Keep It Simple, Silly! - 6 easy steps Sseko took to turn a million dollars in 5 years!
August 7, 2014
I was watching this video online and was struck by how Liz Bohannon was able to turn her idea into a social enterprise turning over $1,000,000 within five years. Liz presented at the SXSW Eco Startup showcase last year and walked away the prize winner for her category. Please check out her presentation here:
As I was watching the video for the 4th time, one simple message kept running through my mind, "Keep It Simple, Silly!" Deconstructing her whole business strategy, I identified 6 easy steps Bohannon took to make Sseko a success...
1. Have a compelling vision
The idea was to put economically disadvantaged girls through college. The problem was that while the girls could gain entry into college, they could not find a job during the 9 months between high school and college to pay for the tuition. They hence drop out of the system. Her vision was to provide work for the girls with a social mission of putting them through college. A very compelling vision indeed.
2. A simple product
Bohannon went totally low-tech and designed a simple sandal that featured a leather sole and fabric ties that can be made into various different designs. The variations will come from the fabric ties, but the raw materials were the same. This allowed the company to produce each sandal at a very affordable price. Simplicity = affordability = scalability.
3. Selling at the right price point
The fact that the sandals can be sold in Uganda is testimony to the right pricing strategy. As they can be manufactured cheaply, it allows each pair to have a healthy margin to enable the company to meet its social mission. Pricing is always an important issue and many CEOs struggle with this (see my article on Should I raise my prices?) But when your cost base is low, you can afford to right-price it without sacrificing margin. This is very important!
4. Have a powerful back story
Each Sseko has a story, so the marketing materials go. And that is a fact. Since each Sseko sandal contributes to one girl's college education, giving them the opportunity to move themselves out of poverty, every Sseko a person buys helps alleviate economic and social inequality in East Africa. And that is a very powerful story.
5. Get out there and test it!
According to Bohannon, when she started up the business, the filled the trunk of her car with the sandals and went around selling them. This allowed her to assess the appropriate price point, the effective marketing message, and the right buttons to press. The fact that she was able to put through the first three candidate-employees with just the trunkload of sandals is a great proof of concept for her business!
Every dollar that Sseko earns is put back into the business to grow. Reinvesting profits when the business is starting up is key to scaling. Like all startups, initial capital is bootstrapped, so there is no way to startup big. Yet as they grow, they need to reinvest the earnings to maintain growth. This is key for any business, not just for startups.
So there we are. Six easy steps that Sseko took to build a million-dollar business in less than 5 years. As we look at these, the key centre of gravity is its simplicity. So KISS - Keep It Simple, Silly - and you too can build your way to a million dollars!