Social entrepreneurship: Changing the World
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Social entrepreneurship: Changing the World



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    Social entrepreneurship: Changing the World Social entrepreneurship: Changing the World Presentation Transcript

    • Social Entrepreneurship: Changing the world
      October 2010
    • A world plagued with problems…
      ~10% of India jobless [ref]
      ½ the world < $2.50/day
      30%-40% of India
      illiterate [ref]
      global mortality, <5 years –
      67 per 1000 [ref]
    • Its all about social change…
      A social entrepreneur is someone who uses entrepreneurial principles to bring about social change
      Mohammed Yunus
      Grameen Bank, Bangladesh
      Alleviating poverty
    • Social enterprises drive change
      Primary goal is “social impact”
      Livelihood or employment
      Better health
      Quality education
      Access to essential goods – water, power, medicines, …
      …essentially, create positive change at the “bottom of the pyramid”
      Profits are a means to “sustain”
      Novel business models
      Novel service delivery models
      High efficiency
    • Constraints are many…
      Undeveloped markets
      Inadequate infrastructure
      Lack of knowledge & skills
      Restricted access to finances
      Little or no regulations
    • …but, opportunities exist
      Meet basic needs of the poor
      Food, quality water, power, sanitation and health-care
      Increase productivity
      Stronger access to information, products & services
      Increase incomes
      Poor as producers with stronger market access
      Increase knowledge and skills
      More awareness, high-quality education, vocational training
      Large numbers – nearly 3B poor people to serve!
    • Some examples
      (scalable ones and new innovations)
    • SKS - Microfinance
      Microfinance to poor (incomes < Rs. 20,000/year)
      Started in 1997
      73,00,000 customers, 2266 branches, Rs. 16670 crores (USD 3.9B) disbursed
      Small loans Rs. 2000-12,000 to poor women - joint-group liability model
      Repayment rate > 99%
      Smart-card based MF platform
      Web-based business intelligence portal
      Integrated & encrypted MPLS communication network and a mission-critical data-center
      Social benefits
      Alleviate poverty, improve livelihood
    • SELCO – Solar lighting
      100,000+ solar lighting systems in 15 years
      Karnataka & Gujarat
      46% of households in India with no electricity
      Photo-voltaic (PV) solar systems for lighting
      Flexibility in usage
      How user’s pay
      4-light home system: Rs. 18,000/-
      Cheaper than kerosene or dry-cell batteries
      Initial capital via micro-finance, increased incomes repays loan
      Social benefits
      Increase in incomes (longer work hours, savings on kerosene!)
      Improved health (no kerosene smoke inhalation!)
      Children can study well (no excuses!)
    • Safari’s M-Pesa – Mobile money
      Mobile market
      M-Pesa – mobile money
      Person to person transfer, individuals to business, cash withdrawals, loans
      12.6M customers, ~20,000 outlets
      Started 2007
      Banking to the millions
      Savings now possible
      “Eko” in India along with SBI
    • Kiva - Microloans
      ~800,000 users; ~5000,000 lenders; $165M in loans; 98.9% repayment rate
      Business model
      Interest returned to lenders, part interest retained by Kiva
      Web service for anyone to lend money
      Easily track your loans, see impact – all online (web or mobile)
      Alleviate poverty, improve livelihood
      In India: RangDe is similar
    • Samaanguru– Mobile supply-chain management
      Strengthen rural supply-chains via mobile-phones
      Inventory management, Ordering
      Stock-level Optimization
      Started 2009 – pilots underway
      Mobile-phone based data capture
      Cloud-based data processing
      Algorithms for inventory optimization
      Business model
      SaaS, transaction-based pricing
      Ensure availability of essential goods in rural areas
    • Key Challenges and Lessons
    • Key Challenges
      How to get adoption?
      How to monetize?
      How to scale?
      How to organize efficiently?
      How to raise capital?
    • Social Enterprises are all-round innovation labs!
      Innovation and experimentation in every possible aspect of business creation:
      Customer development
      Business models
      Service Delivery
      Technology (and usability)
      Organization models
      Funding models
    • We need to build the runway first…
      Market creation
      (expect undue delays!)
      Towards monetization
      (expect false starts!)
      (expect turbulence!)
      3-5 years
      +1-3 years
      +3-6 years
    • Sustenance is key – varied models!
      Market research (early customer development)
      Self-sustenance by entrepreneur(s)
      Grant-based funding – esp. given its research for social good
      Customer development
      Angel and early-stage VC funding
      VCs – different ones at different levels of monetization
      Sustainable Business
      Customer revenues
    • Customer development takes time
      Customers are of many types:
      Private-sector organizations – e.g. a hospital with rural clinics
      Public-sector organizations - e.g. aid agencies
      NGOs – Who already have a field presence
      Village consumers – esp. for a consumer-based products
      Typically, a multi-partner model works best
      Trusted and relevant partners are critical
      Sales funnel should be crafted carefully
      Use case diversity, and probability of project success are important
      Strategically seeking customers/partners, pro-actively anticipating needs
      and adapting fast are critical!
    • Business models have to be novel
      Customers cannot pay much, or are not used to!
      Product pricing evolves over time
      Learn and evolve fast – customer is also experimenting!
      Cultural factors important – economics will not always work!
      Understand value-proposition and willingness to pay – jointly with customer!
      Extreme cost management is crucial
      Management personaland organizationalcosts determines runway (initially) and margins (later)
      Ensure BoP-friendly models and a deeply conscious ways of
      running a business!
    • Technology is essential to scale
      Scale can be achieved only with new technologies!
      Technology has to be disruptive & created anew
      High usability (in resource-constrained environs)
      Low cost
      Easy ramp-up
      Significant innovations are happening
      Water purification, solar lighting, smokeless stoves, low-cost bamboo housing, …
      Information & transaction services via the “Mobile-cloud”
      Low-cost technology has to be invented along with a
      deep understanding of usability
    • Measurements are critical
      Metrics are hard to define and measure
      E.g. Can we correlate number of school meals to improved literacy?
      Data matters, but is hard to come by!
      Not easy to collect and manage data – mostly on paper!
      Computers and mobile-cloud will make it easier
      Need careful and trustworthy measurements
      Done by credible individuals or organizations
      Efficient frameworks for collecting and
      visualizing metrics have to be designed upfront!
    • Scaling impact is really hard
      Pilot evaluations are easy, scaling is really hard!
      Takes time, risks are high!
      Low-cost technology that can scale
      Marketing to remote areas
      Scalable customer support
      Long-term capital
      This is where most enterprises struggle!Few examples of
      scalable models exist today.
    • Funding models are evolving
      New types of “social” investors
      Organized foundations
      E.g. Deshpande, Bill Gates, …
      Social venture capitalists
      Social impact vs ROI
      Expect social outcomes
      Expect return on investments – perhaps, with lower margins
      “Patient capital”?
      Outcomes and timeliness of outcomes are unpredictable!
      Need a breed of investors who can wait!
    • Social enterprise timelines
      5 years
      13 years
      15 years
    • Entrepreneur’s challenges are immense
      Getting funding
      Attracting talent
      Understanding remote villager’s needs
      Convincing customers
      Creating usable technology
      Getting customer to pay!
      Living frugally
      Managing costs efficiently!
      Coping with family pressure

    • Most importantly…
    • It is a journey of personal change
      Build deep compassion
      Towards the underprivileged
      Develop strong passion
      Towards a social goal
      Persevere, persevere, & persevere
      Against all odds, over long periods
      Simplify life, achieve sustenance
      Voluntary simplicity – as found in villages today
    • Be the change you wish to see…
      Thank You!
      Let’s create a good future…
    • Reading List
      My Experiments with Truth, Mahatma Gandhi.
      Banker to the Poor, Mohammed Yunus.
      Innovator’s Solution, Clayton Christensen.
      Conscious Business, Fred Kofman.
      Voluntary Simplicity, Duane Elgin.
      Stanford Innovation Review
      The Social Enterprise – Harvard Business School
      Engineering Social Systems
      Top 25 Social Entrepreneurship Websites