Planting SEEEDs of Innovation

Last week, my daughter Chana and I attended the SEEED Conference on Social Entrepreneurship at BrownChana Scofield ('22) & Gladys Ndagire ('14) ~ Sayles Hall, Brown University University.  It was an amazing gathering of those doing, funding, supporting, working in and for social businesses.  These are Chana's thoughts on the first day of the conference.  Chana is 13 years old and in 7th grade.  Yes, I am a proud mom and find her insights cut to the chase.

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While the entire SEEED Conference (Social Enterprise Ecosystem Economic Development) was interesting and enlightening, by far I found the panel “Core Elements for Building a Social Enterprise Ecosystem” the most intriguing. The varying beliefs and experiences of the panelists were highly educational and made the experience all together enjoyable. Dan MacCombie, co-founder of Runa, in particular, cut down to the basic fundamentals of social entrepreneurship by stating the devotion his company had for their cause. There was also discussion over funding for these enterprises, and finding the balance over providing funding for a company based on their cause or the structure of the company. Overall the points were fairly addressed, even with the occasional run-on answer. The metrics of social enterprises were discussed, the overall topic discussion ending when Dan pointed out that the best way to communicate a social enterprise's success and outcomes are (for now) a good story.

Interestingly enough, I pulled more information from that hour and a half panel then I would have from any given day at school. I now have a good enough idea of social enterprises that I feel comfortable weighing in on a conversation or offering up my thoughts. I do believe that funding social enterprises can be extremely difficult. On one hand, an investor doesn't want to invest in a company whose cause they don't believe in. On the other hand, it can be risky to invest in a social enterprise whose company is doomed to fail or doesn't have a stable enough business plan to succeed. It can be very difficult to find that silver lining, especially when the companies are interested in convincing you to invest, and not providing a complete image of how their enterprise actually runs. There is also the fact that in a social enterprise the focus is on the cause, not on pleasing investors. Those who have invested may not receive dividends since this money will most likely be redistributed into the company. For this reason many investors choose to distribute their money into a regularly functioning enterprise versus a social one.

These reasons are why I believe that Allen Kramer and Gladys Ndagire, plus their team, have created something special. What they have created is a $50 Million investment fund whose focus is solely on social enterprises, the New England Impact Capital. They are set to create a list of criteria to help to help them decide which companies to invest in. Seeing the amount of trouble investors have when it comes to social enterprises, this venture capital will benefit both the investor and the company by choosing social businesses whose causes are just and promises a return on investments similar to the average venture capital firm.

The SEEED Conference had given me an understanding of the importance of social enterprises, as well as the difficulties that come when choosing to invest in them. I think it is important for the investor to have full faith in the company and it's cause, as well as the enterprise's stability and business plan. This is why an investment fund based solely on social enterprises like the one Allen and Gladys are creating is not only an exceptional idea, but would provide support for budding social enterprises as well as a safer way to invest. 

Giving and Taking: Getting Beyond the Title

Thank you Ted Coine & Shawn Murphy for hosting my latest post

 

Lessons in Cambodian Silk Supply Chains

Marcelia Muehlke one of the great young entrepreneurs I get to hang out with.  She's just your 'average' 20-something creating an international supply chain in the fashion industry, and succeeding.  In the spirit of 'and/both' instead of 'either/or', Marcie doesn't accept the 20th C cut throat culture of the Garment District.  This is a wonderful story, with lessons for all of us! 

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Marcie Muehlke

My boyfriend Brian and I were backpacking in Washington State when he proposed.  The engagement caught me off guard, but I didn’t know then just how many more surprises that proposal would lead to--in my professional life. 

Based on my experience as a bride, I've started a fair trade wedding dress company that cares about the workers, working conditions and the environment. Making eco-socially-responsible wedding dresses requires a very special international supply chain and lets me combine my background in international development and my MBA. I thought I was keeping it simple (just a handful of designs and one color) but in the past year I’ve learned just how complex even a seemingly simple supply chain can be.

Weddings are a $50 billion industry in the US and green weddings are growing rapidly (about half of all brides choose at least one “eco” product or service at their wedding) but there are few options for eco or socially-responsible wedding dresses. That lack of options means little competition which is tempting but also gave me pause – was it possible to build the kind of supply chain I was imagining? To find out, IFigure 1 bought a plane ticket to Thailand and started setting up meetings with silk makers and sewing groups there and in Cambodia and Nepal.  To get started, I just needed one reliable silk making group and one talented clothing producer that followed fair trade practices and would agree to my low minimum orders.  This was my initial view of the supply chain (figure 1).

It has been a year since that first trip and I am still learning just how challenging, complex and rewarding it is to develop an ethical supply chain Figure 2 (Figure 2).

The Celia Grace supply chain starts with our fabric, heirloom Cambodian silk.  Our silk is hand woven in rural villages on wooden non-electric looms using traditional craft techniques passed down through families for generations. I visited the village where our silk is woven and walked under houses on stilts to visit with the women as they wove, chatted with neighbors, and dried rice on tarps in the sun.

Silk: Making silk “thread” is a difficult process.  It requires growing mulberry trees, raising silk worms, unwinding cocoons, spinning thread, and crossing the border from Vietnam to Cambodia. Customers ask if Celia Grace silk is organic or pesticide free and whether silk worms are killed in the process.  These are excellent questions but ones I can’t yet answer – I’ll be visiting the Vietnamese silk farm on my next trip.

Cut & Sew: This is when we make the actual wedding dresses.  I am incredibly fortunate to work with an amazing women’s sewing cooperative in Cambodia where several dozen women work in safe and fair working conditions. They pay a living wage and treat members like the smart, talented, professionals they are by offering benefits, professional development and upward mobility unheard of in the rest of the country’s garment industry.  We had to figure out how we’d handle a surge of orders and ensure a steady supply of work, and therefore wages, despite the cyclical demand of the wedding industry. We are regularly in touch about work conditions, pay rates, work policies, and adding an additional layer of (extremely important and rewarding!) of communication, documentation, and thought, helping us earn fair trade recognition (currently in review).

Wedding dress need the right trim and supplies like liner fabric, zippers, buttons and embellishments.  This is a challenge since the high quality zippers and beautiful glass beads we use can’t reliably be found in Cambodia.  I don’t know who was more shocked in this process:  me when I discovered how little was available, and with regularity, in Cambodian markets (“what do you mean you can’t get the same buttons this month?”) or the Cambodian women when we sent a few pre-fab sections of beading from the garment district in New York (“You can buy all these in a store?”).  Quality control poses additional issues: even thread coloring and thickness, every dress element done completely and correctly and arriving perfectly white and pristine after traveling around the globe. 

Another important element of the supply chain is building and managing relationships and business-to-business issues.  This involves all the logistics of a business relationship – invoicing, payments, product changes, placing orders, inventory, and more, but with the added layer of language barriers, cultural differences, and the learning curve of a small business.  And we haven’t left Asia yet!

Import & B2B: Sending dresses from Cambodia to the US is the last step in the Celia Grace supply chain.  How will they be shipped, what is the port of entry, what classification does each dress style fall under and what is the rate of duty?  I went to a daylong course on this topic only to learn that people do only this professionally for decades--and still get it wrong!

The amazing thing is that what I have described is an incredibly simple supply chain: one source of silk, a cut and sew producer, export/import from one country.  We are looking ahead to next year and have plans to expand to more regions.

What have I learned through these past two years? I can summarize them in three lessons that apply not just to my supply chain, but I believe to many supply chains:

1. Partners matter! Given the kind of product and impact I am trying to make, building a mutual relationship with trust is essential.  This starts with face-to-face meetings and spending time to get to know one another’s needs, strengths, and weaknesses.  It continues through regular, clear communication, flexibility, and transparency.  While it is a partnership, both parties are also businesses that want to grow and earn money, so negotiation will take place but should look for win-wins rather than distributive solutions.
2. Supply chain and product development go hand in hand. With a socially responsible supply chain, chances are you can’t take your product and tell a producer “I want exactly this, reproduce it without any changes.” Instead, developing a product takes place alongside developing the supply chain, which will take extra time, more communication, and probably more money.  Be flexible and open to changes and new solutions that you might not have considered but work in context.  For Celia Grace, one example of this was adapting our designs so that they worked with the local silk.
3. This will take longer than you think.  This advice is nothing new but it is important – physical distance, communication challenges, natural disasters, delays from times when I am particularly busy, even abundant national holidays seem to conspire to slow things down.  So plan for this, give yourself a buffer, and create systems as you learn to move things along and make them run smoothly.

It is no surprise that building a supply chain, even a simple one and especially a socially responsible one, is a complex process that takes time, flexibility, and the understanding that you are building a partnership.  What is surprising is just how exciting and rewarding it is – in my case the highlight has been meeting the most incredible women who live and work in really tough situations.  These women are smart, honest, savvy business people who care deeply about their work and the impact it is making.  I am so honored to work with them, share their story, and support the work they are doing, all while adding meaning and beauty to weddings here in the US.