LivelyHoods, led by Tania Laden, has been named as one of nine finalists in the 2014 Gratitude Awards from the Gratitude Network to be awarded at SOCAP this coming week in San Francisco. The finalists were chosen from among 32 semi-finalists, who were chosen from among nearly 150 applicants. To learn more about the awards and SOCAP, see our story in Forbes. You can read all our coverage of the Gratitude Awards, including profiles of all nine finalists here.
Four winners will be announced on Thursday, September 4, 2014. We obtained a copy of the application from LivelyHoods so we could share it with you below:
Please describe your venture:
LivelyHoods creates jobs for youth in Kenyan slums so they can work their way out of poverty and actualize their potential. To achieve this, we employ youth from slums to sell life-changing products in their communities. Although we are a non-profit, we operate with the mindset of an entrepreneurial start-up.
What is the problem are you solving and why is this important?
While Kenya’s economy is expected to grow by 5.1% in 2014, youth unemployment has been identified as a major challenge that could critically hamper Kenya’s prosperity (World Bank, 2013). LivelyHoods is addressing youth unemployment and access to affordable and efficient cookstoves as well as other life-changing products for the 8million people who live in Kenyan slums. By addressing this challenge LivelyHoods is contributing to the economic growth of Kenya, reduction of extreme poverty as well as gender equality by offering equal employment opportunity. Youth unemployment contributes to social problems including civil violence, as seen in the 2008 post-election violence, where 80% of the perpetrators were unemployed or idle youth. Therefore, by reducing youth unemployment LivelyHoods will reduce this population’s involvement in crime and social unrest.
What is your solution and business model?
The LivelyHoods innovative model operates through a two-pronged approach, training youth on vocational and professional skills essential for employment in the formal sector, and providing employment to those trained. We operate a daily microconsignment model, which provides a low-risk mix of entreipreneurial and employment experience through selling socially transformative products in slum communities. Sales agents are responsible for managing their own businesses, including prospecting different locations, managing their resources, and selecting their basket of products from our range of solar lamps, clean-burning cookstoves, and houshold appliances. The professional skill development opportunities that youth access through the vocational training at iSmart assists them to break into the formal job market, and for many, provides their first job. Our branded retail network consists of customer service centers and uniformed sales representatives, targeting the most hard-to-reach households in urban slums and peri-urban communities. Similar to how Apple built a network of showroom stores and well-informed sales representatives, we are building the optimal customer service experience for Kenya’s BOP.
What is unique patentable, or otherwise not seen elsewhere about your venture?
LivelyHoods aims to attract and train youth from all backgrounds, genders and education levels. We offer the opportunity for illiterate, non-educated youth to be competitive in the labor market by teaching them a basic, important skill that is applicable in most retail jobs or consumer-facing endeavors. Our model also includes field training and the potential to earn a commission, allowing youth to see immediate results of their newly acquired skills. Finally, we are not training youth to sell soda or tomatoes. We train youth to educate consumers about green technology goods and other products relevant to their communities. An ability to introduce new products to the growing base of the economic pyramid market and sell high-end goods by communicating their value can be a lucrative skill set. Our key innovation is called the daily consignment model. This model takes all financial risk off our sales representatives and enables us to deliver any product in our catalogue to anywhere in the slums within 24 hours. Our agents do not make capital outlays or take loans with interest. Therefore, if an agent is unsuccessful, they will never be left in debt. Instead, we give our sales agents access to a daily consignment of $75 USD.
Please describe who your customers are and how you know they want your product?
Eight million people live in Kenyan slums, and the number is growing at a rapid rate as people flock to cities from rural areas in search of employment. According to an Accenture 2012 consumer report on Africa, Kenyans spend approximately $23 billion dollars per year on retail. In a 2011 report, the World Research Institute claimed that approximately 71% of all purchasing power occurs in the base of the economic pyramid. And the UN-Habitat estimates that 24% of informal Kenyan businesses operate within slums. By multiplying these three data points, we estimate that the annual consumer market in Kenyan slums is approximately $3.92 billion dollars, with the durable consumer market at about $1 billion dollars. Despite their vast, fast-growing purchasing power, slum consumers lack access to adequate cooking and heating technologies. According to a 2012 Kenya Market Assessment Report by the Global Alliance for Clean Cookstoves (GACC), “the market for improved stoves comprises mainly urban and peri-urban households living just above the poverty line.” The total addressable market for clean-burning cookstoves in urban Kenya, according to the study, consists of approximately 700,000 households.
In which country does the target population your company serves reside?
Please comment on the strength of the venture’s leadership:
Tania Laden is the Executive Director and co-founder of LivelyHoods, having managed operations, staff and sales as COO for the last three years. Her previous experience includes an educational technology start-up in Brazil and financial advisor with Morgan Stanley. Brian Odhiambo joined as COO at the end of 2013 after having co-founded Zamsolar, a last-mile distribution company focused on creating employment and delivering energy solutions. Brian recruited and managed a staff of 20 full-time and 400 part-time personnel. With this team, he grew monthly revenues from $3000 per month to up to $40,000 per month in the company’s first year.
Please describe the impact your company will have or is having, the way that you measure your impact, and the scale you plan to reach?
The outcomes of the program on trainee graduates will be evaluated based on an individual’s progress against the baseline survey . The survey measures data related to the following project outcomes: (1) increasing access to economic opportunities; (2) developing professional and employable skills (3) improving quality of life. Specifically, the baseline data tracks employment status, education and professional skills repertoire, income level, savings, ability to meet living costs, and number of months unemployed in the previous six months. We define success in two ways: (1) if each individual trainee has experienced the three intended outcomes of the LH project based on an evaluation of progress from their baseline data; (2) if 75% of all training graduates, disaggregated by gender, are able to identify employment, education and entrepreneurial opportunities following the completion of the LivelyHoods training program.
How is your organization innovative? Have collaborations with others enabled that innovation?
LivelyHoods grew out of a failed attempt at a program to give youth entrepreneurial training and loans to start their own businesses. After two weeks of training, the pilot group of seven youth told us that that didn’t want loans to start businesses when they had no experience or confidence in their abilities to do so. These youth set out to discover what strengths their peers had and interviewed 300 youth to find out that every person they spoke to had sold something at some point in their lives, from mangos to drugs. We worked with our pilot group to survey their community to find out what kind of products they needed. As a result of this cooperation, we launched the program that we are still growing today and solidified this model of cooperation and ownership with the youth we work with.