Monday, September 29, 2008

recipe for success

You know you've written A LOT of posts on method, here
on method lust, when you go searching for a great new photo of those
masters of clean design (or is that designed cleaning, or clean-up
design, or design"ed" to clean, uh, I don't know...) and when you
stumble upon a pic, you say to yourself "Hey! That looks like a great
photo of the guys! I think I'll use that one!" and you click on it, and
it takes you to...

method lust. Ha ha! THAT my friends, is when you a) realize the Alzheimer's is setting in fast; and b) know you have a big obsessive problem with m.e.t.h.o.d (Hey, that could be their spy name! Yes!)

Anyway, I've found a great new article for you (Uh, I think. I'm telling ya seriously, it's becoming hard to remember what I have and haven't posted! I've done 490 posts this year! Whew, that's a lot! YES it is!) Actually it's a great new old article for you! But I always lust finding these, so I can read how it was, what they were thinking way back then (if 2006 can be considered way back then?) and to see just how far they've come (real far, baby, real far!) So without further blah and blah from me (though I know you love my blah, now don't you! You know you do...)

"By Ilana DeBare, San Francisco Chronicle,

Six years ago, at the height of the Internet boom, Eric Ryan’s friends laughed at him as he turned down one dot-com job offer after another to start a company in the stodgy, low-tech business of household cleaning products.

Today, many of those dot-coms are long gone.

And Ryan’s company, Method Products, was recently named the seventh fastest-growing private company in America by Inc. magazine.

Method, with its minimalist design and trendy-looking soap bottles shaped like teardrops and bowling pins, is a familiar sight to shoppers at stores such as Target, Safeway and Office Depot.

Its revenue of about $45 million is just a drop in the wash-bucket compared with long-standing industry giants like Clorox, which had total sales of $4.4 billion in 2005.

But Method has managed to grow prodigiously at a time when the cleaning products industry overall is largely stagnant.

And the young San Francisco company’s determination to shake things up is changing practices within the industry, as well as turning heads in the design world.

“Method has reoriented how people perceive these household cleaning products that they used to shove under the sink,” said Hsaio-Yun Chin, an assistant professor of industrial design at San Francisco State University. “It’s very sexy. It’s something you can display proudly on top of your sink. It’s another accessory to “cool,” almost a lifestyle item rather than a cleaning item.”

Today, Method has 132 products – everything from pink grapefruit cleaning spray to cucumber-lemon dishwasher cubes, mint window washing liquid and vanilla-apple air fresheners.

But six years ago, the company was little more than a wild idea shared by two high school buddies from Michigan who were rooming together in San Francisco.

Ryan, now 33, was working in advertising and his friend Adam Lowry, now 32, was a chemical engineer who had worked for a foundation researching global warming. The two were intrigued by companies like Apple Computer Inc. that had used a cutting-edge design sensibility to become industry leaders.

“We started to discuss different industries that needed to be reinvented from a design standpoint and from an environmental standpoint,” Lowry said.

The two became intrigued by household cleaning products. It is a huge industry, with annual sales of about $18 billion. But it hadn’t changed much since the 1950s. Companies talked mostly about how well their products killed germs; brands like Cascade and Comet changed little from decade to decade.

“The household cleaning aisle was so big, yet everything was so boring,” Ryan said.

Ryan and Lowry decided to create a brand of household cleaning products that would appeal to the fashion sensibilities of hip, young urbanites.

“Your house is this high-interest, high-emotion place, but the products people used for it were just commodities,” Ryan said. “We were the first ones to treat cleaning as cool. The category treats it as a chore, and to a lot of people it is a chore – but it’s also therapeutic, a ritual, with a sense of purpose to it. Method is very much about design, fragrance, the romance of it and trying to tie (cleaning) back to your home.”

They started working with exotic scents like cucumber, lavender and mandarin orange. They developed a sleek, uncluttered style for their bottles and labels. They looked for nontoxic, non-polluting ingredients, although they consciously decided not to market themselves as a “green” brand.

“There are plenty of eco-brands out there, but it’s a very small category,” Ryan said. “If you go out and call yourself a green cleaner, you’ll just steal shelf space from Seventh Generation.”

Their first product was an all-purpose spray cleaner. They drove around to local supermarkets, pitching it to store managers as they arrived at work at 6 a.m. Once they got a few placements, they conducted in-store demos themselves. They drove by the stores each week to count the bottles on the shelves and replace ones that had been purchased; their first week, they sold a total of four bottles of cleaner.

Ryan and Lowry eventually beefed up their capital by bringing in outside investors, including former Yahoo Chief Executive Officer Tim Koogle.

Their big break came with Target in 2002. Lowry and Ryan felt their approach would be a good fit with Target, which was coupling famous designers with affordable prices. So they contacted award-winning industrial designer Karim Rashid, known for bringing high-end design concepts to mundane items like wastebaskets.

Rashid designed what became Method’s signature product – a bottle of dish soap shaped like a chess pawn or bowling pin. It was built to let soap flow out the bottom of the bottle, so that users wouldn’t have to turn it upside down.

The design proved to have some glitches: Early versions didn’t close well and leaked all over store shelves. But it succeeded in putting Method on the map and getting them in the door at Target.

“Their idea on the packaging side was very novel and carved out a niche,” said Tom Vierhile, an analyst who tracks new products for a company called Datamonitor.

“It was quite polarizing,” said Method CEO Alastair Dorward, who had joined the company full time in 2001. “One group of customers thought it was groundbreaking. The other said, ‘That’s weird, I’ll go back to Dawn.’ ”

From there, Method expanded into products such as teardrop-shaped bottles of hand soap, ultra-concentrated laundry detergent, specialty cleaners for surfaces like leather and granite, and most recently, air fresheners and candles. Revenue shot from $156,000 in 2002 to $3.4 million in 2003, according to Felicia McClain, a research analyst with Mintel International.

In many categories, Method’s growth rate far outstrips its behemoth competitors.

For instance, Method’s dishwasher detergent sales grew by 28.5 percent over the past year, even though overall sales for that category grew by less than 2 percent, according to Information Resources Inc., a Chicago research firm. Method’s sales of liquid hand soap grew by 68 percent during that same period, while industry leader Softsoap grew by just 12.8 percent.

But the risk of basing a brand on iconoclastic design is that design can be easily copied. And competitors did start adopting some of Method’s innovations, such as the eclectic scents and the ultra-concentrated detergent.

Emulation by larger, long-established competitors is only one of the challenges currently confronting Method. The company also faces the growth of private label or “house” brands, one of the biggest trends in the cleaning product arena.

“Private label brands have grown so much, to a point where you have premium upscale private label brands,” McClain said. “That will be huge competition for years to come.”

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