Tweet This
When I first talked to Sarah Kauss of S’well Bottle, her company had just transferred into a new, and much larger, headquarters in Manhattan. The iconic water bottle that sells out on the racks of Nordstrom, Saks, Neiman Marcus, and Starbucks--not to mention at a $45 price point--now has one-hundred employees and valued at $100M.
And no, Sarah isn’t a college entrepreneur. In fact, aged 35 before starting S’well, Sarah had over a decade of work experience in accounting and real estate. Instead, she provides a novel perspective to prospective college entrepreneurs.
“You know I really wish I had started S’well when I was an undergraduate at [University of Colorado] Boulder or an MBA at Harvard. There are just so many resources at all these universities again: cheap access to capital, business plan competitions, advisors. There’s really nothing to lose too. You can take risks.
“But you know...I don’t think I was really ready to start S’well back then. I didn’t necessarily have the confidence, the connections, or honestly even the skills to start S’well in college and grow it to be as successful as it is. Plus, the idea of course didn’t hit me till a lot later.”
Sarah Kauss seems to be an oddity in the age where prototypical entrepreneurs all seem to be college dropouts like Zuckerberg or Spiegal.
To students interested in founding a company, Sarah argues that if you have a good idea, “there’s no better time than college.” But if you feel like you need a “little more finishing,” she posits that “ there’s no reason why you can’t be entrepreneurial in larger publicly-traded companies too .”
“I did accounting in college but was always very entrepreneurial. So when I worked at Ernst and Young, one of my mentors told that I need to make sure to work on projects that I’m sure I can grow in and that I love. She told me that I should mold my own experiences within the firm. So I was super entrepreneurial within a large organization and did projects for companies like Pets.com.”
By the time she had enough inspiration to do S’well, she had the skillset, connections, and access to capital to dramatically increase the probability of success. In other words, while there’s no risk to starting up during college, according to Kauss, if you don’t feel like you have the right idea, there’s no reason to rush it. You can learn pertinent skills at larger corporations if you seek out that lifestyle.
“I always had the feeling that I need to have this big idea. This big ah-ha. Something that’s going to have a massive total addressable market. I never really had that per se. But as time went along, I realized that I would just love to have a high-end bottle that would look nice on a board table and at the gym.”
With S’well, she says that she really wasn’t trying to find the biggest opportunity (or the largest TAM, total addressable market, as touted in business schools). “I had no idea that there is this much possibility. I just knew that I wanted this product. Once I knew what I wanted, I knew that there had to be at least a few others like me who also wanted it. You should stick to what you know. If you’re a coffee connoisseur, try to do something with that.”
When looking at opportunities, she says that students should remember that “you can turn almost any object around you into a business.” In other words, don’t worry if you haven’t figured out the right idea or problem you want to tackle. It’ll come. Sarah sticks to her words, having transformed the ultra-commoditized water bottle that you can buy at Walmart for $2 into a sleek luxury item.
Indeed, Kauss provides a cooling refreshment on a burning, competitive summer’s day to all the young millennial entrepreneurs who feel that they haven’t “made it” if they haven’t built a Facebook or Oculus VR yet. Her example shows that while there may be some precocious Mozarts out there who just know they love piano and music because of their early childhood experiences, many of us won’t figure out what we enjoy or develop skills in that area till much later in life, much as Beethoven did. And that’s okay. By the time that we are excited later on, we’ll be mature enough to make sure that we succeed.
In fact, Kauss was adamant that about how important it is to solve a problem that you personally face. “Things get tough and when solving a problem you care about, you’re willing to work so much harder. Plus, it just makes the brand more authentic and personal. People are really good at figuring out if you’re faking it. You want to build something that solves your own problems.”
When I asked about what she recommends students do to “prepare” for being a founder, she referred back to her MBA years often and how important her network was for S’well’s success. “Harvard was super helpful for me. They do a really good job of putting together a large group of people with very different skillsets. So now I had a network of people in PR or in fabricating metal or anything else. Anytime I had a question about something, I just called my friend from business school.”
She also recommends that prospective entrepreneurs learn some kind of accounting. “You know being able to know what the numbers mean without having to rely on someone else is immensely useful. And it’s not just for financials but also for inventory management, budget, or taxes.”
Perhaps this focus on the numbers is precisely what allowed Kauss to build a $80M annual run rate company without raising a single cent in outside capital? “To minimize your costs and your risk, especially if you’re young, you want to make sure your unit economics check out. Make sure you’re making money on each unit you sell. We were profitable after only shipping our first batch.”
On the other hand, for young students who are just getting started and are looking for a project with little downside and large upside, an idea like S’well might not be a bad idea. At its core, even with the brilliant metal engineering, S’well Bottle is a brand. An Apple-esque brand that scarcity leads people to pay 10x the price on eBay for, a brand that people stand in line for, and a brand whose products people are proud to own.
Now there’s no doubt that starting a successful brand is not easy. But one thing is most certainly true: the startup costs and risk to start a digitally native brand are relatively small compared to other businesses. It’s all about finding a market segment that resonates with a message you have to share. But there’s no need for expansive engineering skills or anything else. According to Kauss, “we were legitimately using a WordPress website until last month. It worked fine. Plus I had outsourced a ton of my early work on sites like Elance.” Brands like these are hard to sustain and nurture, but getting started with them is something that any college student could do.
More than anything, Kauss shows us that household objects that nobody would have thought about can be turned into a massive business opportunities. It’s just about finding something in the market that you think should exist, but doesn’t.
