At this year’s Columbia Business School Social Enterprise Conference, Aligning Strategy to Maximize Impact, the themes of technology and business model innovation, partnerships and capital mobilization featured prominently. Almost in direct contrast to last year’s back-to-basics themes of connection, and the network (which I previously wrote about), this year’s conference was decidedly forward looking, covering a smattering of emerging strategies and sectors experiencing rapid redefinition.
Peppered through various key notes and panel discussions spanning financial inclusion to healthcare and clean energy, were notable mentions of the technological innovations advancing these respective fields and business models. Cathleen Tobin, manager at Women’s World Banking, spoke of their work with lenders using applications on Apple i Touch devices, as an example of using technology not only to measure impact, but drive it forward; these applications visually model the impact of depositing money in women’s savings accounts in terms of interest income saved or lost, allowing lenders and field sales agents to make a visually compelling case for saving. Chris Aidun, managing director of the restructuring E+Co, discussed “utility models” for selling energy in BoP markets, where solar companies mount and maintain units on individual homes, off which energy is purchased by households. If priced right and aided by technology innovation and increasing affordability, such models could present effective and highly scalable avenues for electrifying low-income households.
In a sector such as energy, which is perhaps more prone to faster-paced technology innovation than others, Michael Tsan, partner at Dalberg Global Development Advisors, cautioned against “technology mania,” underscoring that the cool factor often fizzles in the unforgiving light of day when it comes to BoP business models. Applying “appropriate” technology, rooted in an anthropologically informed perspective on client communities, Tsan emphasized, is key. From more established ventures to start-up initiatives involved in Columbia’s Social Venture Pitch Competition, an emphasis on leveraging the advantages of existing technology advancements and platforms was resounding, evidenced perhaps most clearly in the recurring mention of M-PESA’s mobile payment platform as core to various business models.
Fresh off his experience in Haiti with Partners in Health, Paul Farmer keynoted the event, discussing the need for collaboration versus competition among various stakeholders, and the need for more “integrated” approaches to complex problems. When asked to elaborate, based on the expertise that his organization’s name suggests, on what makes a good partner in health care delivery, the founding partner of PIH replied that it is important that an organization not determine its mode of action solely by funding streams. Farmer noted that mission-driven complementarity is important, and that he personally looks for organizations that do not ascribe to traditional vendor or client relationships, but instead take on responsibility for delivery of their goods and services, perhaps even to the degree of mobilizing their own funding.
Farmer affirmed the oft-overlooked public sector as the “partner we forget along the way,” mentioning that in contexts like Haiti, a handful of NGOs bring larger budgets to bear than the entire Haitian public sector.
“In the first 10 years, I don’t think (PIH) did anything with the public sector. We were doing what most NGOs and businesses and social enterprises do. We grow in a space that we regard as empty, the social space. But it’s not empty,” he added, referring to the presence, if inadequate, of public sector infrastructure and reach.
Panel discussions throughout the event reinforced that public sector efforts remain largely outside of conversations on Social Entrepreneurship and impact, and yet can debilitate these efforts. For instance, Tsan of Dalberg spoke of how subsidies for alternatives to clean tech such as kerosene can significantly distort markets and adversely affect the success of solar lighting initiatives for the BoP. Tsan argued for proactive roles for government around setting and implementing standards, for instance in harmonizing locally acceptable standards with emerging global benchmarks for solar lighting and solar home systems. Yasmina Zaidman, of Acumen Fund, spoke of how many Acumen investees contend with the need for simple contract enforcement functions and rule-of-law facilitating payment of receivables, and basic regulatory frameworks that allow a system of social entrepreneurs and actors to emerge.
There are No Incumbents
On designing BoP Business models for success, Tsan noted that it is the rare BoP venture that designs business models for unit profitability, or builds avenues for margins across a value chain. Despite social entrepreneurship at the BoP advancing in recent years, and sectors like energy and health care maturing exponentially, “there are still no incumbents in these markets,” he said.
The absence of successful or entrenched players, is at once significant in terms of opportunity costs for these sectors and communities, and is also opportune for potential partners and stakeholders capable of addressing BoP markets. It would seem then that aligning strategies for maximizing impact, as laid out in this year’s Columbia Social Enterprise Conference, is no easy task for aspiring BoP businesses. It involves firing on many cylinders; focusing not simply on your sector but integrating your work with others across sectors, leveraging the momentum of technology and partnerships and harnessing public sector cooperation wherever possible.
Image credit: The Social Enterprise Program Facebook page.