Soft Sell How two brothers with an idea for a better tissue got in the game with the big boys--and didn't get flushed.

Everywhere we went, people told us it couldn't be done-- andthat if it could be done, it would've been done by now,"says Willy Paterson-Brown, 33. But Paterson-Brown and his brother,Tim, 38, weren't discouraged by the naysayers. TheScottish-born entrepreneurs attacked the task ahead of them withthe underdog fervor of David challenging Goliath--carving out aplace for their upstart company among the tissue industry'sbiggest players.

Seattle-based Linters Inc., the company the brothers founded in1994, is the maker of Purely Cotton, the world's first and only100 percent cotton tissue products. The bottom line? Lastyear's limited regional distribution of Purely Cotton productsbrought in sales of $14 million, and the brothers estimate that thedeployment of national distribution later this year will tripletheir company's annual sales.

Willy and Tim could sense from the beginning that they had awinner. After all, America is crazy about cotton, from wearing itto sleeping on it. And why wouldn't health-conscious andenvironmentally aware consumers take just as keenly to the use of aless-abrasive renewable resource in their facial tissues and toiletpaper? And here's the kicker--it's not toilet paperat all. Goodbye, wood pulp: Says Willy, "The beauty of the rawmaterial of cotton is it's just so much better for theskin."

Square One

Born and raised in Hawick, Scotland, the brothers' careersin the United Kingdom ultimately led to a joint venture in theUnited States. "We both started off [building] strongcorporate backgrounds and then branched out on our own," saysWilly. "We were both able to get into business for ourselves[in Scotland] and [then sold] those businesses at roughly the sametime."

They were playing a game of golf one day when it hit them: Whynot pursue their next business venture together? "We felt itwould work well because our strengths and weaknesses were indifferent areas. Tim's strengths were more in corporate financeand in strategic areas, and mine were more in sales andmarketing," says Willy. "So we pooled ourresources."

In their search for a new business, they each heard separatelyabout a company in London called Multi-Soft PLC: One of Tim'sformer colleagues mentioned the company to him; meanwhile, thebrothers' mother had also heard of the company and shementioned it to Willy. "`You're the sales and marketingguy,' she told me. `Why don't you have a look atit?'" recalls Willy. "When I talked to my brotherabout it, he was amazed. `Somebody was just telling me about thatcompany,' he said."

The group of investors that then owned Multi-Soft had purchasedthe concept of a disposable tissue made from raw materials otherthan wood pulp from a student who said he had thought of the ideawhile he was traveling through China. "This chap thought itcould be done and sold the idea to the investors for roughly$30,000," says Willy.

At the time the brothers contacted Multi-Soft, the company waslooking to raise funds and had a low-quality prototype made from 50percent straw and 50 percent recycled denim jeans. In early 1995,the brothers found equity partners and raised the $1 million theyneeded to purchase Multi-Soft. Then they privatized the company andmoved it to the United States.

Still, the brothers had no marketable product. "We wentback to the basics, and instead of trying denim, a recycledtextile, we went straight to the raw material," says Willy.They found they could use the short fibers of cotton, known aslinter, and with the help of a chemist, their quest for the perfectformula began.

Not a Square to Spare

Discouraged by some and encouraged by others in the tissueindustry, Willy and Tim knew it would be a long, hard road."But if we could do it, [we knew] there'd be amarket," says Willy. They subcontracted with various papermanufacturers for the machine time needed to experiment with theirformula. Their first sign of hope came at the end of a particularlygrueling 16-hour session.

"We'd bought machine time for a period of 24 hours andhad to clean the machines out before we put the cotton mix in. Weran it time after time, but we just couldn't get it[right]," Willy says. The weary team had been working sincefirst thing that morning. By the time things finally appeared to belooking up, it was 11 p.m.

"But [just after] something that sort of looked like tissuecame off, a crashing sound almost like thunder rang throughout thefactory," Willy says. The machine ground to a halt as smokefilled the air and billowed out the windows.

They'd produced the equivalent of about one square oftissue, says Willy. But it was a start. They left and celebratedthe night's progress over beers. "It was extraordinarilyexciting to have produced something right at the end," Willysays, "and we knew where to start next time around."

Sure enough, the next time they ran a formula test, theyproduced their prize within three hours: an all-cotton tissue withsome quality. "We were finally vindicated," saysWilly.

One hurdle down, plenty to go. Manufacturing was the next bigchallenge. "You can't go to the top manufacturers, becausethey own 85 percent of the market and they're not going tosupport a new, unique company," says Tim. Instead, Lintersidentified several smaller, independent manufacturing companiesthat weren't worried about conflicts of interest and that hadthe engineering expertise to produce all-cotton tissue.

As the partners continued to improve their formula, the nexttask was to move toward the marketplace. Backed by positive resultsfrom more than $1 million in blind in-home studies, and clinicaltests for abrasion, absorbency and toxicity, marketing provedeasier than anticipated. Says Willy: "Of the first 14retailers I made presentations to, 14 of them said yes."

Sales of the Purely Cotton line in Texas test markets in 1996reached $70,000. In 1997, with expanded
distribution throughout the Pacific Northwest, the company broughtin $2.5 million from stores such as Albertson's supermarketsand Rite Aid drug stores.

Squaring Off

Purely Cotton was on a roll, and Willy and Tim were carving aniche for their company in the midst of such giants asKimberly-Clark and Procter & Gamble. "We try to becreative in both our supply arrangements and our marketing strategyso we're not knocking heads and being an irritant to the bigpeople," says Tim.

Also key to Linters' strategy is differentiating itself frombeing just another "me too" product on store shelves.While wood-based tissues are all marketed solely on softness andprice, contends Willy, "We try to sell Purely Cotton based onits benefits and attributes." Among the benefits? "Tests[comparing cotton and wood pulp] found that our tissue was theleast disruptive product [to the skin] as a result of having adifferent chemical content," he says.

The company's growing sales have been fueled by not only thebrothers' devotion to the all-cotton concept but the duo'sequity philosophy as well: It's not about 100 percentownership, says Tim. "We've surrounded ourselves with[equity partners] who are far better than we are in pretty muchevery capacity of the business," he says of the $20 million ininvestment capital the brothers have raised to date. "Our roleis to strategically plan the best enhanced value of thebusiness."

"We don't want to suffocate the company by notrealizing its potential," agrees Willy. "And if thatmeans diluting [our percentage of ownership] to bring in the equitythat's required, then we're prepared to do that."

Having achieved their initial innovative breakthrough, thebrothers believe many possibilities lie ahead for Linters Inc. Fullnationwide distribution will be complete later this year. Theproduct line will soon grow to include such items as paper towels,napkins, feminine hygiene products--even baby diapers. They hope toturn last year's sales of $14 million into a dazzling $50million this year.

And what does their mother think now of the idea she casuallytossed to her sons? "She's a very happy shareholder,"says Willy. In a family where both parents are retired doctors,their late grandfather was a surgeon, and an elder brother andsister are also physicians, it appears Purely Cotton has broughtthe brothers as close to things anatomical as they're going toget--a source of humor for the family.

Together, the pioneering duo has come full circle: "PurelyCotton [presents] an opportunity for going beyond America intoEurope as well," says Tim. "It's been a lot of funputting the pieces together."

Contact Source

Linters Inc., (800) 372-SOFT, http://www.purelycotton.com