In Ethiopia, Trading Poverty for Prosperity Provides Global Success for soleRebelsPublished December 11, 2012 in Arabic Knowledge@Wharton
Making recycled tires from Africa into fashionable footwear that sells around the world? That's the amazing success story of soleRebels, which just opened a second store in Taiwan. The Ethiopian shoe brand sells in over 50 countries and counts Urban Outfitters, Whole Foods and Amazon.com among its retailers. Offering generous benefits to its employees and using only environmentally friendly materials, it is the first company certified by the World Fair Trade Organization for its practices. Stating its ambition, soleRebels hails itself as "Africa's Nike."
Just eight years ago, Bethlehem Tilahun Alemu started soleRebels with her first five employees on her grandmother's plot of land in Ethiopia. She has since seen her business grow, and has received a number of accolades. Forbes recently listed her as one of the most powerful women to watch, along with Kate Middleton and South Carolina governor Nikki Haley. She was recently featured on a BBC series with business leaders around the world.
Alemu aims to pay "proud" wages, offers her employees on-site medical checkups and free transportation for her disabled employees. She explains that having grown up in Ethiopia, the real solution to poverty is to give people jobs that they are proud and happy to do. "The best way to create prosperity is the tried and true method," she tells Arabic Knowledge@Wharton. "Create amazing products with service to match, pay your workers very well, and operate in a highly ethical and transparent manner."
An edited transcript of the conversation follows.
Arabic Knowledge@Wharton: You started soleRebels in 2004. What was it like at the beginning?
Bethlehem Tilahun Alemu: From a physical standpoint, it was pretty basic: Five workers plus myself working inside a workshop situated on my grandmother's plot of land inside our village of Zenabework [in Addis Ababa]. But from an idea and vision standpoint it was immense. We aimed from day one to create, grow and control a world-class footwear brand right from our community that would create ever more jobs and growing prosperity for the workers, and to do this by leveraging the artisan skills of the community and the natural resources of the nation. That created an intoxicating sense of motivation and ambition that, eight years later, is stronger than ever inside the company, even as we have grown to hundreds of workers.
Arabic Knowledge@Wharton: What made you decide to start it in your own community?
Alemu: We had lots of talented people in my community, especially artisan talent, and there were little to no job opportunities for these people. That struck me as both an immense tragedy but also an immense opportunity. I knew if we could leverage these talents in the correct format, the response from the market would be incredible. We selected footwear as the platform and away we went.
Layered on top of this was that I kept hearing over and over the phrase "poverty alleviation" in the wider context of Ethiopia and specifically with regard to the community where I grew up. As I entered college and started working to support my brothers and myself it had become clear to me that poverty alleviation is a myth. It also became clear to me that prosperity creation is the sole route to the elimination of poverty. And to create prosperity, you have to create something world class. So that's what started to really crystallize my thinking.
Poverty alleviation sounds great. After all, who could not be for alleviating poverty, right? But poverty alleviation is, in my experience, persons unaffiliated or unaffected by poverty arbitrarily establishing a line that says to the poor: "Hey, guess what? By my calculations, you're not poor anymore. You make 'x' per day."
That's the reason we said soleRebels would never be about poverty alleviation. I saw first-hand what the alleviators of poverty were doing from the time I was a little girl. Without getting into too many details, let's just say poverty was at best a sideline to their main pursuits. So I vowed that I would impact my community in a way that all those who said they were impacting it never had and never could.
We have always said this company is about maximizing local talent and local resources to create good-paying jobs. In turn, let's us pursue our core mission, which is to create awesome and extraordinary footwear and apparel products that make us into a hyper successful global brand that creates prosperity for its workforce, its suppliers and its stakeholders. We have proudly done just that, all while being the planet's only World Fair Trade Organization [WFTO] fair trade-certified footwear company. WFTO is the sole accreditation that certifies companies' practices and not simply the product as fair trade. That's a big difference, especially in an era when gigantic mega corporations claim to make fair-trade goods or people who claim they are fair trade with no certification to back up that claim.
Setting our goals this way is totally different from setting a low-bar goal like poverty alleviation. Those who say they run their companies on that as their aim have set the bar so low they are missing the point: people don't want to be "not poor." They want some form of prosperity. That doesn't mean [they want] to be millionaires or billionaires but prosperous. And the best way to create prosperity is the tried and true method: create amazing products with service to match, pay your workers very well, and operate in a highly ethical and transparent manner -- all of which in turn creates a hyper successful company.
Arabic Knowledge@Wharton: What made you start your own company?
Alemu: I was born and raised in the same community where I funded and continue to run my business. I had to make this company happen for myself and for all those who came to depend on it for their livelihoods. From day one, I realized that's the deal, and that's what drives me every single day. That's what allows me to create world-class footwear and world-class retail stores, which in turn allow us to achieve sales targets, which in turn allow us to pay great salaries, hire more people and continue to grow organically with no outside control. If my skin was not in this game from day one, I never could have created soleRebels and fashioned it into what it is today. I would have simply seen it as a nice pastime that, win or lose, the outcome for me personally would be the same.
It's pretty motivating to see talented people you have grown up with, who possess immense potential and talent and yet have zero opportunity to properly leverage that talent. Add to that an abundance of natural resources here in Ethiopia from which to craft footwear -- everything from free-range leathers to organic cotton, jute and Abyssinian hemp. You've got a perfect platform for something big to happen.
Arabic Knowledge@Wharton: What were some particular challenges and benefits to start your business in the small community you came from?
Alemu: The challenges have been immense, as have the benefits. In the benefits box, the idea of a global company being community grown and based is a deeply competitive advantage. Our roots are here. Our past, present and future is here. Not a lot of companies can say that with a straight face these days.
Arabic Knowledge@Wharton: The foundation of the shoe is the traditional "selate" and "barabasso" shoe, where the sole is made out of recycled car tires. Was there a light-bulb moment or was the fashion concept something you had been thinking about even from when you were a child?
Alemu: There wasn't a light-bulb moment in the classic sense. It was more like an evolution. The selate/barabasso was all around us and so were the myriad of artisan crafts and natural inputs that I described previously. When the final push came down to found the company, I knew at that point that footwear was the platform as it would allow us a broad palate on which to express our creativity and also employ a wide range of incredible artisan-crafted and artisan-engineered materials.
And not only have we re-imagined the selate/barabasso but soleRebels has re-imagined what artisan footwear and artisan craft can be. We never did, nor do we now, just simply employ artisans. We have refined and redefined their craft to help them and us reach entirely new levels of craftsmanship, so that the product they create for our shoes is something totally new. This ethos is innovation in action and has given us innovations like totally new thread types that our hand spinners have imagined and a new weave technique that gave birth to a new, more breathable and absorbent fabric for lining our shoes and sandal straps. When people think of innovation, they think of a new technology, but innovation is in fact substantively improving the state of what was before. And so innovation can and must be applied to areas like artisan crafting. In fact it's this approach that will keep them vital and relevant. This is one of the reasons soleRebels has found success. We have embraced the idea that tradition and innovation go hand in hand, so that yesterday's hand-loomer of fabrics is tomorrow's textile innovator, yesterday's cobbler is tomorrow's added-value shoe artisan, pioneering style and comfort through the use of the improved artisan inputs. When we look at artisan crafting through this prism, we can see a whole new future of possibilities. That's the ethos we employ and that's one of the assets that makes what soleRebels does totally unique, vibrant, dynamic and exciting. And it's one of the key reasons people the world over love our products and our brand. It's a totally new presentation of artisan craft, relevant and dynamic, one that simultaneously reaches back into the past and into the present and the future.
Arabic Knowledge@Wharton: Ethiopia was one of the only African countries to successfully fight off colonialists, which was one of the reasons why the company is called soleRebels. What made you decide to pay homage to the proud history of Ethiopia remaining independent?
Alemu: Rather than looking at Ethiopia's pedigree and heritage of independence as something that is backward looking, I chose my "homage" to Ethiopian independence to be something forward looking and active as it's related to soleRebels. I believe that for Ethiopia to properly create prosperity -- and for Africa as a whole -- we must be at the forefront of, and in full control of the commercialization of our culture, realizing all the gains from the same. soleRebels is at the forefront of an unstoppable movement that proves the creative agency and business acumen of the people of Africa. Our desire to control the fruits of our land and labor and the processing of these will never be squelched. We will never let any usurpation of those resources and our rights to them happen again.
Arabic Knowledge@Wharton: soleRebels pays wages on average over 233% higher than industry standards and four to five times the legal minimum wage with opportunities to earn more. Why do you think more companies are hesitant about offering such wages?
Alemu: I am proud that soleRebels has been at the forefront of creating the change that is showing that Ethiopia and Africa can create, deliver and grow world-class products and brands that can compete globally and win! We have stores opening around the planet - from Taiwan to Switzerland. We are opening these in conjunction with partners -- experienced business folks who have staked their money on our ideas. Now that's change and that's the forefront of the possibilities that face Ethiopia, not simply selling a product or some raw materials but rather getting people around the world to buy into our ideas and support, promote and grow those ideas.
Arabic Knowledge@Wharton: Your company offers some fantastic employee benefits, like 100 percent medical coverage and bringing doctors for on-site medical checks, an artisans' education fund (for the education of artisans' children) and transportation for workers with disabilities. How did you come up with these ideas that are rarely offered in most companies around the world?
Alemu: It's rooted in a few things but mostly it's just great business to treat people as I would want to be treated. That includes employees, partners, and customers. Once you apply that ethos, it's pretty easy to always find yourself doing the right thing.
Arabic Knowledge@Wharton: As you build your first state-of-the-art production facility, what kind of policies will you have to maintain eco-friendly ways?
Alemu: It's important to understand that at our core soleRebels is an artisan-driven company. We are creative artisans who aim to craft the coolest and most comfortable footwear. We do this by combining our heritage artisan crafts with modern design sensibilities, while pouring our creative selves into our shoes. The final result is that when our footwear is bought, the purchaser can see, feel and enjoy all the elements of heart, soul and creative craftsmanship that have gone into their construction.
It's challenging but anything good is challenging. It requires an obsession with quality, attention to detail and craftsmanship. And in a world of faceless, production line-assembled, made-in-who-knows-where shoes, soleRebels proudly stand apart and offers a much desired alternative for the informed global consumer.
This type of business model centers on eco-sensibility and community empowerment. Product design and development involves a great deal of effort to achieve fashionable and appealing quality products that use local materials. Our model maximizes local development by creating a vibrant local supply chain while creating world-class footwear that is loaded with style, comfort and appeal. We do this by directly training and employing artisans who craft each and every one of our shoes by hand, one pair at a time making it a truly zero-carbon production process.
soleRebels products are proudly made in this low-impact manner because historically that is the way it's been done in Ethiopia. And working by hand as we do is not only the truest expression of zero-carbon production but is a study in artisan empowerment. The quality and beauty of every pair we make is literally in the hands and mind and eyes and soul of our artisans so working this way is the ultimate expression of our faith and confidence in the skill and craftsmanship of every single one of our artisans.
We make our own inputs, as other footwear manufacturers buy mass-produced materials to make their shoes. We handcraft our Abyssinian pure leathers, re-purpose materials like car and truck tires into soles and incorporate as many recycled and sustainable materials as possible including Abyssinian hemp and pure Abyssinian koba [plant fiber]. We proudly hand-spin and hand-loom every single meter of our own fabrics in our own facilities right inside our community. This ensures we get the highest quality, most gorgeous, unique and colorful fabrics that make the most amazing looking and super comfy footwear while simultaneously creating ever more high-quality jobs for talented hands.
Many of these talented hands are women who have mastered these heritage artisanal arts but were unable to find an outlet for them in modern business. I am very proud that as a company we have created a vital and sustainable outlet for these historic skills to be used in a highly productive manner. Doing our own designing, as other footwear manufacturers outsource their shoe design to big design firms, we conceive and develop everything we make by ourselves in house, in our workshop in Addis Ababa. The result is that we can conceive the coolest, comfiest and most stylish footwear while also elevating both our own creative capabilities and creating additional, higher-level jobs for the designers that we groom and train.
Arabic Knowledge@Wharton: What kinds of changes are needed for more African companies to participate in global markets?
Alemu: Aid won't create jobs, and cannot and never will create prosperity, especially in the Ethiopian or African context. The aid and charity industries are driven by agendas that have very little to do with ensuring development and prosperity and everything to do with sustaining themselves. They are simply diversions from the larger issues of sustainable development. Period.
We have created world-class jobs, a world-class company and brand while empowering our community and country. We have done this while simultaneously presenting a galvanized, dynamic face of African creativity to the global market. These actions, I believe, have forever shifted the discourse on African development from one of poverty alleviation orchestrated by external actors, to one about prosperity creation driven by local Africans maximizing their talents and resources. And that's key because no one was positioning things like that before soleRebels emerged and certainly no one was implementing it on the scale we have.
This model will not simply forever end aid dependency, but it will allow Africa to compete in the global marketplace of ideas on our own terms, and at full value for those ideas. And once we do that, then the images associated with Africa will be forever changed in a way that is real and meaningful and tangible. After all, Africa's image is our brand, and if that overall brand has value and worth, then all our endeavors, whatever the sector we are in, becomes enhanced by that brands value.
Arabic Knowledge@Wharton: What was been key to your success?
Alemu: One of the elements of our success is the fact that we have always seen ourselves as a creative-force company first and foremost who manifest our creativity and craft through shoes.
Anyone can make a shoe. But not anyone can, year in and year out, create top-flight products that feel as amazing as they look. Not anyone can synthesize multiple artisan crafts, invigorate them and make them relevant in multiple forms of footwear. Not anyone can invent a supply chain from scratch specifically oriented to service this type of footwear company, and keep that supply chain growing and evolving and flourishing, and have, as core underpinnings of that supply chain, eco-sensibility and fair trade. Not anyone can create deep and lasting bonds with customers through the delivery of top-grade customer service that delivers lasting customer satisfaction. Not anyone can create a brand that engages and excites people globally. Not anyone can meld Old World craftsmanship with contemporary design and technology.
It takes a deeply talented and creative company to do what we do while keeping customers looking great and feeling comfortable, engaged and excited by both the company and the brand. It's a totally different endeavor than simply being a "shoe company" and its one where soleRebels is just getting warmed up. Our vision is based on creating value over decades.
Arabic Knowledge@Wharton: Can you tell me about your professional background?
Alemu: I am an accountant by training. I was born and raised in the Zenabwork community here in Addis Ababa. It's the community where I grew up, and it is the same community where I started soleRebels and continue to run it from.
I completed all my education here in Ethiopia as well, and I have never lived anywhere else but Ethiopia. This is a small but critical point. You see there is a distorted but powerful conventional wisdom, here and across Africa, that says if you want to succeed, then get out and go, especially West.
But growing up, and later more intensely as I graduated from college, I was always thinking about what an idea like that really means. Should somebody have to leave their country of birth and family just to survive? Or to be successful? In addition to wanting to build a successful company, I wanted to show that it is possible to be a local person, in Ethiopia and in Africa and also be globally successful, to show that it is possible to deploy local resources while creating a market leading global brand and to do it all from scratch. Exactly what we have done.
It's a powerful idea and one that has provided a much needed and real example for many up-and-coming young women and men here in Ethiopia and across Africa at large. They see soleRebels and myself, I suppose, as an example that local Ethiopians and local Africans by extension, can and have made it globally. And this is, in turn, inspiring a whole new generation of young entrepreneurs.
My success has also served as a powerful counter to generations of media that have attempted to show Ethiopians as helpless passive recipients of aid. My story runs directly counter to that narrative, and has in fact flipped the discourse on African development from one of poverty alleviation orchestrated by external actors, to one about prosperity creation driven by local Africans maximizing their talents and resources. I have shown that it is we Ethiopians and Africans who can create prosperous jobs, world-class brands while empowering our communities. And I have done so while presenting a galvanized, dynamic face of African creativity to the global market.
Arabic Knowledge@Wharton: soleRebels brings in revenues over US$2 million, according to the British newspaper The Observer. What are your future goals for the company?
Alemu: Roll out thirty soleRebels-branded corporate and franchised retail stores around the globe by 2016 - 17. Achieve over US$25 million to US$40 million in annual revenues by 2018. Keep generating real wealth by creating thousands of creative, dignified and well-paying jobs inside our wider community. We are aiming to add thousands of domestic full-time creative and well-paid jobs over the next 12 to 36 months and over 600 global jobs by 2015.
Continue building our thriving network of local entrepreneurs though our suppliers' web for material inputs. This network employs hundreds and creates multi-millions in local supplier purchases. Create our state-of-the-arts production facility that will preserve, promote and keep indigenous artisan crafts relevant through their continued use as inputs in our world-class footwear products.