Archive for September, 2009

Gandhian School of Management or C.K Prahlad B-School?

Monday, September 21st, 2009

Inclusive Growth!

Can social change be achieved by selfless, not-for-profit NGOs, or are businesses inspired by bottom-of-the-pyramid model better equipped to do so?

I had the opportunity to chair a discussion on ‘High-Impact Social Entrepreneurs’ at the recent TiEcon, in Delhi, where we assembled a panel comprising these diverse actors. It was a fascinating experience not only because of this diversity, but also for the discussion it provoked.  
On the one hand was Anshu Gupta of Goonj who chucked up his corp comm job many years ago, and has focused on collecting and recycling old clothing from urban areas to make sure that it reaches the needy in villages( over 30 tonnes/month!). On the other hand was Varun Sahni of Acumen Fund( leading global VC for social sector), and two young for-profit entrepreneurs, Sam Goldman( of D’Lite Design) & Amir Alexander Hasson( of United Villages)• 

Anshu Gupta is in the classical Gandhian mould, and believes that mass involvement and commitment are sufficient to take his ‘clothing for the poor’ mission to greater heights. Over the last decade or so, he has succeeded in this mission, although with great personal hardship.

Sam Goldman, the young CEO of D’Lite Design, like an Apple or Intel, is using strategies that combine great product design, high-volume manufacturing, global sales & distribution to create scale. His mission is to replace the ubiquitous kerosene lantern by clean, safe and bright lighting for the poor, in millions of rural homes. Like Sam, Amir is using a steeped-in-capitalism, though low-cost model, to take consumer products and services to rural markets, through a technology-based supply chain. Amir’s United Villages is currently operating in villages of Orissa and Rajasthan by creating rural ‘E-shops’ that sell everything from soaps to mobile phones.

Both Sam and Amir believe that scale-based businesses that provide affordable, good-quality products & services are the real answer to underdevelopment.

Varun’s Acumen Fund is of a similar view. It has raised USD 80 mn of ‘patient capital’ so far, and has already invested about Rs 100 cr in 12 businesses. The most striking example is the ‘Lifespring‘ chain of maternity hospitals across South India. These 20 to 30-bed hospitals have been set up at a low investment of Rs 40 lacs, and offer low-priced services( e.g. delivery at Rs 2000/-). A new hospital is being added every 35 days. Other Acumen-invested ventures include emergency medical services(Zikitsa, Mumbai); drip irrigation for marginal farmers;  and clean drinking water systems.

While Goonj and the others disagree strongly on the means, i.e. for-profit or not-for-profit, however what’s common to them all is their belief that real impact can be made by finding innovative answers to age-old problems that the government has been slow to solve. Roti, kapda, makaan, bijli, paani, dawai, and many others.

In the coming months, TiE, Delhi will get increasingly involved with this entire ecosystem, and that’s worth looking forward to.