Archive for December, 2010
Is India a Hotbed for Social Enterprise?
If you’ve lived in India for any length of time you have had to wonder about the inate entrepreneurial spirit that abounds. There are also several successful social enterprises that have their origin in India. But is India really a hotbed for social enterprise? What makes India home to so many enterprises and an attractive investment avenenue for international investors?
Lindsay Clinton of Beyond Profit magazine offers her thoughts in her recent article on the GOOD Business website. To find out what makes India tick, click here.
2000-2010: A Decade of Social Entrepreneurship
Here is an interesting post from the Social Edge Blog by Rod Schwartz of CEO of ClearlySo. In it Schwartz suggests that the single-most important event for the sector in the past decade was the financial crash during 2007-2009. Why does he think so? Well because the “house of cards” (the banking system) came crashing down. This he says revealed the ‘economic and moral bankruptcy of “casino capitalism” as it had been practiced.’
This was a good thing, because it recongized that ‘a system focused on profit maximization’ to the exclusion of all else was destined to explode.’ The crisis lead to several positive results for the social entrepreneurship sector: it opened up the way for impact investing, social entrepreneurs challenge singular goals and advocated balanced scorecards, governments and large corporations are now setting out to learn from the sector, and help build it, and lastly there is increased interest in working in the sector, in addition to interest from business schools and universities.
Tell us what you think of Rob Schwartz’s take on this. What do you think was the most important thing to happen to the sector this decade?
Simply Fly: Chapter 3
Devyani Srinivasan continues her analysis of the book “Simply Fly” by Air Deccan founder, Captain Gopinath. Over a series of blog posts Srinivasan has been exploring the lessons Gopinath’s story holds for social enterprises looking to work with the BOP.
In my blog post on Chapter 2, I mentioned that Gopinath attributes his decision to leave the army to a spiritual-emotional crisis, but gives few details on what this crisis is. In this chapter, what spirituality means for Gopinath becomes clearer.
Throughout the book so far, the reader is aware of Gopinath’s love of nature. In Chapter 2, he narrates being awestruck at the mountains of the Indo-Tibetan border, that he saw on his long range patrols when in the army. He says that, “I saw the most spectacular scenes, of gushing waterfalls, snow-capped mountain peaks, and winding rivers. I was immersed in Tagore’s poetry at the time and the entire experience was deeply spiritual.” In Chapter 1 Gopinath describes the Western Ghats, and his village, with love, including the agriculture (coconut groves, areca plantations, betel-leaf creepers, paddy fields, mango orchards and coffee estates), and the dense, pristine rainforests. Yet, the bulk of his descriptions are reserved for the Hemavathy and Yagachi rivers, and in Chapter 3 he confirms that for him, rivers are sacred.
While by Chapter 2 the reader already suspects that there is a close tie between spirituality and nature for Gopinath, this is elaborated upon in Chapter 3. He states:
…My struggle with farming lent my life a spiritual dimension. I sensed within me a sense of oneness with the environment. In one breath I took in the mystic aura of the early morning sunrise; the sweet fragrance rising from freshly churned earth as I walked across the fields. I was in search of a natural method of understanding the crops, the seasons, and the soil.
For example, coconuts are central to Gopinath’s farm. Again drawing from a religious reference, he says that, “in the scriptures, the coconut tree is called kalpavriksha, the tree that lives a long, long time and grants all wishes.” Gopinath believes that if he nurses the saplings for seven or eight years they will keep him going for a hundred years, and therefore the success or failure of his farm will be decided in the time that it takes the coconut palms to grow.
Initially, when termites attack the coconut trees, he uses benzene hexachloride to get rid of them. When it rains this spray washes down into the soil and nearby stream, carrying the residual chemicals with it, and polluting the soil, the stream, the ponds, and the groundwater. Gopinath quickly realizes that by removing all the twigs, branches and dead organisms from the soil, the termites are left with no nourishment, and therefore attack the coconut trees. Once Gopinath instructs the workers not to remove anything from the coconut grove, the termites stop attacking the trees.
While the farm is the focus of Gopinath’s activities in this chapter, he also begins a silkworm business, stock-brokerage, a hotel business, a motor-cycle dealership, and an agricultural consultancy. The silkworm business is particularly worth mentioning, as Gopinath replaces bamboo stems and branches with paddy straw as the cocooning sites for silk worms. He does this to, “save millions of bamboos from felling, and simultaneously eliminate the repeated use of disinfectant on the generally reused bamboo montages.” In addition, he experiments with integrating rain-water harvesting and impounding in ponds, managing weeds, moisture retention in the soil, discreet ploughing, and selective biological pest control. Gopinath’s silkworm business wins the Rolex Award for Enterprise, which he sees as helping to spread environmental awareness and eco-friendly ways of farming.
However, in this chapter Gopinath also seems to be developing an interest in entrepreneurship for its own sake, regardless of the social benefits it does or does not bring. Some examples serve to illustrate this. In the first, Gopinath says that from farming he learnt that:
…If something is not ecologically sound, it is not economically viable. This is a simple law that I think applies to every aspect of life. For a business to be viable, entrepreneurs need to create the right ecology for business and for the interactions it entails. That seed of my future low-cost airline and other businesses was sowed here.
However, in this quote, Gopinath is modifying the meaning of the world “ecology” drastically from its environmental context. In fact there is a contradiction between Gopinath’s love of nature and the environment, and his decision to start an airline business. Another example is of his future helicopter business that Gopinath also refers to in this chapter. While Gopinath refuses to accept dowry at his own wedding, again in a seeming contradiction, he acknowledges that it is dowry that enables his customers to hire helicopters for wedding celebrations.
At his motor-cycle dealership Gopinath decides to hire children, but here the issue is more complicated. He reasons that by hiring boys as young as 8-10 years old, he can train them to become mechanics and open their own garages. Gopinath also displays sensitivity in trying to ensure that the boys are not ill-treated.
One lesson from this chapter for entrepreneurs is that help can often come from unexpected sources, and therefore it is important not to alienate anyone, as far as possible. Even when his farm is ransacked by the previous farmers of the land allotted by the government to Gopinath, he offers to help them to receive title to the land remaining. It is perhaps due to this attitude that Manje Gowda, a neighboring farmer and friend, offers to guarantee Gopinath’s bank loan when none of his other friends and relatives would. Of course, Gopinath is at an advantage over other farmers in the first place because he was previously an army officer, and this seems to interest one bank manager, after several failed attempts, in his loan application.
Chapter 3 begins with the quote, “All that matters is Love and Work”, and ends with Gopinath lamenting that, “People do not love what they do, but do it nonetheless for the money it brings.” While it is clear that Gopinath has a love for agriculture, and perhaps a budding love for his other business interests, the reader hears little of his personal life in this autobiography so far. In this chapter he gets married, and some sections describe the marriage and his subsequent life with his wife. Gopinath’s wife evokes interest because she insists on marrying him although at the time he is a farmer in debt. However, in other respects the marriage seems quite traditional. Gopinath is attracted to her because she can sing, is pretty, and will cook for him, and after marriage she seems to unequivocally support him without voicing any opinions of her own. Gopinath also has two daughters, but they receive only passing mention in this chapter.
Unconvention 2010: Where Path Breakers Meet Path Makers
On December 3rd and 4th, Villgro held the second edition of its 4-in-1 conference, Unconvention 2010. The event brough together over 250 practioners, innovators, investors and entrepreneurs in Chennai for four distinct events – a social entrepreneurship summit, a business plan competition, an innovation fair and an investor forum. Bharath Varshney, a Villgro Fellow presents an overview of the two-day event here.
In an effort to create a viable eco-system for fostering innovation in the social sector, Villgro Innovations Foundation held our second edition of Unconvention in Chennai, India from the 2nd to 4th Dec, 2010. Over 200 delegates gathered for three days of experience-sharing, panels, break-out consultancy sessions, and networking.
The annual platform that celebrates social entrepreneurship had five distinct parts – Wantrapreneur (a business plan competition for startups), Innohub (a showcase of innovators and their product and service innovation), The Summit (a knowledge sharing platform with panel discussions and workshops), for the first time an Investor Forum (medium to directly connect entrepreneurs with investors) and Villgro Awards, which identifies and felicitates the entrepreneurs and enterprises that have made significant contributions to society and the sector.
The spirit of Unconvention was put forward by Paul Basil, CEO and Founder of Villgro: “Where path breakers meet path makers is a platform to foster dialogues for the social innovators to develop sustainable environment for strong partnership and networking,” he said. Further, the event had participation from socially relevant businesses and individual innovators showcasing and deliberating their plans for change in rural India.
The Summit
The first day of the Summit was designed with panel discussions while on the second day was a mix of workshops and entrepreneur sharing sessions. The discussions were focused on brainstorming ideas that have social impact. Moreover, three parallel workshops on different topics: Making yourself ready for investments, Law & Social Entrepreneurship and Applying new tools to Measuring Impact-were conducted as part of the summit on the second day.
Innohub
The other major attraction of the Unconvention was Innohub – an Innovation fair showcasing highly market-worthy innovations- both products and technologies handpicked by Villgro. Innohub also facilitated face-to-face meetings to forge partnerships between entrepreneurs and innovators. Exhibitors at Innohub included Villgro Stores, a Villgro initiative that provides last mile connectivity for agricultural products; Neurosynaptics, a weather monitoring system development unit; Skymet, a weather forecasting technology unit; Arogyam Foods, organic products developed by rural farmers; Network of Indian Agri-Business Incubators (NIABI), and Masuta, a tasar yarn producers company.
Wantrapreneur
Wantrapreneur, the Business Plan Competition, received an impressive 44 applications in the Agriculture, Dairy, Water and Energy categories, of which 10 were short-listed for the finals. While evaluations of the business plans happened on December 2nd, the winners were announced on Day 1. Beating all hurdles, Mr. Inir Pinheiro of Grassroutes, a network of village tourism destinations owned & run by local communities, was awarded the first prize under the start-up category. The award for Early Growth was given to Mr. Kaushalendra & Mr. Anuj Kumar of Samriddhii Green Carts which is working to reinvent the fresh vegetable supply chain.
Investor Forum
The newest addition to the event, based on feedback from last year’s event, was the Investor Forum. This platform provided an opportunity for investors looking for deals in the sector to interact with social entrepreneurs looking for investments. The forum not only opened up investment opportunities but also provided ample learning ground for investors and investees as they interacted directly during the pitches. In total ten investors talked to the entrepreneurs and discussed the best way of making investments in social businesses. Interestingly, more than 40 meetings were requested which will be facilitated by Villgro post-Unconvention. The Investor Forum also hosted a discussion around Community of Practice: Access to finance, was facilitated by Villgro & ABI – ICRISAT with support from Infodev, World Bank.
Villgro Awards
The 2010 Villgro Awards were given out in seven categories to celebrate and recognize individuals and organizations that have influenced society through their work. Mr. Mohammad Haque won the Grassroots Innovator Award for his Paddy Thresher, and SELCO, India won the Best Social Enterprise Award. The Jury included Dr. Ashok Jhunjunwhala, Head-RTBI, Ms. Bindu Ananth, President-IFMR Trust, Mr. Solomon Prakash, Country Director-ASHOKA & Ms. Valerie D’Costa, Program Manager-Infodev, World Bank.
Unconvention’10 ended with My Story session in which three social entrepreneurs shared with the audience their entrepreneur story. The first story was from Ms. Saloni Malhotra, Founder of Desicrew, who spoke of how she discussed how she sustained through the failures to build a rural BPO. Madhabananda Ray, Founder & Managing Director of Masuta Producers Company Ltd., inspired the audience with his story of how he turned tribal women into successful entrepreneurs by making them the owners of the enterprise that produces tasar silk. Finally, Svati Bhogle, Founder of Sustaintech, talked about her green energy enterprise, and how she made the jump into the for-profit businessworld, having always worked in a non-profit background. The sessions offered participants to hear some of the lesser-known struggles that went into establishing these enterprises. Would-be and fledgling entrepreneurs certainly had a lot of food for thought!
In short, Unconvention’10 was a fine example of bonding between those with a need and those with a solution. Further, it provided a common meeting ground for innovators, social entrepreneurs, investors, policy makers, researchers, and the media. Villgro has already announced the dates for Unconvention 2011. Keep your calendar free 2nd and 3rd December 2011!
Should Urban Migration be Encouraged?
Contributed by Robert Moore
With developing world seeing rapid migration to urban areas, the wisdom behind the notion that urban migration is good is being challenged. Jonathan Glennie at Poverty Matters blogs one of the Growth Week panels on industrial development and poverty (and afterwards thanks God that economists don’t rule the world). He especially objects to one conclusion, that: “The marginal farmer in India is helped to stay in agriculture, when this is exactly the person that needs to be encouraged to move to an urban area.” This is a good article to read for both getting the view of a panel of distinguished academics and that of the skeptical observer.
Read Glennie’s full article here.
Is There Hope for a Third Wave for Microfinance?
The microfinance industry in India has seen several waves of interest and investment. The current crisis within the sector (caused by the microfinance ordinance in the state of Andhra Pradesh clamping down on MFI operations), is already causing disruptions within the industry. However, if the sector manages to successfully come out of it, it could see a Third Wave.
Atleast that is the suggestion made by Atreya Rayaprolu and Sree Kumar, in their article “Are Investors Ready to Ride the Third Wave of Indian Microfinance?” In their article the authors suggest that because so much attention has been paid to the sector during this crisis, there is a growing recognition of the need for balance between profitability and impact. Because of the pressures excerted by the system, the authors suggest that the third wave of microfinance will see a growth in client-centric innovations. This is unlike the earlier waves, where the NGOs and investors respectively were centric to the microfianance model.
The authors are of the opinion that this model will ultimately lead to further opporunities for investors, for whom the third wave presents several attractive investment opportunities.
Read the entire article here.
What does it take to Disseminate Innovation?
In their article authors Susan Evans and Peter Clarke take a closer look at how innovatin can be disseminated. They rightly suggest that while a lot of attention is given to creating new, innovative products, little is done to disseminate successful ones. Evans and Clarke, in their article “Disseminating Orpah Innovations,” discuss the distinct, sophisticated skill set required to disseminate innovation. This skill set often requires customizing the innovation to new circumstances and not in replication.
Read the entire article here.
Using the Internet to Achieve Scale
Several organizations struggle with the question of how to acheive scale. The answers present themselves in different ways, depending on the intended outcome. A study published by the Monitor Group in June, explores how the Internet can become a powerful tool to scale.
The case study takes a look at the model pioneered by KaBOOM!, a US based non-profit that is dedicated to building playgrounds across the United States. After several years of successful growth, KaBOOM! saw that real growth would come not just by engaging with communities directly, but to take their model online. The internet held the ability to help them build hundreds of thousands of playgrounds across the country. The did this by putting their resources online so that communities could organize themselves and build their own playgrounds using free resources and guidenlines avialable on the KaBOOM! website.
The KaBOOM! example holds lessons for other social businesses too, particularly those focused on delivering a service. Read the entire case study here.
Freeing the Social Entrepreneur
Social entrepreneurs face several challenges along their way to creating a successful enterprise. One of these challenges is putting in place second-level leadership, strong managers and a good team to work with. Social entrepreneurs often find it difficult to relinquish control over the organization as it grows. However, this can have a negative impact on the company’s growth, its human resource structure, and staff morale.
In their paper, “Freeing the Social Entrepreneur,” authors Chantal Laurie Below and Kimberly Dasher Tripp present steps that a social enterpreneur must take to create a strong team as well as five leadership roles that an organization must have for it to be successful in its early stage of development. They cite the example of Jordan Kassalow of VisionSpring to highlight their case.
Read the entire article here.
Is Giving Money Away the Best Way to Change the World?
Bill Gates and Warren Buffet two of the world’s richest men recently pledged to give their money way to charity. They have also been on a drive to encourage other billionaires to do the same. In India Azim Premji recently created waves when he decided to donate much of this wealth towards improving the country’s level of education. It is beyond doubt that these billions donated can go a long way to create social change. But is giving away money really the way to change the world?
Dayo Olapade, of the New America Foundation explores this question. Read the entire article here.