Soko focuses on the large group of marginalized artisans, primarily in Kenyan slums, who have a valuable skill but who have always been limited to selling in their local markets. The Soko founders realized that many artisans already own a mobile phone, so they developed a "virtual lab" that takes the place of a physical factory in order to employ those in even the most rural areas. Soko continues to capitalize on the power of technology in order to drive revenue that ultimately creates a safe work environment and creates wealth in underdeveloped communities.
Case Western Reserve University - Weatherhead School of Management
Soko is driving innovation through their supply chain. There is already a high level of mobile penetration in East Africa. Citizens there tend to use their phone for potentially as much as the average American citizen does-- "if they want to get a coke, they use their phone. If they need to pay for a cab, they use their phone" (Vivienne Decker, VP of Sales). While it is a fact that mobile phones are the norm in the areas in which Soko operates, this innovation is still something of great impact as they have created a highly technology dependent and advanced business model to the second largest slum in the world, Kibera, Kenya.
While Soko was founded in 2012, sales transactions did not take place for two years. The founders spent this time interacting with artisans in order to figure out their needs and desires: what keeps them going and inspired to continue creating in spite of their life in poverty. These two years were necessary to create a mobile app, or what Soko calls their "virtual factory," that can be accessed from any mobile phone. "The app gives them everything they need to be a part of the work force" (Karelli, Chief of Staff). Artisans have access to specifications for new designs, customer demand, payment, inventory management and more through the Soko mobile app. The app is able to track work done by each artisan in order to ensure the correct payment for their work that is sold.
The creation of the virtual factory was necessary for two primary reasons. First, the company can enjoy a much wider reach as they are able to employ workers even if they do not have the means to show up to a specific location every day-- they can work from home! Second, the lack of physical locations cuts costs which in turn increases margins and brings more wealth to workers.
“Soko” translates to “marketplace” in Swahili—a fitting name for the company that has been dubbed by many the “African Etsy.” The large portion of those living in underdeveloped communities such as those that Soko operates in, support themselves by learning a trade and becoming artisans. They create beautiful art, but they are so limited in regards to income as they can only sell inside of their local markets. Soko seeks to eliminate barriers between these artisans and the global market. By doing this, they are creating wealth for those with little opportunity to do so otherwise while ensuring safe working conditions and fair pay-- concepts that were essentially non-existent in these communities previously.
Soko was founded in 2012 by three American women studying at the University of Nairobi in Kenya. The founders, Gwendolyn, Ella, and Catherine came from strikingly different professional backgrounds, design, social impact, and technology. However, they shared the same values and vision for the future. The mix of their skills and their common desire to do good made them the perfect team.
Gwendolyn brings with her an education surrounding cultural anthropology and systems design, Gwen focuses on creating designs that are on trend and will create revenue but that allow Soko artisans to stay true to their own culture and style. Her role poses the question “how do we take design and make it something that bridges communities?”
Ella brings a background in architect and a great deal of experience working on social enterprises to the company and she is credited with building the manufacturing platform. For Ella, the focus lies in creating access to customers for artisans and “to bridge geography, economic, and technological barriers” (shopsoko.com).
Catherine, known as Kate to those she works with, is a software engineer who was fed by a desire to leverage technology in order to create employment. Her extreme success as a consultant for social innovation and development landed her in the Forbes “30 under 30” in 2016. She continues to be a huge advocate for gender equality and equity both inside and outside of her role at Soko.
“I love my work but I am a mother first. Since joining Soko three years ago, it’s my kids that have benefited the most” – Soko employee.
Soko's main focus is to drive employment and create wealth were there is none. By taking the time to truly understand the artisans' needs and create an all encompassing app that gives them instant access to the rest of the world as a marketplace, the company has heavily impacted Kenyan communities. In only roughly three years of sales, Soko has employed nearly 2,000 artisans and has returned $1.5 million in fair wages to these Kenyan workers. To put this in perspective, an American dollar goes about ten times further in a Kenyan slum than it does in the US. Artisans are promised a return of between 25% and 35% of each item that is sold that they created.
While Soko is driven by its use of a virtual factory, there are workshops available where those that live in walking distance or have transportation are able to meet up and work. A major focus of the company is ensuring safe and healthy working conditions for all employees. They have enjoyed enough success to employ and pay field officers who not only seek out new talent, but frequently check in on any physical workshops to ensure quality conditions.
Soko drives revenue through their commitment to keeping up with fashion trends, however, revenue does not always translate to profits. Many companies enjoy a very large top line while their bottom line suffers due to high costs. This is not the case for Soko. It is because of the mobile app innovation that Soko enjoys a healthy bottom line. Most traditional manufacturing costs are cut completely. There is no formal factory which eliminates the majority of fixed costs in a jewelry manufacturing company.
While Soko employs any artisan, the company does take a special interest in women's rights and empowerment. They have created what they call the "Women's Initiative" in which they teach women male dominated skills. Soldering, for example, is one of the most profitable trades for an artisan and it is almost completely done by men. The Women's Initiative pushes for education among women to give them new skills and ultimately more earning power. They also give women the chance to take on a leadership role in female led workshops. They have found that teams led by women are more likely to meet deadlines and they are more likely to stay together and work in a team.
As they enter more retailers, Soko has found ways to ship product to these retailers directly from Kenya. While this cuts costs, their primary reason for implementing this practice was that it creates even more jobs.
"The first rule of thumb in looking at our materials is making sure they are sourced locally" (Karelli, Chief of Staff). Through the use of their procurement team in Kenya, Soko ensures the minimal amount of variance in their products (mainly brass, horn, and bone) to "extract the less beautiful metal" and ensure quality all while continuing to do what they do best-- create employment opportunities. They run a program in which locals are given cash for quality brass, the main metal used in their products, meaning that they never mine for new metals, they only "upcycle" them. The other primary materials used in Soko designs is horn and bone. These materials are a by product of the meat industry and the company gives value to what would otherwise be thrown in the trash.
Vivienne Decker / Karelli Cabral, VP of Sales / Chief of Staff
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San Francisco, CA, US
Business Website: http://www.shopsoko.com
Year Founded: 2012
Number of Employees: 51 to 200