Public Goods raised $15 million for its subscription-only marketplace of home and personal care products designed to fight decision fatigue

  • Public Good's founder Morgan Hirsch came up with the idea for a personal and home care line with minimalist branding after growing frustrated with over-the-top marketing and decision fatigue at the pharmacy.
  • Public Goods operates using a subscription membership that means the company can save on marketing and give shoppers access to cheaper prices for sustainable goods.
  • Public Goods rolls out new items carefully, making sure each new product lives up the brand's ethos of health and sustainability, and retains customer trust in the brand.
  • Since February, Public Goods' sales have grown 5 times, and subscriptions have doubled. The company secured $15 million in funding from L Catterton in August.
  • Visit Business Insider's homepage for more stories.

Morgan Hirsch found himself procrastinating going to the pharmacy again. He was out of toothpaste, but unwilling to face the "walls and walls of product" that awaited him, each vying for his attention and money, telling him they were the solution to his teeth's woes. Then, his girlfriend brought home a bottle of shampoo that was the final straw. The bottle read "for limp, lifeless hair."

"First they're trying to convince people that they're deficient in some way, and that their product is the solution," Hirsch told Business Insider in an interview. "Take that negative message and garish packaging, and multiply that by hundreds of categories and dozens of products within each category."

That's how Hirsch felt whenever he walked into his local pharmacy. The problem got even worse when Hirsch went on Amazon. Now, he wasn't only deciding between different products and brands to find his toothpaste, he also had to navigate the various vendors all selling the same product.

All of this was giving Hirsch anxiety. And this anxiety over buying a simple tube of toothpaste is what gave rise to Hirsch's idea for an alternate reality — a utopia, really — in which packaging was simple, products were trustworthy, and you could get all the personal and home care items you needed from one great store. That utopian world now exists. It's a brand called Public Goods, which Hirsch founded in 2015. Public Goods is a home and personal care product line that employs a subscription model akin to Costco, which enables subscribers to log on and virtually shop in a world that only offers aesthetically-pleasing, sustainable, healthy products that are affordable — and they're all created by the brand through intensive research.

The foundation of Hirsch's business model is his belief that over-the-top marketing is not only frustrating for consumers, it's also a massive line item for retail companies that takes budget away from developing best-in-class products. Many direct-to-consumer brands have identified the consumer pain point of decision fatigue and developed products that offer shoppers a single, excellent option that doesn't require going to a big-box store: Dollar Shave Club wants to deliver razors to your door every month, Care/of wants to mail you personalized vitamins. Hirsch liked this approach but saw that it would eventually get cumbersome for consumers in its own way.

"They would create an environment where you have to go to one place to get your razors, another place to get your dog food, another place to get menstrual care, another place to get your vitamins," he said.

Plus, Hirsch said each of these DTC companies would still have to spend big on marketing to develop brand awareness and then make its entire margin on a single product category, leading to price inflation. Public Goods is different from these hyper-specific DTC companies because it isn't trying to revolutionize just a single product, it's tackling all home and personal care items.

Public Goods also employs a subscription model, which garners it plenty of comparisons to Costco. The idea behind any retail subscription model is that the up-front charge gives the retailer a guaranteed profit out the gate, which enables them to offer lower prices on products to consumers.

"It really does allow you to deliver better value to your customers," Hirsch said of the $59 annual fee. But it also puts pressure on Public Goods to deliver products that keep customers happy with their subscription.

"It becomes our job to make sure that we're launching products that people want and constantly improving our product assortment so people get the value that they want," he said. "To build trust, you have to deliver on your promise, and you have to deliver on it over and over."

To live up to his end of the bargain and retain subscribers, Hirsch knew he would have to put a lot of effort into developing top-of-the-line products. Early on, before the company launched a single product, he connected with a consultant who is a former executive at Trader Joe's and Whole Foods, who started advising for Public Goods, and introduced him to top manufacturers for sustainable personal and home care products. The company rolled out products slowly, launching with just 10 items, to make sure that each was deeply researched. Hirsch hired a food scientist, and brought in chemists when needed. It took the company six months to launch its eleventh product.

Today, Public Goods makes everything from essential oils and towels to condiments and coffee. Hirsch's goal is to build a brand across categories, a brand in which the ethos of health and sustainability unites this broad range of products, and inspires trust in consumers.

"People can do the research once to understand what you're about, rather than having to do it 100 times," Hirsch said.

It seems to be working. Since February, the company has seen sales increase more than 5 times, and subscriptions double. In August, the company secured $15 million of funding from investment firm L Catterton. The brand also announced it would be launching a line of pet products in September, and released news that its products would now be sold in CVS (at a higher price than on the subscription site).

Wait, back to the dreaded pharmacy? The move might appear counterintuitive at first, but Hirsch explained that all of Public Goods' products will be grouped together in a stand-alone fixture, the idea being that an anxious shopper like him can walk in, beeline to the Public Goods' section and get everything they need from one corner of the store — no need to navigate those awful aisles.

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