Karst: A million dollar business that emerged from a holiday discovery

Kevin Garcia was travelling when he stumbled on a business idea so exciting he quit his job – and caught the attention of Facebook bosses.

Sydney man Kevin Garcia was travelling through Asia when he came across a product so special it ended up changing his life.

That product was stone paper – and Mr Garcia decided to quit his job and shake up the stationery market by launching his own business, Karst, in 2017.

In a nutshell, the company takes stone waste from construction sites and other industrial dumps and recycles it into paper.

And just three years later, Karst is thriving, having evolved into a $1.2 million business.

Jon Tse (left) and Kevin Garcia (right) have both launched start-ups in the past.

BIRTH OF KARST

Mr Garcia said as soon as he discovered the concept of stone paper, he knew he was on to a winner.

“It was just a no-brainer for me. Here was this durable and sustainable product that the consumer market hadn’t tapped into,” he told news.com.au.

Mr Garcia then rang up his mate and eventual co-founder Jon Tse and arranged to meet the president of a facility to find out how stone paper could be used.

The trip was a success, and spurred the partners into action, allowing them to use the knowledge they had garnered from their entrepreneurial backgrounds.

Mr Tse had previously co-founded a textbook rental start-up called Zookal and Mr Garcia had launched a watch company called Lehft.

They said they knew from experience that before they invested their own money, they needed to determine if there were actually customers out there who would buy the product.

“We started a Kickstarter to see if people were willing to pay for such a product and within seven days we had raised $150,000,” said Mr Garcia.

The world-first product took off and motivated Mr Garcia and Mr Tse to combine their savings to start the business. However, there was a problem: together they only had $30,000.

The money didn’t allow them to create much, only paying for a basic website, an initial batch of stone paper and covering the conversion of the paper into an end saleable product.

“We were completely bootstrapped so all profits from the product had to go directly into funding the business. But we were fortunate early on that we could create beautiful products we were proud of,” said Mr Garcia.

Nervously, they bit their nails and waited for launch day. To their relief, Karst made 10,000 sales and from that day on, they knew they had a profitable business on their hands.

The hardcover notebooks retail at around $38.

ROAD TO PROFIT

The notebooks are more expensive than a generic brand at the supermarket but are on par with Moleskine, who the business partners see as the market leader.

“We are really going for that market and Moleskine is huge but our growth in two years has shown us that people are resonating with our products,” said Mr Tse.

Karst generated a turnover of $1.2 million in 2019 and the duo attributed part of that success to being the official stationery of the globally renowned TED conferences last year.

the TED 2019 Conference held in Vancouver brought together thousands of people to listen to inspiring CEOs and other leaders including Aussie comedian Hannah Gadsby.

“The TED goodie bag has allowed us to leverage other companies but also we received a number of inbound requests from the event,” said Mr Tse.

Some of the companies that were at the TED event included Facebook and office space firm WeWork, both of which ordered customer notebooks for company wide usage.

SUSTAINABILITY

They even received an order from the Chan Zuckerberg Initiative, a philanthropic organisation owned and founded by Facebook founder Mark Zuckerberg and his wife Priscilla Chan, because of Karst's sustainable practices.

The duo estimated that in 2019 Karst’s paper production methods helped save 540 large timber trees, 83,100 litres of water from being used and 25,500 kilograms of carbon dioxide being emitted.

But sustainability comes with its own difficulties, said Mr Tse, as producing a notebook was not as simple as just cutting down trees.

Karst has also started to produce woodless pencils to add to its range.

“Even a product like a notebook seems simple but it took us nine months to create our product at a printer. We use different bindings, different ink just a whole range of different products,” said Mr Tse.

NEXT STEPS

Now that they have created a sustainable paper product the two founders are turning to luxury leather alternatives.

“We’ve been looking for 18 months for products in the leather market that are luxurious but also on brand in its sustainability,” said Mr Tse.

While new products were in the pipeline the immediate focus for Karst was increasing the outlets from where its products can be purchased.

Currently the products are sold online and in a few hundred stores worldwide but the plan is for that to grow.

“We’ve gone from a garage to having three professional warehouses and we’ve hired a sales exec from moleskin who is helping grow out our B2B (business to business) line of work,” said Mr Tse.

“So that’s our next six to 12 months, lots of hiring and growth and new and exciting products.”

Originally published as Karst: A million dollar business that emerged from a holiday discovery