0414 Andy at Landfill-46In 2004, Andy Keller, now ChicoBag president, took a trip to his local landfill after spending the day landscaping his backyard. He was horrified by what he saw. Single-use bags were visually the dominant article at the landfill that day, blanketing the landscape in a thin mix of white and beige plastic. On his way home he began to notice plastic bags everywhere, caught in trees and on fence posts, half drowned in gutter puddles and blowing in the streets like urban tumbleweeds.

That day Andy vowed to stop using single-use bags. Inspired, Andy dropped a few bucks on a second hand sewing machine and began sewing what would ultimately become the first ChicoBag® brand reusable bag.

In this interview, Andy and Nate discuss ChicoBag and Andy’s journey from starting a business to running a successful B-Corp.

-Seth

 


 

The Big Idea – Cliff Notes version

Nate: Give me the Cliff Notes version about how you got into the business you’re in now.

Andy: I used to sell software—enterprise-grade software. The company got bought, and I got laid off. I was telecommuting from Chico, and job options in Chico were a little bit limited. I was trying to figure out what I wanted to do with my life and ended up doing some yard work, ended up at the landfill.

That’s where I saw all the plastic bags that this community throws out in a single year—or in a single day, rather. There was a mountain of them. Really, visually, that’s what it looked like. There were things wrapped in plastic bags… I never really thought about it before then, and it just kind of hit me, “Oh, my gosh.” I use plastic bags, and I thought, “I should stop using these.”

The unemployed side of my brain kicked in, and I started thinking about, well, I can come up with a bag that I would like to use, one that I’d remember. An issue that I saw immediately was come the time to shop—or you just don’t think about going shopping; you just end up at a store.

So I figured if I could have a bag that I could keep in my pocket, I can solve my problem. If I can make a business out of it, I can also solve my unemployment problem. So the thinking that happened that day—and I bought a sewing machine that day, got some fabrics, sat down in my kitchen table and started sewing prototypes for a bag that I can keep in my pocket.

Nate: Okay. So how long ago was that?

Andy: That was in December of 2004. Then I launched with the sales of the first bags on Earth Day in 2005.

Andy’s Arrival

Nate: So over the past—close to a decade, what would you consider your biggest success? Try to be specific. Tell me about a moment during your life as a founder and a business owner, an entrepreneur, a moment when you felt, maybe even for a second, that you had arrived?

Andy: Well, the first thing that comes to mind is the big lawsuit by the plastic bag industry. I don’t know if you’re familiar with that. Are you?

Nate: No. I did my research—probably 45 minutes of research into ChicoBag, but I didn’t dig that deep into it. I’m seeing mention now, but I’m just not sure how it rolled out or what happened.

Andy: Back in 2011, three of the largest plastic bag companies in the United States filed a lawsuit against ChicoBag for “irreparably harming” their product or their business by essentially disparaging their product. (laughs) My friends in the business community here in Chico were like, “Congratulations, you’ve arrived. (laughs) You’re officially now a real business because you’ve been sued.”

Nate: Wow. (laughs)

Andy: So when you asked that question, that’s really what came to mind because I’ve had a number of people say that to me, like, “Oh, congratulations. You’re now a real business.”

My whole mission when I started the company was to “help humanity kick the single-use habit”—back then, specifically, the “single-use bag habit.” It has evolved a little bit since then and turned into “Bag the single-use habit,” because ultimately, I think the single-use bag is really the “gateway” plastic, a disposable item that leads to all others, and if you can kick your plastic bag habit, your other habits are easy to kick after that.

Anyway, that was my goal. So to have three of the plastic bag companies sue me was almost a tribute that I was actually making a difference. ChicoBag and all the work we’ve been doing here is actually making an impact that we got the attention of the plastic bag industry.

Epic Fails

Nate: What would you consider, on the flipside, your biggest failure?

Andy: I can talk about my first failure. That’s the first thing that came to mind. I sat down at the kitchen table and designed a prototype, and I found a factory to help me produce the bags. I received the bags from the factory the day before Earth Day. Then on Earth Day of 2005, I went out and set up at the local natural food store in their little parking lot Earth Day celebration. I started selling the bags. The first big failure was that every single bag came wrapped in a plastic bag.

Nate: Oh, God.

Andy: I didn’t realize that that’s just standard for many factories. Everything that you buy essentially comes in a plastic bag. So that was the first failure.

The second failure was that over 40% of the first production run was defective. I didn’t realize it till after I had started selling it, when people were like, “Hey, the pouch just broke.” (laughs) I was there stuffing the bag back into the pouch. I realized that day, “Oh, my gosh. About 40% of these things ended up being defective.”

So that was my first big lesson on really understanding the supply chain and getting really close relationships, which led us to where we are now, being a B corporation and really pushing the envelope on testing compliance and safety. A lot of companies out there really don’t understand all the bits and pieces that go into the products, or in some cases, how it’s even being made, and by who. So we are very diligent about that. That first lesson—I had that lesson early, which was good. It really put me on the right path, and it’s led to who we are today.

Andy’s Mission

Nate: Who are you today?

Andy: Well, we’re still on a mission. We’ve expanded our mission from “helping humanity to kick the single-use bag habit” to “helping humanity bag the single-use habit.” We offer a variety of reusable products on our website that are sensible and convenient solutions to help people reduce single-use plastic in their lives. That’s our mission. Everything we do, we are doing to support that mission.

Nate: How did that happen?

Andy: Well, a couple things. A good part of our business is working with organizations that want to use our products as promotional items. So giving something away as a gift to a donor that gives you money—donor gifts, for example. Our customers do that. They’ll give their donors bags one year and maybe some other form of a bag-like product, like our Snack Time bag.

But there comes a point when they want something more than just a bag. So we decided to start offering other types of products, like Klean Kanteen, and to go where—reusable bottles, reusable utensils and other types of items that complement the bags and also help people reduce their single-use plastic habit.

So that’s why we’ve changed our mission to cover all those options. It’s always been that way because we always felt like once people kick their single-use bag habit, the other habits are at least easily identified (laughs) and could be dealt with. Once they’re aware that they actually have the single-use plastic bag habit, they’d want to do something about it. They notice when they’re using a plastic water bottle, like, “Oh, my God. Why am I—? Do I need this?”

Building Habits

Nate: Describe your routine to me. Like your average work day, from the second you wake up till the second you crash out. Andy: Well, recently, my days changed. I’m a new dad. I have a nine-week-old baby.

Nate: Goodness gracious. My daughter just turned 13. (laughs) I can barely remember when they were that little. So tiny. (laughs)

Andy: Yeah. (laughs) It’s very, very clear for me. My day now is, like, I try to sleep—I set my alarm for 6:30, hit snooze until 7:00, take a shower, change the baby’s diaper, grab some breakfast, hop in the car, I’m at work by 8:00. I usually start with some emails, check my calendar, and then if I have any meetings that day, I’ll do prep work on the meetings. Then typically I’ll have a couple—depending on what day of the week it is—like Wednesday is my product development day, and I’ll just prep for product development most of the day. Tuesday is my managers’ meeting day, and before the managers’ meeting, I’ll normally a number of action items after that I’ll kick into.

Typically, there’s a number of projects, and I’ll just try to tackle a project or check up on people and update. We have one-to-one meetings with each of my managers, and each of my managers has one-to-one meetings with each of their employees.

Nate: How many employees do you have now?

Andy: 25.

Nate: That’s a good size.

Andy: Well, 27, actually. So I update the meeting agendas. If there’s anything on my mind, I’ll stick it into the agenda, and we can talk through it.

Managing the Growing Team

Nate: Actually, I first encountered your brand when I was interviewing interns when I first moved to Chico. One of them was interning with you, and she told me quite a bit about it.

Andy: Who was that?

Nate: Colby, I think.

Andy: Yeah. Okay. Yeah, I remember Colby.

Nate: Have you always hired interns, or is that a newer development?

Andy: Yeah, since the beginning, I’ve had interns. It’s a nice way to try out different potential employees and give them some experience in the process. It seems to work out well. My marketing manager started as an intern. She’s progressed up. It’s nice.

Nate: The reason why I want to dig into this a little bit more is that for the most part, I work with the “scrappy business owner” type—folks that are starting up or folks that are getting ready to fail years into it. A lot of them are clearly overworked, and non-profits and for-profits alike will ask me, “How did you do that awesome intern program?” My intern program—they usually end up getting good jobs after working with me, or they end up getting hired, or end up starting their own businesses—which is, of course, selfishly, what I want them all to do.

So have there been any things that you’ve learned over the years as far as recruiting interns, managing them, or any horror stories (laughs) and how you fixed it?

Andy: My first intern couldn’t spell very well.

Nate: (laughs)

Andy: We had him doing sales emails and stuff like that, and he was just making horrible grammatical errors. I kept him around. I really should have just let him go. (laughs) I guess that was the first mistake, just because I tried to help him. I gave him a sheet of common spelling and grammar mistakes. I tried to coach him. But at some point, you just have to realize that if you need someone who knows how to spell and the person can’t, it’s not something you can really correct easily—especially if they don’t realize they can’t spell, which was the case.

But other than that, we’ve had some really good intern people come through. We used to do non-paid or do a stipend, and we ended up converting to just paying minimum wage for the internship instead of doing the stipend. That’s because I know that some people can argue that they’re an employee, and I know, especially in California, there’s been some issues with…

Nate: I’ve gotten the evil emails before. “Do you realize that you can’t do this?”

Andy: So anyway, we do paid positions now, which actually is nice because you have the expectations there. There’s a little bit more accountability because they get paid, which helps.

Nate: It also makes it easier to fire them. (laughs) That’s what I discovered. “You’re getting paid. It’s not like you’re working for free. My money is more important to me.” It becomes a factor in the decision making.

Andy: Yeah. I’ve had other people on more of a stipend situation, and the accountability isn’t as strong. They don’t want to show up one day for some reason. It’s like they have greater option to do that when they’re on a stipend. So basically, our interns are essentially treated as employees. It’s been good for us.

Great-grandpappy Rasmussen tending to his store

Great-grandpappy Rasmussen with a customer

Editor's note: If you've been following along, then you already suspect what I'm about to tell you, that this is another excerpt from our work in progress. Why else would it have a note from Seth at the head of the article, right?  Right.  

Glad you're paying attention. -Seth


 

So you’ve done your homework, asked fifteen kazillion friends about your big idea, and are convinced that you have a business. Well, you’ll have a business when you get your first customer. Only then are you in business.

Before we dive into all the tactics you can use to unearth your first customer, let’s clear a few things up:

Real Customers Pay with Real Money - no trades, equity agreements, etc… Those can be useful, but customers by definition generate revenue for your business.

Customers vs. Clients vs. [insert noun here] - the definitions here truly don’t matter. The only important thing to distinguish, is that when working larger companies, that you’ll likely have multiple customer/clients, i.e. the woman cutting the check, and the man receiving the service / product.

The Amount of Money Customers Spend with You DOES NOT MATTER - some of my best clients have only spent a few hundred bucks with me in the past 5 years combined. But they referred me $25K+ in new business.

So how do you get your first customer?

1) IDENTIFY THE LOW-HANGING FRUIT

2) START CONVERSATIONS WITH ALL OF THEM

If I were to list off all of the steps required in building and growing a business in sequence, this would be the task that EVERYONE screws up the first time around. Until you’ve put in some heavy repetitions off that first conversation, it will come off as salesy, or weak, or overbearing, or confusing, or spammy, or uncomfortable.

Here’s some guidelines to help take off some of those rougher edges:

  1. CHOOSE THEIR MEDIUM … if you prospective customer communicates with you via LinkedIn Messages, then use that. If texting, then use that. If in-person, then use that.
  2. DEFINE WHAT’S IN IT FOR THEM … this can take many forms: lively conversation, satiating curiosity about ‘what you’ve been up to these past 4 years’, they want to pick your brain on one of their ideas, they want to connect with someone in your network. Uncovering human motivation is art and science - avoid over-thinking it, just remember that have to have a good reason to talk to you - even your mom.
  3. THE GOAL IS RELATIONSHIP … if you open up conversation with a prospect with the sole intent to make a sale, then you will fail, or succeed weakly. The absolute best outcome of any business conversation is creating / strengthening the relationship where that person becomes your biggest fan and top referrer.
  4. BE FORTHRIGHT … even the most dense people can detect an incoming sales pitch. If they ask, “why should we talk?” sometimes the best approach is just to come clean. “Well. 
  5. DON’T SELL ANYTHING IN THAT FIRST CONVERSATION … “Interact first. Sell second.” - Seth Godin
  6. BE HUMAN … nobody cares about “solutions” that you can offer them. They care about you caring about them. I’ve never closed a deal that didn’t include some story-swapping in the initial conversations.
  7. BE VULNERABLE … you cannot expect someone to trust you with their money, buying something that nobody has ever bought before, when you can’t open up to them. If your product was created out of a ridiculous and highly embarrassing incident, then tell them that story. You open up, then they will open up. And when they open up, you can discover what motivates them to open their wallets.
  8. BE SINCERE … if you can’t find something sincere to say during conversation, then you shouldn’t be talking in the first place.

A good default approach, “Hey, Jim. Nate here. So I finally sucked it up and started that ___________ business I’ve been toying with for years. I’d love to get your insight on this - you know, sanity check it a bit. I’ve got some time on Thursday mid-morning. Does that work for you? Thanks in advance, and please let me know how I can return the favor. ”

If it goes well, they will declare, “I can use that … sign me up” … or better yet, “I’d focus more on XYZ. Do that, and I’ve got about 4 folks that could use that.”

That's all for this week.  There's definitely more to this chapter, concerning how you go from conversation to sale, though I plan on omitting it from the blog.  Maybe I'll post it if you ask really nicely in the comments.  Otherwise, look forward to next week's post, which will be about whatever we feel like.  Thanks for reading!

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