For our Change Maker podcast series, we sit down with the CEO and founder of Tiny Library (Julie Munneke) to discuss the company’s journey towards building a sustainable future for parents and babies. From their innovative circular business model to their commitment to reducing the environmental impact, this conversation sheds light on the power of entrepreneurship to drive positive change. Join us as we explore the benefits of the circular economy and how Tiny Library is leading the way in offering a sustainable rental service for baby products.
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For the listeners could you explain what Tiny Library is?
Three years ago I (Julie Munneke) started Tiny Library. From personal experience. I realized that you need so many products for children, definitely in the first phase of their life. Products that you don’t really use for a long time. I thought: this can be done differently. So I started Tiny Library, a rental platform where you can rent baby products that you need for the first years of a child’s life. In this way you’ll only pay for the products which you need. And when your child has grown out of them, you can return it to us. When it has been returned all the used products will be thoroughly cleaned, checked and repaired if necessary so that they can be reused again for the next customer.
Tiny Library is a pioneer with a circular business model and is shaking up the baby product industry. This is a durable and sustainable solution we can deliver.
How did you come up with the idea for Tiny Library?
I got a son and then my second child. I thought I didn’t need anything new, because I can re-use it from my first born. But I was wrong, because the age gap isn’t that large. I needed everything again. At the time I had a busy job and I didn’t want to buy everything new. But I also didn’t have the time to scroll through second hand sites every night, negotiate with people to make a deal and drive to the seller. Also I wasn’t sure in which state I actually would receive it. It all took way too much time for me.
I thought to myself, although I have good intentions with buying everything secondhand. I simply don’t have the time and energy for it. If I buy it online it would’ve been delivered the next day without all the hassle. The same is true for selling the baby products which they’ve outgrown or that you use for a very short period of time. For example the co-sleeper you only need in the first few months.
There the seed for Tiny Library was planted. I thought we need something that ensures that it’s a good product, being carefully checked, that saves time and that you are able to return it at the moment that you don’t need the baby product anymore.
Can you tell us in short how your rental platform works from a consumer perspective?
At the front end it is pretty much a normal webshop. You browse our products which you can choose from, and then you order and pay for the first month. You decide when you want to start the subscription.
The planning of the subscription in the future is something that differentiates us. So when you are expecting a child in March you can purchase your rental baby products and plan it for the future. When you receive your product in March the subscription will start, from then you will pay a monthly fee until you don’t need the product anymore or you want to upgrade to a bigger size.
When you don’t need it anymore, you can reach out to us and return it in the box you’ve received your product in. After this you won’t have to do anything anymore. When we receive it back your subscription ends.
What will happen at Tiny Library when products are returned?
When we receive for example a stroller back, we will disassemble it, replace the wheels, clean it and it will be checked for any defects. The fabrics will be removed and thoroughly professionally cleaned, if needed replaced and after this it will be reassembled. So in short it will be disassembled, checked, cleaned, fixed, re-assembled, placed in a box and stocked again. So when someone orders this stroller they will have a similar experience as buying a brand new stroller.
Do you have different brands and types of strollers?
The most efficient and circular would be to sell just one brand and one type. But we have chosen to have many different brands because most people have preference for what they like. Especially with strollers, that is something you use in public and has almost become a sort of fashion item. We try to find a balance. We have eight different brands and within those brands about ten different variations. In total about eighty different strollers which is A LOT.
Were you already an entrepreneur before you started Tiny Library?
No, I wasn’t. I’ve always had a corporate job. I worked at Ahold from Albert Heijn. This isn’t really entrepreneurial, but I did learn a lot. I had many different functions throughout the whole organization and worked my way up. At one point I became the right hand woman of the Chief Financial Officer (CFO). There I had insights in balance sheet positions, the cash flow and P&L. So to me it was very clear how a business model was executed properly and what is needed. This experience helped me a lot at my own company.
Was it hard for you to leave your corporate job and start your own business?
To be honest it wasn’t that easy for me. Because I had to leave a great job with great working conditions, good secondary conditions. Which I was used to. And there were many opportunities for me at Ahold to grow even further. So taking the step to start my own company was really hard for me. Therefore I tried to prepare myself as much as possible. I’ve made a business plan, meanwhile I kept working at Ahold. Then I took a sabbatical to phase out.
Working on the plan for Tiny Library gave me so much energy. I had a clear vision and I even managed to attract an investor who was keen to invest. I knew it was a viable business and I felt the urge that I needed to go for it. After I’ve made the decision and the jump, I had no regrets about leaving my corporate job to start up my own company.
Why did you choose investors over a bank for funding?
I knew that there would be a huge finance gap due to the circular business model. You don’t directly receive cash, which takes longer to recuperate the investment. This financial gap needs to be covered. Because it’s also a new type of business model, there’s a higher risk. Banks therefore aren’t interested. So I quickly knew that this wouldn’t be possible without investors.
How did you find investors for Tiny Library?
I actually found investors really fast. This was partly due to my financial background. Since it’s a circular business model, which is impact driven. I needed to find an impact driven investor. Because they have the same sustainable mission so you won’t get a discussion about profit over impact or vice versa. Everything worked out because I knew exactly what I needed.
I still found it hard due to the amount of money that was needed. Because we’re recreating a circular business model for baby products which are created for a linear system. Therefore certainly in the beginning we faced a lot of inefficiencies and resistance in the linear system. That costs more time and money. The return of investment for our investor will also take much longer and the risks are higher. Therefore it was hard to find the correct partners. It’s a whole lot more than “let’s sell some products”. Now I know that we are in the middle of a transition.
You really need to find the correct investor. Which I luckily have done. But still it’s pioneering every day.
Tips for finding and attracting an investor for a sustainable company?
For everyone and not just sustainable companies it is very important that you have to know your mission, vision and a clear goal. You need to be sure that there’s a market for your product.
For sustainable companies who are pioneering new (circular) business models, it’s important that you share the same vision as your investor, and the same ideas of how things will be run. Of course things can still go differently then. But I think it’s really important that you both believe in the product. Of course you cannot predict the future and you will always encounter these roadblocks and you have to learn to deal with these.
First, investors will look at the vision. Secondly they’ll look at who is behind the product/ company. Who are the founders? Do they have the capabilities to turn this into something big and a success?
Those are probably the two most important aspects and of course your business model that has to be correct.
What’s your biggest advice for (sustainable) companies that want to attract an investor for funding?
I think the most important advice is not to be tempted to fall for an investor who will give you the money you need, but doesn’t care for your sustainable vision or the sustainable values of your company. Cause this will backfire in the long term.
Be as critical towards the investor, as they were with you.
Don’t fall for quick funding with the wrong investor instead of taking more time to find the right type of investor.
What were some of the challenges that you’ve had with your circular business model?
Several. In a linear system the product is shipped from a logistics- or supply – partner when it’s new. In our circular business model, the returning and refurbishing of the products after use, is an example of something that had to be designed. The refurbishing process was a big challenge.
Logistics
There isn’t a logistics partner that really goes to customers to pick up the products for example. So sending the product to the consumer is simple but the return process is hard. We have tried literally every company, but there isn’t one that is really good. The most bizarre things have occurred.
Software
Also software related things have not been easy. For example, we have a software system which produces address labels for shipping. You would expect a click on the button where you can flip the addresses and then send it back. Apparently, that would have been too convenient. For a while we had to manually type the addresses by ourselves.
Finding a refurbishment partner
As said before we needed a method for the whole refurbishing process in our warehouses. In a professional warehouse it’s all about efficiency. That level of efficiency cannot be done yet with our refurbishment process. Everything has to be checked and cared for manually. That level of efficiency is something we will attain in the long term. After a long search we came to the conclusion that traditional warehouses weren’t the right partners for us. We needed to search for a refurbishment partner. Which we luckily found.
Poor taxation regulations
Another thing we had to take in consideration is that the VAT over labor is high in Western countries and especially in the Netherlands.
It’s a sad fact that it’s cheaper to produce and buy it new in China or India than to recycle it in the Netherlands. Poor taxation regulations make the whole circular economy very complicated. Why should the labor costs in China or India be less than here?
It is all manual labor and because of the cheap labor all our production and expertise has gone to Asia.
How can the government stimulate the circular economy?
I think the government can, for example, reduce taxes for circular companies. But also moving the taxes from manual labor to more polluting resources.
How can we as consumers contribute?
Vote with your wallet to really adapt your own behavior. As long as we are not willing to pay more and let everything come from China, the gap won’t decrease. Because as a consumer you have a certain contribution to this problem.
Be critical. Cause what about our banks and pension funds? In what type of companies and industries do they invest. Do you want to be apart of it?
Instead of shopping at a big supermarket go to a local farmer. Instead of buying low quality products for cheap, invest in higher quality products that last longer. Budget plays a big role in this. In the end everything depends on what is possible for someone. Also keep in mind that there are a lot of people that do have the money and could afford it but turn a blind eye to it.
Together we will make the biggest shift, if we all support circular, shop local products and recycle.
Have you noticed a mindset shift about circular with generations?
Yeah, I can see that the younger generation that now have children have a different mindset. They want to support circularity and sustainable options. The generation now adopts the mindset of: I don’t have to own it. Not owning it will give me flexibility and a lot more freedom.
Previous generations do share the mindset that they need to own things. For them it is also a status symbol and gives them a feeling of security.
What needs to happen for a sustainable future and the role of companies in this?
I believe there are a lot of sustainable initiatives from companies, but the adoption rate by consumers is low. Therefore sustainable companies all stay fairly small. We do share our knowledge amongst circular business, but the information is not always very useful. Due to a different target audience or a completely different industry or logistics.
We need a higher adoption rate, more consumers buying from sustainable businesses. So that the business models can operate at a larger scale and gain some efficiency. We need big companies like for example HEMA. They have scale and could really make a difference. But their main goal is profit and not impact or sustainability. So none of those big brands have done that so far.
At this moment it’s just a few initiatives and they are all a bit too small to really make a big impact.
We also need support from the government
What’s next for Tiny Library in the near future?
I think a physical location could make a big difference, because the baby products we rent out, people would still like to feel and see them beforehand. That is something I see as added value. This is something we strive for in the future.
I also see an increase in product range. We want to be the solution for parents who want to have sustainable products. We will have to expand and advertise, which we have started already. We’ve added toys and child bikes, so that we can provide from birth to about 10 years old. Or in other words grow with the family of our consumers.
Do you have international plans for Tiny Library?
There are many opportunities internationally. It’s just searching for the right moment to move. When do I start a new challenge while I’m still pretty busy with this one?
Don’t forget that culture plays a big role and asks for a different strategy and approach.Different cultures use, different types of products. You cannot simply copy and paste the concept from The Netherlands, to other countries. We’ve noticed that when it comes to birth products each country has their own culture and uses different products. In some countries they don’t use strollers, they only use buggies for example.
To sum it up I do see a lot of opportunities but I don’t know when or where we will start up this new international challenge.
Where can we find more about Tiny Library?
On our website Tinylibrary.nl, Instagram and LinkedIn. Follow us!
Do you just like Tiny Library have a sustainable (fashion) story to tell?
Send me a DM on Instagram or send me an email (birgit[@]anothergreenstory.com with your sustainable story. So you can contribute to this platform.