Building a Responsible Brand

Seth Goldman, founder and CEO of Honest Tea

Organic bottled tea brand Honest Tea will be sold at more than 75,000 retail outlets nationwide by the end of this year, up from 15,000 in 2007, the year before the Coca-Cola company made a minority investment in the company. Earlier this year, Coke exercised an option to acquire Honest, but Goldman has remained at the helm and kept most of his equity in the company.

You really have to make sure you stand for something,” Goldman says. “When we started this business 13 years ago, if growth was more important than anything else, we would have just made the [tea] sweeter and cheaper. It doesn’t take a market research guru to tell you that sweet drinks sell more. But we really wanted to do things differently and in a way that meant something to us. And that’s why it became valuable to Coke.”

Gary Hirshberg, cofounder and “CE-Yo”of Stonyfield Farm

Like Goldman, Hirschberg convinced the French food conglomerate, Groupe Danone, to keep him on the payroll a decade ago, and to let him to continue setting Stonyfield’s policies in the organic yogurt maker’s Londonderry, New Hampshire, headquarters—not in Paris.

“Number one,” says Hirschberg, “is manage your cash flow. Don’t put yourself in a position where you are forced to do a deal. A lot of the really bad deals out there, where the entrepreneur was not in control, happened because they put themselves in a position where they needed cash. Number two: If you don’t ask, you don’t get. I asked for a ridiculous and impossible deal. And sure enough by asking and sticking to my guns, I got an amazing deal that I think can be a role model for others in terms of maintaining your values, not giving up or losing control.”

Jeffrey Hollender, cofounder and former CEO of Seventh Generation, Inc.

Though he was fired last year by the company’s board, Hollender earned a stellar reputation for his business savvy and commitment to sustainable business during his more than two decades building Seventh Generation into one of the most successful “green” household goods companies on the market. As he gets ready to launch a new venture in ethical entrepreneurship, he offers this advice:

“Number one: Be careful who you take money from. If the people you take money from are short-term in thinking, the way they are going to maximize the value of their investment is going to be pushing you to sell the firm. Also, choose your investors more carefully than your employees because they are a lot harder to get rid of. The second most important thing is to integrate your values into your corporate governance. And that is something that I failed to do. I failed to take many of the wonderful things that Seventh Generation does and ingrain them in our corporate bible in a way that they couldn’t be changed.”

Greg Steltenpohl, cofounder and former co-CEO of Odwalla

Steltenpohl, whose company was purchased by Coke in 2001 for $181 million, says entrepreneurs should develop strategic plans for their companies early on to avoid being compelled to take money from investors who don’t care about their mission.

“By asking those questions early on, they may be able to get those support systems in place to allow them to grow without outside investors or venture capitalists,” he says. Otherwise, he adds, socially committed entrepreneurs are often sidetracked onto a path “that they might not notice they are on right away but will decide their fate.”