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What 'Thankyou' means for social enterprise in NZ

***   Edit: After a chat with the *very friendly* team at Thankyou HQ I’ve made a small amendment to descriptions of Thankyou’s social enterprise model and added more things I like about them. I had previously described Thankyou as having a ‘one-for-one’ approach, yet this is not technically correct so now amended. ~J ***

Recently Australian Social Enterprise Thankyou launched into New Zealand with their line of everyday consumer items where 100% of profits are used to fund impact projects. Their arrival pushed social enterprise well and truly into the centre of mainstream media for a few days, with charismatic co-founder Daniel Flynn showing up on Radio NZThe ProjectThe AM Show, and idealog to name a few. Not to mention their personal care items being available online and in heaps and heaps of supermarkets and stores around the country!

Thankyou is one of those amazing brands that people just love. It is a consumer movement that leverages extreme consumerism to tackle extreme poverty. Flynn's book Chapter One describes to some depth the lengths that their (many thousands of) supporters went to supporting Thankyou to launch in Australia. The highlights reel includes helicopters with signs and volunteer flashmobs, with most of the best stories coming from their campaign to get supermarket chain Coles to stock Thankyou Water - where every bottle sold funds water and sanitation projects elsewhere in the world.

The arrival of Thankyou is a significant milestone in the story of social enterprise in New Zealand. We now have well-known media personalities actively promoting and talking about social enterprises, let alone understanding what they are. This is about as exciting as it was having Suzy Cato walk out to MC the Social Enterprise World Forum (which was amazing, in case you weren't there). Social enterprise has well and truly landed in New Zealand!

I will always buy a Thankyou product over a traditional competitor, and as a social enterprise practitioner and teacher I am also a fierce critic of Thankyou. There are many wonderful things to celebrate about Thankyou, and there are also significant flaws to their approach and their model - so they are not a good role model for aspiring or emerging social enterprises. There are many other leaders of social enterprises in New Zealand who are also critical of Thankyou (for reasons I'll go into in a moment), and several of them have had push-back from friends and colleagues for being 'haters' or 'tall poppy'. So I'm here as an ally for them, and to drive the conversation for more and better social enterprises in New Zealand.

Buy Thankyou products and tell your friends about them.

What works about Thankyou

To date, the impact made is considerable and impressive, and every item sold has a unique ID that lets you track your impact directly to where in the world you are helping. As of May 2018 their community (Thankyou + customers) have contributed:

As you can tell, they have a really clear idea of the big needles they are trying to move:

  • 844 million people around the world don’t have access to safe water
  • 2.4 billion people don’t have access to safe toilets
  • It is estimated that 96 people per hour are dying from preventable waterborne diseases 
  • 2.7 million babies don’t make it through their first month of life every year because they don’t have access to basic health care
  • a mother dies every 103 seconds due to pregnancy and childbirth related issues, with 99% of these deaths occurring in developing countries

As a set of impact metrics and measurable and meaningful problems, these are impressive. All of their impact initiatives align with the Sustainable Development Goals too, which is necessary. Understanding the actual problem they are trying to solve is the number one thing that most social enterprises do poorly, and Thankyou doesn't fall into this trap, which is excellent.

In addition to this clear understanding of problem and clear impact reporting, Thankyou does one other thing really well: helping everyday people see the possibilities of social enterprise. Every product sold shares a theme with the impact it is having, so the sales of western consumer products around e.g. babies fund solutions in emerging economies related to babies and childbirth. Their impact is essentially outsourced - they form charitable partnerships with those who work internationally, leaving Thankyou to build a brand and movement that makes money. They talk about leveraging extreme consumerism to tackle extreme poverty. New customers are exposed to the idea that everything we buy could be adding value to the world. Being a (relatively) large brand, the reach of their products will probably outstrip every existing social enterprise campaign in New Zealand. Woop! Their arrival and related media and brand awareness pushes social enterprise awareness in NZ onto a doubling curve. Which. Is. GREAT!

Recognising and acknowledging these great things, lots of social enterprise practitioners are both supportive and critical of Thankyou, which I believe is healthy and productive. We know that there are more unmet needs than solutions, and robust debate can help those of us who care to improve our own thinking and solutions. Such conversations shouldn't involve throwing stones or interrupting other people's approaches to solving social or environmental challenges. In those cases, no one wins. Critical conversations should be about the merits and shortcoming of approaches and models, with a view to learning and improving all of our understanding and practice. That is, how can we solve more social and environmental challenges in more ways, more often. 

What doesn't work about Thankyou

I challenge Thankyou because of the way that they make money and it's unintended consequences, and the way that they talk about how they started.

Bottled water is of course a dumb product, especially in New Zealand where just about every public tap pours out world-class drinking water. This was part of the reason why water wasn't the first item launched into New Zealand, and they instead started with their personal care line which will soon be followed by their baby-related items.

Put simply, most Thankyou products solve one problem whilst creating or perpetuating others. The oft-defended rationale is that 'at least this bottled water/disposable nappy/wet wipe is making the world a better place' - we would rather someone buys something like bottled water from Thankyou than from, say, Coca Cola. This is totally valid, totally short-term, and totally defeatist. It either concedes that extreme consumerism is here to stay so we should work with it, OR, is setting up to be a gateway drug that helps customers go on a journey away from single-use disposable items and towards less consumption in general. I really hope Thankyou is doing the latter, but they've never submitted anything about banning single-use plastics or similar systemic interventions, so it seems unlikely. We can do better, and social enterprises that are really committed to moving the needle ARE doing better. Happy to write about some of them if asked.

My second criticism is the way that Thankyou celebrates and promotes their start up journey. The short version is that 3 passionate, eloquent, well educated young Australians heard the gnarly stats about water and sanitation internationally, heard the money spent on water in Australia, and then worked for free for three years to start a bottled water company fully owned by a charity. They were constantly told 'it won't work' and their war cry became 'What if it does work?'. Despite all odds they were successful, and several years and thousands and thousands of hours and free goods and services later, they made their first donation.

In the business of starting impact initiatives, running off and doing a whole bunch of stuff for many years with the hope that maybe one day you will make an impact is the number one thing you should not do. And that's exactly what Thankyou did and promotes. What we have in New Zealand is the highest number of not-for-profits per capita in the world, and some of the worst stats in the world for things that the majority of not-for-profits exists to solve. We have too many people doing things and hoping they will make an impact down the line, which continues to not eventuate. 

As a role model and case study for how to start a social enterprise, Thankyou might just be one of the very worst approaches that someone could take in terms of building a business focused on actually making an impact, but it's one of the best case studies of a brand raising awareness and growing a consumer movement. That's why they're so successful - they make us feel like we're making a bigger impact than what we perhaps are.

What could they have done differently?

There are a few different ways that Thankyou could have approached their social enterprise start up journey, and a few things they could have done differently within the approach that they took. A social enterprise is constantly optimising the relationship between it's business model (where and how money is earned) and it's impact model (where and how the good happens), and there are a few ways that these two models can relate. What emerges as a result of the relationship between these two is what is called their 'social enterprise model'. Across all models, the approach I personally recommend involves rolling things out step by step, and with each step making a positive dent, learning something specific, and (preferably but not always) making some money. If we fail, at least we've done some good. If we succeed, we'll do a lot more. A critical part of this process is understanding and actively watching for unintended negative consequences - which TOMS shoes learned about the hard way. (Incidentally, TOMS are undertaking a change in their whole model, having moved internally towards a product innovation model but keeping their brand proposition of ‘buy-one-give-one’ after learning a lot on their incredible start up journey.) 

But there are other approaches too.

Thankyou's approach was to 'make money over here, and do some good over there' - what's called a 'resource generation model' of social enterprise. Better approaches to this model would make money in a way that doesn't add to other problems in the process (that’s a polite way of saying that bottled water may have been a bad choice). Such approaches are where someone takes an existing business idea, audits all the negative externalities of the business, then builds a different version without the bad stuff. For example, imagine that someone sells body care items: you'd see that animal testing, synthesised ingredients with harmful side effects on humans, unsustainably sourced ingredients, high water use, plastic packaging, and multi-wrap plastic packaging that can't be easily recycled is a quick hit list of bad things; and then make body care items without any of them. Sound hard? It is. It isn't common because it turns out that it's easier to make a mess than to keep things clean. Despite the obvious challenges, this is exactly how Malcolm and Melanie Rands started Ecostore, now well known for making body care products 'without all the nasty chemicals'. They even spent two decades trying to work around the need for plastic, which they managed to do through the invention of the amazing Carbon Capture Pak - which you should probably read about right now. Ethique took this exact same thinking one step further by not having any plastic, or any water, or any of the other bad stuff - their body care line are all solid bars that are delivered to your door wrapped in paper and cardboard. Hard, and totally doable. The competitive edge that the Rands' and Ethique's Brianne West had is that they were doing things that are deeply authentic to them as individuals - the former living in an ecovillage and the latter being a chemist. It's easy to come up with an idea, but it's harder to develop deep understanding and expertise in something - and that's why 95% of businesses, charities, and social enterprises fail.

Consider if Thankyou had taken what they're really authentic and good at (inspiring consumer movements and forming strong partnerships) and rolled that into New Zealand by partnering with Ecostore and/or Ethique. Multinational organisations are often successful because of their ability to align their supply chains and products, whilst diversifying their brands and marketing. Why not do that? These types of collaborations require all parties to recognise that on the surface they are competitors, but underneath they are all committed to something much bigger than each of them (be it profit or impact). This approach of coopetition (cooperative competition) is exactly what's needed of impact-led organisations if they are going to out-perform existing global monoliths. All it takes is an authentic desire to do good, an open mind, and some sound business acumen. Handily, these are also the main ingredients for running a social enterprise.

Closing thoughts

The arrival and fanfare surrounding Thankyou's arrival provides a great context and awareness for many more people to join existing social enterprises and start new ones.

It's easy to point at products like body care items above and pull apart the business model and rebuild it in an environmentally sustainable way - very easy in concept, very hard in practice. It's even harder to do the same when you look at a business through the lens of The Treaty of Waitangi or institutional sexism, or consider a businesses' role in contributing to domestic violence or drug and alcohol abuse. These are but some of the gnarly challenges that we have to work through in New Zealand, and there simply aren't answers yet to many of these things. We know prevention is better than response (just like not using plastic in the first place is better than recycling it), but both are currently still needed for most social and environmental challenges. Solving a problem usually requires a lot more understanding of the problem than it does designing of the solution. What's the problem that the social enterprise ecosystem is solving in New Zealand?

The opportunity we have in Aotearoa New Zealand is to find and celebrate role model organisations that apply the type of thinking that built Ecostore and Ethique, who also move needles on these other very real social issues. Imagine the impact if every young person inspired by Thankyou was trying to build one of those, instead of spending years and years making plastic to hopefully one day make impact in other ways. 

The reality is that doing social enterprise well is really hard. And that's ok. Doing it well en masse is something that hasn't really been done globally - no country has really figured out how to do this stuff properly yet. That's the role that the New Zealand social enterprise ecosystem could take: aspiring for each organisation to solve one issue as part of a coherent ecosystem that challenges and supports each other to solve each and all of the issues. This is what I'm striving for with the team at Felt, and what I support many other orgs to do in the various programmes I'm involved with designing and teaching.

As an emerging sector, we need to have mature discussions about what works and what doesn't, and to get collective understanding on what counts as 'good' outside of what counts as 'charitable'. Simply doing that will put us leagues ahead of many other places in the world, and we're lucky that the ecosystem is small enough and connected enough that we can still do it in New Zealand. I hope that we can do that before the ecosystem gets too big.

Maybe that can be a '1 year post SEWF' conversation? Or maybe you've got thoughts to add below?