Sarah Paiji Yoo was on maternity leave when she came up with the idea for her non-toxic, zero-waste cleaning line Blueland. As a new mom, she had researched the horrors of microplastics and had already reduced her own plastic use. It no longer made sense for her to use an all-purpose cleaner packaged in single-use plastic and made up largely of water—a resource she had at home—or harsh, eco-unfriendly chemicals that could prove dangerous for an infant.
A serial entrepreneur, Paiji Yoo had already helped launch several companies in myriad markets—fashion, tech, kids’ clothing, to name a few—and understood that launching a new product often meant researching what was already on the market in order to improve upon it—or disrupt it. But how do you research something that doesn’t yet exist? There was no precedent in the housecleaning market for what Paiji Yoo had in mind: a dissolve-in-water tablet that would preserve well as a cleaning product until finished. All the manufacturers she had contacted dealt in liquid-based detergents. Paiji Yoo and her co-founder, John Mascari, knew that they would have to develop their own formulation, which meant finding a chemist and convincing them to work for free. “There was definitely a chicken-or-egg problem in the very beginning,” she said. “We couldn’t hire a scientist because any reputable scientist is going to ask, “How am I going to get paid for this?” On the other hand, Paiji Yoo couldn’t raise capital until she had a product.
She began cold-emailing chemists on LinkedIn at the start of 2018, hoping that she could find one who believed enough in Blueland to come on board. And then she found her match: Syed Naqvi, a chemist whose work background included both non-toxic cleaning products and vitamin supplements. A cleaning, tablet-making dream! She did whatever she could to woo him, visiting him in San Francisco to talk up her idea. “We thought it was such a moonshot, but we were able to convince him to leave his job and join us, with a promise that he would get paid once this was funded,” she recalls. Naqvi is now head of Blueland’s research and development (R&D).
“I was very lucky to have a supportive husband who understood that if I really wanted to pursue this idea, we would need childcare”
Paiji Yoo credits the idea for Blueland to her maternity leave, but it was access to childcare after she had quit her job that gave her the time and headspace to launch Blueland. A former partner at retail developer Launch, Paiji Yoo decided to take an extended sabbatical after her maternity leave ended. “It felt like the right time to pause, step back and think about what was next for me,” she says. She spent weeks exploring her nascent company, and took occasional consulting jobs to help give structure to her day. But balancing a new infant, a new company, and consulting is impossible for anyone. “I was very lucky to have a supportive husband who understood that if I really wanted to pursue this idea, we would need childcare,” she says.
With the cost of childcare came a pressure to succeed, and quickly. She used her personal savings, as well as her consulting income, to fund Blueland, and the new team bootstrapped on an initial budget of $75,000, which covered research and development for about a year. Formulation involved a lot of trial and a lot of error. There were even a few weeks where Paiji Yoo feared her idea might not work. Finally, after just over a year of development, they locked down their formula, and when Paiji Yoo sought investment for their seed round, she raised $3 million on a $13.5 million valuation. “It was starkly different from the first time I raised capital,” she says, which was ten years ago. This time around, there were more female investors, more female founders, and an unspoken camaraderie between them; a desire to support one another. “I had a good list of women investors that I could turn to as soon as I was ready to have the conversation,” she recalls, though is quick to point out that Blueland is not funded exclusively by women. Also this time around: less “inappropriate comments” from men. Paiji Yoo credits the Me Too movement for bringing a new level of professionalism from male investors.
The success of Blueland’s seed round made Paiji Yoo’s appearance on Shark Tank in 2019 unique. With $3 million in the bank, why was she turning to reality television to pitch investors? It seemed unnecessary—perhaps even selfish, to some fans of the show—that Paiji Yoo would be a contestant. But, as a former Chief Marketing Officer (for children’s clothing line Rockets Of Awesome), Paiji Yoo also knew that it was a brilliant marketing move. At $2 a tablet, Blueland’s price point would appeal to a mass audience. Her airtime on Shark Tank was strategic, and hugely beneficial. “Even when we were on, Mark Cuban was like, ‘Oh, this is just a glorified commercial,’” Paiji Yoo recalls, and she doesn’t disagree. The ‘commercial’ brought her access to press, a relationship with the shopping channel QVC, and Shark investor Kevin O’Leary as a continuous financial mentor and advisor.
Paiji Yoo has a clear head about how to spend Blueland’s budget. She hired a Director of Finance early on to manage the company’s spending and keep Blueland financially lean. Aside from inventory, a large part of Blueland’s budget goes toward R&D and securing patents for their formulations. Paiji Yoo also contracted Cradle to Cradle, a research institute and certification program that sets the global standard for sustainability, to ensure that Blueland’s product was clean and green. “They look at every ingredient we use, every supplier we work with. They really evaluate our practices,” she said. From where Blueland sources its bottles (China) and tablets (U.S.), to which paint they use for their logo (non-toxic), Cradle to Cradle ensured that Blueland’s product met the highest standard for sustainability and safety. A higher cost for Paiji Yoo, but in line with the moral integrity of the company. (Paiji Yoo declined to disclose how much Blueland spent on its certification process, but on average, Cradle to Cradle charges $3,600 per product for certification and $2,000 every two years for certification renewal.)
Reflecting on Blueland’s early budgets, Paiji Yoo says that she would have spent less time and energy on social media. Instagram is crucial to any brand’s marketing, but trying to unlock its code to success felt useless. “In retrospect, it feels silly,” Paiji Yoo says, “because we learned that authenticity is king.” Online, they leaned into their mission, posting about climate change and sustainability as much as their brand, and building an engaged community. “If we had to be writing content around spring cleaning and cleaning hacks, it would crush my soul,” she jokes. Comparatively, she would have spent more on consumer testing. Although she tested Blueland’s line of products with friends and family and conducted a lot of surveys, continual testing beyond their personal networks felt too pricey while trying to stay financially lean. “We did a good amount of it,” she says, “but I think you can always do more.”
Paiji Yoo prioritizes Blueland’s self-sufficiency over its revenue. She is wary of raising too much capital too quickly, believing in building a strong foundation and researching product-market fit first, without the pressure to market or meet valuation demands. “The one thing you can be sure of,” she says, “is that the first thing you put out there is not going to be 100 percent. Whether it’s the product or the pricing or the site experience.” Raising less capital means more time and space to perfect their products.
But when it comes to Blueland’s growth, Paiji Yoo is already teeming with ideas, including the big decision of whether or not to sell through retailers like Walmart or Amazon. It’s a tricky question for a direct-to-consumer company. Right now, customers buy Blueland’s products directly through its website, which creates an extra step in household shopping—something, it turns out, most people don’t want to do. “Eighty percent of our target customers actually prefer to pick [household cleaning products] up during their regular shopping trip,” she says. And scaling Blueland solely through their website will cost more in digital advertising. Online ads aren’t so costly when reaching five or 10 thousand people, but they quickly add up when reaching several hundred thousand. “Each incremental customer gets more expensive,” Paiji Yoo points out. Most importantly, though, is Blueland’s bottom line: more customers means a more positive environmental impact. No matter which way Paiji Yoo cuts it, retail seems to be in Blueland’s future.
For now, Paiji Yoo doesn’t have to worry about scaling. Selling a cleaning product during a pandemic, it turns out, is good business. The hit of COVID-19 caused a 300 percent demand in Blueland’s products, a spike that the company of 11 employees wasn’t expecting—and had some initial difficulty meeting while trying to keep staff safe (they have hired three more employees since the pandemic started, bringing their total to 14). They slowed down operations, implemented safety precautions, and split warehouse shifts to give workers more space. They navigated the challenges of having their manufacturers close or slow down. Luckily, customers understood the shipping delays. The demand was so overwhelming, that Blueland decided to temporarily pull back on marketing.
For those who are considering entrepreneurship, Paiji Yoo has two pieces of advice. First, consider having a co-founder. “It can be a lonely and stressful journey,” she says. “Having someone else that you’re accountable to every day keeps you going.” Second, believe in the significance of what you’re selling. Paiji Yoo came up with Blueland while reconsidering the kind of work she wanted to do, and treats the company’s environmental mission as her compass. It informs her daily decisions and is her key motivation. “This product should exist,” she says. “This product deserves to exist.”
Sarah Paiji YooAnswers 5 Financial Questions on Founding a Business
- What do you spend the most amount of money on?
Product development, as well as the legal or patents to protect the product development. It’s an extremely expensive process. It depends on who you do it with, but if you want to do it with a reputable firm that has a lot of experience in the space—which you do because you want to make sure your patents will actually protect you—it is very, very expensive. But it’s so important.
- What do you wish you spent more money on in the beginning?
More consumer testing. We did a lot of consumer testing with friends and family, but it’s harder to pull the trigger on the consumer testing with people you don’t know because it can get quite expensive, especially if you didn’t do it in a rigorous way. But I do think there is so much value to it.
- Who do you lean on for financial advice?
We rely on our accountants a ton. Also, one of the more early hires was bringing on a director of finance. Unless you really understand accurately where you’re spending every month and where the money’s coming from, it’s hard to set the strategy for your business and that introduces a lot of risk. It’s another area where we haven’t skimmed.
- What do you regret spending money on?
Wasting money as well as my own time on nailing our social media strategy. We spent a lot of time trying to craft a formula, trying to figure out how to make the feed beautiful and each post impactful. We spun a lot of wheels doing that and ultimately learned that authenticity is king.
- Most important cost in your business and why?
Money well spent from the very beginning was working with Cradle to Cradle. They are the most comprehensive certification program in the world around health and sustainability—they look at every ingredient we use, every supplier we work with. We paid them a consulting fee and they evaluate our practices to really keep us as educated and honest as possible.