Tag Archives: Bottom of the Pyramid

From the Mayan Biosphere to the World

The Pat family is demonstrating how it is possible to insert a rural indigenous community into the global economy and to preserve the environment at the same time.

I have to admit that I have often regarded ventures of this type as exercises in nostalgia rather than as serious business propositions. Also, too many of us in the development community are in a constant quest for scale and large numbers instead of measuring the intensity of impact for those affected. This project made me look at things in a new way.

The Pat family lives in the Mayan community of Tankuche of about 1,000 residents in the state of Campeche in Mexico’s Yucatan Peninsula. They have taken what was formerly a hobby –beekeeping – and turned it into a business that produces as much as 10 tons of pure organic honey a year. The bees are raised on communal and public lands within the Los Petenes biosphere reserve, and their cultivation requires the preservation of the ecology of reserve, thus aligning economic incentives with conservation. Don Vidal, the father of the Pat family, is currently in the process of formalizing the company as a cooperative, which will allow for easier access to financing. Getting past the bureaucrats who delight in making things as difficult as possible is just one of the many challenges he has to overcome.

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Don Vidal is a highly spiritual man and a visionary. He wants to provide an example to the rest of the village of how hard work can help people raise themselves out of poverty. His whole family is entrepreneurial. His wife, Isabel, is involved in providing healthcare, formally and informally, especially to pregnant women in the village. One of their daughters, Josefa, runs an outsourced garment operation employing women of the village and their other daughter commercializes the honey in Cancun. Their son, Rogaciano, currently manages the beekeeping with the help of three employees. Last year, with some public funding and a reinvestment of profits, the family began constructing a collection center. The center still needs about $50,000 to install the bottling operation and to build the warehouse and shipping center that will allow the family to manage not only their own production, but that for another 32 family producers, 8 of whom already produce with Vidal. The idea is to eventually incorporate as many honey producers in the village as possible.

The commercialization of the Pat family’s honey is being assumed by Mercado delaTierra, an entity formed by The GreenSquids, a company created by architect turned social entrepreneur Enrique Kaufmann who is dedicated to developing sustainable businesses in rural communities. The GreenSquids in turn has participated in Agora Partnerships’ Accelerator program and remains an active member of the Agora community. The GreenSquids is also working on a comprehensive community development project in the Mayan community of Nuevo Xcan in the state of Quintana Roo.

Mercado delaTierra is positioning the honey as a premium, pure organic product. Honey can also be differentiated by qualities such as acidity, color, and flavor derived from the type of flower that produced the pollen. Mercado delaTierra has already signed a contract with Thrive Market to distribute the honey in Thrive’s California stores and is seeking additional contracts for the remainder of the Pat family production. Due to declining U.S. production of honey, attributed to Colony Collapse Disorder (CCD), the causes if which are still being debated, honey prices in the U.S. have risen more than 80% since 2006 and about 65% of US supply is now imported. In addition, much of the product marketed as honey is impure or adulterated.

However, in Campeche, the very biodiversity of the Los Petenes reserve appears to protect the bees from natural enemies. There is a great opportunity to increase production. With a small amount of additional financing for the collection center (anyone thinking crowdfunding?), this business can be taken to the next level. This would indeed produce a sweet result for the Pat family, their village, the biosphere, and very satisfied honey lovers all around the world.

A Brighter Idea for the Future

One idea lights a thousand candles.” – Ralph Waldo Emerson

Imagination and light go hand in hand. A bright idea is commonly depicted with a light bulb, or more specifically, a traditional incandescent bulb – the very same kind that was invented more than 100 years. Our ideas have evolved greatly over the past 100 years, so why has the object used to depict them remained static?

Try to imagine a solar lamp of versatile and sustainable design, a base from which to explore your creativity, adaptable over time to fit the needs of the future. This is a much more accurate representation of the ideas emerging from society today.

Continue reading A Brighter Idea for the Future

Retreat 2014: Accelerating the Shift Toward a New Economy

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John Kohler, Co-Founder of Toniic and leader in the field of impact investing, stated it bluntly: “I’d rather fund a medium business plan with excellent people, rather than a great plan with medium people.” When it comes to entrepreneurship, particularly at the early stage, the founding team of entrepreneurs plays an absolutely indispensable role. They are the ones making the decisions, taking the risks, and creating businesses that have the potential to shift the way that business functions in society. They bring a unique energy that is truly indispensable, an energy that could be felt powerfully throughout the week of January 27 in Granada, Nicaragua during the Agora 2014 Entrepreneur Retreat.

IMG_6030 (1)The Entrepreneur Retreat serves as the launch event for the Agora Accelerator, an intensive, 3-stage program designed to give entrepreneurs access to the knowledge, networks, and capital they need to scale their business models and their impact. The 2014 Retreat was designed with the intent of strengthening three key components of the early stage ecosystem: the community, the business, the individual. The agenda challenged the entrepreneurs to dive deep into both their business models and their own decision-making as leaders. However, as the week came to a close, the development of the community became a top priority for many present

IMG_4441“Back home we are already feeling SAUDADES, a word in Portuguese that describes the feeling when you miss people who, for some period of time, were a part of your life, and for whom you will forever have wonderful memories,” Raquel Cruz, Co-Founder of Brasil Aromaticos, recalled. “I want to convey my gratitude for the opportunity to be with people so special. People who are ahead of the times with their businesses; who are creating both profit and impact…and above all, people who know that it is always possible to do more. I feel honored to have been in a group of people who believe, share their dreams, and are ready for action AGORA (Agora in Portuguese means NOW)”.

At Agora we believe that building this community is critical to accelerating the shift in business from business that focuses solely on profit creation to models that create value for all shareholders. Each of the entrepreneurs in our Accelerator is taking an enormous risk. They are challenging traditional models and building new approaches in some of the most difficult environments in the world. They are creating platforms for marginalized farmers to access and share invaluable data; they are employing prisoners to produce hammocks in high demand; they are bridging the gap between tourism, indigenous communities, and the exquisite natural beauty of Mexico; they are revolutionizing mobility in Brazil with the first ever electric car sharing program; and they are re-foresting Mexico by selling and re-planting carefully-extracted, live Christmas trees. These entrepreneurs are are doing it because they truly believe it is possible to build a dynamic, competitive, and inclusive economy that creates value for all and walks the often misunderstood line between purpose and profit. The Agora Retreat is just one step on the journey of these modern-day pioneers towards accelerating the full impact of that collective vision.

IMG_4382“I returned to Mexico with a complete paradigm change,” 2014 Entrepreneur Kitti Szabo, Co-Founder of La Mano del Mono, concluded. “Now I can dream big.”

 

 

 

 

In Search of Early Stage Impact Entrepreneurs: Agora in Guatemala

Left to right, Neela Pal, Maria Rodriguez, and Sara Lila Cordero during a campus visit to the Universidad Francisco Marroquin, a leading private university in Guatemala City.

I joined Agora Partnerships for this summer, tasked with answering the question (more or less): Where are all the women impact entrepreneurs?

This seemingly simple query led me to…Guatemala. Over the past month, I designed and implemented a series of recruitment presentations for Guatemala—the country that has yielded two of Agora’s most successful and charismatic women business owners: María Pacheco of Kiej de los Bosques and María Rodriguez of ByoEarth (“the Marías,” as we affectionately call them in-house). My recruiting team included: the effervescent Sara Lila Cordero, who heads all things marketing and communications in Agora’s Nicaragua office, and Rodriguez, an Agora Class of ’12 entrepreneur who is locally known as “the worm girl,” thanks to her on-the-rise organic composting business.

During our week-long “roadshow” in Guatemala, we spread the word of Agora’s 2013 Accelerator program, making stops at the major metropolitan—and entrepreneurial—centers of the country: Guatemala City, Antigua, and Quetzaltenango. The level of individual activity and collective energy we encountered during our visit far surpassed expectation.

At the HUB in Guatemala City.

In five action-packed days, we met with: international NGOs like the Rainforest Alliance and Counterpart International; regionally-focused investor groups like Grupo DNA; and dynamic local change makers, including Nikki Bahr (founder of CSR consultancy Sustainable Strategies), Daniel Buchbinder (founder of rural entrepreneurship group Alterna), Gabriela García Quinn (Guatemala director of Central American social change outfit Glasswing International), and Ivan Buitrón (leader in AGEXPORT, which supports, literally, thousands of export-ready Guatemalan businesses). We also met with prospective entrepreneurs, paying a visit to the ultra-cool Campus Tecnológico in a gritty corner of the city, as well as presenting at the up-and-coming, “green” HUB space.

Sara Lila presenting to 120 rural women at a Vital Voices conference in Quetzaltenango.

Everywhere, we shared our vision—to be a one-stop shop for early-stage impact entrepreneurs serious about scaling their business and, in turn, their social impact. And everywhere, we heard the same story: while there are many one-off interventions, there are no comprehensive solutions like Agora’s Accelerator that gets small to mid-sized enterprises ready for growth capital and connect them with a growing network of impact investors.

As I met with actual entrepreneurs, I was struck by their hunger for additional resources and supports. At Quetzaltenango, for instance, Sara Lila presented on the Accelerator to a group of 120 rural women, largely micro-business owners, affiliated with the Vital Voices network. We had the enviable position of presenting right before lunch. However, the interest lasted far beyond our ten-minute “pitch.” Dozens of women approached us afterward. Hidden in their questions, I heard hope—that the Accelerator would be the solution for their businesses.

In Guatemala, the market of scalable social enterprises may be finite, but the vision and collaborative attitude of its leading players is anything but. Take, for example, Philip Wilson’s award winning company Ecofiltro, which is popularizing a simple yet effective clay filter as an ecological solution to water filtration. We toured his factory at the base of Antigua’s volcanoes, which he hopes will serve as a model operation for emerging countries globally.

“The Marias” are generous-spirited leaders, who when they encounter problems or gaps, create smart solutions. In addition to her innovative business venture, María Rodriguez is in the process of helping to incorporate the HUB in Guatemala City, which will provide much-needed convening space for start-up talent. And, María Pacheco brought international women empowerment non-profit Vital Voices to the country to tackle economic disparities along gender lines. The secret sauce to Agora is its people, and the human potential in Guatemala last week felt limitless.

Neela Pal joins Agora Partnerships from the Yale School of Management, where she is studying social sector management and organizational behavior. For her summer internship, she is helping Agora develop a recruitment strategy to increase women-owned and managed business enterprises in its Accelerator program.

Part 3: The Missing Middle of the Missing Middle

Debates on impact investing are not focused enough on system change.

The recent publication of Blueprint (exec summary here and full report here) comes at an important time for the industry and makes a powerful case for the continuing need for philanthropy in the space.

The report did an excellent job of explaining that there are business models out there that can create massive impact at a fraction of the cost of traditional donor programs, but these models need time to scale before they can be profitable, just like Amazon. What the report alluded to, but did not discuss as much, is an even more important system-change question: how can philanthropy create the Stanford – the fertile ground where an Amazon can not only be scaled, but can take root in the first place?

What is Impact?

Blueprint informs a larger discussion of the meaning of impact investing, a meaning that is increasingly broad as different actors have adopted the term. There are now two generally established camps based on which word you prioritize in impact investing.  The first camp (because it came first) sees business as merely the most efficient tool for achieving the only goal that matters – getting the best impact return for the buck. Acumen Fund is one of the most well known of the proponents of this approach, which also tends to define “impact” in terms of products or services sold to the Bottom of the Pyramid (BoP), the poorest of the poor.

One of the most articulate and well-respected organizations in this camp is the Mulago Foundation. In a series of great pieces in SSIR, foundation officers caution philanthropists new to the impact industry to take the time to truly understand what they are trying to accomplish and to be wary of chasing returns in the name of impact. Laura Hattendorf poses a simple question to all would-be impact investors.

Are you a private equity investor in emerging markets? Or are you focused on solving an important social problem at the base of the pyramid?

This question gets to the heart of the simmering battle for the soul of impact investing – is it a radical new way to invest for maximum impact, or is it an asset class (as Wall Street would like to see it) that refuses to cede an inch of profitability?  Are impact investors “putting money—loans or equity—into impact-focused organizations, while expecting less than a market rate of return” (Mulago’s working definition) or are they people who recognize  “the importance of integrating sustainability themes into their investment portfolios” (Morgan Stanley)?

The Middle of the Bell Curve

Both sides of this debate are doing good work and have perfectly reasonable positions based on their corporate mission. It’s good to have debates to air the issues and create better understanding around the term. But here’s the problem: lost in this debate are the actual entrepreneurs who will determine the long-term success of the impact investing movement. The question of whether you are focused on the BOP or focused on profits is too binary; it omits everyone in the middle. Most of the human potential out there is in the middle of the bell curve, but the debate is focused on the tails.

The Bell Curve

The vast majority of investible entrepreneurial ventures that are solving social problems are not ones that, with just a little subsidy, can save one million lives in five years or provide Google-like returns.  Entrepreneurs who can create those kinds of social or financial returns are few and far between. If you are one of them, and have gotten investment from Mulago or Kliener, then good for you. However, if you aren’t going to create tens of thousands of jobs, but just a couple dozen? What if your product merely addresses existing customer demand, like, say a locally produced vanilla wafer, even though you are operating in one of the poorest regions in the western hemisphere and transforming your community?

Mulago or Morgan?

The fact is, there are many, many entrepreneurs out there who fail the Mulago or Morgan Stanley test for impact and risk/return, but who are nonetheless consciously creating net positive impact, even measuring it — and they don’t need any operating subsidies to have an impact.  Many of these entrepreneurs, like dozens we have worked with in Central America, could provide a return of 5% – 15% while generating huge impact in their local community – and maybe eventually the whole region or the world. They may never make it on the conference circuit, but they need to be a part of this conversation. They may not be able to give the perfect reply to a donor’s question on quantitative impact or an investor’s question about risk, other than that they live with these two challenges every day.

It is in these individuals’ attitudes and decision-making ability where transformative impact occurs. Through their success, important things can happen, like building an entrepreneurial middle class, supporting democratic capitalism, empowering citizens and redefining the role of business in society.

Good companies with good managers that judge success based on impact, not just short terms profits, need to be supported just as much as the poster entrepreneurs that win all of the awards. Without direct impact for the BOP crowd, and too small and risky for the market returns crowd, these entrepreneurs struggle to access opportunity.

This is concerning, because they represent the future of business. Whether they collectively decide to incorporate impact into their decisions making  — and can access opportunity as a result — will likely determine the long-term success of impact investing.  That’s why our debates and reports must arrive at actions that drive capital to this core group.

The Missing Middle of the Missing Middle

The impact investing movement is a big tent, and it’s been stretched as far as it can go with different versions of impact investing. This is a good thing, but let’s remember that most of the entrepreneurs who will create impact with their business lie in the middle of the tent. They are the missing middle of the missing middle – not as sexy or impact-focused as the Stanford or MIT entrepreneurs and they are too small and risky to access any of the capital being channeled by Wall Street into the space. But we overlook this group of entrepreneurs at our peril. System change doesn’t happen without them.

 

How Tegu is using Social Media to Fight Poverty in Honduras

Tegu founders Will and Chris Haughey

MARKETING, MEDIA, & DEVELOPMENT
Facebook, Twitter, YouTube – social media terms now dominate the language of mainstream marketing. Companies around the world have adopted a barrage of digital tools to debut new products, gain feedback from consumers, and, more generally, communicate in interesting and compelling ways with their consumers. Though social media has emerged as the go-to toolkit for traditional profit-seeking companies, could it also be one of the key components of impact-oriented businesses to fighting poverty in the developing world? Agora entrepreneurs Will and Chris Haughey, along with their wooden toy company, Tegu, seem to think so.

TEGU, MAGNATES, & HONDURAS
Will and Chris launched Tegu (short for Tegucigalpa, the capital of Honduras) in 2009 out of the desire to create jobs in Honduras and to become the employer of choice in the impoverished nation. The company, which now employees 56 people in Honduras and six in the United States, has reinvented the traditional wooden block by incorporating magnets into its design. This simple addition allows for more play possibilities beyond simply stacking blocks one on top of the other.

Tegu Products

“Our first priority when we started Tegu was to address unemployment in Honduras,” Will explains. “The more products we sale, the more jobs we create. If we can engage people with our story, then we can engage people with our products. Engaging people in our products and story ultimately results in more employment opportunities for people living in Honduras.”

LIKES, FOLLOWS, & VIEWS
Will admits he had limited experience in the social media space before starting Tegu. In fact, he did not create a Facebook account until 2008. However, over the past two years, Tegu’s social media accounts have grown appreciably. Currently, the company amasses over 3,600 Facebook likes, more than 1,800 Twitter followers, and nearly 30,000 views on its branded YouTube page. Though Tegu’s digital presence is strong across multiple platforms, Facebook has emerged as the centerpiece of its digi-strategy.

“We like to use Facebook to highlight new products and share images of what we’re doing in Honduras,” Will notes. “We currently have two products that were named on Facebook. We posted a new product and asked our followers to help us name it. We took their suggestions and acted on them.”

Tegu product named by Facebook fans

Will adds that Facebook has been a critical outlet for receiving feedback from customers, ultimately helping the company craft even better products. Just a quick scroll through their page reveals countless company “@mentions” by followers and a stream of shared photographs and videos from customers around the world. Tegu often responds to many of the posts as a way of keeping the conversation active, a process Will describes as “ongoing.”

A LAB COAT, NATIVITY SCENE, & THE MONA LISA
One of Tegu’s more innovative digital marketing campaigns involved showcasing the varied and often unexpected ways the magnetic blocks can be configured. The campaign, titled “Tegu Live,” employed Livestream, a live streaming video platform, as a means of interacting with their digital audience.

Over the course of the campaign, participants could communicate with a Tegu Genius on Tegu.com (via Twitter, Facebook and Livestream). Once navigated to the site, viewers found a mysterious man in a Tegu-branded lab coat, a stark white table, and a jumble of multicolored Tegu magnetic blocks. Viewers typed in their requests, watched as their vision was assembled by the unnamed “Genius,” and, in a matter of minutes, the mass of blocks was shaped into a helicopter, a ship, a checkered board, the Nativity Scene, and even the Mona Lisa, among other creations.

 

FACEBOOK, ENGAGEMENT, & IMPACT
“Using social media is a great way to engage people in your company or product,” Will concludes. “For us, when people are engaged and buying our products, then they are helping us to create critical employment opportunities for people living in Honduras. In that respect, using social media is an important part of achieving our aim of serving the poor through profit.”

 

 

Three Key Camps at the Heart of the Impact Investing Movement

Ben Powell, Founder and Managing Partner of Agora Partnerships

If you are like many people, you are new to impact investing, have a mild notion of what it is, and believe that it could be important, maybe even revolutionary. But this notion is tempered by massive confusion surrounding the term.

Understanding the different agendas of the three key camps under the impact-investing umbrella can help you navigate this complex conversation.

Impact-First Investors (also called “Social-First”)
The origins of the term impact investing begin with a handful of foundations and non-profit organizations (incidentally, nearly all of which were founded by entrepreneurs). These groups believed that investing in entrepreneurs was a better way to solve social problems around the globe rather than the project-based approach that has dominated development assistance since the 1960s. These foundations wanted to get affordable, “patient” capital to real entrepreneurs who could then turn it into measurable impact. For this group, which includes most of the founding members of ANDE, the primary purpose of impact investing is social – to serve the needs of society, as quickly and tangibly as possible

A good example of an impact-first investor is Kevin Starr at the Mulago Foundation, author of an excellent recent post on the dangers of impact investors chasing returns over impact. His definition of impact investing is:

The practice of putting money—loans or equity—into impact-focused organizations, while expecting less than a market rate of return

Return-First Investors (also called “Finance-First”)
This is a group of mostly mainstream investors interested in creating products for their clients that allow their money to generate a triple bottom line return – meaning a market rate of return and a measurable (or at least ratable) social and environmental return. Much of the attention around impact investing has been focused on these big players like JP Morgan and Prudential. The hope is that traditional finance companies will unlock billions in investment capital that also demands to know its social impact.  Return-first investors are trained in closing deals that make money. For them, the defining feature of an impact investment is that it can favorably compete with the financial returns of a traditional investment. Ignia Fund is a good example of this approach, as is the official definition of impact investing from the GIIN.

Entrepreneurs and Field Builders
The third group doesn’t consist of investors at all, but of non-profits and some foundations that are focused on entrepreneurial eco-system development and supporting the field at the entrepreneur level. This group includes many of the founding ANDE members and smaller start-ups.  As a whole, this group believes that the key drivers of development are entrepreneurs, not investors, and that now is the time to focus our efforts on entrepreneurs. For this group, impact investors are key allies, but they lament that not enough of them are yet willing to pull the trigger, especially with smaller, angel deals, where their impact can be greatest.  The basic allegiance of this group is to the entrepreneurs on the ground. An impact investor might ask, “How can I find good deals that created blended value?” The entrepreneur camp, on the other hand, asks, “How can we help entrepreneurs make better decisions that result in increased growth and increased impact?” B Lab is a great example of this camp.

A working definition of impact investing for this group is Agora’s own:

The practice of investing in impact entrepreneurs.

Working Together
While each group has its own motivations and agendas, they must all rely on one another if we are to put ourselves on the path to a more sustainable capitalism for the 21st Century. Whether these groups can coordinate their resources effectively and work together is one of the most fundamental questions facing the movement today.

Agora’s 2011 Accelerator Class – A Summary

 

The 2011 Accelerator Class and Representatives from Agora Partnerships

In January, Agora Partnerships selected its first Accelerator Class consisting of nine entrepreneurs committed to creating social value through business. Through the successful expansion of their businesses, Agora entrepreneurs are creating jobs for low-income workers, selling products and services that benefit the poor and improve people’s lives, helping protect the environment, and generating economic activity beyond their businesses.

In July of this year, Agora Partnerships held its first impact investor conference. Here are just some of the results of the 2011 Accelerator Class five months after that inaugural conference.

The 2011 Accelerator Class: A Snapshot 

Key Metric: Collectively, Agora entrepreneurs are seeking to raise US $4.2 million in private investment. Earlier this year, Agora set a goal to raise US $2.1 million (or 50% of target capital) for the 2011 Accelerator Class. At present, Agora has exceeded that initial benchmark having already raised US $2.39 million in impact investments and is confident that it will achieve or surpass its next target of US $4.2 million. Below are some updated facts and figures from the 2011 Accelerator Class:

  • Number of Companies: 9
  • Total Actual Revenue of 9 companies at Start of Program: US $2.35 million
  • Total 2013 Projected Revenue: US $25 million
  • Total Incremental Revenue: US 1000%
  • Average Sales at Start of Program: US $276,000
  • Total Investment Sought: US $4.2 million+
  • Employee Total at Start of Program: 250+
  • Projected employee total 2013: 650+
  • Indirect Employments: thousands
  • Amount in Closed Deals: US $2.39 million
  • Deals in Due Diligence: US $3.52 million
  • 5 of 9 companies engaged in due diligence or with closed deals
  • 9 investors engaged in due diligence or with closed deals
  • $10 in private investment per $1 invested in Agora.

 

2011 Accelerator Class by Industry
Geographic Spread of 2011 Accelerator Class

The 2011 Accelerator Class consists of companies pursuing innovation in agroindustry (23%), manufacturing (22%), biotechnology (11%), low-income housing (11%), artisanal products (11%), energy (11%), and recycling (11%). Geographically, Agora Partnerships supported entrepreneurs from such Latin American countries as Nicaragua (45%), Guatemala (33%), Honduras (11%), and Costa Rica (11%).

Impact Beyond the Numbers

Agora entrepreneurs are seeking impact investment to accomplish the following:

  • Become more carbon neutral
  • Develop world-class manufacturing capacity in Central America
  • Construct affordable, sustainable housing for low-income families
  • Bring solar power to rural households to take the place of candles and kerosene
  • Extend much-needed job opportunities to rural Mayan women in Guatemala
  • Provide sustainable housing to those whose homes have been destroyed by natural disaster
  • Develop low-cost, high-productivity organic pesticides & fertilizers to revolutionize the region’s agricultural sector
  • Provide products and services to a diverse range of customers from rural Nicaragua to New York’s Upper East Side.

Agora’s entrepreneurs tackle these critical needs because it’s both the right thing to do and because it’s good business. We support them because they represent a more efficient method of combating the scourges of poverty, inequality, and climate change than any other method we have seen.

Quetsol, headed by Agora entrepreneurs, brings renewable lighting solutions to rural Guatemalans.

The 2012 Accelerator Class: A Look Ahead

Over the next three years, the 2011 Accelerator Class will be on a collective path to, among other goals, generate over 1,000 new formal economy jobs, build more than 3,500 affordable bamboo and cement houses in rural Nicaragua and Haiti, and supply solar-powered electricity to more than 40,000 low-income houses.  Agora’s global selection panel is meeting Monday, December 12 to determine which entrepreneurs will be apart of the 2012 class. Here are some of the projections:

  • Number of Companies: 14
  • Employee Total: 265
  • Average Employees: 20
  • Projected Employee Total 2014: 670
  • Average Employment Growth Percentage: 600%
  • Revenue at Start of Program: US $5.2 million
  • Average Sales at Start of Program: US $370,000
  • Projected Aggregate Sales 2014: US $21.8 million
  • Average Sales Growth Percentage: 1068%
  • Investment Sought: US $5.3 million

Agora’s entrepreneurs see themselves not simply as business leaders but as agents of change in their communities – citizens who are using business as a force for good to address pressing social and environmental problems. It’s our job to amplify those efforts and to help these entrepreneurs realize their true potential.

Gratitude to the Servant Leaders of B Lab

B Corporation Logo

Recently, I walked into one of the most beautiful and magnificent rooms I have ever seen – the walls were completely covered in vines and flowers. In front of me were three charming men, each offering me and the other guests in the room a class of wine.  Their names were Jay, Bart, and Andrew, the founders of the B Corp movement.

For those who don’t know B Corp, it’s an incredible community of businesses that commit to operating at a higher level of impact, accountability, and transparency than what society has come to expect from business. B Corps represent a new kind of business led by a new kind of entrepreneur – they represent in the established market of the U.S. exactly the same ethos around the role business must play that we advocate in Central America and Mexico. Agora Partnerships is proud to be a founding B Corp.

A few weeks ago, I attended the opening reception of the B Corp Champions Retreat, an annual gathering of B Corps. Seeing Jay, Bart, and Andrew welcoming us got me thinking about how far the organization has come since it was launched in 2006, about a year after Agora.

In a year with so much bad news, pessimism, and uncertainly, the B Corp gathering was marked by determination, resilience, and even optimism.  It’s an optimism born out of the conviction that business must do more to solve our common problems –that it can do more, and that, at least when B Corps are concerned, it is doing more. As business as usual and government as usual fail to address our common challenges, there’s a growing recognition that the B Corp-way is the future of business. What’s so powerful about the B Corp vision (to use business to solve social and environmental problems) is that this movement is something we can be for, as opposed to all of the things we are against.

Southern California's Salton Sea

As I entered the room in opulent Longwood Gardens outside of Philadelphia, the simple collective gesture of Bart, Andrew, and Jay personally welcoming everyone and offering them food and drink seemed to express, in a snapshot, everything that has made B Lab so successful (a level of civilization that contrasted distinctly to the legendary first B Corp retreat held amid the rugged sands dunes near California’s Salton Sea.). What has made the B Corp community so successful is the servant leadership of the founders.

Longwood Gardens

Servant leadership, for those unfamiliar with the term, is a leadership style that prioritizes the needs of the team or the customer over that of the individual leaders. These guys bring a humility and service ethic that always puts the B Community first. Their leadership – and the work of the great team they have assembled – has led B Lab to accomplish more than most non-profits, with less money, and within shorter increments of time.

It’s time to call out these humble guys for what they are – some of the most effective, high-impact social entrepreneurs operating today.

The following overview will give you a sense of the momentum that B Lab is helping to create:

To date, 892 legislators voted in favor of Benefit Corp Legislation, 62 voted against.  There are presently 470 B Corps, up from 339 at the close of 2010.  B Labs is on pace to certify 500 B Corps by January 1, 2012, and in the next 12 months, will be targeting major Legislative wins in New York, Pennsylvania, North Carolina, Michigan, Washington State, and Oregon. The GIIRS impact rating system it developed is being used by dozens of funds and could become a global standard for impact investing.

All of this happened because a lot of people have come together to make it happen. But there were a few ambitious servant leaders – Bart, Andrew, and Jay – who have gone above and beyond the call of duty to spearhead this community. It’s hard to thank them because when you try, they instinctively thank you.

The absolute commitment to the B Community and the elite entrepreneurial and management skills this trio brings have turned a timely idea into a vibrant community powered by an inspired and growing professional staff.  Nothing was assured when B Lab was founded, but it’s flourishing – it’s potential only just becoming truly visible to those who care to look. However, none of this happened by accident.

During this time of Thanksgiving, I think Bart, Jay, and Andrew deserve a collective “Thank You.” They have rallied other like-minded entrepreneurs to build something that is exactly what the world needs today. More than just an important idea, B Lab is an important idea with great leadership and a great team. I, for one, am very thankful.

Not All Are Created Equal

Not all are created equal: differences in poverty abatement effectiveness among BoP business models accounted for by ownership

By Sergio Figueroa Sanz

Data from the World Bank Development Indicators 2008 reports that almost half of the world’s population lives on less than $2 per day. Think about it for a second… half of the world’s population living on less than $2 a day… According to the 2009 Human Development Report, in Chad, Guinea, and Nigeria, over 80% of the population fit into the definition. In Tanzania, Rwanda and Liberia the percentage is over 90%. Data from the 2007 Human Development Report suggests that over 80% of the world’s population lives in economies where income disparities continue to increase and the poorest 40% of the world’s population account for 5% of global income, while the richest 20% account for over 75% of world income. Poverty is not only a problem of absolute income levels but also of relative nature: the perception of poverty, which is greatly influenced by income inequality, is extremely toxic for social fabrics and economic structures. Indeed, although the definition of what constitutes poverty has been subject to a lot of debate for decades, that inequality makes it worse is not generally challenged. The end of poverty (sorry for the copyright violation, Prof. Sachs) doesn’t seem to be precisely around the corner. Interestingly enough, not everyone views the persistence of poverty as something undesirable.

Professors C.K. Prahalad and Stuart L. Hart defined the bottom of the pyramid (BoP) in the late 1990’s as the world population living on less than $2 per day and argued for viewing this segment as an untapped, highly profitable consumer market since it is typically excluded from global goods and services markets. BoP advocates see in the BoP market imperfection, an opportunity for bringing poor consumers access to global market standards at affordable prices and increased availability. The most interesting claim, however, around this business model is that consumption at the BoP has positive spillover effects based on the premise that consumption can and does spur income growth. The reason, the narrative goes, is quite trivial and can be understood as a variant of the Keynesian multiplier of government spending – confusingly enough introduced by Richard Kahn the 1930’s and not John M. Keynes. The idea is simple: a given amount of dollars will be spent in local businesses by the government or a private economic agent, these dollars will generate income for the businesses that will, in turn, increase production and pay wages to their employees; the latter, in turn, will spend their wages in other businesses and the cycle begins again. Note that tax revenues are also generated through this process to the extent that spending is made on the formal economy sector. The result is cycles of spending that increase income, regardless of how spending is made, through a consumption multiplier effect. This is how consumption generates prosperity… So far so good… or is it?

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