Seventh Generation: Alan Newman and Jeffrey Hollender

Hey, it's Guy here. And really quick before we start this episode, there are a few bad words that you will hear that we did not bleep out. So if you're listening with kids, just Be mindful. We were working with a tissue paper manufacturer out in Wisconsin that made all the paper products. They thought we were crazy, by the way, because Іно, виверні. unbleached, a hundred percent recycled fiber bathroom tissue, which was the scratchy

Stuff that you found in a gas station. And we insisted that it said made with one hundred percent recycled paper. It had always been made with one hundred percent recycled, but they hid that in all the promoted all the material. Oh, because consumers didn't want that? No. Why would consumers want recyc Toilet paper made of recycled paper? They thought we were absolutely out of our mind. From NPR is how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

I'm Guy Raz and on the show today, how two men Probably had no business going into business together. went into business together and built seventh generation. A pioneer in eco friendly cleaning products. Back in September of twenty twenty, we received an email from a listener named Chiara.

She suggested we consider interviewing her father, Jeffrey Hollander. My dad, she wrote started seventh generation in nineteen eighty eight. He is kind.

intelligent and is as interested in doing good As ever. He would never write an email like this himself, but I think his story and the story of seventh generation Is important to where we are in the world right now.

It's filled with hope. And pain. As all the best stories are. Well, We were intrigued, in part because Seventh Generation is one of the iconic brand in the eco-friendly cleaning category, and in part

Because Chiara said the story is filled with hope. and pain. So we started digging. And what we found surprised us. For starters, we discovered that there was another founder who

His name is Alan Newman. And back in nineteen ninety two, Just a few years after the company was launched, Alan and Jeffrey had a bitter falling out. Allen was ousted. And since then.

The two men have barely spoken. So We called them up. and asked if they'd be willing to appear on the show together to tell their story. They thought about it.

And to our surprise. They agreed. And even seem to enjoy themselves during most of the interview. Coming on to the show.

In this episode. Is the first time they've come together. To talk about the founding of seventh generation and their very difficult breakup. as business partners. So perhaps more than any other conversation I've ever had with co-founders,

This one has an incredible amount of insight into what it takes for two people To build something. bigger than themselves. and how the relationship between partners is actually more important?

than the skills each one brings to the table. Seventh Generation started out as a mail order catalog. It sold a curated collection of eco-friendly household goods, but eventually it became one of the first companies to mass produce detergents, paper towels, and other products that are meant to be better for the planet. By the mid two thousands. The company's products could be found on the shelves of virtually every supermarket in America.

And in 2016? Seventh generation was acquired by the multinational Unilever. for between six and seven hundred million dollars. The small little hippie business Alan and Jeffrey co founded? is now part of a giant company that owns everything from Lipton tea to

X body spray. And even though Alan and Jeffrey were and are very different personalities, One thing they did share was a restless and even rebellious past. Neither follow the conventional path from college into a steady job. Alan Newman grew up on Long Island in the 50s and 60s, and he didn't care all that much about school.

Jeffrey Hollander grew up in Manhattan. His dad was a powerful advertising executive. And like Alan, Jeffrey also remembers struggling in school. And at home. His family life?

A happy one. І вас іномайда. He was A tense

Tightly wound guy. Who wasn't a lot of fun to be around. My mother was an artist. And uh my parents didn't get along. They didn't really like each other very much.

I also felt fundamentally uncomfortable in the very affluent environment that I grew up in. I mean I I remember like I grew up on Park Avenue, which is a very fancy street in Manhattan. Sure. And uh I felt that that sort of

Elite part of society. was not something that I wanted to be associated with. Mm. And I guess you when you went to college, you went to Hampshire College, um But I guess you didn't

really lasts very long there. You dropped out I think after a year or so. Yep. And sometimes after that you ended up Uh living in Toronto. with your girlfriend at the time and so w tell me the story, like what what did you do there? Well I I was trying to figure out what I wanted to do, and I read an amazing book by Ivan Illich, who's an educational philosopher called De Schooling Society.

And Ivan Illich's philosophy was that formal education in universities constrain the flow of knowledge more than facilitate it. Those who are affluent.

who can afford it, get access to it, those who aren't, don't. And so he said, you know, what we really need to do is we just need to find bright people. And let them teach other people in their homes, in their offices. And so I started the skills exchange of Toronto. totally modeled on a chapter of the book that I had read.

never having had any business experience or never having studied business I was You know, nineteen, twenty years old. We basically printed up This little catalog with all these short courses, they lasted a night to four weeks.

And I loved finding the teachers and I love writing up the course descriptions. And the thing was incredibly successful. And we had a little newspaper that we put in what was sort of similar to the village voice in New York. We stuck tens of thousands of these little course catalogs in this newspaper and lo and behold people sent in checks and registered for courses. I think the second year we had thirty thousand people register for these courses. So it was wildly successful. And what kind of classes is like photography or like whatever? Anything?

It was sort of anything. It was photography, it was cooking. But it was Introduction to Marxism, it was alternative health care therapies. And they were very affordable. The classes were, you know, 15, 25 bucks. They were cheap. You know, there were no tests, there were no quizzes. Yeah. It was people engaged in the pure joy of learning because they had a passion to do so.

So you're running this program in Canada and it was a w a non profit, right? No it was started as a nonprofit. And I guess there s something happens which kind of shuts it down. What happened? Yeah. Well I I made a big mistake. I uh failed to get working papers. In Canada. In Canada. And I had a pretty high profile because of this successful startup. And one day the uh Royal Mounty showed up in the office. handcuffed me and threw me in jail. Because I was an illegal alien. I was working in Canada without working papers.

Yeah. So this is like I guess late seventy eight, early seventy nine ish. you end up going back to New York in nineteen seventy nine to kind of regroup and figure it out. Um and and You decided to reconstitute this idea, but in the US. You couldn't do it in Canada.

But from what I understand you decided to do it as a for profit this time around, not as a non profit. Yeah, my dad thought it was really stupid to start a nonprofit. You can't really make much money. So he said start a for profit and I Took that to heart. in more ways than one and instead of teaching an introduction to Marxism

We were teaching how to marry money and we were teaching The art of flirting, how to get invited to the right parties. And by the way, where did you where did you distribute these catalogs? You would just drop them off and like Shops and stores, or would you mail them to people? New York Sunday Times they were

inserted in the certain zip codes of the New York Sunday Times and it was like magic. I mean, we would put hundreds of thousands of these in the Sunday Times and the next week The checks would just roll in. It was pretty amazing. I guess at one point you even got onto the Phil Donahue show, which probably at that time was a huge deal.'Cause you had a you had a course called How to Marry Money, which just sounds horrible. I mean But you went on the Phil Donahue show with the person who lectured, who taught that class how to marry money. By the way, what was the

What was What was the suggestion? What how do you do that? Well This was a taught by a woman named Joanna Steichen. Who was Edward Steigen's wife, the famous photographer. Her claim to fame was that she had married money because he was a pretty wealthy photographer.

And she would give you all kinds of tips, and and I mean literally this we had auditoriums. of four to five hundred people taking this class every other week And we did go on the Phil Donahue show together. And we had a horrible, horrible reception from the crowd. The crowd thought that this was a terrible

immoral thing to do. Uh we were teaching people terrible values. And I was I was really heartbroken after the show. I I felt that Oh my God, what have I done with my life?

I've gone from being a sort of Principle. Politically responsive. Concerned adult to someone who's teaching values that are pretty abhorrent.

Mm. Yeah. Um, Jeffrey, I wanna just pause for for a moment and and turn to Alan. Um by the way, I I'm so sad I'm not on camera'cause I'm Alan, I love your beard. Your beard's amazing. It's the pandemic. It's incredible. It's it's better than a civil war reenactor. It's it's starting to take on a life of its own. It's really cool.

I love it. Thank you. Okay, so you Uh you graduated from Southampton College. on Long Island around I guess the late sixties or early seventies and then from what I understand you were m married when you graduated from college, right? Yeah. Yep. You got you got married pretty young. I did

But just to be clear, you're you're no longer married to this person, right? Correct. Did you meet at college? Yeah. Yeah, she was at the same school that I was

And when I graduated college we were kind of fed up with the United States, frankly. You know, I was one of those people with long hair and a beard. And we decided we were gonna go see what Canada was like because that was a natural path for a lot of people we knew. Yeah. Um so we ended up probably spent a month, you know, camping our way through Canada. But there was nothing that spoke to us and said we're gonna stay here. So we came back to Long Island Did our laundry

Change clothes and Decided to go to Vermont really on a whim. Most things in my life have not been planned. One of my favorite phrases is everybody has a everybody's greatest strength is also their greatest weakness. One of mine is I tend to say yes. If somebody calls us, hey You know, can you talk to me about this? I say yes. So somebody says, Hey, you know, are you interested in this? I go, Well, sure, I'll listen. I find that saying yes opens doors.

And so we just decided to come to Vermont. Um, we found people were friendly, they didn't care that I had a beard, they didn't care that I had long hair, and we kinda settled in. And so all right, you you start living in Vermont. And I eventually I guess you settle in in Burlington. Yeah. And

You got involved in in like a garden supply store or you h you help like co found it. Like how did that come about? Was it like, hey, you know, let's let's do a garden supply store? Well, No.

Um First of all And it may be a more Sensitive to the term founder. I don't consider myself to be a co founder of Gardener Supply. There was a guy named Will Rapp.

Um I went along with Will and I was the number two. I was kind of the finance and ops guy, which is quite humorous to me these days. And by the way, this wasn't like so much of a of a brick and mortar business, but but more of a mail order, right? So so it was a business where people could order garden supplies. Correct. Through a catalog. And The business m my description is the business didn't grow fast enough for both Will and I to be in the same business. And you know, Will was the one who really taught me

Uh he taught me a lot. I actually learned a lot at Gardener Supply about creating culture in a business, but Will wanted to do things his way, I wanted to do things my way, and we started clashing, and we came to an agreement. That since I had really built the fulfillment system, the computer system. Um I was gonna start a business using the computer system, using the fulfillment system to sell time to non profits who had small mail order divisions that I could run through. So so just to understand, you were gonna use systems that you developed to basically

Do you work for other mailer companies? Yeah. Yeah. So I had a bunch of Clients. Of which one of them was a nonprofit called Renew America. They had the most god awful catalog you've ever seen. What did they sell?

They sold. Energy conservation uh and renewable energy products. Like what? Like light bulbs? They probably had solar panels. They probably had w weather stripping. They probably had you know low flow shower heads But to say that they sold it, I think, is is a misnomer. They really did no business. The catalog was indecipherable. It was just

The worst catalog I'd ever seen. So Авто. I I Sent them a note. Yeah. If you really want to do some business, here are my suggestions and I and I outline what I would do. And what were your what were your suggestions? Like just make it clear, offer better products, like what do you remember telling them to do?

I think I was I you know, uh my memory on this stuff, I'm I'm gonna make it up. Guy, but um I probably told them, you know, you need to focus on a lifestyle, you need to educate the customer because you gotta remember back in the mid Mid to late eighties, nobody knew what environmentalism was about. Nobody really cared. And so I said you gotta educate your customers. You gotta make the pictures bigger because nobody they're these tiny little pictures and and they talked in technical terms. I said y you gotta tell why is it a benefit to the customer. And so I made these suggestions and um And they came back and said, Boy, those are great suggestions. So um

Why don't you buy us and and you can buy us out. Yeah. They said well you should buy it. And what do you remember what they offered how much they they asked for? I I don't think we got to that. Um but you were just like this is not for me.

Yeah, I didn't have any money and I knew it was gonna cost money to grow and I didn't believe anybody cared. Yeah, I truly I didn't see the market for it at all. And so Finally I got a call from him one day. And they said. We're done.

So either we're gonna ship everything to you and it's your business to do whatever you want, or we're gonna throw it all in the garbage can. So wait, they said. Uh we're just done with this thing. You can have it for free. Do you want it? Is that Essentially what what they were saying to you? Yeah, pretty much. No, not pretty much, exactly. Exactly. And they're they w and and

We're gonna pack it up, we're gonna send it to you. Got it. But but like you just said. You didn't think this could ever be a viable business. So w w why would you even want it for free?

Um I really honestly and truly I did not. The the line that I've used a million times, which is a hundred percent true, is my brain is saying no, no, no, no, no, and out of my mouth comes, I'll take it. I'll take it. And to this to this day I say God spoke through me. I don't know where that came from. I had no interest. I didn't believe there was a future. I didn't have the money to do it. And yet I said yes. Alright, so you get the catalog business from them. Yep. And uh

You gotta make it work. So what do you do? What's your first step? Oh. Um Well In the catalogue world, you've got to have your catalogue

In the mail. In August to start competing for the holiday business. Right so I had six weeks, I had a month or six weeks to get a catalog together. I couldn't take any new photography So

The catalog was originally eight and a half by eleven. Since I couldn't increase the picture size, I cut the catalog in half. So we went to what's called digest size. And that made the pictures look bigger. I changed the name. The seventh generation um where does that come from? Well it it comes from the the Iroquois quote that um whatever we do we should be thinking about how it will affect the next seven generations. And that that was consistent with you know what we were thinking at the time is that this we really need to change the way we're thinking from immediate to longer term.

How did you have the money to do this, by the way? You know. Burlington's a small town. And so I had relationships. There was a print company that we use. So I went to them and said, Hey How would you like to take a gamble?

And um how about you print my catalog and I'll give you a percentage of revenue or whatever deal I struck. Um and so they printed the catalog for me and I just had to get the catalog out. Uh and and how did you improve the catalog? Like what did you do? Um I focused on education.

I always knew that people didn't understand why they should use a water saving shower head. So we ran these columns down the side, you know, talking about why you should do that. And it was really that that early catalogs was really I wrote pretty much every word of them and they were written from passion And from enthusiasm more than from uh any kind of research. And um If I remember correctly, I focus more on the economic aim. Um you would save money. You save your m you'd save money. You're gonna get a shower that is perfectly comfortable. It'll compare with most shower heads, but you're gonna save money. Oh interesting. And this is really where I l personally learned that

You really need to sell from benefit, not feature. You know, the feature that you're saving the environment. Yeah, that was nice, but it was only good after you pass the what's in it for me. And did you get the catalog out by August? Yes. Uh, did a lot of people did you get a lot of orders? Yeah.

Really? Yeah. Like significant number of orders? Bl it blew me away. It blew you away? Yeah, yeah, it blew me away. Well. Um Alan, just just pause for a sec. I wanna Jeffrey I wanna bring you back into the story because we left off um with you

running this business in New York that s I guess but was making you kind of feel soulless, um And Um you've been doing these in person classes. And then I I read that around this time you started to put some of those classes on tape on cassettes and then sell them in in stores. Yep. that kinda got you into the books on tape business and and that

Actually start to do pretty well, right? Yes, exactly. And we started buying rights to New York Times bestsellers and putting them on tape. Wow. And finally we were we were out looking to make a distribution deal. And we were meeting with Warner Publishing.

And they basically said, Gee, we love this business. We think it's fantastic, but uh we don't wanna distribute the products, we wanna buy the business and uh so you thought you were going to meet with them. for distribution deal, but actually they want to buy it outright. And they did. They offered us a price that was uh we couldn't refuse. They basically looked at the rights that we owned and controlled. And valued the business on our right portfolio.

And came up with a number that just totally blew my mind, millions of dollars. And uh we decided to sell the business. And I remember My dad Got a big check, I don't know, maybe a million dollars or so. As a as an investor, his return?

As an investor, yeah, he was an investor in the business. And it was the first time in my life where he where I I felt like I had finally met with his approval. Having dropped out of college, he was very upset about he he he often would say to me, You're gonna be so embarrassed when you go to a job interview and they ask you where you went to college and you're gonna have to say I never graduated. And of course my response was, I don't ever plan on going on a job interview. And I never did. But uh he was really proud of that and uh But I didn't last long as uh an employee of Warner Communications.

So you From what I understand, you decide. You wanna write a book. and write a book about How to Marry Money and those kinds of lectures, you decided to write a book called How to Make the World a Better Place, which is great. Um how did you come to that?

Realization that you want to do this. Well, as you said, I needed to redeem myself somehow. Бос і вас прош. of all the ways in which you could do good stuff in the world. And uh I remember I I wrote the entire book on these long yellow legal pads.

at the New York Public Library on Forty Second Street, and I would sit in that library day after day doing research and really exploring looking at the world of socially responsible investing, looking what was happening in the world of human rights. looking at what was happening from an environmental perspective. And the book was really a compendium of all the good things one could do on a full-time or a part-time basis to help make the world a better place. Okay, so Alan has his catalog.

now and he's named it seventh generation. Meantime. Jeffrey, you are researching your book, How to Make a World a Better Place, and I guess you you end up in Burlington, how did you come across Alan?

Well, my m my memory is that I Perhaps unlike Alan loved the idea of the Renew America catalogue, I thought The idea of selling people Energy efficient.

environmental products. You had found out about Renew America in your research for the book. How to make the world a better for you. Yes, exactly. Exactly. And somehow I tracked Alan down.

And I basically said I'm sort of heartbroken that Renew America has walked away from this. I'd love to help in some way. If you're gonna continue And I could raise some money, I have some connections, I think I could be helpful.

And my recollection is Alan said, Gee, I'm in the middle of getting this first catalog out. Let's talk in the new year in in January. What did you think was so interesting about w what Alan was doing that y that really caught your eye? I mean I mean Were you looking at the possibility of maybe a business thing here? Absolutely. I mean I I love the idea. of a business that instead of teaching people how to marry money was helping them solve environmental challenges we were facing. So

It was a good business a An opportunity to do To use business to have a positive effect on the world. And

The way the relationship started was I offered to write a business plan or help write a business plan for the business to raise money. And that evolved into us becoming partners in the business. And that happened, I believe, in January of Nineteen eighty nine.

Just curious. Allen. What what was it that convinced you to work with Jeffrey? I mean Did you see in Jeffrey somebody who maybe had those skills that you needed.

Help with? No. No, I it was much simpler than that. Okay. I had enough experience in the catalog business to know that

that I had a a financial hill to climb and I knew that running the business day to day and raising money Which was never my strength, by the way, would would never get me over the hurdle. If I was gonna continue in this business, I needed capital and I needed a lot of it. And since I did not have the ability, Jeffrey was my best option. And and you needed capital because the demand was increasing, which means that you needed correct more inventory and also you need to expand uh right. Grow the business you need more money. Growing your business. Yep. Exactly. I mean my recollection was We spent way more money acquirers than they generated in revenue.

So every time we acquired a new customer, we lost money. And the hope was that over time, over years. They would repeat their purchases and they would become profitable. But they weren't profitable at first. How would you acquire customers? I'm assuming you just mail them a catalogue and hope that people order. Is that right?

Yeah, but ninety nine out of a hundred people didn't buy. So you had the cost of printing and mailing the catalog, and it's the lifetime value of those customers. That you hope. Will turn the business around at some point. But that point was very, very, very far in the future. Hm. Alright, so so the two of you start to work together.

on the seventh generation thing. And um and you had to raise money and Jeffrey was going to be the key to raising that money. Um so Jeffrey, where where did you start? The key to raising money for seventh generation was

The people who had invested with me in my prior business had made a lot of money for every dollar they put into the company, they got ten dollars back. They were happy. So they're like Jeffrey, what's the next thing you're doing?'Cause we're on this. We're we're gonna join that ride. Right.

the vast majority of the investors were those investors from the prior business. Right. And they put up eight hundred and fifty thousand dollars in nineteen eighty nine as the first of an endless series of fundraising cycles. Right. I was always amazed. Uh

Jeffrey's ability To raise money. I understood he had previous relationships, but we would go to meetings Um and do pitches. And we'd walk out.

And Jeffrey would turn to me and he would either say Yeah, we're not getting anything. Or he Put a number out. It's This is the number we're gonna get. Cause I never had a clue. I we'd walk out and I I don't have a clue they're gonna invest or not.

Um and he would hit the number right on the nose every time. And and let me ask you this, Jeffrey. Try to go back to the to that place in nineteen eighty nine. I have to imagine that having Alan

By your side. kind of scraggly beard or whatever whatever you look like, but this clearly this guy from Vermont who was sort of a hippie, but running an environmentally friendly catalog Even more authenticity. Absolutely. I mean

Not only authenticity, but Alan actually knew what he was doing. He knew the catalog business, he understood how it worked, he understood the marketing and the operations of it, and I couldn't have done it. on my own. There was just no way that was gonna happen. Alright, so you raise the money and Jeffrey, you become the CEO and chairman.

But you stayed in New York. You did not move to Vermont. Initially the idea was you're gonna commute back and forth. And Alan, you were kind of running the operation in In Vermont, right? Correct. Yep.

Okay. So from what I understand, you moved into a new space. in Vermont. And uh it was like from what I understand it was like this really kind of it was described as a hippie dan. There's like a ping pong table, there's free Ben and Jerry's, there were chalboards in the bathroom, like people could r write things in the chalkboard uh about the company that they didn't feel comfortable saying in public. Um in the main conference room there was no table or chairs, just pillows. Uh, Alan, is that right? Am I describing a this correctly?

Do you left out the nap room? Oh, there was a nap room. Okay, yeah. Right, there's a nap room. And uh so this was kind of a this was and and was this your vision of what you you wanted a work environment to be like? Which which by the way sounds awesome. I would totally work there. Uh So Again what I learned at Gardener Supply.

You know, we were on a fairly rapid growth path there also. And what I learned Was that the greatest obstacle to success? Was fear fear of people that they didn't know what they were doing, and somebody was gonna find out. And so What I discovered was that if I could get people to share their fears and realize that we're all in this together, um, and that it's better to ask for help, that that created a much more productive and successful business.

And and by the way, were you still Were you still focused on selling the same stuff, Jeffrey? What do you remember? about the catalogue. Wha wh what were the products you were selling? Well, I think part of the breakthrough Was you know, if you sell someone

a low flow shower head, they only need one of them. And I think the breakthrough was getting into the household product. category with paper products and cleaning products. Because those were multiple frequent purchases. People were gonna buy those over and over and over again. And you know, we got to the point where about twenty five percent of our sales

were made up of these household products like bathroom tissue paper towels and uh Laundry detergent. And were you manufacturing them yourselves or were you working with the white you were white labeling them and putting seventh generation on it? Yeah, we were working with a co-packer who would help us design the product and do all the manufacturing.

So we had one Kopacker that made all the cleaning products down in New Jersey. And a uh tissue paper manufacturer out in Wisconsin that made all the paper products. And it was all labeled seventh generation. Yes, and they thought we were crazy, by the way, because You know, we were selling unbleached, a hundred percent recycled fiber bathroom tissue, which was the scratchy

Stuff that you found in a gas station. It was rough. It was r it was like prison toilet paper. Yes. People couldn't get enough of it. They loved it. So you had these like uh copacking plants just kinda laughing. Oh, those crazy weirdos in Burlington and Vermont want this like brown

Rough toilet paper will make as much as they want. The first load we had a guarantee a uh a full trailer load. 'Cause they we insisted that it said made with one hundred percent recycled paper. Yeah. They it had always been made with one hundred percent recycle, but they hid that in all the Promote all the material. Oh, because consumers didn't want that? No. Why do consumers want recyc toilet paper made of recycled paper? Uh.

I had to convince them to use our labeling on it. Hundred percent recycled paper, and they thought we were absolutely out of our mind. Although I think the Best product we had in those days was the string shopping bag. The string shopping a net? Like, it was it was like a big hairnet. Exactly. Oh, the French farmers market bag. Okay. We had so many orders for this string bag. People were waiting

And this is no joke. They were waiting over a year to get their string back. And I remember Alan and I took a wonderful trip to France to visit the factory to try to figure out how to get them to make more of these things. And they they couldn't believe we were selling them. Why is that? Well, in those days it was sort of elderly French ladies who used them to go shopping with. They were not in vogue. They weren't cool. But uh we sold so many of them, it was just incredible. Let me define this a little bit,'cause I I lived the nightmare in in Burlington on this one. Um The software we're using was back in the day of Cobalt.

Cobalt was a very rigid programming system. And when they designed the the back order file for a mail order company, they just assumed that you would never need more than five digits. That would mean you would have ninety nine thousand nine hundred and ninety nine items on back order. And they said, Well, no company in their right mind would ever do this, so we don't have to add another digit. Right. Well We broke through that and took the entire system down when we went over a hundred thousand back orders. And every time the little French company tells us they're gonna deliver it and they don't deliver it. We have to send notices to and this is back in mail. This is not email messages. This is twenty one cents uh an envelope mail. We have to send everybody that has been further delayed. And then The punchline was

Finally. They got a big shipment ready to ship us. And they did something on the label. And it got held up at customs. Oh yeah, yeah. And We got a bill in the mail for I don't remember that something like a hundred and twenty thousand dollars for penalties. I mean it w it was a nightmare. The whole thing was a nightmare, but we finally got it straightened out and that's how many we sold though. We sold over a hundred thousand of these stupid things.

Um, meantime, Jeffrey, you are working out of an office in New York. You got a s couple people there. Yep. The main headquarters is in is in Vermont. And I guess eventually you did move there. And from what I understand for a time, like you You and Alan. Live together or live next door to each other? What do you remember?

Boy, we didn't live together, at least if we if we did, I blocked that out of my mind. But we we we were we were joined at the hip for a lot of those. You guys hung out in separate. Yeah, we were we were I mean, I considered Alan as close a friend as I had. You know, y what I've learned over the years is that if you bond over common goals you develop friendships and we had this tiger and we're we're holding on to the tail of this tiger and every day we're on the phone trying to figure out how to solve different problems and and to some degree we brought different skill sets to the the partnership. You know

I agree with Jeffrey. I mean, you know, I consider Jeffrey one of my good friends at the time and we didn't make a decision. Without talking to each other. Jeffrey, how did you feel about that? the culture at the office that kind of hippie culture and the beanbags and the pillows and stuff. Did you think that actually that's a kind of a good look for a

a company like Seventh Generation, did you were you okay with it? I I had a multiplicity of feelings. I mean in in uh in some respects I loved what Alan was doing and I learned a tremendous amount from him about how to build the culture that was aligned with the values of the business, and that was really cool. And yet at the same time, I took a lot of shit for the nap room from investors. It was like you really need a nap room. Is that a good use of our capital?

Uh. But I You know, Alan was a great teacher and I came to really appreciate the culture. He was talking before about What people don't know. I mean, one of my fondest memories is that in our staff meetings.

We would actually give a prize out to the person who made the biggest mistake that week. And they would get a coupon to go out to dinner with their friend or their wife. The person who made the biggest mistake that week actually got rewarded? Yep. Absolutely, because we had a culture where we didn't want people to feel like they couldn't be open and share the mistakes they made. And if they made a mistake and covered it up.

The only thing that happened is someone else would make that same mistake. So that was part of the genius of the culture that Alan began to build at the company. It was all about the speed that we were growing. People had to make decisions every day. They couldn't keep coming to a boss to make a decision because something new was happening. They had to be empowered to make decisions. And they had to be empowered when they made a bad decision. hide it in the back of their desk. And um it's something that I I learned at Gardener Supply and I've done it at every business since then.

It's a m it's amazing'cause now this is commonly practiced in big companies. Like Google celebrates failure and you know and and it's become almost a fetish. No, we were we were way ahead of our time in more ways than one. Yeah. It's amazing. I read that um there was an article that came out. In 1989, the New York Times mentioned Seventh Generation, which was a huge publicity coup for you at the time. And I think your Catalog sales. In 1989, I read were a million dollars. In 1990, 7 million dollars. You went from a million to seven million in a year.

with the help of the 20th anniversary of Earth Day. The amazing thing was that the media Wanted to find stories about the environment. And we were a great story. We got a huge amount of publicity. We had maybe it was a year or two later, but I remember we had a four page story in People magazine. That was

Unheard of for this tiny little Vermont company. So so you're looking at this explosive growth and you're thinking, All right, nineteen eighty nine, bam, nineteen ninety seven million, nineteen ninety one and then there's a recession. The recession hits. Well, we planned my my recollection is that for ninety one we expected about twenty to twenty one million in sales. Boy were we wrong.

And that was because of The recession? Well, I think it was the combination of the recession and the fact the excitement that people had about the environment during the twentieth anniversary of Earth Day. Did not carry through. Many, many people who bought something.

And we expected that they would buy something else. Didn't you? Mm. Also the war. 'Cause in the world of catalogue marketing

Anything that distracts people works against catalog sales because so much of it is impulse. The other things you're talking about are all true, by the way. I'm not negating. But when the Gulf War started Everybody turned on their television and was glued to the television and our we went from I seem to remember twelve to fifteen hundred orders a day down to less than a hundred. And

It was a disaster. There's no other word. For it It was like jumping out a window and not knowing how far you're gonna fall because Every week we missed our numbers, and every week we missed our numbers again, and it was incredibly scary.

And disconcerting. Wow. I mean At the end of nineteen ninety You're doing seven million. By the middle of nineteen ninety one you start to

You have to lay people off. No, it was we uh my recollection is We had about a hundred and twenty people and we had to lay off half of them, almost sixty people, fifty percent. Wow. My worst recollection I had a good buddy who was running the warehouse who was a a great chef.

And he was having a party. On a Saturday night. And Geoffrey and I had just made The decision on who we were gonna cut. And we decided let's not tell'em on Friday. Let's let'em have the weekend. We'll tell them on Monday.

And so I had to go to this party Saturday night. Knowing That on Monday I was gonna be firing Sixty percent of the people who were at that party. It was probably one of the most difficult things I ever had to do. So you um

This is clearly gonna take its toll on both of you um you know emotionally,'cause you're it sucks to have to do that. Um Alan, at this point I guess.

The toll of of just Crater and it it affected you and you decided that you needed some time off. Is that d is that your recollection? Um I would phrase it a little bit differently. Please. Um by this time

I had gone through the build up at Gardner's Supply Company. where I was working, you know, eighty, ninety hours a w a week Then started niche marketing services where I had been working, you know, I was down to sixty five, seventy hours a week. And then the startup of seventh generation was a hundred and twenty hours a week. I may be exaggerating, but you got the idea. It's it's a grind. It's a grind. I remember I was tired. When I saw the numbers, I was aware that we needed to really rethink what we were doing. This was not a uh temporary setback that we really needed to figure out how to generate some business. And I remember having talked to Jeffrey before it tanked.

You know, talking about I'd love to get a sabbatical before we have to go you know, balls to the wall on the new holiday catalogue, which was always our biggest catalogue. Yeah. And give me a couple months to get my head together and come back with what can we do here to help, you know, regrow this business. And so when I left That was my thinking. Jeffrey, you remember

This differently. What do you remember about Alan's? decision to take a sabbatical, how did you respond to it? Yeah. You know It's hard to separate what I felt at the time with

my memory of what I felt. I felt abandoned, I felt angry, I felt like I was on a ship that was sinking in my partner who's supposed to be steering the ship with me. Just stepped off and left me alone. with a boat that was really sick. I mean I didn't know whether the thing would survive.

So and you know When things Don't work out. Both parties have some responsibility, so there's no question. That I probably didn't behave.

The way I should've. I might have felt like, you know, if you leave now, don't come back, but I might not have said that. Yeah. Are you are you that kind of do you tend to be Conflict averse. No, but I tend to hold a grudge. So uh I did feel sort of abandon with a mess.

That I was not thrilled about having to sort out. And and Alan, do you I mean January nineteen ninety two, you take a six month sabbatical. Yeah.

Uh do you remember Jeffrey saying, Hey, what the hell you y you doing? Why are you leaving? Or do you do you remember him just sort of saying, Okay, fine See you later. Yep. I had really no clue how how annoyed Jeffrey was. I had no idea how angry he was And I didn't know.

Until I sent an email or a and letter or however we communicated in those days saying, Okay getting ready to come back. Why don't we get together and let me talk about some of the ideas that I have put together that I'd love to start implementing and I got the Dear John litter. You gotta You got a letter that Basically said.

Your time at the company is over. Correct. It's so hard because we didn't talk during his sabbatical, at least I don't think we were talking during your sabbatical. And for two people who were so close. То олив би да сепер.

you know, left a lot of room for each one of us to be having our own thoughts in totally different directions. When you look back at the way It was handled. Do you think that you h had no choice, that you had no other way of handling it, or do you think you m might have done it differently? Іно, when I reflect on this.

You know, any time you have a close relationship That falls apart, and any time you hurt someone. There's nothing to feel good about. I mean that's a bad situation and that's a personal failing on my part. But my my reflection is that

One of the things we could have done that we didn't do is put things in writing when Alan left. Yeah. So A written document that says Alan's taking six months off and he will return at the end of six months and fulfill the position he had before. I mean

That wasn't written down anywhere. So We were left with very different experiences and different points of view. About what the outcome of the sabbatical would be.

Jeffrey, it sounds like you wrote that letter thinking Alan would not be surprised that you know, he was sort of out of the picture and You know, it was kind of No, I'm not sure that I thought he wouldn't be surprised, and I was probably relatively certain that he would be angry and hurt. For me, I think it would be crazy for me to expect anything else.

Alan, how did how did you Feel when you got it. And you got that letter. Well. I was totally shocked.

When I got the dear John Noten You know, you gotta remember that I really felt that we were friends. I felt that we were in this together, in my mind at least. I was doing

the best thing that I could do for the business. And I felt this was really my baby. Yeah. And Jeff was clearly a valuable participant and partner in it, but I really still felt it was my baby. And the fact that my friend

Threw me out. And stole my baby without even a fucking discussion. You know, I was ripshit. When we come back. Just a moment.

how Alan's departure left a big hole at the company. and have Jeffrey filled it. with some very risky decisions. Decisions that would turn seventh generation. into a completely different company.

Stay with us. Guy Raz, and you're listening to How I Built This. from NPR. Welcome back to how I built this from NPR. I'm Guy Raz. So it's the early nineteen nineties and Alan Newman

has just been forced out of the company. He started. Seventh generation. He still owns about 20% of it, but Nothing else.

Not even a seat. On the board. You know, I licked my wounds for a while, and then I started coming out of it. And um one of the things for me. was how

I got Paid out. Of Seventh generation and the impact that that had on me when I when I finally got paid for my stock, it wasn't I didn't get a lot, but it essentially gave me enough to start up another business. Right. And and I I guess you got paid out in nineteen ninety three, which was

A bit after you were forced out of the company. Um Had that happened? Well I got a phone call.

Seventh generation is going public. They need you to lock up your shares. And what does lock up mean? It means I agree not to sell my sharteen months after they go public. And I said Why would I do that?

And they said because it will allow seventh generation to go public. And I said, Why would I care? You've never cared about my financial situation, why should I care about yours? If you really want To solve this problem, you need to buy me out. And that's when um that's when I got paid out.

You sold your twenty three percent of seventh generation. I think um You got like two hundred thousand bucks. Something like that. Yeah. And when that happened, a lot of my animosity

Subsided. Hm. And Jeffrey, a around that time period, I mean, um you were still living in in Burlington, which is not a big pl place. I mean, did you ever Run into Alan? Did you ever see him?

We actually did see each other several times. We And I I don't know who instigated this, me or Alan, but We went to see a third party to try to reconcile our differences. And we had a series of meetings with a sort of marriage counselor type person to see if we could mend the relationship. Which I don't think happened very successfully.

Just for the sake of mending the r the friendship or to see if he could come back to the the business? I think it was just to mend the relationship. And and Alan, what do you remember about those those sessions? Honestly, I don't remember a lot. I d I the only thing I really remember is

They were grossly unsuccessful. You know, we were both kind of dug into our point of view. And neither one of us my recollection at that time was willing to To accept

That the other one had You know, some valid issues that were worth discussing. And and do you remember feeling uncomfortable when you would see Jeffrey? Would you get like butterflies in your stomach like Uh No My recollection is Jeffrey was so uncomfortable whenever he was around me that I loved it. My all time favorite.

I was sitting on a plane in Burlington getting ready to take off. And they're getting ready to close the door and and there's a seat next to me that's open and I look up and there's Jeffrey getting on the plane and I immediately know what seat he's going to. And it's this little tiny puddle jumper. You know, we're we're literally locked together. And so, you know, we say hi cordially and Jeffrey sits down and literally as he sits down, the pilot gets on the And the thing that says We we have a little weight balancing problem. Do we have anybody up front who's willing to move out back? And Jeff got out of that seat. Really quick.

Do you remember that one? I don't but I'm sure that was exactly what happened. Um all right, Alan, I'm gonna ask you to to hang on for a while. Um I wanna turn to Jeffrey now and talk about what happened after you left uh Seventh Generation and and Jeffrey went on to to lead the company. Yeah. You gotta Okay.

Yeah, Jeffrey. Um, so Alan is is no longer part of the business. It's now A shadow of of what it was a year earlier. But you still believed in the business, you still believed it had potential? I did, and at a certain point.

My perception was that potential was in a very different direction than the one we had been proceeding. that rather than having a Catalogue business I had developed a vision for a wholesale business where we would sell our products to retailers

And attract consumers in retail stores to buy the brand. You know, that was a that was a business that I had my own experience with because of the books on tape business. And I

just didn't understand and know the catalog business the way Alan did. Alan had done it for years and knew it well. I didn't. Like around this time it's it's clear you need to raise some cash. Um and and as we heard Alan say earlier,

uh you wind up taking the company public. And that does bring in several million dollars. So with that money, what were you now able to do? At seventh generation.

So we sort of did three things. We Built up our line of branded seventh generation products. We were selling in the catalogue A lot of other people's products. So if we were selling sheets and towels and T shirts

Those were not ours with our name on them. So we expanded the assortment of our branded products. So that was number one. Number two was we redesigned and relaunched the mail order catalog. Hoping to get better results than we have been getting. And number three, we started experimenting.

Actually having my brother Peter Hollander. go to natural food stores in New York City. And put our products on the shelf to see if they actually sold. And we got a pretty quick feel of what was moving. And there was no question that three products dominated the assortment.

Mm-hmm. Bathroom tissue. Paper towels and laundry detergent. So from what I understand, I m this straty.

started to to work. I mean you you had a a terrible couple years, right, from sort of nineteen ninety one, but by nineteen ninety four, from what I understand, Revenues back up, you exceed$8 million, your biggest year since I think 1990 at that point. And catalogue sales, I guess, at this point account for like eighty percent of what you're doing, so the strategy seems to be At this point working.

The strategy was working, and the challenge we faced was we had raised about five million dollars of additional capital. And the board and I came to the conclusion that we had two very different businesses.

And they both demanded lots of money. And We decided that we should do something that appeared highly risky and bet on the wholesale. retail business rather than the mail order catalog business because that was my intuition about where the biggest upside was in the future. I guess the thinking was, look, we're really gonna make money by being in stores, in lots of stores, rather than trying to just sell to individual people through mail or a cat line.

And the mail order catalog had a problem. I mean it was a very wasteful business. Whether you got one, two, or three customers for every hundred catalogs you mailed. You were creating tons of garbage and tons of waste for all the people that recycle those catalogs without even opening them. And postage costs were rising, paper costs were rising. So we decided to place our bet on the natural product industry.

And work on getting more and more retailers like Whole Foods and Bread and Circus and Mrs. Gooch's. on board with the brand. So this is nineteen ninety five. You decide.

to sell the catalog business. As you say, I mean this is eighty percent of your revenue. But it sounds like you it it was risky, but that you knew you kind of had to dumped this aside so you could really focus on growth. It was sort of like taking a half a step back to take five steps forward.

Exactly. All right, so you are um now fulfill on being in retail stores. So um And I guess you guys enter Whole Foods. Seventh generation enters Whole Foods in nineteen ninety eight. And was that like a major turning point for you was that

a a year or a time where you can point to and say That was the moment seventh generation just phew. You know, turned a major corner. Yes, it was huge. And it basically unleashed growth.

that would uh propel us from, you know, 10, 12 million dollars to five years later almost 50 million dollars. Whole foods Had so much credibility with the consumer. That that trust rubbed off on us as well. So, you know, we we had sort of the whole foods stamp of approval by just being present in the store.

And and You're still trying to convince other retailers around this time to I have to imagine that you came across people who were like, Listen, I used it Lysol's better.

Or Mr. Clean is better, just kicks us in the butt. And what would you say when people said that to you? Well every product we sold We sent to an independent lab. And test it.

our performance against Lysol, Tide, or Bounty. And we had pretty good test results. We were 90 or 95% as effective. We weren't 100% as effective or more effective. But we felt that we got the job done for most consumers, and that was what would be good enough. And and that's a data you would show to to retailers? Well we would show that data, but we would also show a lot of sales analysis. And basically what we said was Not only are these products healthier and safer, But you will make more money per square foot. By selling them then you will selling traditional products. You'll have bigger margins.

You'll sell more with less space. And honestly, that financial argument was often what was a winning argument because these retailers are in the real estate business and they look at how much revenue they can generate per square foot of shelf space. And if you can create more profit per square foot, they're happy. Yeah. You know um We had um the founders of Method on a couple years ago.

And one of the early insights they had was that you don't they didn't have a whole lot of success, um, telling their customers that their products were, you know uh organic and plant based, et cetera, et cetera. They didn't even really advertise that. They just advertised it as a great product that was effective. Did you find that appeals to consumers like, I don't know, uh better angels worked or or did you just try to kind of sell

The cleaning product says Yeah, good cleaning products and good Paper towels. No, I mean the truth was we sold Health and safety first, environment second.

And As an and These products really work as well as traditional products. We believed that in order to really set ourselves apart. And particularly to appeal to these new moms who were having kids for the first time.

That health and safety was critical, as well as the environmental benefits. And yes, the products had to work. But that wasn't our niche. Our niche wasn't We're cool and will look nice on your bathroom shelf. We appealed to a quite different market.

Mm-hmm. What about kind of figuring out how to expand your product line. I mean, were there any Did you ever come up with products that just like

We're total dogs. It just You really wanted them to work and they just didn't. Oh sure. We created this product made of zeolite that you would put in your refrigerator. And basically what it did was take the humidity out of your refrigerator to allow your vegetables to last longer. and your refrigerator to run more efficiently. So it was a an amazing product that's used in many professional institutional

uh refrigerators. I loved it. I loved the idea, but it was far too complicated a story to tell on a retail shelf. That was a total failure right away. No one bought it. Unlike our diaper business. I mean when we got into the diaper business, I I was traveling in Europe and I saw these Brown diapers. I said, Wow. Unbleached. Diapers made from uh

non-chlorine bleach pulp. And I said, I gotta have these, we gotta sell these, and they were a success from day one. And that added you know about a third to our sales. that was a huge huge driver of our our growth and expansion and and

Who was your first big kind of mainstream retailer that you were able to convince to carry this stuff. Well, beyond the focus on the natural food industry and whole foods, Our first traditional grocery store was a grocery store called Albertsons in Southern California. Sure. I grew up in in LA, I know Albertsons, yeah. And we had

A very unusual experience with Albertsons. About two weeks after we got on the shelf, and we were celebrating and excited because it was the first traditional grocery store. There was a labor strike at Albertson's. Because they were trying to reduce the health care benefits that their employees had. We were so idealistic

That we felt that Those were not the values that we wanted to be associated with. And we had a contingent of our employees pushing to take the products off the shelves. And we debated, and we debated, and the whole company sat down in a meeting together. And some brilliant young man whose name I can't remember came up with this idea.

that we should take all the profits we generated from selling in Albertsons and donated to the workers' strike fund. to help the workers extend the strike and hopefully win back their health care benefits. And that's in fact what we did. That is amazing. I mean this is 1995 when, let's be honest, consumers didn't care about that. kind of stuff as much. Like Today if you did that.

You know, you'd have a bunch of people who were like, Yep. But in nineteen ninety five, I don't think consumers really cared. They probably thought you were if if they even knew that you were doing it, maybe thought you were a little kooky. It was kooky and it was unusual and it was The exploration of a new way to embed values into business. Alright, so the company

It started to do Pretty well. And I guess a around this around like the end of the ninety, ninety nine. You actually Decide to raise some money.

and buy back all the shares and and take the company private again. So uh w what did that mean? Basically meant we had a small group of much more powerful, influential investors. Who were relatively traditional in their investment strategy. They liked the mission.

But they loved the business performance and sales growth. Yeah. And Some of the things that they consider to be silly or extraneous they were willing to put up with as long as the sales kept growing at a fast pace. I wanna go down

A little bit of a rabbit hole here. It's that Seventh generation and companies like it. Create great products. With a great mission.

But that also allow consumers Two Consume. but not feel as bad about it or feel like they're actually not doing Any harm.

I mean for example. If you buy seventh generation diapers. They're recycled, they're brown, but you're still Producing a lot of waste. Right. It's still gonna sit in a landfill for a hundred years, no matter what anybody says. If you buy

Seventh generation Spray. You're you're still buying it in a bottle that is Pretty much impossible to recycle. And

I don't know, I just wonder about that. I mean I I I'm not trying to criticize you or or anybody who does this, but still I just I can't in some ways gives people this feeling like they're doing

Good. When in fact they are still You know. They're still throwing stuff away. Well

First of all, I totally agree with you, and it's a fundamental challenge that the whole green responsible products industry faces. To be quite honest, it's often about being less bad. Rather than good. And and I think we've gotten the two things confused. I think that When you're buying a seventh generation diaper.

You're causing Landfills to fill up. You're causing Increased Climate change.

You're causing water pollution. You're having a bunch of negative impacts. They're just not as bad as they would be if you purchased another brand. But being less bad is not being good. And I think We really need

sort of a sustainability two point oh That's focused on good products. That's focused on Cloth. Wipes rather than paper towels. That's focused on

reusable diapers rather than disposable diapers. And that's why seventh generation just this year came out with cleaning products. That had no water and no plastic packaging. Now. That's still not good, but it's better.

than having the plastic waste that we have with our traditional cleaning products. You know. over time, Jeffrey, you start to to make a name for yourself, not not only as a CEO of seventh generation, but but also as a as a kind of a leader in in sustainable like Green. ego friendly um business as a whole

Um Which I gather led to some tension between You and the board of directors. At what point did you start to Reassess.

the role you were playing in Um It sounds like in your head you started to feel like Maybe this wasn't really the th the the way to to save the planet. I don't know. Am I am I kind of projecting here?

Well In 2007, I began to reflect on my own personal goals and the impact I wanted to have. And it wasn't that I didn't want to be working at seventh generation. It was that I wanted to be doing different things than I was doing. I didn't want to be completely focused on the monthly profit and loss statement. I didn't want to be obsessed about product development. What I really wanted to do Was help build this responsable бізнес movement.

And I wanted to write more, I wanted to speak more. I loved being the public face of the company. But I didn't love doing all the things that a traditional CEO does. And did that

Start to affect. your performance as a CEO, uh the let's say the performance that is expected of a CEO. I don't think so. I mean, you know, 2010 was the best f year financially that the company ever had with about a fifty percent growth rate. But іно, there were a series of factors. that had created an increasingly tense situation with the board.

One was We were in the middle of going to raise about thirty million dollars of additional capital. And There was definitely concern about how my shifting role would play with those new investors. Your shifting role focusing on More public speaking, more building the movement of responsible business. You know, I was a board member of Greenpeace for thirteen years.

I was getting arrested. For standing up for things that we believed in, and my board was definitely not comfortable with a CEO who was getting thrown in jail. Uh That was one

Area of tension. Another area of tension was employee ownership. We had built ourselves up to having a company where the Ownership. of twenty percent of the company was resting in the hands of the employees One of the things that I was the most proud of

hoping to get that to thirty percent. And that was another source of tension with the board because they felt that The employees had enough stock they didn't really need any more. Yeah. And there was

You know, a third area which we had hired This guy Chuck Manascalco who was gonna be This sort of business operational leader He was the Gatorade guy who grew Gatorade from a billion to four billion.

We hired him together. I came to the conclusion that he was the wrong person for that role, that his values really weren't aligned with the company. My mistake, my fault. The board loved him. And the board wanted to keep'em.

And the board was very nervous about the tension between Chuck and myself. So one of you had to go. One of us had to go and it wasn't gonna be Chuck. So In twenty ten

You were fired. Yes, indeed. I'm wondering though if The year you were pushed out of the business, Was the most profitable year.

Were you surprised that you were asked to leave to Uh to step down. Yes, I was shocked and Totally caught off guard. You were totally caught off guard. Unexpected. Totally unexpected.

And You know, it was Done in a somewhat brutal fashion because not only was I let go, but I was let go over the telephone. on a Saturday morning. And told that I wasn't even allowed to go back into the office.

Ever again. I mean you you really took this company to to where it What's you know? It was a

Little mail or business. when you started it with Alan and and now it's a A huge force. Um hundred and fifty million dollars. Were you Okay. Were you I mean, how did you respond? Were you did you get

I think I would get depressed. I think I I would go probably need to see somebody talk about it. I think it would be really hard for me to Handle that. Um but that's me. How did you I was and I did. Yeah it was like a child that had been stolen from me. I was incredibly

Depressed, sad. Angry. Uh And Yeah, it hurt. It hurt.

Boy, I don't know that I've ever cried as much as I cried in the weeks and months following. That experience. Mm. We'll hear how Jeffries former partner Alan Newman reacted.

When he found out that the man who ousted him from his own company Had now been ousted. himself. Stay with us. I'm Guy Raz, and you're listening to How I Built This.

N PR. Hey, welcome back to how I built this from NPR. So it's two thousand ten and after twenty years of building and leading Seventh Generation. Jeffrey Hollander? is kicked out of the company by the board.

And It felt like a gut punch. But At the same time I feel like I have to take responsibility for what happened to me. It didn't happen all on its own. I contributed to what happened. I have to understand how my behavior led to getting fired. I was very headstrong. I was impatient.

And I was too focused on doing what I was passionate about doing, and not focused enough on ensuring that I had brought the board along with me. Jeffrey Uh, I wanna bring Alan back into the conversation. Alan, I know you've been um patiently listening for a a while, so um so thank you for your patience. Um At at the time when Jeffrey was ousted, um

Were you following w what was going on inside of Seventh Generation? Like d d do you remember how you felt? Yeah, no, I I definitely followed it. I was aware of it. People it's a small town. I know a lot of people who were working in seventh generation, so uh I w I was certainly aware of what was going on. And uh Also, while we're on the topic, you know, you didn't ask me. What did I learn from being ousted from seventh generation? And what's really interesting is I would have given you the answer that Jeffrey just gave you. Yeah.

I really let Jeffrey handled the board. They were his investors. I was busy trying to run the business. The board meetings were down in New York. And I really stayed out of it. Yeah. In retrospect. I realized that was something that I've never done since.

You know, I always stay as Geoffrey put it, I think Well put. You've got to bring your board along. Yeah. You can't be out there in a different place, otherwise you will lose. So um yeah, it it I did follow it. Um and I saw the similarities. But

I'm not gonna lie, I took solace in Okay, how does it feel, Jeffrey? And uh The deja vu. Certainly occurred to me. Ellen.

Several I think Five or six years after Geoffrey the company Unilever acquired it. for reportly for seven hundred million dollars, which is incredible. Um when you found out

About That's the same. What did you think? Well First of all

I think what Jeffrey did with the business after I left was in many ways brilliant. You know, certainly deserves a lot of credit. Yeah for taking this concept and this fledgling business who was really down on its luck and finding the way it's what entrepreneurs do. They find opportunities, they climb over the mountains. And that was a hell of a mountain that seventh generation had to climb. And to get it into condition to sell to Unilever, you know, when I got all the calls saying, Well, how do you feel about big bad Unilever buying your your company? It's like, Well, number one, it's not my company, and number two, I'm s excited as hell.

I always wanted to see seventh generation go international. I saw no reason why it was a local, regional, national brand. And so the fact that Unilever took it over and is now expanding internationally to me was exciting as hell. It was my dream for it. Hm. So I I actually want to rewind in time f for a moment because Before we we left off with you, Alan, um you mentioned that after you left Seventh Generation, you went on to start a whole new venture, and this is gonna be mind blowing for craft beer lovers. Um it was called Magic Hat Brewing Company, um, which became a pretty successful uh craft beer. Wha w what's the story? How how how did that happen? So

I had been looking for a business to buy. I was trying to get into the music business. And I had this Seventh generation, he came in one day and said, I listen, uh, this is not what I had in mind. I'm gonna go. And I said, What are you gonna do? And he said, Well,

I'm gonna go learn how to start a brewery. He he had done a lot of home brewing, had won a lot of competitions. And I said, Well, you know, we could start one here and he said, Really? I said, Yeah, I I got nothing else to do. Alright, so you and this friend, um his name's was Bob Johnson. Yep. Um you guys what just decided like Like let's do this. Exactly. And and did you have some kind of strategy? Like what did you what did you even know about the beer business? I knew nothing about it. I I was not

Really a craft beer guy. You know, I was much more of a pothead than an alcohol guy. And I figured well. I better get educated and Bob had been following it, so he knew what was going on. And he said Why don't we fly out?

to the Pacific Northwest because that's where it's most developed. And We flew out to Seattle, we rented a car, and we drove down to San Francisco and it took us eleven days. We stopped in I think the number was like thirty three breweries along the way. And the aha moment for me. Um

Vermont already had three craft breweries. This is ninety three. And I said Does Vermont really, with its six hundred thousand people, really need a fourth craft brewery? And everybody was doing the same thing, and so I was really struggling. With Well

How can we be different? Yeah. And all of a sudden I went Ah. Don't make this about beer. Everybody was everybody, a hundred percent of the craft breweries was saying made with only the finest all natural ingredients. I banned that from our label. I banned from our thinking. Uh I wanted to be in the music business, so we're gonna do a craft beer company, but we're gonna focus on pretending we're a

a music company and Supporting music became the lifestyle. And this is long before anybody else was doing that. Nobody in the craft business was putting their beer in fest in music festivals. You know, I always thought That I would measure my success at Magic Hat. When Ben and Jerry's was at its prime You're in Vermont.

Nobody ever went to a party. Without taking at least a pint or two pints of Ben and Jerry's with them. They grabbed Ben and Jerry's because Ben and Jerry's was really cool and they knew that everybody there would be thrill to see Ben and Jerry's there. And so I made that my North Star. I said I don't want to be a beer company because that's too limiting. I just want them to buy it because it's fucking cool and they this is a great thing to take to a party. And and Magic Hack kept growing, right? I mean you you started to to distribute it nationally. Um how did you guys

Do that. You know No success and no failure is is ever because of one issue. Sure. Um One factor. Was that

There was Bob and me. There were two of us. most other craft breweries in those days were started by an engineer who loved home brewing, knew nothing about business, knew nothing about finance. They just were fascinated with being able to put this equipment together and make Beer. Well, I had just come out of an experience with seventh generation. where I had seen the effects of growing too fast and hitting a wall.

And so when I got into Magic Hat I said we're not gonna do that. We're gonna grow organically. We opened up new territories very slowly. We let demand Exceed supply. For eighteen months before we started trying to

match supply and it kept the demand for our beer growing until you know we were In the top ten. Largest craft breweries in America. Yeah. Alan, I I know that

You know, both of these enterprises. Magic hat. and seventh generation. I mean there are there are different chapters in your life and and some, you know, may maybe fonder memories than others. Um And I know that that Magic had got eventually got into some some pretty severe financial problems uh during the two thousand eight recession and and and ultimately you had to sell it off. And uh you're not involved with it anymore. But I mean, if you think about it right.

I mean you you helped to create two really iconic brands. Right. That's pretty awesome. I mean d d do you d d do you take Pride in that

Part of you take pride in that? Absolutely. I'm very proud of what I've left behind more proud in some areas than others. But on whole, I look at what I've done more as you know building opportunities for people to to grow

Find passion in work. and find a way of of earning a living doing what they love doing. And that to me is is what's most exciting. You know, I I unfortunately I just had an experience where at the same time the Seventh generation was being sold to Unilever and I was feeling really good about that. I was watching Magic Hat, you know, tank. And you know, it's it's continuing to tank and i it's it's probably not gonna make it much longer. And it made me really sad to realize

That's not Living. In my legacy. Um seventh generation I feel. you know, has been a nice part of my legacy along with Garden Supply Company, and I'm just I do have a sadness.

For um the fact that Magic hat didn't make it. Ellen, do you think'cause I think I think you are uh you you're visionary, okay? You've got a vision and you are

You're a dreamer and you've got these incredible ideas. But um I think You are a stubborn. Two.

Right? Oh really? Yeah. Okay. Oh a little bit stubborn. And so maybe that stubbornness And by the way, I am too. I'm not an easy person to work with. I love my team, but I'm not always easy to work with. I think that sometimes you're a little hard to work with. Maybe. Oh, I'm really tough. So let me tell you a story that you'll probably like since it it it relates back to how I built this.

I'm well aware. How difficult they can be. I've gotten less difficult as I've age, but I'm still difficult. Um and I'm listening to you had a the woman who had a cosmetic company. Was it Bobby Brown or something? Yeah, sure.

And She was talking about, you know, the sale to the bigger company and how that really allowed her to have a life and still grow the business and how wonderful everything was. And then you said so why did you get out? And she gave the answer that has transformed my view of myself. And probably to some degree I think describes the relationship.

You know why Jeffrey and I didn't make it. She said well You know what I realize is at the end of the day I like being the boss. Mm-hmm. And I was not the boss. Yeah.

At seventh generation. You know, Geoffrey and I both had that role. And I think Jeffrey also likes being the boss. And I think there was always a friction when we needed each other. You know, and we really needed each other during the growth spurt. But it ended rough because

I wasn't the boss. Knowing what you know now. And you know, having mellowed with age and Does part of you ever Wish that you that maybe

you did it a little different and maybe you kind of Gave a little bit more or accommodated Jeffrey or or didn't take that sabbatical? I I don't know. Just Different. Regret. Not seeing if you could make it work.

With Jeffrey. I I think it was not possible. to make it work back in those days. And I have thought frequently and I've even said this publicly That the shame of it is Seventh generation.

Would have been much stronger. Had I stayed and had we both been there,'cause I think we were very complimentary. Yeah. I think we shared A sense of values and I I think Seventh generation probably would have been better off. I don't know this for a fact, obviously.

Had we both been there and found a way of working together. That said, I don't know that that's within either one of our DNA's. Does any part of you agree with Alan's assessment that Maybe if you would have worked it out and he would have stayed there, seventh generation would have been an even better

Company and brand? I certainly think that that's a possibility, but you know, who knows? I mean As I said, I learned a lot from Alan. He's an incredibly talented and capable guy. He had many skills that I didn't have and And

I you know, in many ways I tried to do the things at seventh generation that I had learned from him. He was a master at creating an incredible culture and community. So, you know, who knows? How

Things might have gone had we stayed together. We didn't. So no one will ever know. What do you think, um I mean, lots of people obviously listen to this show for

business ideas and also for guidance. Um Jeffrey, what do you think Somebody should look for in a co founder. Well, first of all, they gotta make sure that they want a co founder. It's not for everybody, as Alan has suggested. Some people, uh, maybe like him and I, uh

are happier being in the leadership role alone. So If you're gonna have a co founder. I think you need to have a very very transparent and clear agreement. About the relationship. Not just who's doing what, but how you handle disagreements, how you handle things that when things go wrong. It's a challenge. I mean, it's you know.

T to me, in some way, being married is like having a partner. And It takes a tremendous amount of work, so You know, I I think if you're not prepared to do the work, you shouldn't get into the relationship. You know, I agree with a lot of what Geoffrey said. I think that

My most successful partnership. Was with with Bob Johnson with Magic Hat. He clearly recognized That

I was the lead dog, I had the experience, I was putting in the money, and then at the end of the day. Um I was gonna make critical decisions. The other side of it was we had very complimentary skills. He just wanted to be a brewer. He just wanted to make great beer.

and my interest was growing the business. And so We never stepped on each other's toes. Um and I think it's critical. If there are co founders, Jeffrey's right. I think that having written agreements on what the roles are and uh whose responsibility things are are really critical and as things change to update that I think it's really important because at the end of the day you really need to be on the same page.

Mm. Yeah. You know, Jeffrey Um I've been meaning to ask, um 'Cause we mentioned earlier that that in twenty sixteen, uh, Seventh Generation was a was acquired by Unilever.

And at that time you were actually invited by Unilever to return to the board. I think this is like five or six years after your ouster. Were you surprised?

I was very surprised, very surprised. Thrilled. But very surprised. Yeah. Anybody on the board who was also on the board when you ran it? There were a couple of people who were on the board briefly.

But cycled off pretty quickly. And it was a little awkward, quite honestly, but there were also some incredibly wonderful people who were new along with me. And it was uh It was a terrific experience and it's been a terrific experience and I I have had a

Unique opportunity to sort of continue to Shepherd my legacy. with Unilever in a way that I never imagined I'd have the opportunity to do. Yeah. Jeffrey, when you think about The journey you've had.

And all of the Ups and downs and the incredible successes and challenges. And d how much of this do you attribute to your business acumen, hard work? And how much do you think happened because you got lucky and you kinda rode the wave of the natural food revolution. Well, there's no question that you have to be a little lucky. to be successful. I don't think anyone is successful without a fair measure of luck.

But I I attribute a lot of my success to my unwillingness to give up. to no matter what challenge I'm facing, no matter how things how bad things look. I'm glad that I have have not given up and I've stuck with it. And uh if you don't have that passion, if you don't have that love for what you're doing, you won't make it through the hard times. You won't be around to experience the luck that might be waiting out there for you. Alan?

Luck. Skill. Hard work. What do you think? All three. You know, I got lucky

numerous times I got lucky when I took a g a job at Gardens for all. Um that took me on a ride and really taught me the the catalog business, which then took me on my next ride. through seventh generation and Neither one of those was planned, you know, so were they lucky?

I don't know. I was in I was in play. So I had the opportunity to see the opportunities and say yes to them. And then I think you make your own luck. I think once you say Yes. And and Jeffs. Ability.

To continue I mean is one of the things that I always marveled at. You know, when Things were looked impossible. Jeffrey would just dig in and grunt through them.

That causes luck to happen to you because you stay in play. And it's your ability to climb those mountains and then when you see an opportunity to be able to move on those opportunities which other people would then call luck. That's Alan Newman and Jeffrey Hollander. Co founders of seventh generation. These days, Jeffrey still has a seat on the board and is also the CEO of the American Sustainable Business Council. As for Alan

He's busy with a number of small ventures, including a live music venue in Burlington called Arts Riot. It's been closed during the pandemic, but he hopes to open up later this year. And the motto for the place? It's actually pretty catchy. Destroy Apathy.

Hey, thanks so much for listening to the show this week, and while you're with us, please do take a moment to subscribe to this podcast. If you want to write to us, our email address is hibtnpr.org. If you want to follow us on Twitter, it's at HowI BuiltThis or I'm at Guy Raz. And my instagram is at guy dot ros. This episode was produced by Casey Herman with music composed by Ramteen Arablui. Thanks also to Farah Safari, Liz Metzger, Dereth Gales, JC Howard, Julia Carney, Neva Grant, and Jeff Rogers. Our intern is Janet Ujong Lee.

I'm Guy Raz, and you've been listening. to how I built this. This is NPR.

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