This Founder Built a $1 Billion Brand… By Giving Away $5 Gift Cards

by | Jan 27, 2020 | Cards | 1 comment

By getting scrappy, Grove Collaborative’s Stuart Landesberg learned big lessons.

Grow Your Business, Not Your Inbox

Stay informed and join our daily newsletter now!

Will be used in accordance with our Privacy Policy

This Founder Built a $1 Billion Brand ... By Giving Away $5 Gift Cards

Image credit:

9george | Getty Images


4 min read

This story appears in the
January 2020

issue of
Entrepreneur. Subscribe »

Stuart Landesberg started his career at Lehman Brothers and TPG Growth, but he felt a pull toward the sustainable-­living industry. He’d grown up composting in his family’s backyard and had a vision of selling eco-friendly products online. “I was filled with the hubris of a 26-year-old guy who works in finance,” he says.

So in 2012, he did what he thought he should: He looked for two cofounders, scrambled for meetings with investors, and showed off his grand plan for a company called ePantry. It would sell multiple existing brands. Nobody was interested. “It hurts me to even think about it,” he says, laughing.

Those rejections turned out to be a great fortune, however — ­because they forced him to be scrappy and inventive and understand his customer in perfect detail. His business transformed as a result. But of course, he didn’t know that at the time. He was just trying to survive.

Related: Turning Rejection Into Triumph: How Sarah Michelle Gellar and Her Co-Founders Built a New Baking Brand

After the start, after those investor rejections, Landesberg didn’t have much. His team didn’t have the money to develop a functional e-commerce site, so all they had was a PowerPoint presentation explaining their plan.

One day, when not much else was going on, Landesberg decided to see what everyday consumers thought of his company. Where to find them? He chose Starbucks. He showed up, bought a bunch of $5 gift cards, and then went table to table with his laptop. “Hi; I don’t mean to be rude,” he said, “but if you have five minutes, would you mind just clicking through a prototype of a product that we’re launching?” He offered a gift card in exchange for their time.

Two thirds of people said no. But a third said yes. He’d ask for five minutes, but the review usually took 20, and half of them sat through all of it. “Total bait and switch,” he admits, “but you’d usually get really good feedback.”

It was so good, in fact, that he kept going…for a year and a half. It became a routine. Landesberg would arrive around 8:30 a.m. and go for hours. He guesses he handed out at least 900 gift cards.

Related: The Fashion Industry Is Insanely Wasteful. Can Blockchain Fix It?

Some of his caffeinating subjects actually wanted to make purchases — a slight problem, since Landesberg didn’t have inventory. So he bought products on Amazon, marked them up, and resold them to these customers.

But the real benefit came from people’s feedback. Landesberg learned that his vision was all wrong. He thought convenience would be his major value proposition. It wasn’t; people wanted a company that made them feel virtuous and good about themselves. Also, Landesberg figured that he was his main target — a busy urban professional from the coast. But he wasn’t. His core customer was a 29-year-old mother of two working as a substitute teacher in Kansas (or Utah or Tennessee, or somewhere other than New York and California). “When I realized this is my customer,” he says, “I knew the potential for my company was way bigger than I thought.”

By 2016, he was ready to take action. He changed the name of the company to Grove Collaborative, to spark the emotional connection people craved. He launched a line of products and targeted it to a mass-­market audience. And he reacted to something else he’d learned at Starbucks. Many people said they believed eco products were too expensive and wouldn’t work as well as conventional products. So he created a robust team of customer service “Grove Guides” to educate customers.

Related: The Company That Created Robot Pizza Trucks Is Now Pushing to Solve the Global Issue of Plastic Pollution

It worked. Today, Grove Collaborative has some 1,000 employees, carries 100 brands, including five of its own, and logged more than $200 million in revenues last year. Investors are in, too. With its latest  $150 million Series D, the company is valued at $1 billion. 

“If I’d had investors calling me at the beginning, I wouldn’t have been in Starbucks trying to figure out the product,” says Landesberg. “People can get hooked on the growth treadmill, but companies that win are often the ones that are not initially well-funded.” He is still addicted to talking to customers, but the caffeine? “I quit,” he says. “No more coffee!”

Read More

UFC 252 Outcomes: Winners, Scorecards from Miocic vs. Cormier 3 Card

John Locher/Associated PressStipe Miocic closed out UFC 252 with a unanimous-decision victory over Daniel Cormier to retain his belt and take the lead in his series with DC 2-1.It certainly wasn't an easy defense for the Independence, Ohio, native. While he won four rounds to one on two of the judges' scorecards, those rounds were…

The best graphics cards for PC video gaming: Nvidia and Intel tease brand-new GPUs

Updated We'll help you find the best graphics card to fit your needs. Rob Schultz/IDG Today's Best Tech Deals Picked by PCWorld's Editors Top Deals On Great Products Picked by Techconnect's Editors Table of Contents Show More “What graphics card within my budget gives me the best bang for my buck?”That simple question cuts to…

MLB roundup: White Sox hit four straight HRs, beat Cards

Yoan Moncada, Yasmani Grandal, Jose Abreu and Eloy Jimenez connected on four consecutive home runs in the fifth inning to tie a major league record, and Dallas Keuchel pitched 5 2/3 strong innings to lift the host Chicago White Sox to a 7-2 victory over the St. Louis Cardinals on Sunday afternoon.Aug 16, 2020; Chicago,…

MLB roundup: White Sox hit four straight HRs, beat Cards

Yoan Moncada, Yasmani Grandal, Jose Abreu and Eloy Jimenez connected on four consecutive home runs in the fifth inning to tie a major league record, and Dallas Keuchel pitched 5 2/3 strong innings to lift the host Chicago White Sox to a 7-2 victory over the St. Louis Cardinals on Sunday afternoon.Limited to two hits…

How to Use Amiibo Cards in ‘Animal Crossing: New Horizons’

Animal Crossing: New Horizons offers the chance to get the villager you want by using amiibo, a collectible item you can purchase from Nintendo and various third-party resellers. By using an amiibo, you don’t have to hunt for favored residents. How to Obtain An Amiibo Card Amiibo figurines and amiibo cards are an accessory you can…

AP source: Cards-Brewers off; 4 more St. Louis positives

The coronavirus forced baseball’s 17th postponement in 10 days on Saturday, prompting at least two more players to opt out and casting doubt the league can complete a truncated 2020 season.A Cardinals-Brewers game in Milwaukee was postponed for the second straight day after one more player and several staff members with St. Louis tested positive…

Scientist develop magstripe variations from EMV and contactless cards

Man use smart phone and holding credit card with shopping online. Online payment concept. Getty Images/iStockphoto A British security researcher has proven this week that it is still possible in 2020 to create older-generation magnetic stripe (magstripe) cards using details found on modern chip-and-PIN (EMV) and contactless cards, and then use the cloned cards for…

The Best Gift Cards You Can Find at UnitedGiftCards

Are you looking for a present for a friend but don’t know what to get them? If that’s so, an online gift card is a safe bet. You can find gift cards for a wide range of the best and most popular games and gift cards for Amazon, Google Play and Xbox, as well as…

Higher electrical power tariffs on the cards as court rules in Eskom’s favour

The High Court has ruled that Nersa may not deduct a R69-billion cash injection from Eskom's allowable revenue. The High Court has ruled that Nersa may not deduct a R69-billion cash injection from Eskom's allowable revenue. This means the power utility can apply for higher tariffs. The court ordered that the average standard Eskom tariffs approved by…

Goodwood Races: Tips, racecards and betting sneak peek for Day 1 on Tuesday at Glorious Goodwood reside on ITV

GLORIOUS GOODWOOD is here - staying stars, new kids on the block and hot handicaps aplenty. Stradivarius is the star of the show, but there are a bundle of betting opportunities throughout. Our man Callum Jamieson takes a look. 1Credit: Getty Images - Getty OFFER OF THE DAY Bet £10 on 13.10 Goodwood and get…