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Monday, Sep. 10, 2012
This article was originally published by the San Francisco Chronicle. The original source can be found here.
Shivani Siroya is a petite woman hammering away at a tall task - building a model of credit scores for the poor in India.
On a recent weekday in Santa Clara, she took her audacious enterprise before a group of investors, professors and entrepreneurs from Silicon Valley - many of whom have never worked or lived in India.
But they're keen on helping, by transferring their knowledge from the Bay Area to markets in the developing world that seek sustainable business strategies.
Siroya was one of 19 entrepreneurs at this year's Global Social Benefit Incubator who have been undergoing a critical evaluation from this group, whose members also include venture capitalists and experts in social enterprise. Beyond building successful enterprises, the incubator wants ones that alleviate social needs.
"People are not going to give money to you indefinitely, even if you're doing some good in the world. So we have to help these entrepreneurs develop sound business models that will flourish and last," said Eric Carlson
, director of the incubator and dean's executive professor in the Leavey School of Business
at Santa Clara University
Not a typical program
Started in 2004 at the university's Center for Science
, Technology and Society
, the incubator hoped to combine the talents of the valley with the activism of emerging social entrepreneurs to see if social impact and profit-making could be combined. Among its first successes: Husk Power Systems, an alternative energy business that recycled rice husks into an energy supply. Today, Husk supplies energy to more than 200,000 people in 300 villages in northeastern India.
An incubator participant from a year ago, Katherine Lucey
, CEO and founder of Solar Sister, also works in alternative energy for the poor. Her model mimics that of Avon. Instead of lipsticks and perfumes, the local female entrepreneurs she relies on in Uganda and Rwanda sell solar lamps.
Compared with other social incubators of the past decade, Lucey says, the Santa Clara one stands out. "I think their Silicon Valley location gives them an intensity and a drive that ramps up the typical incubator program," she said.
As Solar Sister went from simply being a pilot project to developing a full-blown business plan, Lucey attended a two-week, in-residence program last summer. That resulted in a more nuanced business model and partnerships with past incubator participants such as San Francisco's Kiva
.org, the crowdfunding microfinance platform. Now donors can help fund a Solar Sister entrepreneur's business by lending to her via the Kiva website, Lucey said.
Growing a business
For mentors at the workshop, getting these entrepreneurs to scale is a primary goal. But as Anuj Sharma
, COO of Sarvajal, a water-based social enterprise in South Asia, learned at this year's event, it's not just about sporadic growth. His mentors advised him to go deeper, not wider.
"The constructive feedback has been around not getting excited about numerous small opportunities, such as taking the initiative to other countries ... but making sure that we have greater depth in demonstrating our work in India itself," he said.
"The emphasis of this program is on how to really scale your organization and get the kinks out so you can get home and get back to work and hit the ground running. It's about really coming out of here with a solid operating plan. It's literally like MBA boot camp," she said.
Entrepreneurs attend classes on unit economics, scaling business, value chains, operating plans, budgets and fundraising from 8 a.m. to 6 p.m. daily. Those sessions are followed by late-night get-togethers with their mentors, where they get more personalized advice.
This year's gathering brought together more than 150 mentors, who will continue to work with these enterprises into the fall. One is Jeff Miller
, former director of Santa Clara's Center for Science, Technology and Society. He built a career in technology at Intel before transitioning to supporting social businesses. He's been an adviser since the program's inception and sees one common thread in many of the young people.
"They have such huge, wonderful, passionate visions of how to change the world in energy, water, education
and more. But they lack focus. So we encourage them to look at an area that they can focus on and make an impact. This can be a particular demographic or region, which makes for a more concentrated effort."
Aside from making visions more concrete, entrepreneurs are taught to balance social impact with profit, he explains. Presenting a purely socially driven plan to a venture capitalist rarely gets funding.
"They're not bad people," Miller jokes, "but they have to make a return as well. So you have to tailor it to their needs as well when making a pitch."
Investing for impact
Impact investing, an emerging field for social effect as well as monetary return, has been gaining prominence. But Miller and Carlson are cautious, noting that the area needs to mature and develop an infrastructure. Yet it's quickly become a topic of discussion at the incubator.
"Impact investing has not been terribly successful so far. There's money around in the valley, yes. But it's largely risk-averse. Plus, we have to make sure that investors don't drift from the intentions of the social business, which is very much to create a product for the bottom of the pyramid, not the top," Carlson said.
Carlson hopes that in the near future, they can team entrepreneurs not just with Silicon Valley mentors, who understand the bottom line, but with mentors in their countries of operation, who know the bottom of the pyramid intimately.
"That would be ideal," he said.
Thursday, Aug. 2, 2012
This article was originally posted on Dowser.org. You can view the original article here.
The collapse of India’s power grid cast 670 million people into darkness—nearly one in 10 inhabitants of our planet. It called into question the dominant logic of a fragile centralized power system with chronic outages, growth in demand that greatly outstrips new capacity, yet leaves a fourth of India’s population without basic electricity.
Conventional “solutions” like centralized coal-fired plants and continued price subsidies for energy from polluting fossil plants and the wide use of back-up diesel generators will only exacerbate the scale of future crisis. These subsidies are, in part, motivated by the risks of political instability in the presence of the rising inflation in energy and food prices. Ironically, amongst those prone to protest are farmers forced to run diesel-powered pumps under widespread drought conditions caused by climate change. The day of reckoning for India’s badly inadequate energy infrastructure has arrived, and a plethora of social entrepreneurs is developing solutions that offer great promise.
Social entrepreneurs in India are pioneering a decentralized energy paradigm, characterized by improving efficiencies that bring energy cost into parity with grid alternatives, and contribute to economic development and the eradication of poverty in rural areas. These new technologies provide affordable clean energy through community-scale micro-grids, solar home systems, and solar lanterns that displace the need for subsidized kerosene and provide a hundred times the lumens for a fraction of the cost.
Bihar-based Husk Power Systems
’ standalone mini-power plants convert rice husk waste into affordable off-grid energy to over 300 villages at a total capital cost of less than $1.3/watt—less than mega thermal power plants. Each plant is operated by a village entrepreneur, who manages the plant and collects payment from electricity users. SELCO India
, operating out of Karnataka and Gujarat, provides customized solar home systems to meet specific customer load requirements with payment plans that dramatically reduce the total five-year cost of energy. Working with commercial banks, rural banks and credit cooperatives, it has made clean energy financially feasible and has over 135,000 solar systems installed. In Kolkata, ONergy
has become a valued-added reseller of an array of solar home systems, lanterns, clean cooking stoves and energy-efficient appliances, also providing critical financing, service and support infrastructure to over 150 villages in east India through their Renewable Energy Centers.
While the distributed solutions of these social mission enterprises seek to provide the more than 300 million Indian citizens who are off the grid with access to affordable clean energy, the problem remains that the government continues to subsidize kerosene and diesel, with market-distorting impacts.
On the technology front, solar energy in India is benefitting from positive tailwinds, including a 75 percent reduction in the cost per watt of solar panels in the last five years alone. The policy front is less positive, however, with perverse headwinds designed to prop up a failed central power system. These need to shift to support for potential for these and other distributed clean energy solutions to serve the future of India, its people, and its environment. India could be a showcase, and grassroots social entrepreneurs are prepared to be the pathfinders. The day of reckoning has arrived.
Jim Koch is Energy Sector Director for the Center for Science, Technology, and Society at Santa Clara University and co-founder of the Global Social Benefit IncubatorTM
Thursday, Aug. 2, 2012
This article was originally posted in the Forbes Blog. You can view the original article here.
The following guest post is by Al Bruno, cofounder of the Global Social Benefit Incubator and the William T. Cleary Professor in Santa Clara University’s Leavey School of Business. He is also the founder of the school’s Center for Innovation and Entrepreneurship.
For the past decade, my colleagues and I have helped more than 150 social entrepreneurs from all over the world hone their business plans, which they are able to pitch for 15 exhilarating minutes to Silicon Valley financiers and executives. Through our ten years running this mentoring program, called the Global Social Benefit Incubator, we’ve culled some top tips for anyone looking to develop their business plan and pitch it to potential funders or partners:
1. Prove that you know how your customers make decisions. Virtually every social venture we counsel asks its customers to change entrenched behaviors and make a different decision for spending their precious dollars: to pay for clean water instead of making do with dirty water; pay a few pennies for sanitary pads rather than stay home five days a month; invest in clean solar lights that initially cost more than toxic kerosene. Understanding how such customers or beneficiaries decide to spend – or not spend – can be one of the biggest challenges for any kind of venture. What will prove persuasive to get them to change? What evidence do you have that they will change?
2. Understand how your product or service works on a per-unit basis. To grow and thrive, you need to be able to “scale up” the value you bring to your current customers or beneficiaries. This requires a clear understanding of your marginal costs – how much it will cost to produce the next unit – and the prices that your customers are willing to pay. Typically this means adding in costs to expand production and distribution (which many entrepreneurs forget to factor in) in a way that grows the bottom line.
3. Document your key assumptions and provide a plan for testing them. Experienced funders and partners will want to test the assumptions that you make about customer buying behavior, markets, financing, etc. Do the work for them by setting metrics that can be tracked. India-based Naandi Foundation projected it could sell clean drinking water to 40 percent of its target market. To test that, Naandi employees who educate consumers on clean water’s benefits were enlisted for market research. They learned that customers wouldn’t travel to far-away water kiosks, so they added a bicycle delivery service – enabling them to exceed rather than miss their target.
4. Don’t overlook the “packaging” of your presentation, and be strategic with story-telling. Of course, the content of your business plan and presentation matters most, but packaging is more important than you think. Your audience is human, and you must use persuasion to get them on board. Utilizing video clips, “neat” graphics and a compelling – though not overdramatized – story of one beneficiary or group can grab the audience far better than a dry recitation of facts.
5. Be honest— even if you see opportunity slip away as a result. The starting point to being successful is to be brutally honest with yourself and with the stakeholders in your venture. While hyping the size of your target market to epic proportions may seem necessary to catch a funder’s attention, failing to live up to that hype during the diligence period can burn that bridge and many more. Be restrained and conservative in your projections — such as by overstating your expected costs and expenses, and understating your expected revenues — rather than the opposite.
6. Target and time your requests for funding to significant milestones in the evolution of your organization. A recent report indicates that one major “social impact” investing fund, the Acumen Fund, looked at more than 5,000 opportunities in the past 10 years and invested in only 65 of them. Why? The social entrepreneurs did not understand the business stage and maturity that Acumen seeks before it makes an investment. Do your research to pick the right prospective funders — be they grant-makers, equity investors, or lenders – and time your request at the appropriate stage of your corporate growth. And remember that what you have accomplished to date is history. What you hope to accomplish with the contributed capital is what is important to your funder.
7. Emphasize that you’ve built a strong team and organizational infrastructure—or show how you plan to achieve that vital goal. Funders and partners know that having capable people in key roles is critical to your success. Unfortunately, developing countries often can’t supply the key team members or qualified employees you need to scale. India-based Husk Power Systems (a GSBI alumni company) has addressed this problem by forming its own training entity— Husk Power University— to train the workers it needs to staff the 75 + power plants it currently operates, and to provide employees for future needs such as its move into Africa.
8. Show how you use or plan to use partnerships and alliances. Forming strategic relationships with other organizations can be a means to add complementary products or services, stretch scarce resources, or access markets through otherwise-inaccessible distribution channels. Another GSBI alumni company, Hapinoy, partners with the largest microfinancier in the Philippines to provide financing for its network of rural retailers, and teams up with local bus drivers to deliver essential goods to remote locations.
9. Build in governance and oversight into your plan. It is critical that you have strong oversight and governance to ensure appropriate and objective decision-making. Not only can external participants, such as board members, add useful insights to your thinking, but they also can reassure investors that there is an additional set of eyes and minds at work protecting their money from risk.
10. Be a feedback fiend. In addition to getting feedback from customers, expose your ideas and thinking to trusted advisors, mentors and investors to refine your pitch. Most importantly, listen to their comments, observations, and criticisms so you can address them in your next pitch. You must demonstrate that you have anticipated key concerns and have thought through the issues.
Want to see all this in action? Come hear about innovation that can change lives at the GSBI 2012 business plan presentations on August 23, 2012 in the Mayer Theatre at Santa Clara University. For more information, see http://www.scu.edu/socialbenefit/entrepreneurship/gsbi
Wednesday, Jul. 25, 2012
This article was originally posted in the Huffinton Post Blog. You can view the original article here.
As its many supporters well know, the Grameen Bank
's name bespeaks its Bangladeshi roots; Gram
is a Bengali word meaning "rural" or "village," and ever since its founding in 1983 by the Bangladeshi banker, economist and Nobel Peace Prize recipient Muhammad Yunus, the non-profit microfinance organization, an early pioneer of so-called "solidarity lending," has served the country's rural poor out of its headquarters in Dhaka. Lauded for lifting millions out of poverty, the Grameen Bank is one of the great successes of development, and its model of micro-lending has been replicated in dozens of countries around the world.
One of those countries is the United States.
In fact, Grameen itself began doing business in the U.S. in early 2008, when it opened the first outpost of Grameen America in Queens, New York. It now operates a total of seven branches -- in Indianapolis, Omaha and San Francisco, and three others in New York, including one in Manhattan. Indeed, just miles away from Wall Street, where billions of dollars change hands every day, a Bangladeshi social venture is providing the poor with access to credit free of the fraudulent terms they're typically forced to live with. And it has plans to expand.
That growth is proof that the Grameen Bank's brand of group lending -- which relies on peer pressure rather than collateral to ensure that debts are repaid -- can work in America. But just as important is what it says about social enterprises across the board: while they typically target underserved communities in places very different from America -- places with no access to electricity, much less credit -- their work can teach us a great deal about solving the problems we face at home.
After all, Grameen isn't the only social venture to successfully transition from the developing world to the developed. There's also the non-profit Kiva.org
, which allows microfinance institutions from around the globe to post profiles of qualified local entrepreneurs on its site and invites would-be lenders to browse and fund those individuals over the Internet. Inspired by the Grameen Bank, Kiva's creators built one of the world's most successful social enterprises -- and one we're proud to have worked with through the GSBI
-- by catering exclusively to entrepreneurs in the developing world.
Then, in 2009, after lending more than $150 million in 53 countries, Kiva partnered with the Opportunity Fund and Acción USA to provide its services in America, where the economic downturn had created new demand for affordable loans. Despite initial skepticism that the model would work, new user sign-up went up dramatically in the days after Kiva's launch, and all loans solicited as part of that launch were completely funded within 18 days. Now, through its new Kiva City program, the organization aims to spur job growth in some of the country's most anemic local economies. Co-sponsored by Visa, Inc., Kiva City extends access to microloans in U.S. cities where microfinance institutions aren't operating at scale, providing small businesses with a rare source of capital -- and city officials across the country are getting on board.
If Kiva and Grameen are making the case for microloans in America, Samasource
is doing the same for so-called "microwork." That's the term founder Leila Janah coined in 2008 to describe her non-profit's novel approach to fighting poverty -- one that provides unskilled, albeit capable, workers in underserved communities with small tasks that pay a living wage and can be performed online.
Headquartered in San Francisco, Samasource secures contracts to execute large data entry or digitization projects from leading U.S. tech companies like Google and LinkedIn. It then moves those projects to its proprietary online platform, the SamaHub, where the work is broken down and distributed to service partners in six different countries -- Haiti, India, Kenya, Pakistan, South Africa, and Uganda. To date, the award-winning social enterprise has created more than 2,000 jobs and paid out more than $1 million in wages.
Now, like Kiva and Grameen, Samasource has turned its attention to the U.S. -- specifically the Bay Area, where it plans to pilot its first domestic program, SamaUSA, later this year with support from the California Endowment. If that effort proves effective in helping marginalized women in two low-income communities boost their incomes through online work, they'll seek funding to scale it up.
For all their success overseas, social enterprises like Samasource, Kiva and Grameen are up against a far different challenge in the U.S., and it may be years before they make a dent in the nation's poverty rate, which continues to climb. Still, as we search for paths out of the economic crisis, we would do well to remember that across much of the developing world, financial hardship is a constant -- and that fact is the driving force behind the kinds of innovations that could one day help us fix what's broken in our own backyard.
Follow Thane Kreiner on Twitter: www.twitter.com/thanekreiner
Tuesday, Apr. 10, 2012
This post is a preview of tonight's panel discussion co-sponsored with the SCU Alumni Association and Career Center. You can find event information here.
Social Entrepreneurs apply the principles of entrepreneurship to create social change. They think innovatively about how to improve health, increase access to technology and education, refine agricultural or building practices, or utilize sustainable energy.
Tonight’s panelists offer a diverse range of perspectives on the world of social entrepreneurship. The groups operate in different sectors, different countries and with different business models. The speakers themselves hold different positions within these groups, and come from very different backgrounds, including finance, engineering, and program development.
Andy Lieberman- CSTS: Online Program Director
The mission of the Center for Science, Technology, and Society (CSTS) is to promote the use of science and technology to benefit underserved communities worldwide, primarily by working with socially-minded entrepreneurs. The Center implements its mission through its signature program, the Global Social Benefit Incubator, the Frugal Innovation Lab, and its numerous educational and public engagement activities.
Andy Lieberman manages the GSBI Online program, the Clean Energy Sector program, the Tech Awards laureate programming, and the CSTS social enterprise metrics database. He uses his background in technology, education and international development to help social enterprises increase their reach and impact. He has received awards from the United Nation’s World Summit on Information and Society and The Tech Awards, and also participated in the Global Social Benefit Incubator.
Ellen Metzger - Village Enterprise: Operations Supervisor
Village Enterprise helps equip those in a cycle of poverty with the tools they need to start an income generating business. Their programming focuses on helping these entrepreneurs throughout the whole process to build long-lasting businesses: they provide a start-up grant, ongoing training and mentoring, and a business savings program.
Ellen Metzger is the Operations Supervisor at Village Enterprise. She comes from a background in Finance and Accounting, with a particular interest in development and micro-finance
Gemma Bulos - Global Woman’s Water Initiative: Director
GWWI trains women in Africa to become community leaders for safe, clean water. They provide technical training on how to build simple water harvesting, treatment and toilet technologies, as well as the tools to educate their communities about safe water practices.
Gemma Bulos is one of the co-founders of GWWI. Her background includes developing innovative programming for income generating projects, participating in the creation of several successful NGOs, and extensive travel. Before becoming Director at GWWI, Gemma was the Founder/Executive Directer of A Single Drop (USA) and Founding Director of a Single Drop for Safe water in the Philippines. She has been recognized nationally and internationally for her social entrepreneurship work, and her integration of technology in social change.
Jacob Schultz - Kiva: Fellows Program Manager
Kiva believes that everyone--even those in most remote locations--should have the power to create opportunity for themselves and others. Kiva uses the internet and their network of micro-finance institution partners to connect lenders and entrepreneurs worldwide. The Kiva Fellows are the volunteers who collect the stories, photos, and updates from the entrepreneurs, bringing their stories to life for lenders, while simultaneously providing invaluable information to the local micro-finance institutions.
Jacob Schultz is the Fellows Program Manager.
Marc Krizack - Whirlwind Wheelchair International
Whirlwind Wheelchair International is a non-profit social enterprise dedicated to improving the lives of people with disabilities in the developing world while also promoting sustainable local economic development in the process. They are committed to building all-purpose wheelchairs that are durable and locally repairable, making them truly useful to riders in the developing-world.
Marc Krizack, Director of Operations, helped establish Russia’s first independent living center, first university level disabled students program and first university level orientation and mobility (for blind people) teacher preparation program.
Mathias Craig - blueEnergy Group: Executive Director
blueEnergy Group uses four distinct but complementary programs that aim to provide access to power, water, and other services in the most challenging contexts. Their Holistic Community Development Program coordinates partnerships between communities, the government, education and the public and private sectors to identify and address needs in individual areas; the Global Leadership Program gives individuals the tools they need to implement their own social entrepreneurship goals; the Renovables Program is working on developing Nicaragua’s abundant renewable energy potential; and their WindEmpowerment program is a global association working for locally built wind turbines.
Mathias Craig is the Executive Director of blueEnergy. He founded the group in 2003 and has a background of over seven years of experience working with wind energy. He has also spent time living in Latin America, and obtained degrees in both Civil and Environmental Engineering. At blueEnergy he contributes administrative, programmatic and fundraising leadership.
Michael Chertock - Digital Divide Data: Chief Development Officer
Digital Divide Data increases the value of data by making it more easily available to all by transferring it online, on mobile devices, and in information systems. Moreover, DDD recruits highschool students trapped in a cycle of poverty, providing opportunity through training, employment, and schooling. By doing so, they simultaneously build human resources and management capacities, fueling the economy in the communities that DDD serves.
A co-founder and former Board Chair, Michael is Chief Development Officer for DDD. He has an extensive background in both development and philanthropy, serving as the Program Officer in the Global Development in the Bill & Melinda Gates Foundation; as a consultant in philanthropy and international development for private foundations and donors; acting as the co-founder and Managing Director of Global Catalyst Foundation; managing the philanthropy arm of a Silicon Valley venture capital firm; and helping to start Schools Online.
Sam Baker -Not For Sale: Business Development
Not for Sale combines technology, intellectual capital, abolitionist groups, and a growing network of individuals to create a comprehensive response to human trafficking and slavery. Not For Sale spreads knowledge and inspires action by creating tools that can be used by a wide variety of groups--students, businesses, individuals--to donate their skills to the cause.
Sam guides the expansion of Not For Sale's social enterprise initiatives, which focus on empowering survivors of trafficking and at-risk communities. With a business education and experience as an entrepreneur in Central America, Sam enjoys working through the daily challenges of integrating social impact and business. Whether in the garment industry in Cambodia or indigenous communities in the Peruvian Amazon, Not For Sale's business team is dedicated to modeling businesses that encourage economic freedom over dependence.
Whitfeild Fowler - Driptech Inc.: Director of Engineering
Driptech is an international water technologies company. Their mission is to alleviate poverty by creating affordable, water efficient irrigation solutions for small-plot farmers in developing nations. With this technology, priced 50% lower that the nearest competition, the small-plot farmers can increase their yields 20-50%, with while decreasing labor and expenditures.
As the Engineering Manager at Driptech, Whit leads the engineering and product development efforts there. In addition, he is a visiting lecturer in the subject of Design For Manufacturability for Stanford University's Mechanical Engineering department and for Keio University's Graduate School of System Design and Management (in Japan). Prior to his present positions, Whit worked in jobs involving mechanical engineering or reliability for several other organizations on the west coast and in the midwest including Velkess, SunPower, Bloom Energy, GE Infrastructure - Aviation, GE Healthcare, and Logic Product Development. He completed a Ph.D. (2009) and M.S. (2005) in Mechanical Engineering at Stanford.