Do not Obsess Over the Obstacles, Says the Founding father of Schmidt’s Naturals

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Don't Obsess Over the Obstacles, Says the Founder of Schmidt's Naturals

April
16, 2020

7 min read

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April 2020
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The brand story is almost too perfect: one day, a 31-year-old woman in Portland, eight months pregnant, is in her kitchen, making a natural deodorant, pouring it into a mason jar … and turning it into a multimillion-dollar Unilever store for acquired nine digits. No sweat. Or if there is sweat, it smells like ylang-ylang or maybe rose.

Not quite. Jaime Schmidt had neither a business plan nor a VC fund in 2010. But she knew who she was, and that drove her through the handicaps and imitators, the tough decisions and costly mistakes that broken machines and crumbling products along the way that Schmidt & # 39; s Naturals sold to one in Walmart, Target and Costco Make personal care line. Today she's still involved in Schmidts, but she also has a new book, Supermaker, an investment firm, a website that supports underrepresented founders … and a passion for telling entrepreneurs this: It's never as easy as it is looks like.

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You started out selling your natural deodorant jars at farmers markets and the customers were literally in your face. How valuable was that?

Very valuable. And in Portland it's such a demanding customer market. They want the cleanest, healthiest product and know what they are talking about. I learned very quickly that I needed to know 100 percent of what was going into my deodorants and be able to speak to every aspect of every ingredient, including where it was sourced, because those customers wanted those details .

So Portlandia is true.

That's so funny. Definitely parts of it. They actually did a little parody – it was this commercial for Mother's Sun Deodorant, made from all the "stuff that doesn't do anything". Then did [Portland Monthly] have a quiz called Truth or Portlandia? And the real one was Schmidt's deodorant. So we were really part of that culture for a while.

By 2012 you were making natural lotions, sunscreens, and soaps, but then you decided to remove everything except deodorant. Why?

I just knew in my heart that I had to do one thing and do it really well to really make a difference. I went limp from those close to me, like my husband, and said, “People love your lotions; you can't get rid of them. "But I felt a lot safer about targeting buyers and customers with one thing, and I knew deodorant was the opportunity. It was very new to the industry. There certainly was a need for it. It would have been a lot harder for me to find myself." to use for my soap or lotion.

You never raised money. When was the first time you were profitable?

The first few years were a little messy financially, but there was always income. Then, two years later, we got our D2C strategy going really well: we built a new website and ran ads to get attention and those sales really kept the brand alive.

Tell me about the labeling machine fiasco.

That was in January 2015. The employees had been labeling by hand for as long as we decided to buy a machine. It was a great moment. But we tried to be frugal and bought a used one – it was about $ 15,000 – which was a bad move. It showed up with missing parts, broken parts; It was so old we couldn't find a manual for it. We tried several technicians to fix the problem and no one wanted anything to do with it. A big mess. And learned a lesson.

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What was another lesson?

It is assumed that you can easily enlarge something in a smaller batch. When you work in bulk, everything changes. I learned that the hard way. Right before we started some of our sensitive skin fragrances, we had all the hype about these new products, we had all these orders. And we quickly discovered that the batches were just crumbling.

Schmidt got great feedback when he started in Portland's local farmers markets.

Photo credit: Courtesy of Jaime Schmidt

What have you done?

We had to pull every ingredient until we could see exactly what the problem was. We figured it out, but there was definitely a lot of costs involved and disappointing customers because we had started shipping them out before we realized they were crumbling. We thought we had the right tests, but we clearly needed to do more tests to scale!

How did you deal with the imitators and the competition when you scaled as a company?

It was a constant struggle. The first time I saw a woman with a deodorant table at one of the farmers' markets, my heart stopped. I thought it couldn't be. I'm the deodorant person from Portland. When you see someone emerge like this, you can't help but feel like you inspired the idea in them. She came over and asked if I wanted to trade products. I was kind and said no. I later realized the value of competitors raising awareness in this category because it still had a reputation that natural deodorants didn't work or were for a niche consumer. If their product worked well, maybe people would be ready to try mine. However, there was one brand in Europe that was obviously kidding us. We have issued an injunction. They took the products off the shelf.

When did you think about selling?

It only occurred to me when we were approached in 2017.

And until then, Schmidt & # 39; s Naturals was represented in around 14,000 stores in more than 30 countries?

Yes. We had 400 percent year-over-year growth from $ 1.5 million in 2015 to nearly $ 25 million in 2017. And when we started getting the interest of investment firms and big CPG players like Unilever, it was I realized we were actually where we were could use some new thinking and momentum behind the brand. But it was important to me that I keep in touch. Unilever understood the value in our branding and marketing team and had no interest in undoing it. We have a really good relationship. I get involved in some brainstorming sessions and mainly work as their speaker.

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Now you're on to new projects like your Supermaker website. Is that something you want to monetize?

Our big goal is to tell stories of founders and brands that may not otherwise get the press attention, and we try to prioritize under-represented entrepreneurs. We didn't plan to monetize it ahead of time, but let's look at that now.

Your Color mutual fund appears to have a similar mission and focus on underrepresented founders.

Yes. It's so trendy to get those sexy headlines on a finance deal. But I challenge people: is this really the right step? Or maybe you just need to make a strategic adjustment. Or maybe a consultant. I have Schmidt's experience that I really booted and understand that money isn't always the answer.

So many entrepreneurs start a business because they see blank space or a business opportunity. What else must they have in these early days?

I really don't think you can keep up without real passion. There is also a level of naivety that I think has been very helpful. If I had been too well informed about the competitive landscape and everything else it would have been really intimidating. Of course, you can only get away with this naivety for so long. But in those earliest days it was beautiful – and crucial to our success.