Making Better Investments at the Base of the Pyramid

Monday, April 27, 2009

Managers of business ventures that work with the world’s poor need more than financials and feel-good stories to measure success. They need to know exactly who’s benefiting and how.

Rama was a seamstress by trade, not an optician. Before she connected with VisionSpring, a venture providing vision care to the poor, she sold hand-sewn clothes and blankets from her home and used her earnings to help support her husband (a farm worker who was often between jobs) and their two children. She took home about $44 a month—not nearly enough to make ends meet. Despite Rama’s outgoing personality and strong work ethic, she was unable to drum up increased demand for her handiwork. Then, several years ago, she was trained to be one of VisionSpring’s “vision entrepreneurs.” Now she is selling eyeglasses and offering vision screenings in her rural Indian community, consistently earning around $100 a month.

Rama’s economic turnaround is featured on the website of VisionSpring, which, like a growing number of ventures doing business with the base of the economic pyramid (BoP), shares success stories to demonstrate its results to funders and other stakeholders. These ventures often use anecdotes to highlight how they’re helping families build houses in Latin America, providing health-related products to children in Africa, or linking farmers in rural Asia to new markets.

Source: Harvard Business Review (link opens in a new window)