Many have heard these words separately – social and entrepreneurship. Many wonder, can these words really come together? I thought the same in early 2000. Having seen how businesses could become successful, generate employment, make the economy vibrant, I wondered why businesses could not strive to make the poor rich.
I went around speaking to both businesses and NGOs. Businesses said, ‘There is no way you can make money, because the base of the pyramid is a difficult customer.’ NGOs were angry. They said, ‘How can you make money off the poor?’ Well, I was talking about the poor making money and in the process those serving them making money.
It took the late CK Prahlad’s Fortune at the Bottom of the Pyramid for conversations to start around businesses and poverty. Maybe that was also a good time as urban markets were getting saturated and corporates had to go rural. But way before that Bill Drayton at Ashoka had already started creating a movement around social entrepreneurship. Bill regularly spoke about how people were given fish to eat, while some were being taught to fish and thereby didn’t need to be given fish continuously. Social entrepreneurs, according to Bill, would revolutionalise the fishing industry itself.
Outstanding social entrepreneurs like Dr. Verghese Kurien created an iconic brand in Amul, made India an exporter of milk and drove more money into the hands of the small dairy farmer, creating a white revolution. Dr. G. Venkataswamy, aimed to eliminate needless blindness and created the famous Arvind Hospitals, innovating in surgeries, eye lenses, and created an eye revolution. Micro-finance which started off as an NGO activity is now an industry, with one of the prominent MFIs, Bandhan, being given a banking license. I am certain that this will lead to a financial revolution. There are many great leaders who have blended business with the poor and created outstanding social entrepreneurship. At the same time, there are many rising social entrepreneurs. We salute all of them.
As India and the rest of the world strive to bridge the divide between the haves and the have-nots, social entrepreneurship will become a powerful tool to achieve that, though not the only tool. While estimates say poverty has declined, we need to recognise that global peace cannot happen without eliminating poverty. Encouraging social entrepreneurship therefore becomes important.
Unlike in early 2000, I see a much more vibrant eco-system today, an eco-system that embraces entrepreneurship. Many in our society have generated wealth, thanks to economic development in general, and many of them people have started supporting social entrepreneurship by being angel investors, mentors and some even becoming social entrepreneurs. I am certain that the new CSR law will trigger much more investment into social enterprise models. The new government in Delhi has in the recent budget announced funding of Rs 10,000 crore to start-up enterprises. Villgro’s research in 9 cities and regions across India, show evidence of greater momentum and activity around social entrepreneurship in the years to come.
For those wanting to become entrepreneurs and do well by doing good, there is no better time than now to jump into social entrepreneurship. The opportunity is compelling, as there is a growing low income population. The economic pyramid, seems to be becoming an economic ‘diamond’, with those at the base of the pyramid having some cash flows and thereby willing to engage with market-based models around needs such as education, health, water, communication etc. Some business models have started showing traction, showing that money can be made and yet create impact – micro-finance, affordable private schools. Like never before there is capital, and for great ideas this is the time to raise capital. India has around 20 social venture funds, managing Rs 2500 crore and has invested in 100 businesses. Small but a solid start, all in the last 5 years! Like never before there is a pathway and support ecosystem – incubators, angel investors, venture funds, media attention. You can’t wait for a better time to get started.
We at Villgro also play a key role in this ecosystem. We support early-stage, for-profit social enterprises by funding, mentoring and networking for them – much before any external investor would even consider them – to make these enterprises investable. Biosense, started by a group of young engineers and doctors, is now a respected company in the non-invasive anemia testing space. Promethean Power has built a rapid milk chiller which is helping the dairy industry build a cold chain right from the village level milk collection centre. Desicrew, India’s first rural BPO inspired many others to set up rural BPOs. Skymet, the first private weather forecasting company in India, is now a respected weather agency having raised multiple rounds of investments. We have been fortunate to support these amazing entrepreneurs and be part of their successful journey. These first generation entrepreneurs and business models have blended profits with impact. What about you?
Do not wait. The ecosystem is growing. Ride the wave and together, let’s unleash the power of entrepreneurship to positively impact the poor.
This blog has been reproduced from an article first published in the TiECon Chennai 2014 Souvenir