method: Adam Lowry & Eric Ryan (2018)

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and even more fact checking and then more editing, and then scoring the episode with original music? It takes a lot to produce a single Monday episode of how I built this, so this week We're taking a break and bringing you one of our very favorites from the archive. The story of Method Cleaning Products, a multi-million dollar company. That came to be

Because two old friends just happened to run into each other on a cross country flight. Hope you enjoy. I read it at one point, Eric, that to prove that this really was non toxic, you actually drank it. Yeah, so I was in London, you know, I love the British press, they're so skeptical. And she said, Is it you know safe enough to drink? I was like, sure.

So we both took a shot at the toilet bowl cleaner. Okay. And then I immediately uh text Adam finally got back to me and was like, Hey, just drank the toil bowl cleaner. I'm gonna be okay. Right. From NPR, it's how I built this.

A show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built. I'm Guy Roz, and on today's show, how two friends in their mid-20s mixed up some household ingredients to make soap and detergent. and then took on and eventually outmaneuvered. Some of the

Biggest companies in the world. If you were looking to start a business in the late 1990s, you probably didn't have to spend a lot of time convincing and family that it was a good time to go into tech. This was the height of the dot com bubble, and It seemed like the future was literally being written by companies like Google and Yahoo and eBay and Amazon. So it can be kind of hard to imagine why two twenty somethings, who lived in San Francisco in the 1990s, would survey this promising landscape and say, Do you know what the world really needs right now?

Soap. Soap that will do a good job cleaning your kitchen counter or your toilet. But that won't destroy the planet in the process. And that is exactly what Adam Lowry and Eric Ryan set out to sell in 2000, the very year the dot com bubble burst.

And the company they found in Method, with its sleek bottles and products smelling like cucumber or bamboo. It actually went on to compete with some of the biggest soap companies in the world. But Before they went into business together, Adam and Eric were actually childhood friends they met when they were kids, maybe 12 or 13 years old, because they were both super into sailing. And both of their families worked in the auto industry, which Adam says was

Pretty much what everyone did where they grew up. In Gross Point, Michigan. almost everyone that I can remember their families were involved and I think Eric your family Yeah, so my my great grandfather dropped out of pharmacy school and move to Detroit to work for Henry for five dollars a day. And then ultimately Henry Ford. Yeah. We have I I've some Ford stock that

was bought when Henry was still running the company by my my great grandfather. then my great grandfather and grandfather together started a machine in stamping. If you ever see like eight miles giant presses that come down, so they would make a lot of the parts that went on The automobiles. And so I kinda grew up in the shadows of my great grandfather and grandfather being these entrepreneurs who created something from nothing.

Adam and Eric both went off to college. This was in the ear 90s. Adam went to the West Coast, he studied chemical engineering at Stanford, and Eric went to the East Coast and studied business at the University of Rhode Island. Both of them were actually recruited by the university's sailing teams. They were serious sailors. And to be clear, in college, Adam and Eric didn't really keep in touch. They were the kind of friends who were happy to hang out and catch up. Just whenever they were back in Michigan. So after graduating, Adam stay in the Bay Area to work for the Carnegie Institute of Science. He was doing research on climate change. And Eric got a job in advertising.

And eventually, he made his way out to San Francisco as well. And shortly after that They both just happen to run into each other on a flight. I think it was Thanksgiving, if I'm not mistaken, one year maybe ninety seven, ninety eight. I walk on the plane, I see Eric and I didn't know that he was living in San Francisco. He'd o you'd only move there

A couple of weeks ago. Prior. Right. And so there was an open seat. I ended up sitting next to him on the plane. We for five hours got all caught up. It turned out we were living on the exact same block. Just out of pure

Coincidence and I was living in a flat with four other Guys from Stanford. And Eric was living by himself in a one bedroom. And so when one of those guys rotated out, we invited Eric to move into the apartment and then we were room in the live in San Francisco.

for a reasonably low amount of rent. I paid six hundred dollars a month in rent. Oh my god. This is nineteen ninety seven, ninety eight. Amazing. So you move into this group house. Doing what you do in your early twenties or whatever and And the house was just like a six guys and a

Presumably not super clean. It was exactly as clean as you would expect it to be. Got it. All right. And and I mean did either of you at that time In your minds. Were either of you thinking Business or were you just kind of

Grinding away doing your day to day jobs. I mean for me personally I I knew since the third grade I wanted to be an entrepreneur. I was the annoying neighborhood kid who was constantly selling buttons or anything else I could. So I just I always knew I wanted to start a company and I loved I fell in love with advertising and branding. But

I knew it's pretty uncommon as an entrepreneur your first company will be successful. a little bit of a safety net of a career, but I was constantly noodling on ideas. Um for me personally just coming up with the right one that would eventually take a leap for.

Adam? For me, you know, the journey to entrepreneurship was less predestined. My parents are both entrepreneurs, they started their business in nineteen eighty one. W what's their business? Uh it's an automotive sales rep business. representing parts suppliers in the automotive industry, but um when I was six, seven years old The mom's making Chili for the week for

myself and my older brother and my older sister and I watched them build the business and do it in a way that was much higher risk, um than the risk that Eric and I eventually were so young. We were young and we didn't have families, we didn't have mortgages, and any of that. So while Eric kinda always knew I th I'm going entrepreneur as as soon as I can. For me, I I'm motivated by Creating some sort of good change in the world. And I'm a big believer in that you don't need to figure out what you need to do with your life.

You just need to figure out what you want to do next. So what were you noticing in nineteen ninety nine that eventually would lead to Cleaning products. What was going on around you?

I was working on a project for Colgate, so I was spending a lot of time in the grocery store. And I just started looking at the cleaning aisle and saw that it was such a big category. But a C of sameness. Like everything looked and smelled the same. The brands were pretty dated. And so that was kind of the clue of

Dig here. But I mean you're 25. I get you're working on an ad campaign for Colgate, so that makes sense. You start to get some exposure to that industry, but like It could have been anything. I mean it could have been chewing gum. Like you could have what was it that That made you think, Wait a minute. Cleaning supplies.

Well we're really like I think with any idea you you start off from this absolute place of insecurity. Like when I mentioned this to my mom, she's like, I've never seen you make your bet. Are you sure you're the right person to start a cleaning products business? So I hid the products underneath my bed because I didn't it was pretty dorky. I didn't want anybody to know I was even thinking about this category. And Adam and I were both back in Michigan and we were driving up north early morning to go skiing and being close friends, I felt like Adam was somebody I could

Share an idea with you. Mm-hmm. I didn't even know there was skiing in Michigan, but keep going. Okay. Yeah. And I m mentioned that hey, I think there may be an opportunity in this space and I remember Adam looks over at me as he's driving and goes, You know I've a degree in chemical engineering I was like, that would be useful. Uh, and then we just it was sort of one thing leading to another that and I said, Well, you know, not only are these products really ugly, but did you know they're super toxic as well, right?

Yeah. And that was uh Kind of Where one idea gets added to another and it kinda goes from there. remember is we got there to go skiing and we went up the first chairlift. And

We did a couple of runs and we realized we were more excited to go work on this idea than we were to keep skiing. So so paint the picture for like cleaning supplies and products in ninety nine. Like if I'm going into Safeway in nineteen ninety nine, I'm gonna get four oh nine, I'm gonna get Um Right. you know, if your eyes weren't watering it it means it wasn't clean.

And it was it was a pretty toxic category, and to Adam's point, that was the thing that he brought that really opened my eyes. It's like You mean like you actually pollu when you clean and you use poison to make your home healthier? And at this point, Adam, and this is like the the winter of nineteen ninety nine, were you still working at the Carnegie Institute? I stepped down from Carnegie. I I did.

There is an important detail here. Um, I quit my job in September. And in October was the Olympic trials for the two thousand Olympics and you wanted and you wanted to go. Yeah, and uh and I had been training uh with the US sailing team. I was on the US sailing team for seven years. We did not win the Olympic trials. We got third in the Olympic trials. And so that Period of time for a couple of months there. I had just finished the Olympic trials. I was doing a bunch of interviews with product design firms and looking for a job. Engineering firms in the Bay Area. So so right

Then and there at that moment you both mean, it was a almost a perfect storm for you, Adam, because you were kind of in this transition phase, Eric, you were work still working at the ad agency. Which actually was giving you this incredible experience. It was like sort of opening your eyes to this

entire world that you hadn't been exposed to, right? Yeah, and really understanding like understanding consumerism this was really kind of driven by so you go back to nineteen ninety-nine, IKEA was just arriving in America. Home and garden television was just taking off. So it was a time where people were starting to think more about their homes as a reflection of themselves. And so the thought was well, what if we design these products so they were Like Pieces of decor.

And hey, if a spray cleaner was beautiful enough to leave on the counter versus hidden underneath the the sink, out of sight, out of mind. You might actually use it more. And I love the phrase like there's no such thing as low interest categories. just low interest brands. So our thought was

How do we take boring cleaning? And not make it boring. So what happened after that Christmas trip to Michigan? You you come back to San Francisco and You do what? So You know, I was in the middle of a job search and I said, Hey, you know, I'm gonna look for some jobs, but I'm gonna start doing some research and trying to figure out these categories and

Do some of the digging that Eric had a full time job at his ad firm. Yeah. didn't have a ton of time to do. And I said, I'll I'll start to do this. And so I actually at one point had a desk in Eric's bedroom where I would work on some of this stuff while I was kind of continuing my job search and We're writing the business plan. Together. I was doing a lot of that research and then at night we kinda put the pieces together. So you already decide let's make a go at this.

Well is is really I think You know, the hardest thing was Starting a company is we are really insecure about this idea. Well you're twenty five, I mean sure. Twenty twenty five, and we're gonna take on not only some of the largest multinationals, but the world's first multinationals in the form of Procter and Unilever, who have a hundred fifty year head start. and have really, you know, owned distribution.

But was that your vision in nineteen ninety nine, or did you just think, let's just make this and see who buys it? Yeah, we I mean we said from the beginning like We want to disrupt an industry. But our we We didn't feel very secure getting there, so one of the first things we did was we created what we call the concept book. And so we brought to life the idea.

Gave it to the twenty smartest people we knew. And ask them shoot holes in this. And these were what, professors, friends, family? Tell us why it's gonna fail. And nobody could come back with a reason other than if it's so good, why has nobody done this before? Yeah, or they'd say The reason it's gonna fail is'cause they're big and you're small.

Which we didn't That's not a reason. So let me understand this. This is still the before the dot com. crash. That was in April. I remember it well. But this is a time when Most people your age at that time were moving to this area to get involved in a tech company. Did anybody say

Um So my God. Like why aren't you going into tech? Everybody said that. Right? We had friends who are raising forty million dollars on forty page business plans and bragging about a million dollar per page for a raise or doing these lavish lunch parties, which seems so ridiculous now to spend funds on a lunch party. But yeah, this was San Francisco at the turn of the century and money was being thrown around in tech and here we were showing up pitching

When do you actually mix stuff together and get it get like a was it hand soap, was it dish soap, was it cleaner? What what was the first thing that you decided to work on? So yes, right around that time, sort of mid two thousand, it was mostly me mixing those things. Like what were you mixing? Well, You can make cleaning products out of very standard things that you can buy in the grocery store. Like things like in yeah, of course water, vinegar, baking soda, um These are relatively simple chemicals that don't require

Yeah. professional lab in order to m to mix them together. Yeah. And the best part was I come one day and Adam was uh Mixing things in beer pitchers, which I'm like we're gonna kill one of our roommates here. Luckily this stuff's not toxic. Well I I think there's different soaps and different Detergents.

You know, you can make soap from basically a base and an oil, so a vegetable oil and a base, you bring those together to make a soap. Um for solvency you can use things like vinegar or um Some of the acids that are in present in things like orange juice, very common everyday mild chemicals that You formulate in different ways.

to achieve a certain cleaning function and you mention, you know, dish soaps, hard surface cleaners, that kind of thing. Uh and were you like I'm trying to imagine, were you like in your room or in the kitchen of this group house like With a bucket like pouring in like

Sixteen ounce jars maybe of plastic or glass containers of the orange oils and baking soda and and then I would just experiment. I would try different formulations and I would make experiments the way that a scientist does so that you You know, you kinda have a control and and and then an experiment, and you you know, it's just a iterative process to getting to something that worked really well. So Eric, while Adam was sort of looking into the category and looking at potential ingredients and stuff, what we're What were you doing?

So our plan was to create our first four products, which were the surface cleaners, and get them in the local stores. So Adam was working on basically doing everything in the bottle, and I was doing everything kind of around the bottle. And the sty uh joke was style and substance. Um so what I started doing was we d we didn't have a lot of, you know, money to do custom tooling. And so I started looking for stock bottles. Couldn't find anything I I really liked. So I had this camping water bottle from Norway that I had found. Just a really simple kind of bullet design with these nice, elegant shoulders. I had It was very utilitarian, but at the same time Would look almost like a vase sitting in uh someone's home. So we use that as the basis for the first bottle. And and how are you paying for the the

Cleaning you know the oils and all the stuff. I guess it wasn't that expensive, right? No, it wasn't very expensive. But out of pocket. We paid we ran the business out of pocket for about two years. How much money did you have at the beginning? To to how much money did each of you put in? Uh we each put in forty five thousand dollars.

And that was all the money each of you had. with that money. And so uh we we put it right into method. And you split it fifty fifty at the beginning? Yep. Yep. Put it down on paper and you called it method. At that time, yeah. We wanted a name that represented a technique, a new approach to doing things.

And it's Adam and I were both brushing our teeth at the same time. Sounds very weird. Well you lived in the group house and you probably had one or two bathrooms, right? Yeah, basically one. Adam looks over and goes, How about method? I'm like, that's it. How did you come up with that name? I don't know. I just thought of it. Y you mentioned you had these bottles that you really liked. Were were you just buying these off the shelf somewhere?

No, we uh we did I mean design was so important uh Big chunk of the the dollars we had went into tooling. We just couldn't afford the actual design, but tooling and you designed the bottle? No, we basically uh took inspiration from this bottle I found in Europe. And then had a supplier kinda do the engineering of it. Yeah. Uh and then build the bottle molds, which Most of that ninety thousand bucks. Yep. And then We had the bottles and we were

making product at home with like funnels and paper towels, right? You were filling the bottles yourself. Mm. You were bringing them to your apartment with a funnel and just pouring it in and Closing it up. Yep. Okay. And we wanted We want it to feel very different than everything else out there. but also to really show it was, you know, safe to be around. You think about when most people would clean, they would put on that, you know, that old team building exercise sweatshirt from from 1998 and the rubber gloves, because you don't want the stuffing your skin. So our first labels were very different. They actually showed people on the front of it. And of course we didn't have any money, so we would go to Home Depot and buy a sink and photograph Adam holding the sink. Probably return the sink to get our money back. Wow. Um

If you fast forward to late February of two thousand one, by now Eric and I have product prototypes. And We were taking these prototypes around, walking into grocery stores unannounced. and cornering the store manager and trying to get him to buy our product. And so we got a grocery store um at the end of February to say yeah. Two thousand one yeah. It was actually February twenty eighth, two thousand one.

So we had bothered this store manager enough that he said, Fine guys, I'm gonna give you space but you have to get the product here today. Uh this was in Burlingame in uh sort of the mid peninsula of uh the San Francisco Bay area. What's the store called? Molly Stones. Yeah. So essentially what we need to do is get a proof of concept. So we decided the first step was to try to get into all the independent grocery stores in the Bay Area. These are the places where that manager can make the buying decision. So you got to show up at 6 a.m. This guy's always really grumpy. And I think essentially they just agree to take your product because they know you're gonna keep coming back until they say yes. But w were you going to the store in Berlin Game, I mean you went there multiple times. Mm-hmm.

And and the first time you went there the manager was like, I'm not interested? I mean imagine doing this at six o'clock in the morning with a with a store manager. They are not interested it first of all, store managers don't take sales calls, right? So that was just that's not how you get a product in grocery stores, but it was the only way we knew how. They weren't used to seeing that. And you drove up This message comes from NPR sponsor Kendrill. Kendril designs, builds, manages, and modernizes the mission critical technology systems that the world depends on every day.

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Hey, welcome back to How I Built This from NPR. So it's 2001 and Adam and Eric get the first method cleaning products into a grocery store in the Bay Area. And pretty quickly, they realize that they couldn't just make all this stuff in the kitchen of their San Francisco group house. So they start to think about building a supply chain. to make more of the product. But meanwhile, day in, day out, they're showing up at different stores trying to convince customers to try out Method Soap.

Well we didn't have marketing dollars, so what we would do, we would offer demos. So we did that. And of course we didn't have anybody do a demo, so that would be would be me. You would go there, what, into the grocery store and like He set up a table and I was wearing a lab coat which is comical to look back years later. And it's kinda funny I look at these photos and I was standing in the wine aisle. And I think I just realized that people shopping for wine were way more interesting to talk to than people shopping for cleaning products. But

We were really big believers that the packaging would have to be the primary marketing vehicle. and you would see it on shelf because of the design. You would buy it because of the unique fragrances. You get home and Find out it works, turn the bottle over. and realize it's good for you and good for the planet, and that would start to create a following.

And if you talk to most Americans at that time, they would say green doesn't clean. The only way we're gonna make this work is we had to get the mainstream into a green product. And we thought a lot of it as it's a Trojan horse for good. We had to put our green credentials on the back of the bottom and almost kinda hide them.

So After you got into Molly Stone's what was the next step? How did you get into the next door? Same process, talk to the manager and The uh the first step was that I believe there were ten Molly Stones at that time. There's I think more than that now. Then there were other similar chains of

Premium, high end, more gourmet focused uh grocery stores that we went to in the Bay Area. But what we did, we we built up these thirty stores and we call it our paper route. So every morning we would take turns driving to each store. Counting how many you sold. replenishing it, writing up an invoice, and it was a way for us to really understand the grocery business. And I think the big moment of truth came through when Yeah, we didn't have a customer service number, so my cell phone was on the back of of every bottle.

And I remember getting his first call. From this person who just wanted it call to say how much they loved our cucumber bathroom cleaner. And of course I thought it was a friend just playing a joke on us. But these calls started coming and we realized like we really struck a bit of an emotional Cord.

in a category that traditionally is so low interest and so boring. And it's just twenty four seven. You guys are just working all the time. On this.

Yeah, I mean the challenges, you know, with any startup, but particularly in this space, momentum is your friend. And then to raise capital you need to show momentum. So yeah, you always felt this race against the clock to grow as fast as possible. And I guess pretty soon into this thing and in two thousand one It becomes clear that

You've gotta raise money. You've gotta get because ninety thousand bucks So how did you What was the next step? How did you get the money? Oh wow, that was a saga. That was a saga. I mean it we're constantly running out of cash. And so we were getting five grand, ten grand here from every friend, family

Give us money. And Did that for about almost two years. to run the business and all told it was maybe a couple hundred thousand dollars that we got that way before we were able to raise our first professional money. There are people who believe in you more than they necessarily believe in your idea.

And I also found it so motivating'cause it's one thing like for Adam and I to you know, lose our own money or fail. But when you're taking money from people you really care about, our roommates, grandma, my Siblings, parents.

You don't want to let them down. And I always encourage entrepreneurs to take money from family because I think it's the best motivation to ensure that no matter how hard things get, you're gonna find a path forward. Yeah. So you uh are you know funding this

Any way you can't. At what point are you able to or what point do you decide, hey, we gotta go to like real money people, big money people and and get an infusion of real A investment. So it was probably I mean, even by mid two thousand we knew we were gonna need to get capital to run the business, but

Took another year at least. Before we were able to get a professional investor to to sign on the bottom line. How much did you raise in in that round? The first round was a million dollars. And it was from one investor for this one firm? And we were scheduled to sign the term sheet on what turned out to be September eleventh. Wow. And so in the months that followed we were stalled because of course nobody was doing deals with the uncertainty in the world, particularly in a premium priced cleaning product.

Mm-hmm. And I remember we finally closed in November. And you always have a closing dinner. when you raise capital and we went around the room to pay the bill afterwards and between Adam and I none of our credit cards worked. And luckily we knew the person who owned the restaurant and we asked them if we could pay him next week after we closed.

And'cause'cause we had run out of money. So all of the business you know, we we had inventory and orders and stuff like that and all that was on credit card chair. Yeah, just maxing them out. On the faith that we would ultimately get this investment. Um

That was a scary time for both of us. By the way, w what was your your pitch to these investors. Like what did you think convinced them to to give you their money? I mean big part of our pitch was showing what we had proven locally and regionally. And the argument that we were gonna go get target next.

And that we needed capital to be able to close target and start to scale nationally. But how did you even how could you even say that? Were you talking to Target before you had Any money to make this product? No, not at all, because we wanted to be able to get the capital, but what we started doing is we're working with Karen Rashid. who is a very famous industrial designer. And we wanted to

create a line of products working with Keram that would make a real statement in the marketplace. Just to pass your site, Kara Mashid is like a huge industrial designer. Like he's made products for He s designed Pepsi bottles and iconic furniture and like perfume bottles like

You guys are in your mid twenties, like how did you connect with this guy and why would he even answer your call? We were huge believers in the power of design and great industrial design. So we put a list together of the top industrial designers, and Karen was at the top of that list. Yeah so I figured we just work down the list until we finally got somebody to agree to work with us. And I shot Keram an email. You just went to like Google and typed in his name and the studio Shot an email cold to him. and said, you know, here's our pitch.

We wanna Work with you to redesign the dish soap, an object that sits across every sink in the landscape of America. Will you work with us? And he wrote back within twenty minutes and said yes. Wow I do remember like I think when he first met us for the briefing he he said to Josh Handy who we work with at the time he's like uh maybe try to get some of the payment up front. Yeah, I mean I mean how did you how are you even gonna afford to pay him?

Yeah, we were able to convince him to do it for a lower fee because he really believed in the project, but also with equity. And gave you know got him to have skin in the game with us. So he agreed to do it. So agreed to do it, which was absolutely amazing.

And they at the time Target was working with Philippe Stark and we knew they had an interest in working with Kerim. And so what we did was working with Karam. we were able to use kind of caram as the carrot. To get a meeting with Target Marketing, who then invited the buying team. We did a big dog and pony show with Karen, kind of spent Yeah.

Kinda went all in on this, yeah. And ultimately none of this company would have ever Went on to exist if it weren't for the risk we took on our dish soap. And Adam

to get the first prototype of the dish soap. It arrived moments before the presentation actual soap. Yes. Yeah soap in the bottle. Yep. And the what was unique about this product that Caram had designed is that it was upside down. So the dish soap came out of the bottom. It was on this inside that everybody you know, you always turn it over, it's a weird experience, so it kinda shot out of the bottom, this beautiful sort of sculptural shape. Now I this is an important detail. I was not actually at the meeting because as Eric mentioned

to the literally the very last moment. We're putting together the product. I was in the factory Doing that. twenty four seven for weeks in preparation for this meeting. So

I was like sleeping on the factory floor and doing that whole thing and then I FedEx this thing first overnight to Eric for the pitch. This is like a make or break meeting. Oh, it was. I mean I was starting to work on my business school applications just as backup because Yeah, I mean, yeah. You knew that

If we could not get a national retailer behind it. The economics weren't gonna make sense. I mean, we're competing against people who, you know, they own their own plants, they've had a hundred and fifty years to figure out efficiency. And we were charging initially like five dollars a bottle, but to keep bringing the price down to make it more competitive. So you were losing money on every bottle you were selling. Oh sure, yeah. Yeah. Early on. So we need a scale.

And we needed it fast. So so w what happened at that meeting? Uh they said we'll do a test. Marketing stood up at the end and said, This is right for our guests. It's You know, design forward on trend, and so Target gave us a ninety store test to basically prove ourselves out.

Dish soap? And surface cleaners. And do you remember how how many units they bought? Oh, they bought um Initially about um Twenty five thousand.

That's a lot of that's a lot of Oh it was. Did you were you like jumping up and down? Did you call Adam and say, We made it, we're in Target. Not really, because we knew if we failed that test, we were out of business. It was make or break. There there was I mean to be fair. Triumphant, like, yeah, we've got this test, which was great. But I mean, I remember that moment vividly because my heart sank because. You know, I had to then make sure that we could get twenty five thousand units made with perfect quality and all of this. And how long? It was only about eight weeks. Um, and that includes things like long lead times for making

Bottles and You know, all this type of stuff that It never should have been able to be done in eight weeks. Um I still to this day don't exactly know how we got it done, but we you know, there's a theme that always ran through our business that when you hit a roadblock, you know, you get out the paperclip and the chewing gum and the rubber band and you figure out another way around. And you know, making twenty five thousand units was just another sort of Macyver moment.

You know, if you're gonna Build a business, any business. It's hard. And you've gotta be incredibly resourceful. And for us, that was very real because it was born from all of these times where we went the path you were supposed to go. And a door got slammed in our face, and we had to figure out another way.

So mid two thousand two you are in ninety target stores. And you've got to hit a certain Target. For them to expand out. Further. Yeah.

How'd you do that? How did you create awareness around the product. Well we didn't hit that target as it turns out. The first thing we did was there's a set date. And so we had to make sure we got on shelf as fast as possible. So we started driving store to store, go in, if it's not set up, you go to the back room, you pull it out yourself, you take whatever's on shelf off, and you get your product on shelf quickly. But We start, you know, first week looking at the numbers, we're missing the number.

And then we had a problem. Which was The dish soap that we did, which was the first ever inverted dispenser, so it comes out of the bottom. Yeah, I remember that. Consumers would go to smell it'cause the fragrances were really unique at the time.

Yeah. bottom in a way it wasn't supposed to really come off. So it meant it didn't really go back on. In thinking we were great merchants, we put that on the top shelf. So we would walk into stores and there's just dish soap raining down our entire display. It's hard to sell a product when it's covered in dish soap.

Yeah. And it's really hard to clean up fish soap in the aisle of a store. But how were you I mean You had to hit this target, and you you didn't So what happened? Why did Target keep Keep carrying it. Ultimately it was while we weren't hitting the number of units of sell through that they gave us for a well known brand on promotion and all of that, we were doing reasonably well. And fortunately, um a buyer at Target

realized that it wasn't just the number of units that we were selling. But the type of people that were buying our products and the other types of products that they were buying in the store. Who were they? You know, they were they were people that were sort of the millennial equivalents of the day, right? They were young, they were more dynamic, more slightly more urban, um a higher end audience. These are the exactly the types of shoppers, uh Target calls them guests. Um that they wanted to get in their store. They knew that that was a highly valuable shopper for them. We really broke and I guess we'll take credit for it because we haven't found anybody that did it before us, but

Eco she's a little bit more. And traditionally green products didn't look beautiful and beautiful products weren't necessarily green. And I think a lot of it is Just coming down to our own dumb luck of Adam's

Passion for sustainability. Mine for design. That's why Target made so much sense because w we just needed that bigger platform to drive change. So After target

At that point did it become easier to get into other big box stores and other retailers? Yeah, I wouldn't call it easy. But what I would say is Every next retailer, every next financing round. gets incrementally easier. And that's really that's momentum, right? If you build It really at the end of the day I believe that business is about starting with a really small

That's a small success and build it into a slightly larger one. And if you do that a couple of times, whether it's going from direct store delivery at Molly Stones to some regional grocers to a test at Target, you only have to do that a number of times and you can build А прити бік бізнес і. But the more you do it. It gets easier to get bigger and bigger wins. It's interesting that you started really with Target because we we've had John Mackie on the show and we've had other products that really started out at Whole Foods that were non-toxic and environmentally friendly and organic and so on. I read that actually you had a hard time getting into whole foods at at the beginning.

Is that true? Yeah, they I mean, you know, oddly They didn't like that we were already in a mainstream retailer. Um, and we were just very upfront that said, Listen, we think that we've got a product that your shopper is really gonna enjoy. We just didn't look like a green product. We didn't we didn't wear the uniform of of green. We wanted to change that. Yeah, it

It's it's important to note here, like I think it's totally pointless to make a green product. for green people, right? The Only about five percent of products in the in the US market that are sold are green. And so if

All you're doing is preaching to the converted and the five percent. Like what are you doing? We wanna create a product that That appeals to everyone. Yeah. And not just people that are only gonna shop on their environmental credentials. You actually drank it.

Like you drink what what did you did you dr what did you drink? Which one did you drink? So I was in London And You know, I love the British press are so sceptical. And I was talking about our products that They're you know, non toxic and and safe.

And she said, Is it you know safe enough to drink? I was like Sure. And it was a toilet bowl cleaner. And uh so we both took a shot at the toilet bowl cleaner. And then I immediately uh text Adam. It was still you know, he was still sleeping here. Finally he got back to me. I was like, Hey, just drank the toilet bowl cleaner. I'm gonna be okay.

Right. He writes back, Well wouldn't have been my first choice. I think you kept it obvious. We we've both had to to dr I I ended up on Japanese television a number of times drinking a lot of method, so um I'm still here. So How quickly

When did you actually It was about five years in the world. So in two thousand five, we became profitable. This is after you're in targets all over the country and It still takes Some time before you turn a process. And that's actually relatively fast for a consumer products business to go from nothing to profitable in about five years, pretty quick. Trevor Burrus How much money did you have to raise before you could stop raising money and just fund the country?

Twive million dollars. We we felt we had to grow fast. uh both to keep Startup competitors away, but also all the legacy brands were starting to copy us. I'm sure, right? Because you guys had this people were like, Oh, I love this product, right? Try to crush us. And there were a number of brands that were launched. Bye.

Large. CPG. All of those guys. But what was interesting is it was so funny and and Eric predicted this, um to his credit. He predicted that they wouldn't Be able to get it right.

And what they launched You know invariably was sort of the same old like pistol grip bottle with the finger grooves in it that happens to run down their lines already with like a different label on it and then they slap a flower on it. With some sort of like

Name. It just was like Come on. You know, and and they did throw a lot of money at that stuff. Believe me, it was really scary for us. Did it cut into your absolutely in the short term it did. But because you know they weren't

Authentic products. They weren't Interesting products. You know, people would try'em once and they got promoted, so they'd they'd capture shoppers that way. But then the just The product Didn't perform. Like the big companies did some version of it.

So I guess around two thousand eight you decide to branch out into personal care products. Block. And you say that in a very Matter of fact way. This was uh

Shower gel and hair. Shampoo and stuff like that. The original idea was actually this really kind of beautiful organic shape. But it did stand up. Shape of bottle.

Yeah, almost imagine like a seed. But we wanna still keep that kind of object. approach and we ended up with square and then it's like a plane crash. It's not one thing that goes wrong. Uh from kind of walking away from our core vision of it. to not getting the tooling right. And one of it is we were always a little bit more conservative of

You know, we believed in fail fast, right? So you get products out there, limited number of retailers, make sure it works. Adjust, launch and learn. And everybody loved the design of it, so we went really broad. Everyone said this is gonna Everyone's gonna have this in their bathtub, in their shower. Costco loved it.

Grocery to everybody got behind it. And it essentially was nailed to the shelf and did not move. And it's expensive to launch a new product. It's really expensive to discontinue because when you see something on shelf that's being discounted for the store to get rid of it, the manufacturer is funding it. Oh man. Were you so you just got rid of all this stuff? Like what ha what happened to the excess

Stuff. Inventory. Do you still garage? Like do you still use it? Do you still use it in a kitchen? We did hear some of it was sold a prisons. Wow, so Um How big of a hit did you guys take on that, did did Method take? You know, I don't remember exactly in dollar terms, but it was you know, it was in the low millions.

of you know an investment that basically an amount of money we lit on fire. But the bigger thing though is just product failure is a reputational risk. Um and it's something that you need to recover from. The customers meaning for us a customer was a retailer. Yeah, they w they were Not excited about that. Yeah, something that you have to dig yourself out of.

So I'm curious because At this point you've you've had obviously had lots of success with with method cleaning products, right? The company's profitable. And then you have this failure with block, right? Yep.

Was there any tension between the The two of you around that? Like H how was your relationship going? It was like a marriage. Yeah.

Eric and I are Super good friends. Um, you know, we obviously know each other incredibly well'cause we've been in the trenches together. Um There was a time for a couple of years where we were at each other's throats. Why? You know Eric and I

approach problems from very different angles. And that is a huge asset. But it also can be a huge rub. when you know I see a problem from this direction and you see the problem from another direction and you can butt heads about that. And

You know, that what it requires is it requires a lot of open mindedness, it requires a lot of self awareness, it requires a lot of listening. These are all skills that I'd say that we've learned. Yeah. I don't know a lot of twenty five year olds that have that level of sort of experience and maturity to have those skills. Well I'll be I mean many, many partnerships break down. It's unusual for partners to create a company to scale it and then to stay friends after you know and and good friends. I mean how did you guys get through that

Those tens times. I think we just Over time, you know, we knew how to be friends, but we didn't know how to be colleagues and partner us together. And we started to learn each other's different styles professionally. My instincts is to just

engage and run at it, Adam needs a little bit more space to kinda think it through. He's an extroverted, I'm an introvert. Yeah. And we really learned each other's working styles and we were able to find a better rhythm. And It was I mean it was a very, very conscious effort to say like

Screech on the record like We gotta work on this, right? Or this is gonna end badly. I mean at the end of the day it was mostly about Us. doing it individually and working with one another to figure out

You know. When Eric says XYZ in I feel like it means this. Actually that's not what he means. He means something else and I can separate the two. You guys sold this company method to eco over.

in two thousand thirteen. Why did you decide to do that? He built this from the ground up. Was it a point where you kinda had Had to do this.

Had to sell it. Yeah, I mean, We were approached by a private family out of the UK, and they had owned the uh Ecover brand, which was really the pioneers from the seventies of green cleaning. And so the pitch to us was it was an opportunity to really allow all of our investors who've been in for a long time. We're big believers that you

You build businesses sort of for posterity to endure. And businesses change ownership. And so the question isn't Will it? It's If it does, will the business be better afterwards? And in this case of selling the business um to Ecovere, actually the greatest example of that is we were able to build

what's probably the most sustainable manufacturing facility in the whole world um in the inner city of Chicago immediately after we sold the business. So there was an example of like deepening and enhancing the mission and building something that helped us grow the business much better rather than What other people Fear would happen. So you both of you

Moved on around two thousand fifteen. Yeah, we're still still involved with the company at a light touch. But you have no ownership at all any more of her method. That's correct. So I ask

this question um to pretty much everyone who comes on the show. Um just start with you, Adam. How much of the successive method do you think has to do with, you know, your intelligence and your skill and and how much With luck. Well, I think there's other factors other than just those two. I think that it certainly isn't all because of me. I'd like to think that I contributed an amount

to a group of people working together to create something really awesome. Um I think perseverance was a huge, huge key to the quote unquote luck that method had. And yeah, you know, was there twenty percent luck in there? Absolutely. Eric, what what do you think?

I always say an entrepreneur can never have an ego because luck is always a factor. And I agree with Adam, with enough persistence luck always Look how he shows up. Yeah, I mean we made so many stupid mistakes and kind of had near death moments that luckily the ball just bounced the right way to keep us alive. Is it strange to go into a Target or a Whole Foods and see this bottle you designed, this soap you designed?

This thing that you were making in a San Francisco Group house, call it whatever you want. And it's not yours anymore. It's still ours. But it's the emotional attachment.

And every time I see And you walk into a random restaurant bathroom and there's our our teardrop hand wash sitting there, and you see it and you can think of like the stories and the creation of it and it's so much a part of our identity, like whether or not we own a couple of shares or not has nothing to do with it. It's still ours. That's Adam Lowry and Eric Ryan, the two co-founders of Method. By the way, since selling the company, each of them has launched their own new ventures. Adam founded a company called Ripple Foods, which makes plant milk and other dairy free products from vegetable proteins, and Eric has launched two companies, Ollie, which sells nutritional supplements and Welly, which sells first aid kits.

And in an interview last year Eric said the idea behind Welly is simple. An injury. Is actually the trophy? Have a well lived life.

Hey, thanks so much for listening to the show this week. You can subscribe wherever you get your podcasts. You can write to us at hibt at npr.org. If you want to follow us on Twitter, it's at how I built this or at guy Raz and on Instagram, it's at Guy. This episode was produced by Casey Herman with music composed by Ramteen Arablui. Thanks also to Candace Lim, Derek Gales, JC Howard, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Vera Safari.

I'm Guy Roz, and you've been listening to How I Built This. This is NPR.

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