Greenlight Planet - Social Entrepreneurship - Open 2011
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Greenlight Planet - Social Entrepreneurship - Open 2011
- 1. Scalable Social Business: Revolutionary Mechanism or Simply a Different Perspective? NCIIA open 2011 Patrick Walsh tpwalsh@greenlightplanet.com
- 2. In Indian villages that have no electricity, small diesel engines are common. These engines are used to: Generate electricity Process rice and spices Pump water but one liter of fuel = $1 = average daily wage
- 5. The Problem 1.6 billion people have no electricity They still light their homes with kerosene lamps. They live in a flickering haze: dirty, dangerous, and dim. $38 billion annual fuel cost 10% of kerosene users’ meager income goes up in smoke. Higher oil prices are putting pressure on kerosene subsidies. 200B kg carbon emissions If kerosene lamps were a country, that country would be one of the world’s top 25 CO2 emitters.
- 6. Villagers earning less than $1.50 per day readily paid $24 for solar lantern prototypes.
- 7. Energy everyone can afford.
- 8. SCQ Why are we a for-profit company, not an NGO? It’s true: We can do “well” by doing good. But most importantly in this case, The fastest way to do good is by doing well.
- 9. Introducing the Sun King ™ Powerful Features Twice the brightness of a “Hurricane” lamp 16 hrs of light on a one-day charge Unbreakable, water-sealed polycarbonate 3 year battery lifetime (replaceable) Designed for rural use
- 11. 11
- 12. 12
- 14. Low channel costs: Spend money on the product, not on middlemen.
- 18. Name: Govindraju Day Job: Ironing Location: Belary, India Income boost: 20%
- 19. Are “social” businesses really so different from “traditional” companies, in terms of their motivation or their yield? Social Yield (?) Trend Profit Yield ($) Who is this useless Co.?
- 20. What is a social business? Should it be managed in a different way? Should it pursue profit to a lesser degree? If so, would it ever be capitalized in the first place? And could it survive in the long term? Should it be driven in a more “social” way than any other business? Aren’t the most profitable businesses already driven not only by ROI, but also by management’s passion for the mission at hand?
Editor's Notes
- Steph: This is the village of Badakamandara in Orissa, India where the three of us lived during the summer of 2005. This village is representative of the tens of thousands of villages in India which have no electricity. We were in Badakamandara to install an experimental bio-fuelled generator. We’re going to talk briefly today about this project and another project that spun off of it.
- First, let’s look at yield, and then we’ll look at motivation. Note that “Purely for-profit” companies are purely for profit in motivation only: They still produce a social yield, be it positive or negative. I don’t think there’s much distinction to make. There are no purely social companies (I’m not examining the non-profit sector here) and there are very, very few purely for-profit companies – almost everybody is trying to make a profit by creating valuable goods/services, be they microwaves or life-saving medicines.Let’s plot some companies on this plane – I won’t say which I think is which!Generally, those who produce social yield are compensated for it by the market. The social yield to profit yield ratio may vary greatly, but it’s generally positive.So the yields are fairly similar. Now let’s think about motivation. First let’s think about entrepreneurs who come to work primarily to create social value. These individuals constantly doubt their own effectiveness, and seek to determine and prove their own social yield to the world – they have “social greed”. The bottom line, if nothing else, provides some metric for determining success, and social entrepreneurs love this – it’s part of what made me switch. (A corollary is the non-profit NGOs sector: They have a huge self-doubt wrt effectiveness, in part because there is no bottom line. ) Social yield is not strictly proportional to profit, but the two are correlated, and social entrepreneurs realize this. Now let’s look at entrepreneurs who come to work primarily to make money. They will usually ask themselves “what can we sell to the world? What will the world pay us for?” They are unintentionally asking themselves, “How can we create social value?” Most entrepreneurs fall somewhere in the middle. They are motivated by both profit and the ability to contribute to society. So there is no distinction in terms of motivation, just gradations.In a few cases, companies may have found profits that yield negative social value, but there are probably fewer cases of this than we are tempted to imagine.