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As I learn more about entrepreneurship and job creation efforts I am increasingly convinced that we need a broader range of tools than either microcredit or social venture funding typically offer.  Recently Agora Partnerships caught my eye when they and their founder Ben Powell were awarded a Draper Richards Fellowship.  Agora Partnerships has an integrated approach that "provides strategy and leadership assistance, networks, and access to capital to socially responsible small businesses with the potential to improve their communities and protect the environment."

Agora was founded in 2005 on the belief that economic development happens best when individuals are integrated into the formal economy and can avail themselves of the norms and protections that formalized laws and institutions provide; certainly a key factor in accessing capital.  (My favorite book on this general topic is the Mystery of Capital by Hernando de Soto). Making this happen, however, is none too easy and nascent entrepreneurs often need a lot of help to enter and succeed in the formal economy. 

According to Paul Davidson, Agora's Operations Manager in Nicaragua, access to good advice is as important as access to capital. For example, there are lots of hidden costs - such as the sheer cost of electricity in resource scarce Nicaragua - that entrepreneurs often don't pay enough attention to, masking the actual cost of certain products. In addition, many entrepreneurs there are afraid of outside investment and poorly understand the benefits that outside advisors can provide.  Onerous regulations and high business set-up costs don't make it any easier.  Agora's non-profit structure, coupled with a micro venture capital investment fund it sponsors, enables the organization  to serve a broad range of small business entrepreneurs from those that need assistance with business basics to those that have more strategic or operational challenges that are also ready for growth capital. 

Assistance can come from the Agora network of on the ground enterprise development managers, who charge relatively low or no fees, or it can come in giving an entrepreneur the financial consulting they need to make their case for a commercial investment, This non-profit / for-profit approach enables Agora to provide both strategy support and access to long term capital to companies too big for microfinance but too small to access traditional capital sources.  This integration should also lower the risks for both the non-profit and for-profit sides.

Among Agora's challenges are the difficulties of finding entrepreneurs that meet their criteria and the time and effort needed to build trust and openness with them.  It also takes time to create awareness of venture capital and build mindsets that welcome non-family partners; interestingly being headquartered in the US is helpful to Agora in building local trust.  The investment fund they manage enables Agora to put skin in the game but more importantly ties their success to the long-term successes of the businesses the fund invests in.  The long-term plan is to sell the fund's equity either back to the entrepreneur or to larger funds, and return any revenue to the non-profit to support their mission.

So far Agora has worked with 63 companies - with its fund investing in only a small portion of these - and promoted entrepreneurship to thousands of individuals in Nicaragua.  And while many enterprise development organizations have a very narrow focus, Agora is addressing three key constraints - managerial talent, access to markets, and access to finance - faced by entrepreneurs around the world.  Ultimately Ben and his team are thinking big - in addition to proving their model, expanding into other countries, and developing micro venture capital investments as an asset class, Agora also wants to change mindsets and increase public appreciation and celebration of entrepreneurs as heroes of development.

"I love the content on NextBillion!" he said.  I had just finished giving a talk about the base of the pyramid at NYU, when a graduate student approached me along with his friend, who works for a social investment fund.  "Me too; it's fantastic" said the friend, "but can you do something about the design?"

If you run a web site, and someone tells you that they love the content, it's the professional equivalent of someone telling you that you have a nice personality.  True meaning: you're just not that hot.  Rejection stories aside, we get it.  We've listened, brainstormed, tested, re-tested, built, re-built... and today we're pleased to introduce the new version of NextBillion.net.

The first thing you'll notice about NextBillion is the design - we've re-branded the entire site, bringing new colors and visuals into the mix.  The new design is fantastic - a credit to our friends at Modo Design Group - but we hope you'll stay longer  than a glance and discover some of the powerful new features we've built.

First and foremost, we've brought tags into the mix; these tags (and our powerful new search index) drive a "related stories" module that you will see alongside all blog posts and news stories.  Not only that, but we've given up control of what's "popular" and put it in readers' hands.  A new zero-to-five star rating system - at the bottom of every post - determines the most popular posts.  You'll have to post a comment in order to rate a story; we wanted to discourage click fraud here and encourage y'all to tell us what you REALLY think.

There are some new sections, too... and some old ones are missing.  We heard over and over that there was a real need for research materials - a curated database of sorts, geared towards the students, academics and policy wonks that visit NextBillion.  So we re-vamped the old "Resources" section and turned it into "Research."  If we're missing something in there - a book, paper, PowerPoint, link, whatever - please suggest it and we'll take a look.

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My friend David, NextBillion reader and BOPreneur, pinged me last night and rightly asked why NextBillion.net has been slower than usual these days, missing a few of big news pieces that relate to the base of the pyramid and development through enterprise. He's right. The truth is Rob and I have been with our hair on fire testing and working on what will very soon be the new face of this website.

In fact, if everything goes according to plan, this will be the last post I publish in NextBillion as it looks and feels now! Anyhow, it's Friday and I do want to take the opportunity to point you to some relevant media pieces for you to catch up with this weekend, in case you haven't yet.

The first (hat tip, David) is a 14-page special report about the middle classes published in The Economist last week. Why is this relevant to our readers? Well, NextBillion.net is based on the premise that business, enterprise and the profit motive can serve the poor enhancing their dignity and choice so they can climb the ladder up to that level of the pyramid.

I have read it slowly, re-reading many paragraphs. It offers great elements of analysis and a great excuse to slow down for a second and reflect on the various and complex implications (economic, environmental, political and social) of the fact that more and more of the world's population are now part of the middle class. An indepth analysis of that report is in order and I've made a note to make sure that happens some time soon.

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iBoP Asia recently announced the winners of their first small grants competition and the second competition is coming up soon. I wanted to highlight the grants program for our readers at NextBillion, as I know that many of you have the ideas they are looking for.

A joint collaboration between the Ateneo School of Government (ASoG) in the Philippines and the International Development Research Centre (IDRC) in Canada, iBoP Asia seeks to advance the research agenda on science and technological innovations for the base of the pyramid in SouthEast Asia and does so through policy advocacy, conferences, small grants competitions, and more.

The winners from the first call for proposals can be found on iBoP's website and include Niti Bhan's Emerging Futures Lab, which, as a consultancy for BoP markets, will be looking at payment strategies and practices of the BoP with limited and irregular income. Several of the winners focus on improving farming practices, including the Sub-Plant Protection Department of Angiang Province in Vietnam and the Philippine Rice Research Institute, which focuses on building and sustaining the rice economy in the Philippines, through policy advocacy and providing farmers with greater access to technology.

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Position: Innovative Finance Role

Location: Geneva, Switzerland

Organization: The Global Alliance for Improved Nutrition (GAIN)'s mission is to reduce malnutrition through the use of food fortification and other strategies aimed at improving the health and nutrition of populations at risk. GAIN has set itself the target of reaching 1 billion people of whom 500 million are in target groups most vulnerable to malnutrition. GAIN builds alliances between public and private partners around common objectives, and provides financial support and technical expertise.

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Position: Business Development Manager - Marketing

Location: New York, NY

Organization: Acumen Fund is a global non-profit venture capital fund, focused on supporting the delivery of critical services – water, health, housing, energy – at affordable prices to the four billion people earning less than four dollars a day in India, Pakistan, and East Africa.  Acumen Fund seeks to prove that small amounts of philanthropic capital, combined with large doses of business acumen, can build thriving enterprises that serve vast numbers of the poor.  Acumen Fund has successfully impacted over 10 million lives so far, through over $30 million invested in South Asia and Africa. Its country offices in India, Pakistan and Kenya work closely with the New York team to identify and support local social enterprises.   Through our investments we address problems of poverty using market based approaches, demonstrating that there is a role for patient capital, intensive management assistance, and knowledge sharing at the base of the pyramid.  Since 2001, Acumen Fund has functioned under a philanthropic capital model, raising donations to fund investments in enterprises that deliver health, water, housing or energy to the poor.

Description: Acumen Fund’s Business Development team is responsible for raising philanthropic capital for Acumen Fund and for managing relationships across our extended community of Partners (donors), Advisors and supporters.

Acumen Fund is looking to create a step change in terms of awareness, excitement, and membership in our community of supporters and advocates – from tens of thousands to hundreds of thousands, and someday millions of people who believe that markets and entrepreneurship have a central role to play in the global fight on poverty.

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As I was perusing my Sunday New York Times this past week, two stories stood out to me. Both mentioned migrants struggling to keep jobs in the developed nations where they were working. One article profiled Alexandrina Ciurea, a Romanian cleaning woman working in Rome; the other described Ignace Abdulx, a laid-off Senegalese metalworker worker in Paris.

Both Ciurea and Abdulx had been sending considerable remittances back to their families; Abdulx’s amounted to 200 euros per month for his wife and three children, yet neither knew if their adopted homelands would provide them with continued opportunity. I found their stories to be very interesting, and began to ponder the effects of slowing remittances and potential reverse migration to developing nations.

As many families living at the Base of the Pyramid are dependent on remittances, shifts in remittances and migration are both very timely and potentially worrisome trends. As Manuel pointed out when he wrote on two leading reports on remittances in 2008, "Remittances are estimated to have more than tripled as a share of GDP since the 1980s, rising from 1.1% of GDP to 3.6% of GDP in 2005."

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Editor's note: In December, Professor Aneel Karnani published an article in the Stanford Social Innovation Review entitled, "Romanticizing the Poor."  At the time, we posted about it here on NextBillion.net and suggested that our review of the article would be forthcoming; it has not, and for that, we apologize.

In the meantime, Staff Writer Moses Lee has provided his analysis of the article in his post, "Are the Poor Really Entrepreneurial?"

What's more, Professor Karnani and Staff Writer Al Hammond have engaged in a lively e-mail debate about the article.  Both Karnani and Hammond have been kind enough to give permission to NextBillion.net to post the content of their debate here.  The first installment - a post by Al Hammond - is available here.  This is the second installment is Aneel Karnani's response to Hammond's post.

By Aneel Karnani

Al, I am sorry that you are not happy with my article on the BOP — that certainly was not my intention.   I do appreciate your sending me your critique in advance of publication.  Incidentally, I too had sent you my first working paper arguing against BOP way back in 2006, well in advance of publication.  I had send the same paper at the same time to CK Prahalad, and he did respond publicly on nextbillion.net.

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Editor's note: In December, Professor Aneel Karnani published an article in the Stanford Social Innovation Review entitled, "Romanticizing the Poor."  At the time, we posted about it here on NextBillion.net and suggested that our review of the article would be forthcoming; it has not, and for that, we apologize.

In the meantime, Staff Writer Moses Lee has provided his analysis of the article in his post, "Are the Poor Really Entrepreneurial?"

What's more, Professor Karnani and Staff Writer Al Hammond have engaged in a lively e-mail debate about the article.  Both Karnani and Hammond have been kind enough to give permission to NextBillion.net to post the content of their debate here.  The first installment - a post by Al Hammond - follows.

By Al Hammond

I'm writing this in India, having just spent the day in a rural part of Punjab seeing how a market-based strategy is bringing clean drinking water to villages that have had none. The point of the trip is to plan in detail how we leverage this successful BOP business to bring modern healthcare, as well as clean water, to low-income rural communities.

From this perspective, most of what Mr. Karnani says seems just silly—armchair theorizing. His numbers are wrong—as we have already explained in detail elsewhere, although he does not acknowledge the criticism.  And he misquotes me and attributes words to me that I’ve never spoken, thus underscoring his questionable scholarship and the sloppy editorial work of the journal that published him. But it is his larger critique that is more troubling.

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Last month, Aneel Karnani wrote in the Stanford Social Innovation Review an article entitled, "Romanticizing the Poor."  In it, he states, " ...romanticized views of BoP people as value-conscious consumers and resilient entrepreneurs are not only false, but also harmful." In the article, Karnani spends a lot of time debunking the view that people in dire straits are well-informed and rational economic actors. In the end, he exhorts governments and policy makers to get more involved in the fight against poverty.

Personally, I think a lot of what Karnani says in the article is true.  Particularly on the topic of entrepreneurship, (which is what I'd like to focus on in this entry). It's just wrong to assume that the majority of those living at the BoP are entrepreneurial. Recently, I spoke to a friend who is working on a BoP project that seeks to help the poor start microenterprises.  The project selects a handful of people from a poor community and puts them through an entrepreneurship training program.  I asked her what was one of the biggest challenges of the project.  She responded, "That we're trying to train a lot of people to be entrepreneurial who are simply not."

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