As Ana first reported back in February, Ashoka's Changemakers and the Global Water Challenge have partnered to open a worldwide search for ideas and projects with the potential to transform the provision of sanitation and water worldwide.  The search, entitled Unclogging the Water and Sanitation Crisis, began with a call for projects and culminates this Sunday, when voting closes.

This is a competition through collaboration, meaning that the Changemakers community gets to nominate projects, vet them and vote for the winner.  (If you've never heard of Changemakers, check out Leslie Berger's concise profile of their work in the Stanford Social Innovation Review.) 

The water and sanitation competition is coming to a close; 9 finalists have been selected by the community, and voting is open.  If you haven't already, drop by the Changemakers site and vote - it only takes a few minutes, and your voice actually counts (the winner gets $5,000 cash and is eligible for up to $1 million worth of Global Water Challenge grants). 

In an era when most decisions - political, business - are made in back rooms away from our inquiring eyes, Changemakers represents real change.  By opening up the decision making process to anyone with a web connection, they are democratizing (and crowdsourcing) at the base of the pyramid.  Happy voting...

As I turned the corner, it appeared almost out of nowhere - a monument to the successes (and failures) of capitalism - the New York Stock Exchange. I had ventured downtown to attend the premiere of Carol Pineau's new documentary, Africa Investment Horizons, which was being screened inside the Exchange. As first impressions go, you could do no better: it's impossible not to take Africa's investment potential seriously when you're talking about it inside the center of the financial universe.

Even the security line was interesting: long but vibrant, an impromptu salon of Africanists, investors, expatriates and activists, all of whom share a passion for the business of Africa. Not surprisingly, I saw a number of base of the pyramid and NextBillion allies: Liz Wald, of EDI Imports; Emeka Okafor, of TED and Timbuktu Chronicles fame; Joy Sun, COO of Market for Change. This was going to be a good event.

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The Science and Technology Division of the Inter-American Development Bank is pleased to announce the launch of its grants program: Innovation for Inclusive Development. The objective of the program is to foster innovation in products, processes, and services and engender solutions that can improve the quality of life of the majority of people in Latin America and the Caribbean, those who are poor and/or excluded.

Up to six grants, ranging from USD 30,000 to 100,000, will be awarded to the selected proposals to develop, test, or pilot innovations in the region. Part of the initiative is funded by the Italian Trust Fund for Information and Communication Technologies for Development.

The initiative is open to all IADB member countries but the innovation must be implemented in Latin America and the Caribbean.

The deadline for the call for proposals is Friday, June 20, 2008, at 5pm EST. Applications should be submitted to innovation@iadb.org

More information is available at the Innovation for Inclusive Development website, including program guidelines and application forms.

Erik Simanis is not your average Ph.D. student.  For one thing, he's done work on his degree at two separate institutions (the University of North Carolina's Kenan-Flagler Business School and Cornell University's Johnson School of Business.)  Furthermore, he's spent more time in the field than in the library – not necessarily good for paper writing, but certainly a benefit as far as the paper's content is concerned.  Finally, Simanis probably knows as much about the Base of the Pyramid space – and how it relates to sustainability – as anyone, including BoP gurus like C.K. Prahalad, Stu Hart and Al Hammond.

Last week, I had the chance to sit down with Erik while I was in Ithaca for the Entrepreneurship@Cornell event.  Sitting in Monica Touesnard's office in the Center for Sustainable Global Enterprise, Erik and I polished off a couple cups of coffee over the course of two hours.  The outcome of that discussion – a long-form interview – follows.

Rob Katz: How did you get involved in the "base of the pyramid" community?

Erik Simanis: It goes back to the late 1990s, when I was doing my MBA at UNC.  That's when I met Stu Hart.  I had gone back to school to focus on sustainability – he was (and is) a major player in that space.  Interestingly, the late 1990s was when sustainability was still pretty young.  At the time, the draft "Fortune at the Bottom of the Pyramid" paper (co-authored by Hart and C.K. Prahalad in 1998) was going around, and I had an interest.  

While I was doing my MBA, I had an internship with Monsanto and, after graduation, I was supposed to work there as a country manager in India for their smallholder farmers business.  Essentially, it was in their BoP/sustainability team.  Of course, Monsanto's stock price took a huge hit between the time I was offered the job and when I was to start, so I had to think differently - quickly.  Specifically, Monsanto was acquired by Pharmacia in the face of the GMO uproar – as part of the merger, they effectively dissolved the "BoP team."  I moved into a consulting position with Paul Gilding's ECOS and continued to work with Stu to launch the BoP Lab.

Meanwhile, I was reaching out to different parts of the school (anthropology, social work) and wanted to see Stu and C.K.’s ideas mature.  What I mean by this is that, in 1999 and 2000, the whole BoP space was just about getting people's attention – 4 billion people!  Trillions of dollars! 

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Today in New York, I had the pleasure of attending a round table organized by the Council on Foreign Relations entitled The Commercialization of Microfinance: The Good, The Bad and The Ugly. Moderated by CFR Senior Fellow Isobel Coleman, the discussion featured comments from Mary Ellen Iskenderian (of Women's World Banking) and Roshaneh Zafar (of the Kashf Foundation.)

I arrived early, set up my laptop and grabbed a bite to eat (if you're curious, the CFR building is beautiful and they do a good lunch spread). Before I was through my sandwich, the room had filled to capacity and CFR staffers were scrambling to set up overflow seating – there’s clearly a lot of interest in the recent controversy surrounding microfinance. It was quickly apparent that women outnumbered men in the audience by a ratio of about 2:1 – interesting, though not completely unexpected given the importance of women in microfinance and the fact that the speakers and moderator are all women.

Coleman kicked off the session with brief introductions and quickly segued into the topic at hand – the good, bad and ugly of microfinance. She stated – without dissent – that microfinance now finds itself at an inflection point. On the one hand, there have been calls for microfinance not to profit off the backs of the poor, notably in the New York Times' coverage of Compartamos' IPO. On the other hand, those who know microfinance realize that it can't scale – from 100 million clients today to its potential market of 4 billion – without the capital markets, and the formality capital markets require.

I thought Coleman did a good job setting the stage here. From my perspective as a quasi-insider, there wasn't much new – but it is important to say nonetheless. Microfinance can and will go one of two directions, and it's pretty clear that there are strong arguments being made by advocates on either side.

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What's big, red and innovative all over?  No, it's not Clifford's supremely creative cousin – it's Entrepreneurship@Cornell.  A university-wide initiative, Entrepreneurship@Cornell is unique in bringing together students, faculty, alumni and outside experts across a range of sectors (hospitality, biotech, real estate, venture capital, law and more were all represented at the event I attended last week).  Other universities could learn from Cornell's approach – a truly multidisciplinary program is hard to find in academia, so kudos to the Big Red for getting this one right.

I went to Ithaca last Thursday and Friday to participate in Entrepreneurship@Cornell’s annual celebration.  The 2 day event featured a gala dinner, entrepreneur expo and – of course – panel sessions.  Thankfully, the panel session in which I participated was well organized and expertly moderated.  (No coincidence here: the organizers – Steve Wang and Sara Standish – are Johnson School students and the moderator was Mark Milstein, a heavy hitter in the BoP space.)

I thought Sara and Steve did a particularly good job finding representatives from distinct stages of the BoP continuum.  First to speak was Fernando Lima, founder of Florestas and a New Ventures entrepreneur.  Fernando holds a Ph.D. in economics from the University of Barcelona and has worked for many years in finance – but his passion is personal care products.  Specifically, Fernando is all about certified-organic products whose ingredients are sourced from Brazilian cooperatives.  Florestas' new line – Ikove – just attained nationwide distribution through Whole Foods, which is the holy grail for any start-up company in the organics sector.

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Guest blogger Erik Simanis is Co-Director of the BoP Protocol project. Erik co-founded the Base of the Pyramid Learning Laboratory in 2000 with Professor Stuart Hart. He holds a BA in Spanish from Wake Forest University and an MBA from the Kenan-Flagler School of Business (University of North Carolina at Chapel Hill); he will soon complete his Ph.D. in strategy at Cornell’s Johnson School of Management.

Editor's note: Simanis' thoughts were initially posted as a comment to Derek's recent post, BoP = 1, SME = Global.  They have been adapted, with Erik's permission, as a full-length post.  NextBillion.net encourages debate on different business approaches within the BoP movement.

By Erik Simanis

Thanks for this post, Derek, and for the reference to our work on a corporate innovation process for the BoP (aka, the BoP Protocol.) I did want to make a small correction/addition to your description of that process. Importantly, the BoP Protcol is NOT about how to do "deep listening," nor simply how to understand the BoP customer's "true needs." We contend that such an approach, which reflects a very traditional corporation innovation process, is (counter-intuitively) the reason why so many of the initial corporate BoP ventures have produced lack-luster results, both for companies and communities. It also leads to weak competitive positions for the company and exposes them to low-cost knockoffs.

The problem, therefore, isn't a lack of "good customer data" or new methods (like co-creation or quick ethnography) to get that data; the problem is the very belief that new businesses (particularly in the BoP) are built on "customer data!" When you do business development with that as the organizing framework, it inevitably leads to a transactional relationship with BoP communities and fosters the view that the company's primary interest is simply to "sell stuff to the poor."

The BoP Protocol, instead, is about how companies can engage in "deep dialogue" with BoP communities and, through that process, to creatively marry each others’ resources, capabilities, and imaginations in forging a new business.

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Position: Analyst, IGNIA

Location: Monterrey, Mexico

Organization: IGNIA is a $75 million venture capital fund and enterprise development organization  focused on fighting poverty by investing in Small and Medium Sized Enterprises (SMEs) at the Base of the Pyramid (BoP) in Latin America.

Description:  The Analyst will work with IGNIA's staff to help raise, research, invest and manage a $75 million base of the pyramid fund.  He or she will have previous experience in the venture capital sector.  Spanish proficiency, though not fluency, is required.

For more information, see the IGNIA web site or contact Alonso Bustamante Guerra.

If you're between the ages of 18 and 29, and have founded a social or BoP enterprise, check out the description below.

Launched in 2001 by the International Youth Foundation, YouthActionNet strengthens, supports, and celebrates the role of young people in leading positive change in their communities. Each year, 20 exceptional young social entrepreneurs are selected as YouthActionNet Global Fellows following a competitive application process. The yearlong Fellowship program includes:

Skill-building:

• A seven-day capacity building retreat in Washington, DC (all expenses paid)
• Development of a customized learning plan based on individual leadership learning needs. This learning is focused on six dimensions of leadership: personal, visionary, political, collaborative, organizational, and societal.
  
  

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I like late March. Here in New York - and in Washington, where I used to live - late March is when spring starts to take hold, bringing longer, warmer days. It's also when the annual Skoll World Forum takes place, bringing a breath of fresh air to cloudy, rainy England (apologies for the weather metaphor). For a review of Forums past, check out Jacqueline's blog post from 2006 and Kevin Jones' guest post on NextBillion from 2007.

I sincerely hope for good weather in Oxford this week, since a number of my Acumen Fund colleagues (and numerous allies from throughout the 'base of the pyramid' community) will be attending the Forum. Then again, rain might be for the best - that way, no one is tempted to spend time outside, away from the excellent sessions. I am particularly impressed with this year's lineup, and its theme: social entrepreneurship: culture, context and social change.

If I had to choose, here are some of the sessions I would mark on my planner as "must-see". Unfortunately, some of them are being held simultaneously...so be sure to check out posted synopses online (see below for more info on blogging at the Skoll World Forum.)

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Guest blogger Mallika Ahluwalia works for ACCESS Development Services, an Indian firm providing inclusive and innovative livelihood solutions enabling the poor to ovecome poverty and live with dignity.

By Mallika Ahluwalia

Yakalakshmi lives in Nekkunda village, part of the Telengana region of Andhra Pradesh, with her husband and two children. Though she has water piped to her house by the village panchayat, her entire family fell ill for a month last monsoon season by drinking water directly from the tap. "We all got high fever and severe diarrhea," and as a result, "we had to spend around Rs. 4000 ($100) on health care, which was very difficult for us." So, when Yakalakshmi got the opportunity this past January to buy an effective water purifier through her Self Help Group (SHG) on an installment basis, she was one of the first to sign up.

Yakalakshmi is just one of the beneficiaries of a unique tie-up between ACCESS Development Services, an Indian microfinance technical services non-profit organization, and Hindustan Unilever Limited, one of the country's largest producers of fast-moving consumer goods, to provide safe drinking water to rural poor. "Most of these villages have piped water or boreholes," according to Padma, Project Coordinator at a local NGO; "the problem is that tests by UNICEF in this district show that up to 70 percent of these sources are contaminated." The contamination gets even worse during the rainy season, especially due to poor sanitation and waste-management practices.

Though local bodies have been working to raise community awareness on the importance of safe drinking water, the major penalties of affordability and access remained. Enter the innovative partnership between ACCESS and HUL. HUL has designed a household water-purifier, PureIt, which uses a four-stage filtration process to remove all bacteria, viruses, dirt, and pesticides resulting in water that is 'as safe as boiled water.' It does not require electricity or running water. ACCESS facilitates loans for rural women to be able to afford these water purifiers through its partner microfinance institutions (MFIs).

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When talking with people inside the "base of the pyramid" (BoP) community, I often hear strong opinions about how BoP ventures should be set up.  Some people strongly support registering these ventures as for-profit entities, while others maintain that BoP activities can start out as non-profits and transition into formal businesses later.

There is no one answer, and this is not a straightforward discussion.  The legal and financial implications of a for-profit vs. non-profit organization are myriad, and I don't claim to understand them all by any means. 

Thankfully, a new article in the Stanford Social Innovation Review explores the tension between for-profit, non-profit and hybrid structures.  The Funding Gap (PDF) - written by NextBillion allies Jeff Hammaoui, Eliot Jamison and Michael Chertok - explores the social enterprise capital market and how the BoP community can address recurring legal, financial and funding issues associated with it.

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Back in December, we wrote about the new Piramal Prize for healthcare innovations.  Now, the deadline is just twelve days away...but there is still time to submit a winning entry.  See below for the details.

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Anand Shah, CEO of the Piramal Foundation and a NextBillion reader, alerted me to the recently-announced $25,000//10 lakh rupees Piramal Prize for Innovations that Democratize Healthcare. In his e-mail, he notes that prize was created

...to encourage and support bold entrepreneurial ideas which have a profound impact on access to higher standards of health for India’s rural and marginalized urban communities. The award recognizes high-impact, scalable business models that propose innovative solutions which directly or indirectly address India’s healthcare crisis. Entries may include, but are not limited to, innovations in service delivery, technology applications, health-related products, or mechanisms to address public health necessities such as potable water.

Initial entries for the prize are due no later than April 1, 2008; the winner will be announced at the end of May.

The Piramal Prize is a joint project of the Ajay G. Piramal Foundation and the Centre for Innovation Incubation and Entrepreneurship at the Indian Institute of Management - Ahmedabad. It is interesting to note that the Piramal Foundation gets most of its support from Piramal Enterprises, a major player in the Indian pharmaceutical industry. This prize is an excellent example of how corporate social investment aligns with financial returns. But that's the subject of another post.

Thanks, Anand, for the alert. I encourage NextBillion readers to learn more about the Piramal Prize and submit their applications soon. Even if you are not a BoP health enterprise, consider bookmarking the Piramal Prize web site, as the entries will be available for public viewing as they are submitted.

(Via story suggestion - yes, we really do read them!)

NextBillion ally Cat Laine - editor of the excellent AIDG blog - posted a fantastic social marketing video earlier this week that I just had the chance to look at today. Entitled Don't Wait for the Rain, the video features Maasai rap artist Mr. Ebbo alongside actors portraying the MoneyMaker pump in action. It is a combination music video, advertisement and soap opera all rolled into one entertaining 5-minute package. It is not the first time Mr. Ebbo has signed onto a social or governmental cause.

I will embed it below, but if you can't see the video, click here for the YouTube link: Don't Wait for the Rain.



Lyrics are via the AIDG Blog - thanks Cat:

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What does a next-generation BoP strategy look like?  How do large companies work effectively (and profitably) with the BoP?  What have we learned in the years since Stuart Hart and C.K. Prahalad published their s+b article, Fortune at the Bottom of the Pyramid?

If you're looking for answers to these questions, then you may be in luck; they - and many more - are addressed in the newly-released Base of the Pyramid Protocol: Second Edition.  The Protocol, first developed in 2003 and 2004, has been revised extensively under the leadership of Hart and co-author Erik Simanis.  The new edition's subtitle?  "Toward Next Generation BoP Strategy."  That alone should tell you enough about its value to those of us in the BoP space.

Some may ask, what is the BoP Protocol, anyway, and was there a first edition?  Good questions.  The Protocol is a new business innovation process, developed specifically for the BoP by a group of academics and practitioners over the past 5-plus years.  The first BoP Protocol workshop was held in 2004, and the first edition document was released in 2005 - download it at the BoP Protocol web site.

Over the next 3 years, the Protocol was field tested with SC Johnson (in Kenya) and DuPont/Solae in India.  The Second Edition is, in part, a reflection of what the authors learned through these field tests and in their own development of a sustainable innovation process for the BoP.

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