This may seem odd, but one of my favorite new companies sells laundry detergent. As an entrepreneur (or investor) there’s a lot to be learned from the Company…
First a preface: I’m not a crazy tree-hugger, but I’m fortunate enough to live in a place where being green is relatively straight forward- central London. I don’t own a car (it’s impractical), I ride a bicycle and take public transportation, there are recycling containers in my apartment building, most of the lights in the house are eco lights, I shop locally and try to buy local, in season foods, when possible, etc. Most of this is a by-product of where I live vs some deep belief that cycling in the cold rain is better for mother earth than driving in a warm, dry car (traffic in London is a nightmare).
Back to the story – a few months ago I stumbled across a company called Splosh.com. They have introduced an environmentally friendly detergent brand. The concept is simple: you buy a few empty bottles, they sell you a few refills, you add water and presto magico: you have your cleaning product.
Why did this impress me so much? In a nutshell, it’s a very innovative solution to a problem the founding team felt strongly about, and they did an amazing job convincing me I should part with some of my money on their website. Here’s part of the story, straight from their site:
The logic of recycling is not consistent across different material types. For example, it makes a good sense to recycle aluminium cans, but the logic for recycling plastic homecare bottles is less clear.
Let’s see what happens to that plastic washing up liquid bottle you put out for recycling.
And finally these pellets are re-manufactured into another washing up liquid bottle? No.
Owing to ‘taint’ (the residue left from home and personal care products) only bottles containing drinks can be recycled into other bottles. So your washing up liquid bottle gets turned into something like a fleece or a road traffic cone. In other words it’s not recycled, it’s ‘down-cycled’. And when this new product comes to the end of its life? It can be down-cycled no further and ends up in landfill.
The sad fact is: every plastic home cleaning and laundry bottle ultimately goes to landfill – and that’s not something you would imagine happens from looking at that neat little recycling logo.
So when a bottle is made from recycled material, the material used is usually either ‘pre- consumer’ waste (in other words un-used bottles) or former drinks bottles. Milk bottles are often used as they provide a consistent source of material with little contamination. This means that a recycling logo on a home cleaning product bottle does not stop the manufacture of another home cleaning bottle the next time you buy the product. It’s an illogical system and we can do so much better.
After reading that, you’re kind of hooked. But then enter splosh’s killer reflill approach: they sell small refill sachets that can easily be shipped via regular mail. They cost <$5 per order. That’s less than you’d pay for the competing product on grocery store shelves, and you don’t have to lug it home (remember, I ride a bike). Plus, they’ve done this enough that you get a refill reminder email a few weeks before you run out….which is just plain smart. Re-ordering is a simple process that results in 2-3 clicks max. I’ve used up my intro pack and have placed a few refill orders already. I will be a long-time customer because the products deliver, I save money and it’s environmentally sound. Talk about win-win-win.
Building a D2C brand on the internet isn’t simple, and we can learn a lot from the company:
1) Focus on a real problem
2) Be PASSIONATE about what you do
3) Find a great business model – you may have to borrow from other industries (classic razor blade model at Splosh)
4) Storytelling is a power brand-builder
5) Offer an introductory special – anything to get the ball rolling. If you can charge for this, even better.
6) Use your data to provide a better customer experience
7) Go for green bonus points!
So, if you live in the UK, go grab some splosh. Or buy it for a friend as a bizarre birthday present. Mother Earth will smile on you (even if your friend thinks you’re odd).
Filed under: Entrepreneurship, Venture Capital