Seventh Generation: Alan Newman and Jeffrey Hollender. A Partnership that Flourished—until it Failed. (2021)

The episode opens with the hosts introducing the story of Seventh Generation, a pioneering eco-friendly household brand founded by Jeffrey Hollander and Alan Newman. Jeff and Alan's partnership began in the late 1980s, motivated by shared values around environmental sustainability. The brand started as a mail-order catalog specializing in eco-friendly products, including unbleached, recycled fiber toilet paper, which was initially met with skepticism by manufacturers and consumers alike. Jeffrey shares his unconventional path—dropping out of Hampshire College, starting a skills exchange in Toronto, and later venturing into the catalog business in Vermont. Meanwhile, Alan grew up on Long Island, went through various entrepreneurial endeavors, including a mail-order garden supply, and emphasized creating a company culture based on openness and risk-taking. Their early efforts laid the groundwork for a company that would eventually become a household name, specializing in environmentally safer cleaning products.

Jeffrey and Alan met in 1989, driven by Jeffrey’s interest in environmental products and Alan’s need for capital to scale his catalog business. Jeffrey saw an opportunity to align his environmental mission with a business venture, leading to the founding of Seventh Generation, named after the idea of thinking about how actions affect the next seven generations. The company differentiated itself through innovative marketing, education-based catalogs, and emphasizing benefits like cost savings. They initially sold products like recycled toilet paper and string shopping bags, focusing on benefits like environmental impact and economic savings. Jeffrey's knack for raising initial capital helped finance their growth, and their culture emphasized openness, risk-taking, and learning from mistakes, which was innovative for the time.

As the company expanded, Seventh Generation began to gain national prominence, especially after their products appeared in major supermarkets and Whole Foods, which became a major growth driver by 1998. Jeffrey and Alan invested heavily in expanding product lines—moving from catalogs to retail shelves—and emphasized testing products against traditional brands to prove effectiveness. Alan describes a unique office culture with pings pong tables, pillows, and prizes for mistakes, fostering innovation and openness. Their product line included household goods like paper towels, laundry detergents, and diapers made from recycled, unbleached materials—products that shocked traditional manufacturers but gained popularity. The company grew rapidly in the late 1990s, rising from $1 million to over $7 million in sales and becoming a pioneer in sustainable household products.

By 2010, despite having achieved record profits and a valuation of over $150 million, Jeffrey Hollander was unexpectedly ousted as CEO by the board, in a decision Jeffrey describes as brutal and shocking. Jeffrey reflects on how he felt betrayed and how the decision was made abruptly, with him being fired over the phone and barred from entering the office. This event marked a turning point, ending a close partnership that had driven the company's success. Jeffrey admits his own headstrong nature and impatience contributed to the fallout, while Alan acknowledges the difficulty in managing close relationships and company dynamics. The episode delves into the emotional toll and the lessons learned about partnership and leadership.

Following his departure, Alan Newman received a payout and went on to start Magic Hat Brewing, which also became an iconic Vermont brand before facing difficulties during the 2008 recession, leading to a sale. Alan reflects with pride on building two successful brands and creating opportunities for others. Meanwhile, Jeffrey focused on advocacy, writing a book, and re-engaging with the business community, eventually returning to the Seventh Generation board after its acquisition by Unilever in 2016. Both men discuss the importance of humility, luck, and perseverance in their journeys, and reflect on what they learned about building and maintaining successful partnerships.

In closing, Jeffrey emphasizes the value of perseverance and passion, attributing success largely to an unwillingness to give up despite hardships, while Alan highlights luck, skill, and hard work. Both agree that transparency and compatibility are crucial in co-founder relationships—Jeffrey advocates clear agreements, while Alan cites complementary skills and shared values as essentials. They acknowledge that their friendship and partnership faced fundamental challenges: Alan admits their stubbornness and desire for control played roles in the fallout. Alan regrets that both might have been better off if they had collaborated more closely after disagreements, but recognizes that individual traits, like a need to be the boss, also contributed to their separation. The episode ends with mutual respect and lessons on navigating the complexities of business partnerships.