Honest Tea's Seth Goldman on Regulations and Compromise

With experience in both, CEO Goldman reflects on the differences between the government and business worlds.

Mar 18, 2014 at 9:00AM

Seth Goldman and Barry Nalebuff founded Honest Tea in 1998. In the recently released Mission in a Bottle, the co-founders tell -- in comic book form -- the story of building a successful mission-driven business. Goldman, now president and "TeaEO" of Honest Tea, joins Motley Fool CEO Tom Gardner to discuss sustainability, entrepreneurship, and what it means for a socially responsible, health-oriented business to be bought by Coca-Cola (NYSE:KO) .

Having lived in other countries, including Russia and China, Goldman knows how oppressive government can be toward business. In this video segment he describes the Honest Tea experience in the United States as "unfettered capitalism at its best."

A full transcript follows the video.

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Audience member: Seth, you worked on the Hill with Lloyd Bentsen. How has your view of government regulation changed, as you became an entrepreneur and now as a part of a much larger company?

Seth Goldman: It's so interesting, and a surprise to me, because I always thought of government as sort of the path I would be taking.

What I've been so struck by is when I see, in government, how much compromise has to happen to get things done. I probably am peculiar, but I feel like I have compromised very little. Someone can say I'm compromised because I sold to Coke, but just as we shared in some of these examples, it's been really refreshing to feel like I don't compromise in what we do with our business.

I was just telling Tom about a national restaurant chain we're talking with. They said, "We really want to have organic Fair Trade tea. We just want your tea to be a little bit sweeter."

I would have given my left arm to be in this chain. I said, "Well, if you want sweeter tea, you don't want Honest Tea."

But to answer your question, for us, the government was so light. I mean, the bottling plants have to get regulated and certified and approved -- and thank goodness they do, because you still end with stuff in the bottle, even when you regulate it!

But for us, it was very easy. It was very light. I incorporated in Delaware. I had a lawyer help us, but it was easy. ADP did our payroll taxes; that was easy. Health insurance through a broker, so it really was very minimal. I totally appreciate that, and I don't take it for granted. As I said, I've lived in Russia and China. I've seen what an oppressive government can do. But for us, it was pretty much unfettered capitalism at its best.

Tom Gardner has no position in any stocks mentioned. The Motley Fool recommends Automatic Data Processing and Coca-Cola. The Motley Fool owns shares of Coca-Cola and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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