Lance Kalish knows a thing or two about making a business commercially viable. The Startup Australia Ambassador is co-founder of multi-national skincare brand Yes To, holds seats on the boards of numerous companies both here and abroad, and was named one of The Australian’s Top 20 Figures to Watch in Technology in 2012.
But it’s his actions as a social entrepreneur that have recently garnered him the most attention.
Kalish and former University of Technology Sydney pal-turned-business partner Ido Leffler launched stationery supply brand Yoobi two years ago after realising the products on offer had barely changed since they were young.
The pair aimed to launch a stationery range that would pique the interest of both children and adults and it wasn’t until they were at the coalface they became aware many children in the US didn’t have access to the fundamental items they required. This meant that teachers resorted to paying for classroom necessities out of their own pockets.
- 99.5 per cent of all teachers buy essential classroom materials out of their own pocket
- $485 average out of pocket spent per teacher each year; and
- $1.6 billion total K-12 teacher spending on school supplies each year
The Yoobi business models works via a “one for you one for me” system where for every school range item purchased through retailers, one Yoobi item is donated to a child in need.
“We were [based in the US at the time and] able to start Yoobi with a few hundred thousand dollars that we invested in the first two years. We focused our launch with Target Corporation, which has 2,000 stores. Being successful in getting Target to list over 80 products on launch in all stores allowed us to fund the remaining working capital needs.”
"When consumers have so much choice available, sometimes they need another reason to buy. Knowing that their dollars will also be used to help others is a powerful sales driver."
In 2014 the results of an online survey conducted by the NSW Teachers Federation found teachers’ average out of pocket expenses averaged $1848, and in in late 2015 Yoobi secured a deal with Officeworks in Australia.
Today Yoobi has more than 30 staff and over 500 products on the market across the two countries. In the US, Yoobi has donated more than 49,000 classroom packs with each pack containing enough supplies for 30 school children. While it’s early days, the Australian arm of the operation hit its first milestone within three months of launching – impacting the lives of 10,000 Aussie kids in need.
Kalish says the pair always believed finding a purpose for their business was as important as driving a profit. Understanding that the more successful your business is, the more you are able to give away and make an impact on society is the best driver you can set for yourself and your employees, he says.
"I’ve found that if giving is a part of your brand's DNA from day one, and all other elements of the business are planned around this cost, neither the product nor the price need to be compromised."
“When consumers have so much choice available, sometimes they need another reason to buy. Knowing that their dollars will also be used to help others is a powerful sales driver.”
Kalish admits giving away such a significant amount of product comes at a huge cost to the business. However while others charge a premium for their product or accept a lower profit margin with the expectation of selling more units due to the social cause, Yoobi prefers to work a little differently.
“I do and I’ve found that if giving is a part of your brand's DNA from day one, and all other elements of the business are planned around this cost, neither the product nor the price need to be compromised.
“In the case of Yoobi, we were able to develop a business that is both commercially attractive and has a huge social impact without either interest cannibalising the other.”
Kalish says today’s consumers are information savvy and offered plenty of choice when in retail stores, so those considering following a similar path to Yoobi should work hard to ensure their offer is “clear, transparent and tangible”.
“In other words, a consumer needs to quickly and easily understand how purchasing your product can help someone or something. If they can link the social and commercial side together easily, they will immediately associate your brand with something positive and wholesome, and you will have a major edge on your competitors.”
Tracey Porter is a career journalist whose mug shot appears everywhere from daily newspapers and online news sites to business and consumer magazine titles.