A quiet revolution is unfolding in the world of microfinance. Words like “investment” often conjure images of stock markets or corporate dividends but can also be about human empowerment. This narrative is about micro-investments, not just in businesses but in people. They are investments that are reshaping the world in profound and unexpected ways.
Star Strong invests in human empowerment through The BOMA Project – an NGO providing financial grants to entrepreneurs in rural Africa. Spring Hollis (CEO of Star Strong) sits on the board of The BOMA Project. BOMA’s work in Africa shows how we will build and grow global communities from a grassroots level to provide job creation, support for emerging communities, and offer an alternative to poverty.
This year, we chose to profile similar organizations making significant human impacts. In this article, we are focusing on three organizations around the world working in similar circular approaches to community growth.
In this exploration, we delve into the journeys of exceptional projects:
The Good Hotel Group in the Netherlands, Britain, and Guatemala and their investment into education,
These stories are about financial success, employee empowerment, community upliftment, and equitable wealth creation for all involved. It is also a necessary effort in the communities they serve due to economic, climate and local conditions – the first of many changes we will begin to see over time. We uncover how micro-investments can redefine the economic landscape and sow seeds of social good that grow into a network of impact far beyond the initial investment.
As we lean into the close of 2023, we have a burning desire to do more around equitable capital. Not only is it a clear play in our thesis on diversity and founders with different ideas, but we believe it is good business. There is an opportunity to consider how our learnings, capital, and time can serve communities around the world to build a stronger global economy with a foundation of connectedness.
1. Good Hotel Group: Redefining Hospitality with Social Impact
The Good Hotel Group, based in Amsterdam, exemplifies how a business can be a powerful agent of social change. Born from a chance encounter with a young girl in Guatemala, the Good Hotel's journey is a story of compassion turned into action.
In 2006, while backpacking through Central America, Marten Dresan encountered Mirna, a young girl in Antigua, Guatemala. Mirna's life, marked by poverty and limited opportunities, deeply moved Marten. Buying shoes for Mirna, who had none, opened his eyes to the significant difference small gestures could make in someone's life. This encounter went beyond a fleeting moment of kindness; it sparked a deep reflection in Marten about his role in the world and how he could contribute more meaningfully to people like Mirna.
Inspired by this experience, Marten's vision for the Good Hotel took shape. He realized that the hospitality industry, with its vast reach and resources, could be a powerful platform for social change. This led to the concept of a hotel that would provide a unique and premium hospitality experience and serve as a catalyst for community development and empowerment.
“With the Good Hotel, we aim to show that it is possible to combine doing business and doing good at the same time,” explains Dresen. “The value that has been created is so much more than financial. It's human value.”
The Good Hotel's business model was built around training and employing individuals from disadvantaged backgrounds, reinvesting profits into community development, and creating a sustainable social impact. The Good Hotel Antigua was created to generate a structural income for the Niños de Guatemala Foundation and jobs for the communities where the foundation is active. They call it Good Training – and it serves a dual purpose: ensuring kids coming out of the NDG schools can pursue a career in hospitality, and providing training for the parents of the kids in the NDG schools, to give them a stable income.
Rather than solely focusing on financial gain, the Good Hotel group channels a significant portion of its earnings back into the communities where its hotels operate. This reinvestment takes various forms, such as supporting educational initiatives, funding local development projects, and enhancing training programs. By prioritizing human value over mere financial returns, the Good Hotel Group creates a sustainable cycle of empowerment and growth. Their commitment to reinvesting profits for social good elevates the standard of living in local communities and sets a new benchmark for how businesses can contribute positively to society.
“Good Hotels are a unique opportunity to support education and entrepreneurship. Travelers want connection. Each Good Hotel connects curious adventurers who care about the communities they visit.” – Maria Westfried, Business Development Good Hotel Group, LATAM
At a Good Hotel, guests are immersed in an experience that transcends the typical hospitality norms. From the moment they step through the doors, they are greeted with a warm, community-focused atmosphere, where every detail reflects the hotel's commitment to social responsibility and environmental sustainability. The decor, often sourced from local artisans, tells a story of cultural richness and community support. Guests enjoy high-quality, ethically sourced amenities and are often provided opportunities to engage with local social projects, making their stay a retreat and a meaningful contribution to the community.
Additionally, this has turned into a training program benefiting all the retail and hotel/restaurants around the country, providing a tried-and-true model to support the overall industry.
This unique blend of luxury, social consciousness, and community engagement ensures that a stay at a Good Hotel is not only comfortable and enjoyable but also enriching and inspiring. There is just something “GOOD” about the work they are doing.
2. Max Kothari and Express Kitchens: A Journey of Empowerment
Max Kothari's story is a testament to the power of investing in human potential. An immigrant to the United States, Max's journey from humble beginnings to the founder of Express Kitchens is a narrative of determination and vision. His transformative experience at Harvard Business School laid the foundation for his business philosophy. Max's approach is about investing in people, understanding their needs, and nurturing their growth. This philosophy has not only led to the success of Express Kitchens but has also had a ripple effect in the community, offering employment and training opportunities and inspiring others to dream bigger.
Max's journey to Harvard was as unconventional as his business strategy. He was invited to attend Harvard's Owner / President Management program (OPM) through a unique relationship with Michael Porter, founder of the Initiative for a Competitive Inner City and author of The Competitive Advantage of Nations. He believed ultimately in a hub ‘n spoke model where if you invested in one critical member of the community, and that person made it, they would influence the rest of the community.
Max dreamed up his business in his first year and returned to Hartford to build Express Kitchens. His approach was unconventional; he found a dilapidated 50,000-square-foot building to build his first warehouse. He saw it not as a liability but as an opportunity. He negotiated with the mayor to acquire the building. He agreed to pay the price of the unpaid property taxes to acquire it – a strategic move that laid the foundation for what Express Kitchens would become – a symbol of community revitalization.
"The takeaway for me was that many small businesses tend to walk around saying, 'if you have this much money, we could do X, Y, Z.' Most of the time it is not actually capital that is the issue. The case is actually a lack of clarity, lack of action plan, knowing exactly what your customers want. If you get those things right, money will flow. That's what I learned from this experience." – Max Kothari
Years passed, and Max built Express Kitchens into a successful enterprise. He applied the philosophy he learned through Michael Porter: invest in people. At Express Kitchens, this philosophy translates into a culture of empowerment and growth. Kothari believes that everyone deserves a chance to prove themselves. This belief is evident in his approach to hiring and training employees. He focuses on individuals often overlooked by other employers – those from disadvantaged backgrounds or with limited work experience. Kothari sees potential where others see risk, offering these individuals jobs and a pathway to personal and professional development.
Max's investment in people goes beyond conventional training programs. He has created an environment where employees are encouraged to learn, grow, and take on new challenges. This approach is about nurturing the staff's sense of belonging and self-worth. Max understands that by investing in his employees' growth, he is improving their individual lives and enhancing his business's overall productivity and morale.
Max knows investing in people significantly impacts the broader community and contributes to a better world. By empowering individuals with opportunities for growth and development, Max creates a ripple effect that transcends the workplace. His employees, equipped with new skills, confidence, and a sense of purpose, become agents of positive change in their communities.
This Christmas, Max is doing something special. He gives his 200 employees an extra week of full-paid time off. He wants everyone to celebrate the holidays with their families, but he requests one thing: take a couple of hours to volunteer in the local community. He is asking that they come back with a story of service to tell.
3. Nelixia: Harnessing Local Production for Global Impact
Nelixia's approach to business is a pioneering example of how a company can integrate social responsibility into its core operations. It will be the model moving forward for true, regenerative growth in climate-impacted places. Based in Latin America, Nelixia specializes in producing 100% natural ingredients, such as essential oils, concretes, absolutes, extracts, and spices throughout Central and South America These ingredients find their way into various industries, including perfumery, flavors, aromatherapy, and teas & spices and they are vital products threatened by climate change and social constructs in the communities they serve What truly sets Nelixia apart is its product range and its deep commitment to empowering and uplifting the communities involved in its production process.
“Sustainability at the heart of [our] operations. You cannot create a sustainable product from one day to another. You need to know the producers, know the socio-economic baselines they are living in, and which solutions you will bring to the community, so it takes time, but we think the hard way is the only way.“ – Elisa Aragon, CEO and Co-Founder of Nelixia
Did you know that memory lives at the intersection of smell and taste? Essential oils are foundational in history. Elisa articulated what the world would be like if we were to lose products due to the loss of the supply chain– the smell that is conjured up through a perfume reminding you of your grandma or a tea with a holiday cardamom flavor. Without key ingredients grown in communities like these, we would lose these memories forever. The base notes of so many favorite smells would be lost forever.
Purpose starts at the source was the outcome of a decade of work, positioning 7-core pillars to the front line of their business. They started with the source, and as part of that effort, the Nelixia team invested in and empowered the communities they were working in to ensure they would be there for years to come.
They implemented the Poverty Stoplight methodology. This innovative approach, developed by Fundación Paraguaya, recognizes poverty as a complex, multidimensional phenomenon. The Poverty Stoplight tool allows families to assess their poverty levels across various dimensions, including Income and Employment, Health and Environment, Housing and Infrastructure, Education and Culture, Organization and Participation, and Interiority and Motivation. These dimensions are further broken down into 50 indicators, each represented by three images that depict extreme poverty (red), poverty (yellow), and non-poverty (green). Families use these images to conduct a self-evaluated survey, which helps them identify their specific challenges and needs.
By adopting this methodology, Nelixia can tailor its community support programs to address the unique challenges each family or community faces. This approach ensures that interventions are effective and respectful of the individual circumstances and dignity of those involved. It's a method that turns the abstract concept of poverty into tangible, manageable issues, allowing for targeted solutions that can impact people's lives.
Rural agricultural communities face many unforeseen challenges while participating in corporate partnerships. For example, one community found that they could grow a particularly sales crop on spare farmland and woodland areas in their community. After multiple seasons of high yield of the sales crop, the community decided to transition the rest of their viable farmland into mono-cropping the sales crop. They believed the financial gains would give them everything they needed to support the community. Only months after transitioning their food-producing farmland, the community ran out of food. Because the rural community was an extreme distance from any store or market, it quickly became a food desert. With the previous seasons’ successes, they believed they would have sufficient money to purchase all of their needs. Ultimately, government aid had to step in to support. This story highlights the importance of Nexilia’s unique approach to understanding the socio-economic conditions of each community so they do not put themselves in a dangerous long-term position for short-term monetary gains.
Moreover, Nelixia's commitment to regenerative agricultural practices and impact-neutral production demonstrates its dedication to environmental stewardship. This approach benefits the planet and ensures the long-term sustainability of the communities they work with. By focusing on practices that replenish and restore the environment, Nelixia helps ensure that the communities can continue to thrive and benefit from their natural resources.
Nelixia's business model goes beyond the traditional corporate responsibility paradigm and leans into generational growth. They don't just source ethically; they actively participate in the betterment of the communities they work with. Their use of the Poverty Stoplight methodology is a testament to their innovative approach to tackling poverty, making them a beacon of hope and a model for other businesses aiming to make a significant, positive impact on society.
The Viral Effect of Social Good
The stories of the Good Hotel Group, Express Kitchens, and Nelixia are more than success narratives; they are blueprints for how businesses can be a force for good and reframe the Investing in people goes beyond financial transactions, nurturing potential, guiding growth, and caring deeply. Such investments create a viral effect of social good, where beneficiaries become benefactors, perpetuating a cycle of positive change.
As we witness the impact of these organizations, it's clear that the future of investment is not just about financial returns. It's about creating a world where prosperity is shared and communities thrive.
We believe we can each learn something from the communities that are creating the groundswell of commerce around the world. It is driven by creativity, hunger, and a desire to have more.
Star Strong Capital: Amplifying Impact Through Community Investments
Star Strong Capital is dedicated to exemplifying the power of strategic investments in community-driven businesses. Their diverse portfolio showcases a commitment to nurturing enterprises that not only achieve financial success but also, when applicable, play a critical role in uplifting the community they serve.
Star Strong Capital recognizes this potential and actively contributes to this vision by supporting The BOMA Project, which issues micro-grants to entrepreneurs across Africa. The BOMA Project's Rural Entrepreneur Access Project (REAP) is a cornerstone of this effort, empowering women, youth, and refugees in Africa's arid regions. REAP provides people with essential skills, capital, and support to start and sustain small businesses. This initiative transcends mere financial aid; it's a gateway to sustainable livelihoods, community development, and empowerment.
For those inspired by stories of transformation, find the in-depth case study of The BOMA Project and its impact. For those eager to contribute to positive change and the success of these rural entrepreneurs, you can visit [this link] to contribute to The BOMA Project today. Join Star Strong Capital in this mission to invest in humanity and witness the world change, one community at a time.
You can read a detailed case study of The BOMA Project's impact here and directly support The BOMA Project by clicking this link. By supporting initiatives like BOMA and the social good companies highlighted in this article, we can collectively participate in improving society. Invest in humanity and watch the world change.
The performance quoted represents past performance. Past performance does not guarantee future results.
Not all investments made by Star Strong Capital LLC should be expected to be profitable.
The information and opinions provided herein should not be taken as specific advice on the merits of any investment decision. Investors should make their own decisions based on such investors’ own review of publicly available information and should not rely on the information contained herein.