Social enterprises and impact metrics: 7 startups, 7 tipsMadanmohan Rao
Social enterprises have an even tougher challenge than startups that are focused largely on the tech or business sector. These range from partnerships and mentoring to business models and talent sourcing.
TiE Bangalore recently organised the Startup Showcase on Social Impact at NUMA Bengaluru, anchored by Villgro. Along with pitches by seven social enterprises, the event included discussion and tips by an expert panel of jurors: Madan Padaki, Founder of Head Held High Foundation; Aruna Raman, India Programme Director at Acara; Ananth Aravamudan, Senior Advisor, Villgro; and Sneha Rajan, Senior Associate, Unitus Seed Fund.
Seven startups pitched to the jury, followed by a discussion with the experts and audience. Attendees could offer their own assessments and comments through a Crowd Product app. Tips offered by the jurors in the concluding session covered pitch strategies, team composition, go-to-market approaches, and scaling techniques.
Chasing Sun is a platform that allows Indian artisans to access global markets. The domestic market for art, handicrafts, and handlooms is estimated at $7 billion. The platform currently includes micro-sites for 170 artists, 20 artisans, and 55 weaver societies, and offers certification services to ensure quality and trust.
Alma Nourisher addresses child nutrition problems at the pre-school stage and helps parents and teachers flag irregular height, weight, and eating habits. Such preventive programmes can help with nutrition for child improvement. The social enterprise offers guidance, analytics, and knowledge resources for a fee of Rs 300 per child per year.
ShanMukha Innovations, incubated at IISc, has developed a portable solution for detecting contaminants in milk. The palm-sized box uses microfluidic nanotechnology to identify contaminants such as melamine. The device reportedly costs less than Rs 2,500, and each test costs less than Rs 2. The biggest markets for such milk quality testing devices are India, China, and the US.
The Green Salute offers waterless, affordable car cleaning solutions delivered via micro-entrepreneurs to consumer homes and offices. India wastes an estimated 160 billion litres of water a year on car washing; Green Salute uses chemicals which can be applied and scraped off without using water.
Budli.in is a ‘reverse commerce’ site for used gadgets — it buys back smartphones, tablets, and laptops, and then refurbishes them for subsequent sale. India is the world’s fastest growing smartphone market, and each device goes through an average of three consumer purchases in its lifecycle. Channel partners include Amazon and Flipkart. For every product sold, a portion of revenue is donated to charities such as CRY and Give India.
Superheroes Incorporated offers training for youth in life and vocational career skills. Only about 2.3 percent of Indians are estimated to have formal skills training; they also need further help with job placement and career guidance.
Farms2Fork offers farmers water monitoring solutions for better productivity by using less water. The solution includes IoT wireless soil sensors, AI support, and real-time analytics. While earlier agri-tech solutions were based on batch processing of data, Farms2Fork operates on real-time data. For outreach and services, farmers are contacted via farmer associations and networks.
The seven pitches were followed by an insightful panel discussion, with jury experts offering tips on how social entrepreneurs can successfully navigate the ups and downs of their startup journeys (see also The startup question bank: 40 key questions for founders).
- Customer immersion
Ideas and passion are great but social enterprises need a clear problem orientation also. Founders should immerse themselves in audience lives, especially in times of rapid change. On-the-ground realities in emerging economies are shifting rapidly, and founders should have a pulse on effective trends and aspirations. Disciplines like design thinking offer useful and actionable frameworks here.
- Success metrics
Metrics should be holistic and include activity, business, and social impacts. There should be one or two key success metrics for primary focus, and the rest should be supporting or complementary metrics. This helps founders monitor their progress and assists investors in assessing the long-term viability of the venture.
- Well-rounded team
Founders should build a well-rounded team, with a mix of engineering, design, and social science backgrounds. Sometimes founders get too carried away with the technology; having a holistic mix in the core team will help contextualise the offerings, use and impact.
‘Small is beautiful’ seems to be a common attitude in social entrepreneur and NGO circles, but it also helps to be ambitious (investors like that!). The magnitude of India’s social problems calls for bold and ambitious innovators as well to tackle the challenges at scale. (See also my review of the book Scaling up Business Solutions to Social Problems.)
Partnership strategies for social entrepreneurs can be even more complex than those for startups who have a largely tech or business focus. The social cost of failure is high for social enterprises (as compared to merely pivoting an app design); hence collaborative partnerships are important.
Social entrepreneurs should learn how to work with partners who are not social enterprises. They should be clear about their offerings, values, and philosophy. Partnerships are an art and a science. Partners should be picked carefully, and the relationship should evolve over time.
- An effective pitch
Founders will frequently need to pitch to funders, investors, partners, regulators, customers, and employees. Pitch times are usually short, from three to 10 minutes, so founders should not spend too much time on the context, but describe the problem and who faces it.
The pitch should focus less on product features and more on problem resolution. Techniques like storytelling are effective here. (See also How to make a great startup pitch: slides from 20 TiE Bangalore finalists.)
- Risk management
Founders should enumerate the range of risks involved, eg. regulatory and lack of ecosystem trust. Secondary impacts should also be assessed, since some risks are more indirect or diffuse than others.
TiE Bangalore plans to come up with more such thematic knowledge sharing events for social entrepreneurs, along with other clusters such as education, fin-tech and mobile.