Why UL bought GoodGuide

When I heard that UL Environment, a division of a venerable testing and certification company, had purchased GoodGuide, a Berkeley-based online product rating service, I was at first taken aback. UL is a century-old, conservative, nonprofit institution — practically a regulatory body, given the weight its certifications have in the marketplace and in building and safety codes. GoodGuide is a feisty, unprofitable, venture-backed startup with the audacious mission to, as its co-founder put it, “transform consumption and production and how people see and interact with products.”

Can this marriage possibly work?

I think it can. The union of ULE and GoodGuide holds the potential to shift buying habits — if not by individual consumers, then by large business and institutional buyers, which can inure to consumers. It also ratchets up the pressure on companies to disclose ever more details about their products, policies, and operations.

But getting from here to transformation won’t be quick, or easy.

I first met GoodGuide’s co-founder and front man Dara O’Rourke, an associate professor of environmental and labor policy at UC Berkeley, in 2006, when his vision for GoodGuide was just taking shape. Inspired by questions he had about the ingredients of a sunscreen he was applying to his young daughter’s face, he mocked up an app for his mobile phone that enabled consumers to get instant information about products as they traversed supermarket aisles. This wasn’t the first time I’d seen some scheme to empower consumers in this way, though none had caught on. When O’Rourke and I met to discuss his vision, I expressed skepticism that it would work, his impressive app, and rap, notwithstanding.

Since that initial conversation, O’Rourke has endeavored to prove me wrong. He built a team, raised money from three venture capital firms, and launched GoodGuide, building out ratings for hundreds of thousands of products, launching web and mobile apps, and attracting a sizeable audience and an enviable amount of media attention. He’s become a regular on the conference circuit, from the Wall Street Journal’s ECO:nomics to the World Economic Forum in Davos.

ULE, for its part, was formed out of Underwriters Laboratories, a 118-year-old organization formed by the insurance industry to test and certify products. UL in many circles is synonymous with the word “safety.” The UL logo appears on billions of products and devices, many of them hidden behind the walls and ceilings of buildings, or deep inside cars, computers, and other gizmos.

UL's environment division was launched in 2009 with the not-so-modest goal of taming the environmental ratings marketplace, bringing order to the chaotic world of hundreds of eco-labels and thousands of marketing claims attached to countless products. (GreenBiz Group has a partnership with ULE related to a company-level certification scheme, wholly unrelated to GoodGuide.)

Next page: ULE's buying spree