Barefoot Optometry for the Base of the Pyramid: The VisionSpring Interview
Last week, I had the opportunity to sit down with Jordan Kassalow, Graham Macmillan and Miriam Stone–three staff members at VisionSpring–to conduct a long-form interview. Formerly known as Scojo Foundation, VisionSpring is the pioneering base of the pyramid-focused enterprise working to provide access to eyeglasses in low-income communities around the world.
NextBillion.net readers will be familiar with VisionSpring’s basic story; after all, our team published a What Works case study on the company back in 2007. We’ve followed their progress for a long time, up to and including their recent name change and announcement of a 5-year fundraising prospectus.(Full disclosure: I work at Acumen Fund, which is an investor in VisionSpring.)
Rob Katz, NextBillion.net: How, when and why did you get involved with VisionSpring?
Jordan Kassalow, Chairman and Co-Founder, VisionSpring: It was very practical. I spotted a market failure in my blindness prevention work (I’m an optometrist and public health expert by trade.) For many years, my specialty was river blindness control, and when I worked in low-income communities, I saw more people coming to clinics because they couldn’t see up close, while there were relatively few who were coming to us for river blindness. I saw this pattern regardless of whether I was working in Africa, Asia or Latin America. When you’re working on blindness, the overall market relative to general eye care is small. The normal need for eyeglasses is strong, but underserved in the developing world. After many months, I finally realized that, if no one else is doing something about it, why can?t I?
Because there is a product associated with the solution–glasses, not medicine–I also began to think that there should be a revenue model associated with this work. Besides, I knew I could source the product at a price that even those at the BoP could afford.
Finally, I saw the donation models’ shortcomings–they were hard to replicate, even harder to scale. In addition, there was widespread un- and underemployment in the communities where we were working.
So we put it all together–a bunch of people who are losing their economic lives because they can’t see, and a bunch of people who are un- or underemployed. From this, we developed a ’barefoot optometry’ business. Our goal is to increase productivity–this is an economic development program using a health product.
Rob Katz: How do you relate to the ’base of the pyramid’ movement?
Graham Macmillan, Senior Director, VisionSpring: We’re working in it–our customers are in the BoP market. There’s a major distinction between the $4 customer and the $1 customer. The segmentation of $4/day and under isn’t doing it anymore. Hopefully, we’re seeding a market where larger actors will come in and bring their scale and purchasing power to address the problem as well.
Miriam Stone, Director of Business Development, VisionSpring: We see ourselves as a catalyst–a demonstration model of sorts–for the BoP space.
Jordan Kassalow: We are core to the BoP market–we’re smack in the center of the BoP idea. We’re interfacing with BoP customers, intermediaries (like Acumen Fund), academics (the University of Michigan’s Ted London, for instance), BoP donors and BoP producers.
Rob Katz: Is the terminology useful?
Miriam Stone: Yes and no–to a more sophisticated donor, it is. But to other constituents, we have to position it as a more charitable model. We talk about customers–which we see as empowering–but some often see as exploitative.
Rob Katz: Tell me more about the new prospectus.
Jordan Kassalow: The prospectus is all about solving a pain point–that we didn’t have enough capital to execute our vision. So we want to get more dollars up front to build the team and systems to replicate and expand what we’re doing.
At the same time, we sold Scojo Vision, LLC–which means there’s no longer a relationship between Scojo and VisionSpring.
Graham Macmillan: We came out with this prospectus because of the non-existent/failing non-profit capital markets. Already, in 6 weeks’ time, our execution is so much better because of the capital we’re realizing.
Miriam Stone: The old way of doing things–through grants–is so difficult. You get small amounts of money, huge reporting burdens, restricted funds, etc.–when combined–it’s incredibly restrictive. The prospectus is a declaration of independence from the old way.
Jordan Kassalow: We’ve raised over a million dollars (on a goal of $5M) since our soft launch in June.
Rob Katz: What has been the single biggest change in the social enterprise world since you joined it?
Graham Macmillan: I don’t really spend time thinking about the “social enterprise space”–I spend so much time thinking about execution. It comes up when we talk to donors and investors who ask us what makes us BoP or a social enterprise. I was just a discussant in a SEEP Network online discussion and people’s conception of what social enterprise means. I was shocked by it. We just think that there have to be customers, entrepreneurs–it’s simple, really.
Miriam Stone: There’s even a question about whether or not you can be a non-profit or for-profit. What about a non-profit with an earned income strategy? When it comes down to it, social enterprise is really just about applying market based approaches to social or environmental problems. The question of definition is interesting, but when you’re working in this space, it’s not as important as some make it out to be.
Jordan Kassalow: My read on social enterprise is that it has gone too far towards the for-profit side, and the amount of expected returns that the private sector expects. As a result, people are pushing really hard–and there’s a paucity of deals. Even those deals that do go through have a hard time returning market rates. So I fear a backlash on the idea that you can do well by doing good–e.g., it’s unrealistic to expect that there are 14 to 18 percent returns here.
Graham Macmillan: It’s analogous to the Compartamos debate in many ways.
Jordan Kassalow: With the new prospectus, I feel almost as if we’re the last ones trying to raise donated capital out there.
Miriam Stone: In this offering, which is over 5 years, we can’t deliver the for-profit returns and full sustainability–and we’re being honest about it.
Graham Macmillan: Expectations are really important. For the first 3-4 years, we raised expectations too high. It’s all about execution. The prospectus is a realistic expectation–conservative, even–about what we can accomplish. We want to be fair to ourselves and fair to the community of philanthropic investors. It’s hard work doing this–and when you get down to it, market creation is really difficult. So much of what we do is marketing, education, awareness, etc.
In addition, one of the challenges that we face as a sector is this whole impact measurement question. Does Wal-Mart evaluate the social and public health impacts of selling soap to its customers? Of course not. It’s crazy that we have to try and do that, especially because we’re not operating at a huge margin.
Jordan Kassalow: We’re already working with razor-thin margins, and on top of that, we’re being asked to evaluate the impact of our work–which will totally wipe out those margins. At ANDE, there was a lot of emphasis on businesses that work as well as on impact. (Editor’s note – check out Jordan’s blog post about the Aspen Network for Development Entrepreneurs meeting.) So where does impact fall on low-impact businesses? Should there be an ’impact fund’ that sits off of the balance sheet?
Graham Macmillan: That’s the argument for hybrid organizations. It’s not easy.
Rob Katz: What are some of the most common misconceptions of your work?
Jordan Kassalow: That we have enough money.
Graham Macmillan: That we are a large organization–we only have 25 staff worldwide, including just 4.5 here in the United States.
Rob Katz: What kind of pushback do you get from the public health // NGO community?
Jordan Kassalow: Overall, not so much. We work in a universe that’s not very public health or eye care oriented. We tend to play in the social enterprise space. As a result, we’re not very well known in the public health // eye care space. Part of the reason we haven’t gotten much pushback is that we’re interfacing with organizations and partners who don’t know anything about the actual healthcare work we’re doing–they’re business experts, and they are working with us on the business aspects.
As we start to reach out to organizations like the Lions Club and have a larger footprint, we are getting some push back–e.g., local eye doctors badmouthing our interventions–which have hurt us in certain areas. There are others who want to take a charitable approach and we hit up against them.
Graham Macmillan: There are two aspects to this–one is the NGO/charity perspective, the other is our competition (local eyecare shops.) I think there’s a great jealousy in both–hey, we aren’t doing something really change-making if people aren’t up in arms about it. The opticians and eye doctors out there are frustrated because they don?t know how to deal with the rural market–we are actually their best friends because we are seeding the market for them.
Rob Katz: If you could go back to when you started Scojo/VisionSpring, what’s the one thing you’d do differently?
Jordan Kassalow: Creating markets at the BoP is really hard. Back then, we thought it was a distribution and supply chain challenge. But on top of that–and we didn’t know this–it’s a market creation problem. It’s hard to figure out business models that work–and that work in the timeframe amenable to equity timeframe (3-5 years). Acumen Fund having a longer timeframe is helpful; ideally, for our model, 10-15 years for return on investment is more realistic.
In terms of market creation, it’s like microfinance–taking 15-20 years for the rural eye care market to be really built up.
Rob Katz: Where do you see VisionSpring 5 years from now? 10 years?
Jordan Kassalow: The 5-year vision is the prospectus, which is what we call our interim sustainability model. We anticipate 30% earned-revenue support and 70% donated-capital support. This will give rise to an organization designed to flip that ratio in 10 years’ time and become fully sustainable. The prospectus expands our sales of glasses from 100,000 units sold to 650,000 units sold and scaling up to 5,000 vision entrepreneurs from 900 today.
Graham Macmillan: We want to emphasize the power of our franchise partnership with BRAC–which could really change the story in 5 years. In July, we met our 2008 goals–we?re on our way already.
Miriam Stone: The basic story there is that VisionSpring did a pilot with BRAC, trained 50 community health entrepreneurs and equipped these women with the business-in-a-bag–and it has scaled up to 450 entrepreneurs. BRAC is now ready to scale this up their network in Bangladesh. We will have sold 100,000 pairs of glasses to them this year.
Rob Katz: Do you have any advice for social entrepreneurs?
Jordan Kassalow: Just do it.
Graham Macmillan: Stop talking, just do the work.
Jordan Kassalow: You can’t bake a social enterprise in your head; you can’t get it right in theory. You have to go out and test your assumptions–you should test as soon as you can, as quickly as you can and as efficiently as you can. Expect that for every 10 assumptions, 8 will be wrong and 2 will be right. Then study the two that were right and figure out why. Turn those 2 into 10 new assumptions, and repeat the process. This is all about iterations–figure it out one step at a time, hit your head against the wall. It will take longer than you expect it to take–we are all impatient people as social entrepreneurs. Don?t expect people to flock to your idea, no matter how good it is. You have to prove yourself before you get traction. You only get so far with passion–you have to start getting results at some point. Be results and impact driven. Why we’re successful is because we?re very transparent with our mistakes as well as our successes. We don?t know it all–we are open to learning, re-evaluating, re-assessing, re-considering and people in the space–partners, donors–appreciate that. We don’t tell a pretty story all the time–we want to figure it out together. It’s a team effort and talking about challenges is part of that.
Miriam Stone: Be persistent–you don’t get tired of it if you really love it–approach the mission with enthusiasm and passion and that’s what gets your team out of bed every day.
Graham Macmillan: If there’s one word that social entrepreneurs need to have, it’s humility. It goes along with what Jordan said. I’ve come across a lot of people who are not humble in this space, and they’re going to fail. It’s humility to your staff, your donors and most of all, to your customers. To make the changes you need to succeed, you must be humble. We are not the poster child for great success–we are the poster child for survival.