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Enterprise &Ideas

CONTENTS Nurturing a baby and a start up 58 Are women more business savvy than men? 59 Small and medium businesses ght for life 60

$10,000
The business started with a grant of $10,000 from the Samuel Huntington Fund in Massachussetts

ont judge another till youve walked a mile in their shoes, so goes a popular saying. Ecosandals, located in Kariobangi, one of Kenyas most populous informal settlements, puts a new spin to that phrase. The company produces an environment-friendly product with all inputs sourced from the local market. The sole is made from used tyres and the strap and lining from second-hand denim or camouage or any other recycled cloth. The result is a product that champions its informal settlement origins and, in so doing, overturns the entire understanding of what it is: place for creativity and entrepreneurship and not poverty and hopelessness. Ecosandals began when Matt Meyer, a visiting American student, came to Kenya in 1992 to work with street children through the foremost local African NGO of the time, Undugu Society. I came here wanting to help. You want to do something ... but it is hard to know how to engage, he said. Early on, he learnt two important lessons, both of which contributed to the character of the company that he went on to co-found. First, that the NGO culture in Africa was doing more harm than good. I found that when I gave someone Sh100, they came back the next day for Sh200, then Sh500. And so I found that when I gave people money, I was actually helping myself more than I was helping them, he said. Second, Kenyans had the answer to their own challenges; they just needed to be given the right opportunities. I wanted to give (Kenyans) some way to engage with the world outside. I wanted it to be something where they had responsibility; where they werent recipients. The Ecosandals business began in 2000. A pair of Ecosandals costs Sh800 to Sh3,200 depending on the make. The emphasis is on the Kenyan market and sales are made in the informal neighbourhoods and in boutiques like Adelphi at the Sarit Centre, Yaya and Westgate. Ecosandal is also shipped to two retail stores in the United States. The whole idea is that Kenya can build a globally recognised fashion
| Nairobi Business Monthly July

startup

A sandal maker puts its right foot forward


How worker-ownership model turned Ecosandals from slum idea to a global supplier, reports AAMERA JIWAJI

brand, Mr Meyer said. The business started with a grant of $10,000 from the Samuel Huntington Fund in Massachussetts, and later attracted an additional investment of $50,000. When the business experienced a growth spurt from online sales, its value shot to $1.5 million, but Mr Meyer is unsure of what it is worth today. The sta base uctuates between six and 40. This year, Ecosandals initiated aggressive

rebranding and marketing to development store displays, which will ideally pre-empt mpt their growth into boutique stores and leading ng supermarkets in the country. Ecosandals is s also planning to move its workshop to a larger location in Kariobangi North. Mr Meyer attributes the companys growth and its successes to three key things. The rst is the ownership structure of the company: the workers own

the project. Were a for-profit business. Our sandal makers are shareholders who, like any other shareholders, want to maximise prot. And because they are shareholders, they buy into the project, he said. The idea started by oering a nancial incentive for every worker who came up with a new design but with time, Mr Meyer started oering them ownership and encouraging them to develop new ideas. It was too complex and it didnt work, he said. Instead, they bought into the company and wanted to make cool stu. This bottom-up structure of management and ownership were a key turning point as it gave the workers a sense of dignity, which was in some ways more important than money. I am denitely not running this, said Mr Meyer. And so Ecosandals is no dierent from a private business except that the priva workers own a bulk of the shares. wor Everyone who works for our project for over fo three months is not just t an employee. They are a owners. They have the o skills and knowledge to sk when they need money, I run it. And w shares will you give me? ask how many sh connection with each worker The personal c is entrenched and Michael, one of the owners and sole providers, said: The footwear we make needs to be strong enough for the harsh conditions. I live in Korogocho and my footwear needs to be extra tough. If it can survive this place, there is nowhere in the world it cannot handle. Each sandal is developed on a theme, which is linked to the concerns of the workers. So, for instance, some of their designs are called Amani (peace), Zuri (beautiful), Mbele (forward) and Sa (clean). The second step that Ecosandals took was to embrace social media in marketing. The Facebook thing is good for business. Keeping in constant contact with the customers and pushing messages out to them on a regular basis is good. But also having our workers feel like they the are directly interacting with their customers as human beings. custo A challenge posed by social media, however, is the cultural difference how between the style of posts that a betw Kenyan would write compared to Keny those written by an American. Its thos hard for us to compete with the har American supplier, Mr Meyer Am

TIPS FOR STARTUPS


1. Understand what value you bring, and listen to what the makers are saying. 2. Its all about revenue. Know how much cash burn you can tolerate. 3. Capital nds good ideas. So develop the idea and then look for capital. 4. The job of a business is to tell the customer what they need. So dont conduct focus groups; instead build your market.

Similar companies in this niche


EcoPost is a Kenyan rm that uses recycled plastics to manufacture aesthetic, durable and environmentally friendly fencing posts and custom lumber proles. Alongside its 15 permanent sta, EcoPost hires the services of women working as casual labourers to collect the plastic and sell it to them by the kilo. In its rst eight month of operations, EcoPost manufactured 5,000 posts, removing 300 tonnes of plastic waste from the environment. Menyore Womens Group started in 1995 when a group of 30 women in Nakuru town waded through the expansive dumpsite along Nakuru-Koibatek Road searching for forgotten treasure. The women weave kiondos of various designs and sizes from polythene papers, which sell for Sh400. The women also make necklaces from magazines and old newspapers, which sell for Sh200-300. The Flipop Recycling company collects discarded ipops that blight coastlines and waterways, and gives them to artisans from local communities who transform them into household goods, fashion items and accessories including sculptured animals, stationery and interactive games.

What you can recycle:


Glass Bottles Glass Jars Plastic Bottles Tins Refuse and garden sacks Newspapers and magazines Cardboard boxes Tyre inner tubes

said. What is a said guy in Korogocho g going to write g o n Fa c e b o o k to convince the t beach market? He be knows nothing about their life on the beach. Now Ecosandals is training their workers on social media. The companys third strategic decision, which synchs with making workers shareholders and allowing them to engage with their customers through social media, is to break the anonymity of the worker. By putting a card on each of the sandals which has the sandal makers name and their email address, direct contact between the maker and the customer is established - which ultimately bridges the gap between the two and prevents an intermediary from eating into the prot margin. Mr Meyer says this is probably a revolutionary idea for the textile or the fashion business since through the card, the sandal maker is given a voice and granted them recognition and respect. Mr Meyer talks openly about the management problems that the business has experienced. We had put up a website, and when the businesses on the web was taking o and we got a lot of press from it. But then a lot of people were stealing money. We tried to put controls but when you are making $20,000 every day, multiply that to what the shilling was then, and put that in Korogocho or Mathare terms and that is a lot of money. Theres a lot of temptation. Not putting appropriate nancial controls in place was the mistake. I should have had professional, real auditors and paid them whatever I needed to pay them, and treated it like a real business. I thought I could look everyone in the eye; I go to their houses; I hang out with them and therefore theyre honest. But Ive learnt. Now were working with a local auditing rm. Ecosandals prides Ec itself on its tagline it that boasts that their sandals t are good to wear ar for five years or for 5,000 miles. And to experiA ence the 5,000 mile journey that they are walking, you will w need to buy b a pair.
July Nairobi Business Busi Monthly |

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