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.