Balsam Brands, a home décor and consumer products company whose roots, as it were, go back just over a decade, is a rare breed of business. Best known for its Balsam Hill artificial Christmas trees, the company headquartered in Redwood City has taken the artificial Christmas tree industry by storm. And, almost as notably, it’s done so without venture capital backing.
But there’s more to the story of this unicorn that refuses to buy into the industry of Silicon Valley unicorns. Founder and CEO Thomas “Mac” Harman doesn’t just have a vision for business growth, he has a vision for the growth and happiness of his 250-plus employees.
The route to producing trees — the beautiful, artificial kind using his True Needle™ technology — came through a love of the real thing. An avid hiker and skier who holds an undergraduate degree in environmental studies, Harman has spent a lot of time amongst trees. “I have spent so much of my time in nature,” he said. “… I was well set up to design trees. If I went through my photo reel on my phone, you’d see that I document interesting trees, all the time.”
Still, it might seem like a leap from loving real trees to designing and manufacturing fake ones. Especially Christmas trees, since the real-versus-artificial question can ignite holiday debates on par with the whole-berry-versus-jellied-cranberry-sauce conundrum.
But Harman has a spot in his heart for both kinds of trees. “I grew up with real trees,” he said, and added, “I love Christmas, I love Christmas trees.” When he started dating Stephanie, the woman who would become his wife, though, he was introduced to a different family tradition: the fake Christmas tree. Harman laughed as he recalled Stephanie’s ersatz tree. “It just wasn’t very good. I think I’ve called it anemic … It was just so not awesome, compared to a real tree.”
That underachieving Christmas tree planted a seed for Harman. “I was just like, how come we have Avatar, or you know, all this amazing Lucas Film stuff … but no one has ever made a good-looking artificial Christmas tree?”
That question would percolate for years until June of 2006. Harman, then a recent graduate of Stanford’s Graduate School of Business, decided to capitalize on the market opportunity. He developed his True Needle technology, the full-bodied, as-seen-in-nature pine needles that put the flat, papery, single-toned “needles” of most fake Christmas tree to shame. He just needed a manufacturer which could produce the trees — and quickly: He only had three and a half months to get ready for that year’s Christmas season.
Harman did it all — designed and manufactured the trees, opened a pop-up shop at Stanford Shopping Center, and started an online, direct-to-consumer business —- in less time than it takes to turn out a Christmas fruitcake. Equally remarkable, he did it without venture capital funding. Harman shouldered the $2.6 million start-up and manufacturing cost with the help of family and friends.
“I was totally naïve,” Harman told an interviewer for McKinsey & Company, of which he is an alum. “I never felt like I was taking a huge risk, but looking back, I was crazy. I can’t believe I took that much risk.”
As it turned out, the risk was worth it. Harman was running the business out of his Palo Alto apartment and wearing so many hats — salesman, marketer, customer service rep — that he would often fall asleep at his desk. But that first season brought in $3 million in sales. By the second year, his Christmas trees were decorating the holiday stage of “The Ellen Show.” Then came the first of what has become an annual Balsam Hill float in the Macy’s Thanksgiving Day Parade in New York City.
Soon Balsam Hill also had achieved the status as the go-to Christmas tree for both television shows and musicians’ stages. “Most legendary musicians, at some point, record a Christmas album,” Harman said. ”And when they launch that Christmas tour, many of them call us because we can elevate their sets. We’ve done some great things across all different genres.”
But the moment he knew he was onto something came well before Balsam Hill was receiving Hollywood recognition. Rather, it was from seeing his business start to take off. “I’d say you know, waking up one day that first year and seeing the sales come in order by order on the computer,” Harman recalled. “I was just like wow, this is actually happening.”
The success meant Harman had to change his plans. “I had this poorly educated thought that this would be a highly seasonal business in terms of demands on my time … I really thought this would be a side business to fund my other businesses,” he added, with a laugh.
“It’s not that I was special,” Harman said in response to a question about Balsam Hill’s success. “It was right time, right place, and good search engine optimization.”
Since those early years Balsam Hill has grown into Balsam Brands, which has offices in Idaho, Ireland and the Philippines, and expanded far beyond “Christmas.” Under the Balsam Brands umbrella, customers can shop for outdoor furniture, as well as spring, fall and Halloween décor. The product offerings range from beautiful serving ware to a years’ worth of wreaths and floral arrangements so real to the eye they have to be touched to know they’re artificial. But it’s not just the other seasons that have gotten the royal treatment: The tree line has also expanded to offer even more natural-looking trees, not just artificial versions of what one would find in a tree lot.
“The trees that I’ve been working on the last five years are the trees that aren’t as manicured,” Harman said. “An example is our Yukon Spruce. It’s asymmetrical. Some of the branches are intentionally longer than the branches next to them.” These less-manicured trees, Harman admits, have had his manufacturers, most of whom are in China, scratching their heads. “They’re not used to it,” he said. “They’re like, ‘Wait, this doesn’t look right.’ But that’s the point.”
Growth of product isn’t Harman’s only motivation. “If we don’t grow, we don’t create opportunities for our team members to grow. We want to be a place where people come and invest a significant part of their careers. If we aren’t growing at least 10 percent, I don’t think we’re going to create opportunities for people to take more on and have more autonomy.”
There is also a genuine commitment to culture at Balsam Hill. So genuine that they don’t have coffee in the office. There’s a strategy behind the absence of coffee. Harman wanted employees in downtown Redwood City to go out for coffee to keep them connected to the customer experience. It’s a good excuse, Harman contends, for team-bonding, not to mention the chance to get some fresh air.
“I want our employees to go out, experience retail, customer service … to be reminded of what it’s like to be the customer. We’re an online company. I want to make sure we’re not locked away in an ivory tower somewhere.”
That said, and while Harman says the policy may change, Balsam Brands does buy the coffee, providing gift cards to local coffee shops.
The recently remodeled Redwood City headquarters, which is mainly home to the Balsam Brands merchandising team, sits above the Bank of America office on Jefferson Avenue. It is an open and inviting space which bears no resemblance to Santa’s Workshop. Even without venture-capital backing, the office has the makings of a proper Silicon Valley office: The kitchen area accommodates space for foosball, ping pong and family-style tables. The furniture hints at mid-century modern, but without feeling like it was all swiped from a “Mad Men” fire sale. Out in the open office space, Balsam Hill-branded Patagonia jackets and hoodies are slung casually over desk chairs. One of the small conference rooms has a desk bike.
Though Christmas music is not piped through a sound system, homage is paid to the big guy in red: Half of the conference rooms are named after Santa: “Santa Monica,” “Santa Cruz,” “Santa Rose” … and so on.
Harman said it is his father, who owned a parts manufacturing company, who inspired his own focus on his employees.
“I grew up around the decisions and what I saw was how the number one thing my dad cared about was taking care of his employees,” Harman said. When the late Harman died suddenly at age 50, Mac Harman was touched by the responses of people at the funeral. “Oh my gosh, the people came out of the woodwork to come share how he had done things for them, like, (things) we didn’t even know (about). He didn’t make a lot of money, he wasn’t super ambitious with the business, but it was all about taking care of people.”
That sense of caring about people emanated from Harman with such sincerity that it started to soften even this writer’s Grinch-like stance against the faux holiday tree. But for those who still need to see to believe, check out the Balsam Brands warehouse in Burlingame. Now open to the public (see BalsamHill.com for more details) this is the place to immerse oneself in the Balsam Hill forest, capitalize on holiday décor sample sales, and just get excited about the holiday spirit — and there’s nothing artificial about that.
This story was originally published in the November print edition of Climate Magazine.