social entrepreneurship
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Raj Melville talks about Social Entrepreneurship to The Leadership Program in Boston, in April 2010TRANSCRIPT
Copyright 2010 by Raj Melville
Social Entrepreneurship
Raj Melville
Copyright 2010 by Raj Melville
Key Ingredients of a Social Entrepreneur
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Social Activist Business pioneer
Social Entrepreneur
Copyright 2010 by Raj Melville
What Is Social Entrepreneurship ?
� Business entrepreneurs change the face of business
� Social entrepreneurs play the role of change agents in the social sector
� Social entrepreneurs create sustainablesolutions that change society for the better
"Social entrepreneurs are not content just to give a fish or teach
how to fish. They will not rest until they have revolutionized the fishing industry."
Bill Drayton, CEO, chair and founder of Ashoka Foundation
Copyright 2010 by Raj Melville
Business and Social Entrepreneurs Share Common Traits
� Strategic thinkers: Like business entrepreneurs, social entrepreneurs act upon what others miss
� Mission driven: Work hard to generate value
� Focused: Both entrepreneurs are intensely focused and hard-driving in their pursuit of a social vision
� Resourceful: They are skilled at mobilizing and motivating resources
� Results oriented: Driven to produce tangible results
� Challenge Seekers: Tackle major issues, opportunities or challenges
� Perseverance: Continue efforts despite obstacles
Copyright 2010 by Raj Melville
SEs Bring New Approaches to Social Issues � New Design Solutions
� Process Redesign – Aravind Eye Care (www.aravind.org )� Product Redesign – Jaipur Foot� Distribution/Logistics – Saafwater www.saafwater.com� Infrastructure/Technology – Grameen Phone
� New Business Models� Micro-Finance
� Grameen� Cooperatives
� SEWA http://www.sewa.org� Muthu Velayutham, Gram Mooligai Co Ltd http://www.new-
ventures.org/arquivos/GramMooligai.pdf� Triple Bottom Line
� New Funding Models� Venture Philanthropy � Socially responsible funds.
� Calvert Funds� Acumen Fund
� Creative Leverage models
Copyright 2010 by Raj Melville
Social Entrepreneurship
Governmental Organizations
For Profit Businesses
Non-Profits
SocialEntrepreneurs
Copyright 2010 by Raj Melville
Questions?
� Contact me
� Raj Melville
� Email: [email protected]
� Blog: http://blog.ambientengines.com/
Copyright 2010 by Raj Melville
Extra Slides
Copyright 2010 by Raj Melville
The Non-profit Sector
� Total US Non Profit Organizations (2006): 1,478,194
� 904,313 Public Charities� Organizations do not pay federal tax
� Donations are tax deductible
� 109,852 Private Foundations� Created to distribute money to charities or individuals
� About 29 % of Americans over the age of 16 volunteered in 2005
� In 2004, public charities reported nearly $1.1 trillion in totalrevenues (Source: National Center for Charitable Statistics)
� Total charitable giving in the U.S (2007): $306.39 billion, consists of 2.2 % of GDP
(Source: Giving USA Foundation)
Copyright 2010 by Raj Melville
What Challenges do Social Entrepreneurs tackle?
� Social entrepreneurs typically address areas of unmet social need or social opportunity creation that the public or private sectors have failed to address
� Health� Water/Sanitation� Education� Sustainable Infrastructure: Housing, Communications� Renewable Energy� Environmental Sustainability� Food and Nutrition� Women’s Issues� Sustainable Agriculture & Technology
Also see the UN Millennium Development Goals http://www.un.org/millenniumgoals/
Copyright 2010 by Raj Melville
Examples of Social Entrepreneurs
� Grameen
� Aravind and Aurolab
� Agastya
Additional examples:
� “How to Change the World” by D. Bornstein
� “The Fortune at the Bottom of the Pyramid” by C. K. Prahalad
� www.Ashoka.org
Copyright 2010 by Raj Melville
Grameen
� Grameen Bank was started by Prof. Muhammad Yunus in Bangladesh in 1976 (http://www.grameen-info.org/ )
� Social goal was to� Extend banking facilities to poor men and women who otherwise
would not get bank loans� Eliminate the exploitation of the poor by money lenders� Create opportunities for self-employment for the large number of
unemployed people in rural Bangladesh
� Currently Grameen has� 7.61 million borrowers, 97 per cent of whom are women� 2,535 branches in 83,343 villages � Loan recovery rate is 98.24 per cent. � 2008 Projected loan disbursement of US $ 874 million� For profit concern generating dividends to borrowers who are
shareholders
Copyright 2010 by Raj Melville
Grameen
Copyright 2010 by Raj Melville
Grameen
� What did they do differently?� Went after untapped sector
� Were willing to take a risk with uncollateralized loans to poor� Focused on women entrepreneurs
� Introduced new business processes� No legal paperwork for loans� Created self help groups to ensure repayment thru social
pressure� Simplified loan repayments with weekly meetings for
incremental loan payments
� Created competitive product� Set market rates of interest versus usurious money lender
rates
Websites like www.kiva.org and www.microplace.org now allow individuals to help entrepreneurs in developing countries
Copyright 2010 by Raj Melville
Aravind Eye Hospital
� Founded in 1976 by Dr. G. Venkataswamy, in Madurai, India (http://www.aravind.org/ )
� A social organization committed to the goal of elimination of needless blindness through comprehensive eye care services.
� Every year the Aravind Eye Care System � Sees over 2.4 million patients
� Does over 200,000 cataract operations, nearly half of them free
� Average cost at one hundredth of that in the US.
� Doctors conduct over 2000 operations a year, over 6 times the national average
� Aurolab, a manufacturing spinoff, makes interocularlenses to world class standards at tenth of international cost ($4-5 versus $100 -$150)
Copyright 2010 by Raj Melville
Aravind Eye Hospital
� What did they do differently?� Focused on the social objective
"But Aurolab sells the lenses for less, not only because their costs are lower but because they chose to price them lower –because our goal is maximizing service rather than maximizing profit."
� Streamlined the entire operation process� Setup as a production line
� Increased the utilization of doctors and equipment
� Built new multi-tiered pricing models� Cross subsidized free patients with higher charges for those
who could pay
Copyright 2010 by Raj Melville
Agastya
� Founded in 1999 by Ramji Raghavan in Bangalore, India (http://www.agastya.org/ )
� Non-profit focused on transforming education in India through a scalable and interactive education model� India, one of the most populous countries, has over 35% illiteracy rate� Rural schools are poorly staffed with teachers with inadequate training
� Created a science training center with distributed centers in each rural district� Developed a new style of interactive teaching� Agastya Mobile Labs take science education out remote schools� Mobile Labs reach over 800 rural teachers and 40,000 students a year � Over 30 Agastya Mobile Labs make it largest science outreach program
in the world
� Results show passing rates at Agastya schools up from 40% to 96%.
� Having touched over 80,000 teachers and 2.5 million children, � Prime Minister’s National Knowledge Commission has
recommended the ‘Agastya model’ for nationwide dissemination
Copyright 2010 by Raj Melville
Agastya
Copyright 2010 by Raj Melville
Agastya
� What did they do differently?� Disruptive business model
� Developed a unique teaching model
� Break the typical mold of teacher/student interaction
� Redesigned the supply chain� Took classes out to the student
� Matched resources to talent available� High school students as capable instructors
� Scales reasonably well
� Engage the ‘customer’ i.e. student� Created a product that satisfied both student and teacher’s
needs
Copyright 2010 by Raj Melville
Getting Started
� Social entrepreneurs play the role of change agents in the social sector, by:
� Adopting a mission to create and sustain social value (not just private value)
� Recognizing and relentlessly pursuing new opportunities to serve that mission
� Engaging in a process of continuous innovation, adaptation, and learning
� Acting boldly without being limited by resources currently in hand
� Exhibiting heightened accountability to the constituencies served and for the outcomes created(Source: The Meaning of Social Entrepreneurship, J.
Gregory Dees)
1. Define a clear vision around a social issue or challenge
2. Identify market opportunity and define innovative or disruptive solutions
3. Build a sustainable business model
4. Clearly define social impact metrics
5. Recruit and attract resources and volunteers
Copyright 2010 by Raj Melville
The Funding Gap
Concept Stage
Implement Stage
Growth Stage
Sustain Stage
Developing Concept
Implement and Build Concept
Scale Concept
Long Term Sustainability
Echoing Green ($60K)
Corporate Foundations
Draper Richards ($100K)
Government
Family Foundations
Venture Philanthropists
Schwab Foundation
Ashoka (Stipend)
Skoll($1 Mill)
Social InnoForum
The G
AP
New Profit
Confidential