One of the biggest differences between social ventures and traditional for-profit ventures is that social ventures have an explicit social mission.  This difference can be a significant reason why one person chooses to work for a social venture over a traditional for-profit venture, regardless of any difference in pay. Despite this, there are many who decide to work at a social venture for reasons other than the social mission. 

Shocking revelation, right?

During a discussion on talent management with the recently returned Acumen Fund fellows, one person made the comment to me which I found quite interesting:

One of the mistakes that management makes at a social venture is to think that all workers are drawn to the venture because of the social mission alone.  For some workers, this may be the case.  For others, the social mission is only a small reason why they join the social venture.

So what are these other reasons?  

(This post continues past the break; click "Read More" to continue)

After having devoted my last posts to more abstract aspects of the base of the pyramid, Jim Rosenberg, from our sister organization CGAP, kindly brought me to the ground again with an e-mail about how to connect the BoP to Internet through their mobiles.

The beauty of the mobile phone phenomenon in developing countries (and the reason for its success at the BoP) is its capacity to build linkages between people and markets, thus helping generate wealth in the short and long term for the agents involved thanks to a connection that previously didn't exist. The growth of it has been dramatic: Since 2000, the yearly growth of mobile phone subscribers has averaged 24% and only a few weeks ago, the International Telecommunication Union (United Nations's branch dealing with telecom issues) stated that mobile phone subscribers were likely to reach 4 billion before the end of 2008.

The BRIC economies (Brazil, Russia, India and China) are expected to account for over 1.3 billion subscribers, with China alone representing more than 600 million. India, on the other hand was estimated to have 296 million subscribers back in July, yet its penetration rate is still around 20%, suggesting ample opportunities for growth.

Now, having a mobile phone represents not only an opportunity for generating connections between two users, but also an opportunity to connect with a network which is estimated to include 1.5 billion people, the Internet (about 26.6 billion pages). However, while the developed world is well served by extensive submarine fiber networks, how to connect the BoP to the Internet?

(This post continues past the break; click "Read More" to continue)

The William Davidson Institute at The University of Michigan recently launched an exciting new tool for educators and others in the emerging markets and international business spaces. A remarkably transparent resource, GlobaLens offers cases, courses and community through a user-friendly database and discussion platform.

The site's course and syllabi-sharing section is a particularly unique opportunity for faculty members to identify innovative teaching strategies and approaches to learning.   Beyond encouraging collaboration domestically, GlobaLens has great potential to leverage international partnerships and break down geographic barriers.  If effectively utilized, universities could enhance a their course offerings to include a more comprehensive diversity of perspectives.  At a fundamental level, they can simply talk to each other about what works and what does not work in teaching international business across a multitude of disciplines.
For readers interested in social enterprise and businesses serving the base of the pyramid, the site offers access and easy navigation of great case studies. 

(This post continues past the break; click "Read More" to continue)

Guest blogger Bill Kramer is principal of The Global Challenge Network, LLC, an executive education and training company. From 2001 through mid-2007, he worked on pro-poor business strategies with WRI. Previously, Bill founded a non-profit focusing on the relationship of knowledge to economic development and enjoyed a long career in the private sector, founding a dozen companies, most of which were in the book business.

By Bill Kramer

Nobody should make light of the terrible toll that the current global financial crisis; it will cause human hardship domestically and across the world, and hit vulnerable populations with particular vengeance. But an article in The New York Times from Thursday, October 16, 2008 ("Asia Looks to Its Own Consumers To Bolster the Region's Economies"), points out that there are two sides to this firestorm: export sales are weak, but in a number of sectors, in a number of countries, domestic sales are actually on the rise.

NextBillion readers will know our bias: both the public and private sectors ought to pay more attention to local consumers as sustainable economic growth comes only through development of local economies (if such development is guided by meaningful care inclusiveness, equity and the environment; governance counts).

(This post continues past the break; click "Read More" to continue)

Chip Ransler is the co-founder of Husk Power Systems (HPS), a for-profit company that cost-effectively converts rice husks into electricity. HPS utilizes a proprietary technology to run 35-100 kilowatt mini power plants, delivering pay-for-use electricity to un-electrified villages in India's "Rice Belt." HPS' five pilot projects have become operationally profitable within six months, delivering sustainable, environmentally-friendly, low-cost energy that is dramatically improving the lives of rural Indians.

Chip is also a Pop!Tech Social Innovation Fellow.  We sat down this week at the conference for an interview.  For more context on Husk Power Systems, check out their profiles in Virginia Business (Chip and his business partner, Manoj Sinha, are MBA candidates at the University of Virginia) and Rediff.com.

Rob Katz, NextBillion.net: Tell me briefly – what is Husk Power Systems?

Chip Ransler, Husk Power Systems: Husk Power Systems is a rural electrification company.  We go where the inputs are cheap and where electricity is most needed and valued.  In practice, that means rural villages – places where 3 or 4 thousand people live.  Our systems are truly community based – we don’t have to truck in wires from all over the place.  It’s a relatively small, off-grid system.  There are 350 million people in India without power living in small villages; and those communities harvest 92 million tons of rice harvested every year – we’re meeting the need and using the best, local materials.  Also, this is not a dream – we’re in 5 villages, power 12,000 people’s homes. Our goal is to build 100 as quickly as we can – then scale our model throughout the developing world.

NextBillion.net: Tell me about rice husk – what is it, how much is there, where do you find them?  What do farmers do with them now?

(This post continues past the break; click "Read More" to continue)

You're sick, so you go to the doctor.  He prescribes you drugs.  The medicine makes you better, right?  Unfortunately, that's not always the case – especially for the billions of people living at the base of the economic pyramid. 

Taylor Thompson and Nathan Sigworth are on a mission to make sure medicine makes patients better, every time.  They are the co-founders of PharmaSecure, a for-profit startup targeting the problem of global pharmaceutical counterfeiting – which kills millions each year.  PharmaSecure will soon launch a cell phone-based system that allows healthcare professionals and consumers to easily confirm the validity of purchased drugs, bridging the information gap that allows counterfeiters to sell more than $50 billion worth of fake drugs every year.

Thompson and Sigworth are Pop!Tech Social Innovation Fellows; they presented their work earlier today at the conference.  Prior to their presentation, I had the opportunity to sit down with then for an interview.  After their presentation, the guys were featured on the Wired Science blog (20-Somethings Take on a $50 Billion Counterfeit Drug Biz) – so be sure to check out Alexis Madrigal's excellent write-up for context before reading on below. 

(This post continues past the break; click "Read More" to continue)

As the week winds down I wanted to share a note about a couple of interesting Web 2.0 ventures relevant to the base of the pyramid community. Two social networks have launched recently, aiming to connecting people and ideas around the role of business and entrepreneurship against poverty and inequality.

BOP Source is one of them. The brainchild of Jenara Nerenberg (author of a great blog that goes by the same name), BOP Source was launched just over a week ago. It will be interesting to see how the idea continues to evolve. I was personally intrigued by Jenara's vision of Web 2.0. tools in the hands of the base of the pyramid, as described in her guest post for NextBillion.net. She envisions BOP Source playing that role, as explained in the original press release, which you can read here.

I also heard about Business Fights Poverty, which already has interesting activity going on with over 1,000 members pencilled in, podcasts, videos, interviews and discussions about the role of business addressing development goals.

I have joined both, although I'm well aware I'll probably not be able to be an active member everywhere. It's just a lot to keep up with! Very exciting times nonetheless... The tools are out there to bring together people and groups with a shared vision and shared ideas, and folks like Jenara and Zahid Torres are taking a lead in using them.

Along the same lines, here is another recommendation for your weekend: I just finished listening to Tribes: We Need You to Lead Us, Seth Godin's latest book. Yes... listening to it. You can download the audiobook for free here. It was nice to listen to such great content read by Godin himself. Enjoy your weekend!    

Brian McCarthy wants to live in a shipping container – seriously.  And based on what I’ve seen of his work, I would be thrilled to live in one, too.  McCarthy is the founder of PFNC, a manufacturer and provider of affordable housing. PFNC stands for Por Fin, Nuestra Casa – a Spanish phrase that translates as finally, a house of our own.  

In 2004, McCarthy made a visit to Ciudad Juárez, along the US-México border, as part of his executive MBA program. The city is home to more than 300 maquiladoras, which employ 1.1 million people.  Maquiladoras are factories that import materials and equipment duty-free for assembly or manufacturing and then re-export the assembled product, usually back to the originating country; most of their employees live in slums.

After his visit, McCarthy couldn't shake the images of poor people living in slums, especially since most of those poor people work in factories and contribute directly to the area's robust economic growth rate (Juarez has an unemployment rate of less than 3%.)

In response, he founded PFNC.  Por Fin, Nuestra Casa is a for-profit business dedicated to raising the standard of living for families who currently reside in dangerous or substandard conditions.  It does so by using low-cost, recycled materials – retrofitted shipping containers, to be exact – to create and sell affordable housing for the base of the pyramid.

McCarthy is here at Pop!Tech as part of the Social Innovation Fellows program; he got just 10 minutes on stage today to tell us about his work.  Luckily, he was gracious enough to sit down with me afterwards for an extended interview about him, his work and housing for the base of the economic pyramid.  Side note: PFNC and Brian McCarthy were recently featured by CNN; rather than re-writing it, I urge you to read it before reading this interview.

(This post continues past the break; click "Read More" for the rest of the article and the interview)

The initial $100 price tag of the XO Laptop from Nicholas Negroponte's One Laptop Per Child (OLPC) created quite a furor when it was first announced three years ago. At the time, the cheapest laptops were hovering around $400 to $500.

This subject has been rehashed many times in the press and the blogosphere, but reading a recent report on Total Cost of Ownership (TCO) for computers deployed in schools in India prompted me to write about the pricing debate and what can be learned from it. A longer version of the report can be found here.

The report was prepared by VitalWave Consulting, a firm specializing in consulting and research for technology companies growing businesses in emerging markets. They performed a study in India, funded by Microsoft, on the TCO of computers deployed in schools. They built a model that took various factors into consideration when estimating the total cost of owning a computer over a period of time.

Purchase cost, maintenance, support, training, replacement cycle, and electricity cost are just a few of the elements they factored in. They looked at desktops, laptops, and ultra low-cost laptops like the XO and Intel's Classmate PC. The report also compares the differences between TCO in India and TCO in a "global" model.

(This post continues past the break; click "Read More" to continue)

Paul Polak is wearing a sweater vest.  This will come as no surprise to anyone who’s met him or seen him speak.  The man loves sweaters – cardigans, sweater vests, pullovers.  Hell, in Camden today – with temperatures hovering around 40 degrees in the midday sun – Paul’s sweater makes a lot of sense.  But despite his grandfatherly image, Paul is a truly a young, tireless innovator and entrepreneur at heart.  

Polak is the founder of the non-profit International Development Enterprises (IDE) and the author of Out of Poverty (review here).  He is dedicated to developing practical solutions that attack poverty at its roots. For the past 25 years, Paul has worked with thousands of farmers in countries around the world to help design and produce low–cost, income–generating products that have already moved 17 million people out of poverty.

His goal - like Bunker Roy's - is to create a franchise of barefoot, women microentrepreneurs based on the ruthless pursuit of affordability. Polak suggests that a company could set up a water kiosk where entrepreneurs could sell water at an affordable price, profitably.  (Sounds familiar!)

He starts his presentation with some seemingly random facts – 200 million Americans have hemorrhoids; men talk on cell phones 16 percent more than women do.  His point: we know everything we need to know (and more) about affluent consumers.  But we know next to nothing about the other 90 percent of the world's customers.

Serving these customers means re-thinking business.  But it also means re-thinking development.  To do so, Polak has based his work on what he calls the three great poverty eradication myths:

(This post continues past the break; click "Read More" to continue)

Outside, it is grey and rainy, but inside, the Camden library is warm and inviting.  Today's special session merited an early arrival to Pop!Tech: Scaling the Bottom of the Pyramid, a 2-hour talk by longtime BoP innovators Paul Polak and Bunker Roy.

Bill Gordon, a Pop!Tech board member, kicks things, describing Pop!Tech's active social change mission – realized through its Accelerator and Social Innovation Fellows Programs.  He then introduces today’s speakers as the "heavyweights of the social enterprise world."  I, for one, don't argue with that description.

Bunker Roy admits that he is the product of a "very expensive, elitist education" in India, which prepared him for a career as a doctor, engineer or diplomat. When he decided to work in a village instead however, his mother was appalled; but it marked the beginning of a remarkable career.

Roy founded the Barefoot College, a school only for the poor, in 1971. He asserts that rural India is full of professionals not recognized for their skills, such as water diviners and traditional midwives. His college is open only to people without a formal education and seeks to combine the knowledge of local people with modern technologies.

Roy's students create buildings that harvest rainwater and win architectural awards without a professional architect's involvement. They share knowledge and learn other skills, which they share back home.  In 38 years, the Barefoot College has served 3 million people who live on less than $1 per day.

(This post continues past the break; click "Read More" to continue)

Last July CGAP issued a new report about the main building blocks for any bank that is thinking about offering mobile phone financial services to its customers. (Shame on me for doing this post so late).

Banking on Mobiles: Why, How, for Whom? is, not surprisingly, very good report. After all, these are the people currently in the forefront of research efforts to understand and develop mobile phone banking and the place to go for anyone interested in this market. An additional point in their favor is that their reports are “waffle-free” and go straight to the point.

The report takes the perspective of a small/middle sized bank or microfinance institution in a developing country that wants to start offering mobile phone financial services, but does not really know how or where to start.

(This post continues past the break; click "Read More" to continue)

Tomorrow morning, I return to Maine for the annual Pop!Tech conference.  For the second consecutive year, NextBillion.net will be live-blogging the event, which brings together 600+ thought leaders for three days of inspiring presentations, performances, discussions and declarations.  (I am humbled to be part of this small cadre of bloggers: GigaOM, Fast Company, GOOD Magazine, and White African.)  Here's last year's conference preview for a little bit of context and history.

After last year's Pop!Tech I wondered aloud what its 'net impact' would be in 2008.  Well, we're about to find out. 

Pop!Tech has launched an ambitious campaign that appears to be moving the conference away from the narrow tech-innovation space and into the change the world space.  Seriously - they've invested heavily in a Social Innovation Fellows program, which I will cover extensively this week in addition to my analysis here on NextBillion.

So what should you, the NextBillion reader, anticipate from this year's Pop!Tech coverage? 

(This post continues past the break; click "Read More" to continue)

All good things must come to an end, including NextBillion.net's coverage of last week's Social Capital Markets conference.  SoCap was a 72-hour firestorm of ideas, conversations, impromptu meetings and a lot of blog posts – 22, to be precise.  But at the end of the day, what does it all mean?  I've been thinking hard on this, and have boiled it down to three key takeaways:

1. The tent is big, and growing
2. Measurement matters
3. Show me the money

Allow me to explore each of these in a bit more detail.

The tent is big, and growing

Social entrepreneurship continues to be a broadly-defined term – sometimes to its detriment.  There were more than a few conversations at SoCap that left me wondering, "how is this project different than traditional social activism or charity?"  Anyone interested in social entrepreneurship really must read Sally Osberg and Roger Martin's 2007 article in the Stanford Social Innovation Review, in which they make a case for definition.  

Despite this, most of they people at SoCap were true social innovators or entrepreneurs.  And unlike many other conferences, the panel sessions and plenary sessions went beyond anecdotes and one-offs to discuss real trends and results.  It was refreshing.

(This post continues past the break; click "Read More" to continue)

The final day of last week's SoCap event was, for me, the best of the 3 days.  It was the chance to meet with lots of other participants, hear their ideas, and get actively involved in the things that I really cared about and wanted to discuss.  The "strategically unstructured" format of the day was SoCap’s way to take the informal discussions of the hallways and expand on them.  It was also the place to find the people that were in the sessions on Monday and Tuesday who you never found the time to have a chat with.

I attended only 2 sessions that day, the first on franchising as a tool for scale and the second on China and development, but I actually spent the entire day on-site chatting with new found friends, old-found friends, and a whole host of compelling ideas.  The franchising talk brought together seasoned members of the community from organizations like VisionSpring one of the early adopters of microfranchising, and those that were just starting to look at franchising such as Rubicon. 

I also learned of a really interesting mobile medical initiative in the US that was considering franchising ambulance services in the Midwest and had the chance to share some of the key findings from my own microfranchising research.

(This post continues past the break; click "Read More" to continue)