MIssion-driven social entrepreneurs can't forget the fundamentals of building a successful business when they set out to change the world.
Social enterprise is often described as a marriage between mission and profit, doing good and doing well. Ideas for socially conscious ventures don’t typically spring from market testing, but from a eureka moment: There’s a problem in the world, and, hey, I know how to fix it.
Those motivating origin myths make for great stories, but many social enterprises fail by getting so caught up in the thrust of inspiration that strategy becomes muddled or is skipped altogether.
Yellow Leaf Hammocks, a rising socially conscious lifestyle brand, could have launched fast after its inspiring moment only to crash and burn. Yet smart planning and business sense gave the company the organic, slow-growth start that offers it the best shot at a sustainable future. How you run your company is just as important as why.
The Eureka Moment: Why Hammocks are Awesome
It might take a particular form of corporate burnout to make a man fall madly, wildly in love with a hammock. Or it might take a very special hammock to change a man’s life.
Joe Demin, 28, founder of Yellow Leaf Hammocks, had been lucky by recession standards. Laid off from a green building firm, he landed a finance job at a Big Four consulting firm and was studying for the GMAT. A month before the exam, he and some buddies traveled to Thailand to burn off some steam.
There, outside a shop, Demin found the softest, most comfortable object he’d ever come across—a handwoven hammock. “It was love at first swing,” he says.
Stretched out there, Demin listened to the shopkeeper describe a Thai hill tribe, the Mlabri. Rapid development and deforestation had eliminated all but about 400 Mlabri people and cornered the former hunter-and-gatherers into a small village where they’d been exploited and forced to become slash-and-burn agriculture workers. They suffered exposure to toxic chemicals and high rates of cancer and malaria. Though they wove as many hammocks as they could sell to visiting tourists, their meager living was earned primarily working in deforested fields.
Swinging in the hammock, Demin realized that if selling small numbers of hammocks had created some opportunity for the Mlabri, steady weaving work could build a true alternative. He also realized there wasn’t a major competing hammock brand.
Demin’s girlfriend and business partner, Rachel Connors, 26, laughs remembering staticky phone calls home, “I’d hear ‘crackle, crackle, I found this hammock…crackle, crackle, I’m headed to the jungle.’”
A flight and a 600-mile cab ride later, Demin had left his friends to spend six hours in the Mlabri village of Ban Boonyuen before returning home. He met the weavers and saw their unfinished homes, many of which lacked running water. He spotted forest fires on the horizon. The need for opportunity was obvious. Demin forged an informal partnership, bought as many hammocks as he could fit in his bag, and returned home, gushing about the potential for changing the lives of the Mlabri. “He had his business plan on his airsickness bag,” Connors says.
The Bootstrap Plan for Growth
For all Demin’s exuberance and newfound passion for building the company, testing, roll-out and start-up took a methodical course. “My entire career, that I’d spent my entire adult life creating, I was basically going to drop that in the midst of this recession,” Demin says. Before quitting their day jobs, Demin and Connors—formerly a nonprofit fundraiser and event planner—worked nights and weekends building a brand identity.
Demin was convinced that he needed to test the market. “Any good we do in the world through Yellow Leaf is contingent upon hammock sales,” he says. So the pair spent the summer of 2010 traveling to New England weekend markets and festivals, selling Demin’s first stock of hammocks. They didn’t lead with the Mlabri’s story, wanting to see if the hammocks could hold their own as products.
As festival-goers stretched out in the hammocks, their cries of “Oh, my God, this is amazing!” drew other customers from nearby booths. The amazing factor, bolstered then by the story of the Mlabri, clinched the deal for many customers. Demin’s first $300 investment quickly turned into $1,000, which he and Connors reinvested, ordering more hammocks and building sales organically.
Demin drew advice from a network of people familiar with the social enterprise landscape. He learned that raising startup capital can take six months or more. “For a crazy idea like a hammock company, who knows if there are investors for that? The amount of time I could have spent raising money and giving away equity—diluting the mission,” Demin waves off the idea. “I could just go directly to our customers and start building this movement.”
Alissa Sears, an informal advisor to Yellow Leaf and "Global Betterment Director" for Christie Communications, has worked in ethical business for 20 years and says that Yellow Leaf’s rigor and focus on its product is a good idea. “Often you’ll see trinkets or bracelets or something, where it’s well-intentioned, but it may not necessarily be marketable,” Sears says. Doing market research, considering placement and promotion, she explains, “that’s what is going to ensure success, because then you have a customer buying your product because it’s a phenomenal product and it’s doing good. Otherwise it can’t last.”
In early 2011, the bootstrapping young company used travel funds won through British Airway’s Face of Opportunity contest to return to Thailand and solidify partnerships with weavers. This past December, the company raised more than $10,000 through Kickstarter to develop a new line of sitting hammocks—imagine a far chiller Lay-Z-Boy. The first production line ships in May. It’s a way to expand the hammock market by offering city-dwellers a posh new furniture option with a frame made of reclaimed wood and metal, built by U.S. artisans.
Though planning and testing began in 2010, the official launch of Yellow Leaf, a certified B-Corp, happened in August 2011. In the past eight months, the company pulled in revenues of $52,000, with expectations rising as warm weather (prime hammock-buying season) approaches. Yellow Leaf’s first-year goal is to sell 2,000 hammocks.
Over that same time period, Yellow Leaf has employed as many as 100 weavers in two villages. From making one hammock, a weaver can earn what she and her entire family would earn in a month clearing forestland, giving children who had been working alongside their parents the opportunity to go to school. “They now have choices available to them that were beyond the reach of dreams just a dozen years ago,” says Allen Long, a partner from the Ban Boonyuen Foundation who grew up among the Mlabri.
Photo courtesy of Yellow Leaf Hammocks