ETHAN D. BROOKS: Five Strategies for Success with Social Business Models

One day, in the mid 1970′s, a woman named Sufiya Begum from the rural Bangladeshi village of Jobra told a visiting man of a problem many of the villagers were having. The people, despite being entrepreneurially inclined, were poverty stricken. Local banks refused to lend them money to finance their businesses, claiming that such poor people had no collateral to back the desired loans, and couldn’t be trusted to repay. Having nowhere else to go they were forced to consult local loan sharks who promised to finance their ventures – for Sufiya this was the crafting of bamboo chairs – so long as they agreed to sell him all their goods at a price he would set. Strangely enough, the price always came up somewhat short of the entrepreneurs’ expenses, forcing them to borrow more money, and perpetuating a cycle of never ending poverty. Sufiya spoke of all of this to the visitor and that man, Muhammad Yunus, went on to found Grameen Bank, and change the world.

Grameen Bank is among the oldest, and most successful social enterprises. It was founded on the ideas that conventional business wisdom isn’t always right, and that there is a higher purpose to business than simply maximizing financial profit. There’s a social profit to be had as well by helping people to help themselves out of poverty. Today Grameen Bank lends to more than 7.5 million borrowers. Among those nearly 70% have lifted themselves above the poverty line through their enterprises. Grameen has proven that conventional wisdom can be wrong, with a 98.4% repayment rate on their loans, and has proven that a non-exploitative social enterprise can be financially viable, with profits posted every year of its existence except ’83, ’91, and ’92. Grameen Bank is now part of a larger family of nearly 30 socially responsible enterprises working across a spectrum of problems – access to clean water, healthy food for children, and rural cell phone communication – and is doing a tremendous job in each. What follows is a look at the five key strategies they have found to be necessary for success among their ventures. For full access to their engaging and informative write-up, click here. And for more info on Grameen Bank’s evolution and experimentation in first-world countries check our their film To Catch A Dollar  which can be rented on youtube for $4.

Strategy 1: Challenge Conventional Wisdom

The ability to challenge conventional wisdom, to take an accepted idea and entertain the thought of turning it on its head, is among an entrepreneur’s most important skills. This doesn’t mean you must always reject the conventional way of doing a thing. It would likely be difficult to sell all your email contacts on the idea of communicating via, say, smoke signals, because that’s just not conventional right now. But always remember that the only reason we moved past smoke signals in the first place is because someone had the audacity to ask if it could be done better. Entertaining non-conventional ideas is the only way to move forward.

Grameen Bank, and it’s sister organizations have done this time and time again. When they first started, the conventional idea was that you could not offer a loan to someone without collateral. Collateral was all that motivated a person to repay. What Yunus and his associates did was alter the way the loan worked from top to bottom. Rather than a large loan being given to a single person, borrowers needed to create groups of five. The first two would be given a loan, and only when they successfully adhered to the repayment schedule (itself changed to small weekly payments rather than large monthly ones) would the remainder become eligible for loans. To maintain eligibility, the entire group needed to continue making payments on time. In this way every member was invested in every other person’s success. This group support, combined with the associated peer pressure not to fail, has led to a 98.4% repayment rate among people who were considered unfit for even the slightest trust.

Author Tim Ferriss is famous for this kind of thinking. If you’ve never heard of him before I strongly suggest you head on over and check out his website where you’ll find articles on everything from language learning and marketing, to sales and body-building which all seem to break the rules on what’s possible. His books are fantastic too, and have been gifted to more of my friends and family than I can even remember.

Strategy 2: Create Strategic Partnerships

This is another tactic culled straight from the business world, which has crossover appeal no matter what field you work in. Simply put there’s no such thing as a self made man or woman. Even Henry Ford admitted that his most important skill was the ability to get the right group of people into a room.

Cooperating gives you access to resources and knowledge you never had before. For Grameen, this meant partnering with the cell service provider Telenor when working to bring communication access to rural Bangladesh. Remember though that partnerships are about two groups bringing something to the table. In this case, Telenor brought the know-how for building a cellular network, and Grameen brought its decades of experience in developing world markets. Identify those people or groups you think could provide strong opportunities to your enterprise and then, this is the important part, figure out what it is you can offer them in return.

Strong partnerships provide another opportunity too: Barriers to entry for your opposition. Now I know that to some this may seem counter to the good-willed nature of Social Enterprise. But remember that while you may not be competeing for market share in the traditional corporate sense, you are competing against those people who would exploit your market for their own profit. Recall the loan sharks already active in the village of Jobra. It is through strong strategic partnerships, and innovative enterprise structures that you seek to cut off the access of people like this to your market.

Strategy 3: Experimentation

Experimentation is crucial because your business, or project doesn’t exist in a vacuum. Multiple forces – pricing, promotion, distribution network, etc – affect your success. You must constantly observe how changes in each affect overall success in an attempt to find an effective way of doing things. It is one thing to promise yourself that you’ll pay careful attention to such things. It’s quite another to design and run a formal experiment. According to a fantastic article in the Harvard Business Review (Register for free to access the whole piece, including 7 rules for business experiments) a business experiment requires two key ingredients to be useful.

First, it needs a control group, or a group that experiences no change, to serve as a comparison for those that do. Without a control, you can’t establish causality, you can only guess at it. Second, you need a feedback loop. This is another way of saying you need to choose something to measure. There are two types of measurable responses that the article discusses – behavioral, and perceptual. Perceptual is how a member of the experimental group thinks they will respond to your change. This is often obtained via surveys, but can be unreliable if you’re experimenting with an unconventional idea. People may simply not be able to fully grasp, or project accurate feelings for, what you’re talking about. The second, and more conclusive type of feedback is behavioral. This measures someone’s actual response to a change. Planning ahead of time allows you to put measures in place to collect accurate feedback, and maintaining a control group allows you to compare the effects of your experiment more assuredly.

In 1996, when Grameen partnered with Telenor to bring cellular phone service to rural Bangladesh, they received a business forecast from a UK consultant which projected the market to be a paltry 250,000 subscribers in the first decade. They proceeded though, knowing that only experimentation could yield accurate results, and by 2005 had an astonishing 8 million subscribers. That figure rose to 40 million by 2008. In terms of accuracy, experimental data trumps forecasts every time.

Strategy 4: Value Stakeholders, Not Just Shareholders

This is one of the key principles which sets social business apart from conventional. Every business has stakeholders, that is people who have interest in the company’s performance. Conventional business models tend to favor shareholders, who have breathed life into the company through stock purchase, and expect to see a return. But social business recognizes their responsibility to the larger whole. The other participants in the business who may not fit the traditional role of shareholder, but definitely have something staked in the business’s actions. They can include employees, who would otherwise be jobless, clients who rely on the business for a particular good or service, even the general public is considered a stakeholder, and must be taken into account when making business decisions.

R. Edward Freeman, a professor at Darden University in Virginia, is particularly well known his pioneering of stakeholder theory. He literally wrote the book, contributing the chapters on stakeholder theory to the world’s first Dictionary of Corporate Social Responsibility. Below is a fantastic video introduction to the concept, and its application in the real world.

Strategy 5: State Your Objective Clearly

Most of these strategies are useful whether you’re running a non-profit, a for-profit, or a social enterprise, but this one is particularly important to the social enterprise when large sums of cash hang in the balance.

Grameen Phone, an enterprise undertaken by both Grameen Bank and Telenor, began with a unique structure. Rather than selling phones and data plans to each individual villager, many of whom could never afford them, the phones were sold to entrepreneurs called Grameen Ladies. These ladies financed their phone, and the purchasing of bulk minutes through loans from Grameen Bank. They would then rent the phone on a per minute basis to anyone in the village that needed to make a call. The model was an instant success, and quickly grew to surpass all projections of its size. As it grew the idea arose to give the poor the majority shares in the business, allowing them access to its profit margins. However, Grameen’s partner Telenor didn’t agree with the idea and refused to sell. Ever since then, Grameen has been very careful to spell out its objectives before entering into any kind of partnership.

Define your objectives as clearly as you can. In this day and age, when the snuggy is a multi-million dollar idea, its possible to find someone to buy into anything, as long as you’re clear about your goals. Forget whether they’re realistic or not, and don’t be afraid to dream big. Muhammad Yunus, founder of Grameen Bank, has gone on to receive a Congressional Gold Medal, the Presidential Medal of Freedom, a Nobel Peace Prize, Sydney Peace Prize, Seoul Peace Prize, and 50 honorary Doctorates Degrees from schools in twenty countries. These are but a sampling of many, many more honors and awards he’s been recognized with. All of this the result of a simple idea, to lend a woman named Sufiya – from the rural village of Jobra – $27 to buy her freedom from poverty.

ETHAN D. BROOKS

@EthanDBrooks

Ethan is a traveler and a story-teller. He is the creator of An American Afoot, where he does all his own stunts, despite public concern for his pretty face. He's got a passion for entrepreneurship, especially when it's working to solve social problems, and hopes to use stories to inform and inspire others who want to make a change.

MELISSA JUN ROWLEY: How Life Below the Line Affects Us All

There are lines everywhere. Lines being drawn, crossed, walked around, and even erased when necessary, or when someone has the power to do so. There is an ugly, unjust line that isn’t serving any of us, and killing many who live below it. This is the poverty line. Today, 1.2 billion people around the world live at or below the poverty level, and they exist on $1.50 per day. This sounds unfathomable, but it’s a real fact and a real crisis. To address the issue, the Global Poverty Project created the Live Below the Line campaign challenging everyone to spend five consecutive days eating and drinking on just $1.50 per day.

The challenge runs from April 29 to May 3rd. I started a couple of days early on behalf of UNICEF. Since I’m traveling most of this week, I figured it would be wise to begin the challenge while I’m stationary and more in control of my schedule. So far, so good.

My breakfasts have consisted of oatmeal, bananas and honey. For lunch, I’ve been eating a baked potato a day, and for dinner I’ve been gobbling up  half a cup of rice mixed with vegetables.

Am I hungry? A little. Am low in energy? No. Am I truly living below the line? No. To do that I would need to experience living without a roof over my head, clean running water, sanitized food, and a number of other elements I’ve taken for granted, which would be viewed as luxuries to people surviving in impoverished communities across the globe.

Am I becoming more and more conscious about what my body consumes, and how gluttonous and wasteful I normally am? Oh, yes. There is no need to eat nearly the amount of food that I ingest on a regular basis. The sugar, the large portions, the plastic and paper packaging of food, and the money that goes into it all is JUST. SO. EXCESSIVE.

Someone asked me if I felt that participating in this campaign was life-changing. I don’t know that I would describe the experience as such, but I will say that it is life-affirming and awakening. I have so much to be thankful for, and I don’t count my blessings nearly enough. To have a voice, the ability to write, and the means to pursue all my heart’s aspirations is a gift. More so than that, it’s a miracle. I say this because I entered the world without a family. Fortunate enough to be adopted, I’ve lived a charmed life. There were times that I struggled. There were times I was broke. But there has never been a time that I lived below the line, and that is because of the good will and compassion of others.

So, this just makes me wonder. If thousands of people collectively bestowed their good will and compassion to those in need, could’t more miracles arise?

There are people across the globe, some in the backyards of our very own cities, who have no voice because no one is listening. And if they continue to endure living in poverty their children will grow up in poverty, and their children’s children will be raised in poverty. And these crimes against humanity may lead to those children leading lives of crime, in order to survive. Counter-productivity, the loss of goods and services, and the tragedies that occur because of such extreme aridity are just a few reasons to combat destitution to the best of our ability.

While the Live Below The Line campaign is about engaging our moral fiber to benefit those who cannot help themselves, its potential impact can transcend that monumental summit and shift the human condition. Global poverty affects all of us, and we can all do something to squash it.

Thanks to everyone who has donated so far, we’ve already surpassed my initial  fundraising goal. Thank you and good luck to the thousands of people around the world who are participating in the program starting today. It is an absolute privilege and honor to be in your company. Together, we can erase the poverty line and make miracles happen.

ORIGINALLY PUBLISHED ON INCENTIVIZE

MELISSSA JUN ROWLEY

@MelissaRowley

Melissa

Melissa is a journalist and impact producer focused on promoting STEAM (Science, Technology, Engineering, Art & Math) to advance humanity.

TAYLOR CONROY: Why Working Your Bag Off Is Spiritual

In my favourite book of all time, Autobiography of a Yogi, there is a story about a normal 33-year-old guy in India who is approached by an enlightened guru who helps him to remember his past lifetimes when he too was an enlightened master. The guru, wanting this normal guy to become enlightened again, materializes all the wealth that the normal guy could ever want, right before his eyes. The guru does this so all of the last earthly desire the normal guy had (being really wealthy) could be satisfied so he can move past it and onto enlightenment. The guru says that desire is what chains us to the reincarnation wheel.

While many “spiritual” people speak of wanting less, desiring nothing, and frown upon striving for money or material success, I believe satisfying earthly desires can be one the most spiritual things you can do. I don’t mean just trying to have the biggest boat for the sake of being able to say you have the biggest boat. I mean acknowledging your inner desires and looking them right in the eye. And when you feel like attaining them is part of your growth and purpose, GO FOR IT, regardless of if it is focused on material gain.

While many people cite their darkest hours (like being on their death bed, or losing everything) as the times they learned what is truly important in life, I had a number of different (you could say opposite) experiences. When I was 25, I busted my ass for 365 days straight selling real estate to reach a highly coveted award level, and to get the big plaque that came with it. After reaching that goal (becoming the highest grossing new Realtor in North America), I relaxed for the first time in a year and enjoyed it. Well, I enjoyed it until I realized that if I wanted to keep my success going, I would need to go out and bust my hump for another year to win another big award. It was when I reached the top of my game that I realized that the great feeling success brings is temporary, fleeting, not real, illusory. It is not anything close to true happiness.

This scenario played out over and over again in my 20s. Reaching higher and higher goals in business, physical fitness, romantic relationships, and finances. Each became less and less fulfilling to the point where I said “screw it!”, sold everything, and took up social entrepreneurship full time.

It was largely because of hitting huge goals that I abandoned the notion of “more” equaling happiness. It was because of hitting goals that my entire life is now dedicated to service. It’s not that I made a boatload of cash and became a wealthy philanthropist. Heck no. I sold everything I owned to fund my current venture that has now funded 60 schools and libraries in 9 developing countries for 60,000 kids, and am flat broke because of it.

But you would not believe how great I sleep at night. With a big, stupid smile on my face.

Why? Because a number in a bank account doesn’t define me. And nor does it define you.

Like the normal guy from India, I had desires that needed to be fulfilled. Thanks to going after those desires 100%, I can now say with personal experience that money, success, and hitting goals don’t mean squat. What matters to me is loving yourself, serving others, and taking pleasure in simplicity.

Striving after material success in my 20s ended up being the most spiritual thing I could have done. It was my way of materializing my desires so I could see the illusion they actually are. I am nowhere closer to enlightenment than anyone reading this, but I do know what makes me happy, and that feels really good.

TAYLOR CONROY

@destroynormal

Taylor is the founder of Change Heroes and Destroy Normal Consulting, which focus on innovative philanthropy and building projects like schools, wells, and libraries all over the developing world. His most recent efforts have seen schools funded in India, Nepal, Kenya, Sierra Leone, and Tanzania, impacting over 30,000 children. He has set foot on every continent, dozens of countries, and has worked as a professional fire fighter, real estate broker, and currently as an avid social entrepreneur.

STALIN K.: A Criminal State of Affairs.

THERE ARE ENOUGH LAWS TO TACKLE IT.

THEN WHY IS UNTOUCHABILITY STILL PERPETUATED?

Ten Years ago, I started on a journey to document practices of untouchability across several states and religions of India. 25,000 kilometres, 9,000 minutes of footage and four years later, I put together a documentary called India Untouched. The main reason for making this film was to challenge the belief of most Indians that untouchability is a thing of the past.

In the years since the making of that film, little has changed. We still receive reports of barber shops refusing to shave Dalits. Homeowners unwilling to rent their houses to Dalits. Children segregated and discriminated in schools, women not allowed to draw water from wells, families pushed out of temples. Segregated mosques, churches, even crematoriums. Pervasive violence aimed at those who challenge caste discrimination. Social and economic boycotts for those who dare to transgress caste boundaries. Newly-weds chased and killed because they chose to marry outside their own caste. Rapes. Acid attacks. The list goes on shamelessly.

What is more shameful is that these practices are manifestations of a belief that views certain castes as nothing but an impure sect, which should remain servile and accepting of its lesser status. Our failure is to see this belief as endorsing of and perpetuating criminal behaviour.

Article 17 of the Indian Constitution states that “Untouchability is abolished and its practice in any form is forbidden. The enforcement of any disability arising out of untouchability shall be an offence punishable in accordance with law.” However, society continues to look at untouchability as a social given, grounded in ‘tradition’. Instead, we should see such practices for what they are: criminal acts. If your house were burgled, you would expect the case to be treated as a criminal act/offence. Such a luxury is not afforded, however, to Dalits facing discrimination and persecution. The laws in place to address the scourge of caste-based discrimination may be progressive, but the mechanisms that exist to enforce legislation are regressive.

A large part of the problem is that law enforcement agencies operate in a reactive rather than a proactive manner. Despite the prevalence of caste-based behaviour leading to untouchability (criminal offences) these agencies wait for an aggrieved party to file a complaint — and report violation of Article 17 — rather than do their job in enforcing the law. How else does one explain the fact that police stations and courts have not taken any suo moto cognizance of these everyday events? How else can we understand that there are no public or government campaigns to remind citizens that untouchability has been abolished, and that those practicing it will be treated as criminals? In order to fall in line with the shifted morality and ethics of our time, we need a strong and proactive law enforcement mechanism. We do not have this in India.

On 14 April 2012, we launched a campaign at Video Volunteers (a media and human rights organisation) to draw attention to the issue of untouchability. To date, we have collated 30 videos that document breaches of Article 17. Together with the videos, we collected 2,800 signatures that were sent to the National Commission for Scheduled Castes (NCSC) with an appeal that the videos be taken as evidences of offences, and that those involved be prosecuted. Despite submitting the petition and video evidence twice over, we have not received any sort of acknowledgement — let alone action — from the NCSC. We have now sought answers with an application under the RTI Act. It’s a sign of the times when one needs to file an RTI with the institution responsible for protecting the rights of Scheduled Castes, just to find out what is going on.

As a society, when we hear about untouchability practices, we should feel outraged, as we would with other criminal acts like murder and rape. It’s time we accepted that the practice of untouchability is not the vestigial remains of some backward, social phenomenon or tradition: it’s a criminal offence. Let’s start calling it what it is.

ORIGINALLY PUBLISHED IN TEHELKA.COM

Stalin K. 

@stalink 

Stalin is the Managing Trustee of Video Volunteers India. He is a leading voice in the community media movement in India (including as co-drafter of the government’s recent community radio policy), a human rights activist focused on issues of caste and communal violence, an award-winning filmmaker (screened at Hamptons and winner of the Mumbai International Film Festival and Indo-american Arts Council Film Fest in NY, Earth VIsion Film Festival, Tokyo), and a sought after trainer and guest lecturer in media and human rights at universities around the world. He has produced 25 films on development issues, set up two community radio stations, designed a dozen rights-based campaigns, and conducted over 300 training workshops. Stalin has worked with more than 100 NGOs and regularly distributes his films to over 1000 groups, placing him at the heart of India’s NGO networks.

SHANNON GALPIN: Behind the Scenes of the Afghan Dreamers Project

ART HAS A POWER to reach people viscerally in a way that other work doesn’t. It has the power to crack the walls of apathy and cynicism that people build up around themselves, and break open the vision of what could be. The power is in the storytelling; whether it’s visual art, music, or text, it all comes back to the power of voice.

Afghanistan is probably best known in the West for its poverty, oppression, terrorism, and ongoing conflict. None of this is untrue, but it’s not all there is. Against this backdrop, dreamers and visionaries work — artists, musicians, innovators, activists, media moguls, and politicians. Just as in any other country, the dreamers and free thinkers are often those whose stories are quieter than the stories of violence and anger that shout more loudly. That doesn’t make them less powerful.

Afghan Dreamers is all about the power of voice. Three months ago, I set up a series of life-size photography exhibitions called Streets of Afghanistan. This project was all about voice, about storytelling, and by setting it up as a series of public street-art exhibitions, I wanted to challenge the status quo of what’s seen as possible here. I was shocked to hear Afghan American acquaintances say it was too dangerous, that Afghans wouldn’t understand it. What’s not to understand about art? What’s not to understand about voice?

Afghan Dreamers was a project I wanted to pursue after being chosen as a subject for Sharp Stuff’s first book, American Dreamers. I saw myself alongside Arianna Huffington, Chris Anderson, the founder of TED, and other amazing dreamers and was struck by the concept of the so-called American Dream. It’s not the American Dream. It’s everyone’s dream. EVERYONE dreams of a better life for their children, their country, the world. Dreamers and visionaries are not limited to the West or the First World. Dreamers come out of villages in northern Afghanistan. Musicians are rocking out in Kabul. Media moguls are broadening the landscape and the information output of television programming that reaches deep into nearly every corner of Afghanistan. It is foolish to think a war zone doesn’t breed dreamers, poets, entrepreneurs, musicians, athletes, and activists.

I wanted to continue to challenge the idea of what Afghanistan is, beyond Streets of Afghanistan, and Sharp Stuff was behind me, willing to produce the book if I could gather the dreamers. The amazingly talented and fearless Anna Brones is joining me again for this upcoming trip to help me coauthor the book. Last November, she accompanied me to help with the Streets of Afghanistan launch, diving headfirst into the culture and language. I can’t think of a better writer-in-arms for this project.

The goal of Afghan Dreamers is to amplify voices and broaden the view of Afghanistan at a time when most people in America want to turn their back on the region. Making people aware of our common humanity, our common dreams, our common bonds strengthens the ability to believe that change is possible.

The dreamers include the founder of Zarif Designs, Zolaykha Sherzad, who dreamed of a clothing line that combined traditional Afghan fabrics and textures with modern designs; Afghanistan’s first heavy metal band, District Unknown, featured in Rolling Stone; musician and filmmaker Ariana Delwari; art professor and street artist Shamsia Hassani; singer-songwriter Fereshta; along with the athletes dreaming of the Olympics, the mayor that dreams of a greener Kabul, the female parliamentarian, the media mogul, the female activists, the entrepreneurs, and the comedian.

What, Afghanistan can’t have a comedian?

The initial crowdfunding campaign on Rally will not just fund production of the book — it will also fund a Dreamer’s Project developed in conjunction with Shamsia, to be shared with the Afghan Dreamers community. Sharp Stuff have also agreed to put a percentage of sales of the book into a Dreamer’s Fund, in conjunction with Mountain2Mountain, that will go towards future projects with the dreamers involved, continuing to give back to those who dare to dream.

It is also our mutual hope that we can produce this book in Dari and Pashtun for Afghan readers as well, so that this isn’t a Western project about Afghanistan — it’s a project about voice that has no geographical boundaries.

But we need your help to make this project a success. We need your voice to support this project and make it heard. Because these stories should be louder than the endless narrative of violence, oppression, and poverty. These stories should shout out: We have dreams, and we can change the world.

Read more at http://matadornetwork.com/change/behind-the-scenes-of-the-afghan-dreamers-project/#llKEXJFtIbqk8hFO.99 

ORIGINALLY PUBLISHED ON MATADOR NETWORK

SHANNON GALPIN  @sgalpin 

Fueled by her own experience with violence against women and inspired by becoming a mother, Shannon founded Mountain2Mountain, a nonprofit whose mission is to provide education and opportunities to women in conflict zones. An avid mountain biker continually focused on breaking gender barriers, in 2009 she became the first woman to mountain bike in Afghanistan, a country where the culture does not permit women to ride bikes. A TEDx speaker, she has been featured on Dateline NBC, Huffington Post, and Outside Magazine and is a subject in the documentary film series, MoveShake.