Thomas Murray has come up with an unusual way to make money: His business model is to buy up some of the most valuable real estate in the world, then give it away.
Murray even told CNBC his company would love to give land to everyone who reads this article (more on that later).
It may not sound like a way to turn a profit, but Murray's convinced that his big idea, called Cuipo, will make money and help save the planet to boot.
Click on the video to see him deliver his 60-second Power Pitch on CNBC and judge for yourself.
The big giveaway
Since 1960, more than half of the earth’s rain forest has been deforested. Every second, an area the size of a football field is destroyed.
Murray told CNBC that he and his business partner, Gus Hurst, witnessed the ruin while on a business trip in Panama. That inspired them to start Cuipo (the name comes from an endangered tree species found in the Central American rain forest).
“We thought, why not buy thousands of acres of rain forest and give you, the individual, the opportunity to save one square meter by buying things like a shirt or a watch.”
To assist their endeavor, the partners enlisted John Oswald, a longtime friend and founder of Paul Frank Industries, who has years of experience in apparel and licensing.
How does it work?
The start-up licenses its redemption model to partners, which put the Cuipo code on products they sell. When a consumer buys the item and enters the code on Cuipo’s website, it “redeems” or preserves a meter of rain forest in their name.
The consumer “can see exactly where it is on the Google Earth map,” Murray said.
For example: The water-bottle maker Sigg offers a meter with every Cuipo-licensed bottle, which it sells at Whole Foods and hundreds of other retailers. Appliance-maker Fisher & Paykel offers 20 meters of rain forest with each dishwasher, fridge and washing machine it sells. Other licensers include Gund, Enesco, Sprout Watches and Panda Cycles.
Products that include meters of rain forest appeal to shoppers who like the added value of social responsibility, and companies benefit by creating meaningful ways for people to engage with their merchandise, according to Murray.
“We believe our model is sustainable,” Murray told CNBC. “[We] expect that not only our company’s preservation of rain forest but the message … will allow us to make a significant difference and encourage the public to take a stand against the devastation of our planet’s natural resources.”
How does Cuipo make money?
Though the start-up donates the rain forest to its nonprofit arm, Cuipo’s core business is a for-profit enterprise. The company gets a percentage of every Cuipo-licensed product sold and generates revenue by selling a wide range of branded products on its website, including Cuipo clothing, coffee and even skateboards (each item includes 1 or more meters of rain forest). Cuipo-branded bottled water is already on shelves in Whole Foods (WFM) in Southern California, Arizona, Hawaii and Nevada.
“By the end of the first quarter, there should be about 500 to 600 products in the marketplace selling in major retailers,” Murray said, adding that the company forecasts $3.5 million in sales this year.
Power Pitch panelist, real estate broker, and Delos Living board member Dolly Lenz questioned Murray: Is Cuipo selective about partners, or will it work with any business, including a tobacco company?
“There’s certain categories that we don’t believe are in the best interest of the global cause,” he said. “We’re starting to get a lot of traction, and it’s a specific way for people to actually do something good and feel good about that process.”
Power Pitch panelist and Case Foundation senior fellow Sonal Shaw was concerned about the competition Cuipo faces from other social enterprises such as (RED), a non-profit organization that makes a donation to fight HIV & AIDS whenever one of its products are sold.
But Murray said his redemption method is different from anything else out there.
“We were able to get a patent on our business process,” he said.
After Murray’s appearance on CNBC, Cuipo announced that panelist Lenz had joined the company’s board and that Murray is putting his money (or his meters) where his mouth is. Through the end of February, Cuipo has pledged to give away up to 1 million meters of rain forest to any Power Pitch viewer who wants to redeem one on its website.
Cuipo is based in Newport Beach, Calif., and has raised almost $3 million from investors David Erickson, Todd Buchholz, Crista Cover, Shawn V. Gruver and Brad Fine.The startup is looking to raise an additional $2,000,000 on seedinvest.com.
See Tom Murray #powerpitch his company @MyCuipo to panelists Sonal Shaw @SonalRShaw senior fellow with the @CaseFoundation, and real estate broker and Delos Living board member Dolly Lenz @iDollyLenz.
—Additional reporting by Joanna Weinstein and Ray Parisi
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