Welcome to part II of the “Endeavor” series. You may recall that part I involved a rather interesting conversation with Dan Isenberg, a Harvard Business School professor who had written a case about Endeavor entrepreneur, Lapdesk. Given that dialogue, it seemed only natural to continue the dialogue with Shane Immelman, founder and CEO of Lapdesk. So with no further ado, let’s have a chat with Shane.

Tayo Akinyemi, NextBillion.net:
What inspired you to found Lapdesk?

Shane Immelman, Lapdesk:
Simply put - if we ever hope to meaningfully address global poverty, then the answer must be to provide children in emerging markets with quality education - by doing so we will at least ensure that these children will be equipped to participate effectively in the societies within which they live, and will then have the opportunity to create a better future for themselves. The Lapdesk Company was founded with this in mind, as tens of millions of children the world over lack basic infrastructural equipment that will contribute to their quality education - a classroom desk.

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It has been increasingly clear to me that there is a large grain of truth to the not-so-old adage, “If you want to get something done, give it to a busy person.” As I navigated the handful of near misses with Harvard Business School Professor Dan Isenberg, I realized that I had much to learn about the “busyness” of business school. He surely wins the award for fastest turnaround time —ever. I suppose that explains how Professor Isenberg has time to conduct research, teach classes, write cases and field random interview requests from first year MBA students like me. In any event, I was eager to chat with Prof. Isenberg about the case he wrote about Lapdesk, a South African company that provides portable desks to school children who need them, all 4.2 million to be exact. (Isenberg, 5)

Lapdesk’s business model is unique because it capitalizes, literally, on the desks’ advertising real estate to attract company sponsorships. Companies buy the desks, which are then emblazoned with corporate branding, and given to the students of facilities-poor schools. Lapdesk CEO Shane Immelman has been well-recognized for his work, receiving the “Proudly South African New Business of the Year” award in 2005 and becoming an Endeavor entrepreneur in 2006.

When he is not moderating panels at conferences like: Controlling Our Destiny: Celebrating Africa’s Success, presented by the Africa Business Club at HBS, Prof. Isenberg finds time to write about super chickens, remittances in Latin America and FOPSEs (rhymes with oopsy) like Lapdesk. Confused? Then read on…

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If you believe that Africa is indeed open for business, consider attending the launch of the Africa Entrepreneurship Platform at the Harvard Club of New York on Thursday, February 28th. The quarterly forum, supported by the Clinton Global Initiative and administered by the South African Chamber of Commerce (SACCA), aims to connect South African entrepreneurs with U.S. investors in the pursuit of "sustainable job creation and economic development."

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'Innovate or die' is the challenge issued by the pedal-powered machine contest sponsored by Google and Specialized Bicycle Components. All 102 inventions are based on basic bicycle mechanics; entries range from a pedal-powered tennis ball launcher to the grand prize-winning invention, a self-described mobile filtration vehicle.

In simple terms, MFV is a modified bicycle that filters water as one rides it. All entries were evaluated based on "creativity, environmental impact, and design" as determined by its three judges: Mike Sinyard, Founder & President, Specialized Bicycle Components, Dan Reicher, Director, Climate Change & Energy Initiatives, Google and Rich Silverstein, Co-Chairman, Goodby, Silverstein & Partners.

The contest winners, who were on announced January 16th, were appropriately-compensated given the theme of the contest. The Mobile Filtration Vehicle team won $5000 and five new Globe bikes. Brand new bicycles were also awarded to the five finalists:

• MIT cycling team, who used pedal power to run a computer analyzing data for research on clean nuclear power;
  
  
• Pedal-powered snowplow, which is exactly what it sounds like;
  
  
• Multi-use bike machine that acts as a corn husker, grinder, blender, tool sharpener, etc.;
  
  
• Velocytraptor mobile cinema that enables spectators to watch a ten minute movie and then subsequently "pedal back" the electricity expended for the show;
  
  
• Dual-purpose bicycle, which is a regular bicycle that doubles as rice thresher, peanut sheller, corn shucker, circular saw, or woodworking lathe;

I would encourage anyone with a healthy sense of imagination and a free afternoon to watch the brief YouTube profiles of the winning inventions and submitted entries. It’s an outstanding testament to man’s ingenuity and desire to create.

Nonetheless, a part of me wants to hold up a sign exclaiming, "Welcome to the land of the false dichotomy!" Innovate or Die? Really? Yes, perhaps. But what really exists along the continuum between innovation and death?

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I am sure that few of you are strangers to Amy Smith’s work at MIT’s D-Lab. After all, the D-Lab has been profiled several times here at NextBillion, most recently in an article featured in the news room via GOOD magazine. The article aptly describes D-Lab’s current crop of appropriate technologies, developed with the needs and constraints of the end user in mind.

"Designs are more likely to be successful if they’re not complicated and requiring all sorts of support and infrastructure," says Smith. "But simple doesn’t mean easy. It’s a challenge to get to those ‘simple’ solutions."

(Read the full article)

The five innovations profiled: a water chlorination controller (to reliably regulate the addition of chlorine to a stored water supply), a screen-less hammermill (to churn grain into flour), low-cost water test (to test drinking water safety), phase change incubator (low-cost incubator), are definitely simple, rugged, cheap, and replicable. But are they scalable? The answer is "they could be."

"We’re not as well-equipped to do dissemination as we would like," says Smith, who notes that D-Lab only has about 30 students at any one time. "We’re interested in finding the right partners to move the technologies forward." Scale and dissemination determine where "the rubber meets the road" in a university-based system of innovation.

One has to wonder what the best mechanism for sharing these innovations is. Should development projects be built around them? Can they support small businesses like the ones conceived by the Appropriate Infrastructure Development Group? Or might they spawn full scale enterprises, like d.light design, which grew out of the class project at Stanford? Regardless, I truly appreciate the notion of starting a "design revolution" that will encourage engineers to create strictly for challenging environments, and expand the field of appropriate technology design.

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"If we did all the things we are capable of doing, we would literally astound ourselves.”
-- Thomas Edison

If you haven't already, be sure to check out the Global Social Enterprise Program at Colorado State University's School of Business.  When I applied to the Johnson School at Cornell, I assumed that I knew which schools had reputable programs in sustainable global enterprise.  The Ross School of Business at the University of Michigan, and the Kenan-Flagler Business School at UNC, were among these, but I still managed to find slightly “off the radar” programs like the MBA in Sustainable Management at the Presidio School of Management. 

Nonetheless, it turns out that I made at least one serious omission: The Colorado State College of Business.  The Global Social and Sustainable Enterprise Program at the Colorado State University College of Business is an 18-month MBA program that brings 25 students (50% U.S. and 50% international) together to build enterprises that address environmental, health and social problems in developing countries.  CSU is committed to exploiting the opportunities that exist at the intersection between sustainability and social entrepreneurship.

The unique curriculum at Colorado State tailors traditional subjects to address the challenges of sustainable global enterprise, in courses such as marketing for global sustainable enterprise and accounting for global sustainable enterprise.  It also offers cross-disciplinary courses, including social entrepreneurship, microfinance, and ecological perspectives for business.

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Editor's note: Tayo Akinyemi will be starting the MBA program at Cornell University's Johnson School of Management this fall.

I’m leaving for business school today, so this will be my last post on NextBillion.net for awhile. Although I didn’t answer all of my twenty questions (and attempted to answer questions that I hadn’t posed originally), I truly enjoyed blogging and expanding my knowledge about all things BoP. Needless to say, I will take the remaining questions with me to business school; I have no doubt that I’ll gain valuable insight there. In the meantime, I’ll apply a very quick and dirty analysis to what remains. Also, in keeping with the inquisitive nature of this blog, I’ll throw out a few more questions and food for thought.

Is "Base of the Pyramid" just MNC neocolonialism all over again? Will MNCs behave differently in this space than they have in the past? Can power be successfully decentralized and distributed?

Potentially yes, but the concept of BoP as nouveau neocolonialism runs contrary to what BoP business development is about. Frameworks like the BoP protocol have been designed to view MNCs and BoP communities as partners co-creating mutually beneficial business opportunities. Additionally, systems and institutions are created and implemented by people, so naiveté notwithstanding; we can influence how these entities perform. As long as the basic principles are respected, it is possible that the worst case scenario may be avoided.

Must there be a trade-off between doing well and “doing good”?

How close does BoP come to closing that gap? Where does BoP fit along the public/private sector continuum?

Does CSR, Public-Private Partnership, social enterprise, social entrepreneurship, venture philanthropy = BOP?

Is this really about devising a hybrid system that works better for everyone?

Certainly there are trade-offs, but it appears that the gap is closing. Pushing that boundary is the reason why I’ve chosen to focus on BoP and pursue a business degree. To me, BoP is the counterpoint in the balance between social and financial profit and promotes the notion that the pursuit of social good can be a core, not ancillary, function of business. Superficially speaking, social enterprise, social entrepreneurship, and venture philanthropy seem to focus on “entrepreneurializing” socially-focused organizations and pursuits; while corporate social responsibility (CSR), public private partnerships and BoP aim to leverage private enterprise for social good. Clearly, these are only the broad strokes, and don’t capture the complexity of the similarities and differences.

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Two new funds to facilitate private sector development in Africa are being raised as we speak.

The first, the Africa Enterprise Challenge Fund, is the result of a Commission for Africa recommendation. It seeks to “catalyze the private sector to innovate and find profitable ways of improving market access for the poor — especially in rural areas. The ACF will focus on stimulating innovation in agricultural markets and deepening access to financial services.” (AECF concept summary, http://www.dfid.gov.uk/news/files/aecf-pcn.pdf)

The Fund will assemble a portfolio of sixty ventures and grant $150,000 to $1.5 million in investment that will be complemented by a matching contribution by the applicant. Donors who have signed on include the UK’s Department for Development (DFID), African Development Bank, the Consultative Group to Assist the Poor (CGAP), and the International Fund for Agricultural Development (IFAD). The fund will be up and running in 2008. (http://www.dfid.gov.uk/news/files/pressreleases/aecf-launch.asp)

Next up is the Overseas Private Investment Company’s (OPIC) African Social Development Fund. “The OPIC is inviting proposals from experienced private equity fund managers for the formation and management of one or more investment funds that will invest in Africa. OPIC will provide financing for funds generally ranging between $25 million and $150 million in total capital. More info here.

The dual goal of the fund is to generate social returns for Africans and financial returns for investors. The ASDF will support proposals involving SMEs, enterprises that foster “social development, provide access to energy, and provide goods and services to rural or underserved markets.”

The deadline for proposal submission is 5 p.m. EST August 8, 2007.

I just finished reading Freakonomics, the NY Times Bestseller written by “rogue economist” Steven Levitt and journalist Stephen J. Dubner. It’s about using economic thinking and data analysis to answer practical questions and challenge conventional wisdom. Truly, there is nothing I love more than folks who consciously and skillfully upend easy assumptions. Except perhaps, those who find ways to prove what works using hard data. In the words of the recently-liberated Paris Hilton, “that’s hot.”

As a result, I suppose that it’s not surprising that Freakonomics has inspired me to tackle two of the most difficult questions on my list of twenty:

1. How do you define success at the BoP?
2. How do you quantify it?

Well, fortunately for me, WRI and the IFC have gone a long away toward answering question #2 by publishing the report, “The Next Four Billion.” We now have a very good idea of just how large these markets are. As we all know, assessing the size of the market is a key element of business planning and finance solicitation. We also know that the sizeable profit that accompanies sizeable markets is a great motivator for business development.

However, there is no consensus about how to define and quantify the social benefits derived from building BoP businesses. For example, does success result when the market shrinks, as previously unmet needs are met, or when it expands, indicating that more people are soliciting more services? Moreover, do products consumed and services rendered enhance their beneficiaries’ quality of life, yield a higher GDP per capita, reduce disease prevalence, or create some other desirable socioeconomic benefit? If so, how do we know?

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Something that has consistently bothered me since I began exploring the "business for social good" continuum is the notion (implied, but not often stated), that the government has been usurped as the primary provider of public goods. Government has failed and private enterprise must take over. Conventional wisdom dictates that government bureaucracies aren’t facile enough to meet the dynamic needs of the populace. In the words of David Bornstein, author of How to Change the World: Social Entrepreneurs and the Power of New Ideas:

Today, many people do not believe that we can alleviate poverty, or fix the education system, or improve the government, or find better ways to deal with many social problems. Amidst this disenchantment with government, the field of social entrepreneurship has emerged…..But in order to [solve these problems] society needs to think differently about the approach.
(Source: article introducing How to Change the World: Social Entrepreneurs and the Power of New Ideas by David Bornstein)

It’s to the point at which topics like “Governments as Agents of Change,” broached at the Business for Social Responsibility (BSR) conference “Innovative Strategies – Measurable Impacts,” held last year in New York City, seem almost laughable. But are they?

Now clearly, my professional choices have demonstrated a certain degree of sympathy for this point of view. After all, I am pursuing a business degree, not a degree in public policy — not to imply that two are mutually-exclusive. But I cannot say that I have stopped to analyze this core assumption about the role of government. Not surprisingly, my examination of this question has fallen victim to a seemingly endless flurry of pre-MBA activity.

However, it came bouncing back to the surface (as these things often do) quite unexpectedly after a trip to visit a friend in New Orleans. She courageously decided to move home to NOLA from Nigeria eighteen months ago after witnessing the devastation of Hurricane Katrina via CNN. I remember anxiously tracking the progress of the storm with her and subsequently acting as a sounding board to her internal debate about how, when, and whether to return home.

More than a year later, as she took me on an impromptu tour of the city, she deftly explained some of the issues encountered by the citizens of the New Orleans after the storm. The issues: rebuilding homes and neighborhoods via the “Road Home” fund with all of its delays, the lack of support for renters, the negligence of the levee system, the inefficient and expensive use of mobile homes for temporary housing, control of federal aid disbursement, local political reform, and the practical implications of what a “market driven recovery” should look like, seemed ridiculously daunting. Nonetheless, despite all of this, the people of New Orleans are taking the initiative to set priorities, rebuild, and bring their city back.

As encouraged as I was by the determination of NOLA’s citizens, I was equally shocked and disappointed by the (arguably) apparent lack of a comprehensive recovery plan sponsored by; you guessed it, the city government. (It was still in the approval process at the time of my visit). To make matter worse, even if there had been a finalized plan, given the federal government’s ineffective response to the disaster, including the under-funding of the relief effort relative to the extent of the damage sustained in Louisiana, and the conflation of disaster relief and rebuilding funds, it might not have been financed even if it had been finished sooner.

So my question is, “Is it really okay to abdicate, implicitly or explicitly, the distribution and management of public goods to private enterprise?”

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I have a chronic habit of seeking out cool people. Can’t help it; it’s just what I do. A few months ago, I asked one of my friends, a Stanford Graduate School of Business grad, to e-introduce me to a then second year student. We exchanged ideas and information, a process that always makes me happy. Imagine my delight (pun intended) when the aforementioned student e-introduced me to two of his classmates, Sam Goldman and Ned Tozun, founders of d.light design. I was absolutely tickled, and you’ll understand why shortly.

d.light’s mission is to “develop and commercialize sustainable lighting and power solutions for underserved rural markets in areas without access to electricity.” The d.light team hopes to supplant the use of kerosene and candles, which are “expensive, inefficient, dangerous, low-quality sources of light.” (Source: http://www.dlightdesign.com/vision.html)

Some of you may recall a previous mention by Rob Katz referencing d.light’s participation in the Global Social Venture Competition. But given this happy bit of serendipity, I’ve stepped in for round two.

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The authors of Untapped: Creating Value in Underserved Markets outline strategies for accessing both domestic and international BoP markets. More specifically, they examine the ways in which companies can engage with "underserved markets" using five “success factors” that they apply to the “four business functions [that] cover the range of relationships that people in underserved markets have with businesses: as consumers, employees, suppliers, and neighbors. (12) The five success factors are as follows:

1. Mine and translate local market information.
   
   
2. Adapt business model to community realities
   
   
3. Change internal incentives and challenge cultural assumptions.
   
   
4. Create partnerships and strategic alliances. Improve the enabling environment. (9)

Lodge et al. go on to explain the challenges involved in addressing these markets and how one can apply the success factors to overcome them. (9) So far, so good.

While I appreciate the comprehensive approach to the examination of underserved markets—it was refreshing to encounter a multi-faceted, rather than dichotomous (consumer vs. producer) approach to BoP potential — I had difficulty relating much of the content to a developing country context. To be fair, the authors did incorporate some familiar BoP examples, including Cemex. However, some of the strategies described, particularly with respect to the capacity-building aspect of employee training and supplier development, seemed dependent on resources that may be in scarce supply in an developing markets.

For example, the authors describe the creation of the “Marriott Associates Hot Line.” The hotline idea evolved out of the realization that the productivity of Marriott employees was being hampered by a number of “complex, acute, and urgent life issues — car and transportation issues, language and immigration issues, abusive spouses, crime, drugs and alcohol, school problems of children, financial and legal problems, evictions, etc.” (69) Managers found themselves spending more time addressing these issues than performing business-related activities. As a result, Marriott developed a hotline through which employees could receive the advice of trained professionals. (69) This approach makes very good sense, no? Yes, but in some cases, finding and training qualified staff is challenging enough without trying to source additional staff to support the primary staff.

But then again, I suppose one has to know what is exportable and what isn’t. Nowhere do the authors state that hotels everywhere should establish hotlines for beleaguered employees. Based on the five “success factors", many of which echo general ideas about the best way to approach the BoP, it seems that the main principle is to let the local context be the guide. So if hotlines don’t work, find something that does.

That said, discovering and implementing what works sometimes involves changing the local context or creating the infamous "enabling environment" (principle #5). But who and what are enabled when you do that? In both domestic and international contexts, MNCs have the power to shift the legal and regulatory environment in their favor, a power that they often exercise. What concerns me is the potential for abuse, given the lack of governmental oversight in some contexts. However, as the authors assert:

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I had spent a lot of time trying to figure out how best to work at the base of the pyramid, even before I knew what BoP was.

In 2003, I moved to Nigeria to pursue a career in international development, focusing on democracy and governance. Nearly two years of this work taught me that democracy, or the pursuit thereof, doesn't always pay the bills. In a country where collaborative government means equitable access to oil wealth, one quickly understands how deeply poverty impacts life in Nigeria. But market forces are alive and well there—from the shoeless boy hawking newspapers in the street to the shops selling eggs at midnight. This is what spurred my interest in business and economic development—that and Todaro's textbook, Economic Development. However, I realized that despite my interest in development issues, I was less impressed with the institution of development.

As a result, I sought to discover whether or not development aid is an effective means to end poverty. As with many worthy questions, the answer is far from clear. However, this lack of clarity probably also indicates that once again, I’ve asked the wrong question. The better question may be: "Can development aid help make people less poor?” William Easterly, the author of my favorite book ever, The White Man's Burden: Why The West’s Efforts to Aid the Rest Have Done So Much Ill And So Little Good, would probably agree with the spirit of my question, if not the phrasing. (Ironically, Mr. Easterly is also a Fellow at the Center for Global Development, my second favorite think tank. Can you guess which one is my first?) My boy Bill may be more inclined to mold the question around a specific goal. For example, "how can development aid help the poor secure reliable access to clean water?"

Substitute the words "BoP business development" and you understand why this way of thinking is so catalytic. There is inherently more power in being a buyer than a beneficiary. Consequently, BoP business development purports to profitably and effectively address the needs of the world’s poorest citizens. Interestingly enough, doing so unlocks access to a $5 trillion dollar market comprised of a number of key sectors including health, ICT, water, transportation, housing, energy, food and financial services.

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I encountered a strange dilemma while perusing the website of Mobile for Good. Charged with doing a write-up of the organization, I quickly realized that the folks at M4G have already done a great job of describing what they do. As a result, I’ve just reproduced text from the website here, and added a few of my own comments for good measure.

Mobile for Good (M4G) is a social franchise project designed to use mobile phone technology to help alleviate poverty and improve the lives of people in the developing world. It delivers vital health, employment and community content via SMS on mobile phones in order to inform and empower disadvantaged individuals and help bridge the ‘digital divide’ – the widening technology gulf which exists between rich and poor countries.

The content services are targeted at Base-of-the-Pyramid (BOP) consumers – generally defined as the low income segment of the population that lives on less then two USD a day. However, the business concept also includes premium services aimed at higher income groups, which allows services offered to the BOP to be subsidized.

The content services include:

• Kazi560, a job information service aimed at blue-collar workers and employers. It offers jobs in more than 40 categories from carpenters to secretaries

• Health Tips, which is designed to provide subscribers with useful tips on various pertinent health issues.

• MyQuestion, a service that allows customers to anonymously ask HIV/AIDS and Breast Cancer related questions and receive answers.

• Her560, a lifestyle channel aimed at professional women, providing information on health, diet, fitness, fashion, family, finance, events, etiquette, motivation, romance and the home.

• The Community News service, which is distributed free to subscribers in Kibera, Kangemi, Kawangware, Mathare and Mukuru. It provides a channel for sending out information on events in the community.

The Mobile for Good project has already been implemented in Kenya via a project called OKN Mobile launched by One World UK (OWUK) in 2003, where it has been instrumental in helping more than a hundred people to find jobs every week. Additionally, the business has already broken even and has had over 70,000 people use its services. Over 60,000 have found employment through the job service, Kazi560. In addition, some employers have said that this is the only form of recruitment they are now using.

A social franchise model has been developed by OWUK to provide entrepreneurs with a package of tools including a generic business model, technical platform, marketing advice, links with local telecom companies, and ongoing consultancy, which will allow them to set up a M4G business in their country. The success of this pilot has driven plans to replicate the franchise in further countries across Africa and the rest of the developing world including Cameroon, Tanzania, Uganda, Nigeria and Nepal.

Mobile for Good has been extensively covered by both national and international press, including articles from the BBC, New York Times and Reuters, amongst others.

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When I decided to write about BoP skills, I planned to center the discussion on a conversation I’d had with Yasmina Zaidman of the Acumen Fund. She was kind enough to chat with me a few months ago during an informational interview and gave me a great overview of critical BoP competencies. My plan hit a snag when I failed to locate the notes from our conversation. What else is new?

However, as often happens in life, I found them while looking for something else. To celebrate my good fortune, I am sharing that information via a mini-update. Some of the points have been addressed, but bear repeating. Others are new. Off we go…

At the BoP one must be able to build new markets, utilize operational skills, and design marketing strategies for areas lacking traditional distribution channels. Not surprisingly, this means that the “must have” skills are product design, distribution/supply chain management, marketing, pricing, and product financing. If you want to work for an outfit like the Acumen Fund, you’ll not only need consulting skills or investing experience and an understanding of development issues, but also a demonstrated commitment to the sector and changing the way development is done.

Let’s recap. Question: “What does the BoP need?” Answer: “Everything.”