With the economy struggling to get back on its feet, you might think a fledgling eco-friendly baby products company wouldn’t stand much of a chance at survival. But California-based Sprout Baby celebrated its first anniversary last week, and the company is going strong.
What’s the secret of their success? And what makes Sprout Baby’s products so good that word-of-mouth advertising is their main — and highly effective — marketing strategy?
Blue Planet Green Living (BPGL) interviewed founder and CEO Jody Sherman by phone from his Los Angeles office to find out. We think the insights he shared can help any company succeed, no matter what they’re selling. This is Part One of two parts. — Julia Wasson, Publisher
BPGL: What’s the story behind how you, an ex-Navy man, got started selling baby products?
SHERMAN: It’s a fairly long story, actually. I didn’t start out selling baby products.
I’ve been an entrepreneur since I got out of the Navy in 1988. When the Internet started, I got involved because I was in Northern California, and I was enamored with the idea of being in a new industry as it was growing. I had been involved in several e-commerce companies and, over time, had some successes and some exits, and my investors have made some money along the way. I also had some fun, and made enough money to take time off for a while.
When I went back to work, I found I was just doing the same thing I had been doing before, which was solving a problem nobody had.
BPGL: What do you mean by that?
SHERMAN: When I got into the Internet business, I worked for one of the first search engines, a company called Lycos. There were five search engines at the time, but Internet users didn’t need five search engines. We probably could have gotten along with one or two.
Then I sold software that you could download over the Internet. And, although it was convenient, people didn’t really need that at the time, either. Next I helped a company that made an email product, but there were plenty of email products.
These were all companies that were interesting and innovative, but they didn’t really solve big problems that the online world was uniquely positioned to do.
Then I started a company with a friend who was in the private jet business. We had seen that there was a real problem with the way people bought and sold time on private planes. I helped build that solution, and we sold it to Virgin.
BPGL: So you were financially successful when you finally solved a real problem for people.
SHERMAN: We were financially successful in most of these companies, at least from the perspective of our investors, who all made nice returns. But the best part of working with Virgin was, while I was there, I got to see what I really wanted to do with my life. What I liked about Virgin was, here’s a guy who owns several hundred companies, and in every case, even though the company is designed to make money, there is an aspect of giving back, taking care of the planet on which we live.
Richard Branson basically committed to taking 100 percent of the profits from his aviation businesses — which are gross polluters — and pouring that into environmental resources, investing in companies that would create solutions to environmental problems and things like that.
I was inspired to build a company that was going to address an environmental issue. So I went looking for a problem and, as it turned out, the problem found me.
BPGL: We should all be so lucky. What happened?
SHERMAN: I was walking around a grocery store one day. What I saw was moms talking to moms. Constantly. Or I’d see a pregnant lady walking down an aisle and somebody would intercept her and talk to her. Or, I’d see two pregnant women talking. I just kept seeing that over and over again, and I thought, There’s something to this.
So I started listening to the conversations a little bit. What they were talking about was, “When are you due?” “What’s your baby’s name?” “Who’s your doctor?” “Oh my god, you should try this food.” “I’m in this Mommy and Me group.” “I just read this book…” They were doing in the real world what we do on line. They were social networking. And what they were talking about were all of the things they deal with on a daily basis as moms.
I started watching a little closer, and I saw that it didn’t matter if you were a new mom, or if you were like my mom, who hadn’t had a kid in 38 years; you’re in it forever. It’s a sisterhood. Without actually writing down, “We agree to do this,” they’ve all agreed to support each other in some way. And I thought, Wow, there’s something powerful in that.
So, then I started talking to moms. I started asking them questions, and picking through their grocery carts, and asking why they made the decisions they made and how they made the decisions they made. Then I started asking them what they were concerned about.
BPGL: What were the moms’ biggest concerns?
SHERMAN: For some new moms, I kept hearing over and over again that their biggest concerns were centered around feeding and chemicals and things they were going to put in, on, and around their babies. They’re being bombarded with information about how damaging chemicals are to babies’ skin and to their health. And they’re worried about hormones in foods and such.
For second-time parents, I heard that being repeated, but I also heard things more around money — the concern about how expensive it is to raise a baby. I just started talking to some of my friends about, What if we could start a company that would help moms find eco-conscious, responsible products that are also top-notch, healthy choices for their children?
I had a couple of friends who thought that was an interesting idea. So I started traveling around the country and having the same discussions with moms everywhere. I went to 28 different cities, and I asked moms in little cities in Arizona, and big cities like Miami. I went up to Idaho. I went all over the place, and I kept hearing the same things.
BPGL: What did moms think about your idea of selling eco-conscious products?
SHERMAN: One of the things I heard was that people felt like being eco or being green was hard, elusive, and expensive. I personally found that to be a concern. We are all stewards of the planet. We all have a vested interest in making it last and leaving the next generation something better than we found. If taking better care of the planet either costs more money or feels like it does, those two things are at cross purposes.
BPGL: What was your next step, after interviewing moms across the country?
SHERMAN: We decided we would try to start a company that would source products that were authentically good to put around your kids, in your kids, on your kids and in your home. We would do deep research about those products, so that we could say with some confidence, “These are products that we have tested ourselves. This is the methodology we go through to evaluate products. We feel that these are products that we would use in our own families, and guess what — they’re also affordable.”
That’s not to say I didn’t have people sending me samples of $200 organic cotton receiving blankets. I mean, I would just laugh. I couldn’t even imagine selling something like that to a broad audience. So we went out and started looking for products.
BPGL: How did you come across the baby food that you sell at Sprout Baby?
SHERMAN: While I was searching for products, one of my friends was helping launch a new company. He was a consultant helping a new baby food company get started. There were some things about that baby food that made it interesting. For one, Sprout Foods was started by a celebrity chef, Tyler Florence, who has been on the Food Network for years. He’s a chef and a dad — he has a little one at home. It made sense that a chef would make baby food. And the baby food was really good. It was organic. It came in environmentally friendly pouches instead of glass or plastic jars, and there was no-BPA in the packaging.
Physically, it took up a smaller footprint, and it was lighter weight. You could ship 17 or 18 shipping containers worth of this food in the space of one shipping container of glass or plastic. It was also a perfect product to sell on line, since it was lighter weight than glass or plastic jars. Most importantly though, it was simply a great product. It’s good for growing babies, and it tastes amazing. It really is an authentically better option.
If I was going to start a store on line, and then start adding some other features, it seemed like a good idea to start with a product that would get some distribution in the real world and that already had some notoriety in the form of a chef who has three TV shows.
BPGL: Is Sprout Baby a part of the Sprout Foods company — or the other way around?
SHERMAN: No, we’re not. And I want to make that very clear. Sprout Foods is the company that we partnered with when we started. They make the baby food. But Sprout Baby sells a whole lot more than the food. We have launched into diapers, toys, bottles — practically everything you need for your baby — and many products for moms. All of our products are tested to the same high standard we started out with Sprout Foods.
BPGL: That sounds like a good bargain for parents and makes a lot of sense from a business standpoint. You had a running start just by selling Tyler Florence’s baby food. So, what were your challenges in getting started?
SHERMAN: If you know anything about building an Internet company, building the site is the easy part. The problem is getting people to use it; if you build a mall in the middle of the desert and have no roads to it, you won’t make any sales. So, we thought, What if we could create a relationship with Sprout Foods that would allow us to sell their food online as the first product we’d introduce people to?
It’s a low-cost product to introduce someone to. And it’s food, so if your baby likes that food, you keep feeding it to your baby. It was a good entry point that would allow us to create what we hoped would become a trusted relationship with our customers. We sent them food, and their credit cards were charged. They didn’t experience fraud, and they got what they expected. And if they had a customer service interaction with us, they had a very positive experience. They were happy, and they came back to us again and again.
We would use that as a way to then start introducing them to other products in other categories. We focused first on other consumable products, because those are the products that get used the most. Then we started to look at adding more hard goods. There’s a whole lot more to Sprout Baby than baby food.
End of Part One
Sprout Baby has provided Blue Planet Green Living readers the following discount code for 15% off your first order: BPGL15 The code is good through JANUARY 15, 2010.
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Part One: Sprout Baby – Spreading by “Word of Mom” (Top of Page)