Stapelstein: Doughnut Design Case Study

01 I Brief Summary and Key Facts

Stapelstein® is a German company that makes environmentally friendly play and movement products.

• Location: Korntal-Münchingen, near Stuttgart, Deutschland 
• Founded: 2016 by founder Stephan Schenk, co-founder Hannah König
• Size: 40 Mio. € turnover per year (2024); number of employees: 29 (2024)
• Sector: toys and sport equipment for children (and adults)
• Legal form: GmbH / limited liability company, public benefit corporation
• Website: www.stapelstein.de
• Main products/services: sustainable play and movement elements 

Highlight of their unique approach 

Stapelstain® enriches children's free, active play with innovative, versatile, sustainable play and movement elements. Their products are 100% made in Germany, environmentally friendly, fair, climate-neutral, and delivered through short supply chains.

Highlight of their unique design

After bringing investors onboard early in their journey, founders Stephan Schenk and Hannah König regained control of the company by buying out the original shareholders and establishing a steward-ownership  structure, ensuring the organisation’s self-determination.

02 | Founding Story 

Stephan Schenk began developing Stapelstein® stacking blocks, registered as joboo GmbH, in 2015 with the goal of creating a product that fosters movement and creative play in children. The result is a series of vibrant, lightweight (180g) plastic blocks designed to inspire open-ended, active play and imagination. 

While studying product design at university, Stephan Schenk noticed a gap in children's everyday lives: the lack of opportunities for movement and creative play. Visiting schools and kindergartens, he observed that multifunctional, mobile objects that encouraged action were missing. This insight led to the idea of Stapelstein® — a simple, stackable, colorful, and robust element designed to inspire movement, creativity, and play.

Stephan developed the first prototypes, experimenting with various materials, as a university project. Rather than selling his concept, he decided to bring it to life as an entrepreneur. At just 21 years old, Stephan founded joboo GmbH to ensure the Stapelstein® would be part of a sustainable, fair company that nurtured creativity, physical development, and independence for both children and adults.

With the support of angel investors, Stephan and his co-founder, Hannah König, were able to turn the idea into a product, launching it into production within two years. Their flagship product quickly gained recognition for its versatility and developmental benefits, earning the “particularly conducive to development” quality seal.

Stephan’s minimalist design approach reflects his belief that children should have the freedom to explore their own creativity. As he puts it, "I tried to see and think like a child and leave as much (play) space as possible for their own imagination."

From the start, both Stephan and Hannah were committed to aligning their actions with their values. Stapelstein® focuses on sustainability, producing locally in Germany using climate-neutral and pollutant-free methods. The eco-friendly product is made from resource-saving expanded polypropylene (EPP), free of additives and plasticizers, and designed for long-term durability and recyclability. Gender-neutral and suitable for all ages, Stapelstein® is a timeless product that champions creativity and movement for generations to come.

Today, Stapelstein®  products are sold in over 40 countries worldwide.  They are expanding their product line with products such as the Stapelstein® Mat, a versatile tool with two sides for play, yoga, and workouts. In a significant milestone for the company, Stapelstein® recently opened its first Flagship Store in Berlin-Mitte, where visitors can fully immerse themselves in the brand’s philosophy. This vibrant space showcases the full range of Stapelstein® products, offering a hands-on experience that reflects the brand's core values of sustainability, creativity, and active learning.

03 | Industry Context

The importance of active play in childhood development

Free movement is essential for children's physical, cognitive, and emotional development. It enhances motor skills, fosters creativity, and improves problem-solving abilities while also strengthening self-confidence. When children engage in unstructured, active play, they develop a deeper understanding of their own capabilities and surroundings, laying the foundation for a healthy and well-balanced growth process.

However, modern lifestyles increasingly limit opportunities for movement. According to the World Health Organization, 80% of children worldwide do not meet the recommended levels of daily physical activity. Long hours spent in school, sedentary learning environments and excessive screen time contribute to this alarming trend. As a result, many children miss out on the benefits of movement-driven learning and development, which are crucial for both their physical well-being and their ability to focus, adapt, and thrive in an ever-changing world.

In this context, innovative play solutions that promote movement, creativity, and active engagement are more important than ever. By integrating movement into everyday play, children can rediscover the joy of physical activity while developing essential life skills in a fun and natural way.

Local and regional production with short supply chains 

The European toy industry is a significant economic sector, employing approximately 51,000 workers and generating a production value of about €5.8 billion. Notably, 99% of EU toy manufacturing companies are small and medium-sized enterprises (SMEs), accounting for 61% of employment within the industry. Despite this robust local industry, a substantial portion of toys consumed in Europe are imported, with China being the world's largest exporter, contributing over 86% of global toy exports. In comparison, the EU accounts for just 4.6%. 

Local and regional production with short supply chains in Europe are essential to reach the Paris Agreement and reduce CO2 emissions, yet they are relatively scarce in the toy industry. The dominance of imports underscores the need to bolster local manufacturing to enhance economic resilience and sustainability.

Environmental benefits of local supply chains are significant. Shorter transportation distances lead to reduced carbon emissions, thereby decreasing the ecological footprint of products. Additionally, local sourcing often requires less packaging, minimizing waste and the environmental impact associated with packaging production. By investing in local suppliers and producers, companies can further reduce their carbon footprint and promote eco-friendly production practices. 

In summary, while local and regional toy production in Europe is currently limited, expanding these practices is crucial. Doing so not only supports the local economy but also offers substantial environmental advantages, contributing to a more sustainable, transparent and resilient toy and production industry, overall.

04 | Regenerative & Distributive Strategies and Actions

Sustainability at the core

Stapelstein® is more than a company that makes play products; it is a brand driving positive change through sustainable practices. With a focus on recycling, waste reduction, and toxin-free production, Stapelstein®  is not only setting a standard for environmentally conscious businesses but also showing that sustainability and fun can go hand-in-hand. Products are 100% made in Germany, environmentally friendly, fair, climate-neutral, and delivered through short supply chains.

“We live with the Stapelstein® philosophy of ‘less, but better.’ In our opinion, sustainable consumption is no longer about buying nothing, but to rethink and consume the buying behavior. With Stapelstein® we can show that timeless, gender-neutral design and multifunctionality can make a significant contribution to the sustainability of a product,” says Stephan Schenk, inventor and designer of Stapelstein®.

Innovative and circular material for closed loop products

Notably, Stapelstein® products are manufactured without harmful toxins, ensuring safety for children and a healthy planet. The company prides itself on using the world’s most energy-efficient Expanded Polypropylene (EPP) production facility, minimising its carbon footprint while creating top-quality products.

Stapelstein® products are crafted from 100% recyclable EPP, a material that can be reincorporated into the production cycle. The choice of EPP for Stapelstein® elements was made after thorough material research and testing of various prototypes. EPP has proven to be the only material that meets legal requirements and combines lightness, stability, durability, and environmental friendliness. The production process of EPP requires less energy compared to other plastics, resulting in a lower environmental impact. The elements can be fully recycled at the end of their lifecycle — provided they are returned to the recycling loop.

To support this, Stapelstein® has a take-back program in place, ensuring that products do not end up in household waste. Instead, the collected elements are processed into reusable EPP raw material, which flows back into the production process. This forward-thinking approach reduces waste and integrates the products into a circular economy.

The relevant partnerships for sustainable production 

Stapelstein® is committed to plastic compensation and proudly holds the plasticneutral+ label. While they responsibly use plastic in their products, the company recognizes the importance of understanding the environmental impact of plastic production. Stapelstein® encourages companies to critically examine their role in the plastic crisis and strives to raise awareness among both consumers and producers. Since 2023, Stapelstein® has partnered with WasteReduction, a social impact organisation dedicated to combating the plastic crisis. Through this collaboration, Stapelstein® has successfully eliminated 40,000 kg of plastic waste from the environment. Every purchase made by a customer directly supports the reduction of plastic pollution, further reinforcing the brand's dedication to environmental sustainability.

Championing ethical communication: A unique path to authentic engagement

As a young startup, Stapelstein® has achieved remarkable success without relying on traditional marketing budgets or sales strategies. Instead, the company has embraced a more ethical approach to its business practices. 

Stapelstein® allocated its first marketing budget in April 2022. Prior to that, Hannah König focused on building a network of over 100 micro-influencers. "We’ve always shifted our communication to the digital space, allowing people to organically share their experiences with our product," she explains. However, as the company grows and demand for Stapelsteins increases, both König and Schenk find themselves reassessing their approach. "In the online world, not everything aligns with our values," König reflects. The more successful they become, the more they are mindful of staying true to the ethical principles that underpin their brand. The company intentionally avoids featuring children's faces in its advertising and social media posts. This decision is driven by a strong conviction held by the company's founder, Stephan Schenk. Schenk believes that the quality of the product itself should be the focal point of its appeal, rather than relying on emotional marketing tactics. As he puts it, "There is no need for children's faces in marketing to enhance the product." He adds that using children's faces in advertising at an age when they cannot fully comprehend the decision themselves raises ethical concerns. For Stapelstein®, the emphasis is on creating value through the product, allowing its quality and purpose to speak for themselves.

A strategic pivot: Rethinking distribution channels for Stapelstein®

The business and marketing success Stapelstein® has achieved was not something the founders anticipated from the outset. The journey, particularly in the early days, was challenging. Stephan Schenk initially focused on selling the stacking blocks to schools and daycare centers, believing the colorful blocks were perfect for movement-based activities. The enthusiasm from local municipalities was slow to emerge. "Many offices are very conventional," says Schenk. "The same sales channels and products have been in place for decades, and real innovation is rare due to the decision-making structures."

Stapelstein® pivoted and achieved early distribution success through micro-influencing. Today, the company regularly donates stacking blocks to educational institutions, having contributed more than 12,000 units to date.

05 | How the Deep Design Enables Strategy and Action

The early days: Understanding Stapelstein®'s ownership framework

Stephan received initial equity from two angel investors to establish the company and develop the first Stapelstein® product. In exchange, the investors received one-third of the company shares, with voting and dividend rights shared equally between Stephan and the investors. This setup gave the investors majority voting rights and to even dismiss him from the company. It's important to note that Stephan transferred the intellectual property of the Stapelstein® concept and design to the company, meaning owning shares also meant controlling the concept itself.

The collaboration was helpful in assisting Stephan to establish the company’s initial structure, as he hadn’t learned these formalities at university. At the same time, the investors left Stephan with all other decisions as they trusted him to make the right choices for the benefit of Stapelstein®.

"At the beginning, I focused mainly on the product and less on the foundation of the company. In retrospect, there is much that could have been optimised at the shareholder level and in the ownership structure to facilitate long-term growth for the company in an uncomplicated way.” – Stephan Schenk

A defining crossroad: Securing purpose and embracing Stapelstein®’s long-term vision 

In 2019, after Stapelstein® began generating its first profits following three years of operation, founder Stephan Schenk recognised a pivotal moment for the company. He explained that it became clear to him that any profits would be reinvested back into the business, specifically to fuel product development and support international expansion to expand Stapelstein® mission. On the other hand, the two investors wanted to focus on withdrawing dividends, which Schenk felt shifted the company’s direction. However, with their initial investments giving them two-thirds of the voting rights, the investors held controlling power over Stapelstein® despite not being involved in its day-to-day operations.

Schenk, who is also an avid beekeeper, shared how his passion for the natural world had influenced his approach to business. He explained that sustainable beekeeping requires the beekeeper to harvest some of the honey, while leaving enough for the hive to thrive., Similarly, reinvesting profits is crucial for long-term growth and stability. He noted that the investors’ desire to “take out all the honey” raised concerns for him, signaling that something wasn't aligned with the company’s vision - a huge challenge and emotional time.

Steward-ownership: An essential step towards purpose-driven independence

While researching ways to regain autonomy, the founders discovered the steward-ownership model and realised it aligned with the company they had always envisioned and intuitively built since the beginning. Together, they decided that if given the chance, they would strive for the legal implementation of steward-ownership to ensure the long term independence and purpose-orientation.

As a crucial and essential step towards steward-ownership, Stephan and Hannah successfully bought out the two previous investors, utilising both free cash flow and new, more aligned investments. By 2023, Stapelstein® had fully transitioned to steward-ownership, ensuring that control of the organization remains with individuals who are directly involved in and committed to its mission and values. 

A struggle for control: The investor buyout dilemma

In 2019, they bought out one of the investors  using company funds. The shares were split equally between themselves and the remaining investor, who was reluctant to sell. With equal voting rights, the investor became a co-CEO with Stephan. With conflicting visions for the company's future and how to utilise profits, they found themselves stuck, unable to move forward or backward. This was especially challenging given Stapelstein®'s rapid growth, with the share value — and thus the cost of buying back the company — rising each quarter.

Stephan and Hannah sought alternative financing options and were excited to find investors offering steward-ownership aligned funding. These investors provide financial support with a fair return, while ensuring control remains with those actively involved in the company. After weighing their options, the founding team chose to partner with Purpose Ventures and Purpose Evergreen Capital, both focused on steward-ownership investments. Their key condition was that Stapelstein® must complete its transition to steward-ownership in the coming months. Following successful negotiations, the financing deal was finalised in 2022 through redeemable shares. After lengthy negotiations they successfully bought out the second business angel with 58% of the funds coming from the new investments and 42% from available profits. A buyout could have been achieved at one-tenth of the price just 1.5 years earlier, but previous negotiations failed. The painful experience showcased the relevance of considering ownership and financing from the very beginning – and of choosing the most aligned partners.

Stapelstein® chooses golden share model to safeguard steward-ownership principles 

In 2023, Stapelstein® could finally fully embrace their journey and legal adjustments towards steward-ownership. They decided to use the Golden Share model as a basis for their future financing structure. The Golden Share model adapts the structure of foundation-ownership and creates distinct classes of shares to separate economic rights and voting rights within the articles of association. The two principles of steward-ownership, purpose-orientation and self-determination, are embedded in the company’s statutes and can only be altered with unanimous approval . To ensure long-term protection, a guardian entity holding a small portion of the voting rights, known as the golden share, safeguards these principles.

The steward shares are held by Stephan, who retains the majority of voting rights, Hannah, and a golden share with the Purpose Foundation to safeguard the principles of steward-ownership. A comprehensive framework has been established, outlining the decisions that require the approval of both Stephan and Hannah, including financial, strategic, and value-driven choices, such as dissolving the organization or appointing and removing CEOs.

Ensuring fair compensation for the founders early contributions

Stephan Schenk, like most founders, invested significant unpaid time, money, and energy into launching Stapelstein®. Unlike the early investors, Stephan didn’t undergo a buyout and won't receive high future dividends or exit compensation. To fairly recognise his early contributions, a founder compensation agreement was established in line with steward-ownership principles. It’s been decided he will receive compensation comparable to that of the investors, though it remains uncertain if it will be fully paid out. Additionally, one third of Stephan's compensation will be allocated to co-founder Hannah, who also played a crucial role to Stapelstein® success.

With Stapelstein® choice for redeemable non-voting shares as its financing structure, it  allows investors to buy shares with the option for the company to repurchase them at a later date, capped by a clear return formula. Unlike conventional private equity, the repurchase price is transparent and agreed upon, avoiding unlimited valuation increases. Stapelstein® repurchased the shares from Purpose Venture in July 2023. 

The investment between Stapelstein® and Purpose Evergreen Capital is structured in a way that the investing entity does not obtain controlling voting rights but is granted information rights to ensure transparency, accountability and continued exchange. Investors receive a basic annual dividend, contingent on Stapelstein®'s financial capacity. Stapelstein® can repurchase shares after a minimum holding period, with a "put option" for investors to trigger the buyback if needed, though this is unlikely. The repurchase price is designed to equal the initial investment if the basic dividend is paid annually.

Stephan and Hannah have developed a positive, collaborative relationship with their steward-ownership aligned investors, and they value the regular exchange of ideas. This ongoing dialogue has been mutually beneficial, enriching decision-making and enhancing Stapelstein®'s business strategies and overall performance.

06 I Reflections and Lessons for Other Businesses

Stapelstein®’s journey emphasizes the importance of early consideration of ownership and financing options, and how these decisions impact power dynamics, especially during the early stages of financing. Nevertheless, the case also demonstrates that organizations can reclaim autonomy and regain control over a business, even after relinquishing ownership rights, albeit for high financial costs and entrepreneurial energy spent.

Finance and investors are vital in shaping what businesses can do and be in the world. Many socially-driven startups struggle to find investors that support their genuine social purpose, which may entail slower growth for the business and the deployment of alternative ownership models. Companies like Stapelstein, ShareTribe and Haferkater (all of which have been written up as case studies as part of this project by DEAL) exemplify different paths to executing the financial transition towards steward-ownership. The company's structure, key players, and customers must be considered to find the right model. The Purpose Foundation has advised the companies on their transition. They offer great resources and advice for any company considering steward ownership.

Globally, steward-ownership is helping drive new discussions and models for corporate purposes. Policy-makers are also taking note. In Germany, a new legal form is envisaged to facilitate the founding of steward-owned businesses. Historically, companies like Bosch, John Lewis and Zeiss are examples of steward ownership companies. These recent developments demonstrate that a fresh wave of startups are joining established players in applying  steward-ownership to embrace a purpose-led model. 

This case study was researched and written by Vanessa Rosenthal in collaboration with DEAL.

Sources:
www.who.int/news/item/24-04-2019-to-grow-up-healthy-children-need-to-sit-less-and-play-more
www.single-market-economy.ec.europa.eu/sectors/toys_en
www.waste-reduction.de
Purpose Economy, Stapelstein Case, Share Model: https://purpose-economy.org/content/uploads/purpose-stapelstein-casestudyen-final.pdf
www.purpose-economy.org/en/purpose-foundation
www.purpose-economy.org/en/whats-steward-ownership