Feature: Entrepreneur & ecoman: lessons in business from Malcolm Rands
November 20, 2014
By Matthew Tukaki, Editor of EntreHub
There has always been something brewing in New Zealand when it comes to entrepreneurship and innovation – in fact, for a little country at the bottom of the world there is no doubt that they punch above the weight of your average western nation. I mean consider this, for a country of just over 4.5 million they are home to one of the world’s largest dairy company’s and one of the largest fishing organisations.
For perspective, kiwi’s not only feed each other they have turned themselves into a global food production giant. But, it would be wrong to assume that New Zealand only turns out those big company’s when the truth is somewhat different because, as we have learnt, just as you take from an environment under pressure so too do you need to give back.
This is where innovative entrepreneurs such as Malcolm Rands come into play – and when it comes to sustainability and the environment he is a unique (and we hope growing) group of leaders giving back. Change for Malcolm came when he realised the potential of living sustainably could also be turned into a business. After travelling and working in Australia, the USA and the UK Malcolm returned home to his native New Zealand and, with other likeminded people, established an eco-village in Northland.
From there it was a natural transition into taking the concept further by developing a range of products that could be sold on the open market all with the aim of changing buyer behaviour. In 1993 this led to the establishment of Ecostore which is now a multi-million dollar business with significant global reach.
Malcolm recently published his story entitled “Ecoman” which traces the growth of the business from a garage in Northland (New Zealand) to a pioneering global brand. I decided to reach out to Malcolm by posing questions such as “what were some of the lessons you have learnt” and what barriers have you come up against.”
The answers just go to show that entrepreneurship is more than just about making money, it’s how and why you make it and what you do with it that sets you up for ultimate success. Take a look at my interview with Malcolm:
When you started with the business idea and began setting things up (Ref: Page 15 -17of the Book) on reflection do you think what you were doing was more oriented towards the business being a social enterprise?
Having worked in the not-for-profit sector for many years, business for business’ sake was not very interesting to me. I did need to find a way to make money so I could take care of my family and there are many other and much easier ways I could have done that but right from the start I knew I wanted to make a difference in the lives of others in a way that fitted with my values and that’s why, before we launched the business in 1994 I spent a year working on a very detailed mind map of what I wanted the business to look like. I was designing a new model in which a percentage of profits from the business would go to fund, a not for profit called the Fairground Foundation. Through ecostore I have been raising awareness of the harmful and unsafe chemicals used in everyday products and providing healthier alternatives for people to use. The role of the Fairground foundation is to make a difference in the lives of others through social change. Looking at things like how we live together – urban eco village design project, how we move around – carpooling initiative, where our energy comes from, making solar power more affordable and accessible to everyone, how we feed ourselves and others – organic gardening in schools.
Was the business idea / concept more or less seeded when you returned home at age 26 and was the business idea also possibly informed by the world view developed by your travels?
When I came home I still had a lot of learning to do and my years of working for not for profits helped channel and develop the strong need I had to balance the inequality I saw around me at home in New Zealand and during my travels – particularly in the extremes of Southern California and Mexico just down the road. I also learned a lot from living and working in a kibbutz in Israel which influenced my decision to start up and live in an eco community with other families. We created an environment in which consensus decision making, conflict resolution and active neighbouring became the new norms. We were challenging the isolation of the nuclear family and doing a lot of work to develop ourselves individually and collectively. This was the perfect incubator for an idea like ecostore to form and grow. But the thing that steered me in the direction of starting my own business was actually frustration and disillusionment. Having run some very successful events in my local town such as the mid winter festival in which I set up a working ski field in what is known as “the winterless North” so that local kids could experience snow for the first time, I was loving the projects but I was also doing all the fundraising for them (including my own salary) and I got frustrated about how much time that took, not leaving as much as I would have liked to have had to actually develop the projects. I knew there had to be an easier, more sustainable way.
What were some of your initial barriers to success in the early days?
Money – or rather, lack of it. It’s all very well to have an idea but when you’re starting with a $1000 overdraft and a run down old car, things can be very difficult. I also had responsibilities to my family, to my wife Melanie and our two small children, Ahi and Keva.
We also lived in rural Northland and for a while we were shipping products all the way to our home only to ship them all back down to Auckland. Not very eco! Other things – mail order was relatively unknown in New Zealand, so trying to sell cleaning products by mail order was a big ask. Also the lack of experienced business people. I couldn’t afford the team I needed next to me to go where I needed to be
What kind of support network were you able to tap into?
Family – my brother leant me $30k out of the blue. I had friends who were printers and graphic designers, as well as the manufacturers we started working with who believed in what we were doing and extended credit for us. New Zealand’s top formulation chemist worked with me just because he believed in what we, alone, were doing. Every month I would have the same dilemma - I couldn’t pay everyone so I had to choose who would get paid. Those were very tough times.
That’s the beauty of a good idea that is principles based – it’s a lot easier to get people to buy in and be a bit more understanding about payment deadlines!
What were your own personal clear drivers to success or did you find yourself very much gathering a following around you and leading them towards change as well?
The year I had creating a mind map for the business and really getting clear on what it looked like and the things we would not compromise on, was invaluable. There were wobbly times when I didn’t know if we were going to make it or not and every time having a clear vision and strength of purpose would pull me. Living in the eco village in the early years, surrounded by deep green people was the perfect place to start the business. No one held back in terms of giving me tough but constructive feedback. Over the years I’ve gathered an excellent team around me.
Who were your own role models in terms of business (and or social enterprise)?
My role models weren’t business people but people who were motivated by principle and making a positive change in the word. Like Gandhi, Mandela or Martin Luther King
What do you think the current state of entrepreneurship is and what might we do more of?
I am optimistic about the current scene. The principles I came up with 21 years ago have lately been copied by many start-ups. Principle lead, radical transparency, joint decision making and cause related businesses are popping up all over the place
In the book you talk about the current model (Ref Page 51) being broken. Reflecting on that point (and some of the many challenges faced by the sector being complex but often related to funding) do you think it’s time for a little disruption in so far as the NFP sector is concerned? How close does your business model come to that utopian model?
We’re getting close! It took a lot longer for the business to make a profit than I had anticipated because for many years we put any profit into growth and my time was pretty much taken up with leadership responsibilities but I have unwavering belief in Fairground and although we have a few successful runs on the board I can’t wait for the next phase of my mind map (master plan) to fully unfold! One of the important things I’ve done to protect the model I came up with more than 21 years ago as we’ve taken on other investors was to secure funding for Fairground as a core principle of them joining the business.
If you could share two of the biggest lessons you learnt along the way – what would they be?
Trust yourself and your intuition. Whenever I have compromised my principles to fit in with others I have always regretted it. People are looking to you to lead, of course they will argue the old ways but you need to believe in yourself.
Make sure you actually do have the same understanding as your partners. We often delude ourselves we are all on the same page or make assumptions people have a better understanding of what you are trying to do, than they actually do. Be clear. Over explain. Write it down and keep a record. Keep everyone informed as you move forward, don’t be afraid of upsetting people to keep the peace.
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