NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

A “BoP businesses” … What is that? What do they look like? What do they do? How are they organized? How do they enter the market? What is their revenue stream?

These are some of the many questions we ponder as many companies, non-profits, and entrepreneurs launch businesses targeting the BoP communities from both the consumer and producer perspectives.

The BoP short-essay competition was launched three years ago in an attempt to gather these examples and better understand the various business models being used in these BoP communities. These examples can be examined for commonalities, strengths, weakness, etc, so we can better understand the factors that prevent failure and ensure success. What are the cutting-edge business models? That is what the Base of the Pyramid Short Essay Competition is designed to discover.

Submitted essays must illustrate existing BoP enterprises (not hypothetical businesses) that meet the following three criteria:

1. They are based on private-sector business models that are locally transformational. In other words, the business creates mutual value, such as capacity building and wealth creation, for both the community and the enterprise. Implicit in this is the expectation that the business will be partner-intensive in an effort to achieve the greatest success.

2. A strong element of the Triple Bottom Line must be embedded in the business strategy – consideration of the environmental, societal, and economic impacts of the business. There must be motivation displayed to improve the quality of life for the community while simultaneously being sensitive to normative culture. Simply creating economic activity without regard for the local environment, community, or cultural impact is not in the vein of a BoP Enterprise.

3. There must exist the potential, as well as aspiration, for scale and replication. The inability to grow and expand a business fails to meet the objective of transforming the local society and economy.

Sponsored by USAID and International Finance Corporation (IFC), last year this worldwide competition attracted nearly 100 submissions from 15 countries, illustrating a diverse array of business ideas and solutions in 25 different countries. The winning essays are posted on the Center’s website.

First place with a prize of $4,000 was awarded to Srinivas Venugopal, an MBA student at the University of Illinois, Champaign. Before seeking his MBA he was a social entrepreneur for the Rural Technology and Business Incubator at IIT Madras. His winning essay, “Lessons from an Education Venture in the Low-Income Villages of Tamil Nadu” was based on his experience launching this online educational business. His essay speaks to the necessity of creating a learning ecosystem that leverages technology, but relies on local content and infrastructure.

Second place went to co-authors Shashank Verma and Archana Devar of CleanStar Energy Pvt. Ltd. Their essay describes the franchise model used by CleanStar Energy to provide reliable, renewable energy to cell phone towers in India. By tapping into the agriculture sector and local womens self-help groups, CleanStar is able to provide a holistic, community-based energy infrastructure.

Third place went to Shashank Kumar, a post-graduate student at Indian Institute of Management – Calcutta, and Ashok Kamal an MBA at Baruch College in New York City. Their paper explores the challenges faced by the producers and vendors of fresh vegetables in India and the role the company Knids Green plays to fix the vegetable supply chain and create value for both the farmers and the sellers.

Submissions must not exceed 1,000 words and must be submitted by midnight Jan. 19, 2010. For more information about this year’s competition, visit the Center for Sustainable Global Enterprise website here.