Eight Milestones in Eight Years in Business
The first of October 2020 was our eighth birthday! Eight years ago, today, I started Ethique in my tiny kitchen, in my tiny flat in Christchurch, New Zealand.
Ethique was a culmination of three passions; an obsession with animals and our environment, a love for science and thinking outside-the-box, and, believing that business creates faster, longer-lasting change than government ever will.Anyone who has ever started or run their own business knows how hard and lonely it can be. From the outside looking in, it can look exciting and like a long series of achievements. Really, it can feel like a never-ending series of challenges. So, few people look back and think about all the good things that have happened and instead concentrate on the daily grind, without taking a moment to be appreciative of the past. So, for this week’s blog post, I thought I would focus on eight of my favourite milestones in the last eight years.
1. Moving into the first factory
Ethique took over my house rapidly, and subsequently, one of my first team members’ too. There was shampoo on the ceiling, in the carpet, empty boxes in the hallway… it became untenable. But making the leap to a new premises and signing a lease was a big scary move for a company that was turning over very little in the scheme of things. Thankfully, I had just finished a business competition at University, which had paired me with a couple of mentors, one of whom stayed on to become one of my business partners. That relationship gave me the confidence to move ahead with moving into a factory.I spoke to a few landlords and was very honest about how the company was going, how we couldn’t sign to a long-term lease and what we needed. Two weeks later, I found a small, dark unit with a warehouse, commercial kitchen area and office. It doesn’t sound like much but in our eyes, it was perfect!We repainted it, planted a tiny garden and made it our own. Moving in was bliss.
Businesses need money to grow. There are lots of options when you are starting out; angel investors, banks, dodgy lenders, friends and family, and crowdfunding. All have pros and cons, but the one that caught my eye was equity crowdfunding. Slightly different to the crowdfunding you may be more familiar with where people are given ‘rewards’ for offering money, equity crowdfunding is like a mini share market where people buy pieces of the company.We did two equity crowdfunding raises, the first in 2015 and the second in 2017. We ran both through PledgeMe, aided by the wonderful team led by the amazing Anna Guenther and bought 350+ shareholders on board as supporters and cheerleaders. The money enabled us to invest in the branding you see today, expanding our manufacturing capabilities and expanding offshore.Without question, going out publicly for a crowdfunding raise is terrifying, but it was incredibly exciting and worth it. I still don’t think I will ever get a better email than “Congratulations! So-and-so has supported your campaign and bought 500 shares.”Talk about a vote of confidence.
3. Huffington Post
If you’ve ever heard me speak, you have almost certainly heard me talk about this.I was in Hawaii, at a conference and I met a Forbes reporter. She did a little interview on what it was like to be a woman in business. Now this made me very excited, because I thought it was going to set the world on fire. Forbes is a big deal and I figured that everyone would read it, retailers around the world would stock our products, we’d get heaps of orders and it would catapult Ethique into success.It turns out that on the first day, just four people read it.But about two weeks later, when I got over the disappointment and I was back in New Zealand, I had an email from a Huffington Post reporter. She said ‘I saw your story in Forbes, I really liked it, so I have written about you on our website’.”
The Huffington Post gets about 200 million unique visitors every month, in comparison, Forbes is under 100 million. And that is when the world set on fire (figuratively speaking).The team had hundreds and hundreds of emails, the phone wouldn’t stop ringing, we had people offering investment, Ethique had thousands of orders, 90% of which we had to cancel because we couldn’t fulfill (remember, we were still in our tiny kitchen and office still!). We drafted in friends and family, who saved us by spending their time answering the emails and the phone, wrapped bars and just kept the general morale up. Because while it was super exciting, it was also incredibly stressful and at least one person was in tears each day.A few days after the initial article, I woke up to a text from my Mum. It said, ‘Britney Spears has shared you on Facebook’. Now I’m not very friendly in the morning, so my response was probably something along the lines of ‘don’t be stupid, it’ll be fake’ or something.But she was dead right, Britney Spears had shared our website to over 30 million people on social media. It was definitely one of the best days of my life (at that point anyway). AND Ashton Kutcher followed suit about two days later, even making a video about us.So that was when the world began to pay attention. Not only that, but it reinforced to us that this idea had legs and that it wasn’t just a product for New Zealand, but one for the world.
4. First ‘proper’ hire – Tristan
I made our first big hire in late 2016. The hubbub from the Huffington Post article had begun to die down and we were all coming down from the high and facing the reality of what we needed to do to really scale. It quickly became apparent we needed some experience and muscle in the company. We were a young and energetic team of four at that point with a load of passion but lacking any real idea of how big business worked and more importantly, how manufacturing should run.
I knew of Tristan (Christchurch is a small place) and that he had deep breadth of experience in manufacturing and trading globally, but more importantly, he had started and sold several of his own enormously successful businesses. Tristan had retired to his farm a few years earlier and had spent the past two years bringing up his daughter with his wife at home, so I called him and asked if he would come out of retirement and help me with improvements in increasing our production beyond what we were doing at the time. He told me that he would give me 10 weeks. Four year later, he is still here as our Chief Operating Officer.
The reason this is one of my top milestones is that without question, Ethique wouldn’t be where it is without Tristan’s involvement which has gone far beyond helping us sort out manufacturing. He enabled our mass international distribution, taught me how a business should operate from how to hire people, how to read and review contracts, how to prepare meaningful financial projections and interpret financial data, secure substantial international investment (not just any investment but strategic investment) and the list goes on. Tristan has also taught me how to get out of tricky or combative situations and he even helped with my fear of flying. He has been right at my side as together we have taken Ethique through the start-up, stay-up phase, through to the other side of a truly global and highly profitable business.
People make a business and since then we have built an amazing team full of passionate, incredible people who work so hard to make Ethique successful. But this first hire was the scariest and definitely the most rewarding.
5. First international distribution agreement
So, we had the team, we had the demand from offshore, now how to get product there?
Our first international distribution deal was a big deal. It was not only the first time I had travelled to America, but the first time I’d entered into any real contract negotiations and had to think long term about all the things that could potentially go through when it comes to handing some control of your brand to someone else. Thankfully, now I had some trusty business muscle alongside me (Tristan) to light the way.
We had a few options to choose from (courtesy of the Huffington Post) and spent a couple of weeks travelling around getting to know them, understanding their business, their people and their values. This was followed by an agonising decision about who to finally choose and move forward with.
We are very lucky we entered into the partnership we did with a company called Pharmapacks in the US. They are now good friends of both Tristan and I, they have grown sales to almost $1m every month on Amazon alone and they have introduced us to some other wonderful people throughout the world who have advised us in other ways.
Our first ever distributor was a big decision, but such a good one.
6. Mass manufacture
Ah yes, I still remember the eighteen months of unpleasantness that was figuring out how to take manufacturing from 50 bars a day, to 50,000. Some of you out there may remember the frustration of finding us out of stock so often of your favourite bars.It took a long time, a lot of machinery, some very clever chemists and even cleverer engineers to build machinery, create processes and train teams to scale manufacture.
Solid shampoo is still relatively uncommon (and was much more so back in 2017) and there were just two main types; soap or syndet based extruded shampoo (which is easily scaled - like the milled soap you see in supermarkets), or pressed bars which are the ones you will see where the ‘noodles’ are visible. Our formulas suited neither method, we use something called melt casting. Yet our formulas were not up for debate and I was not changing them.
So that was a mega challenge, that took a lot of cooperation between our manufacturers and us and they rose magnificently to the challenge! Now we have capacity to make over 150,000 bars a day, so it was certainly worth the pain.
7. First big retail deal
In early 2019 we received an email from a company called Holland and Barrett who were interested in stocking our products. That was exciting, because Holland & Barrett have over 1,000 stores across more than ten countries, though predominantly in the UK.
We zipped across to the other side of the planet and sealed the deal in a one hour meeting with some wonderful likeminded people. (That is not how most meetings go!)
Five months later, we launched into their stores across the UK, Sweden, the Netherlands, Belgium and a sprinkling of other countries.Whilst it wasn’t our first retail launch, it was by far the largest and in one of the markets we had earmarked for future expansion. It was an enormous deal to land and then to sell out within 48 hours of hitting shelves really was the cherry on the top.
The team managed to pull that off, whilst launching into Target stores in the USA simultaneously.
8. Palm oil-free certification
We are one of the very, very few cosmetic companies in the world who are certified palm oil-free. I know of several who claim it, but are actually not (I will not name names). It is hard to be palm oil-free, because nearly everything is made of palm oil; emulsifiers (to make creams), surfactants (to make products foam) and much more. I never started the company with palm oil- free as an ideal, as I didn’t realise the problems that the production of palm oil was causing.
But in about 2016 we started phasing it out and by beginning of 2017 we were confident our supply chain was palm oil-free. Only problem was, we couldn’t find a certifier to prove it!
Last year we proudly received our palm oil-free certification from the Orangutan Alliance and whilst amongst our other certifications it might not see as exciting, it was probably the hardest to get and took the longest.