NEW YORK (April 25, 1:15 p.m. ET) — Horrified by a landfill piled high with plastic water bottles that they saw on a trip to Asia, Richard and Stephanie Smiedt set out to do something to reduce that stream of garbage.
Tapping Richard's experience in the consumer products industry in Australia — where he'd been general manager of a $425 million consumer products company called Breville Group — and Stephanie's background as a product developer and visual artist, in February 2010 they started SoHo-based Move Collective, a maker of a stylish, reusable personal water-filtration bottle known as the Bobble.
With many manufacturers peddling reusable water bottles, Move Collective's founders knew they had to differentiate themselves. Their first step was creating a bottle with a reverse carbon filter built into the top; they tapped into a method commonly used for purifying tap water.
“A reverse filter in a reusable water bottle was a very new concept,” said Richard Smiedt. Inspired by Apple's success in bringing style to utilitarian products, they hired well-known industrial designer Karim Rashid (known for hit products like the Garbo wastebasket) to design the Bobble from recycled plastic, free from bisphenol A.
“We saw there were great opportunities to develop products for the creative class,” said Smiedt. Offering the Bobble for $10, they quickly attracted a slew of mass retailers—Crate and Barrel, Macy's, JC Penney, Target, Walgreens, Kohl's and American Apparel, to name a few.
The Smiedts, who bootstrapped the business, didn't have wads of money to wave around to attract talent. Instead, they secured the help they needed—from sales and marketing services to the actual manufacture and distribution of the product—by paying other small firms with equity. “We really struggled to get this off the ground,” said Smiedt.
The strategy quickly helped the company take off. “The fact that we have this vastly experienced team of entities that were already in business gave us a huge head start,” said Smiedt. “We could hit the ground running with major retailers from day one.”
One key player was Jeff Ross, president and CFO of C.A. Short, a Shelby, N.C., company. Ross agreed to manufacture and distribute the Bobble in exchange for an equity stake in Move Collective, on the recommendation of an employee who had worked with Smiedt at a previous company.
“I thought it was pretty brilliant on Richard's part: Everyone in the whole supply chain and the distribution and sales chain had a piece of the company and a vested interest in its doing well,” Ross said. Although he has yet to receive any payoff—that should come when the company offers equity holders an exit—his firm, which employs 145 workers, has added people to work on the Move Collective project.
“I guess on my side, it'll be a good deal when I get a return on my investment,” he said. “None of that has happened yet, which is fine. For C.A. Short, with the economy being tough, it's allowed us to keep people employed.”
It seems likely that the investment in Move Collective will pay off for C.A. Short. The 10-employee company brought in “just shy of $8 million” in its first nine months of sales, according to Smiedt. For 2011, he said, sales exceeded $20 million. With the Bobble taking off, Move Collective has introduced a water-filtration pitcher, taking on Clorox-owned Brita. It has also introduced other products, such as smaller versions of the Bobble.
Of course, Move Collective faces steep competition. A quick search of reusit.com, an online retailer of reusable products, turns up hundreds of water bottles from makers like SIGG and Kleen Kanteen, in materials from glass to stainless steel. And the Bobble is far from alone in being stylish.
Even classic brands like the Thermos have come up with sleek products. But Smiedt is confident that the company will meet its projection of up to $40 million in sales for 2012, based on the initial reaction from retailers—and the infrastructure he's set up to grow the company. “Our distribution is second to none for a designer product,” he said.
The bottom line: Off to a rip-roaring start, Move Collective will have to continue to find fresh ways to distinguish itself from its competitors—ranging from industry Goliaths to small, niche players—to build a sustainable business.