How to Start a Green Business without Raising Money
When I had the chance to interview Beth Gerstein, co-founder of Brilliant Earth, I first wanted to ask her how they raised the money to start the company. I figured that retailing gold, platinum and diamond jewelry had to be a capital-intensive business and thought Beth could shed light on how a green entrepreneur can convince investors that there is a large market for products that are sustainably produced.
However, I got a very different story. Brilliant Earth has been entirely boot-strapped, although that adjective doesn’t seem apt for a company that sells beautiful products, has an elegant identity system, and does business via a beautiful website.
Brilliant Earth sells conflict-free diamonds, which are mined in Canada in accordance with environmental laws as well as jewelry made of “renewed” gold and platinum, i.e., recycled metals.
Instead of investing in a large inventory up front, Gerstein and Eric Grossberg started Brilliant Earth by serving as a match-maker so to speak for people looking for conflict-free diamonds for engagement rings, as well as other jewelry pieces of ethical origins. Gerstein says, “Our philosophy was to start to build supplier relationships and then to get customers, growing organically.”
Given that the products are photographed beautifully and are shipped free with a 30-day return policy, it is not so surprising that consumers were willing to buy from BrilliantEarth.com, although I am sure no entrepreneur would want to hear me discount how much work it is to make the first first few sales.
What is surprising is that Gerstein and Grossberg had trouble finding suppliers willing to let Brilliant Earth sell their products. Gerstein explained, “[Fine jewelry] is a trust-driven business. There are lots of family businesses with relationships going back a very long time. You would think that if you want to retail their products companies would be happy to work with you.” However, Brilliant Earth wasn’t just a new company trying to break into an established industry, but, as Gerstein says, “We were asking questions that they weren’t used to. We have certain specs and parameters we want our suppliers to meet. We only want manufacturers that use recycled platinum and gold.” Plus Brilliant Earth wanted to change the business model. Instead of purchasing inventory, they wanted to take possession of the product when they had found customers.
Brilliant Earth’s story should be encouraging to entrepreneurs, since they are making it. Gerstein and Grossberg started the company in April of 2005 and made their first customer match within a few months. As you can see from this photo of Gerstein (left) at the Green Festival in San Francisco in November, the Company has working capital to invest in marketing, including sample inventory and booth space at shows, which can cost thousands of dollars per event.
My husband and I purchased our wedding bands, and engagement ring through Brilliant Earth. They make a fantastic product, and their customer service was fantastic. I would certainly recommend them to anyone in the market for jewelry, so I hope this kind of word-of-mouth buzz does them well!
Thanks Sharon, You bring up a good point. Green startups don’t have the marketing budgets of the established traditional retailers. Those of us who love having green options, need to help spread the word about our favorite products and services, so that these companies can thrive and that more will be encouraged to start up.
It’s encouraging to see that with persistence, a newer way to do business can thrive. I wish I knew about them when we were getting married! But I still love my ring.
[...] Donating to environmental organizations is almost a must for sustainable businesses. (See my recent post on Brilliant Earth.) But Nau does something I haven’t seen anywhere else and that is they pay YOU [...]
[...] Groos Richmond speak, reminded me of my conversation with Brilliant Earth co-founder, Beth Gerstein, who told me that she advices future ecopreneurs to forgo perfection and to pursue the possible. [...]
[...] Another option, which would not work for this inventor, would be to bootstrap a company, as I described in a previous post. [...]
[...] I recently had the chance to talk with the co-founder of VivaTerra, Bonnie Trust Dahan, about her motivation to found the catalog- and online-retailer of high-design, green products. Dahan had authored three books on interior design and headed merchandising and/or branding for major retailers including Banana Republic and Smith & Hawken. However, it was her personal shopping preferences that made her want to market beautiful products made from organic, recycled, and renewable sources. I have noticed that a number of entrepreneurs have started business based on their personal frustration at not finding a source for a desired product or service. (Another example is Beth Gerstein’s fiancé wanting to buy an engagement ring that he could feel good about, and Beth then co-founding another green business, Brilliant Earth.) [...]
hello we are looking to start a green business doing water conservation. i am a 16 yr plumber and have watched so much waste through the years.now i am wanting to give back and help this wondeful planet.if you have any advice i would be so grateful.-justin
Hi Justin. Congratulations on your decision. It is hard to know where to begin with advice with so little information, but I can recommend Megan Prusynski’s posts on Ecopreneurist about her experience starting a green business. She is describing her process step-by-step:
This is her sixth post, which has links to the previous posts:
http://ecopreneurist.com/2008/03/28/sustainability-an-essential-part-of-business-planning/
We also have discussion forums, with one on starting a green business: http://discuss.greenoptions.com/viewtopic.php?f=38&t=457
Good luck!
Very inspirational post. Green businesses are possible!