Peer-to-peer selling, “eco-tags” and selling to the environmentally conscious consumer.
June 3, 2015
JOHN SHEGERIAN: Welcome back to the Green Festival’s edition of Green is Good. We’re so excited to have with us today Kristen Drapesa and her Head of Marketing, Andrea Plell. Thank you for joining us today on Green is Good. I was reading about your company last night. Before we get talking about Ecohabitude, could we talk a little bit about your journey, starting the company, how you even got here today?
KRISTEN DRAPESA: My background is really in fashion and business. I moved to New York to work as a buyer for a company that was an ecommerce company, a startup again, and basically they were focused on green and luxury, which is really hard to do. They have to be completely green and also luxury. For me, as I was working with them, I was really frustrated because I would spend hours, like six or seven hours a day, searching for companies. I’d be online, and it was really frustrating to me, because I’m like why can’t I find better companies. I’d go through Amazon and there’d be like 20 pages to sift through of things only to find out that like maybe three of them were actually really what they said they were. Then, most of them weren’t even luxury anyway so then I’m like spinning. My brain was just spinning. Then, I would go to these trade shows, though, like this, and lots of them at the Javits Center, and I was really inspired because I would run across these great brands and I was really bummed because I’m like where are they? I can’t find them in brick and mortars. They had amazing stories. One of them that was really inspiring to me was a company that was making these beautiful textiles. They would work with women in India who had come from abuse situations. Some of them didn’t even have fingers. They would teach them the skills. It was just a small company, husband and wife, and they worked with these women in these villages and produced these amazing products. I was just really bummed because I’m like why can’t I find these anywhere, why aren’t there more places. The public can’t even come into these trade shows, so how’s anybody else going to find them. So eventually, long story short, the company I worked for I kind of helped them redo their platform, their business platform and their website. They had a partner so they let that partner go and they had asked me to become a partner. I was going to put some money into it as well. We kind of went back and forth in negotiating on a business side. I said, you know, for the amount of work that you guys want me to put in and the money I’m putting in and equity, it just doesn’t really make sense. I’d already seen a need for something like my company at that point.
JOHN SHEGERIAN: The void in the marketplace this big.
KRISTEN DRAPESA: Yeah, and I just said, I go, you know what? I’m going to build something else, and I really hope that I can kind of support you still and your company. That was really the inspiration behind my company here.
JOHN SHEGERIAN: I just want to step back. When I was reading about you, you grew up in Hawaii.
KRISTEN DRAPESA: I did.
JOHN SHEGERIAN: So Hawaii itself is very lush and green area with pretty sustainable living there, right?
KRISTEN DRAPSEA: Yeah, and for that, it’s interesting and I am native Hawaiian. I’ve studied it quite a bit, my genealogy and my culture. For the Hawaiian religion, interestingly enough, they actually believe that the earth is a god. There’s several gods in their religion, but the way that they sort of revere the earth is as a higher power to them. They did worship it, and they were very conscious in the way that they sort of operated their daily lives, even the way that they were eating their food and things like that, growing their crops and just in everything.
JOHN SHEGERIAN: That was part of your DNA.
KRISTEN DRAPSEA: Oh absolutely.
JOHN SHEGERIAN: And culture.
KRISTEN DRAPSEA: Absolutely.
JOHN SHEGERIAN: Andrea, where did you grow up?
ANDREA PLELL: I actually grew up in Washington State.
JOHN SHEGERIAN: Washington, another very green part of this country, right?
ANDREA PLELL: It’s very green.
JOHN SHEGERIAN: Were your parents into sustainability when you were growing up?
ANDREA PLELL: Actually, they weren’t. They were really young when they had me, and they were kind of just figuring things out as they went. It wasn’t until I moved out on my own and something just clicked and I started being a lot more conscious about the things that I ate up to the things that I wore and how they were affecting different people. I don’t know if it was just some universal thing that happened to me as I got older.
JOHN SHEGERIAN: You saw the importance.
ANDREA PLELL: I did.
JOHN SHEGERIAN: And it started becoming part of your lifestyle. Kristen, when did you start Ecohabitude? What year?
KRISTEN DRAPESA: I incorporated in April of 2013. But what we did is we actually built the technology platform, so we actually built the whole back-end software system. It took us a good 10 months just to build that. Then, what we did from there is we launched a closed beta, which means that we launched the site, but I did was it wasn’t open for people to see, the public. We invited on like 25 friends that we sort of picked that we knew and had relationships with. We really asked them like what do you want to see? Like what’s going to help you sell better on our site? What’s going to help you grow your business more? Then we kind of tweaked our platform to incorporate what they were saying to us.
JOHN SHEGERIAN: Gotcha. For our listeners and viewers out there, to find your website they can go to www.ecohabitude.com. So, really, your website is a platform that creates transparency in the marketplace?
KRISTEN DRAPESA: Yeah, we’re really trying to build transparency. It’s also a peer-to-peer commerce website, meaning it’s direct. So people come on and the sellers actually sell directly to consumers. What we’ve created is just the online platform and the means for like the conduit to do that for them.
JOHN SHEGERIAN: So you’ve taken these small, little gem business concepts that you’ve seen at the trade shows over the years, you continue to source them, and you put them on this platform. So it’s a B2B and B2C?
KRISTEN DRAPESA: It’s really a P2P.
JOHN SHEGERIAN: P2P. Explain.
KRISTEN DRAPESA: P2P is like peer-to-peer commerce, meaning this is kind of like an etsy or a Storenvy or like an Amazon, where they come on and then they sell directly to the consumer. We don’t do any wholesale buying or anything like that. What we do is we just have the online marketplace. We aggregate the brands there so they can come on. The benefit for people is that a mom, for instance, can come on there and she can actually find baby products for her child. She can discover new brands for beauty brands. She can buy household products, and we’re really tried to create a space to be able to find as many brands in one place as possible.
JOHN SHEGERIAN: So you’re the Founder and CEO?
KRISTEN DRAPESA: I am.
JOHN SHEGERIAN: And, Andrea, what do you do with the company, Ecohabitude?
ANDREA PLELL: I do marketing and communications.
JOHN SHEGERIAN: On a day-to-day basis, you’re getting the brand out there more visual in terms of the online marketing and also communicating to the people who are using this site or just trying to bring more people onto the platform?
ANDREA PLELL: A little bit of all of those things.
JOHN SHEGERIAN: Tell me how it’s going so far. What’s the journey look like?
KRISTEN DRAPESA: Great. We raised our first round. We’re opening our second round, our Series A. What we really want to do is bring on more developers and then more money into marketing and advertising for our brand. We launched less than a year ago, so we launched in late fall of last year. We’re close to about 400 shops now on the site. We’ve got pretty much everything in every category. We’ve got bowties. We have chandeliers. We’ve got baby products. We’ve got lots of fashion just by default since there’s a lot of women in my company. So, that’s kind of where we’re at.
JOHN SHEGERIAN: So you raised the seed round already.
KRISTEN DRAPESA: Well, we’re raising our A.
JOHN SHEGERIAN: But, before that, how did you even launch the company?
KRISTEN DRAPESA: Oh yeah, so I raised a seed round with two investors and myself. Then, from there, we had to build the platform. Everybody is in-house now, so I have a small team of eight people.
JOHN SHEGERIAN: Right here in New York City, New York.
KRISTEN DRAPESA: All in New York, except for Andrea is on the West Coast.
JOHN SHEGERIAN: You’re the West Coast.
ANDREA PLELL: I’m the West Coast.
JOHN SHEGERIAN: That’s okay. That’s a nice combination in a virtual world you can work virtually from almost anywhere and feel very part of it.
KRISTEN DRAPESA: We also just hired another girl that is in Austin, Texas. She’s our brand liaison. What she does is she works directly with the brand and then reports to the marketing team mostly to kind of bridge that gap and say these are the cool new brands that are coming on. They just launched our blog, which is directly connected. You can find it on our website. So, she kind of works with Anna to figure out who are the new brands, what we should be writing about. If there is a brand that has a really great story, we always try to highlight. We love talking about the story behind the brand and that is what we really do. We love to carry it, all the brands on our site as much as we can.
JOHN SHEGERIAN: If I met you both on an elevator today and I said we’ve got 30 floors to give me your elevator pitch, what’s the mission behind the company and how’s that tie to sustainability?
KRISTEN DRAPESA: Do you want to do that or should I?
ANDREA PLELL: Maybe we can do two elevator pitches. My perspective on it is that we’re making eco-friendly and socially conscious products more accessible to consumers. I mean when Kristen started the business her intent was to make it easier for people to find these really awesome small companies that are doing some really wonderful things for sustainability. The unique thing about our site too is that, we haven’t got to it yet, but we have these things called eco-tags. Eco-tags are different badges of certification that different sellers on our site can claim to have in their products. For example, we have a badge called organic. We have a badge that’s fair trade. We have a badge recycled. Within these badges, we’re able to communicate better to the consumer what is the product-
JOHN SHEGERIAN: So, they don’t have to go on a so-called Easter egg hunt to go find how sustainable is that product. They look for your tags and they see.
KRISTEN DRAPESA: It’s about making better educated decisions on what you’re buying, because for consumers, for us to really change the marketplace, we really need to start voting with our dollar. In order to do that, you really need to ask those questions – as far as if you are organic, fine, then how are you organic? For us, we are really focusing on transparency, provoking the thought and bringing the education there for the consumers. If they’re not even thinking about it, they should be thinking about it and asking those questions. For us, the eco-tags not only help to kind of track that product footprint, but, for us, we’re really trying to make it more of a normal thing for people to start realizing that they need to be asking these questions and they should be thinking about these things when they’re purchasing. Because we all really do care, and I feel like it’s a matter of starting to just get educated as far as what we’re buying.
JOHN SHEGERIAN: For our audience members and our listeners who just joined us we’re so excited today to have Kristen Drapesa with us and Andrea Plell. They’re from Ecohabitude at www.ecohabitude.com. You mentioned earlier ladies that you have approximately 400 vendors right now.
KRISTEN DRAPESA: Going on, yes.
JOHN SHEGERIAN: On your site that our listeners could come on and buy from in a lot of different categories.
KRISTEN DRAPESA: Yes, directly from them.
JOHN SHEGERIAN: Directly from them. Explain your business models of how are you a sustainable business, how do you make money from this so I understand.
KRISTEN DRAPESA: Well, right now, because we’re in the startup phase, we’re actually not making a lot of money. What we’re really trying to do is just build up the site. Eventually, what we’ll do, just like an etsy store, is we’ll take just a small transaction fee from the sale that happened on the site.
JOHN SHEGERIAN: I gotcha.
KRISTEN DRAPESA: For sellers, it’s very beneficial because for them there’s not a lot that they’re giving up in order to sell on there. It’s a couple of points. What they would otherwise pay in marketing and social we’re doing a lot of that for them, and we built up our social media that we’ve got a pretty large audience at this point and we’re less than a year into it with the blog and things like that.
ANDREA PLELL: We also have a showroom, as well.
KRISTEN DRAPESA: We do really try to have Lee promote the brands. Andrea, we pair up a lot with different media. Like for Christmas, I believe, it was we took one of our brands and we got them on CBS Morning Show. We really try to get them. Andrea works really hard in trying to leverage her relationships with magazine editors. We have then coming in and out. We try to get them in mainstream media like People Style Watch, Cosmopolitan and things like that.
JOHN SHEGERIAN: As you mentioned earlier, you try to curate their stories.
KRISTEN DRAPESA: Right. Absolutely.
JOHN SHEGERIAN: And get those stories out there. You have 400 now. What’s your goal? How much are you trying to raise in this next round, the A round?
KRISTEN DRAPESA: The next round, we’re raising several million. Interestingly enough, I’ve had a lot of feedback from VCs that are like, yeah, she should raise 7 to 10, you know, she can do that. But I’m like, you know, honestly, we don’t need that much for a small team. My team is amazing actually. I am so proud of them. We’re like this little family, but everybody is just so passionate about the business. For us, I’m just like all we really need is a little bit more money to market and advertise for our brand, and we’re good. So that’s what we’re really looking to do in this next one is just raise a small amount just so that we can continue sustaining the business.
JOHN SHEGERIAN: If we were sitting here a year from now, how many people will be on the platform? How many companies will be on the platform then?
KRISTEN DRAPESA: I’d like to say a couple thousand. We’re hoping to at least have a thousand this year.
JOHN SHEGERIAN: We’re down to about five minutes so I want to understand. So, the 400 that you have now, how many countries are they from? How diverse is this marketplace that you’ve created?
KRISTEN SHEGERIAN: It’s growing. It’s mostly mainly in the U.S. We do have several Canadian brands and then several international brands from Spain, Iceland, France and London. We leverage all of our payments through Stripe. It’s like a PayPal. Everything is done through Stripe. We are a little bit limited at this point of who can sell on there just based on what countries Stripe is operating in. But we are pretty much around the world at this point. We’d like to grow our U.K. presence a little bit more just because they are ahead of the curve as far as sustainability goes.
JOHN SHEGERIAN: In terms of who’s doing what you’re doing, I haven’t heard of this before, so are you the first of your type in this area?
KRISTEN DRAPESA: We really are essentially the first P2P marketplace. There was Abe’s Market. I would say it’s probably the closest thing to what we’re doing, but they’re a little more food based. I feel like we’re a lot more lifestyle. We’re very heavily fashion focused and lifestyle focused. But yeah, essentially a true P2P, I believe we’re the first.
JOHN SHEGERIAN: Are most of your users, people buying online from you, men or women right now?
ANDREA PLELL: Women.
KRISTEN DRAPESA: Yeah, mostly women. But, funny enough, when we were looking at our analytics, I was surprised as far as men users on our site, which weren’t shocked about that, because I feel like sometimes we try to be more versatile and men and women, but of course, we just by default, I think, have a lot of women products.
JOHN SHEGERIAN: But as you continue to grow, you’re going to do baby, more men’s.
KRISTEN DRAPESA: At this point, we’ve got men’s shoes, men’s bowties, chandeliers, furniture, women’s fashion, beauty products and we even have food products.
JOHN SHEGERIAN: What’s the least threshold that a product can have? How many eco-tags, and how many is the best product that you have? How many eco-tags does it have?
KRISTEN DRAPESA: They have to have a minimum of two.
JOHN SHEGERIAN: That’s cool. That’s great.
KRISTEN DRAPESA: It doesn’t necessary mean you have to be green, but it has to be in some way, shape or form socially conscious. So a brand could be profit-shared and then they could be made in the U.S. So these are sort of thinking about the way that they’re building their brand and their product. Then, some of them have like 11. There are some brands that have tons. The point is that somebody can go on there and really base their decision on how important it is to them. If somebody goes they’re not doing enough in their company that I want to buy from them, cool.
JOHN SHEGERIAN: But it’s easy. When I’m on your site, it’s easy just to see how many tags, so I don’t have to sit there. Do you have like an eco-tag person?
KRISTEN DRAPESA: We have brand development. What we do is we go in, and then we’ll make sure, because we can see all the new brand and we make sure that they’re abiding by the standards that we have. Also, just a side note, with the eco-tag it’s not just pull a tag. You actually have to open it up and you have to explain. So you can’t just say I’m made in the U.S. It has to say I’m made in the U.S. Where are you made in the U.S.? We’re actually overhauling that and we’re deploying an even better eco-tag system this June.
JOHN SHEGERIAN: Great, so you’re constantly evolving it?
KRISTEN DRAPESA: Absolutely.
JOHN SHEGERIAN: That is great. We’re down to the last minute and a half or so. I’ll leave you ladies with the final word.
ANDREA PLELL: I would just say if you thought that green was really crunchy in the past, go to www.echohabitude.com because you’ll see an abundance of all the beautiful eco-friendly and socially conscious products that are really available to the marketplace now and you’ll be surprised if you didn’t know already.
JOHN SHEGERIAN: And they’re made around the world.
ANDREA PLELL: They’re made all around the world. I mean we have some gorgeous fashion all the way from London and Spain and also Australia. They have a really prevalent sustainable fashion industry there so it’s nice to be able to see this craftsmanship and have it available here.
JOHN SHEGERIAN: That’s awesome. For our listeners again and our viewers, go to www.ecohabitude.com to buy some of these great products or to join the marketplace, get on the marketplace and apply to join yourself. Andrea and Kristen, both of you are sustainability rock stars and truly living proof that green is good.
KRISTEN DRAPESA: Thanks for having us.