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Seventh Generation: Alan Newman and Jeffrey Hollender. A Partnership that Flourished—until it Failed. (2021)

How I Built This with Guy Raz

Hosted by Guy Raz

1h 31m
Transcript

Original podcast

Summary

Written by a model from the transcript; not yet reviewed.

This classic replay explores the founding, massive growth, and turbulent breakup of Seventh Generation, the pioneering eco-friendly cleaning product company. Co-founders Alan Newman and Jeffrey Hollander share how they met, built a mail-order catalog from a bankrupt venture, and faced near-collapse during the 1991 recession before a bitter falling out led to Alan's ouster. Jeffrey then pivoted the company toward wholesale retail, scaling it to millions before being ousted himself years later, just before Unilever acquired the brand for hundreds of millions. The episode is a dramatic, unusually candid look at the emotional toll of co-founder conflicts and the reality of scaling a mission-driven business.

  • Focus on customer benefits rather than features to get past initial resistance, as seen when early catalogs emphasized money saved alongside environmental perks. 25:37
  • Build a company culture around psychological safety by encouraging employees to share fears and mistakes rather than hiding them. 36:34
  • Establish crystal-clear written agreements with co-founders regarding leaves of absence and roles to prevent catastrophic misunderstandings. 52:28
  • To win over major traditional retailers, present hard data proving that sustainable products can generate higher profit per square foot. 1:08:44

Chapters

  1. 0:00
    Sponsor Intro and Podcast Hook

    The episode opens with the sponsor Anthropic and Guy Raz setting up the theme of hard questions that drive founders.

  2. 5:45
    Guy Raz Announces the Story

    Guy Raz introduces the episode’s focus on Seventh Generation, its founders, and the dramatic partnership that eventually failed.

  3. 8:28
    Birth of Seventh Generation Catalog

    Alan and Jeffrey meet, combine resources, and launch the Seventh Generation catalog, focusing on recycled products and educational content.

  4. 10:40
    Founders’ Early Lives and Ideals

    Alan and Jeffrey recount their upbringing, education, and early rebellious spirit that shaped their future ventures.

  5. 14:03
    From Toronto Skills Exchange to Renew America

    Jeffrey explains how he launched a nonprofit skills catalog in Toronto, the legal troubles that ended it, and the transition to a for‑profit catalog business in New York.

  6. 40:00
    Rapid Growth and Corporate Culture

    The company scales quickly, builds a distinctive hippie‑style office culture, and secures significant media exposure and sales growth.

  7. 50:00
    Recession, Layoffs, and Emotional Toll

    Economic downturn forces massive layoffs, strains the partnership, and leads to Alan’s six‑month sabbatical, creating tension and miscommunication.

  8. 51:25
    Sabbatical Fallout and Breakup

    Alan’s sabbatical turns into a permanent split; a written “Dear John” letter formalizes the end of their partnership and deepens the rift.

  9. 51:57
    Aftermath and Reflections

    Both founders reflect on the failure, lessons learned about communication, trust, and the challenges of balancing business and friendship.

  10. 54:05
    Alan’s Forced Exit and Jeffrey’s Compensation

    Alan Newman is forced out of Seventh Generation, and Jeffrey Hollander negotiates a payout that fuels his next venture.

  11. 1:06:20
    Jeffrey’s Vision Shift to Retail

    Jeffrey pivots the company from catalog sales to wholesale retail, betting on a wholesale model over mail order.

  12. 1:07:03
    Whole Foods Breakthrough and Expansion

    Securing a shelf at Whole Foods propels Seventh Generation into rapid growth and national recognition.

Highlights

  • 11:42

    Starting a Course Catalogstory

    The guest describes starting the Skills Exchange of Toronto as a young man based on an educational philosophy book, printing thousands of course catalogs, and achieving massive early success.

  • 24:02

    Pivoting to For-Profitstory

    After being deported from Canada for lacking working papers, the guest returned to New York and started a for-profit course catalog offering classes like How to Marry Money.

  • 24:18

    Naming Seventh Generationstory

    Alan Newman explains how he took over a failing catalog, changed its name to Seventh Generation based on an Iroquois quote, and focused on educational copy to drive sales.

  • 26:56

    Warner Publishing Buyoutstory

    The guest explains how a meeting intended for a distribution deal turned into an unexpected multi-million dollar buyout of his books-on-tape business by Warner Publishing.

  • 47:26

    Laying Off Half the Staffstory

    Following the onset of the Gulf War and a severe recession, the co-founders had to lay off nearly half of their 120 employees, creating a deeply painful moment for the leadership team.

  • 51:25

    Receiving the Dear John Letterstory

    Alan Newman recounts returning from a six-month sabbatical expecting to resume his role, only to receive a letter from Jeffrey Hollander terminating his position at the company.

  • 1:05:16

    Pivoting to Wholesale Retailstrategy

    Jeffrey Hollander explains the high-stakes decision to sell off the 80-revenue-generating mail-order catalog business in 1995 to fully commit Seventh Generation to wholesale retail.

  • 1:20:22

    Being Fired by the Boardstory

    After twenty years of building Seventh Generation into a 150 million dollar brand, Jeffrey Hollander was abruptly fired over the phone on a Saturday morning by the board of directors.

Quotes

  • “And it reminds me a little bit of the founders I talked to on this show,”
    Guy Raz · 4:23
  • “We were teaching people terrible values. And I was really heartbroken after the show.”
    Unnamed speaker · 16:36
  • “The first load, we had to guarantee a full trailer load because they, we insisted that it said made with 100% recycled paper.”
    Unnamed speaker · 38:50
  • “You know, I licked my wounds for a while, and then I started coming out of it.”
    Unnamed speaker · 58:41
  • “creating tons of garbage and tons of waste for all the people that recycled those catalogs without even opening them.”
    Unnamed speaker · 1:06:07
  • “We were 90 or 95% as effective, but we felt that we got the job done for most consumers, and that was what would be good enough.”
    Unnamed speaker · 1:08:20
  • “I think we've gotten the two things confused.”
    Unnamed speaker · 1:15:36
  • Anthropic 0:00–3:52
  • NetSuite 55:20–55:59
  • Framer 56:11–57:05
  • Stripe 57:17–58:13

About this episode

With its eco-friendly paper towels, diapers, and cleansers, Seventh Generation was one of the first—and most successful—green household brands to hit the market. But in the early 1990s, its two founders had a bitter falling out. Alan Newman and Jeffrey Hollender have barely spoken since that time, but they both agreed to come on the show to talk about the business they were both passionate about, and the delicate nature of partnership. What you'll learn: Why Alan says his great strength—and his greatness weakness—is his tendency to say “yes”How Jeffrey and Alan lost their friendship and business partnership after only three years. How Jeffrey grew Seventh Generation into a household name–and then got fired How two formerly estranged partners feel about partnership now Generation into a household name Why Jeffrey and Alan agree that having a co-founder isn’t for everyone Timestamps: 7:55 - Jeffrey makes it big in Canada selling adult-learning courses…before he’s forced to leave the country 14:15 - Alan moves to Vermont on a whim, and winds up in a mail-order catalog business 26:56 - Alan and Jeffrey meet for the first time and find common ground: Alan needs capital and Jeffrey has it 32:38 - An atypical office for 1989: Ping pong table, nap room, and employees get prizes when they make mistakes 43:00 - Crisis hits … and tears Alan and Jeffrey’s friendship apart 48:06 - Jeffrey sends Alan a “Dear John” letter, and Alan leaves the company 54:40 - Seventh Generation grows to new heights… then Jeffrey is fired as CEO 1:29:06 - Jeffrey and Alan reflect on why their partnership failed, and what it takes to have a good one This episode was produced by Casey Herman with music by Ramtin Arablouei. It was edited by Neva Grant. Follow How I Built This: Instagram → @howibuiltthis X → @HowIBuiltThis Facebook → How I Built This Follow Guy Raz: Instagram → @guy.raz Youtube → guy_raz X → @guyraz Substack → guyraz.substack.com Website → guyraz.com See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

0:00
1:31:16

16,110 words · 3 speakers

Speaker names marked are inferred from speaking time and the show’s known hosts — they are not voice-verified.

Topics

  • Seventh Generation
  • Vermont
  • New York
  • Unilever
  • Whole Foods
  • Renew America
  • Albertson's
  • Long Island
  • Garden Supply
  • Gorgon Supply Company

Page updated · transcript and summary are machine-generated