Green Way Laboratories is a Long Beach, California based startup that has distinguished itself by producing a line of high-performance green cleaning solutions. Their patented cleaning product is renewable, plant based, and effective for both industrial and consumer use. CEO and Co-Founder Ted Cote shared an excellent tag-line exclaiming, “You have a product that will clean off roofing mastic, yet it’s safe enough to also clean your baby’s crib.” They completed the 500 Startups program and are currently working with the LA CleanTech incubator. We like them because they are successfully applying startup strategies despite having a more traditional product.
It’s not necessary to fit the typical startup mold
Startups come in many shapes and sizes. Green Way is a product company as opposed to an app or online platform. Its uniqueness has allowed Green Way to stand out in the startup scene and develop strong cross-industry ties with cleaning services and distributors. However, this also means that they are facing some different obstacles than most. For instance, production cost per unit as well as storage costs are much less of a critical issue for startups today. This is often due to the fact that many of the assets most valuable to startups are virtualized. For a product company like Green Way, their assets have a real marginal cost per unit in addition to their fixed costs. A physical product means that you have to pay to develop, store and ship each individual unit.
It’s okay to start out by private labeling and producing through a 3rd party
Cleaning products are a big market, dominated by huge players like P&G. How does a startup compete? Green Way is able to generate revenue by licensing out its patented formula to companies that have a need for truly green cleaning in their product line. This means that their product is also appearing under different labels beyond VERDAY TM (Green Way’s household product) and MastiClean (Green Way’s industrial grade cleaner.) This is an excellent first step as Green Way does not yet have the capital to produce its products in a self-owned facility. Third-party production of Green Way’s product has allowed them to offset some costs, though it also poses the limitations such as minimum quantity orders. This is an important first step for the organization to start competing with some of the larger cleaning corporations.
Partnering with complementary companies
Hassle is a company based in London that offers uber-like on demand house cleaning service, primarily in Europe. Hassle wanted to offer a green option for their customers and also have a more consistent cleaning for their customers too. After talks with Green Way, they decided to adopt VERDAY TM as their official cleaning product for their company. They have just launched a big pilot where they are sending out samples of the cleaning product to all their customers in return for a profit-share on every order that comes in from their customer base. “That’s a unique way to sell the product outside of traditional retail” Cote pointed out, and they hope to build further partnerships with similar cleaning services companies in the US as well.
A product with a variety of use scenarios
Green Way’s MastiClean has also proven to be an excellent degreasing tool in motorsports. They have developed a strong relationship in the industry and will be featured on a NASCAR race car. A company like Boeing can use their product for cleaning off Cosmoline (a rust preventive) from planes, which is effective both at the commercial and military level. This is an especially important vertical as the green product performs much better than other more toxic cleaners. Industrial applications will still take a lot of firepower. Though Ted Cote mentioned, “we thought Boeing was going to buy it by the truck loads, but it turns out the different departments and locations tend to buy autonomously from wherever they want.”
This is a critical stage for the company to build up customers that have consistent reorder rates. It is also important to continue working with strategic investment partners that help both with capital inflow as well as sales. Green Way will continue to develop its industrial grade sales with companies like Boeing as well is its direct consumer sales. Overall, they have found a number of inventive ways to thrive outside of the usual bounds of product and brand, whether it be by licensing or being amenable to a variety of markets. These are are universal concepts that are critical for any startup founder. The company is heading in all the right directions with its strategic marketing and partnerships, we look forward to seeing their products on the shelves in the near future.