“Going green” wasn’t exactly mainstream back in 2010. Rising carbon emissions weren’t regular dinner table conversation and Gwyneth Paltrow wasn’t yet spouting the benefits of organic ingredients in a podcast.
Which makes Annalea Krebs’ success in the “green” space all the more remarkable.
The B.C. entrepreneur was only 25 when she founded ethicalDeal, a Groupon-like site for green deals at service-based businesses like healthcare practitioners, spas and restaurants. Four years later, after growing the team to 22 people and pulling in millions without any financing, Annalea sold the company. She was 29. Today, Annalea has a new venture — Social Nature, a product sampling community for natural products. Users sign up online and are matched with products that align with their interests. They get to try the products for free and in return, they’re asked to provide their honest feedback through reviews shared on social media. Brands not only receive the power of social reviews, but also have access to a platform where they can track ROI and export reviews to their own website.
It’s influencer marketing for natural brands, and it’s working: Social Nature boasts 300,000+ users and counts top natural brands like Bob’s Red Mill, Kicking Horse Coffee and Flow Alkaline Spring Water amongst its clients. In 2016, the company closed a $1 million seed financing round from a group of investors that included HIGHLINE.vc.
We recently chatted with Annalea about the co-existence of passion and profit, maturing as a founder and the difference that investment and mentorship has made in her growth.
What sparked your interest in starting an environmentally-friendly venture?
My parents raised me to have strong social and environmental roots. They were sort of hippie parents. As early as 10 or 12, I would be out with my parents in Vancouver’s downtown eastside giving food to the homeless, or doing soup kitchens, or beach cleanups. When I was in my teenage years, I thought I was going to pursue a career in the non-profit space. That’s where I thought meaningful and fulfilling work took place.
It wasn’t until I went to university and had mentors and broader exposure to the business community that I started to realize that there were for-profit businesses that had a positive purpose.
You launched, grew and exited ethicalDeal all before the age of 30. What would you say was most central to that success?
I had learned a hard lesson with my first company [TheChange.com, a social green business directory] where I hadn’t really surveyed my community or my customer, and I was blindly pursuing my passion for green business. With ethicalDeal, I was so hyper focused on asking my customer and asking my community very often “Is this working? What can we do better?”
Where did the idea for Social Nature come from?
It was my ethicalDeal community that ended up giving me the idea for Social Nature. In my third year of business, my community was saying “thank you, Annalea, for introducing me to the nice-to-haves in my city. But what about the everyday choices that I have to make? What about what I eat, what I use in my house, what I put on my baby’s skin, what I put on my own skin?”
I started talking to consumer packaged goods brands that were green and said “I have these hundreds of thousands of ethical shoppers who would love to try your product at 50% off.” They said they couldn’t do it. The retailers that carry the products would not allow that. The business model for ethicalDeals did not work for product. But one of the things that came out of a conversation with one of these brands is that they could give away their product for free. In the grocery business, trial is one of the top ways they acquire customers.
I had to figure out a business model that would work to give away free product, which meant I needed to create additional value for the brands, who would become my customers.
How was launching a venture different the second time around?
Things started happening faster. I found that in my first year of Social Nature, I was already at where I was with ethicalDeal at two years. There’s so much stuff you need to learn when you start a business, like legal, accounting, bookkeeping, etcetera. All that administrative rigamarole of setting up a business, I could just blow through the second time around. The problems don’t go away, though. They just become more interesting. And all the little problems you thought were big problems with your first business, once you go through them enough, you have a plan for how to tackle them and it’s just a reality of growing a company. When you’re an entrepreneur, you just have to accept that every day, you’re here to solve problems and you’re here to pursue opportunities.
Your first business was entirely bootstrapped. What made you explore investment with Social Nature, and how did it help?
I was a bootstrapped entrepreneur previously, so I had no investor contacts. I didn’t have a network of investors. I knew I could run a business on my own, organically, and make millions, but what kind of change could I create if I had access to even more capital? I was really excited by that. The reason I joined the HIGHLINE.vc network was to learn about how to fundraise, putting together a pitch deck, doing my 30-60-90 plans, building out an MPP, showing that traction and making a pitch to investors, and getting connected to that investor network.
It was really useful. Because it was such an accelerated program, it really forced you to validate your concept really, really quickly. What could’ve taken someone a year to figure out and validate took us three months. To me, that’s the greatest value of these programs.
What advice would you give a prospective entrepreneur who wants to create a mission-based, for-profit company?
I am proving that profit and purpose can exist in parallel. But you have to start with the business model. You have your passion and purpose, but the more you adopt and follow best practices in the startup space, and not just chasing your passion, the more successful of a business you will be.
We’ve always run our business just as well as any other tech, investor-backed business would. We’ve followed all the same stuff. The difference is that when we find our investors and when we go after our customers, they have to be aligned with our mission. I stuck to my mission and now I’m a leader in my category.
This interview has been edited and condensed for length and clarity.
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