I wanted to do after college. And so I did the thing that other people who I knew who had good grades did, which is, went and got myself a finance job and that was okay. I learned an incredible amount. Got to meet some really wonderful, brilliant people. Moved out to California to work with an investment firm called TPG, which I think was one of the earliest private equity firms to have a big focus on sustainability. But ultimately found that I wanted to have more impact than I thought I could have just by working in investing. As a naive and hubris full 26 year old, or maybe I was 27, I was like, all right, how hard could it be to start a consumer internet business? And so Grove was born.

Stephan: And that was 2012?

Stuart: 2012, yeah.

Stephan: We're just skipping all over the place. But just a couple months ago it was announced that you've raised a series D of $150 million that puts the company over $1 billion in valuation. Over the course of the past seven years or whatever it's been since you started it. That's a pretty impressive kind of rise. It's a really impressive one given that you're a B Corp. We can go into all of that, but I guess one of the questions that comes to mind is: Was your experience as an investor useful in starting Grove or how did those two things come together?

Stuart: It's a great question. For me, the experience, not just as an investor but in business helped me understand the business models that succeed in the business models that fail. And I got the privilege of meeting a lot of really wonderful, successful entrepreneurs and successful executives before ever starting Grove. And so I had a little bit of context for, okay, if you want to scale a commerce business, let's think about working capital up front because that's going to be really important for cashflow. Let's think about how we build a business that has real durable advantages and a competitive moat relative to its competitors. How do I make sure that we're playing in a category that has tailwinds for a long term growth perspective and not headwinds? And there's a bunch of other fairly simple but actually incredibly critical elements of basic business strategy that I got really a crash course in over the first few years of my career. And I think those are the foundational pieces for me of building the growth business. That said there are other pieces where I had literally no background like product management, engineering design, brand marketing, product development. And so just to name a few. Over the last however many years have been really fortunate to bring in an amazing group of people to help me guide the company who have expertise that I don't have. And so I don't think it's necessary to have a business background by any stretch, just to be really good at something and make sure that you use that to design the company super deliberately from the very beginning.

Stephan: What stage were you involved in investing at TPG?

Stuart: TPG is a big firm they've owned everything from Burger King to Continental Airlines. I primarily worked on what they called growth-stage. So, 50 to call it, $200 million equity checks. 50 to half a billion dollars in revenue, usually growing fairly quickly, but not always.

Stephan: And were you an analyst there or what was your role exactly?

Stuart: My title was associate, but basically I was the junior person on all the teams and would build as close relationship with management as I could to help guide our analysis of the business. And then I had the privilege of building the model, putting together the materials, writing the investment memos, all that stuff. With guidance from the senior people in the team. And I will say there's a quote that I like about planning and how the plan itself may not be that valuable, but the planning process is really valuable. And I would say the same is true of any investment committee memos, right? The memo itself is not that valuable, but the act of writing down a thorough analysis of a company really does teach you or certainly taught me a lot about how that company worked. And so doing that dozens of times over several years was a really great way to build fluency and become really numerous in terms of understanding how a business narrative and a team combined to create a business outcome.

Stephan: It's a really interesting perspective that you were exposed at that early age to what it takes to have the right kind of metrics and profile of a company that's going to receive 50 to $200 million. Or was there anything about that in terms of building, grow from the beginning where you were thinking: At some point I want to be able to raise that much money or grow the company to that scale and so I'm going to need to hit certain things about our revenue or the predictability of the business that influenced your decisions?

Stuart: It's a great question. I tend to think about milestones and you never in my experience really need to see too far beyond the next milestone. Right? And so as long as you can hit the next milestone and to do so in a way that doesn't totally destroy the company, you'll be able to get from A to B and B to C and C to D. You don't necessarily need to be thinking about D when you're at A. You'll probably learn a lot, at least in my experience. learned a lot between A and B and so maybe C is in a slightly different place than I expected when I started. And so, we really do have run the business over the last however many years thinking about, okay, what's the next milestone that we need to hit to go from our current stage to the next stage? Is that a revenue number? Is it a profitability number, is it market share for our own brands number? Is it a sustainability initiative? Whatever it is, how do I get us from where we are today to the next phase? And then once we're in that next phase, can think about how do I get from that phase to even one level up.

Stephan: Yeah, that makes sense. So one thing I was alluding to was the fact that you're a B-Corp. We've had several B-Corp's on the show before, I don't think any of them have reached such a scale. And I'm curious if at any point that was a challenge for you or, or something that raised questions among investors or anything like that? Yeah, it's not something that we've thought of ever as a challenge. And a lot of ways I think of it as an advantage. You know, I think that companies that have clear missions and clear north stars really do perform better. And so I think being a B-Corp and being a mission oriented business is something that's really honestly been a big advantage for Grove over the last however many years. And I think, certainly there are some investors who look at it and aren't super familiar with the idea of purpose and serve in business or conscientious businesses. But I think the most proactive investors or most progressive investors, the type of people that I want to have on our cap table and that I want to be our partners, those folks really, they understand like they understand 100% the value of having a business that walks the walk on more than just money being the goal. And I think having a culture that really has a north star that's not just financial has huge benefits in terms of attracting the right type of people. People who care about what you're doing, not just in it for the almighty dollar and creating a culture that celebrates things that matter to the user, not celebrating, excuse me, remuneration for the team. And so I think, the B-Corp is one way to signal that. But in general I think that this is an optimistic perspective, but I certainly believe that many of the best businesses that get built over the next 20 to 50 years will be ones that have a foundation of conscientious principles. And that will give businesses like ours a real leg up in attracting the best young in particular talent of folks who want to do something. You know, want to change the world a little bit in a way that's really, really cool. When it comes to your sustainability initiatives. And we can talk about the range of them. I've noticed that there's a very multifaceted approach. You've got on the paper product line that is all around using materials like sugarcane and bamboo to replace paper in toilet paper and paper towels and you're planting trees on that side. You acquired Sustain, which has its own strategy around the kind of materials. There are other product lines where you're approaching it more from how do we reduce the amount of water that's in these detergents and soaps. And there's a bunch of other things you can probably explain better than I can, but those are some of the things that I've noticed. I'm curious, when you go about entering these new CPG categories, how much do you have your priorities at the company level versus at the product or department level in terms of what you're going to try and do sustainability wise?

Stuart: So the company has a pretty clear vision statement that guides all of this, which is that consumer products will be a positive force for human and environmental health. It's deliberately positive force, not just less negative force. And so that pulls us on a category by category basis to think two ways. First, how do we reduce the impact that we're having? And then second, how do we ideally give back to whatever ecosystem has been impacted by that product over time. And so Seedling, which is a brand of tree free paper that we launched in 2018 is a great example. It starts with the feedstock, which is mostly bamboo, which is a grass that grows five times as quickly as traditional soft, excuse me, 30 times as quickly as traditional softwood trees and sequesters five times as much carbon, so much, much more environmentally sustainable feedstock for paper. And then say, okay, well the paper industry cuts down something like 94,000 trees a day just based on US paper consumption. Let's do our part to replant trees in the US in an ecosystem that's really been devastated in many ways by the single use epidemic of which household paper is a big part. And so that's an example of a category where we've tried to not just be less bad but actually be more good as well. And so, as we move from category to category across the portfolio, we really do try to think about, okay, if this is a category where shipping water is a big part of the impact that we late in the product take some of the water out and how do we find less plastic packaging? A lot of these categories are also ready to do stuff that gets washed down the drain. So how do we make sure it's a plant based formula that's biodegradable and not something that's petroleum based and we're going to end up finding it in our water in six months. So you know, there's a lot of different considerations from one product line to the next. But importantly they're all really unified by that company vision statement around every category being a positive force for human and environmental health.

Stephan: How deep are you trying to go in terms of life cycle analysis and all that kind of stuff before you put a product out there? Or are you okay with a incremental improvement and then we can keep iterating on that once it's in market and we prove that there's demand?

Stuart: I think it always ends up being a balance. And one of my favorite things about the company is the bigger we get, the better we are at serving our mission, right? The more innovative we can be in sustainability because we have more resources. I am not one to let perfection stand in the way of progress. And so I believe that this problem will get solved through incremental innovations 20 times over 20 years. And it's a natural human tendency to overestimate what can be done in a year, but to really underestimate what can be done in 10 years. And I think of the problems of these categories are 10 to 20 year problems. It's taken a hundred years to create them and will take probably a decade to unwind them. But I think we're making really good progress so far.

Stephan: Well this was something, and I don't know if I totally agree with him, but Jeffrey from Seventh Generation when he was on the show, I guess it was episode 88 I just pulled it up, was saying kind of the opposite. I think that I felt a certain amount of pain coming from him when he was describing this, but that he really felt that one of the areas he felt he didn't push far enough with Seventh Generation was on innovation. That a lot of the products they sold were in many cases like a major improvement over what existed in the market but wasn't fundamentally rethinking the entire concept of what that product needed to be or whether that product even needed to exist in the first place. I think maybe I tend to side with you a little bit more being more pragmatic, but I think you need that kind of a balance of those two things.

Stuart: Just cause you're rethinking something doesn't mean you get it right the first time. I think there's this false halo around innovation that just because something is really different means it's better. There are plenty of examples of innovation that we're not actually better, right? One of the reasons I believe so much in progress and one foot in front of the other is I couldn't tell you exactly the roadmap to get to zero waste in our category from here. I know a couple of steps on the journey I think, but I'm not a believer in sort of the like one genius theory. I think it's a good decision over time and I do think that one of the big challenges that Seventh Generation had no longer exists today and that they don't control their own distribution, right? And so they could come up with something totally different and a big retailer could say this doesn't fit in our planogram, see ya.

Stephan: That's a great point.

Stuart: For us because we go directly to the consumer. We can do stuff like roll out our hard surface cleaners in one ounce concentrate instead of 24 ounce bottles. We can do a reusable glass laundry dispenser with concentrated laundry detergent. And a bunch of these innovations that are totally foreign to brick and mortar retail but are better for the consumer, higher quality product, lower cost, lighter environmental footprint. We can just sort of do it without sort of any intermediary. And so I do think the ability to innovate directly to the consumer is an advantage that we have that Jeffrey didn't have in his day.

Stephan: But I think your point about not getting in your own way is so essential. With Lumi we have kind of a meta-level perspective because tens of millions of units of packaging are being produced through the platform. And so I feel a great sense of responsibility. I'm back here like making the technology for all of these companies that are procuring the packaging. And I just feel a tremendous sense of responsibility to try and make good defaults, push people slightly in a better direction if we can. I've made the joke before that we're sometimes like a methadone clinic. Like, we're trying to get people off of unsustainable patterns in a way that is palatable to the approach. It's not a holier than now kind of approach. You kind of have to get your hands dirty and accept that you're going to make some things that probably if we fast forward 10, 20 years in the future we're all gonna agree is crazy and should not exist. And that part is, I think, challenging, especially when you're part of a mission driven company cause people need to remember the long term mission.

Stuart: It's so hard, right? Because if you're a good mission driven business, you have people there who really passionately care and it's really hard not always being able to do the perfect thing. I mean, it kills me not being zero waste today, but I believe we've taken a lot of steps in the right direction and we'll get there. And so it's just one of the many reasons why doing things like certifying as a B-Corp every year is important. How do you communicate clearly the long term goal when executing to perfection is not possible.

Stephan: Yeah. One thing that, and I would love to get your take on this: One thing that we find so often, even with companies that are making an effort or have as part of their mission or their charter, a sustainability goal, is that they really have analysis paralysis when it comes to making choices, whether it's around packaging or their core products. One of the things that we put out six months or so ago was this glossary of sustainability properties and they're things that we've been talking about and renewable materials and certified wood for example, like FSC volume reduction, biodegradability like all of these concepts, trying to define them clearly and help companies use that as a guide for what are they gonna prioritize. Because a lot of these things are intended with each other. Like you can get to a much lower volume, let's say in shipping, but you might not be able to do that in a renewable container yet, right? And so you kind of have to stack rank some of these things and decide which one are we going to prioritize? Which one is the one that has the biggest impact, which one feels right to the product and to the brand. And being able to make those priorities seems really, really important, especially for you in the product developments phases of coming up with something. And I wonder how you do that or what you would advise to companies that are really having a hard time prioritizing those different ways to be more sustainable.

Stuart: It's a really hard tension, right? There's probably no perfect answer, I'll tell you that the companies who are really pulling on the rope in the right direction, the number one thing that we have to do is get adoption. And so when faced with a choice, obviously analysis paralysis is the worst thing, right? Making a choice and being decisive, really important. I think making a choice that drives consumer adoption is often the right one. And the reason I think that, and this is sort of how Grove is oriented also, is you don't get a lot of converts when you preach to the choir. And so Grove, one of my, the statistics of which I am most proud is that 50% of our consumers are completely new to the category, never tried any products, natural products in our category before. So I think if we are all attempting to make our various industries more sustainable in a country where a lot of people don't necessarily see sustainability as today a part of their decision making framework, how do we get those folks into the fold and realize that everyone can and should be a conscientious consumer? And you know, when I tell people that I work at a company that sells sustainable products on the internet, folks assume that our consumer base is New York, Boston, LA, Chicago, San Francisco, DC. But in practice we do just as well in Kansas as we do in California, our three best zip codes are in Utah, Texas. We have found that, to get back to the question, right, if we have to make a choice never compromise integrity but also don't forget to prioritize adoption because it really does count to making sure that the mission starts to matter on a real scale, not just a micro scale.

Stephan: Yeah, I think that's a really good lens. What is going to move the needle from the customer point of view? I think that the other one that I would love to get your take on is how do you organize your team to make those decisions and be able to keep moving quickly? Is there something that you're giving as a mandate to the different people who are trying to do the product development or however the marketing around. How do we describe this thing that we've done that helps them continue moving quickly in the right direction as opposed to getting that analysis paralysis?

Stuart: Yeah. This is a great question in general, not just for sustainability oriented companies. I think the bottom line is twofold. The first is having people on your team that you really actually trust and want to trust. The partners that I have at Grove are exceptional and because of that almost any decision, I would rather have the team running that part of the business, make the call instead of me. And I think that culturally has really permeated our organization in a lot of ways and allowed for a real level of autonomous decision making across the organization. So many parts of business start with people. Most important thing without question and decisive planning and decision making really starts with having a team that is high trust with each other and of themselves. That's the first piece. The second piece is clarity of mission and strategy and no matter what we do and how big we get, I find that the return on my time when I'm investing in clarifying our strategy is always that it's always worth it. People in my experience genuinely want to do great work and genuinely want to do work that's aligned to the company's goals. But the company's goals can be really complicated and so the better job that I can do, or I think an organization's leader can do, communicating out exactly what the company's goals are and not just financial goals, right? Here are the initiatives we're working on, here's why we're working on them. Here's how those initiatives line up with our value system and our mission. I think getting that message out clearly to the organization just leads to super high quality work from across the org. But it takes real time to do that in a high quality way. And I don't want to act like I've mastered it, but I definitely can see the company benefit when the leadership team does a better job communicating out clearly exactly what the company's goals are and why.

Stephan: Have you ever had a situation where there is backlash from the choir about something that you pitched at they're sold at their, marketed that people were like, that's not good enough. Or you know, the "well actually" crowd that will come out.

Stuart: Oh my gosh, we get backlash all the time. Right? There's a constituency for just about everything out there. A great example is the Seedling tree free stuff. We get a lot of static from people in the, in the logging community. We're explicitly talking about how logging has negative environmental repercussions and folks in that community obviously don't respond well to that. And I will say there are a wide range of logging practices from more sustainable to less. But you know, we have our strong point of view that tree free is better than trees made from effectively virgin softwoods. And so yeah, we hear it from those folks. And then at the same time we had our seedling paper wrapped in a very thin plastic and a lot of folks really came at us for having a product that had any plastic at all, even though the impact was materially better than every other product on the market. It wasn't enough for a lot of our consumers. And so we are evolving and will be moving towards a plastic free new version of seedling in the coming years because of feedback from our audience. But I will say the product has been overall extremely successful. So I'm glad we did it even though, yeah, we took it on both sides. We took it from the sustainability people for having bath tissue wrapped in plastic and we took it from the logging community because we were talking about the environmental impact of virgin paper product, but still worth it.

Stephan: Yeah. Well I think there's, there's definitely always a certain contingent and I think it's, in this case, really important to listen to the customer and what they're saying. There's a certain proportion of your customers who are living in the future, they're living in a time where we're beyond where we are today. And so they have much higher expectations in a certain way they're guiding your product development. That's great. But you still have to be able to navigate the conversation with them in the present. And I'm curious how you do that.

Stuart: Yeah. And I think living in the future's a nice way to put it. You know, one of my favorite business lessons is that imperfection is inevitable and the more I learned to just accept imperfection, the better I seem to get at my job and the more I seem to enjoy it. And so I think using our community and the feedback that they give us as a north star for what we do from a product development perspective and really from a company perspective is always super valuable. But at the same time, I think it's totally okay to be sanguine about the fact that we're going to launch an initiative and it's going to be just okay. Sometimes it'll be awesome, but sometimes there are fires burning at the office and we can only control what we can control and we have to prioritize and understand that we can't put every single fire out every single day. Just the most important ones.

Stephan: The notion of not going out there and just saying this is the greatest thing since sliced bread is also one way to sort of maybe make something that is objectively better without kind of enraging the people who are living in the future, let's say.

Stuart: Yeah, and I don't think those folks are enraged, right? I think they genuinely just want us to be better.

Stephan: Yeah. They're pushing you more so than. And I think companies that have higher standards also have much higher expectations from their customer and that can be a challenge.

Stuart: Exactly. It's a lot about what kind of brand you create to your consumer, right? If the brand message is we are awesome, we are perfect, gosh, you know, your consumer is going to expect you to really be perfect. If the brand message is one of not judgment, we're all doing our best. We want to be really inclusive. People are going to be a lot more warm in the way they respond. And the company's mission statement has to do with creating homes that reflect the best of ourselves. It's not, create homes that are perfect, right? What does that even would that even mean? But it's really about every person knows what the best of him or herself means. I should say himself or herself or themselves. Every individual knows what that best version of themselves means. I think having a more earnest and nonjudgmental tone and genuinely trying to get better means that our community is more understanding than they otherwise would be. And I'm really grateful for it. A mentor said to me when I was first starting Grove was that if you run a conscientious business, you will attract conscientious partners and conscientious customers, which will always make it better when things are both going well and when things are going badly. And I have really found that to be true.

Stephan: I've seen you say that you're trying to Grove to be a hundred year company. I have a lot of thoughts and questions about that, but what does that mean to you?

Stuart: It means to me that we have an obligation to think long term. An obligation and an opportunity to think long term. I think a lot of the problems in society are caused by short term thinking from issues in the way environmental policy gets done, to the way that companies prioritize things that matter today at the expense of the long term. And I think if we position ourselves a hundred years, obviously kind of an arbitrary number, but it's beyond our lifetime, right? Like I'm not going to be here in a hundred years. It's like it's about what kind of legacy my company leaves, right? What do we want this company to stand for a hundred years from now and do we stand for having prioritized profit over consumer and environmental health? God, I hope not. Right? I hope that we're a company that says, look, we understand the writing on the wall and we're willing to do the hard work to align consumer and environment in a way that hasn't happened and health honestly in our category in a way that hasn't happened. It might be really hard and maybe the efforts to do that won't hit the P&L this year or next year, but that we believe that's where the industry has to go. And so we're gonna work on that even at the expense of short term profit.

Stephan: Yeah. And I think I've been advocating for this. I don't know why I feel like I get a snicker every time I talk about things on that timescale. To me it seems very obvious that we should be thinking that way, that a lot of the most important goals that we have as a society take multiple generations to accomplish. And at the same time, when I'm at the office, half the time, I'm the guy who is like, how can we ship this faster? It's a difficult dichotomy for people to understand. It seems, but I think something needs to change at least in western society about how we think about time I guess and how we think about the impacts that we will have. We're in a very political time period right now, but I think a lot of the conversation that is happening under the surface is a conversation about short term versus long term thinking. But it's not really addressed in that way. And it seems especially for anyone who's below the age of 40 should be trying to think about that or people who have kids and grandkids should be thinking about that.

Stuart: I think everybody should be trying to think about it. And, and I will say, I don't think that urgency and long term thinking are mutually exclusive. There's a great quote I love, which is never put off to tomorrow that which can be done today. Yeah. And like if you can ship that product today, like ship it. Totally an advocate for ship today, but I think that the challenge to a certain extent, and this is well beyond the area where I'm qualified to speak, is often that folks need to know that their immediate needs are taken care of to be able to think long term.

Stephan: That's a great point.

Stuart: And that's one of the reasons why I talk about as a privilege. We've only recently started talking about building a hundred year company for a little while. It was like, Oh my God, we just got to live another day. It took us four years to raise our series A. I'll tell you, two and a half years in, we were running out of money and I was lending the company money to cover payroll. I wasn't talking about building a hundred year company. I was like, we got to get to that next milestone kind of now. But at this point, the business is big enough and stable enough where we get to choose what kind of company we're going to be. Whether we grow 30%, 50%, 80%, 100% next year, all of those are great. And it's just a question of, okay, well we have a lot of different opportunities in front of us. Let's pick a path that doesn't optimize for outcome in two years. Let's pick a path that optimizes for outcome in a hundred years. And that's a really privileged way to be able to think. I'd say it's privileged because I spent the better part of the last seven years, seven and a half years working on this company and for 80% of the company's life cycle. We couldn't think longterm like that. But now that we can, I do think it'll be an advantage.

Stephan: And I think that that is true for companies and for people. I mean, there's a Maslow's hierarchy that is the Maslow's hierarchy for companies, I'm guessing.

Stuart: Exactly.

Stephan: I appreciate that. A lot of people in America are in the lower brackets of Maslow's hierarchy. And so they're trying to solve a problem that's much more fundamental.

Stuart: Yeah, said explicitly, right. If you don't know how to pay for food for your kids tomorrow, it's totally unreasonable to expect that person to be thinking about their single use plastic consumption. Gotta put food on the table and that obviously goes to a lot of deeper societal issues, which are outside of the scope of what a consumer product CEO should venture to talk about. You really hit it that it is a privilege to be able to think more than just either for yourself or your company's survival and another 48 hours.

Stephan: One area that some people could be skeptical about is the fact that you've taken a significant amount of funding into the company is going to to some extent require some big returns. And whether you sell the company or go public or something, if you are able to give liquidity to your investors, it's probably going to be in a context that doesn't necessarily prioritize the long term. What would be your answer to that?

Stuart: I would say two things. The first is that I believe in capitalism as a force for good. I think that business can be one of the most powerful change agents in the world and it has to be. Businesses is one of the foundational organizing principles of the world today. And so it has to be a positive force to help solve the problems that exist today. It's not an option of well is it or is it not? It just has to be. Businesses need capital to expand and that's never going to not be true. I think it's about what kind of capital the best businesses want to bring in. And we've been deliberate from the beginning about bringing in folks who support the right kind of growth and building the right kind of company and who understand the importance of mission alignment. Not just today but tomorrow and over the very long term. And I think as an independent company, be it public or private, we obviously have a huge ability to have impact. Even just the company is the reason why I get to talk to you and your incredible audience gets to listen. Thank you all and hopefully think, gosh, maybe conscientious sort of business decision making is not incompatible with massive business success. Maybe it actually helps that in a way that's really cool and I would say when it comes to liquidity, right? Like I said, as an independent company, public or private, you can have a big impact, but I think that the smartest business minds around the world are all waking up to the fact that the consumer is starting to care a lot about the kinds of companies that he or she or they buy from. And I think a small business like ours, if we were to join forces with the larger one, which is not something that's in the works anytime soon, would have a lot to offer that larger company in terms of how to become as sustainability minded as possible because I think the consumer is going there. If people are focused on plastic waste today, there'll be double or triple as focused on it in three or four years. And I think we are just in the beginning of a long term trend towards consumers caring a lot more about who the companies they buy from are.

Stephan: Let's say that happens, flash forward however many years, maybe 20 years, maybe 50 years. If that happens, what does capital capitalism look like in the future? You're doing a lot of things that you think should be the norm. So if they were the norm, what would that be like?

Stuart: I think we're moving there today, right? There's a lot of different ways that it's happening. You can see consumers putting money in ESG funds. I mean a lot of this stuff comes from us, right? The consumer economy is the largest part of the economy, but consumer and business decision makers just have the ability to change the C on this one. And I think if you're a consumer and you have the opportunity to buy from a B Corp buy from a B Corp, if you're a consumer and you have the opportunity to do research on the companies you're considering buying from this holiday season, right? You have the opportunity to buy product from different companies. In a way that wasn't possible 20 years ago. You can go to that company's about page, read what their mission is, see what they're doing from a sustainability perspective and make an informed decision and this is like, tip of the iceberg on this stuff and that's going to drive companies to care a lot more than they ever had. I mean if you look across many of the biggest businesses, we're going to be carbon neutral in 10 years or plastic free or whatever it is. They're actually investing in sustainability for the first time because their customers are pressuring them. If you're a small business owner or a larger business owner, right? You have a lot of power over your suppliers to tell them to have ethical business practices to stop using single use product. An easy thing we do and we get catered meals. We insist that we have zero single use products at all of our catering. Zero where zero single use office. Right? And so like that forces our catering partners to think differently about how they deal with companies that want zero single use in an industry that's created a lot of waste and super small impact. But across when more businesses start to do that, it'll change that industry. So I think the groundswell is happening, I believe in this. So I think it's not a fairy tale that consumer and business leaders will push businesses to be more conscientious over the next couple of decades in a way that's really powerful and that the businesses that can't evolve will die.

Stephan: Yeah. The rest of my questions go definitely along this line go definitely into the realm of things that we're probably not qualified to talk about but would be fun to discuss over a beer.

Stuart: Shoot if you want to, clearly I'm out over my skis here.

Stephan: Yeah, I think a lot of these things are, are really, really important. And I think that is what we're seeing at Lumi on a meta level from all of our brands that work with us. That's kind of the nature of what I was asking before because they're all saying to Lumi, "Hey, all of our customers are asking us about how sustainable our packaging is and we don't know". It puts a lot of responsibility on us, but it's a really fun problem to solve for. And I hope that if people ask that question more and more, it will create the right kind of discussion within the business itself that can actually make a change. I want to close the loop on the sustain acquisition and kind of what you're thinking with that. I also saw you acquired a company called Darby Smart and I'm actually quite familiar with them because in a previous life they were a retailer of a product that I made at my previous company. Nicole Farb who is the founder of Darby Smart is running a new business unit for you called Roven. I'm really fascinated to hear a little bit about your thesis around acquisition and what you're hoping for for Sustain and for Roven.

Stuart: So it's a great question and I think that M&A can be a really valuable part of the toolkit for a growing company because there are a lot of amazing businesses out there like Darvey Smart and Sustain that have different DNA than your company or our company had. And the addition of those two companies, not just sort of like the thing they did, but actually the way they did business has been really valuable to Grove. Those two business lines are different but similar in that each of them brings a different thing to the consumer than what we had offered before. Sustain obviously brings expertise in natural period care and sexual wellness, which is a category we did not have any expertise in. And Roven is an entry into the clean beauty space, which shares a lot of foundational dynamics with natural home and personal care, which is our sort of like core existing business but also has a lot of really different nuances. And so, the Darby Smart acquisition allowed us to again move into a category where without Nicole and that team's capabilities, we probably wouldn't have been able to do it in a high quality way as quickly. And so, I think we will continue to be active acquirers of really exceptional businesses that have strong teams or products that can be additive to what we bring to the consumer.

Stephan: Well it definitely helps to have cash in the bank to be able to do that. Is that one of the big reasons you raise money?

Stuart: It's one of the reasons I think that relying on acquisition is a dangerous thing. Relying on M&A is a dangerous thing because you don't control the destiny there. I can't control what's happening at a company that I may want to partner with. So it's definitely one of the reasons to raise capital, but for us we're not banking on being able to find and partner with the next Sustainer or Darvy Smart in order to see our goals. Those are two exceptional companies that we were really, really fortunate to welcome to the Grove family.

Stephan: Well, how do you think about the brands and how they all kind of relate as a family? Is it a portfolio ultimately in the long term, the way that the traditional CPG's operate or do you imagine which ones do you imagine folding into the Groove brand? How do you think about that?

Stuart: I think it's different than in the traditional CPG model because in the traditional CPG model, they're all sold on a third party brick and mortar store shelf. Right? And so because we own our own distribution, we can be a little bit more explicit about where we have conviction in the innovation story and why we're moving into a category like Roven and be just more direct with our consumer about where we are, the manufacturer and where other people are. That's really cool and really wonderful and another positive element of the direct consumer business model. We're able to bring more value to our customers in a way that's really direct. If we were a business that sold dish soap on shelf and we decided, gosh, we should really get into the dish towel business when that's sold in a totally different part of the store, potentially a different retailer even, how do you connect those two? But in practice, you kind of use the dish towel right after the dish soap and so we can be really explicit in adding more value to the consumers Grove experience because of the way that we go to market and the inherent interconnectedness of all the brands in the single distribution platform like on our website.

Stephan: Yeah, I'm really curious. I would love to get someone from Walmart on the podcast because they've been experimenting with a lot of strategies ever since they purchased Chat.com And have purchased a lot of direct to consumer businesses over the past few years, like Bonobos and a few others. I'm just so curious to know how well that's working in terms of having all of these different separate units operating independently is very different than the Amazon approach, which is just let's integrate everything into the main amazon.com experience and like the search bar on amazon.com has to be like the place where people find everything. But the strategies have very different implications and outcomes in terms of what does the customer experience look like. And I don't know if you have a take on that.

Stuart: I think different companies will have different approaches and so I can't speak to Amazon or Walmart. I will say for us being able to be clear about what a single brand stands for has a real benefit. So you know, just to use the ceiling example again, it's important that has its own brand because the equity there really is in tree free paper, which is a different story than our rooted beauty, natural personal care line, which is much more about the ingredients. And so being able to tell concrete stories in a distinct way is a useful way for the consumer to understand what the brand stand for quickly and a useful way for the company to invest in do different but very important consumer value propositions at the same time.

Stephan: Right. Do you consider yourself in competition with Amazon?

Stuart: Not really. I think that over the long term our goal is to change the consumer products industry. And so I think anyone who can be a partner to us in doing that, we think more about how do we partner with folks to change what the consumer products industry looks like as it transitions from offline to online. And so we are, the second word in our name is collaborative and I think we really do take that approach to the ecosystem because I think the level of change that's needed in our category and in society frankly means we're all going to have to work together.

Stephan: Well, I know that the Sustain condoms are sold on Amazon, so it's like would you consider selling more things, more Grove family products on Amazon or is it more that longterm you expect to remove them from there and kind of avoid them having visibility on how your business is doing?

Stuart: I think, look, we'll think about it and make decisions over time, but my bias is to see them as a partner because they obviously have a ton of audience. There are a ton of folks that we can reach and if someone has the choice between buying a sustained period care or sexual wellness product or a conventional one, I'd really always rather have them buying Sustain if that's from Grove or from Amazon.

Stephan: This has been so fascinating. I have so many more questions for you. I think that we'll have to do a part two at some point, but I want people to go check out Grove. I saw that you're hiring a bunch. What are the big areas that you're looking for at Grove these days and what makes a great Grove teammate?

Staurt: So, we're hiring across geographies and across roles. Grove.co/careers. I'm obviously biased but think it's a great place to work. The thing that makes someone successful at Grove is the combination of integrity, passion for the mission, kindness and I would say intellectual curiosity. The atmosphere is kind of like studying for a test with your friends. It's like it's important, but we all know it's not life or death and there's the sense that if we succeed, we all succeed together and you genuinely, at least I'll speak for myself, I genuinely just love the people that I work with and that makes a lot of fun. So if you're interested in joining a high growth company that wants to change the world, we're certainly looking for more great mission driven people.

Stephan: Awesome. Yeah. grove.co/careers. Anything else you want to point people to?

Stuart: I think that's it. I would say just in general, right? Like don't forget that every single decision matters. I think Grove is one of many companies doing things that move the world in a positive direction and nobody ever knows who's going to be the single deciding vote that changes the direction of an industry, et cetera. And so I would just say it's a lot of fun to work in a business where I have conviction that we're on the right side of the line there. And I'm so grateful for all of the amazing consumers out there who've given Grove a shot and who make good decisions with their purchasing habits every day.

Stephan: Well, thank you Stu. This has been so insightful and best of luck.

Stuart: My pleasure. Thank you so much for having me. Look forward to part two.

Stephan: Oh one last thing before we go. I'm talking to you at home. What's your favorite brand these days? Is there something that you think is really well made or maybe someone that you'd love for me to talk to? Send us a tweet. We are at Lumi, L U M I on Twitter. We're making this show for you, so tell us what you want to hear and we'll make it happen. Thanks. See you next time.

You can find this and all future episodes on iTunes, Google Play, and here on the Lumi blog. This episode was edited by Evan Goodchild.

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