Village Capital: Lessons Learned from our First 15 Programs: And announcing our 16th and 17th
At Village Capital, we’ve been operating accelerator programs with partners worldwide for early-stage enterprises serving the base of the pyramid over the past four years. In our three-month programs, groups of 10-20 entrepreneurs build world-changing innovations in education, health, financial services, energy, and more; focusing on HR, product development, customer validation financials, scale, impact assessment, and exit strategies for investors.
Our core innovation is our radically democratic process: At the end, two entrepreneurs from each cohort receive $50,000 in pre-committed capital – and the investees are chosen by their peers. In March, we’ll be wrapping up our 15th program worldwide. Now that more than 250 entrepreneurs have come through our doors in six countries (Kenya, China, Brazil, India, the U.K., and the U.S.), we’re excited to share a few of our key learnings about the seed-stage/accelerator space worldwide:
- Customers > investors. When we first started Village Capital, we thought the greatest thing we could do for companies was provide funding. We had “Demo Days” in every program, and a key metric of success was the capital raised. Four years later, we’ve found some companies with terrific success in fundraising go on to flounder later, and we’ve seen some tremendous companies not raise a dime, but grow to serving thousands of customers through revenue alone. Great entrepreneurship is about solving problems, and solving them so effectively that people will pay you to solve them. Great base-of-the-pyramid entrepreneurship is about solving problems disproportionately faced by people living in poverty so well that individuals will spare a small share of the little income they have for your solution. Over time, our programs have increased focus on customer acquisition as key metric No. 1, and de-emphasized fundraising as success.
- Going deep in specific sectors increases quality. Our first programs were sector-agnostic; we’ve found, counterintuitively, that narrowing the sector focus for a specific program increases the odds that we will get great social enterprises. Our first “sector-themed” program, in partnership with the Artemisia Aceleradora in Brazil in 2011, focused on financial services, health, and education; we found some terrific “social entrepreneurs who had never heard of social enterprise” simply by marketing our programs towards “entrepreneurs with health care solutions for the poor” (or similar sectors). Sector-focuses also enable us to improve customer acquisition: we have cut back on “investor pitchfests” and increased “customer pitchfests,” where four to six enterprises in the clean energy value chain can pitch to common customers, getting real-time results on how effective the solutions are. While Village Capital is still sector-agnostic, each program now has sector themes, and sector-aligned co-investors.
- Recruitment is as important as marketing. Originally, when we were launching programs, we thought like Ray Kinsella in “Field of Dreams”: “If you build it, they will come.” We would send out tweets, post blogs on NextBillion and other sites, and talk with other impact investors – and that would be our primary recruiting strategy. We found one thing: great entrepreneurs are so focused on their businesses that they aren’t even reading this blog post! In partnership with the Monterey Institute for International Studies, we launched the Frontier Market Scouts program, sending interns to trade shows, happy hours, online message boards – basically anywhere that great entrepreneurs serving the BoP might be – and found terrific entrepreneurs with BoP solutions who had never heard the term “social entrepreneurship.” We’re thrilled with the results.
Now, we’re excited to announce our 16th and 17th Village Capital programs worldwide.
- Village Capital-CIIE: Technology for Impact is recruiting ventures in India using technology inventions to provide affordable basic services to low-income populations, with a particular focus on health, education, agriculture, financial services and energy. Hosted in partnership with CIIE at IIM-Ahmedabad, applications are now open! Please apply here.
- This month, Village Capital launches our second Village Capital-Brazil program in partnership with the Artemisia Aceleradora; we are especially interested in business models serving customers in financial services, education, and health. Apply here!
- Finally, we’re excited to announce a partnership with SOCAP to present the finals of Village Capital/VentureWell: Boston, a program focused on BoP-facing energy and mobile solutions, along with SoCap:Soul, a one-day conference about the intersection of money and meaning, in Boston March 7th-9th. NextBillion readers can use the discount code NextBillion30 if you register here for 30 percent off SoCap!
While we don’t expect many of our target entrepreneurs to be reading this post, we’ve been recruiting for months. Still, we would be grateful if you could forward this post to a rushed entrepreneur who can take a break from his/her busy day to check out the Village Capital programs. We’d love to hear from them.