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Season 4 | Episode 3

Balancing people, planet and profit

Dave Bolotsky on the partnership economy podcast

When Dave Bolotsky established Uncommon Goods, his goal was to create something unique. During his tenure as an e-commerce research analyst, he had observed a prevailing sense of uniformity on the internet, which prompted him to identify an opportunity for innovation. A quarter-century later, he remains dedicated to this vision. Uncommon Goods has emerged as a frontrunner in ESG initiatives, a cause that deeply resonates with Dave. He firmly believes that consumers should scrutinize companies’ practices to ensure they avoid greenwashing and genuinely adopt sustainable approaches. In a conversation with host Dave Yovanno, they explore topics such as transitioning to a B Corp status, implementing fair wages, and integrating your brand’s ethos into strategic partnerships.

Episode transcript

Canned Intro [00:00:01] Welcome to The Partnership Economy. This podcast explores the power of partnerships through candid conversations with industry leaders. Join our host, David Yovanno, CEO and Todd Crawford, co-founder of Impact.com as they unpack the future of partnership as a lever for scale and an opportunity to put the consumer first.

 

David Yovanno [00:00:24] Welcome back to The Partnership Economy podcast. This is your host, David Yovanno, and I’m excited to announce today’s guest, Dave Bolotsky. Dave is the founder and CEO of Uncommon Goods, which as the name suggests, is an online marketplace that connects makers and their creations with shoppers looking for truly unique goods. Dave founded Uncommon Goods 24 years ago, has built a thriving business while crucially, not compromising on his values, surrounding giving back, being environmentally conscious and putting people first. Welcome to the show, Dave. How you doing today?

 

Dave Bolotsky [00:00:59] I’m doing great, Dave. Thank you for having me.

 

David Yovanno [00:01:02] Actually, I’m looking forward to today’s conversation. Lots to talk about. I thought we could just jump right in and maybe just have you tell us a little bit about Uncommon Goods and how you founded the company even.

 

Dave Bolotsky [00:01:12] Sure. So Uncommon Goods was founded back in 1999, and the idea for the business were an e-commerce business. I had been a research analyst studying the e-commerce industry and the retail industry, and what I had seen was a world of sameness, just a lot of homogeneity and had been to some craft shows and saw how customers, visitors to these craft shows loved the creativity that many of these artists and makers were putting out there. And I thought, Wow, this would be perfect for the Internet and these artists could have their products live 24/7. You didn’t have to have it in a chain of 2000 stores where you had to do a million dollars in an item to justify the revenue. So we offer a broad range of categories of creatively designed products. Customers will often use us for gifts for the hard to find person. And cover categories spanning from kids products, jewelry products for the home, really a wide range.

 

David Yovanno [00:02:20] You mentioned your time as a research analyst, but I think he spent like more than a decade, probably 14 plus years of arm count rate in investment banking. I think the business that you’re in now seems to be quite a I change from that. Was there something else that really motivated you to start a business such a long time in goods?

 

Dave Bolotsky [00:02:38] So I never viewed myself as an investment banker. I always viewed myself more as somebody involved in the retail industry and I had worked in retail. Growing up in college, had run our university record store, always enjoyed retail. My grandpa had a candy store, so doing research on retail was somewhat connected to what I had done growing up. Starting the business was really a function of finding the Internet to be so fascinating. I had front row seats as a research analyst and thought, Wow, this is really an incredible revolution happening. I can sit here and be a critic, or maybe I can help be an actor and help build a business. And so that really was the catalyst for me, the excitement of helping create something rather than critique it.

 

David Yovanno [00:03:35] I’m just curious, back then, as you started your career as a research analyst, were there any factors that were considered back then around ESG, the way some research has done today?

 

Dave Bolotsky [00:03:45] I would say it was not nearly a consideration. It was for me. So I’ve been a vegetarian since I was 11 and I was asked to work on some hunting company and I really didn’t want to do that.

 

David Yovanno [00:04:06] Yeah. So on that point, that’s definitely something I wanted to unpack. I think terms like sustainability, ESG gets thrown around a lot and I think oftentimes lose their meaning because I know it has very deep meaning for you. What motivated you? Is there something else in your background that inspired you to think that way?

 

Dave Bolotsky [00:04:24] I think it was my parents brainwashing me. My mother was a social worker working with the elderly. Some people would disparagingly today use the term social justice warrior. When she was 20 years old, she took a bus down to Montgomery, Alabama, and was involved as a white woman in the supporting the folks involved in the bus boycott there. My dad grew up in the thirties and forties. He was a free spirit and really a very independent minded person. He was a freelance photographer, challenged me to think independently about everything that I did and not to follow the crowd. So I think they really instilled that in me at a young age. And then just throughout my life, I think I’ve looked at the world through that lens and tried to have a positive impact in whatever way I can.

 

David Yovanno [00:05:22] It’s inspiring how you can adopt such a strong philosophy, if you will, and something as important as the balance of people, planet and profit. Bring that into such a successful business venture, like Uncommon Goods. I think a lot of people can take inspiration from that. When I compare that with other companies, some brands like Patagonia, Bahamas, like they’re tying themselves to causes and highlighting their ESG strategies. I’m just curious, do you think companies have become more and more socially responsible or if customers are now just only becoming more aware of these efforts?

 

Dave Bolotsky [00:05:56] It’s a very complex topic. In that I believe we used to live in a much more community connected society. Today, we’re electronically connected to an extent we never have been. But there’s not the same connection in America to your neighbor, to your community, the way there once was. And so I am not an expert on the history of business or sociology, but based on what I’ve read, I think many companies were a lot more concerned about community 50, 60 years ago. There were also some really awful companies that treated their workers terribly and led to the creation of unions and many other worker rights programs to counteract that. But I think there have been companies like Hershey’s that have been socially responsible for a long time, provided housing for workers, but wasn’t a big part of their marketing. And I think what’s changed in the last 10, 20 years is that with the breakdown a bit of community, less faith in government that people are looking to businesses to compensate for some of the other shortcomings that they see in society. And a number of businesses are trying to really hard to do the right thing, fill some of those voids. And I think as there always is, there are also opportunists who are trying to take advantage of that sentiment for purely marketing reasons, the equivalent of greenwashing.

 

David Yovanno [00:07:53] Now, on that topic of greenwashing, and just maybe to explain, I mean, my understanding of it is where a brand might use another business or a creator even to advocate for them and describe them as being sustainable when maybe in truth, not so much sort of thing. How would you define it or describe what greenwashing is?

 

Dave Bolotsky [00:08:13] I think your description is pretty apt. It’s a superficial coat of paint, if you will, as opposed to what’s foundational to your core. We’re a part of an organization known as B Corps, where we get evaluated every three years on our sustainability practices. How much does the highest paid person work make relative to the lowest paid person at the company? Does the lowest paid person make a living wage? What kind of diversity do you have in your organization? What are your environmental practices? That’s not marketing. That’s killing the onion back, ripping off the veneer and saying, what are you actually doing day to day as a business? We were founding B Corp back in 2007. Patagonia is one as well, and I think that’s a good way to counteract some of the superficial marketing.

 

David Yovanno [00:09:13] Seems like there’s a struggle and I am thankful for you educating me on B Corp and the importance of this conversation as well as is [00:09:21]why we put [0.3s] that in there. But I had also learned that there are companies like Etsy, for example, who I understood were a B Corp when they were a private company, had a drop back commitment as they move to be a public company. Any thoughts on that? And at the same time, are there other examples of companies who you think are doing it right?

 

Dave Bolotsky [00:09:38] Having been a research analyst and worked on initial public offerings. When a company goes public, you’re essentially selling the business. And when you’re trying to sell something, imagine selling your house, you want to have as few things, as few obstacles as possible for the buyer. And so the idea of the B Corp where a company puts in its shareholder agreement that in addition to being responsible to shareholders, you’re responsible to the community, you’re responsible to your workers, you’re responsible to the environment. That’s going to scare some investors off. And why does an investor buy a stock? Because they want to sell it at a higher price than they bought it from. You know, it really comes down to that and it tends to be very transactional frequently short term in nature and not necessarily viewed as in sync with a company that’s really trying to do the right thing as it relates to the people and the planet. So I think that was having not been on the inside for Etsy, but Etsy and Warby Parker, both were B Corps for a period of time and prior to their IPOs no longer B Corps. As a private company that’s majority owned by the people that work at our company, we have more control over our destiny in that regard. Other companies that I really admire, there’s a company up in Vermont called King Arthur Flour that’s also a B Corp. Also, actually, they’re 100 percent employee owned. They’ve been around, I think, since the 1700s. And really, in my opinion, Walk the Talk another business, also a Vermont, B Corp is called Gardener’s Supply, also an ESOP employee owned.

 

David Yovanno [00:11:41] And I’m curious on your journey as you started to engage with the B Corp certification process, what were some of the things that you learned?

 

Dave Bolotsky [00:11:47] I would say the most jarring one for me related to the concept of living wage. We always paid our workers our lowest paid workers, at least 30 percent above the minimum wage. And when I say minimum wage, we’re based in New York City. So the New York City minimum wage, not the federal minimum wage. Now, our lowest paid worker now earns 20 dollars an hour, which honestly is still not a full living wage in New York City, but a lot closer than we once were. That was an area where I was just honestly somewhat ignorant on what’s good enough.

 

David Yovanno [00:12:31] And balancing profit. Just knowing that some companies are just outsourcing to lowest cost of labor place to produce goods. Let’s say outsourcing to China where maybe they’re not paying a competitive wage, etc., etc.. How do you remain competitive? And I guess I’m trying to hire back into the sixties, let’s say. It seems like everybody was on that same page. It was all about supporting Made in America, that sort of concept, whereas now it seems like a complete free for all, where it’s all about the lowest price, highest quality, lowest price. How can companies be competitive on the profit side and have a successful business when it’s not a level playing field?

 

Dave Bolotsky [00:13:10] I look at what we charge people for our product and I think about if we were selling commodity items. So if we’re selling a gallon of milk or anti-freeze or toilet paper, it’s going to be very hard for us to compete against the Amazons and the Walmarts of the world for the reasons you cited. But as our name implies, we are selling uncommon goods.

 

David Yovanno [00:13:43] I guess that makes a lot of sense.

 

Dave Bolotsky [00:13:44] Nearly half of what we sell you can’t find anywhere else. And so our competition is the craft there, is the small local boutique or buying direct from an artist, which certainly you can do on Etsy. But we’re providing typically same prices and terrific customer service and pretty fast shipping. So I think the way in which we compete is if everybody zigs, we zag, we’re selling what they don’t have. And at the same time, I think paying people well leads to more loyal, more productive workers, treating people with dignity, respect. And I think that’s a positive in a lot of the people who come to work at our company come because of the company values and stay because of the company values.

 

David Yovanno [00:14:42] That’s an excellent point. Maybe switching courses a bit, how do you infuse this sort of ethos into business partnerships that you’ve got at Uncommon Goods? Do you look for partners who share these same values?

 

Dave Bolotsky [00:14:54] I would say the number one value is doing what’s right for the customer along with our team. And if I have a vendor, prospective vendor who has an amazing product, I might and I have encouraged them to consider becoming a B Corp. But if that’s not something they’re interested in and they have a superior product, I am not going to ask our customer to buy an inferior product from a B Corp versus a superior product from a non B Corp. And I think lecturing people or trying to coerce people is in business and in life generally, not a winning long term strategy. I think trying to do the right thing and be an example and walking the talk yourself is a better approach. So I would say if two products are equal or two services are equal and we can find somebody or close to equal and we can find somebody with similar values, we’re definitely going to look to work with them. And then we’re also going to amplify in our marketing companies, vendors that are doing something special with their workers or regarding recycled product around the environment will definitely highlight that.

 

David Yovanno [00:16:26] I think I heard you say in part is that you’re investing in your partnerships and they aren’t like quick transactional, high turnover sort of relationship. If you’re really trying to inspire someone to coach somebody on the benefits of being a B Corp and whatnot, these are like meaningful relationships. It sounds like you have as a business and I’m just curious, we talked about this being the partnership economy and honestly for our company, we got our start and our roots are in traditional affiliate marketing, right? One of the reasons that we’ve been driving a term partnership which describes the performance partnerships that companies will have, including traditional affiliate, those relationships with creators, other businesses, large media houses, large publishing groups like Meredith and Condé Nast. One of the things that I think was rampant in the early days with affiliate marketing is just the transactional nature that it’s like, here’s a coupon or here’s an offer, and if you can’t run it, I’m going to run to the nice guy. What I’m trying to understand is how do you go deeper with your partners? How are you utilizing partnership marketing?

 

Dave Bolotsky [00:17:25] So I think from a values perspective, integrity, quality, long term orientation, those are things to your point, as opposed to trying to make a quick buck that are very important to us and we work typically with partners for 10 years or longer. Many of the merchandise vendors that we’ve worked with, there are some we work with for 20 plus years and there are a lot of retailers out there who will see a successful product. And then say to the vendor, okay, well, we’re doing well with your product now. Cut the price 30 percent or cut the price 50 percent. And if you don’t do that, we’re going to make it overseas and just knock it off and have a good time trying to sue us. And we really try to respect the intellectual property, the creativity of our partners. So I would say we see that to a great extent on the merchandizing side.

 

David Yovanno [00:18:33] We’re in our fourth season of this podcast where over 100,000 downloads or listens people listening. I have to imagine that there’s a couple of people at least in there that listen to a conversation like this and just they have this skepticism about what does this all mean? Like, why is this important? And where does this all lead? Why does any of this matter? And if you were talking with somebody who is skeptical about why this matters, why should I pay my people living wage? Why should I care about sustainability of the planet? Well, let me get your view on it.

 

Dave Bolotsky [00:19:03] I think there’s an element of what I would call enlightened self interest. We saw that in America during the Depression, when I think our government created much more of a safety net program. And if we had not done that, there very well might have been a revolution and probably justifiably in a revolution at that time. So I think if businesses, both on the people front and on the planet front do the right thing, number one, it’s going to be a better world that we live in. And number two, there’s less likely to be government intervention or government regulation.

 

David Yovanno [00:19:45] Yeah, I think that’s great. And for a lot of people, I think it’s like, what is your point? What is the world or the society that we want to live in? I know this is a good analogy or example or not, but I take a look at a town like San Francisco, which over years had the middle class has basically been displaced. Right? They’ve got multimillion dollar homes, which the average price nearly in San Francisco. And then COVID hits, okay, because they have enough money, they can split the city. And what is the city left with? I guess my point is we have a responsibility to people, to the planet and as a business to profit.

 

Dave Bolotsky [00:20:20] I think if you say, to paraphrase the Bible, that if I were employing my brother, how would I treat my brother? Well, whether or not I’m one degree of separation from an employee, I believe we should treat people like our brothers. Similarly, when it comes to the environment. If I lived in a house and I had a backyard and every thing I’d throw out is on my property, I would probably have a very different approach to fixing things versus tossing them out, how much plastic I buy. And I think thinking about the implications of what we’re doing is really important. And back in the day when people were less mobile and we were eating our own cooking to a much greater extent than we are in this outsourced economy, I think it was a lot easier to see the consequences of both our actions and inactions. And today we’re a lot more separated from the consequences of the decisions that we make.

 

David Yovanno [00:21:32] That’s very well said. The only thing I would add is I don’t think you’re going to be able to stop this train of consumerism. But I do think that if companies took the lead, we can be producing goods that are more sustainable. Just as a bottom line. I’d be like an easy place to start in my mind rather than thinking that we can change everybody’s buying behaviors.

 

Dave Bolotsky [00:21:52] No, and that’s what we’ve tried to do at Uncommon Goods, both from a people and an environmentally responsible perspective.

 

David Yovanno [00:22:02] And so for those listening who do want to get started and learn more, at least even for those who are not the CEO of a company but want to personally make a difference in the world, what are some suggestions that you would have to them on how they can contribute, where they can start?

 

Dave Bolotsky [00:22:19] So I would say a couple of things. Number one, within your own company, there’s an expression if you never thought one person could make a difference. Just think about a mosquito flying around your ear. And the reality is, as an individual, I worked at a very big company, like 10,000 people, and there were layoffs and basically the way people were fired, I felt was inhumane. And I spoke up about it and the company ended up making changes as a result of that. So where you see something being done that you don’t agree with, I think have the courage to say, you know what, I don’t think this is going to cost me my job. But even if it does have the courage to do the right thing, speak up and try to make change. If you can do it in a way that’s solution oriented, where, hey, we’re using this product rather than just throwing stones and saying, this is a terrible product, we shouldn’t use this, try to find an alternative. Hey, here’s a product that costs a similar amount and is more environmentally friendly, or this company treats its workers better. Let’s support this vendor. That’s one way to do it. If you’re in a relatively small organization, perhaps you can convince them to become a B Corp. Something that you can do as well is the website is the bcorporation.net. For free, you can actually take the assessment if you know enough about your business or if it’s your own business and see where do I get passing marks, where do I have room to improve? I would focus some of my energy on business. And then on the personal side, can you volunteer as a tutor in your community? Ideally in person, but perhaps virtually. Or help out at an independent living facility with the elderly. There are lots of different ways that one can volunteer, so I think there are lots of ways, both through business and on the personal front where you can make a difference.

 

David Yovanno [00:24:41] I think the B Corp that’s a pro tip, I think, what you just gave there, just anyone can get started in going through a certification process without becoming a B Corp. But just understanding where you sit, where are the gaps and then maybe continuous improvement. And then how about like on the social front or the people from DEI? Especially as a CEO, any tips to, you know, other leaders, managers, whether it’s hiring or how we treat people? Any ideas there?

 

Dave Bolotsky [00:25:09] So we operate with the philosophy of an inverted pyramid. And the idea is that as founder and CEO, I’m not at the top of the organizational structure. I’m actually at the bottom. And if I’m doing my job well, I’m providing our team with the tools and resources that they need to perform their job well. And we hire hundreds of people each holiday season to work in our warehouse or warehouses located in the same building that our office is in. I meet with our new warehouse workers and groups of about 20 people. I do 20 plus of those meetings. Every holiday season, I meet all our new customer service team members. And so I think staying grounded and treating everybody with dignity and respect is really important. I think as a company, we’re an open book management company, so our leadership team meets once a week. We have notes that we prepare for that meeting and we share those notes with the entire company. There may be a couple of sensitive topics that we don’t share, but our PnL, our profit and loss, every week we share that. We share what’s going on. And so I think that those are important steps today in terms of specifically around [00:26:47]DEI [0.0s] by providing opportunities. I think there’s generally a tendency the expression birds of a feather flock together. There’s generally a tendency to be attracted/interested, most impressed by people who are similar to you. And I think it takes a conscious effort to overcome some of those unconscious [00:27:15]biases. [0.0s] It’s something that we work on as an organization. I think it’s very much a work in progress for us. One of the things that we’ve done with some success is encourage folks who work in our warehouse and work in customer service to do internships in other departments. And that has led to opportunities for folks. We have people who are software developers who had never written a line of code before and had worked in our warehouse previously. And so I think trying to create those kind of opportunities is a positive thing. We also offer a tuition reimbursement for our team members to get a college degree for somebody who doesn’t have it. And so that also can help level the playing field and create some opportunities.

 

David Yovanno [00:28:14] Yeah, I agree that homogeneity is a force of habit. And I think one of the ways to to break that we’ve talked about is adopting the Rooney Rule, like the NFL, where for any position at least one candidate has to be a diverse candidate, essentially. Putting systems like that in place are relatively easy to do you think about for companies, but incredibly inspiring and insightful. Dave, thank you so much for joining me in this insightful and thought provoking conversation. For our listeners, thank you for tuning in. We sincerely hope that you enjoy this episode of The Partnership Economy Podcast.

 

Dave Bolotsky [00:28:47] Thanks so much, Dave.

 

David Yovanno [00:28:51] I thoroughly enjoyed this conversation and gained a lot of knowledge around all things ESG. The concept of the triple bottom line or the three P’s really stood out to me, which is the balance between people, planet and profit. It’s absolutely true that many companies focused entirely on profit. Now, thinking about their impact on people and the planet, it certainly inspired me to analyze business through a new lens. It was also fascinating to hear that companies today might be doing less for their people and communities, but have gotten better at marketing the causes that they stand for. They’ve shared some helpful tips on how brands can really walk the walk, and I believe a combination of doing the right thing and amplifying it for the modern customer who does care will result in business growth. I’d be remiss to not mention that utilizing partnerships is another great way to spread cause based messaging and to reach an audience who cares about the same things you do. If leaders can treat employees in many of the ways they describe providing fair minimum wage and creating opportunities for those who wouldn’t normally have them. And on the flip side, if you can inspire your leaders to make a change, for example, going through a deep water purification exercise, we can truly make a difference as individuals. I hope you enjoy this episode of The Partnership Economy Podcast. Thank you, Dave, for joining us and thank you for listening.

 

Canned Outro [00:30:11] Thanks for listening to the partnership economy brought to you by Impact Econ. If you enjoyed today’s episode, be sure to subscribe to the show and rate and review it on Apple Podcasts.

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