1M/1M – only for profit, sustainable social businesses
During this week’s roundtable, one of the questions that I answered was about the One Million by One Millionprogram’s plans around supporting social enterprises. Well, 1M/1M is focused on helping businesses generate $1M in annual revenue, whatever be the nature of the business. We see a lot of businesses that can be characterized as social enterprises, ranging from education to rural development businesses. But our goal is to make sure that these businesses are sustainable, have customers, revenues, and profits. We do not and will not have any particular focus on non-profits that are dependent upon funding from charities. While there may be initial grants that launch businesses and get them off the ground, philosophically, we believe that a model of self-sustaining development is the key to a stable global economic system.
Now, as for today’s entrepreneurs, first up today was Hardika Shah presenting Mesoloan, a small enterprise loan program for Indian entrepreneurs in the $2,000-$20,000 loan size bracket. This is a segment that is well beyond traditional micro-finance, but also somewhat below the scope of the regular financial institutions. Hardika intends to build a financial institution focused on this segment with financing from social entrepreneurship oriented venture funds like Unitus.
It turns out that in my Vision India 2020 book, I have a similar project called FDBI. My personal analysis is that to make a financial institution successful by catering to the said segment will require a tight control of the types of businesses that are financed. This is why I have focused on micro-franchise oriented businesses where a tightly controlled structure is replicated across a large number of small businesses. My recommendation to Hardika is to study the FDBI project.
Next Annette McClellan presented DaisyClip, a non-surgical contraception device for women that she is in the process of syndicating a $1.8 million financing round for. Her market penetration plan is to start with India, and she wanted to know what kinds of options / connections we could provide. Well, there are some Government and NGO contacts that I have in mind for her to explore. However, she will, of course, need to clear the clinical trials and get the proper regulatory approvals.
Our next presenter was David Ciccarelli discussing Voices.com, an interesting niche marketplace for freelance voice talent used by businesses and entertainment companies. David has 25,000 freelancers of which about 20% are paying subscribers (a very good number). He also has 120,000 companies using the talent from his marketplace.
David asked how to convert more of his users to paying users. I pointed him to the oDesk case study in which I have discussed the strategy for a marketplace in great detail. David is also struggling with the notion of his community taking the transactions offline. Well, eLance has experienced similar problems, and I asked David to concentrate on communicating to his user base of service providers the value of building a reputation through references and reviews / customer feedback. Taking the transaction offline would mean the service provider would not get any feedback from the transaction. Nor will (s)he get any assistance with dispute resolution, for example. Overall, I felt that making the reputation building features available only to the premium members would be a good way to convert more free users to paying customers.
Then Tarini Kinkar discussed a media concept for marketing green products and services to Indian consumers. The business idea was not very well fleshed out, and needs a lot of work still. One of my key concerns is that the level of awareness about green / environmentally conscious issues is very, very low in India. Also, the business model for the business is unclear.
Last up Alicia Butler Pierre pitched Klonos, a consulting service focused on small companies with 2 – 10 employees and at least $250k in revenue. Alicia wants to help align the tasks and staffing, goal setting, and objective management of these companies and charge $15-20k per company. She is also considering developing software to address these issues. I advised her to become a value added reseller of SuccessFactors, a company that I have anin-depth case study about on my blog. SuccessFactors is a talent management platform that has built-in functionality for task and objective management for making workforces operate successfully. I do not see any point in Alicia reinventing this wheel.
It is clear to me, after doing these coaching sessions for over two years, that entrepreneurs need a lot more training on positioning and go-to-market. As such, I have created video lecture modules with case studies in the 1M/1M premium lounge on these topics with very specific guidance on what analysis to perform and how. The easiest way for me to teach a large number of entrepreneurs some of these basics is to have you spend 30-40 hours on the curriculum I have created, and THEN have you come work with me on refining your strategies and positioning.
I have thought a lot about how to make entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. Over the upcoming months, the program will become much, much richer. But for the moment, we can get you started and give you a significant jump-start.
About Sramana Mitra
Sramana Mitra is a technology entrepreneur and strategy consultant in Silicon Valley. She has founded three companies, writes a business blog, Sramana Mitra On Strategy, and runs the 1M/1M initiative. She has a master’s degree in electrical engineering and computer science from the Massachusetts Institute of Technology. Her Entrepreneur Journeys book series, Entrepreneur Journeys, Bootstrapping: Weapon Of Mass Reconstruction, Positioning: How To Test, Validate, and Bring Your Idea To Market and her latest volume Innovation: Need Of The Hour, as well as Vision India 2020, are all available from Amazon.