Michael Stausholm
Danish entrepreneur and founder of plantable pencil company Sprout World reveals the secrets to growing a sustainable business
One day in 2013, while browsing Kickstarter.com, Danish businessman Michael Stausholm stumbled across an invention that would unknowingly change the course of his life. He discovered a page created by robotics students at MIT to showcase a pencil they’d created containing a seed capsule that could be potted and grown into a plant. The germ of an idea was planted, and Sprout World was born.
Stausholm, a consultant at the time, has long recognised that companies wanted to be sustainable and yet many didn’t quite grasp the concept or know where to start. “I thought the pencil was a fantastic way of illustrating what sustainability is,” he says. “You have a product, you use it for one purpose, and instead of throwing it away when you’re done, you use it for another purpose. In the case of the Sprout pencil, you’re literally giving it new life by planting it.”
The entrepreneur contacted the students, acquired the rights to manufacture the pencils in Minnesota, USA, and sell them across Europe, where sales exploded. He went on to purchase the patent, open another manufacturer in Poland to service the European market, and took the company global. To date, Sprout World has sold more than 40 million pencils globally, mostly to B2B and B2C clients.
“It's much more than a product – it's what we call it a green messenger,” Stausholm says. “Many of our customers get messages or logos engraved and printed on the pencils and the packaging. That way they can actually build a story around what they are doing on sustainability.”
Stausholm is a self-made business leader. While he initially self-financed the company, he quickly found that being the only person with the pencil’s patent gave him a strong advantage. He was able to make his own rules and create a pre-payment model with customers who flooded in from across the globe. “When you start a product-oriented business, one of the biggest challenges is to constantly finance the production and the purchase because customers will require 30, 60 to 90 days credit. But I managed to build a business based on pre-payments. We still do that a lot, which creates positive cash flow,” he says.
The entire business was built around the brand’s values, which gained them a lot of media exposure, particularly when high-profile customers such as Michelle Obama and Richard Branson started using Sprout World pencils.
Sustainability is the founding core of the business and they have recently just announced that they are now B Corp-certified as well as carbon neutral. “Our product is sustainably harvested; to produce the sprout pencil, we cut down one tree and replant it immediately. From that one tree, we can make 175,000 pieces of sprout pencils. So, you can imagine that's potentially at least 175,000, new trees – that alone makes our business by definition, carbon neutral, probably even carbon positive.”
This ethos carries on to every part of the business. To reduce its footprint further, for instance, the company recently purchased land in Poland where they will initially grow 12,000 trees close to the production facilities. “Sustainability is in our DNA. Everything we do must be from natural materials, packaging must be reusable, and so on,” Stausholm says, revealing that Sprout also has a chief sustainability officer on its 80% female-led team.
Another major business value is transparency and Sprout World is using blockchain technology to open up its entire supply chain to customers. “Blockchain is a way to authenticate where you get your materials from and document your whole value chain,” Stausholm says. “In our case, you will be able to see where the seeds come from, where the wood for your specific pencil comes from, and so on. It will be completely transparent on our website.”
Looking to the future, the company is branching into new consumer product lines including makeup. “It’s a challenge,” he says. “We're moving into a completely new market which is 100% consumer driven – it’s a different target group and a different way of communicating. Makeup is much more complex than just a pencil.”
The beauty line launched in 2021 with eyeliners and browliners, all of which are all-natural natural, vegan, AllergyCertified, and can be planted to grow into bee-friendly wildflowers.
Whatever the product, Stausholm reveals his mission is about encouraging others to think about how they can reuse products instead of throwing them away. “In the end, Sprout World is about a second life,” he says. “The biggest challenge today is not how we produce our products; it’s how we get rid of them. And that's our mission; to inspire others, both people and companies, to think about how we can reuse products in different ways.”