When Lowry and Ryan returned to the store a couple of days later, they discovered a few of their precious bottles missing – gone to the homes of happy shoppers, presumably, and not simply slid aside. "It was so surreal to think of people taking your product, putting it in a cart, and using it at home," Ryan says. "I mean, imagine that."
Elation, however, quickly gave way to panic: The shelves would have to be replenished.
"So that Saturday," Lowry recalls, "my packaging guy and his 7-year-old son, we got a bunch of pails, a bunch of funnels, and about 50 rolls of paper towels. Cleaning products foam; when you fill them up, they overflow, and you have to wipe the bottle. So we spent an entire Saturday and part of a Sunday filling up a couple of hundred cases of product. Each one of us hand-filled with a funnel, wiped the bottle down, hand-applied the label, and put it in the box. That was our first warehousing."
Three years later, Lowry and Ryan oversee warehouses and production facilities across the country, and one in China. Their company, called Method, has its cleaning products on the shelves of 10,000 U.S. stores, including Safeway, Albertsons, and Target, and will be available in London next month. And the products certainly stand out among their competitors: Method's dish and hand soaps, shower and kitchen sprays, floor and surface cleaners come candy-colored in bottles of stylish design, boasting fragrances such as cucumber, bamboo, and ylang-ylang. In an industry long dominated by a few well-established corporations churning out look-alike products that often smell bad, tend to harm the environment, and sometimes don't work very well, Ryan and Lowry see Method as more than just a breath of fresh air. They view their company as a means to redefine the very essence of cleaning, transforming ugly objects that hide under the sink into chic, must-have countertop accessories. By creating environmentally friendly, well-performing cleaning products that look hip and smell great, Ryan and Lowry want to turn a chore into a delight and renew the emotional bond between a home and its hygienist.
"It's kind of the same way Williams-Sonoma approached cooking," Ryan says. "They really came in and closed the gap between the love of cooking and food. We're trying to do that with cleaning."
In one corner of the Method conference room, overlooking the boutiques and BMWs of Union Street, stands a gigantic steel shelf. Like some kind of horrific, oversize closet from a housewife's nightmare, the shelf is crammed to overflowing with squeezable bottles and spray canisters. Most of the bottles on the shelf are produced by one or another of the few corporations that dominate the household cleaning products market. Ever mindful of the competition, Lowry and Ryan have spent much of the past three years eyeing this shelf. Ryan adjusts his wire-rimmed glasses and leans forward in his chair, pensive. "Bottom line," he says, in a dry, deadpan voice, "it's pretty foolish to try to go up against P&G, Unilever, Colgate-Palmolive, SC Johnson –"
Lowry, seated across the table, picks up on his friend's mock naysaying. "On their turf."
"Break into a category that has tiny shelf space –"
"No room for growth –"
"And to do it on a zero marketing budget." Ryan smooths the front of his tan shirt, tucked into a pair of black striped pants, and gives a sarcastic laugh. "Yeah, it was pretty stupid."
The rapport between Ryan, 31, and Lowry, 29, isn't forced. Method employees playfully refer to them as "the boys," and the two interact almost like brothers. Ryan has a hipster's fashion sense and a confident, professional demeanor, occasionally leavened by self-deprecating humor. His ruffled blond hair makes for an interesting contrast with the brunette spikes of Lowry, an avid sailor who competed for a spot on the Olympic team in 2000 and hopes to make the team in 2004. His athleticism is evident: He stands well over 6 feet tall, and his lanky limbs and dark, angular features give him a streamlined look.
Growing up in suburban Detroit, Lowry and Ryan were high school friends, and they kept in touch sporadically throughout college, when Lowry went to Stanford and Ryan attended the University of Rhode Island. After graduation, they happened to bump into each other on a plane coming back from Thanksgiving vacation in Michigan. They got to talking and realized they were living only a block from each other in San Francisco. A short time later, when one of Lowry's roommates moved out, he invited his old friend to move in.
Lowry had earned a chemistry degree at Stanford and gone on to develop a couple of products that were patented by companies he worked for. He had also held a job developing software, computer models, and interfaces for the Carnegie Institute of Washington. But his parents had started their own business in 1981, which focused on improving product quality in automotive parts; Lowry yearned to start his own company, too.
He was unemployed when Ryan, also the product of an entrepreneurial family, moved in. Ryan's great-grandfather dropped out of pharmaceutical school to work on one of Henry Ford's assembly lines for $5 a day, and later started a family-run company that made doors, hoods, and other car parts. From an early age, Ryan seemed destined to replicate his path: In middle school, he reopened the campus' shuttered bookstore and kept it afloat by selling Fruit Roll-Ups. When he was older, he parlayed his more marketable skills – spotting consumer trends and studying corporate brand imaging – into consultant jobs for Gap, Old Navy, and Saturn. But after several years of working on other people's advertising campaigns and product rollouts, Ryan was ready to introduce his own ideas to the public.
Driving through northern Michigan on a ski trip around Christmas of 1999, the newly reunited friends got to talking about, of all things, cleaning products. And to their mutual delight, they each had a lot to say. "We realized there was a huge disconnect between how high-interest your home is – how much people care about the design of their home and what they put in it – and how low-interest the products are that serve the everyday roles of cleaning," says Ryan, recapping the life-changing conversation he held with Lowry on their now-mythical drive up the mountain. "At the end of the day, the aisle in the grocery store is a home section, but it doesn't feel like a home section. It feels more like a pesticide section. And the way people clean has changed. It's no longer the afternoon deep-clean, the bucket and mop of the 1950s.
"Now it's about trying to keep up, cleaning on the fly. There's so much missing – like the real simple thing of making something look nice so you can leave it on the counter instead of having to hide it away."
The idea was born: Create a cleaning product people would actually desire.
Ryan and Lowry did their homework, delving into the history of household cleaning products and finding that not much had changed in the past 50 years. The leading companies were well-established: Procter & Gamble, for instance, was started in 1837, about the time the soap industry exploded in the United States and turned a luxury item into a daily necessity. Because the major corporations had had no incentive to step back and re-evaluate their industry, they had been content to make a succession of tiny tweaks to their products, hesitant to risk alienating customers by changing well-known fragrances or designs.
Lowry and Ryan spent a year trying to shoot holes in their own idea. Ryan quit working, Lowry stopped looking for another job, and they got a tiny office. They brought together a panel of experts – grocers, marketing veterans, lawyers – to suggest reasons their concept wouldn't fly. In the end, there was one chief concern: How is Goliath going to react?
"That was the big moment of truth," says Ryan, shaking his head at the memory. "Trying to explain to your parents that you're starting a soap company. And they've never even seen you pick up your bedroom."
Lowry nods. "Knowing what I know now, I don't think I would have had as much faith in me as my parents did. They knew I had the bug to start my own business, but what amazes me is how little my parents, as investors in the company, asked to know."
Once they had decided to go ahead with their idea, Lowry and Ryan set about finding money. They pooled their life savings – they won't say exactly how much, but Ryan jokes that there are cars on Union Street worth more than their initial nest egg – and raised some funds from friends and family members. As early as April 2000, when the NASDAQ was high and the dot-com bubble was still rising, Ryan and Lowry held some meetings with cybercrazed venture capitalists. "In this part of the world, when you're talking about soap, they don't always take you seriously," Ryan notes. "We had some truly obnoxious meetings."
Meanwhile, Lowry was finalizing the chemical formulations that would enable Method to blend fragrance, color, and environmental safety. He rejected harsh bleaches and other substances that "oxidize" dirt by reacting with it and breaking it down, because oxidation can damage surfaces and skin. Instead, Lowry developed an "adsorptive" cleaning technique that functions almost like a liquid vacuum cleaner. Active ingredients in Method cleaners selectively attach to dirt and not to other compounds, Lowry says, and Method employs a complicated set of supporting ingredients that can target specific stains or mediums; for instance, some sprays include a formula to tie up hard water particles, which often dilute the concentration of cleaners, leaving the products free to bond with dirt. Method uses higher (and more expensive) levels of active ingredients than its competitors, but because they are naturally derived from coconut and palm oils, Lowry contends, these ingredients don't create the environmental problems posed by bleach- and antibacterial-based cleaners. The nontoxic Method products are touted as being safe around children and pets, too.
"It actually turned out to be a real shock that we could create something safe, and something that could work really well," Ryan says.
"Well, it was a shock to you," Lowry retorts. "The chemistry that's on the cleaning market today is chemistry that's left over from the 1950s. But you've seen the TV commercials. The second you change your formula from a bleach, your competitor's going to launch a side-by-side comparison that says, 'Ours has bleach and theirs doesn't.' That's a really risky proposition if you're a large brand."
Following their first sale, Ryan and Lowry canvassed the city, gradually building a base of grocers, many of them gourmet stores, and for the first six to eight months the pair's distribution system consisted of Lowry driving his SUV around town from 6 a.m. to noon, three days a week. At night they would return to the stores, counting up the missing bottles and comparing the sales rates against the numbers they crunched on national competitors.
Soon, larger grocery chains began to take notice. Albertsons introduced Method in its Phoenix-area stores, and Safeway followed. And in April of 2002, Ryan and Lowry found themselves waltzing into a meeting with the discount giant Target, arranged with the help of a San Francisco advertising firm.
"Our presentations literally went from trying to find a frantic manager in the back of the store to Target, where we went in with 10 people and put on a three-hour show," Ryan says.
For their presentation to Target, Ryan and Lowry unveiled a new twist on the cleaning genre. A few months earlier, on little more than a whim, they had sent an e-mail to world-famous designer, artist, and author Karim Rashid, whose clients include Prada, Armani, Sony, Tommy Hilfiger, and Estée Lauder. They had asked him, very simply, if he would be interested in redesigning a fixture of every kitchen in the developed world: Could he make liquid dishwashing soap chic? "Karim was on top of our list for a number of reasons," Ryan says. "He really helped start the movement toward democratic design – he was willing to design for the masses, but came from a high approach. He obviously got it right away."
Perhaps not sensing quite how small this operation was, Rashid enthusiastically agreed and eventually came up with 12 different design concepts for the dishwashing soap. Ryan instructed him to create something that would live on the counter; with the advent of the dishwasher, he reasoned, dishwashing soap is used in short bursts and picked up frequently. He was also inspired by the upright stapler, an object that can be raised and perform its function without needing to be turned over.
And so Method presented to Target its "bowling pin" dish soap – a curved, sculptural bottle that squeezes soap out of its base. It was one of the more radical concepts offered by Rashid – who has since become the company's de facto design director – and he backed it up by arriving at the Target meetings dressed "like a rock star," Ryan says, in a sparkling all-white suit and big funky glasses. Even the normally staid Target executives and buyers were moved by Method's bold ideas, and they scheduled a six-month test run in Chicago and the Bay Area. During the test phase, Method's founders were delighted to receive data that showed they were selling well not only in Target's affluent "A" stores, but also in its low-income or sparsely frequented "D" stores. To Ryan and Lowry, this proved their proposition that people from most income levels would pay a few extra cents for a cleaning product straddling the line between mass and premium, as long as it resonated with them on an emotional level.
"There's a time when a business goes from being a few guys in a room to really becoming something that operates like a business," Lowry says. "And when we went national with Target after the test run, that's really when we shifted gears and began to define the way we did things."
It has been easier, since Method's partnership with Target, to find investors willing to back a start-up soap company headed by a pair of young guys. The company is now primarily funded from three sources: an affiliate of the Simon Property Group, an Indianapolis-based real estate investment trust that is the largest owner and operator of retail real estate in the United States; Tim Koogle, former CEO and chairman of Yahoo! Inc.; and the Sumitomo Corporation of America, an international trading and investment company. Method is developing a sales track record that also speaks to an ever-surer foothold in the industry. According to Information Resources Inc., which tracks data for supermarket sales nationwide, Method rings up about $10 million in annual sales. (Just for comparison, Procter & Gamble did something north of $43 billion in annual sales in 2002.)
But Ryan and Lowry want to see the company expand further, believing the only way to succeed is to beat their large competitors to the punch. They have plans to roll out new household products in the next year, and although they won't name specific categories they're targeting, they say the brand will begin to develop more of its own identity.
"A lot of people who start a company are control freaks ... I think it's cool to see other people take ownership of your ideas," Ryan says. "I mean, this company started with a simple folder – I still have it, actually – and it'll be amazing to see where we are in a year."
Then the pragmatist in him returns, drawing on his extensive knowledge of consumer and corporate trends. "Most people fail a couple of times before they're successful in start-ups," he says, shifting a tad uncomfortably in his chair. He lets out a hoarse chuckle. "If you had asked me to place money on whether we'd be here or not, I would have bet against it."
Lowry frowns. "Well, that's nice to know."
Method's office occupies the second floor of a converted Victorian house, beyond a sign on the door that simply says, "Method, since 2001." The interior is cramped and intimate, redolent of the households Method seeks to serve. Former bedrooms have been turned into offices, which are shared among three or four employees, and the bathrooms are even stocked with reading material – shelves upon shelves of old-fashioned magazines, waiting to be plumbed for design ideas. But Method has outgrown the space, and an upcoming move will be the company's fourth office relocation in 18 months. Despite the success, Method still somehow feels like a grass-roots operation.
After a sales meeting breaks up on a recent Tuesday morning, the company's CEO, Alastair Dorward, emerges from the boardroom cradling a conference-call telephone, its wires spilling out of his arms. Lowry, who has been waiting for Dorward to come out so he can run his own meeting, stops the CEO with a hand on his elbow. "I need the conference phone," Lowry says.
Dorward, wearing a smart green vest and a brown suit, pauses, glances over his glasses at the taller Lowry, and answers in a prim British accent: "I'm going into another meeting, and I need it." There's an awkward pause. "We have only one conference phone."
"I know." Lowry rubs his face.
Dorward steps aside so someone can file past him, and after a few seconds' hesitation, hands over the phone and its dangling cords. "You take it."
Dorward, 35, who calls himself "the gray-hair in the company," joined Ryan and Lowry in November 2000, by which point the two young entrepreneurs had realized they would need an older guiding hand to help them transition from their apartment operation to one that could serve retail giants like Target. Dorward, who earned his M.A. in politics, philosophy, and economics at Oxford University and his M.B.A. from a business school in France, had excellent credentials: He had founded and presided over a successful venture-backed soup business called Covent Garden Soup Company, which was worth $40 million and at the brink of sale when he left in 2000; he had spent the previous six years providing strategic consulting for executives at leading corporations in London, Warsaw, and San Francisco. Plus, he already knew Eric Ryan, having recently rejected him for a job as head of marketing at his previous company.
"I knew we'd wind up working together someday," Dorward chuckles. "Instead of me hiring him, he wound up hiring me."
Dorward was attracted to Ryan and Lowry because they exhibited a mixture of "passion and humility" that he found relatively rare among young entrepreneurs in the roaring late '90s. He was also struck by how well the two friends blended their respective skill sets – Ryan concentrating on the external forces of fashion and marketing, Lowry on the internal processes of chemistry and product development. When they first told him of their idea for a product, Dorward says, his initial gut reaction was, "Duh. This should have been done before, and I couldn't come up with a good reason it hadn't."
Neither can Tom Vierhile, executive editor of Productscan Online, a trade database that tracks new consumer products and packaged goods. Method's emphasis on look, scent, and safety contrasts sharply with its more established competitors, Vierhile says, who have always tried to sell themselves on efficacy alone.
"The company is really to be applauded, because they've tried to do several things – packaging, formulations, the aromatherapeutic angle – in a pioneering way," Vierhile says. "And if you can come in and be first in something that's defined as a niche, you do have a leg up."
But, he adds, the nonproprietary nature of the packaged goods market makes it easy for large corporations to simply copy the upstarts, and this is one reason the consumer cleaning aisle remains the province of so few companies. There are no trademarks or patents to prohibit a company like Clorox from introducing a line of cleaning supplies mimicking Method; the only obstacle is the high cost – in both dollars and consumer trust – of re-engineering a mass brand.
"But Method may be harder to copy, because they're not just hanging their hat on one thing," Vierhile says. "If a company knocks 'em off, they're probably not going to do five varieties of every cleaner. And I really doubt Procter & Gamble is going to come out with a shower cleaner that smells like cucumber or ylang-ylang."
Indeed, Dorward is banking on the big companies being too entrenched and muscle-bound to rethink their entire approach to a stagnant consumer category that has historically been viewed as unsexy. "We'll never be the core driver of this category, but we can bring some incremental growth to the niche we've been working on," Dorward says. "We're not trying to cannibalize the business of our major competitors; we're looking to grow the category and play to our own strengths.
"We get fan mail you'd expect from a different business," he says with a dry laugh. "We're getting consumers saying, 'We're a Method home. We only use Method products.' You'd be surprised the extent to which our customers become passionately engaged by these cleaning problems. We're onto something ... we're trying to elevate the category from problem-solution to something a bit more inspirational."
Such levitation is made easier when one of your products -- in this case, a Method dish soap bottle – pops up on the counter of Courteney Cox's kitchen in an episode of Friends.
There's a downside to success in the grocery business.
"When we went national, it just ruined shopping for us," Ryan says with genuine sadness. "Every time you go to a Target or a grocery store, you go to the section, and you either get upset that it isn't there, or you get upset it isn't merchandised well ...."
"I eat out almost every night," Lowry says, and he's not kidding. "I hate going to the grocery store. I can't do it."
"It drives my wife crazy, because I disappear every time we go inside," Ryan says. "But she knows right where to find me."
Even when he's not in a grocery store, Ryan can't keep his eyes off the merchandise. His gaze floats back to the sprawling shelf of cleaning products in the corner of the conference room – a hulking symbol of the industry's monotonous uniformity and a constant reminder of Method's still-small stature among the Goliaths. "I was on a flight the other day, and someone asked what I did, and I told them ...," Ryan shakes his head sheepishly. "I told them advertising. It's soap – you can't get too cocky."
He continues to study the products, talking almost to himself: "The category's eventually going to wake up, so we're just trying to go as fast as we can right now." Then he sighs, drags his gaze away from the shelf, and leans back in his chair. There's a wistful look in his eye, and the dismissive tone he usually employs when speaking about the industry disappears.
He points at a bottle of Method dish soap on the table in front of him and offers a summary, plaintive wish: "I just hope my grandchildren go into a store someday and say, 'My grandfather started that.'"
