Soap and Glory: A Peek Behind Method's Methods
Soap and Glory: A Peek Behind Method's Methods
Adam Lowry, a chemical engineer, and Eric Ryan, a designer, are childhood friends who, a decade ago, took on the laundry and household cleaners sector with cool design and green products. Their company, Method, has become a force within that industry -- not because of its size, which, at roughly $100 million annual revenue, is a rounding error in a multi-billion-dollar sector -- but through innovation and ingenuity. Along the way, they've helped redefine green marketing -- largely, by not really doing it.
On the occasion of the publication of their new book,The Method Method: Seven Obsessions That Helped Our Scrappy Start-Up Turn an Industry Upside Down, I spoke with Lowry (pictured on the right) and Ryan to learn what they've learned -- about small companies in big markets, about innovation, and about the green marketplace.
Joel Makower: You guys risked your life savings to go into the staid, highly commoditized business of household cleaners and laundry detergent. What were you smoking? Why did you choose that product category and would you choose differently next time?
Adam Lowry: Would I choose this industry again? There are challenges when you launch into categories with a low margin, as our categories are. They're dominated by really big companies because the only way to compete in low-margin commodity spaces is to have tons and tons of scale. That's also one of the reasons it's so ripe for innovation -- because people haven't invested into making the product more sustainable and more beautiful. There's just not a lot of chips to go around, if you will. Sure, I romanticize about being in a higher-margin category because it would make life a little easier, but being a low-margin category in some ways actually created the opportunities that we're exploring.
Eric Ryan: What's attractive about this space is that the margins may not be the most beautiful in the world, but it is a big category. Liquid laundry detergent in the U.S. is a $4 billion category, so it's exciting to play on such a big playing field. We were definitely a bit naïve in believing that we would go in and shake things up.
Makower: Clearly, you've learned a lot about starting and building a small business, but what have you learned about big business along the way?
Lowry: I learned that big businesses are often successful because they have a way of doing things that is very difficult for them to change. And it gives you an opportunity to use those legacies against your competitors by doing something unique and different. So as long as Method continues to get better every day and improve the way we're doing business in our business model, then I am 100 percent confident that we can continue to compete with our competitors because they have a way of doing things that's really, really, really hard for them to change.
Makower: Are you saying that Method could never exist as part of a large company, if it was acquired at some point?
Lowry: In our book, we talk a lot about culture, and "Creating a culture club" is our little phrase. That culture allows us to vertically integrate all of the parts of the product experience that we design in one building and then continually build one innovation into the next innovation. That is the way that we're able to stay ahead. So, regardless of the ownership structure of Method, I think you'd need to preserve that way of working in order to keep Method innovative.
Ryan: What I've learned about big business is they move slower than what I expected. But I've learned when they do they can have such a bigger impact on the world.
Makower: Let's stick with that for a minute. What have you learned about what it takes for a small business to dance with the big guys?
Ryan: Really good big businesses are a bit of fast follower, so they can see a trend and get on it a big way. But for them to move on it, they need to see some sort of proof of commercial success. So, for us to be successful, we've got to have the ability to sniff out a trend at its earlier stages and be able to capitalize on it.
Makower: You're not afraid that some of your great innovations -- the 8x concentrated detergent, for example -- that someone's going to come along and create their version of it? In other words, that you will have created the new standard but won't profit from it?
Ryan: You have to operate from a point of view that if you're successful there will be copycats. That's just the reality of the game.
Lowry: This is a place where we are holding the legacy assets of our competitors against them. I've talked with you in the past about laundry detergent, that the way it's normally used [by consumers] in the U.S. creates a lot of waste, and that creates a lot of extra business for our competitors. So for competitors to put a pump-dispensing technology on the laundry detergent, even if they first have to figure out how to make the formula the way we do, would mean their giving up a lot of the business that comes from that overuse. So, here's a legacy that we're able to hold against our competitors to say, "Listen we're going to do something that's more innovative, but it's also aligning the interests of the consumer with the interests of the environment."
Makower: Let's talk about consumers. What have you learned about consumers' willingness to change, particularly when it comes to environmental aspect of products. Are motivated by the "green"? Are they motivated by design, convenience or something else?
Ryan: It really depends on the categories. There are a lot of very trend-forward categories where you have a built-in consumer base that is always looking for the next thing; cosmetics is a great example. Method is in very slow-moving categories and they're slow-moving for a reason: there's not a lot of people walking around wishing they could find a better dish soap. So, creating change of behaviors is a very, very difficult task.
Makower: So what motivates them? What have you learned about how to change consumer behavior?
Ryan: I think design is a huge part of that. I mean when you put something out there that is aesthetic, you don't have to educate. It's instant and it creates an immediate emotional connection and reaction. So leveraging design has been a really powerful tool for us to create change in the category. You may not understand right away what our laundry detergent is about from the environmental perspective, but what you do notice right away is a beautiful little form sitting there on shelf.
Lowry: We don't really think about the green consumer as a single type of consumer. There's a little bit of green consumer, or a lot of green consumer, in everyone. In our book we use this phrase, "Making it selfish." It's kind of tongue-in-cheek but what it means is if you can make sustainability part of the product that you're selling, and then make the product better for all of the other reasons that they buy it -- convenience, price, value -- then you're creating a layer of reasons why that consumer would want to buy that product. You're creating multiple entry points into that product.
I think combining that with the design that Eric talked about, it creates that immediate, visceral, desire for the product. You can get people to just pick it up and give it a try. If you do that and you delight them with the performance of the product, they might turn the package around and read a little bit about the ingredients or that the package is made from recycled plastic. And that's the type of thing that leads to loyalty.
Makower: The delicious irony in all this is you've become one of the iconic green brands and you downplay the environmental aspects of your products.
Ryan: It is quite ironic, isn't it?
Lowry: I think that comes from the fact that we don't see sustainability or green-ness as a branding thing or a marketing thing. It's just a quality thing.
Makower: Speaking of that, what's the business case behind your new bottle made from plastic waste mined from the ocean?
Lowry: To be honest, there isn't one. Eric and I like to tackle crazy challenges. As I think you know, Joel, we've been making bottles out of 100 percent post-consumer plastic for a while. We started asking ourselves, "What's the ultimate recycled material?" We've always been concerned about the ocean plastic problem. It is a problem that everybody, when they understand the scale and scope of the problem, it's kind of overwhelming and depressing -- how could you ever do anything about it? The point of this project is to make a point: If we can make a bottle that's 100 percent post-consumer and 25 percent ocean plastic, which is what we've achieved so far, we're showing that the solution to our plastic pollution problem is using the plastic that's already on the planet.
Ryan: I'll defend a little bit of our business rationale. What's very different about Method from other companies is sustainability does not start from marketing, as it does in a lot of organizations. It's much deeper into the company's DNA. And as a founder here, I'm in the position to take something that we're doing because we believe in it and generate value that's helpful to building the brand and building the business.
What I love about the ocean plastic initiative is it's a great opportunity for us to tell a story about who we are and what we believe in -- a story that not only has positive impact but also positive impact on our brand as it helps people to more emotionally engage with us and believe in what we're doing. As a marketer, it's not going to be the easiest story to tell, but what a killer story to be able to tell about a bottle made from ocean plastic! So ultimately I do believe there is a positive rationale.
Makower: So you've injected passion and emotional engagement and innovation into this staid cleaning and laundry industry or sector. How much more radical and exciting can cleaning and laundry products get?
Lowry: Oh, just wait! What I think is most exciting is the technical side. For a long time we've done a really good job replacing petroleum chemistries with renewable chemistries. We've even created some new molecules and things that give us the performance and a product that is as good or better than the traditional ones, but made from better stuff.
But we're on the verge of a revolution, in terms of green chemistries and green molecules that come from biological sources. They are just absolutely unbelievable in the types of functionality we'll be able to bring to household products. I think that the innovation engine is already just starting to fire up here at Method, and I'm excited to see what comes next, technologically.
Ryan: The deeper you go into the science, the more opportunity that opens up. Ten years ago, I don't think I couldn't even come close to predicting the level of green innovation we would be doing today. We look over the horizon, but not terribly far; we've got a pretty strong pipeline 18 months out. Within that 18 months, I feel pretty good about the innovation coming and, from there, I don't think it will be hard to find the next round of innovation.
Lowry: We try to imagine what a fully sustainable product would look like in any category. We haven't achieved that fully sustainable product yet, but our business is built around getting better and better and better all the time. So if you imagine what a fully sustainable laundry detergent looks like, it's probably not a liquid that gets consumed. Or if you imagine a fully sustainable countertop cleaner looks like, it's probably not liquid-in-a-bottle with a trigger sprayer on it. That's the type of long-term innovation we're dreaming up. It gives us the opportunity to extend our lead in terms of radical innovation in front of our competitors because that's ultimately where we want to go.
Makower: When you think about Method being successful five years, ten years from now, what's the story that you hope to tell?
Ryan: The story we want to tell is that we took a really basic product that everybody uses and it gave us the opportunity to try to make the world a little cleaner place.
Lowry: For me, it's that we changed a lot of peoples' minds. That we showed that you can bring sustainable design and beautiful design together to any place and improve peoples' lives. If you can do it in laundry, you can do it anywhere.