World of Good Inc., a company that has made a business of connecting artisans in developing countries with mainstream consumer markets, announced last week that eBay has fully acquired its brand and related assets. The company also announced that GreaterGood, a division of Charity USA has acquired its wholesale division and line of designer Fair Trade products. Existing relationships with retailers and artisan partners will be maintained. The terms of the transactions were not disclosed, but given eBay’s track record of significant acquisitions, we know that this is a company that believes in the adage, “you have to spend money to make money.”
We spoke with World of Good CEO Priya Haji, to understand the logic behind the sale and to ask her, “Has World of Good sold out?”
Triple Pundit: So what was the question you were trying to answer that ultimately led you to become a part of eBay?
Priya Haji: We started World of Good almost six years ago with the goal of opening much larger mainstream markets for small producers doing fair trade and sustainable products.
3p: And how did you get to that point?
PH: The way it really started was as a result of my background in social justice, poverty remediation and affordable housing. As a senior at Stanford, I started a non-profit called Free at Last, which ultimately brought great things to the East Palo Alto community, where drug turf wars led to an exceedingly high murder rates and there were no treatment programs and absolutely no access to alternate sentencing. Free at Last created mobile health clinics, affordable housing, economic development and counseling to thousands of people. From Free at Last, I went to business school. I wanted the opportunity to think freely and to study some of the things that I had learned by doing, and I really wanted to think about how to utilize market-based-models and self-renewing approaches to create social change.
In the not-for-profit world, I had found that that the donor constituency and the constituency you were trying to help were not always aligned. So it was in the desire to demonstrate that you could create a market-based model in which you could align the customer’s interest and the opportunity to generate income with the solving of a social or environmental problem. This way, as the business grows and as the market grows, you are actually solving the problem in a self-renewing manner.
When I started World of Good with co-founder Siddharth Sanghvi, and a couple of other friends from school, we started not only a business with a focus on building a brand and a relationship with US consumers on behalf of producers in developing communities, but we also started a non-profit focused policies and best practices around fair trade and the measurement of fair wages and ensuring fair competition to informal workers.
We started out by reaching out to mainstream companies, offline, like Whole Foods, Hallmark, Carnival cruise ship retail stores, and others, where we were bringing products from various countries, helping to design the products, ensuring that producers’ wages were in line with the competition and then connecting them with the market opportunity. Ultimately, we saw that while we could grow this model, there were thousands of organizations around the world that were making amazing products and wanted access to markets, so there had to be a more scalable model. With that in mind, we started working with eBay about two years ago with the goal of building an ethical marketplace online, which allows for a much more flexible and scalable platform and for utilizing the system we had created for the vetting of all the sellers, producers or products through third-party “Trust Providers” like World Fair Trade Organization, Rainforest Alliance and TransFair USA.
We brought together many different producers, sellers, and Trust Providers and launched WorldofGood.com by eBay, which now has about 200 sellers and more than 30,000 eco and socially responsible listings from 85 countries around the world.
Meanwhile, the non-profit—World of Good Development Organization—has also gone on to define the sourcing practices of almost 600 companies in 20 countries through its Fair Wage Guide and though other tools that ensure fair wages.
As the online marketplace grew, we began to see that the greatest opportunity to truly scale and to create an impact on the magnitude of the problem that we’re trying to address is through our partnership with eBay.
3p: So what happens with the non-profit after this acquisition by eBay takes place?
PH: The World of Good Development Organization is a 501c3 and has always operated completely independently. Ella Silverman is the Executive Director and works on all policy issues and the tools around fair wages that affect the industry as a whole. She does that. I run the business. Ella will continue to run that non-profit work, not only the Fair Wage Guide, but also a series of other tools that they’re building to refine industry practices. In 2009, the NP was honored by The Tech Museum of Innovation with an award and a $50,000 cash prize for its Fair Wage Guide, a free, open-source platform that calculates fair wages for artisans around the world and specific to their locations.
The only impact of the acquisition on the non-profit is that it will be renamed and rebranded. The for-profit has made an ongoing contribution to the non-profit, and as a result of this acquisition there were funds allocated to the non-profit. Additionally, there will be on-going funds to the non-profit, but the non-profit has always raised the majority of its money independently through its programs and activities and will continue to do so.
The Development Organization is now developing a tool called SMS Labor Link, a mobile phone text feature of the Fair Wage Guide that will provide unprecedented fair wage transparency to global buyers and producers.
As far as World of Good’s wholesale business and line of Fair Trade products, that has been acquired by GreaterGood/Charity USA, with some of our employees going with GreaterGood to help with the wholesale transition and to continue to work with our retailer partners and artisan groups.
3p: So Priya, what are your plans; will you be staying around for a while, or starting something else?
PH: Siddharth Sanghvi, who is the co-founder, will be managing the marketplace at eBay and I will be staying on as a strategic advisor to eBay, mostly focused on scaling sustainable shopping.
It’s important to me to be part of the process during this next phase of growth. We chose this path forward for the business with eBay, nearly a $60 billion platform and the largest commercial trading market anywhere. Creating a more robust process for sustainable products, that’s a really important opportunity because it creates market access for so many producers and it also gives many, many more people in the world, and in the US in particular, access to these kinds of choices in their consumption patterns. For the foreseeable future, I’m going to help steward this to the next stage.
3p: So has World of Good sold out?
PH: The reason we chose this path for the business and for the brand is because it realizes our vision at a much bigger scale and creates a much bigger mainstream market for sustainable products and producers. So I think that becoming a part of eBay is the right way to accomplish our original goal. I don’t feel that that is changing in any way. Part of this is protecting the values and the ethics behind the products and ensuring that the standards for the selection and verification of products will be maintained. The entire structure of the marketplace is based on the network of Trust Providers (e.g. World Fair Trade Organization, Rainforest Alliance, etc.), or established organizations that verify the origin and the environmental or social implications of these products. We have 41 of these third- party verifiers. And because of all of those trust providers, the way that all those products get selected and vetted onto the site because they are part of one of those entities. I don’t feel that that is changing in any way and that logic is a sort of weighting system to define these products and the sustainable shopping very core to the way consumers will experience the site.
The entire system of verification is transparent. So if you click on any listing, you can see who verified it, what the standards are for that verification, and also the specific impacts that the item has on people, animals or the environment. And by making it so transparent, we retain a highly accountable system over time. And that is why we created it that way: because it really holds water over time and remains transparent to the consumer.
3p: So having that structure in the business basically assures that that the integrity and the principles are upheld?
PH: Really this is what the mission of World of Good has been from the very beginning; it’s always been to open larger mainstream markets to these kinds of products, so all of our thinking from the very beginning has been in the interest of creating a system that will hold its integrity as it grows. And that is why I think this is possible as this endeavor scales. That is something that each of us, as a social entrepreneur, has to think about. Each of us starts with something that has our passion and it has depth and clarity. But we have to think from the very beginning about how to design our endeavors to hold their core values as they grow. That has been and continues to be an important challenge as we design our new organization, as well.
3p: It sounds like an innovation that breaks out of the mold of a traditional company life-cycle, that starts off innovative and open and then becomes defensive after a while.
PH: Absolutely. It’s ultimately a contract between our customers and the brand, the more we make it transparent and clear, the more the customer becomes part of holding that contract.
The sellers and all of the producer groups are very positive about this move. We had phone calls with every single stakeholder before making the final decision and all of the organizations involved were excited about our future. For me, the real compass that shows whether or not you’re taking the business in the right direction is whether it serves your mission as well as your business, and that was the universal way that it was greeted by all stakeholders. So I really feel good about that, too.
3p: It really sounds like a win-win. All parties involved will have a much larger market to offer their goods to while customers will maintain the integrity and transparency of knowing where the products come from.
PH: As an entrepreneurial endeavor, trying to build something and to create something … the level of resources that you operate with at the starting point, versus once you can demonstrate an impact and demonstrate growth and demonstrate that the thing is working, then when a larger company like eBay comes along and can take it and build it and invest in it, the amount of resources it can then use to grow the business is very different. And I think that is what the producer groups realize, that in this kind of environment, those resources really matter, and those new markets really matter.
3p: Do you feel that you have the controls in place so that if eBay starts to take things in a direction that is moving away from your vision, that you have the ability to set them back on the right track?
PH: I think they have a great team in place, including Siddharth and his World of Good team, and our eBay team, which has been dedicated to this project in-house and is part of eBay’s Global Citizenship endeavors. Robert Chatwani, who is the head of the Global Citizenship division of eBay, has been a business partner and friend since the beginning of this endeavor. I would say that he is the intrapreneur and I am the entrepreneur. I have a lot of trust and confidence in him, as well as John Donahoe, the new CEO, as far as their intention to really build in this area. If I didn’t see that, I don’t think we would have ever moved in this direction. As it stands, we have a lot of confidence in their leadership and in the direction that they are driving endeavors within the company.
3p: That sounds good.
PH: Well, we’ve been working with eBay for two years. We’ve built things, had conversations, disagreements, worked through things, that’s how you build trust in a partnership and what gives you the confidence that something can work.
3p: Is there anything else you wanted to say before we close?
PH: I think the most important thing I said is the alignment to our mission and our purpose as a company in this decision. And if I didn’t think that was the case, I certainly wouldn’t have guided the company in that direction.
3p: Thank you very much and congratulations to you.
PH: Thank you. It’s a good feeling to have been able to bring something like this together.