JULY 18, 2018

Episode 22 – A Marketplace By Women for Women

Monica Peraza from Alegreea

This week, we sat down with our good friend Monica Peraza, CEO of Alegreea, an online marketplace where women designers and artisans connect with buyers from around the world looking for unique, high-end products. Alegreea is a marketplace by women for women, and this vision is very clearly ingrained in each aspect of the company. In the episode, we explore the access struggle that women makers outside of the US experience and how Alegreea is closing this gap.

Lisa Graham (00:00):
Hi, my name is Lisa Graham, and I’m happy to welcome you to another episode of Change The Rules. I have my co-host, Dan Graham, with me. And today we will be talking with Monica Peraza, who is President and Co-Founder of The Hispanic Alliance, CEO of alegreea.com, President of MXNet Alliance, and Chair-Elect of the Board of Trustees of the Long Center for the Performing Arts. She has a lot of spare time, so if you need her for anything, please email her. Thanks for coming, Monica.
Monica Peraza (00:28):
Thank you so much for the invitation. I love being here.
Lisa Graham (00:30):
Yeah. Well, the first thing we really wanted to chat about today and the main thing was Alegreea. So can you tell us what Alegreea is and what inspired you to found it?
Monica Peraza (00:39):
Well, I found out that the main problem that women designers and artisans of high-end products across the globe have is the access to markets. These women make unique products and the market around them doesn’t want to pay for price for those products. So they really have to go out and travel to get to places that are willing to do that. So, Alegreea really solves that problem because we’re a marketplace by women for women. And we want to become the largest marketplace of women makers in the world. And how we do that is by connecting them with women who really want to buy high-end products. Our women are very busy, so they want to go and find something quickly, but something that is quality, but also that has a social impact. And that’s what we do.
Lisa Graham (01:29):
Great. And how, on like a base level, how do you make these connections? How do you get these products out to people who want to buy them? How does this look?
Dan Graham (01:38):
I’m guessing finding the artisans or the makers is, in of itself, probably challenging. I mean, I’m sure it’s really fun. But, you know, what does that process look like?
Monica Peraza (01:48):
Well, it was a complicated process in the beginning, because for you to be able to get the best of the best, you need to be able to convince certain designers to be on the marketplace. That was the hardest challenge at the beginning. And then you have to create all these processes and systems to be able to onboard them, because all of them have big collections. So you have to decide from that huge collection, what are their 10 best items that represent their brand.
Lisa Graham (02:20):
And just to clarify too, this is an online marketplace, correct? So do they sell their products directly to consumers?
Monica Peraza (02:27):
Exactly. And we do that because by that we eliminated every single intermediary between them and the consumer. Most designers and high-end artisans keep at the most 35% of what you pay for a product at any store. And it’s really hard for them to grow a sustainable business on that. With Alegreea, they really make 50%. So that’s a 15% increase right in the pockets. But answering your question, how do we find the makers? So our phase A was done in Mexico. And we went through the Mexican government and really find out what they considered the best makers. And then we traveled to different States and met them and started curating all those products. It was very difficult in the beginning, but when you start getting a mass of designers, the rest of them want to be in there. Now we’re expanding into the U.S. — minority women makers in the U.S. — and you do a lot of that through social media and connections that you have in that world.
Lisa Graham (03:42):
Where are some of the most interesting places that you’ve seen great products come from?
Monica Peraza (03:48):
Well, actually, in Mexico, there is one of the largest banks in Mexico is called Banamex. And Banamex has something called The Hundred Masters of Mexican Handicrafts. And these are real masters. People that, you know, their pieces of art. And I had to travel to the mountains of many states in Mexico under very tight security to be able to meet with women and find out what they were doing and how they were doing it. And we realized at that point, that the first thing we needed to do with them is teach them costing and make sure they were making a profit. Because a lot of them don’t really know how to cost indirect things. So they were custom materials, but that didn’t help them at the end of the day, because they were not making enough money.
Dan Graham (04:46):
So, delivering sort of basic business education? And how are you doing that? I mean, are you setting up kind of workshops, or?
Monica Peraza (04:54):
We did workshops with the designers with webinars. And that really helps them to be more mindful on marketing, on branding, and elemental stuff that we find through them that is the main challenge that they have to scale the brand. Although, Alegreea, we’re going global next year. And part of going global, what we really want to do is develop a platform to give content to all these makers, which will have a business side, but we’ll also have the balance side that a woman needs to have to be able to be happy and successful. And that’s based on the program that we develop at McCombs with The Hispanic Alliance, with emotional intelligence and nutrition and meditation and all those things that they need to really be successful.
Lisa Graham (05:46):
And do you find, you know, when educating these makers, you know, a lot of them are artisans by trade. And so what are some of the challenges that you’ve come across in terms of educating on setting prices and some of these basic business ideas? Where do you all start in educating them on how to even get their products out? Because I know that could be a challenge too, based on where they’re located, having access to the internet, pricing things where maybe in America women would pay an amount of money that they wouldn’t pay, maybe that their neighbors wouldn’t pay. How do you even start to educate folks on that?
Dan Graham (06:21):
That’s a great question, because when you kind of describe it as “traveling into the mountains under tight security”, that doesn’t scream, “Oh, that’s probably on a UPS route.”
Monica Peraza (06:30):
Well, I need to say that because of these traveling to the mountains, we develop a strategic partnership with FedEx and we develop a one step system that any maker, wherever they are, and I need to say most of the makers in Alegreea, we call them makers. Because we think the designer and the artist who is making these very unique products are equal. So our makers, most of them are designers, but a lot of them are designers that create brands that give a lot of work to artisam women. And then we have the core artisan women that are also doing the unique products. So the one step solution with FedEx was basically that we emailed them one attachment and what most do is their children printed in school and they come back to them. So they only have to go and take their products to the nearest FedEx office. And it’s here in two days.
Monica Peraza (07:26):
So how did we realize that? It was through that spending time with them. And believe me, it was an equal awakening and educating part for me from the designers and also the artisans. The artistans have their own challenge, but the designers have their own challenge too. So in the artisans side, it was going back to zero and saying, I need you to tell me how much everything you’re doing is costing. I want you to tell me how much time you’re spending in doing this product. And how are we going to pay you the hour. And most of the times they’re cutting their selves really short. And that’s why the artisan community in the world has always been struggling.
Monica Peraza (08:23):
There was a Social Innovation Summit in Mexico City three years ago and we had a meeting with Muhammad Yunus and I was just talking to him about what I see is the biggest challenge that they have. And the biggest challenge is all of these artisans are buying. And a lot of designers are buying products at retail price. The products that they’re using to make their products are retail price, either fabric or thread or whatever you want to call it. So if you start at that level to really create profit and create a sustainable business, it’s a big challenge. So that is a problem that no one has been able to solve. And I think with micro loans, they give them micro loans, they charge them 30% and those micro loans give them the ability to keep going and buying those products retail. And then the chain keeps going. The only way you’re going to break it is when you’re able to fulfill their materials at wholesale prices. So that is one of the things that we have in mind for the future.
Dan Graham (09:20):
And, just to clarify, Muhammad Yunus is the Founder of Grameen Bank, which is a kind of a micro lending movement and has written a lot of books and has won a Nobel Prize. I’m assuming that’s the Muhammad Yunus you were talking about?
Monica Peraza (09:35):
He is the one. And he did incredible things in his country. And now he’s trying to do it around the world. And I think they have a lot of learning things that were very interesting to me. But in my mind, the only way you can break that circle is when you give them access to wholesale prices. So the designers on the other end, they have a totally different problem. Designers are incredibly creative and most of them doesn’t have that huge business sense. So yes, I make these. And, you know, as entrepreneurs you guys will understand it. We always love our chickens. Our chickens are the most beautiful ones and there’s no chicken like our chicken anywhere else. With the designer, it’s the same thing. The problem is that if the price is not competitive in the market, it doesn’t matter how incredibly beautiful something is. They’re not going to be able to sell it. So the designers need to have a counterpart. That is the business part of it.
Dan Graham (10:40):
You don’t actually sell chickens on the site, yet?
Monica Peraza (10:44):
I don’t, I will not sell chickens. That’s for sure.
Lisa Graham (10:48):
They’re fashion chickens. They’re not quite in yet, but we see what’s coming.
Lisa Graham (11:00):
So you know what Grameen learned and Muhammad Yunus’ movement is how fundamentally life-changing doing loans to women can be to her family and to her community. And when you get a group of women who are getting these loans, how that can change the community and uplift an entire community. And so are most of the people that you guys are working with, are they female? And are you anticipating seeing a lot of this change? Because the amount that these women can make by selling to a country like the United States, I think could be life-changing in terms of the income for them.
Monica Peraza (11:37):
So the U.S. is the largest market in the world. And I wanted to figure out our makers. So some of them are designers and some of them are artisans living everywhere else. As you know, when one has children, and we estimate that 85% of our makers have children. You have, from the moment you drop the children in school, to the moment you pick up the children, it’s good to make the most of your day. So let’s say you live in Bastrop and you’re making this incredible fashion item. And you need to come to Austin and you need to start visiting shops to see what boutiques can buy the product and sell your product. That’s going to take you a few hours in a day, and then you need to redo it several times a week. So then you need to stop because you need to go back to Bastrop and pick up your children from school.
Monica Peraza (12:36):
And then you cannot do it every single day. Because if you do it, who’s going to make the products that you need to sell. So that is the case that they’re living right now. So yes, the loans are imperative for production. Yunus, in his country, they have now these systems that they that. They buy the products they need. And they do all kind of the supply chain for them. That is not what happens all over the world. If you see Latin America, Latin Americans are kind of a virgin zone for the world. There’s not a lot of designers from Latin America that are currently selling in the U.S. market. And they’re incredible products. Italy has been the country that has done it really well. If you buy something from Italy, you’re willing to pay an extra price because Italy is so good at design.
Monica Peraza (13:39):
I need to tell you that we have items from Mexican designers that people think are Italian. There’s a lot of that in Latin America. And people don’t realize that. There’s a lot of women in Africa that make incredible things, but the moment you hear “artisan”, you instantly go like that’s going to be cheaper, and I’m going to pay this.
Lisa Graham (14:01):
Is this a marketing challenge for you all?
Monica Peraza (14:03):
That’s why we call them makers. And that’s why we decided to go high-end. And we decided to curate every single product. So the core of Alegreea is when we meet the makers and now we have a process. And answering to your question, how do we work with the artisans that are remote? We work through WhatsApp. That’s the way they communicate. So we created systems on the backend to be able to funnel all these artisans and designers.
Monica Peraza (14:34):
And, yes, there is a Mexican designer. She’s very well-known. Probably one of the best finds in Mexico. She has like a hundred products. When we went through her collection, we chose 10 for Alegreea. And she was like, why are you choosing 10? And I said, 10 is your core. And 10 are your most competitive items in the U.S. market. So we’re kind of saving. It’s like when I go to Whole Foods. Whole Foods doesn’t buy 79 ingredients. If you present something for them to buy and has one of them, they don’t buy it from you. So for me, I go there. I loved going there because I don’t have to read all the labels. So when you coming to Alegreea, we already did all that work for you.
Dan Graham (15:24):
Why women for women? Why not men on one of those sides of the market?
Monica Peraza (15:32):
Because I think a lot has changed into the world. And you can see it in the business sense, and you can see it in the spiritual sense. There’s a theory that every certain number of years, the energy of the world changes from ying to yang or otherwise. In the last years, the energy of the world change into the ying, into the feminine. At South by Southwest, all the main keynotes were about women. Melinda Gates. The Mayor of London. Everybody was talking about the same thing. And it is women. And giving access to women. I think also there has been a real mind shift on women across the globe. We used to compete each other, and now we’re kind of over that. And we’re about helping each other. So Alegreea is capturing this energy that is going around is like, okay, let’s help each other. How can you best help another woman? When you buy their products. When you invest in their businesses. And that’s why there’s also now this new trend of venture funds of women for women. So we just kind of felt the momentum of the world going forward. And tapped into that.
Lisa Graham (16:56):
And what are the top products? When you say, somebody has hundreds of products to choose from, how do you choose the 10 going onto the site? Is it look? Is it type of product? What goes into that decision? And how big is the team that’s figuring that out?
Monica Peraza (17:11):
So, my former life, I did private label for a lot of the biggest retailers in the U.S. High-end retailers. And you need to know your market. And you need to feel the market and the trends of the market. So when I started doing this business, I used to have like 3000 stores all over the U.S. and 55 reps selling my products. Then I clearly saw that it was going through to the Target’s and that kind of merchant. And we started developing products for them. Then Amazon came into the market and it was like, okay, let’s start looking at the online. So when you have a feeling to the market, you kind of know your customer. And then you look at the designer and the designers are always innovating, which is great. There’s always this core in the designer. If you go to a designer’s webpage, you can find 12 collections. And then if that is your favorite designer, then you go there and you explore the new collection so you decide if you like one of those. But when you have 206 designers like we have, we need to make it very easy for you to decide if that is what you want, or that is not what you want. And finding the core of what they are, it’s very simple. Because you analyze their history, how the brand develops, and then it just makes sense. It’s just kind of a gift.
Lisa Graham (18:40):
It’s a gift, yeah. Because I was thinking that sounds really complicated, but I do not have that gift. I like having small amounts of choices to choose from.
Dan Graham (18:47):
I’m just envisioning you going into one of these maker’s studios, and they line out all your products, and you just walking down the row going, “Nope. Nope. Nope. Maybe. Nope. Yes. Nope. That’s crap. That’s great.” And that’d be an interesting experience.
Monica Peraza (19:04):
Well, because we automized a lot of that. Now we have systems in place. What happens is my team prepares things, and we have meetings, and they send me this stuff, and we’re looking at the same list with the pictures and everything. And I go like, “Nope. Nope. Yep. No. Forget about it. Yeah. Yeah.” And now, you know, the team is also kind of catching it up. They even tell me before, “I don’t think you’re going to like this.” And I go like, yeah, “You’re right. I don’t like this. It just doesn’t make sense.”
Lisa Graham (19:43):
Can you talk a little bit about your work with empowering women and empowering women entrepreneurs? Because it sounds like you guys are absolutely doing this with Alegreea, but you also do it in some of the other work that you do. And so how are you guys doing that specifically with Alegreea? And then how do you work that into everything that you do? Because I feel like whenever we speak, it’s kind of a core piece of what your mission is with the work that you do.
Monica Peraza (20:10):
Yeah. You nailed it for me. For me, I’m very passionate about the things I get involved with. I don’t do things just lightly. If I go in, I really go in. For me, women empowerment is my number one thing. I’ve been to enough places and I’ve seen how women struggle. And I see how women really suffer and go through everything just to give education to their children. That for me, that is a mission. So in Alegreea, that is what we’re going to do. And the empowerment part, I think when you have self-confidence and you have emotional intelligence and you have a balanced life and you slept well, you are a much better entrepreneur than if you didn’t. So, a lot of us were born to give, and we start giving and giving and giving until we drain ourselves.
Monica Peraza (21:17):
There is no way you can grow a business. You know, being an entrepreneur is not easy. If you are the business, every single fund in the world will tell you that 70% of the investment goes to the entrepreneur. So making sure that they’re in their best to thrive is something that I love. And we put a program in The Hispanic Alliance in motion in 2016, we’re on our fifth cohort and it’s being hosted at McCombs School of Business. Half of the program is business. They have finance, they have marketing, they have to put together a pitch, all that. But the other half, the course starts with me doing an assessment of balance of the seven most important areas of their lives. And then we go through emotional intelligence and we dive into nutrition and the hormones. It’s a huge class for them. So at the end of the 13 weeks, we close with leadership. You see how that entrepreneur, that Hispanic women entrepreneur, has transformed herself into a totally different person. I think that’s huge. And that’s something I’m very passionate about. Terry Long and I also put together a group of the 16 most influential Hispanic women in Austin.
Dan Graham (22:47):
You say six-zero?
Monica Peraza (22:48):
Monica Peraza (22:56):
And we’re putting together a report card with the Latino Research Institute at UT. Then we’re going to start publishing four times a year. And we’re going to measure how Hispanic women are doing in executive leadership positions in the government of Texas, the city of Austin, the University of Texas and the main employees in central Texas. So we’re going to start measuring the opportunities because we really think there’s a lot of incredible Latinas that are staying behind. And like the Chief People Officer said at South by Southwest, this is not a pipeline issue. This is a comfortability issue. The world is comfortable with the status quo. And that’s why a lot of us are not getting where we need to be. Because a lot of people say there are not enough diversity and that’s not true. And there are not enough women. That’s not true either. So right now, a Harvard Business Review data that we’re publishing says that women control $24 trillion of spending. Women used to be the Chief Financial Officer’s of the house. Now they’re the Chief Purchasing Officer’s. They buy 85% of everything.
Dan Graham (24:28):
Incredible, 85%.
Monica Peraza (24:31):
So we’ve really controlled the money.
Lisa Graham (24:34):
And so when you’re speaking with these women, you mentioned the seven tenants. What are those?
Monica Peraza (24:40):
Oh, the seven areas of your life that need to be balanced? So it’s financial, your work, relationships, spiritual, physical, fun, and social. So, we do 10 questions per each of those seven, and then there is a circle. So when there’s something they’re missing, you all of a sudden see that bump in the circle. So they do that exercise when they start and when they end and you can see how that circle transforms.
Lisa Graham (25:45):
And is a lot of that transformation a result of starting to really focus on yourself and figuring out how to find that balance?
Monica Peraza (25:52):
I always tell the women of something when we start. And I say, we’re going to give you a piece of a puzzle every week. And when you have all the pieces, you’re going to see your life totally different. But there’s one thing that I want you to learn and start doing today. It’s you first, you first and then everything else. And it’s the same thing that happens when you’re in an airplane. And they always tell you, if you have children, you need to put your oxygen first and then help the children. This is same concept. But women have been raised to give and to give and to give and we forget a lot of ourselves. That is not good for the family. And that’s not good for anyone. If you want to have an unhappy family it’s because the woman in the house is really unhappy. Isn’t that true?
Lisa Graham (26:41):
Yeah. Very true. I think that that’s great. And it’s this universal thing. And I think more women are talking about it more. And I think people are starting to be more honest about finding that balance and how they feel out of balance and that it’s okay. But then how can we collectively talk about it? And so thank you for sharing those seven things that we all need to focus on. Well, thanks so much for coming. We really appreciate coming back and thanks for everything that you do. I think that Austin is a better place for having you here. And I think that you are changing the world with a lot of the things that you’re doing. So, thank you so much.
Monica Peraza (27:11):
Thank you so much.
Lisa Graham (27:16):
You can find a link in the show notes for more information on Alegreea if you’d like to learn more. And once again, Monica, thank you so much for joining us. The Change The Rules podcast is sponsored by Chez Boom Audio. Chez Boom Audio is the leading audio post-production company for TV, film, advertising, audio books, and podcasts in Austin, Texas. And we’re so honored to work in their studio with the wonderful Shayna Brown. You can find her studio at https://chezboomaudio.com/. And if you want to hear new episodes every week, please subscribe to the Change The Rules podcast on iTunes. We will see you again next week with another amazing story of innovation. Thank you for listening.