June 21, 2004
Drawing a connection | Rockland's Goodkind Pen Co. combines business savvy and environmental consciousness
By Taylor Smith
As a second grader in Philadelphia, Ian Lebauer got busted. His teacher shut down his fledgling business of collecting fellow students' pens and pencils during recess and selling them back to his classmates before the start of afternoon classes. In a wink, he was out of the pen and pencil business. But fast forward 15 years, and Lebauer, looking for entrepreneurial ideas, found pens and pencils to be an unlikely answer.
Lebauer, 34, graduated from Bowdoin College in Brunswick in 1992. He chose to stay in Maine, but found few prospects and a weak, post-recession job market. A double major in economics and environmental studies, Lebauer decided to get back to his entrepreneurial roots. His idea: Start a company that drew equally from his admittedly disparate academic pursuits. His buttoned-down economics side wanted a company that would make money. The Birkenstock-wearing environmentalist in him demanded that Lebauer's company adhere to certain ecological principles.
The resulting business became Goodkind Pen Co., this year's Eagle Feather Award winner in the small business category. Lebauer started Goodkind in Scarborough in 1993 after being discouraged by his large collection of disposable plastic pens. He figured there was a way to make pens that would be more environmentally sensitive than the durable plastic husks with petroleum-based ink he found around the house. Lebauer also thought inexpensive reusable pens would offer consumers more value.
Goodkind, which Lebauer moved in 1999 to an old First Baptist church on Main Street in Rockland, produces environmentally friendly, reuseable wooden pens and pencils. Its products dispense non-petroleum-based inks, and the company favors laser engraving over toxic-heavy processes such as screen or pad printing. That's made Goodkind products popular with merchants and custom clients such as L.L. Bean (Goodkind produces specially branded pens for the company).
Goodkind's products and its operations have struck a balance between commerce and conscience, satisfying both the economist and environmentalist in Lebauer. "I'm a moderation kind of guy," he says. "Everything in moderation, including moderation."
But while the company wears its eco-friendly ethos on its sleeve, the corporate side of Goodkind is shrouded in secrecy. It's difficult to quantify the company's success because Lebauer declines to divulge details such as revenues or the number of pens Goodkind sells each year. (In fact, Lebauer wouldn't say when a certain company placed an order for 500,000 pens engraved with its corporate logo). Outsiders aren't even allowed into the company's Rockland building.
The reason behind what Lebaur laughingly calls his paranioa is that disclosing such details opens the company to increased competition, which ultimately would result in higher prices for the consumer. What Lebauer will admit is that the company ˆ which he says is profitable ˆ doubled its sales annually in its first few years of operation. In recent years, he says, Goodkind has posted annual revenue growth of between 20% and 50%.
But when the economics mix with the company's values, you get a clearer picture of how the company operates. Goodkind's pricing model is an interesting example. While many consumers are used to paying more for environmentally friendly produts, Lebauer refuses to follow the market's penchant for slapping premiums on such goods. He instead prefers to price Goodkind's products in line with its mass-produced competitors. The company's pens and pencils cost between $2 and $10, and a two-pack refill for a Goodkind pen costs just 98 cents ˆ prices that have remained static since 1995.
But that insistence on competitive pricing leaves Goodkind vulnerable to its much bigger competitors, such as French manufacturer Bic, whose sheer volume of sales (roughly six billion pens per year) gives it incredible pricing power. Lebauer quickly realized the only way to stay competitive was to be a contrarian among environmentally friendly manufacturers. Instead of paying a premium for materials to satisfy the company's eco-friendly mandates ˆ costs that inevitably would be passed on to the customer ˆ Lebauer decided to keep his production costs extremely low. "We've gotten knocked off before, but [competitors] can't figure out how to beat us on price," he says.
The turn of the screw
Goodkind's pens and pencils are made exclusively from white birch that Lebauer buys on the cheap from northern Maine dowel mills, who are happy to unload their waste wood. The castoffs come to Goodkind already round, saving Lebauer untold amounts every year by cutting out the dozens of steps it would take to get the same material from raw timber. Though white birch grows too narrow for milling into planks, the wood boasts tight, straight grains and high tensile strength ˆ ideal for making dowels as well as toothpicks, tongue depressors and, yes, pens. What's more, Lebauer says customers love the natural-wood look of white birch.
Goodkind's prohibition against plastic also has forced Lebauer to come up with other creative solutions in pen construction. Eight years ago, he wanted to add a retractable pen to the company's line of products (which now includes eight pens and pencils and four wooden gift boxes), but couldn't figure out how to replicate the durable and cheap plastic gears that control a typical retractable pen. Ideas were bandied about, including replacing the plastic gears with custom-made metal gears. "That would have worked if we were willing to sell the pen for $30," he says.
Instead, during a brainstorming session with a few Goodkind workers ˆ the employee count varies from as few as five to as many as 35 ˆ someone asked if the device could function like a screw, turning each way to raise and lower the ink cartridge. "You can't get more simple than a screw going back and forth," said Lebauer, who figured out the tensions and dimensions needed for the parts and began consulting with manufacturers. (The company's employee base varies depending on the number of orders that need to be filled. But the staff numbers also fluctuate because Lebauer has instituted a flexible schedule at Goodkind, where people work when it fits in with their lifestyle ˆ even if that means showing up an hour a week.)
But Goodkind hasn't been able to avoid plastic entirely. Certain merchants ˆ L.L. Bean included ˆ told Lebauer they wouldn't stock his company's products unless they could be hung on display walls in clear plastic packaging. Rather than refuse a potentially huge market that includes big-box retailers such as Staples and Wal-Mart, Lebauer went to the drawing board. The result was a reuseable sturdy plastic box (made from recycled plastic, of course) that customers could affix a stamp to and drop in a mailbox to be returned to Goodkind. Surprisingly, the company receives roughly 40% of its packages back from consumers and is able to reuse the majority over and over again. In fact, consumer products giant Proctor & Gamble, which wanted to put a similar program into place, recently approached Lebauer to discuss licensing the idea. In this case, the environmentalist in Lebauer won out over the economist, and he offered the concept to P&G gratis. "I like it when the big boys notice us," he says.
Lebauer's business has attracted its fair share of notice, especially here in Maine. Goodkind was tapped early last year by the Baldacci administration to provide the governor with an official pen to use for commemorative bill signings. Now, every piece of legislation okayed by Gov. John Baldacci is signed with a Woody Widebody model, laser engraved with the state seal and personalized with the governor's name. "Why not?" says Lebauer. "It's Maine-made, it represents the state well and it's environmental."
Lebauer, 34, graduated from Bowdoin College in Brunswick in 1992. He chose to stay in Maine, but found few prospects and a weak, post-recession job market. A double major in economics and environmental studies, Lebauer decided to get back to his entrepreneurial roots. His idea: Start a company that drew equally from his admittedly disparate academic pursuits. His buttoned-down economics side wanted a company that would make money. The Birkenstock-wearing environmentalist in him demanded that Lebauer's company adhere to certain ecological principles.
The resulting business became Goodkind Pen Co., this year's Eagle Feather Award winner in the small business category. Lebauer started Goodkind in Scarborough in 1993 after being discouraged by his large collection of disposable plastic pens. He figured there was a way to make pens that would be more environmentally sensitive than the durable plastic husks with petroleum-based ink he found around the house. Lebauer also thought inexpensive reusable pens would offer consumers more value.
Goodkind, which Lebauer moved in 1999 to an old First Baptist church on Main Street in Rockland, produces environmentally friendly, reuseable wooden pens and pencils. Its products dispense non-petroleum-based inks, and the company favors laser engraving over toxic-heavy processes such as screen or pad printing. That's made Goodkind products popular with merchants and custom clients such as L.L. Bean (Goodkind produces specially branded pens for the company).
Goodkind's products and its operations have struck a balance between commerce and conscience, satisfying both the economist and environmentalist in Lebauer. "I'm a moderation kind of guy," he says. "Everything in moderation, including moderation."
But while the company wears its eco-friendly ethos on its sleeve, the corporate side of Goodkind is shrouded in secrecy. It's difficult to quantify the company's success because Lebauer declines to divulge details such as revenues or the number of pens Goodkind sells each year. (In fact, Lebauer wouldn't say when a certain company placed an order for 500,000 pens engraved with its corporate logo). Outsiders aren't even allowed into the company's Rockland building.
The reason behind what Lebaur laughingly calls his paranioa is that disclosing such details opens the company to increased competition, which ultimately would result in higher prices for the consumer. What Lebauer will admit is that the company ˆ which he says is profitable ˆ doubled its sales annually in its first few years of operation. In recent years, he says, Goodkind has posted annual revenue growth of between 20% and 50%.
But when the economics mix with the company's values, you get a clearer picture of how the company operates. Goodkind's pricing model is an interesting example. While many consumers are used to paying more for environmentally friendly produts, Lebauer refuses to follow the market's penchant for slapping premiums on such goods. He instead prefers to price Goodkind's products in line with its mass-produced competitors. The company's pens and pencils cost between $2 and $10, and a two-pack refill for a Goodkind pen costs just 98 cents ˆ prices that have remained static since 1995.
But that insistence on competitive pricing leaves Goodkind vulnerable to its much bigger competitors, such as French manufacturer Bic, whose sheer volume of sales (roughly six billion pens per year) gives it incredible pricing power. Lebauer quickly realized the only way to stay competitive was to be a contrarian among environmentally friendly manufacturers. Instead of paying a premium for materials to satisfy the company's eco-friendly mandates ˆ costs that inevitably would be passed on to the customer ˆ Lebauer decided to keep his production costs extremely low. "We've gotten knocked off before, but [competitors] can't figure out how to beat us on price," he says.
The turn of the screw
Goodkind's pens and pencils are made exclusively from white birch that Lebauer buys on the cheap from northern Maine dowel mills, who are happy to unload their waste wood. The castoffs come to Goodkind already round, saving Lebauer untold amounts every year by cutting out the dozens of steps it would take to get the same material from raw timber. Though white birch grows too narrow for milling into planks, the wood boasts tight, straight grains and high tensile strength ˆ ideal for making dowels as well as toothpicks, tongue depressors and, yes, pens. What's more, Lebauer says customers love the natural-wood look of white birch.
Goodkind's prohibition against plastic also has forced Lebauer to come up with other creative solutions in pen construction. Eight years ago, he wanted to add a retractable pen to the company's line of products (which now includes eight pens and pencils and four wooden gift boxes), but couldn't figure out how to replicate the durable and cheap plastic gears that control a typical retractable pen. Ideas were bandied about, including replacing the plastic gears with custom-made metal gears. "That would have worked if we were willing to sell the pen for $30," he says.
Instead, during a brainstorming session with a few Goodkind workers ˆ the employee count varies from as few as five to as many as 35 ˆ someone asked if the device could function like a screw, turning each way to raise and lower the ink cartridge. "You can't get more simple than a screw going back and forth," said Lebauer, who figured out the tensions and dimensions needed for the parts and began consulting with manufacturers. (The company's employee base varies depending on the number of orders that need to be filled. But the staff numbers also fluctuate because Lebauer has instituted a flexible schedule at Goodkind, where people work when it fits in with their lifestyle ˆ even if that means showing up an hour a week.)
But Goodkind hasn't been able to avoid plastic entirely. Certain merchants ˆ L.L. Bean included ˆ told Lebauer they wouldn't stock his company's products unless they could be hung on display walls in clear plastic packaging. Rather than refuse a potentially huge market that includes big-box retailers such as Staples and Wal-Mart, Lebauer went to the drawing board. The result was a reuseable sturdy plastic box (made from recycled plastic, of course) that customers could affix a stamp to and drop in a mailbox to be returned to Goodkind. Surprisingly, the company receives roughly 40% of its packages back from consumers and is able to reuse the majority over and over again. In fact, consumer products giant Proctor & Gamble, which wanted to put a similar program into place, recently approached Lebauer to discuss licensing the idea. In this case, the environmentalist in Lebauer won out over the economist, and he offered the concept to P&G gratis. "I like it when the big boys notice us," he says.
Lebauer's business has attracted its fair share of notice, especially here in Maine. Goodkind was tapped early last year by the Baldacci administration to provide the governor with an official pen to use for commemorative bill signings. Now, every piece of legislation okayed by Gov. John Baldacci is signed with a Woody Widebody model, laser engraved with the state seal and personalized with the governor's name. "Why not?" says Lebauer. "It's Maine-made, it represents the state well and it's environmental."
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