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Graham Griffin
Graham Griffin
Articles (25) 

1,000 Entrepreneurs: The Natural Home Goods Revolution With Stuart Landesberg

Our profile covers the CEO and co-founder of Grove Collaborative

May 12, 2020 | About:

Since 2012, Stuart Landesberg, the CEO and co-founder of Grove Collaborative, has been at the helm of his company. Aiming to produce and distribute natural and healthy consumer goods, the company has grown to over 1,000 employees in its eight years of doing business. Leading the revolution toward producing natural and sustainable home goods, Landesberg hopes that Grove Collaborative can one day become the largest consumer goods company in the world.

Landesberg grew up in New York with what he describes as semi-progressive parents. Until he was 10 years old, he was under the impression that every family had brown paper towels and a compost bin in their backyard. After growing up, he found himself entering the world of business.

Moving to San Francisco almost 11 years ago, Landesberg found himself working for TPG Capital, a private equity company. During his time there, he was exposed to grocery stores and consumer goods on a large scale. These interactions led him to realize that convenience largely ruled the lives of people and dictated the goods they bought.

Idea

At the same time, Landesberg noticed a dissonance between the products he was using every day and the beliefs that he had grown up with. As a busy professional, it was largely more convenient for him to use less environmentally friendly products. He began to question why this was the case. Thanks to his connections with supply chains from work, he concluded that distribution of products is the main contributing factor for a certain product being on the shelf.

Landesberg found that there were two macro-level trends that were occuring within the industry. The first was that a transition from offline to online was happening. Shopping was no longer solely occuring in brick-and-mortar stores. The second trend was that people were increasingly looking for natural products over conventional ones.

Feeling a lack of fulfillment at his job, Landesberg sought out the opportunity to capitalize on both of these trends. He would create a digital distribution service that allowed people to gain access to products that they were traditionally excluded from in their physical shopping locations. With this idea, he would satisfy both his personal need to drive positive change and revolutionize consumer’s access to natural and sustainable goods.

Building the business

The next four years would be the hardest of Landesberg’s career. Working alongside his two friends and co-founders, they would set off to make Grove Collaborative a reality. Starting in the spare bedroom of an apartment and eventually moving to a think tank, the three did everything by hand in the beginning.

Landesberg recalled getting their first customers by meeting them in local coffee shops. At the time, the group did not even have a website created, so he would work off of a powerpoint presentation. At the end, Landesberg would ask if they wanted to buy into the idea and would swipe their credit card in the moment.

The team would work all day long to broker as many deals as possible and further develop their company. Each day, they would gather in the basement of the building they worked in to box all of the products that needed to be shipped out. Days would often end with a mad dash to the local FedEx (NYSE:FDX) store with a dolley stacked with boxes. After three years, the team had grown to eight people, but Landesberg was adamant about the team consisting of less than 20 people overall for the majority of their existence.

Struggles

Come 2016, Landesberg was actively seeking growth capital and pitching to investors regularly. Unfortunately, it took him 175 pitches before he was able to get Grove Collaborative’s first investment. The excess of disappointment created an unforeseen strain in his life.

His previous years at TPG Capital had shown him success and he thought of himself as a driven professional. The multitude of failures after having a good track record created a crisis of identity for him.

Was he really capable of creating a business? What did it say about him if he could not get funding for the business? These questions and more began to circle him on a daily basis. Luckily, thanks to the help of those surrounding him, he was able to overcome this crisis and come out stronger on the other side. While some people may rejoice in their failures as learning experiences, failure was never an option in Landesberg’s mind.

As the CEO of the company, he was continuously tried with maintaining emotional control over the situation. Landesberg knew that he of all people had to maintain a positive attitude on a daily basis to help the company flourish. However, this positivity was never harder to maintain than while getting rejection and he said that he still feels the same way about rejections to this day.

While the rejections may sting in the moment, Landesberg admitted that some of the biggest mistakes the company made fall solely on his shoulders. Along the way, he has made almost every mistake possible. At one point, the company toyed with white labeling their software and selling to other companies. “What a waste of time,” Landesberg said.

The most egregious mistake was the original name of the company being E-Pantry. Landesberg cringed at having to mention the name. At the time, he had no idea how to create a brand that could stand the test of time. He claims that the people he works alongside ultimately righted those mistakes that he made. To this day, he credits the survival of the company to the people surrounding him.

Success

Taking almost no credit for the success of the company, Landesberg truly believes it employs the best people to bring it to success. Alongside these people, he credits their early successes to having such a small team for so long.

This team allowed them to stay amazingly close to their customers. One of their earliest pivots came in their targeted audience. They realized through their customer interactions that young families in small cities loved the messaging that the company was putting out. They also shared a genuine desire to do some good by buying sustainable products. Changing this early marketing allowed Grove Collaborative to maintain consistent reception of their products over time.

With the connection to their customers, Landesberg also believes that early adoption of influencer marketing allowed for the company to progress into new markets. The influencers had strong success promoting the products to their own audiences, which allowed for a second wave of organic growth in Grove Collaborative’s customer base.

The single biggest pivot and success for Landesberg came when the company made the transition to creating their own product lines. This allows the company to not only increase their sales, but offer a much more diverse selection of products to their customers. At this time, their unique products make up the majority of their sales.

Future

Looking towards the future, Landesberg is focused on helping Grove Collaborative make the biggest impact in the industry possible. Currently, the company is less than 10% of the size of Tide in the U.S. while still making a big impact. They are able to reach millions of customers and Landesberg believes that the bigger they grow, the bigger the impact they can create.

He also wanted to emphasize that consumerism and environmentalism do not have to be exclusive of each other. Landesberg knows that if companies are able to increasingly produce natural and sustainable products while offsetting their impact, they can see their sales hit new levels.

The overall goal for Grove Collaborative is to become the largest consumer goods company in the world. Landesberg understands this could take at least a hundred years, but he is confident the company will get there. Thanks to their digital first initiatives, he believes that the company is able to focus on growth from the start while maintaining their existing customer connections. Their unique customer data can also be utilized alongside their complete ownership of production to rapidly innovate for years to come.

Question and answer

GuruFocus: What are the biggest perks of your position?

Landesberg: The biggest perk is that I get to work with amazing, like-minded people. The people at Grove are brilliant and they care. We put together this great video for Earth Day that talked about all of our accomplishments. We are on the way to planting a million trees in the U.S. We are the only plastic neutral company in our space. If you think about the amount of plastic that our industry creates, to be plastic neutral is incredible. We will ship probably tens of millions of plastic bottles this year and we will offset every ounce of that impact and we are on our way to being plastic-free in five years. We offset our carbon footprint and have an environmental impact so different than any company in our industry before. Almost none of that was done by me. It was all done by brilliant people who understood how to incorporate sustainability into our products. How to go build a product to generate profit for our investors and at the same time leave the planet better off than we found it, and at the same time deliver a great product experience with improved health outcomes from our consumers. Very little of that was done by me. I get to show up to work every day with these people and this team that figured out a way to make one plus one plus one equal 12. That is a privilege.

GuruFocus: Is there anything that keeps you up at night?

Landesberg: In the pre-Covid era, there were hundreds of things and now there are thousands. The number one thing that I always think about is our people. I have given that answer a lot of times, but we are still a small company. Each person holds unique knowledge and unique value. We are not super redundant. I think a lot about what happens if say X person, I don’t want to say gets hit by a bus, but that, you know, equivalent. We have been lucky to have really good employee retention over time. That is the thing that I think about most over the long term.

GuruFocus: What are you most grateful for at this point in your life?

Landesberg: In my life I am most grateful for my family. There is no question. I get to spend extra time with them, sort of, during shelter in place. We are only as strong and happy as the people around us. I am lucky to have a wonderful wife and two terrific children and a terrific dog. I am super grateful to have had a loving family growing up, and loving in-laws, and a really wonderful home to participate in.

Landesberg’s advice for entrepreneurs

Do something you love:

Landesberg believes that no matter what you choose to create, it should be something that you absolutely love.The journey is going to be hard. There will be many times that you struggle and things are never going to get easier. The bigger you grow, the more complex problems you will have. As Mike Tyson once said, “Everyone has a plan until they get punched in the mouth.” If you are not in love with what you do, you are not going to get back up from that punch.

People matter most:

As your company grows, the people that you look to for support are going to become increasingly important. The culture of your company will grow from those very first people. They will influence every generation that comes after them. Make sure that you get your people right from the beginning to avoid issues down the road.

Have a real message:

Landesberg believes that people think that social change and making profits are mutually exclusive. He argues that being conscientious is actually a strategic advantage in business. If you have a message that resonates with people, it will be infinitely easier to get them on board with your product. Whatever your message is, make sure it is real regardless of how insignificant it may be in the grand scheme of things.

Make sure to check out the podcast.

Watch the video of the entire interview here:

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