1. Concept  Apply the “Avon Lady” sales model to train, equip, and deploy individual merchants to sell goods that treat the diseases of the poor and promote health.  Use a market-based approach to increase access to basic health items by:  Making it profitable for mobile salespeople to sell in their communities.  Offering products that are otherwise unavailable or unaffordable to the poor. Model  Employ franchise business model: methodical screening for agents, strict quality control, uniform branding and product mix, economies of scale, penalties for violating franchise rules.  Partner with microfinance institutions (BRAC in Uganda), local consumer product distributors, NGOs and community groups to train loan clients to sell health and hygiene products door-to-door.  Extend credit to these salespeople, called “Community Health Promoters,” for inventory.  Develop basket of goods for profitability and public health, with a focus on a short list of diseases that account for 2/3 of mortality and can be prevented and/or treated at low cost, including malaria, diarrheal diseases, worms, and TB.  e.g., oral rehydration salts for childhood diarrhea; bed nets to protect from mosquitos and malaria; toothpaste and sanitary pads for hygiene.  Document training manuals and systems with the aim of replicating to new countries, or becoming “master franchisor” to other orgs that want to implement system in their network. Leadership  Chuck Slaughter, founder, was the director of HealthStore, the micro-clinic franchisor, before leaving to create LG. He built and sold a travel goods catalog business and remains a private investor. After undergrad at Yale, he worked for an early microfinance organization. MBA also from Yale. Mission  To sustainably defeat diseases of the poor while creating lasting livelihoods for village-based health workers. Living Goods Analysis  This is one of our 4 key investments in the field of health franchising. Very similar to Freedom from Hunger, the key difference is that LG is a start-up led by a dynamic, experienced entrepreneur who has built strong partnerships, while FFH is large and was founded in 1946.  Learning from HealthStore experience, Slaughter is laser-focused on making sure Health Promoters are individually profitable. And then organizationally, LG can break-even in poor yet dense areas. But may need govt. subsidies in poor less populated areas with higher costs?  Once the distribution system is ironed out, LG can add other development products for the poor, like VisionSpring reading glasses, cook stoves, solar lamps, and water pumps.  Health Promoter yearly sales of $2400, with retail margin of 25% and $100 in costs, project to earn a net yearly profit of $500. That’s a bit less than twice the average per capita income in Uganda. Progress  Living Goods began in Uganda in 2007, now operating in 8 districts, plans to reach 15 in ‘08. DWFF contact: Josh Kwan, Director of International Giving. joshkwan.dwff@gmail.comjoshkwan.dwff@gmail.com Updated: 8/08. Site visit: n/a. www.livinggoods.orgwww.livinggoods.org 1 World Health Organization, 2 USAID Plan for Scale Jul-Jun Fiscal Year200820092010201120122013 Health Promoters recruited20050010801440210-- Total HPs, after attrition2006901736308931442987 Expenses per HP$2457$838$563$415$347$333 Uganda costs$544k$664k$1.28M$1.74M$1.37M$1.26M Uganda contribution margin--$71.9k$246k$571k$969k$1.02M US costs$123k$357k$407k$432k$450k$469k Profit / Loss($667k)($949k)($1.4M)($1.6M)($848k)($703k) Problem  Many of the diseases of the world’s poor are easily treatable. But partly due to a lack of knowledge and access to basic health products, each year 1 million people die of malaria 1 and 2 million from diarrhea-related causes 2. Status: Approved May 2008 Since: new A “Health Promoter” in Uganda