Startup of the Week – Fairnopoly, the Amazon competitor with a conscience

Fairnopoly
Fairnopoly

The team behind Fairnopoly wants to offer Germans a more socially-conscious alternative to eCommerce giant Amazon. Based in Berlin, the startup is all about transparency, promoting fair-trade and organic products and giving part of its sales to charity. Although entering a fiercely competitive market, the team behind Fairnopoly believes there are plenty of consumers who are sick of buying from companies that only have one aim: profit maximisation.

We caught up with cofounder Anna Kress to talk crowdfunding campaigns, balancing social values with making money, and fighting corruption…

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Who are you and what are you doing?

I’m one of the founders of Fairnopoly, a social startup. We launched our website about three months ago. With Fairnopoly, we’re aiming to become a serious alternative to other major online marketplaces. At the core of Fairnopoly are three principles: A company model based on fairness towards all stakeholders, the promotion of responsible consumption and a contribution to the fight against corruption.

On our website, both commercial and private sellers can list any kind of new or used products. But fair-trade, sustainable and organic products get special promotions – for example, if the user searches for chocolate we display fair-trade or organic chocolate more prominently than normal chocolate. Also, fair-trade products get a big discount on our sales provision – we also donate part of the sales provision to Transparency International. Fairnopoly is organised as a co-operatative, in which everyone can become a member and control what the company does.

How did you come across your idea?

The idea was originally developed by Felix Weth, one of the managers of Fairnopoly. Felix was an activist in a movement against corruption and travelled widely through Africa. There he saw how corruption deprives people – and young people especially – of life chances. From these experiences he developed the idea of a corruption-resistant, transparent company which could serve as a model for other businesses.

Who are the founders and how did you find each other?

We started with around 13 founders with diverse backgrounds. The one thing we all shared was our anger with the injustice in this world – many of us worked for NGOs in the past. Now our co-operative counts over 1100 members. When I joined the project, Fairnopoly was one of the mentee projects in the Social Impact Lab, a hub for social enterprises, and I learned about it on the Lab website. Most of our members came through our first big crowdfunding campaign.

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Fairnopoly managers Felix Weth, Anna Kress and Bastian Neumann

What makes you different from everyone else?

What makes us different is our company model. Many people are fed up with companies that are not transparent and that they have no control over. People are also concerned that these companies only have one target: profit maximisation. We want to put social values first but also prove that we can be successful economically as well.

How many users do you have?

At the moment we have around 520 commercial and 2900 private users. As a transparent company, we regularly publish our relevant numbers online.

What is your business model?

After a sale goes through on our website we get a sales commission from the seller, six per cent for conventional products and three per cent for fair-trade products. On top of that we have what we call the Fair Percent, that is one per cent that we donate directly to Transparency International.

Who is financing you?

We decided to exclude venture capital and similar investor models. As a co-operative we are financed directly by our members. One co-operative share costs €50, and nobody can invest more than €10000. In that way we want to prevent that someone can set the course of the company based on his or her financial power. Our first crowdfunding campaign at the beginning of 2013 was very successful as we collected more than €200,000. At the moment we’re running our second crowdfunding campaign.

Why did you choose the crowdfunding route?

Crowdfunding fits very nicely into our concept. It allows many people to join the company with a small amount of money and have their say in what the company is doing. A project like Fairnopoly, which aims to become really big, needs a broad base of supporters to become successful. The first crowdfunding round was also kind of a test balloon to see if people would be interested in supporting us.

Is there something you’re missing?

At the moment we are seeking more members via our second crowdfunding round. But we are also looking for someone to head up our marketing department and for startups or projects that would like to share our nice office space in Kreuzberg.

Any advice you’d give fellow startups?

We would love to see more startups, also in the tech scene, consider the co-operative model. We believe in the model because we think it is more satisfying to build a company in a sustainable way, which also results in a more enjoyable and relaxing work environment.

Where will you be in a year’s time?

At the end of 2014 we would like to be financially sustainable, to attract at least 100,000 active users, and to have more than 4,000 co-operative members. We also plan to expand to other countries.

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