Lessons from a Philly Entreprenuer: Morgan Berman and MilkCrate
April 18, 2016 |
In a keynote presentation in March 2016, Morgan Berman of Philadelphia’s MilkCrate shared her entrepreneurial journey with the Center for Social Impact Strategy’s Executive Program students. Her words reflected her personal and professional path and eight lessons that we think any entrepreneur would benefit from hearing. We’ve copied the full text of her speech below. We hope you enjoy it as much as we did. — Ariel Schwartz
Good afternoon, and thank you for having me today. It is a pleasure to be here.
My name is Morgan Berman, and I am the CEO of MilkCrate. We are a mission-driven tech company dedicated to creating a sustainable future by motivating and tracking the impact of our choices.
My personal mission is the same as my company’s – to make it easier to do the right thing; to support and uplift individuals on their journey to become more conscientious beings and neighbors; to internally know that your choices matter and to want to make good choices. We create tools that allow people everywhere to see the social and environmental impact we all have on our communities.
I know many of you are from overseas, and so you might not be as familiar with who Judy Wicks is as the Philadelphians in the room, but this woman is one of the original social entrepreneurs. She turned her individual choices as a consumer and business owner into a viral social movement, founding transformational organizations and shifting the political and economic landscape locally and internationally. For the last two years, I’ve had the pleasure of getting to know Judy and learn from her story. Just earlier this week, we sat in her beautiful home in Fitler Square sipping tea and discussing this idea of making good choices. When I asked her if she ever changed the heart and mind of someone who was so deeply entrenched in making wasteful or destructive choices, she admitted that some of her own friends uttered phrases like, “I can’t imagine that anything I’ll do will make a bit of difference.” Judy’s work, and now mine, is to first say as loudly and as often as I can that our choices do matter and to help create a reality, through technology and relationships, that reinforces this essential truth.
“At its heart, our movement for local living economies is about love.” – Judy Wicks
The big question on this journey has been “the how?” That word, “HOW” is what me and my teammates have been asking ourselves for the last few years, day and night. The answer has come in fits and spurts, but I can say that while the journey has been long and scary, and will continue to be at times, we’ve come to the other side of the first leg of our journey. We have built the HOW. We are living the HOW. I’m excited and honored to be here today to share a bit of our HOW, our WHAT, as well as our WHY, with you.
So first let’s start with the WHAT. We reward individuals for progressing as conscientious beings and reveal the social and environmental impact we all have on our communities. The WHY is the best part I think. We believe that when everyone supports local business, everyone who needs a job will have one. When everyone is eating lower on the food chain and closer to home, we will be healthier with more nutrients and have happier farm animals. When everyone uses local, renewable energy and sustainable transportation, we eliminate fossil fuels making our air cleaner and our cities easier to explore. We believe it is within all of us to create a sustainable future. I’ll get to HOW we do this in a minute.
My journey to uncovering this mission and revealing my own vision began before I was even born. My mother was a part of the farm-to-table movement here in Philadelphia, a small group of purpose-driven chefs bringing fresh produce back into the city and banishing what she called “battleship grey” beans and spam from normal rotation. When I was little, I would watch her cook dinner while I sat in front of a little wooden stool on the floor eating freshly cut veggies from our own garden and turkey hotdogs from a local farmer’s market. These values of local and fresh produce and humane natural meat became the metaphorical and physical building blocks of my own body. Soon my outer layer of being, the clothes on my back and the furniture I sat on, were also a lesson in sustainable lifestyle choices, as my mother soon learned that a dollar could go a lot further at thrift stores than the ritzy department stores her mother frequented. My dad was in grad school, and my mom was staying home to care for me, so every penny counted. The experience she gained as a thrifty mother of one snowballed into the largest database of thrift stores in the Delaware Valley. She soon put pen to paper (literally) and started what became The Thrift Shop Maniacs Guide to the Delaware Valley and Beyond, a book that made it easy for anyone to become a savvy thrift shopper. She was making something that had previously been seen as a last resort, undesirable choice and elevating it into a hobby or even sport. It made it fun and easy to make choices that were better for people on a tight budget but also for the planet, reducing the demand for new materials and goods. This woman (my mother) wrote, edited, published, designed, distributed, and promoted a home spun thrift shopping guide that was so good, so sassy, and so useful that she outsold regionally the New York Times Bestseller. My mom, the woman who didn’t finish college and worked her way up from dishwasher to head chef, was now on the cover of the Wall Street Journal. She taught me more than just sustainable values, she taught me sustainable business sense. She modeled for me the purest form of “fake it till you make it.” Of course, like all mother daughter relationships I didn’t always understand or know what to do with the pearls of wisdom I was given right away.
I unwittingly became a startup founder about three years ago when I drafted the first rough outlines of a green app for my master’s thesis. I was in graduate school for sustainable design at Philadelphia University and had become increasingly passionate about and connected to the “sustainability scene” in Philly. But I was concerned that what felt like a group of die hard advocates was not reaching the mainstream consumer fast enough. My goal was to take all the information I had learned about how to be a more sustainable urban dweller (much like my mom did with thrift shopping as a thrifty mom) and pull it all together in an app like a “Green Yelp.” If we consider this moment in the context of Design Thinking, I was basically imagining what I myself would want, putting the customer first, and asking “why doesn’t this exist for me?” I recommend always starting with what you know, problems you personally understand, and you will be taking the first of many steps needed to check assumptions that could otherwise wreck you down the line.
If we hit fast forward for a moment to today, I’m running a feisty team of the most amazing humans I’ve ever had the pleasure of fighting with. We are building enterprise technology platforms that engage, track, and report on making simple sustainable life choices. I still get mental whiplash sometimes when I think about it. So I’ll spend some time now talking about how I got here and any lessons learned that might be helpful to you on your journeys.
I’ve said it many times that graduate school at Philadelphia University was basically my company’s first incubator. My reason for applying to graduate school was that I wanted the chance to redirect my path from what had been an unsatisfying and unreliable job market. When I was 25, I did the math and realized that if I doubled my lifetime I’d be 50, and I just couldn’t imagine waiting that long to finally take the plunge and go after what I really wanted. It was at this moment when my fear of never trying exceeded my fear of failure. To help visualize this, I even made a graph for you. If you want the gory details about this particular part of my life and more slides like this, just Google my TEDx talk “Finding Your Unicorn” with highlights like dodging cockroaches, nonprofit embezzlement, and unrequited love. I wanted to know that when I graduated from graduate school (unlike when I finished college in 2008) that there was a purpose-driven and well paying job for me, even if I had to invent it myself.
My criteria for graduate school were pretty lofty. #1: It had to have a strong design component because I was tired of ignoring the part of me that was creative and artistic. I’d ignored what I knew was my strongest innate talent and love because of fear of that stupid phrase – “starving artist” – that had been in my head for what seemed my whole life. The many professional paths for designers were completely unknown to me when I made my first attempt at creating a profession for myself after college, so this was my chance. #2: Whatever program I attended, it had to focus on sustainability. I wanted to use my natural talent for design to make the world a better place. I had been reading the alarming reports about climate change, polluted oceans, resource scarcity, and the resulting military conflicts. I saw the impact on the streets of Philadelphia, in our food deserts and our transit issues, our poverty and our littered streets. It all felt connected. And this word, sustainability, seemed to speak to a potential universal truth that could answer all of these injustices.
Then there was #3, and this one was going to be a bit harder to find. It had to be free. I’ve always been a penny pincher, and debt terrifies me. I don’t want to go into this too much since I’m assuming you all or at least most of you are paying to be here, and that is great. But I just knew I wouldn’t sleep if there was this big scary thing hanging over me. As you can imagine, the list of schools was pretty short. And for my final criterium, I wanted to stay near my family. So the “list” became basically one option: A Masters of Science in Sustainable Design at Philadelphia University with the slim chance of winning one of their two assistantships. The simplicity of a list of one is a blessing and a curse. Talk about all your eggs in one basket. Luckily I got in and, even more importantly, got the assistantship. I was going to grad school and it was going to be FREE. Lesson number one, then, is everything you need is all around you. Something my mother has said to me with great frequency, and like all mom truths, is always right and usually annoying.
I was initially drawn to the program before I even knew about the assistantship in large part because I had seen another woman use her degree as a vehicle for turning an idea into reality. This woman who inspired me is Fern Gookin; she’s the founder of a program called RAIR, which stands for Recycled Artist in Residency. It is a free program for artists to explore making art inside of Revolution Recovery, a Philadelphia business that recycles construction waste in what I understand to be a nearly perfect recycle rate. Fern took her love of art and sustainability and created something new and special that made Philadelphia a better city. I wanted to do the same. After working in a company that tracked a lot of information about sustainability lifestyle info in Philadelphia, it was a pretty natural leap when it came time to pick a master’s thesis. I was going to make a tool that helped share this information with Philadelphia and maybe someday the world. Finding a role model, even only on paper, is a great step to the beginnings of a plan.
From that first lightbulb moment, I knew I had to build “this thing.” What that thing is has grown and changed in countless ways, but the WHAT was always been the same: help make this city great using a tool that addressed the need for a strong local economy, sustainable lifestyle choices in areas like food and transit, and shift our behavior to change the course of climate change and pollution. The WHY has similarly stayed the same. That our choices impact others. We are morally bound to one another. I always think of this picture I saw at a Bill McKibben event on fossil fuel divestment a few years ago that is forever stuck in my mind. It is of seven young, Haitian children, holding signs that say “Your actions affect me. Connect the dots.” Haiti is disproportionately hit by the rising instance of extreme weather patterns that are part of climate change. I think of these children often.
I promised myself, without knowing how or with what, that I was going to launch what at the time was still a nameless “thing” in exactly one year. My first step was seeing how hard would it be to design this thing myself. A crash course in advanced webdesign answered that right quick. Step two was finding a slightly more experienced developer that could bring my vision into reality. I went door to door to every geek event and meet up I could find, shouting practically from roof tops “I have an idea, will you help me?!” Weirdly enough, this actually worked. Part of what helped was I did a lot of community engagement and promotion of the idea, getting some early press which helped make this whole crazy mission feel more legit. This actually helped attract the first few people to join our team, two of which are still with us two years later. And as for my promise to myself that I’d launch in exactly one year, well I was wrong, we launched two weeks early. Such is the power of people awake to a problem in need of fixing.
The lesson from this? Getting a good buzz going is not just fluff. It can make a world of difference. It is now twenty months ago that we launched our first product, My MilkCrate, and made our company truly known. Right before launching the app, I was eagerly packing my bags for a much needed vacation. I had decided for a number of reasons that, before “hitting go” on what would be a very soul-sucking, yet fruitful launch of the app and our crowdfunding campaign, I needed to flee the country and let my team fend for themselves. Right before ducking out, on what was not the first or last of many entrepreneurial whims, I applied to something that had come into my inbox that day: the Forbes Under 30 Summit Pressure Cooker Pitch Competition.
As a founder, you get used to rejection way more than lucky breaks. If your ratio is something like 10:1, you are doing really well. So you can imagine that upon my return to the states and mid crowdfunding mayhem, when I got a call from Forbes saying I was one of the Top 5 finalists, I swear I said, “Are you sure?” Turns out they were. The event took place on the main stage in the Philadelphia Convention Center, and the competition became one of the most highly anticipated portions of the conference. Judges included AOL founder Steve Case. The crowd was around 2,000 of the most accomplished and young entrepreneurs in the world. The excitement and pressure were thicker than whiz.
Remember that success ratio? 10:1? Well, we didn’t win this one either. Yet, while it sounds cheesy, I really felt like we did. I came away with two priceless trophies. The first was, nothing will ever scare me as much as doing that pitch. My new found fearlessness, that is truly priceless. And second, this event pushed us into the spotlight, earning press coverage from all over, it impressed a lot of people and helped us secure our first funding.
Using my little megaphone to promote our “Green Yelp” has won us trips to the White House, awards from Forbes, and praise from the UN Foundation. These things, while not the makings of a working business model, have earned us the attention and support needed to help get us to that point. So I guess lesson number two is brag!
We’ve raised capital twice, successfully completed a crowdfunding campaign, onboarded over a dozen people. Getting here has taken a lot of sweat and tears (no blood yet). Fortunately, I live in a city with a blossoming startup culture. We are where we are because of amazing support from investors and advisors drawn to our mission. While we are on the topic of investors, for those of you who haven’t yet tried to raise capital, here’s some great advice I’ve gotten that needs to be shared over and over.
People more experienced than I have often said that a successful investor/founder relationship is the next closest thing to a successful marriage. Be sure to like each other and that he or she brings relevant expertise to the table: they advise. I’m happy to say that after a long but not drawn out courtship, we have signed on the dotted line, and now we have a great crew of angels. Each of these special people has brought a different perspective to the table, and I’m grateful they have joined us on our quest.
Now, with this round closed, MilkCrate is building out our second product: MilkCrate for Communities. This was not the plan from the very beginning, but rather the logical next step after taking many long, hard, honest looks at what we had been able to achieve and where we were still struggling. We held focus groups, we did surveys, we tried new marketing campaigns. All of this gave us data. The task was figuring out how to interpret the data and then finding a way to fit all the pieces together. I can’t say I’m 100% certain we’ve done it because who has that kind of certainty? What I can say is that I know that we are doing everything in our power to connect the dots. And what is shaping up is that we have taken the feedback from our users- that they want to be led and guided and rewarded, and from our sustainable businesses, that they need immediate access to a large group of users, and come up with something that could be a hundred times better than what I first imagined. But the only way we could get there was by first failing. And failing hard. Failing every day to get it and then being obsessed with figuring out why.
Our new product is actually a companion product to our existing free app. Together they make a perfect pair, whereas by themselves they would have been inadequate. This new product, MilkCrate for Communities, is a platform that allows groups of people – like employees at a corporation or students in a school – to foster a community focused on impact and sustainable values. Just as B Corp Certification codifies a company’s responsible corporate behavior, or LEED signifies green building practices, MilkCrate for Communities tracks employees’ actions and collective impact within a community and local economy. We do this by guiding you through sustainable choices you can make in a premium version of the My MilkCrate app and then rewarding our users with points that can be redeemed for rewards.
Our secret sauce is a unique aggregation of actions, items, and vetted information – including our dynamic directory of triple bottom line businesses, relevant articles, lifestyle tips, and events. Again, I didn’t see this coming, not by a long shot. But we have arrived at what feels like a perfect solution that couldn’t have been an accident because we tried everything we could think of and then looked at what was working and what wasn’t. What we had gotten right the first time was nothing to sneer at; we had a great brand, we had a scalable (ish) data model, we had strong values and a mission people cared about. We knew how to get people’s attention. And we had a lot of relationships with big organizations. What we’ve now realized is that we had the makings of something valuable that just needed to be reframed and added to, tying our data to a tracking and reward system that big organizations could use to further our shared mission.
We had to go through a massive company overhaul to redirect energies into this product and this new model. The good news is it is working! Through our behavior tracking and impact reporting, our customers can share vivid and compelling information about their company cultures’ widespread impact. This corporate buy-in is an essential step towards normalizing, and eventually spreading, sustainable lifestyle choices far and wide. The way we arrive at the goal may change, how you even describe the goal could change, but staying true to the heart of your mission – in my case, making it easier to do the right thing, to make good choices – has stayed the same. And my vision only gets clearer, if not a bit wider. Together, we can lift each other up and make an equitable and sustainable future.
If you know of a corporation, firm, nonprofit, or school that has a passion for sustainability and a desire to share their values with the wider community, I’d love to share our MilkCrate for Communities with them. I can be reached at email@example.com. That’s another tip. Never shy away from shameless self promotion. When someone hands you a megaphone, use it.
Finally, I just want to leave you with three things I came up with the other day during an interview. The reporter asked me, “What is your advice to other young entrepreneurs out there?” I know I’ve sprinkled a few things in here already about using what’s around you, building buzz, being self critical, and finding your angels. And while I’m sure I could spend hours compiling a very long list of missteps and lucky right steps, the things that came right to mind in that moment I think were there for a reason.
So here it is. #1 is be coachable. The first investor I built a relationship with called me this, and it is one of the greatest professional compliments I think you can receive. Being coachable is being humble enough to know you don’t know everything and a willingness to learn from others. This happens to tie directly in with number 2.
If you are coachable, you might be lucky enough to attract a team willing to follow you into what can at times feel like the bowels of hell. The most honest and rewarding thing you can do to thank them is to let go. What I mean is to realize that as much as this thing – whatever it is, your company, your idea, your app – while it is your baby, it is also theirs, and while this might mix my parental/familial metaphor here, you are the parent and they are the child who has grown up into an adult. And to honor that you have to let them take ownership for their piece of what you’ve built together. So number 2 is that being a good CEO is like being a good parent: you have to step aside and let go.
Finally, but most importantly, keep that picture in your head, the one where you picture what the world could be like if you worked hard enough and things come together the way you hope. It’s the only way it will ever happen. Hold on to that.
Written by Morgan Berman; Edited by Ariel Schwartz & Ashton Yount; CSIS Photography by Eva Cruz & Emmanuel Afolabi; Slides provided by Morgan Berman