We know how daunting it can be to start a new business, especially if you’re disrupting an industry or creating an entirely new one. When there is no path to follow, the biggest question is, where do I start? There is so much to do, but before you get ahead of yourself, let’s start at the beginning. To kick-start the process, and ease some of those first-time founder nerves, we’re asking successful entrepreneurs to share their stories in our series, From Scratch. But this isn’t your typical day in the life profile. We’re getting into the nitty-gritty details—from writing a business plan (or not) to sourcing manufacturers and how much they pay themselves—we’re not holding back.
When Sarah Paiji Yoo became a new mom, she was shocked to learn the water she was using to make baby formula contained hundreds of pieces of microplastics. She discovered that most of our everyday products, from toothpaste and lotion to household cleaners, come packaged in plastic that, when discarded, finds its way into our waterways and oceans and leads to it showing up in our drinking water and food. “That’s when I decided to cut back on my own plastic consumption, but I quickly realized there were so few non-plastic choices as a consumer,” Yoo tells Create & Cultivate.
Yoo, who started her career in finance at McKinsey, Goldman Sachs, and Berkshire Partners before becoming a serial retail entrepreneur, decided she could have a positive impact on the environment if she built a business that offered everyday products in reusable packaging, which is how Blueland was born. Founded with the goal of ending single-use plastic, the brand pairs reusable glass bottles with revolutionary refill tablets of either hand or dish soap, household cleaner, or laundry detergent, eliminating the need for plastic spray bottles, refillable containers, and the like.
Ahead, the entrepreneur tells Create & Cultivate how she built Blueland from scratch, including why she didn’t write a business plan, how she knew VC funding was right for her company, and what the future holds for the brand post-COIVD.
Can you tell us a bit about your background and what you were doing professionally before launching Blueland?
I’ve been a serial retail entrepreneur for the past 10+ years. I started my journey in startups after I “dropped out” of Harvard Business School and founded Snapette, the largest mobile platform for local fashion shopping at the time, and was eventually sold to leading e-commerce platform Pricegrabber in 2013. I was then a founding partner at a startup studio LAUNCH and helped launch a range of brands including M.Gemi and Rockets of Awesome. Prior to jumping into start-ups, I built my career in finance at McKinsey, Goldman Sachs, and Berkshire Partners.
How did you come up with the name Blueland? What was the process like, how did you know it was the right name, and what are some of the things you considered during that process?
The name Blueland derives from the idea that our planet is all our collective home. We thought of it through the realization that we may rid all this single-use plastic from our houses, but it continues to exist for centuries on this planet, our collective home. It encompasses the notion that our home does not stop at our doorstep, or even the water’s edge, and embodies our hope to return the oceans to their natural, pristine state. We also wanted a name that was very simple and strong, easy to spell, and for which we could own the domain name.
Did you write a business plan? If so, was it helpful, and if not, what did you use to guide your business instead?
I didn’t write a business plan. In fact, while I’ve launched several businesses in my career, I’m actually not exactly sure what a “business plan” is! My co-founder and I did lay out for ourselves the problem we wanted to solve (single-use plastic packaging), our mission, vision, and potential solutions. We weren’t attached to a single way or path of solving this problem and instead wanted to make sure we had the flexibility to change our plans based on testing, learning, and iterating.
What were the immediate things you had to take care of to set up the business?
Secure the domain name, trademark, and social media handles and incorporate the business.
What research did you do for the brand beforehand, and why would you recommend it?
I scoured the internet for publicly available information related to sustainable consumer products and cleaning products. I spoke with over 50 different scientists, industry experts, and manufacturers. Starting a brand new business is really hard, so do your research and whatever you can to become an expert on the space and products.
How did you find the manufacturers you work with? What advice can you share for fellow business owners on finding the right partners?
We had to be incredibly creative in finding a manufacturer since these products simply did not exist, and traditional cleaning product manufacturers do not have tablet-making capabilities. We spoke with over 50 different potential manufacturers, across a range of industries (even candy manufacturers) before finding the perfect set of partners. My biggest advice would be to make early strategic hires who can help you with the process. One of ours was our head of product development, who was formerly the director of formulation at Method. He’s been a critical part of finding the best manufacturers and developing the cleanest, effective formulas.
How did you fund Blueland? What were the challenges and what would you change? Would you recommend that route to other entrepreneurs?
My co-founder and I did bootstrap it for the first year of our work and self-funded our idea and product development. Eventually, we raised a $3 million seed round led by a VC firm. Venture capital is likely not the best type of funding for most businesses. Ultimately you need to understand what the expectations are with the form of funding that you are taking and if that matches how you want to build your business over time. VC investment often comes with expectations of high, fast growth, getting to a large valuation, and giving up some control in the form of board seats.
How much did you decide to pay yourself, and how did you determine what to pay yourself?
We paid ourselves a fraction of what we were making in salary at our previous roles. For us, we wanted to be able to use as much of the capital to build the business.
How big is your team now, and what has the hiring process been like?
Currently, we have 24 employees. Hiring has always been one of my highest priorities. Some weeks I still spend hours on LinkedIn looking for and reaching out to interesting talent, for both current open roles as well as roles that we may not be hiring for right at the moment. I’ve learned to start hiring early and be patient because it can take a long time to find the right person, but the right person is absolutely worth searching and waiting for.
Did you hire an accountant? Who helped you with the financial decisions and setup?
I actually started my career in finance and management consulting. I really loved and valued my experiences at places like Goldman Sachs and McKinsey, as they helped me develop a strong foundational understanding of business and also enabled me to go deep in areas like accounting and finance, which I still lean on today.
My advice would be for founders to really know their numbers. Always hire great talent in the fields you need help with, but when it comes to finances, make sure you know critical numbers like your costs and customer economics in detail.
What has been the biggest learning curve during the process of establishing your business?
I would say my biggest learning curve and takeaway has been don’t see problems, see opportunities. In all my past failures, I had to stop and realize there was little-to-no value in being stressed or upset, and a lot of value in learning from them and pushing myself to be better the next time around.
How did you promote your company? How did you get people to know who you are and create buzz?
Marketing is incredibly important because it’s all about figuring out and delivering what matters most to consumers, and how to do it profitably and at scale. At the very start, we were focused purely on organic growth and wanted to focus on achieving product-market fit before investing in any paid marketing. Today, we are more active in running paid social ads, search ads as well as TV commercials. Social media has also become one of the most important marketing channels for us—we grew to almost 200K Instagram followers in just one year. It allows us to both reach new customers organically as well as engage with our existing customers every single day.
Do you have a business coach or mentor? How has this person helped, and would you recommend one?
I feel very fortunate to have a range of people that I consider as both mentors and friends who I can turn to with my biggest business, career, and life questions. They include former bosses, current and former investors, and even a former professor. I’ve never asked someone formally, “Will you be my mentor?,” but rather these relationships have all developed organically out of close working relationships and genuine connections.
How has COVID-19 impacted your business operations and financials? What tactics and strategies have you put in place to pivot and ensure your business is successful through this period?
Demand for our cleaning products and hand soaps increased by over 300% within the first few months of COVID hitting the U.S. as effectively and frequently cleaning down surfaces and hands became a priority for many consumers. Many conventional brands were also sold out both online and in-stores, and many consumers were hesitant to venture into physical retailers and opted to shop online. We’ve continued to focus on how to make it increasingly convenient to purchase online, including our subscription offering, which we introduced during the pandemic.
We’ve continued to see the elevated level of sales remain through today. For us, despite the pandemic, we’re finding that our environmental mission continues to resonate with and attract new consumers who are still cleaning and washing their hands at elevated levels.
What short-term changes will be crucial to your business strategy long-term post-COVID-19 and what plans are you making for when we get back to “normal?”
We believe we are well-positioned for long-term success beyond this pandemic as we continue to focus on building a strong foundation and fundamentals for the business that will continue to benefit us in a post-pandemic world. This includes our robust portfolio of effective but money-saving products, defensible innovation with over 40 patents pending, an authentic mission-driven brand with a large and engaged community, and a financially sustainable business model. We’ve also increased our focus on highlighting the efficacy of our products and showcasing the test results we have from third-party labs that show our products work extremely well. Previously, we were much more focused on our eco messaging, but believe that going forward, consumers will be equally interested in efficacy.
What advice can you share for small business owners, founders, and entrepreneurs who are also reeling in response to COVID-19?
Brands that can prove that they are providing an essential or desirable good/service, even during a pandemic, will emerge stronger. It’s also critical for brands to also make it increasingly convenient to purchase online and not focus energy purely on brick-and-mortar for the foreseeable future.
For those who haven’t started a business (or are about to), what advice do you have?
Break down your big goals into small steps. For example, with Blueland, the initial goal to tackle creating cleaning tablets seemed massive. We needed an amazing chemist with relevant experience, we needed to find a manufacturer that could make dry tablets, we needed to find a way to package them in paper instead of plastic, etc. We started breaking the problem down into daily actions that we could take to keep moving forward towards our goal (i.e. we got on LinkedIn one night and literally messaged hundreds of chemists to see who would speak with us). You also really need to hold yourself accountable for the things you commit to doing each day. It ensures important steps are moving forward and at a good pace.
What is your number one piece of financial advice for any new business owner and why?
Shop around and sign up for a high-interest savings account. After raising funding, we had millions of dollars that were now in the bank and could be earning interest. We looked around for savings and money market accounts to find which banks offered the higher interest rates. The difference in annual income we could earn just from interest rates could support one to two full-time hires, so it definitely was an area worth spending time on and only took about 5-6 hours in total.
If you could go back to the beginning with the knowledge you have now, what advice would you give yourself and why?
I would tell myself to stay tenacious and relentlessly optimistic. It’s going to be a long, iterative path, and most of the time you’re not going to feel 100% ready, or 100% prepared, but there will be breakthroughs when you least expect it and you can’t let doubt thwart progress.