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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.
