PETER BARRETT: You’ve done various projects that combine enterprise with social development. How did you get started in this work?

SIMON GRIFFITHS: Throughout my university years I spent a lot of my holidays in Asia, and one year I was working with a really small NGO in Cambodia trying to figure out how they could use local tourism to funnel more money into their projects. So I launched a website with three other guys called Ripple that fundraises for different aid organisations using internet advertising. I thought it was going to be this amazing game-changer but we found that our main users were people already engaged in development aid. Ripple just gave them a different channel to engage with.

So it didn’t take off?

The website performed really well, it just didn’t do what I wanted it to do, which was to make development accessible to a new audience. So I started thinking about a few things. One was how, instead of trying to change people’s behaviour, you work with existing behaviour to create something that is potentially much more impactful.

And that led you to work with a traditional NGO in South Africa, where you discovered that the “model” they used was broken?

I was in Durban, South Africa, working on an education-based program around life skills—things that growing up in Australia you’re taught and take for granted, like the concept that rape is wrong. I felt really limited by the number of people I was helping. There were four of us working with about 100 students each and a lot of the time I’d drive two hours to go to a meeting and the person I was there to meet didn’t show up. I had been working towards that meeting for three days. There was this constant time-wasting phenomenon that, at that point, just didn’t make sense.

So I planned a trip through Eastern and Southern Africa, looking at different aid development organisations, to build an understanding of what good development looked like.

What did you see?

Everything from the smallest of the small NGOs to much larger operations that were doing really good work but were limited in their scalability.

So, maybe they were doing an amazing job educating 800 students, but would never be able to grow their model to reach hundreds of thousands of people—which is necessary when there are over 700 million illiterate adults globally! I found that regardless of how good one solution was, pretty much every place I went through suffered from a lack of funding. So I was learning how to solve this funding problem that existed for everyone. That’s the other piece of the puzzle that came together.

A “eureka moment”?

It was a really gradual process actually. At this point my friend from university, Zanna McComish, had been in Tanzania, volunteering teaching English. She was on a beach, on a broken chair, drinking warm beer and said, “This is incredible. What if we could take this moment and replicate it in Melbourne where we’ve got great hospitality, and use the profits from these exotic products that we bring in to support our own development projects?”

At that point I realised that it made a lot of sense because you were working with someone’s existing behaviour which makes it much more impactful than just funding a regular for-profit company.

In the latter case, you created a new channel of funding for these organisations that were spending around 30 per cent of their time competing against each other for a limited pool of philanthropy capital, which just didn’t make sense for anyone.

How did you feel at that point?

It all kind of made sense. By then I had been through 44 countries over the 10 years. I’d been throughout the developing world for that period and basically tried all the products that we now sell at Shebeen in their country. I’d done the market research! So I came home and started working on it a bit more seriously. That was 2008. I wrapped up the last of my study and started trying to piece a business model together.

Did you know anything about hospitality?

I’d worked in a bar at university. We basically put together a business model that had all these holes in it and I shopped the idea around to different hospitality figures in Melbourne, trying to get them to tell me what was wrong with the model.

And did you manage to raise the capital?

We went to the press and got an article in the Sunday Age in December 2009. We had a huge response from that. I remember going back to see my family for Christmas and going, “This is it. We’ll open in three months, everything is looking great.” And then after three months of following up we only had $10,000 in the bank.

It was pretty frustrating.

But everything takes five false starts—this was just one.

Then we refined the model and realised we should probably be asking for more money. So, instead of just looking for one individual, we needed a large number to come in for a small amount of capital. We set our sights on $250,000. We went back to the press, did a big launch, got a tonne of media coverage and through that process had a bunch of different investors come forward and say, “Yep, this is great. I want to be a part of it.” We got the first $150,000 on the table and that was the point that we said, “We can make this work.”

The idea behind Shebeen is that 100 percent of the profits are donated and it’s the customer’s choice at the bar to determine where the profits end up.

So, if you have an Ethiopian beer you are sending a portion of profits to our partner in Ethiopia, KickStart, who produce agricultural pumps for the rural poor. And if you have a glass of South African wine you’re helping provide a local language book to a school kid in KwaZulu-Natal. We currently sell products from 11 countries and work with seven beneficiaries in those geographies.

Have you been able to track the difference made in all these communities?

We’re just getting into that now. We opened in February 2013 and after four-and-a-half months we made our first donation: $12,787. We’re now generally donating between $2,000 and $7,000 each week depending on how busy we are and how well we’re rostering. We’re still working out exactly what that translates to in terms of the impact that we’re making through our beneficiaries, and we are going to release some impact data in the very near future. We know, for example, with Vision Spring in India, it costs four dollars to give someone a pair of sight-restoring eyewear, and an independent study by the University of Michigan shows that once someone has got that pair of glasses, it increases their efficiency by about 20 percent. That’s an extra day in the week to do stuff.

What about Who Gives A Crap? Where did that idea come from?

A couple of things happened. First of all, Shebeen changed from a relatively harebrained scheme into something that would actually work, so our mindset changed a bit through that process. As a result I started thinking about what was wrong with it, what was the downside of the model.

I started thinking about not just the financial side but also the physical product—what you could do that could reach a much larger audience.

I suppose you can only sell so many beers in one night.

And you can only fit so many people inside Shebeen. I walked into the laundry one day and saw toilet paper sitting there and thought, That’s it!

We work with toilet paper, we fund sanitation projects in the developing world and we call it, Who Gives A Crap!

So we had to figure out how the hell you start a toilet paper company. First of all, we put the idea out there and we won a spot at the Unreasonable Institute, which is like a social business incubator in Boulder, Colorado. The pick-up was phenomenal. A year later we were still meeting people who were like, “Oh yeah, I’ve heard about you guys from that initial email you sent around asking people to help you get a spot at the Institute.” We came back to Australia and started piecing together a partnership with an Australian producer. We also won some grant funding from the Australian Centre for Social Innovation and were going to use that to put this partnership into place.

So, talks were going well with the Australian producer, WaterAid was on board and then…

One of the major supermarkets launched a price-slashing campaign. Basically all the profit margin in commodity items, including toilet paper, evaporated overnight, nationally. And so the producer was—understandably—concerned about the profitability of their company moving forward. All their costs had to be tightened up and as a result our partnership got scratched.

We visited heaps of factories. After the first visit I was on a train back to Hong Kong feeling sick in the stomach after seeing what I perceived to be pretty dire working circumstances. You either saw all the “blood and guts” of the operation or you were shown this rosy picture of what was going on. But once you walked behind the wrong door things weren’t as the seemed. I thought, How can we as a company that’s all about ethics produce in a way we’re happy with? We can’t produce in Australia but if we are producing in China, are we comfortable with that? At that moment, I realised that literally every single thing that I had on me, including my clothes and everything in my suitcase and my suitcase itself, with the exception of my wallet, was made in China.

So how did you resolve that tension?

As a company that is all about improving the lives of people in the developing world we saw an opportunity to work with the factory to improve their working conditions.

We’re expecting that making these improvements will also make our producer more internationally competitive so they get more work, and start to sell that story as part of their business—it’s win-win.

Ultimately we want to see more ethical production and greater transparency in all companies. If something is made in China you should really know what’s going on in that factory, if you’re a customer.

It’s been an amazing journey for Who Gives a Crap. Have there been any failures?

A tonne. The first production run for Who Gives A Crap was horrible because I didn’t do the quality control well enough. It was purely my fault. I was the person on the ground and in the factory for that production run and I just didn’t get it right. The perforations were a really low quality to the point where we’ve still got tonnes of stock that’s not good enough to sell to our regular customers and we’re trying to figure out how to offload it in a way that doesn’t just mean dumping it and wasting a whole lot of resources.

Doing anything new is always about learning from your mistakes. If you’re going to make mistakes, make them as quickly and cheaply as possible so that you can refine what you’re doing. You are never trying to get to the end result straight away. You are taking incremental steps and using that to inform what you do next.

What has been your impact so far at Who Gives a Crap?

We made our first WGAC donation in June 2013 and worked out that every roll that we’d sold was providing access to a toilet for someone for a week, which was a pretty cool outcome. We made our second WGAC donation in June this year and found we were still achieving that same per roll impact metric, but because we’d grown so much we were creating about 10 times more impact in total! We’ve actually been working on the full impact report this week and are just waiting for internal approval before we release it publicly.

Shebeen and WGAC aren’t conventional businesses. What keeps you going through the ups and downs?

You learn that mistakes are really beneficial so you stop fearing them and kind of relish them.

That’s just part of managing your own sanity. Otherwise, there’s a really big picture motivation there, which is all about poverty alleviation.

On a day-to-day level, for me, it’s really about delivering something that I believe in and seeing people interact with the product. Creating something that’s meaningful for them.

Is there a greater goal?

Impact-wise, if we are not improving the lives of one million people I won’t be happy.

That’s what I personally shoot for. Each model and each step we take is an iteration getting closer to what the end product will look like. We’re trying to figure out how you can create a business model that is sustainable.

When you chose to leave your investment banking job in Sydney were you making a conscious decision about your personal level of financial wealth?

Yes, but the big thing, though, is that I think a lot of people have an assumption that quality of life comes from money. What I’ve learnt is that quality of life comes from lifestyle. Certainly, I can live well without necessarily having a big income. And that partly comes from the fact that there’s a lot of people that believe in what I’m doing and are helping make things easier.

Could you imagine yourself doing anything else?

Totally. But for the moment this is pretty good. I think for me it’s very much a work in process. I see this as the very beginning of what is going to be an incredibly long journey that will change a lot over time. I definitely don’t see what we’re doing as being hugely successful, I see it as being 10 per cent or five per cent of what could be achieved overall. It’s all about the potential output.

You seem like a pretty restless type, always looking for the next challenge. Anything else in the pipeline?

At the moment I’m really focussed on getting both businesses to their full potential. That said, there’s always something new in the pipeline, just nothing I can talk about publicly just yet!

Is there anything you’d have done differently?

When all of this started no one knew what social business was in Australia. If we had our time again now, starting out, I totally would have gone and worked for someone else who was doing something similar and tried to get skills and experience in that area so I could learn from their mistakes and their skills and experience. It would have saved a lot of time.

So what is a social business, for you?

I think it is about a financial transaction with someone—whether it’s a consumer or business—but as part of that transaction there is an element of social good or impact that is embedded into it. Ideally it’s measurable impact so the customer knows exactly what good is coming out of that.

For example, five cents from every drink goes to charity?

That’s not necessarily creating social impact, though. Because if five cents of every drink goes towards building a well somewhere but no one ever uses that well then you’re not creating any impact at all.

How are your businesses measuring social impact?

Shebeen’s probably the better example because we’ve worked really hard on the impact. So with VisionSpring we know that for four dollars we’re improving someone’s level of efficiency or income by 20 per cent. With KickStart in Ethiopia we know that by gaining access to a Kickstart pump the average farmer will be able to increase their annual income from $150 to $850 through improved crop yields. All of Shebeen’s beneficiaries are measuring their impact all of the time.

You seem to have a different relationship with your work. It’s not just a means to an end—it’s a way to fund the life you want to lead.

Yeah, and I think that’s where everyone should go. That’s when the world will make most sense, when everyone is doing something that they actually believe in, where the outcome makes sense but they’re being financially rewarded at the same time. It’s a balance.