BYU Social Venture Competition

Musana Jewelry: Phase 2

Executive Summary:
Musana Jewelry connects and fulfills the needs of women in Uganda and the US through a sustainable social venture based around fair-trade, handmade jewelry. Women in Uganda are employed in making jewelry, which is then sold to international consumers. During the first two years of Musanas existence, operations remained relatively constant at an exiguous level of low-risk, no investment, and little growth. However, major pivot points have emerged since then through validation testing. As a result of these pivots, Musana has expanded the target market to include middle-aged women; moved from consignment to wholesale selling in retail stores; and invested money in key areas such as staff, marketing, and design rather than relying on free labor and donated space. Musana is changing its investments of time and money to become a more sustainable venture both in Uganda and the US. With the help of the Social Venture Academy, Musana has created a financial plan that will support a US staff and fund the Uganda program expenses without a need for outside donors.

The Pains:
Musana Jewelry strives to address pains occurring among women in two very different societies: Uganda and the United States. Fortunately, Musana has found an interconnected solution for both. Pain #1: Uganda The most recent UN statistics from 2009 show that approximately 38 percent of Ugandans live on less than one dollar a day. While women in Uganda often carry much of the familys economic burden, there are disproportionately fewer employment opportunities and lower income levels for women than men. In addition, education levels are lower for women because families often view sending a girl to school as a lower priority. Pain #2: United States Furthermore, a global movement has emerged toward ethical consumerism. As industries continue to lower costs through outsourcing, consumers are increasingly aware of the less than desirable conditions in which their products are made. These consumers would like to buy quality, fashionable products without doing harm in the process. According to a five-year study by Edelman, when cost and quality are equal, consumers look to the purpose behind products to make their purchasing decisions.

The Solution:
In its Engendering Development report, the World Bank found that investing in women strengthens a countrys ability to reduce poverty, grow economically, and govern effectively. The study showed that a woman reinvests an average of 90 percent of her income into her family, while a man only reinvests 30 to 40 percent.

Musana Jewelry is a 501(c)(3) nonprofit social enterprise that employs female artisans in Uganda to make handcrafted jewelry that is then sold to international consumers. Profit from jewelry sales returns to artisans in the form of a stable income and a development program that includes training in small business development, English and literacy, and health and wellness. After a period of stable employment and training, artisans are prepared to graduate from the Musana program and start their own local enterprises. This enables graduates to then pursue their own ideas and dreams, employ others in the community, build the local economy, and make room for other women who will enter the Musana program. When hiring women as artisans, Musana specifically targets women who come from a difficult background. These women face a multitude of challenges: they may struggle with HIV/AIDS, lack formal education, and work as the sole providers for their large familiesall while surviving on less than one dollar a day. Musana began with seven women from the Lugazi community and has grown to its current employment of 30 artisans: 15 full-time and 15 part-time. The 45 children of Musanas full-time artisans are now all in school, and artisans are able to support the basic needs of their families by providing nutritious food, safe housing, and proper medical care. Through investments in operations both in Uganda and the US, Musana is seeing real change in the lives of its artisans. Preliminary data from a 2013 community survey of 400 people in Lugazi, conducted by BYUs Health Science Department, shows that, compared to their peers, Musana artisans have more savings, have more of their children in school, are measurably more healthy and confident, and report a higher level of happiness and life satisfaction.

The Product:
Musanas jewelry is a fusion of current Western trends and local Ugandan materials and cultural influence. Musana strives to always use locally-sourced materials for the jewelry, including hand-rolled clay beads, banana leaves, bamboo, cow horn, seeds, leather, recycled paper, and locally melded metals.

Musana provides an opportunity for US consumers to buy handmade jewelry products while supporting a fair-trade, environmentally conscious production process. Every product also comes with a note informing the customer of which artisan crafted the piece. This allows the

customer to connect with the artisan by viewing her profile on Musanas website. Thus, each purchase is tied to a womans journey out of poverty.

Responsive Progress:
Since Musana began in 2009, it has relied on several assumptions that have informed its decisions. Fortunately, many of these assumptions have since been validated, while those that were refuted have led to pivot points that have ultimately brought Musana to its current state of market growth. While these assumptions have occurred both on the US and Uganda side of operations, for the purpose of the SVA, this document will focus mostly on US issues. Investment mentality pivot: During the summer of 2009, Musana began with three BYU students and alumni working in the Lugazi, Uganda, for the summer. They witnessed the plight of many women who bear the economic responsibility for their homes in a town that offers very little economic opportunity for women. As a result, they came up with an idea to sell handmade goods abroad. They at first assumed they could rapidly create a viable social venture based solely on four months worth of Ugandan cultural understanding, a passion for development, and great intentions. During the first two years, operations remained at a relatively constant level of low-risk, no investment, and little growth. On a shoe-string budget, one hundred percent of profits went to the artisans in Uganda. Everything from the logo and website design to the marketing and US management was done through volunteer hours or paid for by staffs out-of-pocket funds. In 2012, cofounder Melissa Sevy returned to Lugazi to assess the situation of Musana. What she found was that even with one hundred percent of profits going back to artisans, and despite artisans making double the amount of money they had made before, very little had changed with their actual economic condition. With strained US sales, money transfers came late to Uganda and at times had to be drawn out of the cofounders personal funds. Furthermore, Ugandan management was pilfering that money and often delivering partial salaries late to artisans. A one-month trip turned into an eight-month stay as Melissa saw opportunities to invest in Ugandan management and larger contracts from the US.

With this on-the-ground perspective, the US staff realized the importance of investing in key areas including Ugandan management, communication technology, and expanded sales channels. Tina Kyambadde, a university graduate with experience was hired as the Ugandan manager (at three times the salary of the previous under-experienced manager). A computer and wireless network were also installed in the Ugandan workshop. This set the stage for a contract that year with Plan International, a large international NGO, for an order of 10,000 products. Musana partnered with existing womens groups in the town to complete the order. Upon Melissas return to the US, the Musana cofounders again recognized that in order to grow, they must also invest in US operations to fund and create the market need for such expansions. With that realization came a shift in mentality: rather than running Musana as a funding-starved no-profit, Musana would need to invest in operations much as a business would. In order to facilitate this shift, Musana has hired two staff members and is currently revamping the website through an industry-standard company. In addition, Musana has created a marketing strategy that will fully fund Musanas US and Uganda initiatives. Marketing pivots: Two marketing assumptions existed from the onset of Musana. One was that Musanas target audience for jewelry sales in the US were women ages 25 to 40. The other was that the social impact was the largest determining factor in a Musana purchase. While 25- to 40-year-old women still remain an important target audience, social media and website analytics show a need to focus on other groups as well. Young adults ages 18 to 25 are a crucial target audience due to their generations increased interest in social responsibility and products that promote it. Analytics have also shown the importance of including men 25 to 50, who often shop for women and look for products with meaning. According to a 2013 market survey by the Musana team, only 2 percent of survey respondents stated that the number one factor in purchasing jewelry was knowing that it supported a social cause. However, over 90 percent of past Musana customers indicated that knowing their purchase was an investment in empowering Ugandan women was a factor in their purchase. Therefore, while the cause behind the jewelry is a compelling part of purchasing from Musana an icing on the cake of purchasingproviding a fashionable, high-quality product is even more important to consumers. This has led to a greater emphasis on quality and design. With a simple inventory analysis, it was found that designs that looked too African or tribal were not what customers wanted. A fusion of Ugandan materials and a handmade look coupled with current cutting edge US fashion has proven the most successful.

2010

2014

Over the past 18 months, Musana has invested in finding product design interns who have worked from both the US and Uganda sides. This has improved the aesthetic, quality, and craftsmanship of products, which were previously far from uniform and would often break during shipment. As a result, from 2012 to 2013, overall sales more than doubled. Sales pivot: In the beginning, Musana almost exclusively sold through free or very low-investment venues. These included free booths and events, Facebook, and volunteer-led home parties. These all required a large investment of time and little monetary investmentbut they produced low sales. Even when Musana entered into its first retail partnership, jewelry was sold on consignment, with 10 percent of sales going to the boutique. Musanas products were displayed in low-traffic areas, and sales associates had little motivation to push sales of the jewelry. As a market experiment, in early 2011 Musana entered into a wholesale relationship with M&S Turquoise in St. George, Utah. Jewelry was sold at 50 percent of the retail price to the vendor. This was a large risk, as Musana would earn 40 to 50 percent less per sale than before. However, results were quite immediate. Sales associates were motivated to draw attention to the jewelry because they were receiving commission on the jewelry just like the other products sold in their store. Within the first month, jewelry sales at M&S Turquoise equaled the total sales in one year from the consignment relationship with Country Hearts Boutique. Musana is now sold wholesale in six high-end boutiques throughout Utah and has a goal of expanding to a total of twelve boutiques this year.

Financial Sustainability:
On February 1, 2014, Musana held its first annual fundraising gala at the Provo City Library ballroom. Through corporate sponsorships, ticket sales, and live and silent auctions, the event raised $15,000 for Musana. The priorities for use of this money have been largely designated for infusion into the US side of operations. We will begin to pay a living stipend to the executive director and marketing director, revamp the website to be more robust and user-friendly, and

invest in US marketing and supplies. Musana is simultaneously implementing plans for longterm, sustained income. Sustainability Jewelry is currently sold via four main channels: online, within partnering retail boutiques, at Musana Markets, and at events or booths. In 2014, Musana will also add additional channels of corporate partnerships and Uganda expeditions. Online: Musanas main channel of online sales is via the website www.musanajewelry.org. The website averages around 1,500 hits per month, and during 2013, 30 percent of total income came from sales on Musanas website ($7,873.90). Currently a full redesign of the website is underway. Musana will also begin targeting sales through other online channels such as Overstock.coms fair-trade subsidiary, Worldstock.com, and online pop-up shops. In addition, Musana will continue its ramped-up social media initiatives, which have increased the Musana social media following by 19.7 percent since November 2013. In addition, this year Musana will begin an online party sales channel, where hosts can start a Facebook group or email chain and then invite party attendees, who are given a discount code to purchase directly on Musanas website during a specified time. Starting in May, Musana aims to have three parties per month through the end of the year, with a projection of $200 per party. In total, online sales are projected to bring in $21,200 for the year. Retail: During 2014, Musana aims to expand from 6 to 12 retail locations. Musana is currently creating a retail package and scripts to approach retail stores in a systematized way. Musana is also responding to retailer feedback by offering entire jewelry displays that come ready-made. Together with better packaging and compelling posters and information cards, it is projected that each retail location will gross an average of $150 per month ($1,800 per year). Musana intends to expand to two new retail locations each quarter of 2014. Overall, retail location sales are projected to bring in $13,500. Corporate Partnerships: Musana is currently working through a contract with Shabby Apple, an online vintage dress company based in Salt Lake City. Shabby Apple is interested in collaborating with Musana to design exclusive jewelry pieces for each of its two remaining lines coming out in 2014. In addition, Musana has recently been offered a free year of membership in the business networking company Corporate Alliance, which will allow Musana to offer companies more socially conscious solutions for Christmas gifts, employee incentives, and conference materials.

Musana anticipates two contracts this year as result of involvement with the Alliance, bringing in an estimated $7,000 combined. Uganda Sales: In Uganda, Musana currently sells jewelry to three high-end tourist retail outlets. In 2013, sales at these locations totaled nearly $1,500. Musanas Ugandan headquarters is in Lugazi, which is situated along a main tourist route. Tourist groups can meet and interact with the artisans, witness Musanas empowerment program, and purchase beautiful handmade jewelry. As an additional attraction, Musana will begin selling smoothies out of the workshop. This is made possible through two high-grade blenders donated by Blendtec, $700 in funding from BYUs 2014 Hunger Banquet, and $1,000 from the SVA Audience Choice award. Uganda sales currently make up 12 percent of Musanas income. The goal for 2014 Uganda revenue is to cover 40 percent of Uganda operating costs, which include artisan and management salaries, education classes, rent, and supplies ($800/month).

Business Model (9-square):

Key Partners - Artisans - Management - Material suppliers - Retailers - Corporate partners - Volunteers/ Interns KeyActivities - Training - Quality Control - Marketing - Sales KeyResources - Artisans - Management - Volunteers/ Interns Value Propositions - Steady income - Education - Purposeful, ethical shopping option - Unique fashion Customer Relationships -Newsletter - Social Media (non-promo) Customer Segment - Tourists - Women 25-40 yrs - Young adults 18-25 - Men 25-50 yrs

Cost Structure - Artisan, management salaries - Materials/shipping - Website - PR/Marketing - US Staff Green=Uganda, Gray=US

Channels - Workshop - Retail - Online - Retail - Corporate contracts Revenue Streams - Workshop (inc. smoothies) - Retail partners - Online - Events/Booths - Corporate contracts