Scott Anderson

Incubator and Impact Investor Aims for Multiple BoP Sectors

In July 2011, Anurag Jain decided to leave his position as the head of Dell’s Services Delivery unit, where he lead a team of 18,000 IT professionals working in key areas like cloud computing, applications, and business process solutions. Jain, an engineer and entrepreneur, decided to focus exclusively on growing an impact investing incubator, Anavo Global LLC. Leaving Dell wasn’t necessarily a leap of faith. After all, Jain has founded multiple India-based IT services outsourcing firms, which have been acquired by multinationals such as Perot Systems. (He’s much more of a serial entrepreneur than a corporate climber.) Still, this was his first foray into operating an incubator, and one focused on scaling BoP startups offering a wide assortment of products and services. Anavo is developing diverse collection of enterprises in the education/skill development, telemedicine, bio-energy/water and housing sectors.

I caught up with Jain earlier this winter when the University of Michigan MBA dropped by his alma mater where I’m located, to ask him about this exciting venture. (Full disclosure: the William Davidson Institute is collaborating with Anavo on a venture development initiative to gauge impact).

NextBillion: You led a large team as VP of Dell’s Services Delivery unit, more than 18,000 as I understand it with a $3 billion budget. What made you decide to leave and pursue a second career life as social entrepreneur?

Jain: Obviously, it was the passion. I have been thinking about these concepts and models for a long time. I’ve had the privilege of having built three organizations from the ground-up, of leading teams from two to 18,000, or growing from two to 46 countries, and of running my own organization as well as working for large public companies – the experience, knowledge, and skill set that I have the privilege to learn, could be utilized in a way that could profitably deliver products and services to 3 billion people without access.

NextBillion: You’ve founded three large-scale IT outsourcing businesses based in India. How have those experiences informed your perspective on how to launch and operate businesses focused on the BoP?

Jain: The other way of framing the question is to say that I’ve launched three businesses in completely new spaces where we had the challenges of: convincing customers of the need and efficacy of the product, or hiring people from various backgrounds that did not necessarily understand the product and retraining them in the new space, of building business models enabled by technology which eventually became the norm in that industry. I believe that I am continuing to engage in that same process in the BoP space. There is a huge opportunity with the people that we consider BoP – they need and deserve the same things we are used to every day and we have not figured out the business models to provide affordable, accessible and acceptable.

I hear a lot of people talk about products and services, which are aspirational for the BoP. I prefer to use the word “acceptable” for our services because these things should be envisioned as something that should be part of their everyday life. Not that the services should be reached for, but that they fit into their everyday lives.

NextBillion: Related question: How is operating a double bottom line enterprise different than a single bottom line operation? How is it similar?

Jain: Every business has multiple stakeholders that need different things. For example, in a typical profit-maximizing enterprise, we try to manage the balance of profit, the appropriate quality product for our end users, as well as manage the interpersonal dynamics and politics within the enterprise. Simply put: stakeholder management. This is exactly the same thing that happens in a social venture, where profit is a key lever in running an organization that delivers value and other results to its stakeholders. So, its just stakeholder management with a different strategic mix.

NextBillion: Let’s talk about the model you’re launching with Anavo Global LLC. It’s described as a social incubator. What does that mean exactly?

Jain: Anavo field tests social innovations in the marketplace, invests in early stage ventures with high potential to alter the BoP marketplace, and accelerates social ventures to scale quickly and globally. Each of our ventures has a target of impacting at least 7 million people. So, we learn by doing and believe that scale is critical to flesh out the variables and drivers we need to respond to in order to build a robust, sustainable model.

NextBillion: What sorts of companies will Anavo invest in or otherwise recruit?

Jain: Let’s talk about the four companies we are co-creating. First, Laurus Edutech, a vocational training company that trains people profitably in over 100 trades across 80 locations for less than 50 cents a day. Second, WorldHaus, which will build $1,500 houses using local materials and innovative technology to shelter peri-urban and rural communities without housing. Third, GloCare, a provider of quality, primary healthcare to rural and peri-urban communities through, enabled by technology. Fourth, AgrE, a biomass based microgrid-enabled service provider for rural communities. Thus, our primary focus areas are education, housing, healthcare, and energy.

NextBillion: What is Laurus and where is it headed?

Jain: For vocational training in India, there is an 8 to 10 million gap. The government wants to train over 500 million people by 2022. Laurus is one of largest vocational training companies in India, training more than 20,000 students in 80 centers across the country. It has a unique software that is running in over 700 locations.

NextBillion: An obvious question perhaps, but why is skill development so critical for poverty alleviation?

Jain: Enabling people to create their own fortunes at the bottom of the pyramid. Ultimately, having the skill to do something with your hands and head not only provides independence, but changes your outlook by building self-esteem and confidence.

NextBillion: Forgive the broadness of the question, but coming from the multinational world most directly, I’m very curious about where you see the most need and where social entrepreneurs can make the biggest impact. What is the landscape looking like as someone who is relatively new to this space?

Jain: First of all, I am humbled at the number and quality of people that I meet every day who are and want to be social entrepreneurs. I think the needs still outpace the capital and leadership that is chasing this problem. A few more successful stories and case studies will help attract even more people and capital to this important area.

One of the biggest challenges I see out there amongst many of the models is the lack of scale, which is critical to help fine tune robust, self-sustaining business models. Also, the ability to connect ideas, people, capital, and some successful models – like what NextBillion is trying to do, is a critical need to bring more efficiency and scale to the process.

Health Care
impact investing, incubators