Not for profit as we know it, using DTC to create a new way of doing business
There has been much chat lately about the validity of DTC businesses, specifically are they just a trend or do they offer something of real value? The most balanced commentators acknowledge that while there is no shortage of hyperbole, they recognise DTC’s role as a platform for innovation. What’s more, the innovation allowed by DTC doesn’t have to be limited to just products alone, but can also extend to the whole structure of a business. For example, who has ever heard of a company that is 50% Not For Profit and 50% For Profit? Me neither, that was until I met Simon Griffiths CEO of Who Gives a Crap.
I spoke to Simon just before Christmas on a Zoom call as he lives and works in Melbourne, Australia. When we spoke, Simon was looking hot and bothered. Melbourne had just had its hottest day on record. My timing was lucky, the call was just days before the Australian bush fire nightmare started. In hindsight, it was appropriate that much of our conversation was about the impact of Simon’s Business, both the social contribution it makes and the importance of having a more sustainable product which uses less natural resources and carbon than its competition. Little did we know at the time of the call, it was about to come clear why businesses and products like Simon’s are needed now more than ever.
For me, this experience puts to bed any doubt about the merits of DTC as without it Who Gives a Crap (WGAC) would not exist. This post is the story of why that was the case and why it would be a travesty if WGAC could not do its thing.
Just like his business Simon is a bit of a dichotomy. He is a born entrepreneur who could be raking in cash in tech, finance or big business, but instead uses his savvy to lead a social enterprise helping finance toilets across the developing world. We spoke about his entrepreneurial beginnings on the playground, through to spending his late teens in the UK. He was a handyman to pay the rent and then teaching himself to build websites, when the internet was first becoming a thing. It was only when the tech bubble burst in 2001, he figured out now would be a good time to head back to Australia to get a degree like the rest of his peers. A few years later and a degree in Economics and Electrical Engineering under his belt he was in his own words “funnelled into the corporate world”. After unhappy stints as a proper electrical engineer, then as an investment banker, and just before he was about to try his hand at management consulting, he realised why he was miserable. “I was just not passionate about what I was working on, and therefore only giving it about 60 or 70% of what's possible. I reflected on this and realised to give my all, I need to care about the outcome”. Simon did not become a management consultant and instead joined a not for profit working on an education project in South Africa.
After cutting his Not for Profit teeth in Africa, Simon then headed back to Melbourne and started another unconventional enterprise, a not for profit bar which specialised in beers, wines and spirits from the developing world. The idea was the business would send it’s proceeds back to those countries where the drinks came from for development projects.
These two experiences taught Simon some valuable lessons which were critical in his thinking behind WGAC. 1) he enjoyed working on social development projects, 2) he was frustrated about the limited impact even the most thoughtful project could have and 3) how hard it was to get access to finance for a not for profit enterprise. With this figured out, Simon was now on the lookout for something new, something which delivered a scalable social benefit but did not have the restrictions of a traditional not for profit company.
Simon Griffiths, searching for inspiration
His moment of inspiration came while sitting on the toilet, staring at a toilet roll. Having spent lots of time in the developing world, Simon knew first hand that having access to a working toilet was something over 2 billion people do not have. He also knew that there will always be a demand for toilet paper. The idea for Who Gives a Crap was born. He quickly sounded out his friends and contacts for feedback on his plan. The response was so positive it was in those calls he also roped in the first of his two co-founders.
Together they started to tackle the problem of how to fund a mission led organisation which did not need to rely on philanthropy and charity. Eventually, they settled on the 50% for profit 50% for impact business model. This allowed them access to more capital meaning that if they were successful they knew they were able to scale quickly. Scalability was critical as they wanted to ensure their mission could help as many people as possible as quickly as possible.
The next challenge was to be able to test the demand and work out where they should sell their product. To do this, the team came up with an IndieGoGo campaign to finance their first batch of toilet rolls. The campaign involved a live web-stream of Simon continuously sitting on a toilet for 50 hours until they hit their £50,000 target. Apart from some damage to Simon’s legs (he would now not advise anyone to sit on a toilet for 50 hours), the campaign was a massive success. Not only did they now have the money to make some products, the campaign also showed them there was a big demand for their idea, it had global appeal.
The crowdfunding campaign also answered another question about how to sell the product. Initially, the team had figured they would sell their toilet rolls in the supermarkets, as this was the place where everyone bought household essentials. Simon explained, “I went to those buyer meetings, but it was always ‘we like it but come back in six months’, six months later it was the same story, and then we found out the buyer for the category had changed and we needed to start all over again”.
The good news, for Simon, was there was now a way to sell their products which did not require a supermarket listing, namely a Direct to Consumer model. The IndieGoGo campaign had already shown them there was online demand. The crowdfunding campaign had also started to build a following for the brand. Direct to Consumer, therefore, became the chosen sales and distribution model. An eCommerce website was built and an Australian warehouse set up to store and distribute the goods. This model was soon to be repeated in the US and the UK, with local websites and warehouses.
As well as DTC allowing Simon and the team to scale up the operation domestically and internationally rapidly, it also allowed them to have fun with the product experience. They could write what they wanted on the boxes and rolls, do limited edition runs, add more personalisation and could quickly test different products and ideas.
In the book, I will get into more detail about both their marketing and how WGAC have scaled their business, but the primary take out from this post is that using a DTC model has allowed WGAC to establish a new business model, a brilliant brand, produce more sustainable products and to date, they have donated nearly £1.5 Million to sanitation projects across the world.
As they say on their website; “Not bad for a toilet paper company, eh?”.
WGAC is an excellent example of why DTC is the platform to innovate, build a successful business and make a difference. If you are trying to launch a new product and an overworked supermarket buyer does not return your call, remember you may not need them after all.
