Our Mentor Program Isn't Perfect But It's Just What We Need
When our company, Balsam Brands, took off like a rocket in 2006, we had to quickly design a business that would last for the long haul. We knew that above everything else, we wanted to create a place where our employees would be happy and fulfilled and would love their jobs. We are not saving the world here — we are selling artificial Christmas trees and home decorations. So we felt this kind of people-first workplace would be critical not only for our company’s success, but for everyone’s personal happiness.
Although I was only 30 years old when I started the company, I had already been in business for a number of years working for McKinsey, a large nonprofit, and running my parents’ manufacturing business in Ohio. I had seen what worked and what didn’t. I knew that happy workplaces are ones that give employees opportunities to grow both professionally and personally.
That’s why we developed our mentor program, which has gone a long way toward ensuring employee growth and happiness. It’s an idea that we encourage all Evergreen companies to adopt.
How does it work? Mentors are separate from managers. Managers oversee work goals and have a say in things like raises and promotions. Mentors are there for support. A mentor is there to listen and offer guidance.
At least once a year, each employee meets with their mentor for what we call a Development Chat (it intentionally is not a review). Armed with feedback from several of the worker’s peers, mentor and mentee discuss how things are going and set some goals for the coming months. If those goals are all business-related, that’s kind of a bummer. We want these discussions to be more holistic, which could include goals like going to the gym more, eating healthier food or taking up a new hobby.
Those are the formal mentor meetings, but mentors are available anytime a worker has a problem or needs a friendly ear or some advice. We hope employees will meet with their mentors three times a year — even if it’s just for coffee — but we don’t force it down anyone’s throat. The whole point of the mentor program is to encourage employee happiness and to make Balsam Brands a place where people love working.
Although we’ve found this system to be incredibly beneficial and a big part of the reason we have such low turnover, I’d be lying if I said it wasn’t time-consuming. Not everyone is a great mentor, so the people who do sign on to the program end up taking on more work because they will often have several mentees. There are people in the company who are giving feedback to between five and 15 employees. To ensure that feedback is valuable and productive, people who are asked to review their peers are expected to be very thoughtful in their responses, which also takes time.
We’ve searched far and wide for a way to redesign this process to make it more efficient. But here’s the thing: Whenever we talk to other companies about this question, they almost always end up wanting to adopt our program. They see how inspired our employees are and they want to try and replicate that in their own company.
Every Evergreen CEO knows that in order to build a 100-year company, you need to put your people first. Although we don’t think our system is perfect, it’s achieved our goal of creating a satisfying, happy workplace. Thanks to our talented team, our company has continued to expand; last year we did $90 million in revenue and were named to Forbes’ Best Small Companies list. The future looks bright for Balsam Brands thanks in part to our mentor program.
Mac Harman is the CEO of Balsam Brands.
What Operating In A War Zone Taught Me About Putting People First
Entrepreneurs know they need grit to persevere through tough times. But nothing could have prepared me, or my entire company, for the perseverance we would need to show when two-thirds of our staff was suddenly engulfed in war zone.
My husband, Kenny Rosenblatt, and I started our gaming company, Arkadium, in 2001 in New York City. We were two determined 25-year-olds, hungry to trade our cushy six-figure salaries for the risks of entrepreneurship. It was a low time for our industry — the bubble had just burst, and I was looked at like a lunatic when I announced that I was going to start a tech company with my (then) boyfriend.
One marriage, three kids and over a decade later, we found ourselves with a multimillion-dollar business. Kenny serves as Arkadium’s president and I am the chief executive. We are known for successful Web and mobile games like Mahjongg Dimensions, Twisty Hollow and Imago. That solitaire game that came preinstalled on your PC that you use to unwind at the end of the day? That’s us.
In addition to our headquarters in New York City, we also had a fully staffed office in Simferopol, in the Crimean Peninsula of Ukraine. We spent close to 10 years growing that office, building relationships and investing in our future there. We even bought an apartment and spent the summers there with our kids. By 2014, our office in Ukraine had grown to over 100 people. Then the war started.
Suddenly an area of the world no one had heard of was front-page news. Tanks rolled through the town square and armed men roamed the streets, putting tremendous stress on our employees as they weighed the safety of leaving their families every day to come to work.
That December, the Obama administration declared sanctions on any U.S. company doing business in Crimea. The penalty was 25 years in prison and a $250,000 fine. Suddenly, in addition to worrying about the safety of our staff in Simferopol — a city we considered a second home — we were worried about the future of our business.
It might seem like this would have been a good time to cut our losses and start fresh with new employees in a safer part of the world, but that never occurred to us. My husband and I had built our company by hand, and our Ukrainian employees are no different to us than our New York staff. Abandoning them was out of the question.
As an Evergreen CEO, I focus my energy on culture and people over making myself a billionaire. I know that by following this path, success is not only inevitable but that it will be truly gratifying.
So instead of folding the Ukraine office, we talked to our employees to find out what they wanted.
While some members of that team wanted to stay because of personal obligations, others were ready to leave and trusted us to do the right thing as we helped them find ways to relocate and pick up the pieces of our business. Ultimately we moved 55 people — and their families — to mainland Russia and opened a new office near Sochi, where our employees were safe and we were no longer subject to U.S. sanctions.
These events, and the decisions we had to make, were extreme. But remarkably, and against all odds, Arkadium is thriving once again. With nearly half our staff gone, we dramatically scaled down our efforts in mobile gaming, an area that had given us minimal success, and returned to what had been the original nerve center of our company: casual Web-based games for publishers like USA Today and CNN.
We had a tremendous year in 2015, growing profit by over 400 percent and adding close to 500 new partners. We even started to grow our new office in Russia, adding 20 new employees.
As the story spread across the tech sector, our reputation grew. There are very few companies our size that have been around as long as we have. Most startups either are bought or fold before they reach our capacity. We are known in our industry as survivors, and the events of 2014 certainly reinforced that reputation.
As a business owner, you have to be a crazy optimist. If you don’t see the light at the end of the tunnel, you won’t survive. But a bigger lesson from this story, for me, is the karmic one. Evergreen CEOs put their people first, and those people notice. As a result, when times get tough or given the chance, those same people will step up in extraordinary ways for you.
Jessica Rovello is the CEO of Arkadium.
Our Values Have Kept Us Moving For 148 Years
Building a culture requires a Crock-Pot, not a microwave. You don't post core values on the wall and then move on to the next thing. It's very organic and requires that slow, steady repetition, and over many years it does take shape.
At Betts Company, we’ve had the time to put in that work. We are in our sixth generation of leadership at our 148-year-old company and we’ve come to realize that it’s the values we instill in our company and our employees that will help us stick around for at least another 148 years.
At Betts Company, we “Improve the Way Things Move.” We make springs, mud-flap hangers, fenders and other parts for commercial vehicles and other industries. We started off making springs for horse-drawn carriages, and as modes of transportation have evolved, we’ve evolved with them. At the end of the day, if our team remembers one thing, we want to remember that we exist to “Improve the Way Things Move.” That’s just five words. Hopefully we can all remember five words.
“Improve the Way Things Move” has been our purpose statement for the last three years. Around that time, while I was getting my MBA, I realized we had a wonderful history, but needed something more. As part of a marketing class, we watched the Simon Sinek TED talk "Start With Why," and it inspired me to think about the why of our business, and to find a way to communicate our why for generations to come. I started really looking back through our history and checking in with team members to say: What are the things we believe in? What really is the DNA and the root of where we've been? We've always had values, but before 2013 we never really described them in a plainspoken kind of way.
Our company comprises three different divisions in 11 different locations. We had been growing and expanding organically, but we hadn’t really taken the time to explain why, so the company felt fragmented. With that much reach, you end up with these subcultures that have different interpretations of what the company is about.
So after watching Sinek’s talk, I was inspired to write down the Betts Way with a view toward unifying our company around a common set of values: Respect everyone, aim for excellence, share your passion, work smart, take care, act ethically and communicate.
The values help us stay focused. They create a third perspective if team members are having a healthy debate. If things get a little “cattywampus,” there's always a document we can go back to, which is the Betts Way, to help frame how we should be interacting with each other for the betterment of the company. We can take the emotion out of an emotional situation. This isn't me — this is what the Betts Way says.
It also helps with new recruiting. When we’re recruiting, it’s a two-way street. We’re getting to know somebody and they’re getting to know us. What better way to get to know us than to be able to read the Betts Way and decide if what is written energizes you or scares you? It's either exciting or not. And if it's not, better for us both to understand that very early on in the process, rather than somebody coming on board and realizing our culture is not the right fit.
We want the Betts Way to give our team members permission to be their best selves inside the business and in their homes and communities. We’re hoping it's not just a J-O-B. Work is a big part of life. We want to think about how we’re contributing in our homes and communities, not just the workplace.
Our values also help us move forward together as a company. It gets back to us needing to constantly get a little bit better to have a fighting chance at continuing to grow. We can't be stagnant. We're in tough industries. So if we don't continue to improve and evolve, one day we won't be relevant. Our values keep us focused on improvement. We can’t control the economy but we can certainly control how we run our business.
Bill Betts is the President of Betts Company.
Why I Only Hire Weird People
Weird people change the world.
When I co-founded my environmentally friendly soap company, Method, in 2001, I quickly realized that we were up against some mighty big competition. Cleaning-product companies like Procter & Gamble and SC Johnson were multinational and had 100-year head starts on me; they had strong control over grocery store shelves and well-entrenched relationships with the big-box stores. In order to compete against these Goliaths, Method had to be different. And that started with my employees.
If I wanted my people to go a mile in one direction, I needed them to set a milestone two miles out. The best people who could successfully complete this task? The weird ones. I generally find that people with a little dose of weird are more motivated to do things differently, as they find normal boring. They are naturally wired to go the distance to create change because conformity is uncomfortable for them.
My co-founder, Adam Lowry, and I sought to hire — and keep — that specific demographic. We liked people showing up as their personal selves, not their professional ones. People do their best work when they are comfortable in their own skin. So we established a test to make sure we were getting the right folks through the door. We would give every final candidate three questions as a homework assignment. The first two questions would be tailored to the role. But the third was always “How would you keep Method weird?”
People were given great freedom in how to answer this question. One person led an entire band into our conference room to play a song. We’ve had a spontaneous yoga session and a tennis match in the alley. It’s all over the place. The best answers are not necessarily events but personal stories that really describe who the candidate is and what they will bring to Method.
Our hiring strategy paid off. The weird folks we hired were aligned with our vision of the company and helped us grow like crazy. Over the course of 15 years, Method completely changed how people look at and buy cleaning products. I’m proud to see how we have made our mark with clean, green, beautifully packaged products — and how they have even influenced our competition’s lines.
I still do some work at Method, but last year Adam and I co-founded a new, Evergreen company called Olly, which is going to do for vitamins what Method did for cleaning products. Evergreen companies put their people first because a company's employees are its best asset. Letting our employees show their true colors is our way of building a workforce that is going to be as dedicated to our mission as we are.
Asking potential employees to help keep Olly weird helps people let their guard down, and we get a real sense of who they are. Plus, this prevents window shopping. Candidates willing to work on a homework assignment like this one are serious about the job.
Once we hire, my challenge is to make sure our employees stay weird and are always given opportunities to march to a different beat. That’s tricky when you need to have a cohesive team. We’ve found a few specific ways to maintain our culture of weirdness and individuality. A different person leads our companywide meeting each week. At the end of the meeting, we choose a name out of a sparkly hat for the next leader. This keeps things exciting and allows everyone an opportunity to shine. We have larger meetings throughout the year that have specific themes (think prom!) that allow people to work together but, again, let their freak flags fly.
These touch points give us moments to reinforce our culture. Whenever we feel like there’s a lull in the office, we slip some money to an employee and ask him or her to spice things up with spontaneous breakfast for everyone or a happy hour. Culture is contagious, good or bad. If people do good, they get inspired and keep the momentum going.
To keep workers from getting complacent, every job requires people to take a shift at reception. Every six weeks you’re on front-desk duty, delivering mail and answering phones and greeting visitors. We decided this would keep the place more humble and keep the ego out of it. Plus, whoever is running the front desk can create themes for the front. It’s another opportunity to keep Olly weird.
Olly achieved $12 million in first-year sales. Our Evergreen company is off to the races. And we couldn’t do it without our staff of 20 weirdos.
Eric Ryan is the Co-Founder of Olly.
Building a Big-Ass Company for the Long Haul
I get approached all the time by people who want to invest in our company. But I don’t want to have to worry about what some knucklehead thinks I should be doing. I want to run my business in a way that makes me and my employees happy and satisfies our customers.
So far, we’ve managed to do pretty well without investors. My company, Big Ass Fans, brought in $224 million last year selling, well, big-ass fans for industrial spaces. We’ve also recently started selling residential fans and lights for industrial spaces. We’ve grown 30 percent every year since the recession and we expect that to continue — without outside investors.
It’s always been important to me to run my business on my own terms. When I started out in insurance in Dallas in the 1970s, I specialized in reinsurance, but I thought my company could build a nice new business insuring the local oil industry. My bosses wanted me to just keep doing what I was doing. I couldn’t get my brain around the idea of sitting in an office in Dallas for the rest of my life doing the same thing and looking out the same window. So I took a leave of absence and started my first company.
Sprinkool was a good idea. We set misters up on the roofs of industrial buildings to help keep them cool. Industrial buildings, where you can have thousands of people working at any given time, are rarely air-conditioned. There’s a real need for an efficient, cheap cooling system.
But I couldn’t sell people on the idea of Sprinkool. I still spent 10 years trying. At our peak we brought in only $1.4 million. That wasn’t enough to earn a living or grow a company. Our first company wasn’t really a business — it was an airplane we couldn’t get off the runway.
But that time provided me with an education in public relations, marketing and industrial buildings. One of the big problems with Sprinkool was that employees couldn’t see it, so there was no psychological benefit. But they could see a big-ass fan.
So in 1999 I started selling giant fans. Initially I tried to sell the fans along with the Sprinkool system, but people only wanted the fans. So I focused on that. I wrote articles for trade magazines about the benefits of big fans. Many buildings relied on small standing fans that employees fought over. A giant ceiling fan not only covered more area and eliminated those fights, but it used less electricity than all of those little fans going all day.
Customers caught on to the benefits and we were off and running. We grew quickly but I was able to shape Big Ass Fans into the kind of business I always wanted to work at. We run our business like a three-legged stool, which means we pay equal attention to the happiness and success of our customers, suppliers and employees.
We employ our own salesmen, which means we have a direct link to our customers. We know what they need and we make sure they are satisfied, even if that occasionally means earning less money. In many industries, suppliers often get treated very badly and that hurts quality. We make sure we treat our suppliers with respect and attention and that has helped us sell great products.
On the employee side, we encourage people to come up with new ideas and even new businesses. I don’t want anyone to feel like I did back in my insurance days. In fact, our two new business lines, Big Ass Light and our residential line, Haiku Home, were both started by employees. Work has to be fun and exciting and there has to be a bright future. If not, your best people will leave. We hire only about 1 percent of all applicants and we have an incredibly low turnover rate thanks to this philosophy.
I’m now building a 200-year company. I think about and plan for succession. It’s not the next generation I’m worried about. It’s the third and fourth. My goal is to build a strong enough culture, and a strong enough business, that Big Ass Fans will keep going, without investors, long after I’m gone.
Carey Smith is the CEO of Big Ass Fans
My Surprising Journey to Becoming an Evergreen CEO
My path to becoming an Evergreen entrepreneur was not a straight one. Twenty-five years ago, I never thought I’d own a manufacturing business, let alone one where I would be turning away potential investors. But at the age of 60, that’s where I find myself. And Dynamic Architectural, my windows and doors business, is a thriving Evergreen business.
My journey started in 1991, when my friend Norm Evans asked me to run his manufacturing business.
The request came as a huge shock. Norm was a client who was in the process of buying two divisions of a public company. One division manufactured wood windows; the other made wood doors. Norm had asked me to come in as an investor on the deal, and although I told him I wasn’t Bank of America, I happily put some of my own cash into the venture.
I had no plans to run the company. But Norm made the request from his hospital bed. The sale had closed on March 23, 1991. On March 25, Norm suffered a massive heart attack. His wife called and asked me to go see Norm in the hospital. When he made the request, I couldn’t say no.
At the time, I was 35 and my insurance brokerage business was able to run on autopilot. I’d grown up admiring my grandfather, a consummate entrepreneur. Here was an opportunity for me to try my hand at running a large business. And besides, Norm was a friend. He had sunk all of his personal assets into the business and needed my help. How tough could a window and door business be?
I quickly found out. The company barely had enough capital to get through my first day. The workers were scared and seven salesmen were in my office, each claiming he should be the new owner of the company.
Then I got hit with some really bad news. It turned out that the public company Norm bought the divisions from had gone into receivership before the sale had gone through. Those divisions had been put up as security against bank loans. The divisions technically belonged to the bank and the sale had been unwound.
To make that point perfectly clear, the sheriff and his deputies showed up to say they were seizing the company and all of its capital goods. The sheriff dead-bolted the doors to all five of our buildings.
I was desperate not to lose Norm’s life savings my first week on the job, so I managed to convince the bank that our inventory of “machined wood components” was valuable only if we could turn it into specific windows and doors. They agreed to let us start working again. At 7:30 every morning, the sheriff’s representative unlocked the doors. Then he sat in the boardroom drinking coffee until 4:30 p.m., when he padlocked them back up.
Six weeks later, Norm was out of the hospital. We’d renegotiated with the receivers so Norm could repurchase the assets and inventory at a lower price so that was good. But there was a change of leadership at Norm’s bank. The new management said the $350,000 loan he needed was off the table. We had a week to come up with the cash. Thinking on our feet, we asked the owner of three of our five buildings if he’d put up $350,000 to keep us in business and keep his buildings rented. He didn’t like the idea, but he liked the idea of three empty buildings even less. He funded us.
Norm owned the company again, and I figured my work was done.
But a few months later, I was back in. That fall, Norm had to go back into the hospital for a six-bypass heart operation. I agreed to hold the rudder until Norm was back up to full health, but during those weeks, something changed in me. As the company began to emerge from its initial crisis, I got hooked on the challenges and joys of working in manufacturing. Windows and doors were so tangible and so different from the often dull routine of insurance work.
When Norm left the hospital, I offered to form a 50-50 partnership. He agreed. We pushed our desks face to face and started building what is now Dynamic Architectural Windows and Doors.
About 18 months after Norm came back to work, his health again deteriorated and he decided he wanted to retire. I agreed to buy out his shares, making me the sole owner. Over the past 25 years, I’ve learned a lot about running a business. Although institutional investors often approach us, I want to keep Dynamic Evergreen. I view our company in the European model. There, business owners see themselves as stewards of the enterprise, responsible for growing the business for the next generation.
That mindset has allowed me to build a company which is as much about our people as it is about our products. We have found great success hiring immigrants from war-torn countries like Syria and plan to hire more next year. I try to encourage people to move (slowly, over time) from the factory floor to management through hard work and, often, night-school classes.
Being Evergreen has also helped us innovate. We’ve invested more in research and development than outside investors might have approved of, but we now offer a unique product: windows and doors tailored to architectural specifications, sold directly to contractors and homeowners, produced with the speed and efficiency of mass-produced goods—we call it Mass Customization.
Last year we shipped $30 million worth of customized products. We are debt-free and we expect to grow another 50 percent over the next three years.
Norm passed away this spring after many happy years spent with his family and fly-fishing. His sons have remained with the business these past years (one as vice president of operations, the other as a production manager), and they’ve been great partners along the way.
When I look back on what we’ve built, I couldn’t be prouder. I don’t sell out because there’s nothing I’d like to leave in my estate more than my shares. We make something real, and to me and our 250 employees, that means everything.
John Mathews is the President of Dynamic Architectural Windows & Doors.
Why You Should Ditch Performance Reviews
If you have ever worked for a large company, chances are good you’ve experienced the painful process of formal reviews. Maybe you’ve even been on a committee charged with evaluating staff and passing judgment on their performance. In my opinion, formal performance reviews are a terrible waste of time. They do more harm than good to morale and they reduce employees to a meaningless number derived from a meaningless formula. At Evergreen companies, employees are the most valuable assets. It doesn’t make sense to treat them with so little respect.
At my company, Standish Management, we have taken a very different approach to measuring performance over the past nine years. Our way reduces the time (and expense) of written evaluations and fosters a culture of collaboration and teamwork.
At the “big four” public accounting firm where I started my career, performance reviews had the patina of a scientific process. Employee evaluations were sent to human resources, where someone who really did not understand your job, and most likely did not know you, ranked you among your peers. Rankings could determine things like who got raises and who got fired. No surprise — they often created adversarial relationships. I remember one year when some HR guy, embracing the GE model, suggested firing all the lowest-ranked employees. It was a toxic environment.
Over the years, the process got even worse — especially if you advanced in the firm. At one point, my bosses and my staff were reviewing me, I was reviewing my bosses and rating my staff on a scale from 1 to 5 on almost every conceivable measure of performance and I was reviewing our clients. Talk about a waste of time.
We have calculated that some firms spend 100 to 200 hours per employee per year crafting these corporate report cards. That is not only a time-consuming process but a very expensive one when you think about the loss of work hours given over to evaluations.
Why do large companies perpetuate the performance review cycle when it wastes time and money, causes unneeded stress and leads to increased employee turnover? Human resources managers will answer, “Because everyone else does it.”
At Standish, we have decided we are not going to replicate a process that we think fails in its most basic goal — to help employees develop professionally. Here’s what we do instead:
Encourage communication.
If you have something to say, say it in real time, candidly and sensitively. Managers are urged to offer feedback to staff throughout the year instead of relying on canned surveys at specific times of the year.
Eliminate rankings.
We hire really good people and retain them for as long as possible. Creating petty distinctions between staff at the same level discourages teamwork. The goal is to identify employees who can’t, or won’t, perform. Don’t waste time evaluating the people who are performing.
Ask open-ended questions.
By asking the broader questions, we are able to get details on the employee that might be missed in a typical written evaluation comprised of specific questions. This, in turn, allows for comprehensive answers to some of the most basic and important questions about whether the employee is a good team player, if they are growing and what they might need in terms of support.
Implement annual employee-led discussions.
This is an idea we borrowed from my daughter’s elementary school, where each student leads a meeting and summarizes their performance over the past year. Think of it as a self-review without all the paperwork, time and anxiety.
It is not a perfect system, but we think it is a significantly better process that saves our company hundreds of thousands of dollars a year in productivity gains.
I am often asked how we identify and manage poorly performing staff at Standish. The simple answer is that our staff members receive feedback from their managers immediately. If the feedback is consistent with other managers’ observations, we document their poor performance and manage it. That can mean having some difficult conversations but ultimately, our staff respects honesty and candor from management. Poor performers can begin looking for new opportunities sooner rather than later, when it becomes clear the fit is not right. In the end, this is better for everyone.
The worst scenario is when managers avoid real conversations for long periods of time and the employee is misled about their performance. There is no reward for kicking the can down the road. By managing the evaluation process in an immediate and thoughtful manner, we have found an efficient solution that has ultimately put an end to the traditionally stressful and wasteful process of formal written evaluations.
Robert Raynard is the CEO of Standish Management.
Evergreen Companies Need Strong Communities
Our community is the lifeblood of Spikeball Inc. Over the past seven years Spikeball has grown from a casual backyard game into a sport that supports 150+ tournaments per year and has 1,400+ ranked teams. My company was just named the 139th fastest growing business on the Inc. 500 and sales have doubled or tripled every year. While it would be nice to take full credit for all of this growth, the truth is I owe everything to the communities that love and nurture Spikeball.
Community means something different for every business. For you it might mean your employees or your customers or it might be your supply chain. For me, community means the thousands of people who act as evangelists for Spikeball every day. But I learned the hard way that you can’t force the communities into existence. You can’t just start a fire. Instead, you have to nurture little flames that are already out there and pour some gasoline on them to build them into something more powerful.
A little background: in 2008, some friends, family and I acquired the rights and relaunched an old game we loved called Spikeball. I figured I could sell the trampoline-like net and rubber ball sets online to make some extra money. When I started shipping, I sent a personal note to every customer and asked for feedback. Their passion helped convince me that I should build an Evergreen company around Spikeball.
Community feedback has guided me every step of the way in the evolution of this company. Early on, inspired by the enthusiasm of my first customers, I thought I could create active communities from scratch. I decided to promote the sport online, start leagues and host my own tournaments. Even though we had no following in Charleston, SC, I chose it to be one of our first tournament locations in 2012. It was a complete bust—only 10 or 11 people showed up.
Another example of me trying to light a fire, rather than growing a pre-existing one was a tradeshow we attended in 2009. We were trying to get retailers to buy Spikeball. They had zero interest in us, we spent a small fortune attending it and the sales from the show were close to $0.
Those setbacks helped shift my thinking. Instead of building new communities I would make sure every pre-existing community—with its social networks and word-of-mouth chain—that seemed open to learning about Spikeball had what it needed in order to evangelize Spikeball. After hearing from Ultimate Frisbee teams, PE teachers, and faith-based youth groups, we started shipping them free products. Eventually these groups became the baseline for our Spikeball community.
Now my gameplan is simple: Let the community guide you. We have never done formal market research or hired a company to help us better understand our audience. I interact with players (i.e., customers) at tournaments, on phone calls, via email and more. Instead of just telling people who we are, I ask them—over and over again—to tell us what they want.
Using my "SpikeballChris" accounts on Twitter and Instagram, I try to interact with people who have posted Spikeball-related pictures. Sometimes I'll just “like” them; other times I'll reach out in a more personal way. Here’s a perfect example: A few weeks ago, a guy tweeted to me, "I need a replacement part- can you help? I met my wife playing Spikeball!" I ended up having a great phone conversation with him, and we're going to tell his story to our entire audience. We're also sending flowers and a box of Spikeball goods to them as a thank you—we're big on “surprise and delight.”
We recently launched an app so our players can communicate with each other more easily. When I’m on the app, I post as SpikeballChris, not as "Spikeball Inc.” I speak in the first person and have as much fun with our fans as possible. I ask our employees to interact with players and other as if they were talking to friends. Our close relationship with our community has led to some great hires. Of our nine employees, six were Spikeball players before they were hired.
We always ask for feedback on new products. Last year we had a Facebook promotion titled, "Pretend you are a Spikeball Product Designer. What does the next Spikeball set look like?" From that, we learned that the vast majority wanted a higher level "Pro" set. We shared different designs with the community and let them vote on their favorite ball and give feedback on other elements of the product. The Spikeball Pro set is launching this spring.
We also listen when our community rejects an idea. A digital watch company wanted to sell a Spikeball-branded product that made it easier for Spikeball athletes to keep score during games. I thought it was a great idea so I showed it to our employees and some top-level players. They gave it a resounding, "No!" I listened to the community, let my ego take a hit and rejected the idea.
Engaging with this community on such a high, consistent level can be a lot of work. I wouldn’t have it any other way. It’s much more rewarding to run a business where tons of people (not only employees) are personally invested in guiding its overall direction. It’s vital to our Evergreen business—and so far, it’s been a blast.
Chris Ruder is the CEO of Spikeball Inc.
Inspired By Ancient Traditions To Build A 100-Year Company
I found inspiration for my Evergreen business in Kyoto, Japan, among gold-leaf artists and geisha.
As an overzealous intern during my time at Harvard Business School, I had tested too many skin-care creams on myself and contracted a case of acute dermatitis. The only thing I could use on my skin was Aquaphor, which left a greasy residue, but blotting paper from Japan mitigated the shiny effect.
During my travels, I found myself in Kyoto, where I learned that the papers were the byproduct of gold-leaf manufacturing and that geisha had discovered their usefulness. When I met these women, I was immediately enchanted by them. Their white makeup didn’t hide their skin like Western makeup does; instead, it enhanced every possible flaw. But of course there weren’t any flaws, because the geisha had perfected the art of skin care. Their products were all-natural, from the days before cosmetic companies put questionable ingredients in lotions. I went to their apothecary, bought a bunch of geisha-recommended ingredients and started using them myself. Within eight weeks my skin recovered from the acute dermatitis that had plagued me for years, and I knew I had found my calling. I planned to create a skin-care collection — based on the timeless rituals that the geisha honed over centuries.
I started building Tatcha out of my one-bedroom apartment in San Francisco. As an entrepreneur in the heart of the tech world, I was tempted to go the venture capital route. All around me, I saw friends taking millions of dollars in investment money, selling out quickly and reaping the material rewards of a quick exit.
Given my long-term goal, though, that didn’t feel right to me. I was building my business based on my respect for these ancient traditions. I wanted to build something that would last 100 years.
I started like many small-business owners, using credit card debt and working multiple jobs for seed capital. When that ran out, I sold my furniture and engagement ring and worked four jobs. When that again ran out, I borrowed money from family and friends. At one point I considered selling the company despite the amazing traction we were getting, because I couldn’t figure out a financing strategy that would give us the runway and independence to create the brand in a way that would stay true to its vision. Thankfully, it was at that time that I met my business partner and future Tatcha president, Brad Murray. He came from the private equity world and has managed to keep Tatcha majority owner-operated while still securing the capital necessary to grow.
Our financial independence has allowed us to make decisions we wouldn’t have been able to make if we had fast money behind us. For example, as part of our purpose, we wanted to make sure that our business had a built-in charitable aspect, so we partnered with Room to Read. Every full-sized skin-care purchase from Tatcha or any of our retail partners sends an incredible girl to school for one day through Room to Read’s fund for girls’ education in low-income countries. Investors might have frowned on that diversion of funds, but I’m proud of the fact that in the first 18 months of our partnership we have raised enough for 1,000 years of girls’ education.
We don’t spend money like Silicon Valley startups typically do. Our offices are nice but not fancy. Until two years ago we were based out of my house, which was often bursting with products ready to ship. We spent on real estate only when it became completely necessary. We focus our spending on things we think are the most important, like product development and customer service.
Brad and I have not taken true salaries yet. We’ve opted to invest every dollar back into the company. Every year, I consider paying myself in the next year, but then I think about what that money could do back in our business, and I hesitate to make that change.
Sure, it would be nice to own my home and have a fancy new car — but those things matter less to me than building equity in my own company. Our hard work and frugal ways are paying off. Between 2011 and 2014, we grew over 10,000 percent. We had revenue of $12 million in 2014. We are on track to grow 50 percent in 2015 and expect to keep this pace up next year. This year we also debuted, at 21st place, on the Inc. 5000 list of the fastest-growing companies in the U.S.
I look at companies in Kyoto and I see how they’ve thrived over 14 generations. Through thick and thin, they’ve become part of their community. What I’m learning is that if you want to be around for 100 years, it’s best not to benchmark companies that are going to exit in five. Instead, you surround yourself with the kinds of people who share your values and you build a culture of sustainability. That’s truly the best way to grow for a century or more.
Victoria Tsai is the Founder of Tatcha.
How Diversification Helped Our Business Survive And Then Thrive
A lot of companies focus on doing one thing well. We think an Evergreen company needs to do several things well in order to succeed over the long haul.
But multiple business lines and far-flung geographic markets were not something we considered in the early days of our company. In 1998, San Francisco was teeming with young dot-com companies. Money was flowing, and workers were sick of unhealthy foods littering their offices.
Delivering fresh fruit to offices was a novel — yet refreshingly simple — concept that allowed The FruitGuys to grow quickly. Our first delivery was in 1998 by scooter; by 2000 we owned five delivery trucks. It felt like everyone in the city at that time was enjoying our fruit around the conference table. We even had a secret knock to gain entrance to Napster. That year, we hit $1 million in revenues.
But in 2001, the bubble suddenly burst. We were showing up to offices that were closed and had posted eviction notices. We were devastated when we found a chain around the door of one high-flying Internet company; it owed us thousands of dollars.
Things spiraled from there. We laid off 50 percent of our staff, and we lost half of our customers. We asked the remaining customers what they needed in addition to fruit. They said they wanted dairy service for their coffee and cereal needs, cut-fruit platters for the partner meetings, and bagels and other baked goods. Very quickly, we shifted gears. In addition to providing offices with fruit, we became their corporate caterers.
And we survived. In fact, we got back our footing and started once again to thrive. Over time we grew from being a regional office delivery service to a national provider of fresh fruit. By the mid-2000s, we were producing a few million dollars in revenue and growing. Ex-dot-com workers who moved from the Bay Area reached out to us and we started shipping fruit crates around the country. We continued to service the Bay Area with our expanded products.
Then 2008 hit. Our country went into a recession, and we were hit hard, losing approximately 25 percent of our revenue. We had a company vote — we had to decide if we should move forward with layoffs or reduce our salaries by 25 percent for 90 days to see if we could boost revenues during that period. Our staff voted on the latter, and we hit the streets trying to find new ideas. Out of that desperation, we again moved into another ancillary business.
The USDA had just piloted a program to provide fresh fruit to schools. I rented a car and drove all around California educating schools on how they could apply for grants for free money. I got a couple schools to sign up for it — and pay us to provide the fruit. This became a new line of business.
Today our school service accounts for approximately 15 percent of our revenue. We serve roughly 200,000 pieces of fruit every week to elementary students; the majority of these kids are part of the free and reduced meal plans. This was a necessity for our business to survive the last big bump in the road, but it also feels good to be making an impact for these kids who often don’t have access to fresh fruit. Our program is aligned with nutrition education, and in a few cases we provide on-site assemblies to teach the kids why eating healthy is important.
We now have 125 employees in nine different states. We serve thousands of companies with our fresh fruit every week. We’ve been growing our revenues 20 percent year over year for the past few years.
We will always sell fresh fruit. After all, we are The FruitGuys. But adding nuts, school programs, workshops and gifts to our business mix provides multiple layers of padding that protects our company from the ups and downs of an ever-changing environment and keeps us fruitful.
Erik Muller is the President of FruitGuys.
