Bamboo, Business, Believe

The Cheeky Panda uses the world’s fastest growing plant — bamboo — as a more sustainable alternative to tree-based tissue. Notwithstanding society’s growing fondness for sustainable products, the success of The Cheeky Panda is profoundly due to its founders, Julie Chen and Chris Forbes, whose business acumen and sales expertise are anything but cheeky. I’ve had a virtual interview with Chris to discuss his entrepreneurial methodology, The Cheeky Panda’s astronomical growth, and how to build a brand that will last.

Mary Letey: You’ve spoken before about the R&D process and how you wanted to make sure you had a viable product before starting the company. How did you navigate that process without a definitive end result?

Chris Forbes: As you can imagine, we had no idea how to do what we wanted to do, so we focused on understanding the manufacturing process, particularly the quality of bamboo. Even though we’re making a sustainable product, we wouldn’t have started the business purely on the basis of sustainability. We needed to have a product that was as good as, if not superior to, what already existed in the market. That process took almost a year for us, involving much back-and-forth between the manufacturer regarding samples and tweaking sample quality. After we were happy with the quality and the price, we visited the factory. You cannot run an ethical business unless you really explore the complete manufacturing process.

Mary: How did the trip to China go?

Chris: It was amazing! I finally understand the scale of bamboo. Imagine driving from London to Scotland, and all the land you pass is covered in bamboo; and this was just the road I travelled, there must be much more! The supply is definitely abundant! We’re using a very modern manufacturing site; I think its actually better than what I’ve seen in the West. We were able to optimise energy efficiency systems, such as capturing steam and turning it back into electricity or recycling water collected from the bamboo pulp. After working hands-on with this process, we knew we had to go for it. It was a great opportunity.

Mary: An amazing opportunity, one that you were a first mover in. How do you go about protecting your idea and maintaining intellectual property and competitive advantage?

Chris: From the beginning, we knew it was going to be a race. Tissue products are so universal, and there is nothing, you know, particularly unique about bamboo tissue. So we needed to create a strong brand and get contracts with retailers. It was important to be a pioneer and secure the “first mover advantage,” where you’re scaling faster than everyone else. It can take years to secure some form of IP protection, and while you’re doing that someone can create essentially the same product with “different” IP in six months, and now you’ve wasted three years focusing on IP. For me, it’s always better to be in market, to be selling products, and to be demonstrating the demand for those products. It’s critical to ask, “even if we do this product, is it something that the market wants?”

Mary: How did you go about gauging that market interest?

Chris: We market-tested through crowdfunder. When we overfunded in early 2016, that gave us the confidence to know we have a good product. We’d also acquired customers through that process. I think crowdfunding is a great way to test the waters and understand your market for the product that you’re developing.

Mary: As you mentioned, you believe it’s better to get yourself into market as soon as possible, so how did you secure your first retail contract? What were the challenges and, ultimately, the keys to making that happen?

Chris: First, we were actually able to go straight to Amazon Launchpad through Crowdfunder. It was a great way for us to get traction through the people that follow launchpad and looking for interesting products. Secondly, because of the market interest that we raised through Crowdfunder, we had already signed contracts before we even had our products in the country! It was a smart move for us. We were actually generating revenues as soon as possible, rather than waiting for the products to be shipped and then spending three or four months trying to get retailers. Instead, we used the gap in time between contract and shipping to get some good PR by putting ourselves up for different innovator awards.

Mary: What was the return on time investment for such awards?

Chris: I often wondered about the award judges and their qualifications, since they sometimes work for big corporates and approach things with a corporate hat rather than an entrepreneurial one. We’ve probably won 50% of the awards we applied for, and sometimes I think we should have won when we didn’t win. That said, every time you’re mentioned in the press is valuable. We use a panda face for our logo, which is quite a striking symbol and one that newspapers like to pick up on.

Mary: The power of good branding!

Chris: We’ve easily received over half a million pounds worth of media exposure, so it was a core strategy to build our brand. The award dinners are a bit overpriced for their value though! As long as you know you’re in it for the brand awareness and media coverage, then it’s actually not bad trade for startups.

Mary: What other techniques and tactics did you use for marketing? There are very well-established brands in place for the services and the products that you offer, so breaking into the market would be challenging, but you seem to have done that very well.

Chris: The great thing about social media these days is you’re able to create clusters of influence in a cost-effective way and build your market interest before you have money to spend on larger media campaigns. If you have a good product, people want to talk about it and share it. By doing trade shows and different events, people post their pictures and their friends get to know about us through social media.

Mary: Would you say the internet in general has been helpful and democratising for entrepreneurship?

Chris: Absolutely. For us, Amazon is an established platform, but you don’t need to be a big brand to play on Amazon. By working through Amazon, you have credibility which allows you to scale quite quickly.

Mary: What was your learning curve for entrepreneurship? What expertise did you bring from management, and how did that play into your leadership style?

Chris: Both myself and Julie have run businesses previously, so we know that it’s not Christmas every day. If you get investment, then you must use that investment wisely and drive sales. You can’t continually keep raising funds, otherwise you end up with no equity. Our number one goal every month was to drive sales. What can we do to get more clients? What can we do to sell more units?

Chris: As for decision making, you have to consider the return on investment. Google asked us to spend £100K on advertising, which is ridiculous! What are we getting out of it? If you can’t answer that question, then you shouldn’t make that decision. We’ve been very lean with third party organisations we’ve worked with. You have to learn how to say “no” an awful lot. You can’t spend more than you’ve got.

Mary: You’ve grown incredibly rapidly and are planning your IPO soon! What advice do you have for entrepreneurs in the same boat who are looking to achieve a rapid rate of growth for success?

Chris: Having been in business for a long time, I know you need a unique proposition that the market is ready for. Timing is awfully important. The environmental product space really started to take off, and we had already set the foundations, secured retail, built a team, and put in processes. If someone was to try to compete with the operation that we’ve got now, it would cost them 5–10 million pounds just to get off the ground, and it would take a massive cost just to become profitable. We’re already profitable. It’s about how unique your product is, how ready the market is to receive your product, and how much mass market potential there is. If you tick the boxes “people want it” and “people can afford it,” then you can achieve the fast-paced sales growth that we’ve achieved

Mary: You used crowdfunding to gauge market interest, launch onto amazon, and raise capital. After that, what was your experience with fundraising and investors?

Chris: The crowdfunding attracted some angel investors, for 10% backing before we had even sold any products. He knew what I was capable of, and I think our personal connection made all the difference. Now he’s made back 50x the value of his investment!

Mary: That’s really what we try and cultivate here at Embryo, through partnerships. We believe that an idea holds value in itself, but the people driving and implementing the idea are absolutely integral to its success.

Chris: Exactly. To expand, anybody can have a great idea. But do you have the ability to take it to market? Some people will have an average idea but outperform the competition because they’re better skilled. In business, in order to do something that will take the market by storm, you need to have the business acumen to be able to take the idea to market and scale it.

Mary: With your and Julie’s experience in business you were really well set-up for that!

Chris: Absolutely, we’re really strong founders. If I would have done this without running my own businesses previously, it would have been a lot harder. I had 20+ years of experience running operations, running PL, hiring and firing people, managing partners, developing strategies; you need to have that knowledge of what works and what doesn’t work.

Mary: Even with all your amazing business acumen and experience, what was a challenge for you and how did you drive through it?

Chris: We didn’t pay ourselves for the first 18 months. Financially, it was worrying because we had made a massive bet that this was going to be successful. We were fortunate enough to be able to take that risk, so that our first funds were able to go straight to development and not paying salaries. Founders that are taking large sums of money at the beginning aren’t serious founders, in my opinion. They’re basically paying themselves on someone else’s chequebook.

Mary: What’s the first thing that comes to mind as a tip for beginning entrepreneurs?

Chris: The more interesting businesses are the ones that are starting on the beginning of an emerging trend, whereby there’s lots of opportunity. By following that, there will be investment opportunities and sales opportunities. If you’re in a sector that’s growing, it’s much more fun than being in a sector where you’re being pushed out by competition every day.

Mary: I’m sure the onslaught of interest in environmentally friendly products and the rapid growth associated with it was very exciting for you!

Chris: Ah yes! Anybody with half a brain must have been able to see that environmental products were going to be the future, since we’re living in a world with limited resources. You must create better ways to get better yield out of those stretched resources. We started The Cheeky Panda because it was the right thing to do, as much as anything else. Our business has purpose. We can wake up every day and really enjoy what we’re doing. Knowing that we’re making a difference has a real effect on the clients we work with and the people we employ. It creates a culture of also doing good as well as doing work. I think that’s a very powerful thing for a company to aspire to.

— Written by Mary Letey

Embryo Ventures is an innovation and venture development partner to the most exceptional entrepreneurs and forward-looking organisations. We are passionate about backing ventures that are destined to make their impact on the world.