Vodafone xone Innovators Series: Eat My Lunch's Lisa King on 250,000 lunches and the power of social enterprise

To mark the arrival of the Vodafone xone business acceleratorIdealog is interviewing a whole heap of established New Zealand innovators, as well as the founders of the 10 startups selected by Vodafone to receive mentorship, funding and the potential benefits of working with a global network. In this episode, Eat My Lunch co-founder and CEO Lisa King talks with Idealog's editor Henry Oliver.

Henry Oliver: A lot has been made about the conception of Eat My Lunch – you working for the man, selling energy drinks to kids. What changed?

I think having little kids myself and selling these products that I wouldn't actually give them at home. It kind of weighs on your conscience after a while. I wanted to actually do something I was proud of and I could actually tell my kids and have them involved and not be ashamed to be selling it. I'm a huge advocate of healthy eating and healthy foods. I think it just got a bit hypocritical for me to be marketing all of these unhealthy foods to the New Zealand public.

Where did the lunch idea come from?

As a mom with kids going to school, one of the biggest time pressures is around making lunches in the morning. I was thinking about that. The idea of actually kids going to school without lunch. I couldn't imagine going without for a whole day. I really wanted to do something that at the core of it was about giving back and having a really meaningful impact. At the time, Campbell Live had highlighted the school lunch differences between a decile 10 school and a decile 1 school. Seeing that, I just thought I really wanted to do something about it.

So was the social enterprise aspect of it part of the inception of the whole idea?

It was from the very start. Coming from this corporate world where it's all about making money and then sometimes they'll look at doing something to give back to the community, but it sometimes felt like a bit of an afterthought. 'We need to do it, so we'll do it', rather than 'Actually, this is what we really believe in'. Wanting to put the social mission at the heart of everything we do was really important and having that drive the business and the profit and all the decisions you make around a normal business.

Social enterprise is, not necessarily a buzz word, but maybe a buzz model. Certainly, it's something more people are trying. Why do you think that is? What's social enterprise doing that traditional business isn't doing or charity isn't doing? Where's the sweet spot?

I think consumers are voting with their pockets and they actually want to support brands and give back as well. I think as Kiwis, we're known to be a very generous country. There are so many issues, there's so many charities out there. It's really confusing. You kind of don't know how to give back in a really meaningful way. Just giving money away to charity isn't enough. You don't know where it ends up, how much of it actually goes to the cause. With business, I think consumers actually want to be able to do something or purchase a product that they know that actually has some kind of meaningful impact at the end.

I think combining those two things of this traditional charity model where at the heart of it, it's all about doing good with a business model that actually we're selling a service that enables you to give back to the local community. This isn't about kids in Africa. This is about kids 10 minutes from here. That's been the sweet spot for Eat My Lunch. It's really become this vehicle that people can engage with really easily and be able to demonstrate their generosity whether it's through buying a lunch, whether it's through volunteering, donating lunches. It's a very easy and simple way for people to give back.

You have volunteers and people have donated money. Is there a limit to how much people will give to a for-profit enterprise?

That's been one of the biggest questions when we started Eat My Lunch. We based this business on volunteers making the lunches for the kids. We had no idea where we were going to get volunteers from. We're not a charity. When they started coming, we were like, 'How long is this going to last?' People asked, 'Are you a charity?' We said no. We were very upfront about the fact that we were here to make a sustainably viable commercial enterprise. I think what it's really shown me is people don't actually care if we're a business or a charity. They're here because of what we do. We have volunteers now. There's a waiting list for two or three months to come and volunteer. In terms of support and donations, as more and more people are finding out about Eat My Lunch, we're getting more and more support from the business community and from individuals as well. I think everyone actually just wants to be involved in achieving the same purpose.

The last effort to raise money was the lunch bonds. Can you tell us about that?

We wanted to extend Eat My Lunch and have further reach outside of Auckland and Hamilton. Of course, as a startup, capital is one of the biggest issues. For us, we never wanted to give away more equity. It was how can we do this apart from borrowing money from the bank? At the time, Pledge Me had just applied for a license with the FMA to do crowd lending. The timing just happened to be right. We were the first campaign on the Pledge Me lending platform.

Everything is about being driven by our social mission. We didn't just want to issue debt bonds with a financial return. We actually wanted to issue a bond that also a social return. The lunch bonds were created to give Kiwis the opportunities to support us. In return, they got a really great financial return, 6% interest on every $1,000 that they lend to us. Plus, they gave away a lunch every month. There was that social aspect to it as well. We raise just under $820,000 which was incredible. That was the first ever transparent crowd lending campaign in New Zealand.

So you obviously give lunches to the schools most in need. How is that done? Is it a raw decile number? How do you figure out where those lunches go? There must be plenty of schools that want them.

Yeah, there are a lot of schools in need. It's not just decile 1 and 2, but we also provide lunches for decile 3 and 4 schools. I think people have this perception that's only those low decile schools need help. When we started, we approached a couple of schools. Since then, it's kind of just grown organically and through word of mouth. We've got schools coming to us now.

For us, there is no hard and fast rule. If there is a need, we'll provide the lunches. When we take on a school, we agree with them how many lunches they think they'll need a day. We commit to that number every single day. Sometimes it goes up, sometimes it goes down. As long as there's a need. The school is responsible for identifying the children and distributing them in the way that they feel is best.

You've got a waiting list I presume. Do you just when you get over a certain amount of buys, you can add another school. Is that how it works?

Yeah, again, it's about the sustainability of this model is that we need to have enough buys to be able to give the number of lunches that we need to give. We've also looked at some other models where we've had some corporate sponsors come on board. They've bought the lunches for a school for an entire year. That enables us to bring on another school as well. There are different ways of how we can give more. People buying lunches is really the core way for us to do that.

You've mentioned in interviews the inspiration of TOMs shoes. TOMs is a company that's had a little bit of criticism for providing shoes in a similar buy-one-give-one model. The criticism hinges around not addressing the causes of the poverty that they are wanting to alleviate. How do you respond to that? Do you see that as an issue with the lunches? Obviously, no one wants kids going hungry, but is there potential that giving lunches away alleviates the pressure on the government or other social institutions to help fix the problem?

I've gone out to so many of the schools that we are giving lunches to and spoken to the principals and really trying to understand why these kids are coming to school without lunch. There is no one answer. There's no one cause or problem. Every family has a different situation. It can be anywhere from kids who's mom is in a mental institution. She's never, ever going to make them lunch. It could be families that have 10 children and the youngest gets the lunches, but sometimes the oldest misses out or both the parents are working two jobs. They're not there in the mornings. It's a variety of situations. I think there's never going to be one answer to address that. What we believe is that the only way to break that cycle for a child is to become educated. They're not going to get an education if they're sitting there starving unable to learn. That's what we're trying to address is providing the kids with enough fuel and nutrition to be able to get the most out of their learning opportunities at school.

Where to here? You've mentioned wanting to expand beyond Auckland. You're in some schools in Hamilton. Are there targets in mind? Are the cities awaiting your arrival?

The next stop is Wellington. We're opening in Wellington in October. The money that we raised form the lunch bonds, part of that will go towards funding the setup in Wellington. We're just looking at feasibility of other locations at the moment. We're only a 14-month-old business. There's still a big job to do just in Auckland alone. We're only in 35 schools at the moment. The need is just growing all the time. As you said, we've got this huge waiting list as well. Next week we're about to give away our 250,000th lunch. That's a quarter of a million lunches that we've given away in this time.

Things like My Food Bag, companies like that have been a real success in the last 14 months as well. Is dinner an area that you'd want to expand into?

Absolutely. I think the more occasions that we can go into, it means the more lunches that we can give. As part of the lunch bonds, capital raising exercise, we also looked at expanding into potentially a dinner occasion and launching Eat My Dinner.

The modern business ideal is to be replicable and scalable. There are cities with hungry kids all over the world. Is this a model that you yourself want to scale and replicate?

Yeah, we've had pretty amazing global business people approach us and say we think this model is something that can be taken and put into any big city in the world because you have this problem anywhere you go. We have brought on Derek Handley for example, as an investor and advisor. He lives in the States most of the time. He's got a really great view of what's going on globally. We kind of have a view with him to look at how we can make sure that this business is scalable and replicable. It's starting with some of our technology platforms. Some of that money that we raised recently will go towards that and starting the exercise of looking at where else could this potentially work.