After an impressive Kickstarter campaign last year, makeup brand and social enterprise Indigo & Iris have returned with the launch of its much anticipated online store last week. Jihee Junn talks to Indigo & Iris CEO Hannah Duder about its Levitate mascara, how it’s helping to end avoidable blindness in the Pacific, and the challenges of being a social enterprise in New Zealand.
Just over 24 hours after launching its Kickstarter campaign, Indigo & Iris had raised more than $12,000. Almost three weeks later, that went up to more than $39,000, then $75,000, before finishing with just under $128,000 in the bank.
Surprisingly enough, it was all for a mascara – a mascara called Levitate that’s vegan friendly, cruelty-free, and ethically produced. But most importantly, a mascara that donates 50% of its profits to help end avoidable blindness in the Pacific. It was an idea conceived three years ago by an 18-year old Bonnie Howland who felt a disconnect between New Zealand Fashion Week, where she was working while studying event management at AUT, and the volunteering she’d just done in Vanuatu.
During her time on the tiny Pacific Island, Howland met people whose lives had been changed by a very small amount of money from the Fred Hollows Foundation, a not-for-profit working to make high quality, affordable eye care accessible to everyone. Three years later, Indigo & Iris’ successful Kickstarter campaign has donated $3,000 to the Fred Hollows Foundation, helping to restore sight to more than 120 people. That amount is set to increase as the inventory it’s been able to purchase since then gets sold over the next few months.
“We’ve put money into marketing, getting our inventory sorted and launching a new website where people can actually buy the mascara,” says Hannah Duder, CEO of Indigo & Iris. “So now when we sell those mascaras, they’re already paid for by the Kickstarter presales and we’ll be able to make a profit, allowing us to make more donations as we go along. So there’ll be more than $3,000 coming out of the $120,000 raised.”
Duder, who joined Indigo & Iris approximately a year ago and is also the co-founder of ethical clothing company Little Yellow Bird, met Howland at the 2015 Global Entrepreneurship Summit in Nairobi, Kenya. Howland was selected for her work with Indigo & Iris while Duder was selected for developing a website and app modelled off Tinder to engage young people in the political process ahead of the 2014 general election.
“We were the only New Zealanders there and we eventually became good friends,” recalls Duder. “When we came back to New Zealand, Bonnie continued Indigo & Iris while I continued on another journey. When we eventually crossed paths again, she needed someone loved the business side of things. She was looking for someone to push Indigo & Iris to the next level.”
“My inspiration [for coming on board] was definitely the fact that I’m all about trying to prove that you can do good business while still doing good in the world. We’ve structured ourselves so that we’re still about profit and making money, but we want to make sure that our impact on the world is only positive and that our profits can actually do good in the world.”
Being a social enterprise in New Zealand is no easy feat. There’s currently no legal structure designed for a venture that’s both commercial and charitable, with most social enterprises – including Indigo & Iris – registering as companies (aka LLCs). “Choosing a company structure has advantages because it’s well known and provides a return of profit to the founder through dividends or selling shares,” lawyer Steven Moe explained in a piece for The Spinoff last year. “Investors are easier to attract, although they probably won’t understand a business that exists for more than profit. And, in fact, directors may feel a legal obligation to maximise shareholder returns.”
To work around these issues, Duder says Indigo & Iris had to take a somewhat “DIY approach” by setting up not just Indigo & Iris Ltd, but also the Indigo & Iris Foundation, a registered charity that owns 50% of the business. “Hopefully in the future when we’re this big makeup brand and we’re making lots of profit, we’ll pay out dividends and the Foundation will receive 50%,” she says.
“The US, Canada and the UK already have specific legal structures [for social enterprises] with rules such as caps on how much you can pay shareholders and caps on how much you can pay a CEO. So I would love to see a similar structure in New Zealand. I’m definitely quite passionate about it but unfortunately, I don’t quite have the time to start a rally about it. But I do hope the new government is looking into this.”
In the short term, however, Indigo & Iris looks to stay afloat during its startup period by portioning out a certain amount to growing its business. “It’s not like its a dollar figure – it’s based on a bunch of calculations that my accountant and I did to make sure we have an impact early on,” says Duder. “As most businesses know, you don’t normally make a profit in the first five or so years, so even though we say 50% profit, it’s probably going to end up being more than that because we’re kind of giving as we go rather than just waiting until we’ve actually got the profit on the balance sheet.”
“It’s quite complicated having to work out how to make the impact that we want but still run a successful, sustainable business. Because it’s all well and good if we give all our profits away, but then it’s no good if we can’t continue to make more profit and impact. We’re still working out a few different kinks but hopefully New Zealand will implement and create a legal structure for us soon because there are so many social enterprises around now.”From Eat My Lunch and Everybody Eats to Little Yellow Bird and Nopesisters, most of New Zealand’s top social enterprises have been based on food or fashion. So when it comes to Indigo & Iris, why makeup? And why mascara in particular? Turns out the reason is both simple (“Bonnie loves makeup and specifically mascara”) and symbolic. “With mascara, we really like that you actually have to use your eyesight to put it on. The mascara you’re putting on by using your eyesight is helping to restore [eyesight to others]. So every time you apply the mascara, you think: ‘I wouldn’t be able to do this’ or ‘I wouldn’t be able to do this as well if I was blind’.”
“Mascara is also something women use a lot and it’s a good way to get into people’s makeup bags. We find that people often buy multiple mascaras as they’re not that brand loyal, which could be good or bad for us. But in terms of actually getting people to purchase a new mascara, this is a good way of making their purchase have a lot more meaning.”
“Bonnie spent two years trying every mascara she could get her hands on and working out what made a mascara. We’ve now got an amazing manufacturer in Italy and we actually went over to Milan in March to meet. [They’ve formulated] a mascara that’s not waterproof – because waterproof can actually really harm your eyelashes – super black and lengthening. We’ve also used organic coconut oil from Samoa so it has that connection to the Pacific Islands.”
While Levitate’s sales over the next few months will determine where Indigo & Iris go from here, Duder says its goal is to become a full-range, high-quality makeup brand with different products linked with different charities. But she emphasises that she doesn’t want people to buy Indigo & Iris products as a form of charity. “We want them to see it as a product they actually want to use. We’ve tried to put a lot of focus on quality with our branding and story [and not make it all about] the Pacific and our charity work.”
“We want women to see Indigo & Iris as a beauty brand that they can rely on that just happens to have this amazing background. We want people to see it as a high-quality product first before a charity”
The Spinoff’s business content is brought to you by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
The Bulletin is The Spinoff’s acclaimed daily digest of New Zealand’s most important stories, delivered directly to your inbox each morning.