S'well: Sarah Kauss

In 2009, Sarah Kauss had a well-paying job in real estate development, but she was itching to do something more. On a hike in Tucson with her mom, she got an idea for a business while swigging warm water from a metal thermos: why not design a water bottle that kept cold things cold and hot things hot, but was also beautiful to look at? Just six years after launch, S'well reportedly made $100 million; but today, Sarah is especially focused on how the brand can help eliminate plastic waste around the world. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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

• 0:00Guy Raz?

  Hey, really quick before we start this brand new episode of How I Built This, I want to remind you about a new video series that we've just launched. It's sort of a How I Built This online, a live conversation with me and a different founder to talk about how they're handling the crisis, how it's affecting their business, and also how they're working to build resiliency and think creatively about ways to navigate through it. This Wednesday, April 8th, at 12 noon Eastern, I'll be talking with David Neileman, the founder of JetBlue and Azul Airways, about his industry and his ideas on how to move forward. And then on Friday, April 10th, at 12 noon Eastern, I'll have Tristan Walker on. He's the founder of Walker & Company. It's a company that makes personal care products like the Bevel Razor, so we're going to catch up with him.

• 0:45Guy Raz?

  You can join us live, and please bring your questions. Those conversations all happen at facebook.com/HowIBuiltThis. You do not need a Facebook account to watch it, so just go to facebook.com/HowIBuiltThis. Again, that's this Wednesday, April 8th, with David Neileman at 12 noon Eastern, and then Friday, April 10th, with Tristan Walker, also at 12 noon Eastern. Find those conversations live at facebook.com/HowIBuiltThis. Bring your questions, and I hope to see you there.

• 1:20Guy Raz?

  You went to a trade show and you literally saw a table with knockoffs of your bottles there. Is that right?

• 1:27Speaker 01

  Yeah, so not only were there swell bottles at this trade show, but the swell bottles had one in a ward and had a ribbon on a display case at the trade show.

• 1:37Guy Raz?

  Was it the same logo with S apostrophe "well"?

• 1:41Speaker 01

  Yeah, it was the same logo, and it had the trademark symbol on the side of it.

• 1:44Guy Raz?

  What? What was your first reaction like?

• 1:47Speaker 01

  I almost passed out.

• 1:55Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 2:06Guy Raz?

  I'm Guy Raz, and on the show today, how Sarah Kauss turned the humble thermos into a sleek accessory called Swell and watched her business grow by the tens of millions of dollars.

• 2:24Guy Raz?

  So one of the common threads you might have noticed on the show is the element of design. Design matters a lot, and not just design of your product, but the design of your business, the logo, the colors you use, the customer interface. All of these things differentiate successful brands, especially when they're trying to break out of the pack. So for example, think of Spindrift sparkling water. That is a crowded space, but Spindrift stands out, not only for the quality of its product, but for the simple and clean design of it. Or SoulCycle. The founders of that company spent months coming up with the colors, gray, black, yellow,

• 3:06Guy Raz?

  and the simple geometric logo, a bike wheel with spokes. So, design matters. And that is, in part, the story of Swell. It's a water bottle, yes, a very good water bottle, but when Sarah Kauss launched it back in 2010, there were already lots of good bottles out there. Thermos bottles that kept your drinks hot and cold, Camelback bottles with those foldable straws, squeezy plastic cycling bottles, but almost no bottle that looked sleek and beautiful, a bottle you'd want to put on your Instagram feed. And that was Sarah Kauss's great insight. That is how she broke through the pack.

• 3:49Guy Raz?

  And as you will hear, she didn't have personal wealth, and lots of her friends wondered why she was throwing away a perfectly safe career in accounting to pursue water bottles. But Sarah had a hunch that lots of people would want a better bottle. People who didn't want to buy and throw away single-use plastic. People who wanted a functional and nice-looking bottle at the same time. And she was right. In 2016, just six years after it launched, S'well reportedly did about $100 million in revenue. And by the way, Sarah managed to scale the company without ever taking a dime of outside money. She did it by building Swell methodically and strategically.

• 4:34Guy Raz?

  Anyway, right now, the company is dealing with the same economic anxiety that everyone else is facing. And I'll ask Sarah about that. And because of the current situation, I couldn't interview her in a studio. So Sarah joined me from her home in Florida, which is where she grew up.

• 4:51Speaker 01

  I am sitting in my bedroom in Jupiter, Florida. The reason I'm sitting in my bedroom and not my home office is my son, who's just under two, likes to come and knock on the office door and say, "Mama, mama." So this was the quietest place in my house that I could hide. So it's a beautiful sunny day in Jupiter. I'm watching the boats on the Loch Tahachi River go by. It's a bit bizarre that it's so pretty out, given what's going on in the world.

• 5:19Guy Raz?

  And that river you're looking at, you actually grew up by that very same river, right?

• 5:24Speaker 01

  Yes. Life was simple. It was easy. You could ride your bike outside and have all kinds of adventures. There was always some kind of something to be discovered, something to be built. It's a beautiful place to have grown up.

• 5:41Guy Raz?

  Yeah. And tell me about what your dad did for a living.

• 5:45Speaker 01

  He ran and owned a car wash. He built and ran that business for 40 years, five, six days a week, working at the car wash, which also had a gas station, a little shop, and a few tenants, including an ice cream store that my mom ran and a plant nursery that he rented out. So he was a small business owner in Florida.

• 6:07Guy Raz?

  Wait, all of this was at the gas station? There was an ice cream shop and a nursery and a gas station and a car wash?

• 6:13Speaker 01

  It was genius. So you it was you dropped your car off on one side and you had to walk through the retail establishments to pay for your car wash. And of course, you had to wait 15 to 20 minutes until your car was done. So why not buy a plant, an ice cream cone, and maybe some greeting cards while you're waiting? So it was it was sort of one stop shopping.

• 6:33Guy Raz?

  Yeah. So your mom and dad basically worked together every day. I mean, your dad was kind of running the facility. Your mom was running the ice cream shop. It sounds like they made it work.

• 6:43Speaker 01

  They made it work, yeah. They're they're still really very close. And I think that, you know, building a business, building a family, you know, going through all that together. It's a unique opportunity to sort of talk about your day and talk about your lives together. But they certainly made it work.

• 6:57Guy Raz?

  What kind of kid were you in high school? What do you remember about you as a high school student?

• 7:02Speaker 01

  Oh, I was as awkward as they come in high school. I had terrible hairstyle. I wish somebody had told me at the time that those big bangs were going to come back and haunt me in later years. I was certainly not a popular girl. I, you know, I was a bit of a nerd. I was co-president of the Save the Manatee Club with my best friend.

• 7:22Guy Raz?

  Love it.

• 7:22Speaker 01

  Yeah, I was. I was at a club called DECA. It was a business club. And I went to state and national conventions, working on business problems. My senior year, I was voted most likely to succeed in business.

• 7:36Guy Raz?

  So you were already into business in high school? Like you were, I remember those kids in high school. They would be mocked, you know? There's that kid in the business club. And some of them would carry briefcases. But you were kind of like that?

• 7:50Speaker 01

  I was definitely like that. I actually, I think because I grew up with entrepreneurs that were always running a business. I think that I knew that I would go into business in some form or faction from a pretty young age.

• 8:03Guy Raz?

  So you went off to the University of Colorado and you studied accounting, which is a very practical thing to study. And I guess you, your first job out of college was with Ernst & Young as a trainee or a junior CPA?

• 8:19Speaker 01

  Correct, yeah. So I took the CPA exam right out of college and I went to work at Ernst & Young, I think the weekend after I graduated. And I, I was in Denver for two years, working as an auditor. And then I moved to Los Angeles and I was still at EY and I worked in the tax division for two years.

• 8:37Guy Raz?

  And basically that means that you were, your first two years, you were sent to a client and you would just go through all their books and just make someone's life miserable by asking them, what's this, what's this for, what's that, right? I mean, is that sort of what you did?

• 8:49Speaker 01

  Yeah, that's, that's basically right. I mean, I wouldn't say we were there to make everyone's lives miserable, but I can't say there was a single client that was ever happy to see us coming. You know, they would give you this audit room somewhere in the basement without heat or air conditioning or window and say, oh, how long are you staying? Can you leave tomorrow?

• 9:05Guy Raz?

  Yeah, no one's like, woo-hoo, here come the auditors. Welcome. All right, so you do that and then you do tax auditing too, after your first two years?

• 9:14Speaker 01

  Yeah, after my first two years in Denver, I was getting a little bit itchy to try to do something different. And this was 2000 where all the dot com companies were really quite exciting. And I kept reading about the clients that EY had had in California and they were all the dot com companies. They were mostly new media companies and really the first DTC companies that I went to go work with. And it was really a bit of the Wild West because a lot of these internet companies were transacting, you know, potentially for the first time. And we were helping them think about and solve questions and problems that were absolutely brand new. So as non-glamorous as a tax role sounds, it was actually pretty interesting work just

• 9:57Speaker 01

  because of the types of individuals our clients were.

• 10:00Guy Raz?

  It's amazing because this really does speak to how you were really kind of, whether consciously or not, laying the groundwork for what you would eventually do. Because all of those skills would be crucial when you started your business eventually. I mean, just having that knowledge and the ability to think about financial issues from the beginning gave you a huge advantage.

• 10:21Speaker 01

  I agree, absolutely. You know, in hindsight, almost everything that I did helped lay the groundwork for where we are today, but it didn't feel like that at the time. I was such a restless soul, right? It was, I just couldn't wait to do the next thing and find myself and figure out what the universe had in store for me, that I didn't realize that all of that was, you know, potentially very valuable and necessary steps to get to where we are now.

• 10:47Guy Raz?

  Yeah. All right, so you do your thing at Ernst & Young and you decided to go to business school, to Harvard Business School.

• 10:54Speaker 01

  Yeah.

• 10:55Guy Raz?

  And did you make that decision because you thought, all right, I've done this, now I need to build a network of people, or I need some new ideas about the next thing to do, or was that the thinking?

• 11:06Speaker 01

  It was. After a few years of really working with these clients, I just wanted to become one of my clients. And one of the common themes that my clients had were a lot of them had gone to business school. And so it was more just the gift of time, of a couple of years, to try to come up with some idea or some kind of what's next for me. Because I realized at EY, I didn't aspire to be my boss, or my boss's boss. But, you know, I met so many amazing and fantastic people in business school that I wasn't really networking with to help me with my business. They were just my knucklehead friends that were helping me get through this experience of school that now happened to be, you know, the movers and shakers of business.

• 11:50Speaker 01

  So I don't know that I needed to go to school to learn finance, or marketing, or operations. But I think for me, it was the combination of the confidence, plus the network of friends that kind of helped support me through the times that I needed.

• 12:04Guy Raz?

  Now, you were there from 2001 to 2003. And I should mention, right, that you were there at a time where I don't think entrepreneurship was really being emphasized, right? Like, most students were really kind of going there and they would end up at McKinsey or at a big finance firm on the partnership track. Is that right? Entrepreneurship wasn't really a thing quite yet.

• 12:27Speaker 01

  That's right. It really wasn't a thing when I was in business school. I think I took one half class on entrepreneurship, but it was more how to finance a business than how to start and grow a business. Now, of course, there's whole centers devoted to it and there's a lot of resources that I wish that I had had. But no, it really wasn't a thing back when I was in school.

• 12:45Guy Raz?

  Do you think that going there, in the back of your mind, you had this idea, maybe I'll graduate and become an entrepreneur? Was that your thinking or not quite yet?

• 12:54Speaker 01

  You know, it was. I mean, even my essay before I went into business school, I wrote about how I wanted to start some company at some point and do something. I just really was looking for that big idea when I was in school. And unfortunately, I didn't find the idea while I was in school. I was still searching for it when I finished school. I was actually at HBS during the time of September 11th. So, the economy took a real change from the time when I started in 2001 to the time when I left in 2003.

• 13:24Guy Raz?

  Yeah. So, you finished in 2003. And what did you do when you graduated?

• 13:29Speaker 01

  Oh, I had a really hard time finding a job when I graduated. So, myself and just a couple of my friends, we actually wound up staying at Harvard Business School and the school created jobs for some of us. So, you're working in a position that, you know, quite honestly, I was making less after business school than I did before. You've got a massive amount of student loans and you also just don't know when the economy is going to get better. And it was a really strange and difficult time for myself and a couple of my friends that wound up basically kind of sticking around and not finding our next step.

• 14:02Guy Raz?

  All right. So you get a job at, working at HBS for a while. And then, and then I guess eventually you got a job with a real estate development firm?

• 14:11Speaker 01

  I did. So my, my previous roommate from before business school, when I worked in California, she said, well, there's an interesting job at my company. I know you have no real estate experience, but they're looking for someone. And I was able to talk my way into international real estate development role for a number of years, helping to build big private partnerships for mostly laboratory buildings for scientists.

• 14:38Guy Raz?

  Huh. Tell me about your, kind of your state of mind then. Were you happy? Was your life interesting? Were you thinking, all right, I'm on the right track now?

• 14:48Speaker 01

  You know, I was really unsettled at the time. I liked my job. I liked the people. But professionally, I found myself sort of really wondering, was this all that there is? You know, I certainly was finally, you know, making a pretty good, normal, decent salary, you know, being a VP at a public company. I had some, some stock options that, you know, would vest over time and, you know, was obviously helping me with my savings account, but, you know, helping me pay off my loans. I just, I sort of started to get a little bit itchy, almost the same way that, you know, when I was at EY, I knew that I didn't want to become my boss's boss. You know, it was certainly a really interesting challenge to see if I could figure it out. But it wasn't necessarily the thing that was making me feel really excited

• 15:33Speaker 01

  about my career.

• 15:35Guy Raz?

  And you were living in New York at the time, by the way?

• 15:37Speaker 01

  I was. My, my company had put me up in a month to month rented apartment because I was doing a real estate project there. So I was really living a nomadic life. They, they put me up in a studio apartment there.

• 15:49Guy Raz?

  So, did you have time to think about, or did you make time to think about what else you could do? Did you talk to people about it, or did you kind of keep it inside?

• 15:59Speaker 01

  I kept it inside. You know, I would say that from the outside, everyone thought that, oh, things were going pretty well. I think I was at the point in my life that I didn't want to whine and moan about, they seem to be high-class problems about, oh, you know, I'm not feeling fulfilled. But I was working so much and I wasn't really making the time to think about what came next. I almost had to go on a, you know, a vacation with my mom and really step away from the day-to-day of my busy life to even have any type of, you know, reflection time. I literally had to get outside of my own life, you know, in a place that required you to put your BlackBerry at the time away and not be so focused on, you know, the next ping that you're going to get on your email. Because

• 16:44Speaker 01

  I wasn't really making the time to think about my own personal situation and what came next.

• 16:48Guy Raz?

  All right. This is, this is an important moment because I think it's around 2009, you and your mom go on a vacation, a hiking trip to Arizona. I guess your mom had been cancer-free and was celebrating.

• 17:02Speaker 01

  Yes, it was a really big, exciting moment. My mom had had breast cancer and was so brave and so strong and really got through it to the other side and was done taking all of the horrible medicine. And we said, you know, if you can just get to the other side of this, we're going to go away and have a, you know, a fancy spa vacation. So we went off to Tucson, Arizona, and it was one of those moments that because we were celebrating her, her health and really having those deep conversations and those, those thoughts about, you know, life, you get one and, you know, what are you going to do with it? And, you know, how do you want to spend your time and what's really important? And my mom started it. And she said, you know, if I had to do it all over again, I would have been a painter.

• 17:46Guy Raz?

  Wow.

• 17:47Speaker 01

  She said she loved to paint and she taught painting classes in high school, but she wanted to have a career and raise her family. And she studied something else and she did something else. And she said, you know, now that I got through this cancer thing, I'm going to take painting lessons. And she said to me, she said, what is it that, that you've always wanted to do? And don't wait for a health scare. Don't, don't wait for, you know, until you get my age to go do it. You know, what is it that you wanted to do?

• 18:14Guy Raz?

  Wow.

• 18:15Speaker 01

  And I don't, it just, it all came out of me, just, just in that conversation.

• 18:19Guy Raz?

  All right, so you're on this hike. You're, this is intense, man. I'm like, your mom's survive, like, she's telling you all these things and you're like, oh, my God. Must have been, you must have been crying a lot and laughing. Like, it must be super intense. Because this is really the beginning of what would be the rest of your professional life. What, what happened on that hike?

• 18:40Speaker 01

  It was one of those things, Guy, that it was everything, everything just came together. I just, you know, I was walking with my reusable water bottle. So I, for many, many years, have, gave up single-use plastic. I think part of it was, you know, Boulder being part of me going to CU and, you know, being a very environmental school. And, you know, I grew up recycling, so there was, I always used a reusable bottle. But it was, it's hot in Arizona and we're hiking for a long time. And so I'm, you know, I'm walking with this metal bottle on a hot day and drinking hot water. So the first thing that occurred to me is, wouldn't it be great if somebody invented a water bottle that actually kept things cold?

• 19:16Guy Raz?

  Right, right.

• 19:17Speaker 01

  And then I had just recently been at my business school reunion at Harvard, and they had a professor that made a presentation about climate change and talked about how those that are affected by the water crisis were only going to become worse in the future. And so I had this idea on the hike that if there was a company that, that was creating a better water bottle and you tried to tie it to a social mission by, by working on plastics and climate change and educating people about the water crisis, it could be really interesting to do something good while doing something good.

• 19:55Guy Raz?

  Wow. So you're thinking, all right, maybe there's something to do with water, a water bottle, a better water bottle. You finish your hike, your trip to Arizona ends, you say goodbye to your mom, and you go back to New York and you go back to your job. But does this idea, like, like, when you are on the flight back to New York, when you get back to your apartment, like, is this idea now planted in your head?

• 20:22Speaker 01

  It was. I started writing a little bit of a business plan. It's embarrassing to call it that now, but it was more of an outline, a manifesto of what I thought this company could be.

• 20:32Guy Raz?

  And what did you write?

• 20:33Speaker 01

  Oh, I wrote that we were going to be the water bottle partner to Fashion Week and the TED Conference and Sold in Bloomingdale's and, you know, changing the world. And, you know, I sat down and just started writing, like, if a product could do all this, you know, how would it work? You know, of course, there weren't any practical bits in there. There wasn't anything in there about the financial statements or, you know, how to do processes or procedures or manufacturing. It was more of just a thought piece about what could happen if this really worked.

• 21:06Guy Raz?

  So what was your first, what do you remember your first step being? I mean, here you are, you are working for a real estate development company, no background in manufacturing or supply chain or design even. What was the first thing that you remember doing after writing down your manifesto?

• 21:25Speaker 01

  Well, I remember going to the sporting goods store, Paragon Sports in Union Square, and I purchased one of every water bottle on the market and started using them myself and passing them out to my friends and asking them to use them as well, just to try to get some feedback on how it could work better, how it could look better, how it'd be packaged better, really just trying to educate myself on what was out there and what I wanted to build.

• 21:52Guy Raz?

  And what did you find out?

• 21:54Speaker 01

  Well, I mean, I found out that there were a lot of bottles out there, right? This was a very crowded marketplace. But what I discovered was there wasn't anything that really looked great. I mean, everything was appropriate for the gym. Everything was fine for hiking, right? But there wasn't anything that I thought could catch like wildfire, like a fashion accessory, a thing. And so I thought it really needed to catch your eye. When I designed this, it really needed to be Beautiful, for lack of a better word. And there were some bottles that were functional, but they were marketed for extreme camping and hiking. And that wasn't the market I was going to try to go after. And so I just thought if I could convert the non-converted.

• 22:37Speaker 01

  So if I can convert people to use a water bottle that haven't, because it actually works, right? It's like the thermos, it keeps things hot and cold. But in a way that it's the thing to do instead of the, you know, the Evians and the Fijis and the Smart Waters. You know, if I could try to go after sort of that set that was using what they were drinking as more of a statement, the bottle needed to really be a statement piece.

• 23:06Guy Raz?

  Yeah. When you started to talk to friends and other people about this, I'm assuming people were like, Sarah, there are millions of bottles out there. Like, you know, are you sure you want to get into this? Did anybody say that?

• 23:22Speaker 01

  No, that's, that's exactly what they said. Everybody, you know, closest friends included, thought this was a foolhardy idea. I actually went to a business school, a classmate's wedding, and I was explaining, oh, I, you know, I just quit my job and I'm just getting ready to launch this company. And I, what do you think about the idea? And one of my good friends jumped into the conversation and felt the need to defend me. And she said, but she used to have a really good job. And she felt so uncomfortable for me that I was explaining myself to a perfect stranger at this wedding, that she almost wanted to defend my honor by saying, well, I used to have a business card that made sense to people.

• 24:04Guy Raz?

  What did it take for you to quit your job? I'm assuming when you quit that job, you figured, well, if this doesn't work, I can get another job like it again. Is that what you were thinking?

• 24:14Speaker 01

  No, that's right. I think my downside risk protection was, you know, I still had my CPA at the time. So I thought, okay, if this really doesn't work out, I guess I could always go back to, you know, helping people with their taxes, which I really didn't want to do. So I was super motivated. But yeah, so I always thought there would at least be something for me to do if this went sideways.

• 24:35Guy Raz?

  And how much money did you have to live off? Like, what was your runway?

• 24:40Speaker 01

  So I had $30,000 in the bank at the time.

• 24:43Guy Raz?

  That you had saved up from your job?

• 24:45Speaker 01

  Correct.

• 24:46Guy Raz?

  And that was going to last you, you know, it could last you a while, but you also need that money to, I guess, to start the company.

• 24:52Speaker 01

  Right, to start the company, to buy the first initial inventory, build the first website. It seemed like a lot to me at the time, but when I really started getting into, you know, beginning to build the business, it actually wasn't going to take me very far.

• 25:07Guy Raz?

  So let's start with how you began to build the business. First of all, you have an idea for a water bottle that's going to be a beautiful bottle, that's going to do everything that a really good thermist does, but it's going to look cooler. Who do you call? Like, where did you go?

• 25:22Speaker 01

  I started designing the product actually in PowerPoint. Of course, now we have, you know, 3D printers and engineers on the team. We do things properly, but, you know, back then, I started with a line drawing that I had made myself and I thought, okay, how do I take this drawing and turn it into an actual product? And I just wound up taking my business school friends out for coffees and say, this is what I'm struggling with. This is what I really need your help. You know, how do I find a factory? How do I do this? And I wound up finding a friend of mine in school whose dad had made some products and could put me in touch with the right people and kind of send me on my way.

• 25:58Guy Raz?

  Wow. So eventually you land on a, on somebody who can help you design the bottle?

• 26:03Speaker 01

  Correct.

• 26:03Guy Raz?

  And how, how did you land on that design of the bottle that most people listening now will, will recognize?

• 26:10Speaker 01

  You know, I wanted it to be really classic and really simple. You know, I wanted it to be something beautiful and iconic enough that could be sold in the MoMA store, but I didn't want it to be like the ones in the sporting goods store with, you know, the carabiners on the top and, you know, the neoprene on the side and the neon colors with the reflective tape.

• 26:29Guy Raz?

  Right.

• 26:30Speaker 01

  And I just wanted it, you know, the whole idea was just to try to encourage people to drink tap water and not to use so much plastic. And so I wanted it to be as sleek and elegant as possible. And so I, I really just tried to make it functional more than anything.

• 26:47Guy Raz?

  All right. So you've got a prototype. And then where do you get it made? Is it again, like the father of that friend from business school kind of connected you to possible like factories in China that could make a prototype?

• 27:00Speaker 01

  Yeah, so I actually originally really wanted to make the bottle in the US and spent a fair amount of time reaching out to factories in the US. And I couldn't find anyone that was interested in working with me. We just didn't have the scale. And we, you know, I couldn't say that I wanted to make, you know, thousands or millions of pieces day one until I had the demand. And so I wound up finding that the factories that I had been connected with in China were willing to take a risk on small entrepreneurs and do a small run until we were really up and running. So.

• 27:32Guy Raz?

  So what was your initial run? How many bottles?

• 27:35Speaker 01

  So I made 3,000 pieces and they were all blue. They were all the same size and they were all exactly the same. And I had them shipped to my apartment.

• 27:44Guy Raz?

  How much did that cost you?

• 27:46Speaker 01

  Oh, it was the majority of my savings at the time.

• 27:52Guy Raz?

  I bet.

• 27:53Speaker 01

  I actually convinced the factory to let me do a 50% down payment and a 50% payment 30 days later. So that helped a little bit, but I had a bit of a fire under me to sell.

• 28:05Guy Raz?

  And the name Swell was on the side? The logo and everything was printed on it?

• 28:11Speaker 01

  Yes.

• 28:11Guy Raz?

  How did you come up with it?

• 28:13Speaker 01

  Oh, I wish I could say that I came up with the name myself. Unfortunately, I'm an accountant in part. So I actually originally named the company Can't Live Without It because I thought you can't live without water. Yeah, I thought I was a genius. I actually spent $1,000 on the URL can'tlivelotit.com.

• 28:33Speaker 01

  Which is available if anyone's interested. Yeah, no, it turned out that was a terrible name for a water bottle company because I, so I actually hired a team to help me build the first website. And I had them sign an NDA. And I tell them my big top secret, you know, idea for starting this water bottle company that's going to change the world. And they said, okay. What are you gonna call it? And I told them, can't live without it. And they just started laughing, just like you did just now, Guy. And they said, you know, we like you. And we're gonna tell you this. No one's gonna buy this product if you call it can't live without it. And so even though I hired them to create the website, on the side, they helped me come up with some other names. And they actually came up with the name Swell. And as soon as I heard it, I knew that that was the right name.

• 29:19Guy Raz?

  But I'm imagining that Swell existed, like swell.com, or there was there were companies like Swell.

• 29:26Speaker 01

  Swell existed. So Swell actually turned out to be really difficult to register. But it was actually a business school friend of mine that said to me, you know, how are things going with Swell? And I said, oh, we don't get, we can't use the name. We have to go back to the drawing board. She just, she was a banker. I don't know how she came up with this idea. But she said, well, why don't you put an apostrophe in the word Swell?

• 29:46Guy Raz?

  Huh.

• 29:47Speaker 01

  And then it's a logo and not a word. And of course, I called my attorney and said, hey, could we do this? And he said, sure, yeah, that's no problem. Of course, this is after he had billed me for lots of time and hours and expenses and didn't come up with the idea itself. But it was, it was the way that we were able to register.

• 30:04Guy Raz?

  That's crazy, because you look at it and you think it just works perfectly.

• 30:09Speaker 01

  Yeah, I think the word Swell, I mean, it works perfectly because it's so positive. You know, it's so old fashioned of a word. And the idea of Swell is so old fashioned. You know, I was trying to hearken back to the time that people weren't walking around with plastic water bottles and they were drinking water out of the tap or their filter at home. And the fact that we build wells for people, you know, we bring clean drinking water to people in need, you know? So the fact that we're separating the S with the word well sort of leans into the mission of what we're doing. It's, it's everything that I was looking to do was sort of wrapped up into a word, which it turned out quite lucky for us.

• 30:44Guy Raz?

  All right, so it's 2010. You are in New York, living in New York, still.

• 30:49Speaker 01

  Correct.

• 30:50Guy Raz?

  These 3,000 bottles arrive from China. And then what? Like, how do you start to think about getting people's attention and getting, creating awareness around it? What did you do?

• 31:00Speaker 01

  I, I literally just packed up and went into stores. And I asked to speak to the buyer or speak to the owner in the case of smaller stores and, and just explained, said, this is me. I'm Sarah, this is my product, this is what I'm trying to do. How many can I put you down for?

• 31:16Guy Raz?

  Were you nervous doing that?

• 31:18Speaker 01

  I was really nervous. I have to say, I am not a natural born salesperson.

• 31:23Guy Raz?

  Yeah.

• 31:23Speaker 01

  But I had to sell the inventory because I had to pay off the other payment.

• 31:28Guy Raz?

  Were there days where you would like walk around store to store and walk in and just feel like there was no interest or?

• 31:37Speaker 01

  There were days and weeks, actually, that I would, I would sort of pound the pavement and try to find people to buy the product and I would only get no's. It was a bit depressing in the beginning. You know, I wrote that manifesto, that, that small business plan and said, you know, we're going to be sold in Bloomingdale's. And the buyer said, no way, we don't sell water bottles. You know, in those early days, I got a lot of no's before I got a few people to start saying yes.

• 32:04Guy Raz?

  When we come back in just a moment, how Sarah got those buyers on board and how Swell began to get a lot of attention, including from people you don't want to get a lot of attention from, copycats and counterfeiters. Stay with us. I'm Guy Raz and you're listening to How I Built This from NPR.

• 32:33Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2010. Sarah Kaus has 3,000 brand new Swell bottles in her apartment and she starts pitching them store by store in New York City. And when she can't get any traction with stores?

• 32:50Speaker 01

  Yeah, I'd say, you know what, I really think if you use the product, I really think if you tried it, you would understand how great this is. And lo and behold, oftentimes I would get a call back and say, you know, I tried this. I put ice cubes in last night or I made tea before I went to bed and it's still hot, it's still cold. Come back and tell me a little bit more about this product. So, you know, I had to take a little bit of a risk and give away some product in some cases to try to get people to really understand it worked like I said it was going to.

• 33:19Guy Raz?

  So, did you eventually sell all 3,000 of those bottles?

• 33:24Speaker 01

  I did, I did. So it took a number of months, but I eventually sold all of those bottles, some on the website, on swell.com.

• 33:33Guy Raz?

  And who knew about the website? How would people even find out about it?

• 33:36Speaker 01

  I put it on my Facebook page. I told my friends and family members and I asked if they would repost it as well and created a swell Facebook page and I just asked people to start liking it. I also started to reach out to the press at that time as well, myself.

• 33:50Guy Raz?

  How did you do that?

• 33:51Speaker 01

  So I went to Barnes and Noble and I didn't buy the magazines, but I wrote down the address of almost every editor, mostly women's fashion magazines, and started writing letters. And every day I tried to send out a couple of boxes to different editors with a letter and saying, you know, this is my product, this is what I'm trying to do, and here's a sample. I would love it if you could try it and if you like it, could you write about it?

• 34:15Guy Raz?

  And how would you know that it was the right editor? I mean, because, you know, a person could be a features editor, but the person who writes about products could be an assistant editor and you would never know.

• 34:25Speaker 01

  I would not know, but I would hopefully guess that if this, what I thought was a beautiful product would show up on their desk and they weren't the right person, that potentially they would pass it along. I also had a hunch that even if they weren't the right person and a product arrived, that they might just use it anyway.

• 34:42Guy Raz?

  Yeah.

• 34:42Speaker 01

  And that, you know, maybe that's one way that I could win people over. You know, having a swell bottle sit on the desk in someone's office as they're trying to think of story ideas, you know, potentially they'll think about us.

• 34:54Guy Raz?

  And when you initially reached out to the editors, did you write a letter saying, "Hey, I'm Sarah Kaus, this is me, I started this business, I'm making..." Did you tell a little bit about yourself?

• 35:06Speaker 01

  I did. I told them about myself. You know, I told them about what I was trying to do. I talked about how much plastic was in the ocean. I talked about how many people, women and girls primarily, are affected by the water crisis and how we're trying to give back to UNICEF and make a difference in the world. And I talked about the product. You know, I said, "This is, this is a hydration fashion accessory. This is not a water bottle. You've never seen anything like it before. And this is why it's important to your reader."

• 35:30Guy Raz?

  Were you thinking initially that this should be something that women would want to use out and about, particularly women?

• 35:39Speaker 01

  Yeah, so actually, my my target in the beginning was women because I was really making something for myself and, you know, friends like me. And I thought, you know, women also do a lot of the shopping for the household. So if you really want to get in with a group, if you target someone, why not try to make this a fashion accessory and appeal to not just women, but to their spouses and their their families, their kids. So, you know, it really did start with women as the target. Now, we're actually pretty balanced in our customers being women and men. But that's really where the idea started in the beginning.

• 36:12Guy Raz?

  Meantime, did you order more bottles from China? Or did you still, did you kind of hold off until you sold all 3,000?

• 36:20Speaker 01

  Well, at this time, I was still working through my first 3,000. And I got a call back from Oprah's Magazine, from the O Magazine, who I'd sent one of my samples to.

• 36:32Guy Raz?

  Oh, wow. Because you can imagine, O Magazine, they get 1,000 samples a week.

• 36:39Speaker 01

  Or a day, right?

• 36:40Guy Raz?

  Or a day.

• 36:40Speaker 01

  What happened was the editor called and said, I got your bottle.

• 36:43Guy Raz?

  Wow.

• 36:44Speaker 01

  I took it on my family vacation to Peru. And it worked. I used it every day. I kept my water cold. We really want to run this product. And we want to run it on the O list, which is the must have list for the summer.

• 36:56Guy Raz?

  Wow.

• 36:56Speaker 01

  But the catch was, she said, you need to send me one of every color you have, because color looks good on a page.

• 37:03Guy Raz?

  And you only had them in blue?

• 37:05Speaker 01

  I only had blue. And of course, I still remember what I said. I said, well, I'm standing in the warehouse right now.

• 37:10Guy Raz?

  Which was what, your apartment?

• 37:12Speaker 01

  Yeah, like my kitchen, living room, tiny apartment.

• 37:15Guy Raz?

  Oh, you said, I'm standing in the warehouse. Okay, yes.

• 37:17Speaker 01

  I can bring you as many as you want, but they only come in blue. And it was this heartbreaking moment, because she said, well, call me back when you have more colors, because we really need colors to go on the page.

• 37:27Guy Raz?

  Oh, and so you said?

• 37:30Speaker 01

  I said, I will. And I literally hung up the phone. I walked out the door. I went to Barnes and Noble. I purchased a Pantone color book.

• 37:40Speaker 01

  I picked out six additional colors and I called the factory and I said, listen, I need you to make me two bottles each in these six colors and FedEx them here. I need one for Oprah's Magazine and one for myself to take pictures to put on the website so we can, we can show that we're selling these products. And that's how we went from one color to, to seven. And we were featured then in the summer of 2011 in Oprah's Magazine, which was a really big milestone for the business.

• 38:09Guy Raz?

  Yeah. We talked to Sarah Blakely, um, three years ago on this show and, you know, there was the Oprah effect for Spanx. Uh, what happened to swell? I have to imagine like people, all of a sudden your web traffic went up.

• 38:22Speaker 01

  Well, the web traffic went up so much that we, and I say we, I was still the only employee. I had to really work on the backend of the website because we crashed immediately. So there was absolutely an Oprah effect, but I would say more than anything, it was sort of this stamp of confidence in the business that, that either gave me more confidence as I went into retailers, or it gave retailers more confidence to try the product and put it on the shelf. I made a little sign that said, you know, as featured in Oprah's Magazine and that certainly helped, you know, opening up retail doors.

• 38:53Guy Raz?

  How were you fulfilling web orders? I mean, there must've been a lag time between the time somebody ordered it, cause now when you order something, you expect to get it in two days or three days. But I imagine you didn't have the, you weren't able to fulfill all these orders that were coming in through the website quickly.

• 39:08Speaker 01

  Well, at the point that I had ordered the additional inventory, I realized I was going to need a fulfillment center. So at that point, I wasn't actually sending the orders myself from the post office. So I had set up a fulfillment center luckily and, you know, worked with a company that basically works with direct to consumer companies. So surprisingly, even though we were a pretty small company, orders were going out in a day or two.

• 39:32Guy Raz?

  Wow. All right. So you start to fulfill orders and you're now getting more interest from smaller boutiques. But you also had a pretty big turning point in addition to the O Magazine 2011, when you landed a deal with Crate and Barrel, they ordered a few thousand bottles. How did that happen? Did they approach you? Did they hear about you through, you know, just media attention?

• 39:54Speaker 01

  You know, I think Crate and Barrel did hear about us through media attention, but the way that I actually met them was through a trade show. So I had been going to some of the gift trade shows and standing in a little booth, almost like a science fair booth, you know, where you stand there next to your poster board and you say, oh, hi, this is my product. And I remember being very excited to meet the buyer from Crate and Barrel. And, you know, they said they were going to put us in all of their stores, but also their catalogs that would go to so many homes in America. So that was a really big, exciting turning point.

• 40:22Guy Raz?

  That first full year, which was 2011, do you remember how many trade shows you went to?

• 40:28Speaker 01

  I went to 17 trade shows that year, and it was exhausting. I would stay on friends' couches and start doing customer service for the e-commerce site or billing credit cards, you know, being the only employee and doing all of the jobs, you know. And of course, my friends would want to talk. You hadn't seen them in years, and you'd say, oh, can I crash at your place in Atlanta? The last thing you want to do after talking about a water bottle all day is talk to anybody. So those were trying times, that's for sure.

• 40:57Guy Raz?

  But that must have been really, I mean, going to all those trade shows must have been absolutely crucial because that's where you've got the critical mass, where you meet those retailers and distributors.

• 41:07Speaker 01

  Correct.

• 41:07Guy Raz?

  So Crate and Barrel, was that a huge deal for you? I mean, you'd already had the O Magazine thing, but was Crate and Barrel an even bigger thing?

• 41:14Speaker 01

  You know, Crate and Barrel was a bigger thing because it gave us a bigger stance. It gave us, you know, national attention. And in some cases, from a press perspective, they really want a retailer to tell their readers to go to. And so we started to sort of get a little bit more press because we had better retail placement. It was also the first time we figured out how to make a barcode sticker. Crate and Barrel was our first national account, so it was the first time we had to read a vendor guide.

• 41:42Guy Raz?

  Oh, yeah.

• 41:42Speaker 01

  And so they had these requirements that said you have to actually have a SKU number and a barcode sticker. So I Googled how to do it, and I printed out the barcode stickers on my home printer, invited my girlfriends over, and we had pizza and wine and stuck all the stickers on. I actually shipped the bottles from my warehouse to the house to put the stickers on because I, the stuff that was in our warehouse, wasn't compliant with their vendor guide. And so it was a real learning opportunity to say, hey, listen, if you're going to start working with some of these really big partners, you're going to have to get smarter on how to service them.

• 42:16Guy Raz?

  Meantime, it's just you. You are the company. You are Swell.

• 42:20Speaker 01

  It was just me.

• 42:21Guy Raz?

  Wow. Do you remember what your sales were in your first year?

• 42:27Speaker 01

  I think my sales in the first year were just under $100,000.

• 42:31Guy Raz?

  All right. So, by the way, did you ever think, okay, now I gotta go out and raise some money if I want to scale this thing?

• 42:40Speaker 01

  I considered it, but then quickly discounted it because I thought, you know what? This is going to be a big waste of time and I'm not really sure if it's going to work. And so why don't I just wait until we're bigger and more successful? Because we'll have a better pitch and a better story to tell to investors if that's the path we want to go down.

• 42:55Guy Raz?

  So your idea was, let me get some traction and then I'll find the money to scale it.

• 43:00Speaker 01

  Exactly.

• 43:00Guy Raz?

  Right. Okay. Makes sense. So you continue to kind of get attention and you're in crate and barrel. And by 2012, you did like $2 million in revenue. Did you? I'm assuming by that point, you had to hire people to help you.

• 43:18Speaker 01

  I did. I hired my first employee that year. Her name is Katie and it was her first job out of college and she showed up to come work with me. She was very brave.

• 43:28Guy Raz?

  I remember the first time I saw, I really sort of noticed a swell bottle was at the TED conference in 2013. Was that a deliberate strategy in your mind? Like, let me put these in these in the TED bags? Because you have to, because right, it's a barter system. Like TED is not really buying them from you.

• 43:44Speaker 01

  TED does not buy it. It's a donation.

• 43:47Guy Raz?

  It's a donation.

• 43:48Speaker 01

  It's an expensive, you know, 2, 3,000 people that go every year. And so, you know, but it was, it was very deliberate because as you can imagine, being as scrappy as I was starting swell, I didn't have a marketing budget. And so I thought, how do I get my bottle in the hands of influencers, of people that are sort of on the cutting edge of ideas? TED being one of those real obvious places. And I had sent a bottle to TED and said, you know, again, this is my bottle and this is my story. And surprisingly, they called me back. And even though that's really what I wanted, it was a huge decision to pull the trigger and make the donation.

• 44:30Speaker 01

  Because it was expensive and it was product that I had to basically give away and not sell with the hopes of, you know, something coming out of it.

• 44:39Guy Raz?

  How did you know that donating all these bottles into the TED gift bag? How were you able to track whether that was going to be? You know, whether there was going to be a return on that investment.

• 44:49Speaker 01

  You know, it is hard to track, but we can try to see where orders come from. You know, on the website, we have a little, how did you hear about us line? So we try to see, you know, are people talking about TED there? But we have a pretty big corporate business where we actually work with big companies and we, we put their logos on bottles. And some of the first bigger corporate orders that we received were CEOs and founders of companies that had, had attended TED. They actually wrote to us from the TED conference.

• 45:17Guy Raz?

  Said we wanted the same thing.

• 45:18Speaker 01

  Yeah, exactly. And so in a couple of years ago, Shonda Rhimes was one of the, the TED speakers. And she wrote into, you know, info at Swell Bottle herself and said, oh, hi, I'm Shonda. And I just got a swell bottle at the TED conference. And she purchased wells for all six of her shows at the time.

• 45:34Guy Raz?

  Wow.

• 45:35Speaker 01

  And the cool thing about that was then you had the likes of, you know, Kerry Washington and all of those amazing stars that she has access to because of her shows, all walking around with a swell bottle. So it's really hard to really quantify. But when you pull back and you think, you know, how did I meet Shonda? How did we meet LinkedIn? You know, how did, how did we get a bottle to Guy Raz? It was a big, you know, calculated expense, but at the same time, it certainly has paid off for us.

• 46:00Guy Raz?

  Now, I read that like a year after you started Swell, you, you went to China to go visit the factory that was making the bottles for you. And then you went to a trade show in Hong Kong and you literally saw a table with knockoffs of your bottles there. Is, is that right?

• 46:17Speaker 01

  That is a true story.

• 46:18Guy Raz?

  What, what happened?

• 46:19Speaker 01

  So I had gone to so many trade shows, you know, over the first year. And here I am in Hong Kong and I saw a big, you know, promotion for a trade show. And I thought, great, I spend all my free time at trade shows now. Why don't I go check out this show and see what it's like? And not only were there swell bottles at this trade show, but the swell bottles had won an award and had a ribbon on a display case at the trade show.

• 46:44Guy Raz?

  What?

• 46:45Speaker 01

  Yes.

• 46:45Guy Raz?

  Was it the same logo with S apostrophe well?

• 46:49Speaker 01

  Yeah, it was the same logo and it had the trademark symbol on the side of it.

• 46:53Guy Raz?

  Oh, my God.

• 46:53Speaker 01

  And it was all of our colors. It was everything. It was, it was as if we had gone to the show ourselves. Yeah.

• 46:59Guy Raz?

  My God. What was your first reaction? Like, what's going, like?

• 47:02Speaker 01

  I almost passed out.

• 47:04Guy Raz?

  I'm sure.

• 47:04Speaker 01

  I couldn't believe it. And I was there with my boyfriend at the time, who's now my husband. And luckily he kept his wits about him and went over and started talking to someone standing by this, you know, display case.

• 47:15Guy Raz?

  What did he say? He said, hey, what are you doing?

• 47:16Speaker 01

  Yeah, he said, oh, hi, tell me about this. And the gentleman that was working in the booth was super smiley and happy. And he pulled out his business card and gave it to us and said, oh, hi, I'm from Swell. And his business card also had Swell on it. Of course, I had never seen this man before.

• 47:31Guy Raz?

  So what'd you do?

• 47:33Speaker 01

  We contacted the officials that were running the show and showed them my business card and showed them the Swell website in the US and said, listen, this is a counterfeit company. This is not Swell. We are not showing at the show. We found someone that had the keys to the display case and we took all of the samples out, stuffed it all into our bags, and we went back to our hotel. I mean, we couldn't believe what we had just seen.

• 48:00Guy Raz?

  Yeah, I can't imagine you had a budget to hire lawyers at that time.

• 48:04Speaker 01

  No, I mean, I had done, you know, the initial registration of the patents and design patents and intellectual property, but but certainly didn't have a lawyer on staff or really the budget. You know, unfortunately, we did have to hire some attorneys and we really did have to try to get to the bottom of it to make sure that this was stopped immediately.

• 48:23Guy Raz?

  You did eventually win a lawsuit. You received $19 million in damages against defendants that were accused of trademark infringement. These were similar, these are just knockoffs. These were counterfeiters who were making bottles and calling them Swell.

• 48:39Speaker 01

  Correct. So we've had a number of lawsuits, that one included, of individuals and companies that are there making products that directly infringe upon our intellectual property rights.

• 48:49Guy Raz?

  I mean, we talked about this a little bit with Randy Hetrick of TRX, because TRX straps massively counterfeited. And he spent years and years and years in litigation, eventually won. I mean, it can eat up a huge part of a company's budget and take away from marketing and other things and just time and like mental space, right? I mean, just dealing with all that is a lot.

• 49:15Speaker 01

  It is a lot. I mean, it absolutely affects the bottom line. I think it's hard to quantify, but I think you're right. I think more than that, it's the brain space. It's the the opportunity cost of time when you have your time and attention or your team, or the fact that you're spending money on legal and not on product development or marketing. It really creates a lot of stress and strain on the organization. It also creates a fair amount of confusion for customers in the marketplace. We hear from customers through customer service that they bought us well, what they think is as well, and it's not working. It's not keeping things hot and cold, or it's dense, or the paint is coming off. And we ask the customer, hey, send us a picture of it, and it's not real.

• 49:57Speaker 01

  I think that's the thing that I have the hardest time with is it's not just that they didn't buy the product from us. It's just that customers are having an inferior experience. And it could really be turning customers off from our brand because they're not getting the real thing. And I think that's where it really gets my blood boiling.

• 50:17Guy Raz?

  So as you were growing, 2012, you do 2 million in revenue. 2013, Starbucks approaches you. They want to put your bottles in some of its stores in two cities, Atlanta and Austin. They did great. They sold out. But you wanted them in all the Starbucks. How did you get them into all the Starbucks?

• 50:36Speaker 01

  So I actually was at Starbucks headquarters for a meeting with our buyers, talking about the program that we were doing in Austin and Atlanta. And it was very fortunate because at the time, this was in December 2014, they were opening this new store in Seattle called The Roastery. And it was sort of this Willy Wonka Chocolate Factory coffee experience.

• 50:59Guy Raz?

  Yeah, I've been there.

• 50:59Speaker 01

  Where you can see the beans roasted. Isn't that cool?

• 51:01Guy Raz?

  It's amazing.

• 51:02Speaker 01

  It's the neatest. So my buyer said, hey, there's an opening tonight of a new store. Why don't you come to the opening? And so I go to the Roastery opening, and who's standing at the coffee bar waiting for his espresso but Howard Schultz? And so, yeah, I just had this moment where I realized that this was my time to try a much bigger pitch for swell at Starbucks. So I asked my buyer, I said, hey, do you want to come with me? I think that's, that's your boss over there. And she said, oh, God, no. She said, I'd be way too nervous to speak with the CEO. And so I said, okay, well, here, hold my bag. And so I give her my purse, I grab my swell bottle, and I beeline over to Howard before anyone else can get to him. And I just told him my story and said, hey, listen, we're both CEOs here. I'm running a much smaller company, you're running a

• 51:46Speaker 01

  much bigger one. But we could be doing so much more business with you if you could just give us the opportunity to sell in more stores.

• 51:54Guy Raz?

  Wow.

• 51:54Speaker 01

  And he listened. He said, okay, well, here's my card. And why don't you contact me? And after the holidays, we'll sit down and have a meeting. And he was true to his word. He had me in for an hour and a half the following February. Yeah, and we hatched a plan. We, it was, it was one of those incredible moments where I really would have kicked myself if I hadn't done it. But I still can't believe I actually did it.

• 52:18Guy Raz?

  And that meeting led to Starbucks putting swell bottles in like, I think, 14,000 of its locations around the world?

• 52:27Speaker 01

  That's right. So I think 10,000 stores in the US and Canada, 25 countries in Europe, all over Asia, Russia, South Africa. I mean, it was incredible.

• 52:39Guy Raz?

  And if you hadn't done that, if you hadn't, you know, had the courage to go up to him, had you been too nervous, that may never have happened.

• 52:47Speaker 01

  Absolutely. I had a moment before I went to go talk to him, and I was grabbing my swell and thinking about what I wanted to say. And I just thought, how am I going to get on the plane tomorrow back from Seattle and live with myself if I don't go do it? I mean, the worst that can happen is he says, no, thank you, leave me alone. And the best is that something comes of this. And so I thought, well, I've got absolutely nothing to lose. And it worked out. You know, from that, you know, we sold a lot of product. But more than that, you know, we became more of a household name.

• 53:21Guy Raz?

  Yeah.

• 53:21Speaker 01

  We had a sign in all the Starbucks that said, you know, Starbucks favorite. Hydration fashion accessory is swell with our logo bigger than the Starbucks logo.

• 53:30Guy Raz?

  Wow.

• 53:31Speaker 01

  That's better than sales. That's brand recognition.

• 53:33Guy Raz?

  That's incredible. I think by 2015, that year, your sales hit $50 million. You had not raised any money. You had not gone to investors. Did you at that point kind of give up on that idea and say, I don't, I don't need to do this anymore?

• 53:47Speaker 01

  We were actually having some investors come to us.

• 53:49Guy Raz?

  I'm sure.

• 53:50Speaker 01

  And we had some really interesting conversations, but at that point, we were just so busy and trying to scale this company. We're like painting the plane after we took off. We didn't really have time to think about an investor pitch or really what that would look like. So luckily we were self-funding pretty well at that point. We really didn't need the outside capital.

• 54:10Guy Raz?

  It's amazing. I mean, did, did any investors kind of not maybe say this directly, but sort of suggest that like, hey, look, if you don't take our money and you don't, you know, scale up even faster, you're going to get crushed. Cause some other big brands are just going to make a similar bottle and crush you.

• 54:26Speaker 01

  I mean, I definitely heard that from a few people, but I honestly was so focused on what I was trying to do that I wasn't really that concerned about what others were doing. And I had a lot of confidence in Swell and in myself and what I was doing. And, you know, I have met some really nice investors. I just didn't meet anyone that I thought was really going to be that helpful to what I was trying to do.

• 54:54Guy Raz?

  I'm curious about this idea of confidence, right? Because some people just have it. They're born with it. And, but I think most of us aren't. Most of us, we grow into our confidence and confidence can come and go, right? Depends depending on your circumstances in life and where you are. But as you built this business and as you saw more and more people buying it, I'm assuming that your confidence grew more and more as well.

• 55:21Speaker 01

  I would say yes, although I think with every phase of the business, there was always something that sort of put me on the back foot. And so I didn't have time to have too much swagger or overconfidence because there was always something that I could have done better. I should have known or, you know, a person or a process or a system that, that needed to be upgraded. And so, you know, I think where I really have come full circle on the confidence piece is. Being able to admit that sometimes things aren't working perfectly and to be able to be honest about that imperfection and ask other entrepreneurs or even just, you know,

• 56:02Speaker 01

  other employees for advice or help because I think that if I had been overconfident at any step of the journey, that it might have blindsided me or the company for sort of that next big step forward on the growth perspective.

• 56:18Guy Raz?

  So as you got to a point where your sales are huge, I mean, and you are, you know, you've got to grow the company and you've got to build it out and you've got to get a space and how did you hire and what did you do? How did you manage all that chaos happening while still, you know, with all that growth?

• 56:40Speaker 01

  It was chaos for sure. You know, it was drinking out of the fire hose or, you know, any one of those analogies, but it was, um, it was a really interesting, fun time. You know, it was trying to figure out, you know, how do you get six months ahead of yourself instead of always being three months behind? But it was a lot of fun. I mean, I had, I had a really energized, you know, team. There was something that was a bit magical to our scrappiness that, that we seemed to be able to get through a lot of that chaos and make, I don't know, thrive on it really.

• 57:11Guy Raz?

  Yeah. It's amazing that even in the last, and Swell jumped onto the scene. I mean, over the past 10 years, pretty much every airport has a water filling station. It's a common thing. Parks, public parks have a water filling station, not water fountains, but stations where you put your bottle under and there's a, you know, there's a sensor and you, and I have to imagine that Swell is part of that, right? Don't you think?

• 57:34Speaker 01

  Yeah. I like to think that we really did create part of this movement of people carrying a reusable water bottle, you know? Part of why I started Swell was I was trying to get people to stop drinking so much single-use plastic. And so it makes me very happy to see so many, you know, water filling stations pop up and so many people carrying a reusable bottle.

• 57:55Guy Raz?

  You mentioned earlier your ex-boyfriend, because he's your husband, Jeff,

• 58:01Speaker 01

  Yes.

• 58:01Guy Raz?

  who joined the company, I guess in 2016 as the COO. How's that been to work with your partner?

• 58:10Speaker 01

  It's been great, honestly. The poor guy, you know, he never applied for a job. He basically got kidnapped one day.

• 58:17Guy Raz?

  Right.

• 58:17Speaker 01

  It was one of those situations where I would come home from work after, you know, something had happened, you know, the website being down, for example. And being my partner, I really just needed to vent about it. I would say, oh, this happened today, and I just needed to get it off my chest. But he would spring into problem-solving mode, and he would stay up until 2:00 in the morning fixing the thing, fixing the website, fixing the thing, coming up with a new system for it. And so he said, listen, Sarah, why don't I come in for a half-day every Tuesday and help you get in front of these things, instead of you coming home after the fact? And it was one of the classic cases of escalation of commitment, you know? That half-day on Tuesday basically just escalated to, you know, him working full-time for the company.

• 59:01Speaker 01

  And, you know, it's not what I would have expected, having met him, you know, after Swell was started. I never would have thought, oh, I'm gonna make this guy come and work for me and fix all of my problems. But it's been so incredibly valuable for the company to have him there by my side. I really couldn't do it without him. There's no way that Swell would be the company that we are today, you know, if he wasn't willing to sort of put his ego aside and say, listen, I'm gonna drop what I'm doing to support you and your dream and your company, so all of this will work.

• 59:37Guy Raz?

  Yeah.

• 59:40Guy Raz?

  Your business, I mean, I know you don't release financial information anymore, I think in part because of all the counterfeiters, is that right?

• 59:48Speaker 01

  That's correct. I found that the more that I talked about our revenue numbers, the more that we seemed to have a bit of a target on our back.

• 59:55Guy Raz?

  Yeah.

• 59:56Speaker 01

  Yeah.

• 59:56Guy Raz?

  But, I mean, you still own 100% of the company?

• 1:00:00Speaker 01

  I do, I do.

• 1:00:02Guy Raz?

  Wow. It's pretty insane. I mean, it's pretty crazy, right? I mean, you, there are very, very few businesses that have been on this show where the entrepreneur who founded it still, Sarah Blakely is a good example of this, where they still owned the entire company, unless they were independently wealthy at the beginning and just had, you know, endless supplies of cash. Sarah, I think just in the recent weeks, from the time that we're recording this conversation, you stepped down as CEO. You're still the executive chairwoman, and you hired a CEO to take over. As of this recording, we're not sitting in the same room. You are at your home. I'm in my home studio. And we're living in a really crazy moment

• 1:00:46Guy Raz?

  where all businesses are just, they don't know what's happening, right? There's a lot of uncertainty. So first, tell me about that. I mean, are you, I know you're not running the company day to day, but what's going on right now with the business in this situation?

• 1:01:03Speaker 01

  I'm incredibly happy that I did bring in a CEO who is absolutely the right decision for Swell before this global pandemic, but especially now. And I'm following the leadership of the CEO who started just six weeks ago. So it's not the transition I was hoping for for him. But in trying times, that's when leaders step up, and he's doing an incredible job.

• 1:01:27Guy Raz?

  Well, this really is a moment that's going to test every single business in America, small and large. And there's so much unknown about what's ahead. But how are you thinking about your business and about staying resilient as best as possible? I think it's probably fair to assume you are like every other business. You're going to take a hit. People are probably not going to be buying your products for a while. It's possible. It's very likely. So what are some early creative ideas that you guys are coming up with to build some resiliency into your business?

• 1:02:04Speaker 01

  Well, I have to say, these are really uncertain times. No one knows where this is going to end up, myself included. I do think that there's going to be more pain and more disruptions before we get out on the other side of this, unfortunately. But what I hope that we find on the other side of this is a changed business environment, sort of a new sense of community and relationships that businesses have with their customers. One of the things that I'm working on and I'm optimistic about is just really leaning into the mission of Swell. And I think one of the things that we'll be left with on the other side of this is really how COVID-19 or otherwise, we're all intertwined and we're interconnected. And that

• 1:02:48Speaker 01

  My actions and your actions matter for our communities. Our key messaging is really like, how can Swell be your companion at home right now? You know, we're, we're trying to have a sense of humor about, you know, video conferencing and, and trying to do your at-home workout while you're homeschooling your kids and, you know, trying to be the cook and, you know, we're, we're trying to say, we've got products to help you. But at the same time, like, can we be this place to kind of keep you healthy and happy while you're staying home and staying positive? But we know that all of our retailers aren't going to make it through this time. We're just trying to be supportive. And, you know, if, if there's ways for us to weather the storm and get out on the other side, what I'm really hopeful for is that we have sort of a renewed sense of community

• 1:03:33Speaker 01

  and why companies that have a mission really matter.

• 1:03:40Guy Raz?

  When you think about success that you've had with this brand, do you attribute that to, to skill, to hard work, or, or more to luck, or a combination? What, what do you think?

• 1:03:54Speaker 01

  You know, I think it has to be both. You know, I, I would say that it absolutely has been hard work. It's been a lot of hustle. You know, no one's ever going to outwork me, and I, I live for Swell. And this is, this has really been my, my life's work these last 10 years. But I have to say, luck has played, you know, such an incredible role in, in our success. I was lucky to be born to parents who were entrepreneurs, you know, who taught me the power of hard work and positive thinking and doing the right thing. I was born in a country and a society that values education for girls, and I went to great schools, and I have a network of friends who supported me on this journey. And the power of timing was so lucky. You know, I, I started Swell because I had a personal mission to eliminate single-use plastic bottles.

• 1:04:39Speaker 01

  But at the same time that I started the company, there were so many people around the world waking up to the issue of climate change and global warming and, and how they potentially had the need to take personal action. And so, yes, it's been a lot of work, but all of the stars aligned in a really lucky way for that work to have turned into something.

• 1:05:02Guy Raz?

  That's Sarah Kaus, founder of Swell. Swell recently became an official B Corp, which means the company is now legally required to consider the impact of all its decisions on its customers, workers, the community, and the environment. And by the way, remember the original name Sarah had for Swell? Can't Live Without It? Well, the domain name, can'tlivelotit.com, is still presumably owned by Sarah. But should you be interested, you can still register can'tlivelotit.shop, can'tlivelotit.biz, can'tlivelotit.life, and many other variations. Hey, thanks so much for listening to the show this week.

• 1:05:46Guy Raz?

  You can subscribe wherever you get your podcasts. You can also write to us at [email protected]. And if you want to send a tweet, it's at How I Built This or at Guy Raz. Our show was produced this week by J. C. Howard with music composed by Ramtin Arablouei. Thanks also to Julia Carney, Candace Lim, Neva Grant, and Jeff Rogers. Our intern is Raini Toll. I'm Guy Raz, and you've been listening to How I Built This. This is NPR.

• 1:06:25Speaker 02

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