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Remembering the first failure

Jan Garrison
 

Part of building a brand

 

June 2, 2022

Sami Elsaden has a big, dull, metal thermal mug that he used to keep on his desk while he was the Chief Executive Officer of Ignite USA, the company he founded in 2001. Known for the Contigo brand of environmentally safe, reusable beverage containers, Ignite USA was founded by Elsaden and that thermal mug was the company’s first product, which they sold through Starbucks.

The mug reminds him how to learn from failure, he told the Foundations in Innovation class, which is part of the The Ron Rubin School for the Entrepreneur at Culver Academies. The company shipped the travel mugs, but Elsaden said they were not big sellers.

At the same time, the company’s investors were out of money. Starbucks could have “thrown us out on the street,” Elsaden explained. Instead, after negotiating with them, Starbucks paid the company within three days of delivery instead of making them wait 30 days. That arrangement lasted for several months.

It gave Ignite enough breathing room and capital to produce its second-generation travel mug, which became a best-seller for the coffee giant.

“That was hard,” Elsaden said of the negotiations. He went into it with “a lot of humility,” laid out the details and simply said, “We could really use your help.” They found the Starbucks people to be sympathetic, they understood the need, and believed in the relationship enough to do Ignite that favor, he said.

Through his career, there have been other negotiations. It requires relationship-building skills and empathy, he said. Understanding what the other party believes in. “There is a very human element in negotiating, Elsaden explained. “You’ve got to compromise.”

Elsaden, who is the father of Payton Elsaden ’22 and Ethan Elsaden ’20, said selling Ignite’s products with the Starbucks nameplate, it still not as valuable as creating your own brand. The value of your personal brand is better than helping someone else advance their own, he said.

Ignite saved money over time, he said, and was able to launch the company’s own brands without any outside financial assistance. Elsaden explained having a solid management team was essential. Having people with passion and staying in the search for the next innovation is essential for any business.

After launching Contigo and Avex brands and designs, he said, Ignite became a $350 million business. In 2013, Ignite completed an investment deal with a private equity firm and was later sold to Newell Rubbermaid in 2014.

Elsaden told the class that he didn't major in business at Stanford. But he did learn analytical skills and critical thinking skills with his liberal arts education. He received his business background while working for Nestle, adding there is nothing wrong with working for a big company before starting on your own. "They trained me."

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