“I am so sick of fundraising.”
Leila Janah, the founder and CEO of Sama Group, has just left an hour-long staff meeting about grant proposals, and she is venting as we dig into an artisanal brick-oven pizza at Farina, a restaurant in San Francisco.
Janah, 33, founded Sama in 2008 with the belief that creating work opportunities is the most effective tool for fighting poverty. Sama goes into communities that lack living-wage jobs—from the slums of Nairobi, Kenya, and Port-au-Prince, Haiti, to rural Arkansas—and trains people to do digital work, such as verifying data that makes Google’s search algorithms smarter and flagging inappropriate content posted to TripAdvisor. So far, Sama reports that it has helped approximately 51,000 people, almost 22,000 direct beneficiaries and another 29,000-plus of their income dependents. In 2015, Sama aided twice as many people as it did in 2014.
Janah, as usual, is feeling bullish about her mission, but she’s chafing at the strictures of the traditional not-for-profit model. Janah may run an antipoverty organization, but she is also a Harvard-educated former management consultant who believes in the startup ethos of experimentation, iteration, and the occasional pivot. Grant proposals, by contrast, typically compel organizations like Sama to detail programs step-by-step, in advance. “It basically requires you to predict what is going to happen in the future,” Janah says.
Eradicating poverty, though, is by definition unpredictable labor. Janah’s team has to find and train people in Kenya who have never used a computer. It has to find dependable Internet access to teach clients in rural Arkansas, where bandwidth is as scarce as jobs. Some of the good assignments it finds require several weeks of unpaid training, and Sama’s clients can’t afford to go that long between paychecks.
Janah tells me that when she gets discouraged, she remembers the maxim that every human being you help is an infinite victory. In Sama’s work, its success stories are people like Kristen Logan, a former administrative assistant in economically depressed Merced, California. She lost her job after five years and wasn’t sure if she would ever find another one that would let her support three kids by herself. Logan has used the skills she learned via Sama’s training academy to find a position fielding calls for a beauty school in New York—and earns more than she did previously.
For Janah, that is hardly enough—which is why she has dedicated herself to freeing Sama from the stifling not-for-profit funding process. This is a radical burst of independence, and Sama is already close to achieving it. Thanks to contracts with companies including Getty Images, Microsoft, and Qualcomm, Sama has generated enough income to cover the majority of its operating costs. “If we can show that not only can we provide this dramatic improvement [in Sama workers’ lives], but we can do it on a break-even basis, it’s revolutionary,” Janah says. “Let’s say you invested a dollar in 2009. The social return on that dollar will be infinite.”
Sama represents a new model for social impact: a nonprofit that is self-funding. To get closer to that goal, in October, Janah launched an affiliated for-profit business called Laxmi, a high-end cosmetics line that enlists poor African people, predominantly women, to grow, harvest, and process its ingredients in exchange for a fair wage. Her goal is to use some of Laxmi’s profits to fund Sama’s current operations as well as give her additional capital to find new ways to fight poverty. While buy-one, get-one companies like Toms and tech-powered not-for-profits like Charity: Water have blurred the line between charities and startups, Janah wants to merge the two worlds entirely.
Sama, which means “equal” in Sanskrit, has had Silicon Valley DNA since its inception. Janah started the company in a Facebook-backed startup accelerator alongside ride-sharing service Lyft. Shervin Pishevar, an early investor in Uber, and Dave Morin, then a Facebook employee who would later become a noted angel investor, were among the program’s first funders.
Janah partnered with an outsourcing center in Kenya to create jobs for the poor. Sama supplied it with work from tech companies—with the requirement that tasks be completed by people who, prior to hiring, were making below a living wage. To help maintain quality, Sama developed proprietary software that breaks this digital work into bite-size tasks. Last year, it took a step away from this partnership model altogether and opened its own work center near the Mathare slums in Nairobi.
To address poverty in the United States, Janah introduced a school to teach Americans how to find virtual work. The initial plan was for students to secure gigs through freelance labor marketplaces such as Upwork. But while some students found success, they faced steep international competition from low-wage laborers. To improve job placement, Sama shifted to focus on specific skills like social media marketing. Sama’s program directors in Merced, California, and Dumas, Arkansas, two of the locations where it operates, secured at least one virtual internship for each student. By the end of its second year of operation, about 50% of attendees succeeded in winning at least one online contract, and in August, Sama launched an online course to reach more people. It has since expanded the program to Nairobi.
Janah hasn’t been shy about promoting her mission. “Some people don’t like [it],” she admits when I ask her about complaints regarding her Instagram selfies with Richard Branson and her frequent presence on the conference circuit. “But all of our biggest deals come from pounding that kind of pavement.” She counts the likes of Eventbrite cofounder Julia Hartz and Uber CEO Travis Kalanick as friends, and she aggressively converts those relationships into professional opportunities. She recently won a deal with Uber to create a custom curriculum it could offer potential drivers.
At Google Zeitgeist in October 2015 (the search company’s own version of TED), Janah met Thumbtack cofounder Jonathan Swanson; a couple of weeks later she visits his headquarters to find a way to work together. Thumbtack is a startup valued at $1.3 billion that uses a smartphone app to connect customers with plumbers, home cleaners, and other independent professionals in their area. In 2015, the company claims that 200,000 of those pros fielded 6 million project requests and generated nearly $1 billion in revenue. “In New York City, we are training 1,000 people,” Janah tells Swanson, citing a new deal Sama made to teach courses there in 2016 thanks to a grant from the Robin Hood Foundation. “If we had people get jobs on Thumbtack after that, it would make everyone very happy. Are there any gaps [our students] could fill?”
Swanson pulls up a spreadsheet. Carpet cleaning? Lawn mowing? Moving? He moves down the list of job requests for which Thumbtack has the most unmet demand. Before long, Janah and Swanson launch into a full-fledged brainstorming session, and I watch like it’s a game of Ping-Pong. Swanson has an idea for outsourcing video editing in partnership with GoPro: “One click, and someone in Africa would pick out the good clips and set it to a song.” Janah suggests a matchmaking service, with workers swiping profiles on their clients’ behalf. She pitches Swanson on joining a yet-to-be-created Sama advisory board and a plot in which cities would use Thumbtack to hire Samaschool graduates. Swanson is careful not to commit, but he can’t stop nodding his head at the ideas. As Janah says on her way out, “We have so many businesses to start.”
The idea for the Laxmi skin-care line first occurred to Janah during a trip to Benin, West Africa, where she realized that locals were growing shea in their yards. “I said, ‘Let’s build an export industry, but only buy from poor women,’ ” she remembers. “We can solve poverty while also making our skin better.” Laxmi’s mission, as with Sama’s not-for-profit initiatives, is to create good jobs.
When I visit last fall, Laxmi has just shipped its first orders, and Janah has set up a notification on her phone to alert her every time a new customer orders Nilotica Facial Crème ($72 for 50 ml) or Rose Water Regenerating Mist ($52 for 50 ml) from the website. “Did you see that we made a sale this morning?” she asks MJ Doctors, Laxmi’s COO, as she enters a meeting in a Sama conference room. Doctors, who is just as excited as Janah about the early sale, has spent the past year traveling to rural African villages to set up Laxmi’s ethical supply chain, sourcing its antiaging ingredient, called Kigelia, from South Africa and its rose water from Morocco.
The $11.2 billion luxury cosmetics market is a crowded one, so having a product line with a good story attached to it is essential, and this meeting is devoted to Laxmi’s marketing. Thea Kocher, Laxmi’s chief marketing officer, who has also led marketing at beauty brands Caudalie and Bobbi Brown, Skypes into the meeting from New York. Janah swivels her laptop so that the screen faces Doctors and the beamed-in Kocher. She plays a video produced by the natural candy company Unreal. “We love candy,” it begins. “But it’s made with junk.” Janah pauses the video. “I think a key marketing idea,” she says, “is that you should be able to pronounce all of the ingredients in your food, but why not what you put on your skin? Do you really want Yellow No. 5 on your face?”
Janah tells me later that she wants Laxmi to be like Method Products, the household supplies company. Does Method use bottles made from 100% recycled plastic? Sure. But it distinguishes its soap with its good branding as well as its values. Laxmi has the social-good story and the clean-ingredients list for those people who care about it, but it also has a distinctive design ethos: Its facial cream comes in an appealing black glass jar that blocks UV rays so it doesn’t need to use synthetic preservatives.
Initially, Janah envisioned Laxmi as part of her not-for-profit, but she knew Sama’s donors would be hesitant to fund the marketing and infrastructure needed to build a high-end beauty brand. “Who cares?” she says of the expenses when compared with the potential benefits. “What you spend on pencils versus pens, versus salaries shouldn’t matter. What matters is this amount of money was spent in this fiscal year and this impact was delivered in this fiscal year.”
Instead of applying for grants, Janah tapped her network to fund Laxmi’s launch, raising a $2 million seed round from the likes of LinkedIn cofounder Reid Hoffman, Toms Shoes founder Blake Mycoskie, and former Yahoo CEO Tim Koogle (who’s also chairman of Method Products). “I was shocked at how easy it was to raise money as a for-profit business,” Janah says.
Eventually, Laxmi wants to grow its line to as many as 70 or 80 products. Then, there are ancillary markets such as jewelry and home decorations that Janah envisions expanding into, both of which could create jobs for poor women in remote locations. “This is the beginning,” Doctors says. “The idea is to iterate.”
The high-end beauty market may seem dissonant with the rest of Sama’s mission, but that disparity is by design. “The problem is poor people are typically doing low-margin activities,” Janah says. “That’s why businesses don’t hire them. It’s expensive to recruit and train them. However, if you have a big enough margin on top, you can cover the cost and return to investors.” Making Laxmi as luxurious as possible is, ironically, the only way for it to effectively employ some of the poorest people in the world.
Sama owns 12% of Laxmi and Janah owns 24%. This means that if Laxmi pays dividends or is acquired, Sama will receive a windfall. “Laxmi can eventually generate money for additional social enterprises,” she says.
It is, Janah acknowledges, a hack of the system. In her ideal world, she would not have to promise investors or corporate backers profits, just as she doesn’t want to adhere to rigid grant requirements. All of it detracts from maximizing social impact.
But this is not an ideal world, and as Janah told me when we first met, “I don’t have a Mother Teresa complex. I’m a pragmatist.”