BUILDING A COMPANY AROUND A MISSION
Establishing a culture with shared values is a critical part of building a successful startup, says Brian Lee, CEO and co-founder of The Honest Company, who says, “we try to be as transparent as we can with everything we do.”
Lee says this mission and the inspiration for Honest’s name, is reflected in everything from its hiring practices to its packaging.
John Battelle, chairman of The Circle, spoke with Lee about the lessons he’s learned throughout his career in developing and leading early-stage companies. Here is an edited transcript of their conversation.
John Battelle: Thank you very much for allowing us to talk about lessons learned over a remarkable career. Let's start with the founding mythology of The Honest Company.
Brian Lee: Jessica Alba had brought the idea to me in 2008. My initial reaction was, “I'm a little too busy.” Jessica approached me again a few years later. After having children and watching with my wife change her purchasing habits; that made me take a second look.
My wife had started buying more organic foods, making organic purees for the children, and trying to lead a healthier lifestyle herself. I realized that Jessica was onto something. It was more than just her; it was true for most mothers and conscious consumers.
How does this personal experience differ from what inspired you to start LegalZoom and ShoeDazzle?
For LegalZoom, it was more about the timing. The Internet was heating up, and I wanted to take advantage of my background in law and the growth of online commerce. For ShoeDazzle, I thought sexy women’s shoes would be more fun than divorces and corporations.
The Honest Company is definitely the most important company I've been part of, in terms of what we’re trying to accomplish. It’s a lifestyle brand that empowers people to live an honest, happy, healthy and safe life.
That's a big promise. Did you hesitate on its name?
It makes sense with our company’s mission – we’re an honest company. We try to be as transparent with our customers as we can - in everything we do, from our ingredients to our packaging.
Upon co-founding Honest with Jessica, Christopher Gavigan, and Sean Kane, what was on your plate?
We had to do everything from trademarking to securing the name and URL. We were on a very tight timeframe with Jessica scheduled to announce the company on national television
It was a big, national launch and we were still working with a beta website. We finished the website at 4 a.m. PT and pushed it live at 6 a.m. with 17 products.
How do you make sure new hires are a fit for the culture you want to build?
We invest a lot of time and resources in recruiting. It's the most important part of running any company. You need team members who really fit into the culture and whom you want to work with every day. Beyond being smart and hardworking, we look at how much a person believes in our mission.
How do you think about fundraising?
When the atmosphere is right, you should take advantage of it, even if you don’t need the capital. You can never go wrong with raising capital when the money’s out there, as long as you're not significantly diluting your shares and your investor base shares the vision with you and your team.
And how do you manage growth expectations?
LegalZoom only grew 10 percent to 20 percent every year for a long time. It was the overnight success that took 15 years. Growth expectations today are significantly higher. But the fundamentals haven't changed. They’ve always been to build a smart business first and foremost. Don’t chase valuations and growth, just for the sake of valuation. Your emphasis really should be on growing a smart and sustainable business. Keep the bottom line in mind.
How do you see your role as a founder and CEO?
Founders and CEOs are truly only as good as their teams. My father told me once that if I ever thought I was the smartest person in a boardroom, I’d know I was in trouble. I’ve learned to surround myself with the most talented team I can and we work together to develop innovative solutions – I never underestimate the importance and value of teamwork.