How to create a successful, mission driven business in a profit driven world – Interview with Seth Goldman and Barry Nalebuff of Honest Tea

Honest Abe, Honest Tea

Today’s interview is with Seth Goldman and Barry Nalebuff the co-founders of Honest Tea. Today they join me to talk about their new book (Mission in a Bottle: The Honest Guide to Doing Business Differently–And Succeeding) which recounts their stories, both personal and professional, of how they conceived, started and grew Honest Tea from zero to a turnover of just less than $100 million and then sold the company to Coca Cola.

This interview follows on from my recent interview: Leading A Renaissance in English Whisky – Interview with Andrew Nelstrop – and is number seventy six in the series of interviews with authors and business leaders that are doing great things and helping businesses innovate, become more social and deliver better service.

Here are the highlights of the interview with Seth and Barry:

Mission in a Bottle

      • They recently published a book called: Mission in a Bottle: The Honest Guide to Doing Business Differently–And Succeeding
      • The world doesn’t need another business book so they wanted to tell their story about doing business in a different way and, also reach different people.
      • To do that, the book has been written in the style of a graphic novel.
      • The book tells the story of Honest Tea, which “seeks to create and promote great-tasting, truly healthy, organic beverages.” They “strive to grow their business with the same honesty and integrity they use to craft their products, with sustainability and great taste for all.”
      • Through the book they have ‘open-sourced’ Honest Tea’s business plan.
      • This book is a ‘warts n all’ story and they believe that if they had read this book before they had started it would have saved them millions of dollars.
      • It is their story, both personal and professional, of how they conceived, started and grew Honest Tea from zero to a turnover of just less than $100 million and then sold the company to Coca Cola.
      • They found that in the long-term not having a background in the beverage industry was a help as they were able to bring a lot of creative and new ideas to bear. However, not having the right manufacturing and distribution experience, in the short term, did cost them initially.
      • Most entrepreneurs want to do things differently but the key is know what are the right things to do differently.
      • One of their keys to success is that both Seth and Barry have stayed very close to their customers.
      • For the first ten years, Seth and Barry personally answered every email that came into the company from their customers. Even now, whilst he may not reply to all of them personally, Seth still sees every email that comes in to Honest Tea that comes from their consumers.
      • This has been a great source of market research insight and feedback from customers about what they like and don’t like about what you are doing.
      • They believe it is a mistake to delegate that responsibility to someone else.
      • This was a key strength and opportunity for them when they were acquired by Coca Cola as many of their consumers were emailing them to ask why, when they were an organic, fair-trade company, would they want to work with Coca Cola. Answering the emails and staying close to their consumers allowed them to enter into a dialogue with their consumers so they could understand how they were feeling and how they could best answer their questions and assuage their concerns.
      • In actual fact, the CEO of Coca Cola is quoted in the book as saying “This deal is not about making Honest Tea more like Coca Cola; in many ways, we want Coca Cola to operate more like Honest Tea.”
      • One of the the biggest lessons that Seth and Barry learnt over the last few years is this: You have got to bring to market a product or service that is radically different or better than what already exists. Anything else just won’t get people’s attention or get you over the other hurdles/issues that you will face.
      • Another big lesson was learning about how they created value. When they started out they thought their value was about the teas that they made but, in time, came to find out that what their customers valued was the ‘honest’ way that they went about making their teas. That allowed them to extend their Honest brand into other beverage products.
      • This book will help you decide between whether you have a good idea or a good business.
      • This story and it’s format is proving to be accessible to all generations and that is really exciting to the authors.
      • In UK terms, they are the ‘Innocent’ of tea.
      • You can read more about their story by grabbing a copy of their great book: Mission in a Bottle: The Honest Guide to Doing Business Differently–And Succeeding

About Seth and Barry (adapted from their bios on the book’s website and the Honest Tea website)

Seth GoldmanSeth Goldman is President and TeaEO of Honest Tea, the company he co-founded out of his home in 1998 with Barry Nalebuff. Today, Honest Tea is the US’s top selling organic bottled tea, and is carried in more than 100,000 outlets. In March 2011, Honest Tea was acquired by The Coca-Cola Company, creating a platform for national expansion and helping to further the reach and impact of Honest Tea’s mission. Ever since the enterprise was launched out of Seth’s home, the company has been a mission-driven innovator, launching the first organic bottled tea (1999) and the first Fair Trade certified bottled tea (2003). Today all Honest Tea varieties are organic and Fair Trade certified. The company continues to be recognized for its mission-driven leadership, commitment to transparency, and unconventional marketing techniques.

Under Seth’s leadership, the company has initiated community-based partnerships with its Fair Trade Certified™ suppliers in India, China, South Africa, and is known for its creative marketing initiatives (The Great Recycle and The National Honesty Index) and its partnerships with TerraCycle, Arbor Day Foundation and IndoSole. In addition to being named one of The Better World Shopping Guide’s “Ten Best Companies on the Planet based on their overall social and environmental record,” Honest Tea was ranked by The Huffington Post as one of the leading “8 Revolutionary Socially Responsible Companies.”

He is a frequent blogger at inc.com, TreeHugger and Huffington Post. Seth enjoys sharing lessons and insights learned from scaling a mission-driven enterprise at various conferences and events across the country.

Seth is a graduate of Harvard College (1987) and the Yale School of Management (1995), and holds an honorary Doctorate of Laws from American University and is a Henry Crown Fellow of the Aspen Institute. He lives with his wife and three boys in their eco-friendly house less than a mile bike ride from Honest Tea’s Bethesda, Maryland headquarters where he starred in his first (and last) rap video.

Barry NalebuffBarry Nalebuff is Chairman of the Board and Co-founder of Honest Tea with Seth Goldman. He is the Milton Steinbach Professor of Economics and Management at Yale School of Management. He and Seth met in 1995 when Seth was a student in one of Barry’s classes. An expert on game theory, Barry has written extensively on its application to business strategy. He is the co-author of Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life, the first popular book on game theory, and one used in classrooms worldwide. In his second book, Co-opetition, Nalebuff applies game theory to business strategy, with an emphasis on creating and capturing value. Problem solving and ingenuity is the topic of his third book Why Not? How to Use Everyday Ingenuity to Solve Problems Big and Small and his most recent book is entitled The Art of Strategy.

A graduate of MIT, a Rhodes Scholar, and Junior Fellow at the Harvard Society of Fellows, Nalebuff earned his doctorate at Oxford University. In addition to his work with Honest Tea, Professor Nalebuff also serves on the board of Nationwide Insurance.

You can grab a copy of the book at Mission in a Bottle: The Honest Guide to Doing Business Differently–And Succeeding, check out the book website here and connect with Honest Tea on Twitter @HonestTea.

Photo Credit: ElizabethHudy via Compfight cc

Comments

  1. The second interview I have heard this week from these guys.

    The first was here http://www.danpink.com/office-hours/seth-goldman-and-barry-nalebuff/

    The thing I found particularly fascinating was how they are trying to maintain their corporate identity even though they are now part of Coca Cola. It will be very interesting to see if they survive or not.

    James

    • Hi James,
      Yes, it will be interesting to see how they get on, particularly if Coca Cola change their CEO.

      Also, good to see that I may be in the same mix as Dan Pink, in terms of interviewers ;)

      Adrian

  2. Hello Adrian,
    I found that the following two points resonate particularly strongly with me:

    - One of the the biggest lessons that Seth and Barry learnt over the last few years is this: You have got to bring to market a product or service that is radically different or better than what already exists. Anything else just won’t get people’s attention or get you over the other hurdles/issues that you will face.

    - Another big lesson was learning about how they created value. When they started out they thought their value was about the teas that they made but, in time, came to find out that what their customers valued was the ‘honest’ way that they went about making their teas. That allowed them to extend their Honest brand into other beverage products.

    Why do these resonate with me? Because I am constantly asserting that to be truly customer-centric you have to focus on creating superior value for customers. And ‘value’ means more than product and more than interactions around accessing-interacting with the organisations that sells-services this product. Value can and does included what you stand for in the world: the possibility that you bring into being. In this case, honesty.

    Maz

    • Hi Maz,
      I think it was a long and hard road for them to come to that realisation. But, what a powerful realisation to come to…..the value that you create and what you stand for is not about tea but about honesty. Very cool.

      Thanks for pointing out your favourite bits of the interview. It’s always helpful to hear what resonates with others.

      All the best,

      Adrian

  3. Excellent interview, Adrian. Thanks! So many great points… one of my favorites is attribute success to staying close to customers. I’ve added the book to my reading list… look forward to reading it!

    Annette :-)

    • Hi Annette,
      Indeed.

      How does the old saying go….’a picture paints a 1,000 words’? Well, if they had written out all of the lessons that they have told in the book then it would have turned into a Harry Potter sized book. Genius to deliver their story as a graphic novel. Allows them to pack so much in.

      I am sure you won’t be disappointed with the book. Test Barry’s theory and test it out on your kids too :)

      Adrian

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  1. […] interview follows on from my recent interview: How to create a successful, mission driven business in a profit driven world – Interview with Seth… – and is number seventy seven in the series of interviews with authors and business leaders that […]

  2. […] can read the highlights of the interview and listen to the podcast here: How to create a successful, mission driven business in a profit driven world. Or, if you want to dive straight to the podcast you can listen to it on iTunes […]

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