Starting a new business can be both an exhilarating challenge and a soul-destroying enterprise. It can bring you to the breaking point of stress or to the height of success, and sometimes both at the same time. For fledgling entrepreneurs, it can seem like a long and tumultuous road, though the journey is often easier with some simple guidance from those who have gone before.
Sarah Burrows, one-half of the Modern Sprout team, sat down recently to discuss how to create a business from the ground up. Over the course of the last four years, Burrows and her husband have built up their company to provide apartment and small space dwellers with beautiful tools and solutions to grow their own herbs, plants, and flowers, all packaged up in gift-worthy branding. The company challenges the notion of where and when you can indulge in your green thumb. The duo was able to leverage Modern Sprout's disruptive place in the gardening market into a thriving wholesale and e-commerce business.
Looking for a solution within the problem
Modern Sprout began in 2013 from the Burrows' love of growing and cooking with their own fresh ingredients. They were living at the time in a small city apartment with hectic travel and work schedules, and they struggled to grow and maintain a garden that would supply their kitchen with fresh ingredients. Finding only large and cumbersome gardening products on the market that didn't cater to them as metropolitan growers, a spark of inspiration and several science like experiments in their living room led to them creating a prototype hydroponic planter that could be refashioned for the home to create a successful indoor container garden for those with limited space and skill.
Much like many modern entrepreneurs, in an effort to bring their idea to life, the Burrows then took their project to the digital market through a Kickstarter campaign, which they used to raise the initial capital they needed to fully launch their product. The Burrows then used the $80,000 in pre-sale capital from their Kickstarter campaign to expand into an e-commerce site, build their product offering, and attend trade shows to bring their concept to a wholesale market.
Though the Burrows have been aided by the ease of use and exposure that these digital tools afford, it still wasn't an easy road at the beginning.
"My key piece of advice in setting up a business is that if you're going to fail, fail fast," says Burrows. "We had a lot of bumps on the road and had to rely a lot on partners because we were so clueless about the whole process some of the time."
Luckily for the Burrows they didn't spend too much time trying to reinvent the veritable wheel. Modern Sprout is based on a model of creating smaller sized gardening containers for urban growers. To achieve this the couple sourced custom components for their smaller packages and simplified a timer system that is easier for non-professional gardeners to use. In their endeavors, the Burrows' learned the value of working with local manufacturers to deliver the best possible models through their initially limited run of 800 units.
"Because we worked with all local manufacturers our costs were really high and to this day we don't sell some of the particular products wholesale because we simply can't make our margins," says Burrows. "It took some time to go back to the product to re-engineer it to make it cheaper and better, but we started with a solid model."
Working Locally and Then Expanding
The Burrows tapped every available resource they could to fill positions and make fulfillment. They utilized Google to search for potential partners at the best possible price and found an engineer off Craigslist to give advice on the logistics and design side of the business. They also begged and leveraged with other suppliers and tapped into their friend group for the better deals to meet their small run requirements. They took full opportunity to network with other entrepreneurs who had experience starting their own companies and could sympathize with the process and offer them lower production costs. After time and trial and error, it became easier for the Burrows to find appropriate vendors and seek out opportunities from across the country and around the globe.
"We learned the value of working locally," says Burrows. "It's important to work with people that you can have face time with. It's very tempting to go offshore to cut down costs, but you have so much less control. You may spend more money using suppliers in your area, but you actually get to go and meet the people and they become more personally invested in the project."
Burrows recommends bearing the burden of refining the perfect product first locally before thinking about sending it to a broker overseas for cheaper manufacturing. As part of their growth strategy, the couple relied upon Kickstarter to raise the capital they needed and validate that they had a product that people desired.
"It's important to network with as many people as you can who will listen to you and give you advice," says Burrows. "If people aren't really willing to listen you may need to pivot your idea or approach. You also shouldn't worry about having it totally defined and completely perfect before launching on Kickstarter. Your idea will evolve and change and your market insight will shift given input from Kickstarter."
A chance endorsement leads to major demand
A major shift for Modern Sprout came when one of their planters was picked up by O - Oprah magazine as one of Oprah's favorite things early on in their business. The endorsement was both a blessing and a curse for the Burrows as they experienced extremely high demand for their product and exposure to new buyers, but struggled under the weight of being able to fulfill their multiplying orders.
"Our capacity at the time was maxed out at shipping around 250 units a day, but we needed to ship around 700 units to keep up," says Burrows. "We were air freighting all over the world and were pulling 17 hour days stressed out to meet the demand."
While the spike in orders stretched Modern Sprout to their limits, it also gave them a lot of extra cash flow which they used to expand their assembly, build, and fulfillment capabilities and allowed them to bring on consultants who advised on how to refine and improve their processes for efficiency.
This exposure also opened them up to large retail owners who might want to carry their product. When coupled with the brand's participation at trade shows it allowed them to scale up to new markets.
"The more you exhibit at trade shows, the more you build better relationships and legitimacy and credibility with retailers when you keep showing up time after time."
The Burrows have also been lucky that they don't have a huge amount of other competitors in their space. The majority of gardening companies cater to big suburban backyards with huge products, while Modern Sprout is repositioning gardening tools into the gift sector with beautiful packaging, so they aren't as saturated.
"Another piece of advice is to know your competition and don't enter a super saturated market," says Burrows. "We've been lucky to have retailers coming to us rather than having to do a hard sell. We've enjoyed good media and press coverage because there aren't a lot of other companies that have gardening products that look as good. Find a market that hasn't been disrupted or reinvented in a very long time and you'll stand out."
Though they have been savvy in their product offering and market approach, the Burrows have experienced some bumps in the road in terms of expanding the e-commerce side of their business. While the fast-moving digital space is beneficial for entrepreneurs and small businesses to enter with little investment and no bricks and mortar space, it also makes it harder for them to stand out. E-commerce also involves investment in optimizing web sites, content creation, and social components. For Modern Sprout, wholesale represents about 70 to 80 percent of their business while e-commerce is concentrated on a smaller 20 to 30 percent. Yet the margins on e-commerce deliver much greater reward than wholesale, so it's a critical area of focus for Modern Sprout and other fledgling companies.
While these methods deserve attention, Modern Sprout's successful business journey, as well as that of any business, is underscored by phenomenal ideas and the tenacity to follow through with them.
"When launching a new business it can't just be about a one-hit-wonder product," says Burrows. "You have to think of the brand, you can't just think of the one product that you have in mind. If you really want to be successful and establish a company you have to have good ideas."