SU works with organizations of all shapes and sizes: corporations, startups, NGOs, governments, academia, you name it! They help people understand how technology is transforming the future and how they can prepare for that transformation. In this episode, hear about…
- 2:00 How SU addresses the Global Goals
- 4:00 Solving Problems with Vision Instead of Tactics
- 7:00 SU’s Global Grand Challenges
- 12:00 The brain-computer and casting a vision
- 22:00 The Global Grand Challenges App
- 33:00 Challenge: Go have a conversation with someone about… the future.
[0:27] Singularity University was founded about a decade ago with a recognition that technology is advancing at an extremely rapid pace in the world, and it’s our responsibility to make sure that these powerful developments of technology are leveraged in a way that makes the world a better place.
“So the mission really is to build this community of leaders that are empowered and equipped to leverage the advancement in technology to tackle some of the greatest challenges that we face in the world,” Brett says.
What is Singularity up to with the Global Goals?
[02:00] SU thinks about addressing the Global Goals in two main ways:
Resource Needs These are the things we need to survive and then societal needs– the things that we need to thrive. So on the one side of resource needs, we’re thinking about everything from food, water to energy, space, and resources.
2. Preparing for the Future These areas of development include education, healthcare, and mitigation of future risks.
To tackle these two categories, SU has developed a very large global community that they have been building for this last decade. Today they are at about 200,000 people in 131 countries in scope.
There are chapters set up in 142 cities around the world, and now they are beginning to launch different types of country partnerships to spread the global footprint. Brett says,
“We tried to bring together around this one common mindset and this one common vision of what we can do together and what we can accomplish.
We believe we have with these tools in our world, like technology to bring about a future of abundance to bring about a future where people, no matter where you are on this planet, you’re no longer experiencing these different types of global grand challenges or they’re at least being reduced in some meaningful way.”
Solving Problems with Vision Instead of Tactics
[04:13] The SU community frames the global grand challenges with a slightly more broad view on the future state that we can imagine within each of these challenge spaces. Brett mentions that there’s something really fascinating in the psychology of problem-solving that has come up as their community has taken on the goals: humans tend to react to problems with fixes and solutions, rather than creating a vision for a new possible future.
“The vision tends to get a much more compelling response from people,” Brett says.
The Stimson Center Study
[04:57] The Stimson center is a nuclear threat reduction think tank. They were curious about why people globally were not actively getting involved in the question of nuclear threat. It’s a very real, very tangible issue for people today… but no one was getting involved.
What they discovered was that the more seriously a threat or a problem was framed, the less likely people were to actually get involved in solving it. It’s sort of an unexpected psychological reaction where people think “oh, if it’s such a serious problem, then someone smarter and more specialized must be taking care of it and I don’t necessarily need to take action.”
This research pointed the Stimson center to look toward the future vision that people can create together. a future vision is more motivating and it doesn’t elicit that same “someone else is taking care of it” reaction.
[05:44] “So that idea is really baked into our approach to the global grand challenges. We’re creating future visions of what we can achieve, and we are inviting people to come together and take action as a community.”
SU’s Global Grand Challenges
The Global Grand Challenges road map will be created together with SU’s global community, faculty, startups and partners to become a core part of their thought leadership. They will:
- Help people find the opportunities that truly make sense for them to take on.
- Show the small steps each group can take.
- Show some of the large steps we can take as a community.
- Help orient people toward the types of R&D breakthroughs that we might need in order to push an industry or push a challenge space forward.
- They’ll include policy changes that we believe would be very helpful in shaping the correct ecosystem to let this change come about.
- The GGC’s will also incorporate technological developments to guide people through leveraging technology.
The Brain Computer
[12:27] Ray Kurzwell had one specific prediction that influences SU greatly: that within 10 or 15 years people will be able to hold in our hands a computer that has the processing power of a human brain for $1,000.
So that’s a computer that can process 16 trillion calculations per second and we’ll have that kind of computing power in their hands.
[14:54] The prediction is that this power of computing and access to technology will be spread all around the world. It will begin opening up completely new markets… completely new communication channels. It will begin to level the playing field a little bit more from country to country and from continent to continent.
The Exponentially Growing SU Community
[20:29] “So we have this massive community of 200,000 people in 131 countries and right now that community convenes primarily around geographies and country partnerships that we have. But we’ve been asking, “how can we start to create smaller action groups within that large Global SU community? Can they come together around existing interests and existing industries?
These are called the Singularity University micro-communities.
Measuring, Reporting and Validating Micro-community Actions
[21:12] Brian asks, “How do we truly take ownership for something that’s happening out in the world, especially when it’s happening in such a distributed manner? We’ve had about 5,000 initiatives reported from around the world… but we know there’s so much more we’re not capturing.”
[24:28] Just this week we launched a brand new feature through our app, which you can download from the App Store or from Google Play and it. It’s a feature called Impact Goals, and we’re kind of asking our community to set some goals with us as we come into 2019.
So it’s a really simple framework for setting the goals that you would like to achieve in whatever timeframe you’re looking for.”
The app has 6 different pathways:
- Creation of a new organization
- Innovation within your existing organization
- Education and awareness campaigns
- Mobilization of resources
- Pursuing policy
- Pursuing research and development
Challenge: go have a conversation with someone about… the future.
[33:14] We actually have some really amazing pop culture that we can turn to, Brian says. Whether it’s Scifi that you’re reading or it’s TV shows or movies, we already are seeing questions of the ethical dilemmas and the interpersonal dilemmas. And, some of the social challenges we’re going to see.
“We’re beginning to see these really pervade a popular media. And that makes me really, really excited because that provides framing for people to actually engage in the future together. You can look at possible probable futures and have a meaningful conversation about them without really overextending yourself to try to grasp at new information, or find something that’s not in your world.”
Black Mirror and Star Trek
Brett recommends watching Black Mirror, a TV show about some of the ethical dilemmas that may come up as technology develops more and more. But don’t just watch it, he says, … go have a conversation about it with your family or friends afterward.
[35:35] “I was watching Star Trek Discovery when it first came out, and I specifically remember a scene where the main character is arguing with an AI. She’s reasoning with an AI to try to release her from imprisonment and they’re going back and forth about what moral standard is the most important.
It was this fascinating scene to think about… this is actually something we might have to deal with at some point in time. How do we encode moral and ethical frameworks into our technology? And then how do we actually reason with it and help it evolve?”
That will be the game… constantly evolving. Faster than the technology, hopefully…
- Get ready for the Global Grand Challenges! They’ll be released soon… with roadmaps we can actually use to make a difference, and make better business decisions.
- Challenge: Keep an eye out for the Road Maps!
- Challenge: Join one of Brett’s workshops if you’re near San Fransisco.
- Challenge: Log one of YOUR goals in the App! You can download it here:
Singularity University is on a mission to make the world a more abundant place. In this episode, we’ll hear from Molly Pyle, the Senior Program Manager of Singularity University Programs and the Co-Chair of the Women’s Impact Network.
In this episode we’ll explore the SU ecosystem, learn about the resources they have available, and get a glimpse into the next-level community it will take to prepare for an exponential-tech-driven future.
[00:51] Ultimately we are working on preparing leaders of the future, whether it’s startup founders, leaders of governments, NGOs, you name it. We really want people to understand the opportunities and the implications of exponential technologies and help them become more connected. Connected to our global ecosystem as well as connected to the future business and tech landscape. We’re asking, how do we ultimately understand how to solve the world’s most urgent and pressing problems?
SU provides program services, information, education, and resources to help folks have the mindset, the tools, and the resources to ultimately transform the future and create a world of abundance.
How Singularity Started: Niching in Exponential Technology
[02:16] “Singularity University was founded by Ray Kurzweil and Peter Diamandis. These guys are very famous thinkers, inventors, futurists and entrepreneurs in their own right respectively. Ray and Peter came together one day and realized that the future’s going to look a lot different than what we currently understand it to be.
Exponential technologies are those which are rapidly accelerating and shaping major industries. And ultimately every aspect of our life and that if we can understand these exponential technologies like:
- Artificial intelligence
- Augmented and virtual reality
- Digital biology
- 3D printing
- Blockchain robotics
We want to know how they’re changing and the law of accelerating returns, as Ray Kurzweil called it. We can actually leverage that information to help make the future abundant and help make it a place where everyone has access to what they need to thrive.
With exponential tech, we believe it’s possible to live in a world where nobody wants for anything. It sounds like a crazy sort of idealistic future, but we really view that the future can be anything that you can create it to be.”
An Exponential Mindset
[04:09] “An exponential mindset or an abundance mindset refers to that point of view that we have here at SU: that ultimately there’s no problem that we cannot solve when we apply exponential technologies and innovative ways of thinking. We really have that hopeful outlook on the world and our future. So we want to focus our energies on bringing that information to others and empowering them to create that abundant future we envision.”
The SU Ecosystem
[04:55] SU has hubs or chapters that are led by alumni. People who have gone through a program with us before will go out then into the world and galvanize others around the mission. They can start a chapter anywhere in the world.
“Right now SU has 126 chapters across 63 countries. We have 191,000 community members who either have been to an SU program or are part of an SU chapter and are really keen on the exponential mindset.”
SU and the UN Global Goals
[08:47] The goals that SU focuses on are the following 12: Energy environment, food, shelter, space exploration, water, disaster, resilience, governance, health, learning and security. SU buckets various sustainable development goals under these 12 global grand challenges.
[09:18] “We are not telling you how to solve these problems. We are not standing on the stage dictating the future and exactly step by step what every country or government or city or organization needs to do. That would be really prescriptive, right? And it’s not our role to do that.
Our role is that of a convener. So we want to bring the right people together with the right skills and the right technology so that they can solve these big pressing problems that honestly should have been solved decades and centuries ago, but we’re still working on them because they’re that hard.”
The SU Community
SU resident entrepreneurs have 7 weeks of in-person mentorship and then 3 weeks of virtual mentorship. The point is to create a global network that resources mission-driven people.
SU is asking, how do you integrate a 190K+ people who already have a shared vision and value set? How do you make sure that they are authentically meeting and connecting with each other and helping each other?
The Startup Ecosystem for Global Problem Solving
[14:03] We’re on a mission within the next 10 years to back 10,000 impact startups. So 10,000 startups using technology, hopefully using exponential technology to solve a global grand challenge to make it a thing of the past.
[15:16] “I am the designer, right? I mean, I speak on behalf of them because they are what I believe the lifeblood relate to creating this transformation in the world is through the design of experiences.
[15:34] Molly puts together the right curriculum, the right content, the right speakers, mentors, faculty, and what the program is going to look like so that it transcends everybody’s expectations.
How are businesses going to anticipate technological shifts in your own business model and your roadmap for the next five years?
[21:31] “That’s what we want people to really be challenged with. We understand that is not an easy thing to figure out, so that’s why this program is a hybrid model of in-person and digital support. For a whole year.”
Content Style: Curriculum Designed for Startups
[23:20] “We’ve asked the experts to redesign their usual talks and lectures completely from the ground up with startup founders in mind.”
It’s important that the information is actionable or meaningful to the student. So, even if you think you’re an energy company using blockchain, you listen to the talk on quantum computing and then you listen to the talk on the blockchain, and you realize there is a convergence of those two technologies. You realize that quantum computing is the key for you to massively scale or for you to 10 x your impact.
The Global Startup Program
[25:06] SU is packaging up the content curriculum, the speakers and sending it all over the globe to be – the global startup program. Part of this will take place in another country, another continent, and then faculty and students will come back to Silicon Valley for the accelerate phase. They network like crazy, look for opportunities for funding, meet local mentors, and ultimately then launch out a big demo fair in the valley.
Where do I start?
[26:52] First, you can access SU’s digital content first and get all of that foundational knowledge before you even enter the first in-person phase. You can get access as a GSP participant to this digital platform with all of the digital courses. That way, you can feel really prepared walking in the first day of the program.
“But even if you’re not in GSP in those digital courses, I’d say they are a great place to start to understand what all this terminology means and beyond terminology. How do I actually integrate this to transform my life and build a future that I want to live in?”
A Fearless Abundance Mindset
[30:12] Molly says, “Once I heard Ray say in a talk, ‘optimism is not idle speculation. It is a self-fulfilling prophecy.’
We can create the future that we want. It may seem really daunting and scary sometimes, but an abundance based mindset and ultimately a community of other people who can help you make it happen. With that, anything can happen.”
What do the next decades look like for SU?
[31:33] “We’re really working on our approach to sort of future growth with the platform mindset. So how can we build infrastructure that allows others to create, to convene and to connect ultimately to solve these really huge problems for humanity? So I’d say that’s what we’re thinking about.
Molly talks about the innovators and geniuses in emerging markets who have the creativity to solve global challenges.
[34:52] “If we get voices in the room and people around the table who maybe aren’t often invited- they have answers that are just waiting to be scaled, waiting to be acted upon. To me, that’s also what entrepreneurship is about. It’s a way of, if I may be radical here, decolonizing what current power structures look like by providing people with information, power, resource, and opportunity to create things. They may have never had that opportunity before.”
Molly emphasizes how many of us are all trying to solve the same problems. What kind of velocity could we create once we work together, across genders and cultures, to solve problems?
- SU is a global organization – because the problems and solutions are global.
- Challenge: join the SU virtual community and download the app.
- Let’s increase the speed of our feedback loops, or we won’t be positioned and ready for the ever-changing future.
Did you know 1.1 people escape poverty every second? The World Poverty Clock uses data to countdown toward Global Goal #1, no poverty.
In this episode, we talk with Kris Hamel, Chief Operating Officer at World Data Lab. World Data Lab sources high-quality data and then makes the data come alive in the form of interactive tools, such as the World Poverty Clock. Here’s a podcast summary:
- 1:45 What is the mission of World Data Lab?
- 8:15 What is WorldPoverty.io, and why did you join World Data Lab?
- 13:00 Why did you choose Global Goal #1?
- 14:50 What is the current state of poverty and how can we remove it?
- 18:30 How does the tech work?
- 14:45 How does the business model work for World Data Lab?
- 27:50 What are some of your biggest 90-day challenges?
- 32:00 What do you see for the future of impact data in general?
- 36:30 How can someone get involved?
We’ll focus on how World Data Lab addresses Global Goal #1, no poverty. At worldpoverty.io you can see a real-time estimated number of people living in extreme poverty. Listen in if you’re interested in learning more about interactive data tools and how to help eradicate poverty. 💯
World Data Lab is a social enterprise operating out of Austria. They are set up to do 2 things:
- Income: How much do people earn?
- Demography: Where are people likely to live?
“We view these 2 domains as the two biggest questions people will ask themselves, so governments and development organizations will be interested in this data.”
That’s why the data is important. As World Data Lab sources high-quality data internationally, their job is to get the data peer-reviewed and then make it visual and simple to understand. Their poverty clock shows how many people are living in extreme poverty every single day. You can actually see animated little people escaping poverty, and how close we are to increase the “escape rate” from 1.1 people to 1.6 people per second, which is the rate that would have us reach Global Goal #1 by 2030: to reduce poverty from 8% to 6% of the global population.
“No one can credibly talk about trying to solve SDG #1 (no poverty) or any of the SDG’s if we don’t know the reality of the current situation or the likely future situation… we can design development interventions to try to solve what’s likely to happen. So that’s what our maps give you.”
Kris has worked in the development space for 15 years, and worked as a project economist at the World Bank Group. He did infrastructure projects like hydroelectric dams and finance projects to fund them. As he spent time around people with the influence and power over governments, Kris got interested in how best to make a difference.
He then moved to work with the UN on more grassroots initiatives to support marginalized people. Kris was able to see the difference between how to make an impact through large intermediary organizations, and how to make a difference from the bottom up.
He concluded that the real currency is through data “it’s most important give people access to data and help them use data to help them make decisions.”
Why Global Goal #1?
Here are the reasons World Data Lab chose to tackle Global Goal #1: No Poverty:
- It is a quantified, specific goal that can be tracked
- Tackling this goal will impact multiple other Global Goals dramatically
- We can use data on this goal, whereas other goals are more aspirational or broad and less quantifiable.
However, we’re not quite on track to reach the goal by 2030:
- Currently, there are 630 million people on the planet who make less than $1 per day
- By 2030 it will still be around 415 million. That is progress, but it’s far from eradicating poverty.
- Asia will eradicate extreme poverty as a region by 2030, which is huge. Extreme poverty is people making less than $1 per day.
- So, extreme poverty will be isolated to Africa. The good news is, we can target very specific areas of development as organizations with an aid budget.
“The thing we’re trying to do now with the poverty clock is to get to the next level… we want to tell you which countries in which regions need the most targeted aid.” The data becomes a critical decision-making tool to address poverty where it counts.
Kris sees the tech as a 2-step process.
- Advance the data and tech familiarity and usage as a 20th-century phenomenon – with visual data clocks and easy-to-read dashboards. They intend to use the data available now and design the best use cases to collect and show it.
- Gather data more efficiently. Move from surveys as the sole-source of information and use more reliable and granular techniques to gather information, like satellites and sensors.
Kris shares that gathering and showing data has been a political issue in the past. Governments want to allocate aid funding based on political preferences rather than where the aid was most needed. So as data collection and distribution improves, the politics become less of a block to accomplishing Global Goals.
When developing the poverty clock, it has been important to create a sustainable business model to keep the tech up to date and drive traffic to the website. So, the World Data Lab partners with organizations who find this data valuable.
In the next 90 days, the World Data Lab has 2 goals:
- To go deeper than just what survey data can provide.
“What we really want to do is go down to the village level. So our challenges are developing new methods to process satellite imagery data – teach machines how to recognize different attributes in a daylight picture.”
2. Develop games where people upload pictures and information that will crowdsource data.
“We’ve got the platform, now we can improve the credibility of the data and the visual maps we’re working with.”
What’s it going to take to get to 1.6 escape rate (people per second)?
Kris says that the biggest gamechanger for poverty actually isn’t economic growth. “Another place to look is human capital – the extent to which education can be focused on, and transitioning graduates with skills into jobs – that will have the most direct impact on poverty and infrastructure.”
To get involved:
- Read the methodology and send feedback.
- Go to the world poverty clock and drill down on the country, and check the numbers.
- Become an affiliate partner to represent World Data Lab locally, and help develop the next data tools. Contact them at email@example.com.
Chandler shares his top takeaways at the end of the show:
- The role of credible data in society. “It’s tough to know the real information and find legitimate numbers from credible sources about the Global Goals. I love the world data labs put the world poverty clock together and they’re going to expand to other SDGs.”
- As a social entrepreneur “I gotta say my favorite part about this tool is just seeing the real numbers behind these grand challenges.”
- Asking the right questions. As Kris mentioned, with the current solutions we have as a planet, we’re behind pace to eradicate extreme poverty off the planet by 2030. So, that means there’s a gap in the marketplace. Here are some questions to close that gap:
- Who are the top players?
- What solutions are out there?
- What are the top solutions that have the most leverage?
- What do they need to scale faster?
- What does your mind think about?
- How does the data change the way you see your business if you’re working to tackle global goal #1?
Spring has helped 700 entrepreneurs launch over 350 business globally. In this episode, we talk to Co-Founder and CEO Kieth Ippel to hear how Spring’s growth programs work.
Keith Ippel is the Co-Founder and CEO of Spring. Spring helps social entrepreneurs make an impact with their Incubator, Accelerator, Peer to Peer learning network, and their Funding Roundtables. Here’s what we cover:
- 2:20 How Spring started
- 3:30 Spring has worked with a LOT of entrepreneurs… how?
- 5:45 What does it take to start a social venture?
- 15:30 What are the top lessons Keith has learned?
- 26:45 Keith’s proudest company wins
- 37:30 Impact investing tips and the Global Goals
Spring is taking on Global Goal #8, decent work and economic growth. Listen in to hear some of the top lessons learned while working with these social entrepreneurs, and the key things to know as you look to raise for your social venture.
Keith shares what it takes to start a social venture, and what Spring looks for in entrepreneurs they want to work with.
“We’re looking for entrepreneurs who are highly inquisitive, sharp, have a trememndous amount of hustle, are coachable, are able to articulate their why, and understand that they’ll need to create some white space in their industry in order to create growth. Our heart is really for people who want to change the world… it requires a deeper resillience to get impact-driven products and services to the world.”
How Spring’s Programs Work
Spring’s programs are set up to work locally in the cities they have a presence in, and they are headquartered in Vancouver.
- Incubation: Pre-launch, idea validation, setting the path to launch. 6-12 weeks. Guest speaker and teaching heavy, classic models.
- Acceleration: Post-launch, helping people prepare for scale and capital raising. 3-6 months. Mentoring and capital raising education.
- Funding Roundtables: Educating impact entrepreneurs to get the check.
Finding Success in Fundraising Rounds
Kieth shares with us that the biggest gap they are trying to fill for social ventures is targeting the right impact investors.
“Our entrepreneurs are good at target marketing for their customers, but not so much for investors. Most investors have criteria for who they are looking for.”
The rest, he says, is helping them get the paperwork right. How to create a cap table, how to break down and manage a due diligence folder, how to do a negotiation and ultimately how to get 8-12 investors to sign the same deal.
Should We Pre-Sell? Or Go for Funding?
“That is the million dollar question!” Kieth says,
When it comes to raising money for our business, there are several ways we can go.
- Our own back pocket
- Friends and family
- Selling shares of your company
Selling shares of your company is expensive, especially if you don’t have revenue or credibility data. Kieth advises to get all of that data together to prove that you can get users, understand your key metrics, grow a team and company, and prove your model. “That will make it easier to find the right investors for you, too,” he says.
Top Lessons from Working with Social Entrepreneurs
- The paperwork is universal. These are the four main ways investors fund a business.
- Common shares
- Convertible notes
- Safe agreements
- Preferred share deals
The entrepreneur should be agnostic to what type the investor chooses. Each one can be great or terrible for a company, depending on how the terms are set up.
2. Be cross-border fearless about finding the right investor.
“You’ve said the most important thing: raising money is a business. It requires a sales process. Run it like a business. Run it like a funnel.”
He explains, “There’s a top of funnel, there’s stages that you go through with gates, you’ll need to ask for 10x what you need at the top of the funnel in order to get what you need at the bottom. And frankly, investors value being treated that way, because it increases the communication and efficiency of the deal.”
Better to Build an MVP or Fundraise Right Away?
“The more that you can prove, the more confidence you’ll have to go raise as an entrepreneur.”
At the end of the day, Kieth says, if you’re working under a million dollars of revenue then the investor can only invest in you. After the first meeting, all other follow up meetings will be all about
- Can I trust you and your team with my money?
- Are you asking smart questions?
- Are you adaptable?
- Are you showing progress?
So, the more that you can push to MVP, they more you’re showing that you and your team are capable, adaptable, and pushing toward the finish like. You have to display your resilience and perseverence towards that. Sometimes a landing page with an email signup to get a million interested buyers!!
The No-Fail Investor Trust Plan
Kieth says 50% of the preparation is for the first meeting. The following 50% is planning for the 3-6 months after the first meeting to the next meeting, in order to show maximum progress and exceed your investors’ expectations.
So, plan for your first meeting with an appropriate deck and sales pitch training. Then, plan your growth stages between the first meeting and second to prove your progress.
And, how can you get to the MVP as cheaply and quickly as possible? It’s not about how to do it all, just get to MVP with less time and less money and you will succeed. The more money you have leftover, the more time and margin you have to adapt.
“Apple computer started in a garage with 2 guys. If they can do that, you can.”
Which companies is Spring Super Proud of?
- Social Nature: transforming the way people get food.
Anna was lazer focused on getting her ideal investor, and the 3-6 month plan to keep investors engaged and invested.
2. Nada: the zero-waste grocery store.
This grocery store has an underlying platform that could enable all grocery stores to strip all consumer plastic waste. They were strategic and balanced their raise across multiple platforms. They took loans, won a contest, did a killer crowdfunding campaign, and raised several good investment rounds as well.
“The best rounds with the highest investment have all been female founders. They are incredible at preparing ahead. They know their stuff when they go in. And they’re more natural in sharing their impact WHY. For all the female founders listening to this, go for it. And here’s a challenge for the men: take some best practices from the women around you.”
Another example is Emily with LegWorks, who was fearless about being cross-border with her investors and being prepared for rounds. They are now able to sell their products globally.
Growing Impact Investing
“Human nature is hard-wired to make the world a better place.”
Kieth says what works is to get rid of the term impact. Smart investing isn’t some exclusive thing to do with money, Kieth says, so to change the terminology will lower the entry and remove the cognitive bias to make impact investing mainstream.
Kieth emphasizes telling the success stories of impact companies and investment rounds to show the world of investors and partners that the “impact sector” is not only viable but worth being personally involved as a player. Telling the success stories captivates the market who still thinks traditional philanthropy is the only way to make impact.
Impact Investing and the Global Goals
In order to really tackle the Global Goals, Kieth says, it will take more collaboration. Most of the companies Spring works with have no idea how many countries and markets they could impact, if they were fearless about going cross border for customers and partners and teams.
“My encouragement for investors is to know that cross-border deals are going on every day. Set aside a part of your portfolio for Cambodia, Belgrade, Canada… wherever you find values-aligned opportunities. That’s how we’re going to change the world.”
- Your investors are customers as well. They need to align with your values because they’re buying the future potential of your company.
- Build an ideal investor avatar, and be ready to turn down investors who are not aligned.
Thanks for reading and listening – please COMMENT with the biggest questions you’ve had about starting a social venture, and check out spring.is to see more of Spring’s awesome impact companies.
“If you’re doing something for me without me… it’s not for me” In this bonus episode, Chandler shares six resources for social entrepreneurs to know what’s going on in the world – so you can start solving problems that matter now.
As social entrepreneurs, we believe that we can use business as a vehicle to solve problems.
One of my biggest takeaways from Kenya is that you have to go to where you want to solve a problem to see it from the ground. If you don’t have the chance to go… You better have really good data about the challenges. I’ve found that’s pretty tough! So I started digging, and I found some amazing resources and thought I’d share my favorite top six with you.
- 2030 Agenda for Sustainable Development
- The SDG Indicator Handbook
- UN Stats List
- SDG Data Hubs – Explore Geospatially Referenced Data by Goal
- UN Data Forum Blog
- The UN Global Pulse
Listen in to hear why these six are such game-changers… and to source data on the problem you’re solving!
Maybe you’re excited about impact and trying to figure out what business you want to start, or maybe you’ve been in the game for a while and have had several social ventures. So we’re problem solvers and we see these global goals as opportunity to integrate those that we want to impact into our business model. The bigger our business grows, the bigger the impact.
“if you’re doing something for me without me… it’s not for me”
It takes really good data to effectively address a challenge. And I’ve found that’s pretty tough. Finding real numbers about these grand challenges can outdated, biased based on the source, etc. We’re talking about every country, 17 goals, 169 targets, and 232 indicators (which are the specific metrics they measure).Here are six resources you can use to find the data you need.
The 2030 Agenda for Sustainable Development provides a global blueprint for dignity, peace and prosperity for people and the planet, now and in the future. And we’re only three years in.
I’d highly recommend checking out the 2018 progress report! It’s on unstats.un.org You’ll find every global goal on here with progress metrics. Are we ahead of pace or behind pace? Which ones are Goals are going really well and ahead of schedule and which are behind?
For example, in the least developed countries, the proportion of the people with access to electricity more than doubled between 2000 and 2016.
However, the proportion of undernourished people worldwide increased from 10.6 per cent in 2015 to 11.0 per cent in 2016. This translates to 815 million people worldwide in 2016, up from 777 million in 2015.
These are just a few stats that scratch the surface. Go check out your favorite global goal and see the progress.
The global indicator framework was adopted by the General Assembly on July 2017. It’s goal is to provide a solid framework for how we will go about measuring progress of the goals to inform policy makers and ensure accountability.
These efforts are especially important in identifying those left furthest behind, since data are increasingly disaggregated by income, sex, age, race, ethnicity, disability, geographic location and other characteristics. This type of detailed information is the basis of effective policies.
Tool #3: Inside the SDG Indicator Handbook | UN Stats List
I found a great handbook that breaks all of these indicators down to make the progress very easy to understand. The handbook defines the indicator, shares how they gather data for the indicator, and shows references. For my data friends out there, you can even see the formulas they use! 😍
Yes. I’m excited too.
- Indicator 1.1.1: Proportion of population below the international poverty line, by sex, age, employment status and geographical location (urban/rural)
- Target 1.1: By 2030, eradicate extreme poverty for all people everywhere, currently measured as people living on less than $1.25 a day.
- Goal 1: End poverty in all its forms everywhere
If that isn’t cool enough, this database has an open API. The database, maintained by the Statistics Division, was released on 20 June 2018 and contains over 1 million observations.
Tool # 4: Explore Geospatially Referenced Data by Goal | SDG Data Hubs
This site breaks down all the indicators by location to see progress. They have maps and other data visualizations and analyses, and easy to download in multiple formats.
And, you can also see by country! Ireland, Mexico, Philippines, and the state of Palestine.
This blog is updated constantly with new info on how the UN is gathering data for the SDGs. For example, one great article was centered around the topic of how can we use mobile network data to integrate into the global data platform to better understand the progress towards the SDGs? This is particularly fascinating because the amount of people who have access to the internet is growing so rapidly.
With more than 5 billion people connected to mobile services in 2017, and projections reaching 5.9 billion by 2025 (71% of the world’s population), we can see the mobile phone sector is increasingly important in achieving the SDGs.
And still… can we use data to make decisions with over half of the current population not online?
Global Pulse is a flagship innovation initiative of the United Nations Secretary-General on big data. Its vision is a future in which big data is harnessed safely and responsibly as a public good. Its mission is to accelerate discovery, development and scaled adoption of big data innovation for sustainable development and humanitarian action.
To this end, Global Pulse is working to promote awareness of the opportunities Big Data presents for sustainable development and humanitarian action, forge public-private data sharing partnerships, generate high-impact analytical tools and approaches through its network of Pulse Labs, and drive broad adoption of useful innovations across the UN System.
So if you’re like me and a data nerd, you’re going to spend a TON of time of these sites. My goal for you is that it makes you curious.
How can you use this data to better understand the people you want to impact. And to get what’s happening in your market?
Or if you’re already hyper zoned on the problem… What impact are you making on a global scale?
Show us with the data.
In 2016, 42% of Kenya’s GDP was transacted on the text-to-pay platform M-Pesa. So, without bank accounts, wifi, or credit cards. In this episode, we have the CEO and Global Managing Director at I-DEV International, Jason Spindler, to talk about how M-Pesa works.
- Jason’s background and how he got into the business in Kenya
- How M-Pesa works without internet
- How M-Pesa impacts the economy
- Strengths and weaknesses of mobile money
- Factors of the success of M-Pesa
- The timeline as M-Pesa scales
We talk about M-Pesa’s impact on Global Goal #9, innovation and infrastructure. Find out how simple solutions can transform an emerging market in this episode.
[02:30] “I’m the one of the Co-founders and the managing director of I-Dev International. We started about 10 years ago. The core of what we do is help high growth businesses in emerging markets grow and scale.”
I-Dev focuses on working with SMEs across their target markets. Our global headquarters are in San Francisco. Our Latin America headquarters is in Lima, Peru, and our Africa headquarters are in Nairobi, Kenya where Jason is based. The business landscape in Nairobi has only evolved in the past five, maybe 10 years in East Africa.
The Kenyan Ecosystem
[05:04] The Kenyan ecosystem is unique, Jason says, because almost everyone you meet here is starting something. But in Kenya, they are actually they’re immediately out rolling it out and they’ve got their first customer traction.
There’s very little that’s just in the idea stage for the people who do make the move out here. The locals who do decide to start something are actually getting it done.
[08:10] “Everyone in Kenya uses mobile money. I think it’s something like 90 percent of all adults use it. And that’s been the case for around 13 years now. ” Jason says.
“I saw a stat a while ago where one in five mobile money transactions globally happened in Kenya, and that’s in a world where WeChat is very pervasive. India is moving to mobile money, too. Now, we’re helping Peru launch their mobile money platform.”
So, so why is everyone using it and what’s it all about?
MPesa mobile money in general has a couple of different forms and versions. We’re not talking about digital wallets like Apple Pay or Google Wallet. Those are for people who already have online capital. They’ve already got their banking online, they’ve already got their money online. And that just consolidating your analog, your credit cards and your money into digital.
[09:27] “In this day and age it’s kind of silly for us to use cash or credit cards, the physical plastic. And if you think about it, the physical plastic that you use is just an analog representation of what you have in your digital account. So why do you need to go and take something from your digital bank account or digital credit card statement and use a piece of plastic, a physical thing, to just complete a transaction that will go into someone else’s digital account? It doesn’t really make a lot of sense.
So that’s where the world is moving – away from any physical forms of money and toward totally digital currency.
What is mobile money in the context of emerging markets?
[10:09] It’s a tool for people who don’t have accounts.
Two to 3 billion people on the planet or nearly half of the population don’t have access to digital currency, meaning digital bank accounts. They’re not online with their banking. So that means if I want to buy something or pay or something, I have to physically hand someone the cash to do it. Now, think about all of the transactions that you do every day, how often have you walked into the store to buy a microwave, a refrigerator, you know, almost anything and paid in cash?
That is a world that two to 3 billion people on the planet had been left out. They’ve had to physically walk in and hand someone cash. That means they can’t do long distance transactions.
“So if I’m a farmer and I’m trying to send my crop to Nairobi, the capital and I live several hours away I may or may not know the person that I’m sending my crop too. I have some hesitancy about putting that crop on a truck and shipping it. Let’s say it’s coffee and I’m shipping it to the merchant that I’m trying to sell to because I’ve got no way of making sure that they’ll actually pay me that crop needs to arrive. They need to inspect it. Then they need to give someone else the money to bring to me. It’s needing to be physically present for transactions that slows down these economies.”
Mobile money is really addressing that. It allows the people that don’t have access to credit, and don’t need access to a bank to make payments.
Tech Literacy and A World Online
Chandler says, “I think the part that really blew my mind the most, Jason, was that I learned that you could buy a “dumb phone” for 10 bucks and you can use MPesa to send money via text.”
Jason says, “I do believe that we need to add an extra dimension to literacy. I think that in this day and age if you don’t know how to get online and access things online, either through a smartphone or through a computer, most people in the emerging markets and at the base of the pyramid are leapfrogging laptops and computers and are actually going straight to smartphones. That’s how you have 3 billion people are getting onto the Internet for the first time and are staying on.
But if you’re, if you don’t know how to do that, I think that’s functionally illiterate.
So, not only do you need to be able to read, write and do basic math, but you also need to be able to access things online. So there is still a significant percentage of the population that doesn’t have access to the internet on a regularly recurring basis, which is a critical factor. If you don’t have access to the Internet, how are you going to do online transactions? E
Even if you do know how to get online, the mobile money that I’m speaking of enables you to send money using a text feature on the phone.
Disrupting Banking with Mobile Savings
[14:33] You’re able to send people money. People in Kenya use it for everything from buying one cigarette or buying a coca cola. Here, it’s also become the country’s largest savings account. So you can have loaded onto your account up to a thousand dollars.
I’d actually like to see that limit go up. I think the banks have probably been a big pressure on the government to put that in, that you can keep up to a thousand dollars in that account for most of the population in Kenya. I would say that for the majority of the population, that’s a decent chunk of savings. If they do hit that thousand dollars, MPesa has become their bank account or savings account. And this is where we’re seeing a ton of disruption. MPesa has become the largest banker in the country. It’s hosting more transactions and more volume than any of the other banks in the country.
Cashless Transactions and Data Collection
Next, Jason talks about the 85%+ of the commerce in Africa that happens offline via vendor transactions. Companies like Twigga are simplefying the transactions in that market by placing them all on their app/
[19:33] “There has been no data on that population at all, but they’re representing 85 percent of the volume of the very large market. So Twigga Foods recognized is that they can control a small part of that market. They started with bananas and in nine months they became the largest buyer and seller of bananas with a few thousand customers. They basically buy from the farmer and sell to the kiosk owner right to their doorstep. They built a hub and spoke model. They own the entire logistics network from farmer to kiosk retailer.
So now those kiosk owners open their app and they say, I want five kilos of tomatoes, five kilos of bananas, six kilos of onions. The next day the order gets delivered to their doorstep at a significant discount to what they can buy in the traditional market. They’ve been able to do this because they’ve cut out a ton of waste and loss, product damage, etc. Throughout the supply chain. Now here’s where it really gets interesting and where mobile money comes in because all of that’s happening online. Twigga is a completely cashless business.
They pay the farmers with mobile money for the product. They have access to an entire two to 3 billion people that have lived almost entirely off the grid, around the planet.
One of the really interesting things about mobile money is that it allows businesses to leverage the data that they can collect in realtime, not static data. Survey-based data. So I call and ask you questions, you give me answers that you think I want to hear and we all go away and say good job.
So for example, within Twigga’s network, one of the areas that they can move into with this data is to start saying, ‘Hey, you’ve been a great customer for six months. Why don’t we automatically provides you with working capital financing? You want to expand your store, we’ll give you a small loan to be able to do that.’
Lending and Insurance
[24:26] Then, you’ve got the customer automatically on the system, you’ve got credit analysis and history that’s pretty accurate for that customer. And you can automate the lending process. So your cost of customer acquisition, your risk profile for acquiring customers has come down dramatically. Your default rate is coming down because they don’t want to default on their payment. That means they’re defaulting on their distributor. So you essentially completely disrupted the lending on the street for these small businesses. And that’s just one area. Now you’re starting to develop much more accurate data on these populations that can then be turned into insurance product for them as well.
Expanding to more emerging markets: How long will it take?
[34:37] “I think we can actually take the 12 to 13 year time frame that it took to get Kenya to where it is and shorten it to five or six years to build a similar ecosystem,” Jason says.
[34:46] I think there’s a couple of factors at play. it’s regulatory environment. So the banks either don’t want it to happen or they wanted to control it. There’s a big push and lobby for that from the banking side to want to roll it out. Similarly, telecom companies want to have the monopoly on MPesa too.
[35:50] So there’s two large political factions that are also large industries. They have strong political networks and inputs that are battling it out. That’s caused a lot of the issues.
MPesa’s use case is for someone who’s not online right now, who is not doing online banking. MPesa will really be relevant to them and really, really change their life. They’re not a first adapter. So they need a real reason to use mobile money. They need it. It needs to make their life better or they won’t use it. So use cases, whether it’s energy, whether it’s you’re paying through mobile money, whether it’s your customer and you’re on it because your distributor requires you to use it for transparency… The use cases are really critical to driving volume and driving consumer adoption.
[37:06]So to drive adoption in a new ecosystem, you need to go into a market when you can build out those use cases in the ecosystem that makes it relevant for the local population. Those companies are being developed just now, here in Kenya. They’re getting ready to start scaling in a massive way. Then the Kenya model will work in Nigeria. It will work in Mexico City and in Lima. But it’s just in the early days of development. It’s the early adoption, like when Google was just getting started and it took five, 10, 15 years for that to get going.
Facebook and the future of mobile money
Chandler talks through his takeaways:
[43:32] My biggest takeaway was thinking about the role that mobile money plays in an emerging market. If we were to take a look at global goal number nine and talk about creating resilient infrastructure is for our economies. I believe that mobile money is a vital role in an economy to have a secure, fast and cheap way to transfer money for goods and services.
If someone is looking to start saving for the first time ever, you don’t need credit, you don’t need a bank account. It is location independent and you can start saving in a financial first step. This provides reliability and efficiency in life and in business in general.
It allows you to start planning for the future ahead so you’re not just surviving from day to day. You can start surviving and thriving from week to week, month to month, et cetera. I believe if we’re going to have amazing innovations coming into emerging countries like drones or self-driving vehicles, we need to be able to have the basics for people to transact, which is exactly what MPesa has proven out.
[44:50] “What happens when Google or Facebook really tries to roll out their own mobile money and does it in emerging countries? They already have the trust. They have the global network. They could reach billions. I believe this is a super interesting landscape for those that are looking to enter into the mobile money game and if your business is looking to expand globally.
- Wow, the role of mobile money in an emerging market is huge!
- Global Goal #9: It’s vital in an economy to have a secure, fast, and cheap way to transfer money for goods/services. Not to mention a safe way to save money.
- And loved the challenge from Jason here… What happens when Google or Facebook really tries to roll this out mobile money?
- The Mobile Money Landscape: If your business is looking to expand globally, you’ll need to ask:
- How are we willing to take payments?
- How do we plan to take payments depending on the country we go to?
- Are we flexible?
- Is it easy to integrate?
- Can we adapt as this landscape changes?
Those are the top takeaways. Want more? check out resources at idevinternational.com
The average age in Uganda is 16 years old, and the unemployment rate is over 60%. Nationally, 400,000 people graduate university each year in Africa while only 80-100k jobs open up! In this episode, we will talk about the online platform that closes that graduate-to-career gap.
We talk with Eddy Vaisberg, the COO of Fuzu. Fuzu is a career platform where 500k active users can discover their talent, get the skills they need to fully unleash their potential and find a career they love. We will talk about:
- 3:00 The unemployment challenge
- 7:30 How Fuzu aims to help graduates and employers
- 26:30 The technology behind Fuzu
- 46:30 The business model
- 48:45 The global goals they are tackling
Find out how Fuzu tackles 3 Global Goals: Global Goal #8, decent work and economic growth for all, Global Goal #10, reducing inequalities, and Global Goal #1 of taking on poverty through the power of jobs. Listen and enjoy!
The Unemployment Issue
Eddy explains the numbers of the education to job-entry gap.
“What you’re looking at is a bunch of young people coming into their own, looking over the next 5-10 years to start building their careers to push the continent forward. But at the same time we don’t have the ecosystem to support them yet. What you see is this great push toward education… however, unfortunatly, the quality of that education is not at the level of the States, or Europe, or Asia. So when they come out of higer education they are not ready to jump into the job market. 70-80% of these graduates are not ready to contribute. And there’s nothing that bridges that gap between education and unemployment.”
Here are some of the stats:
- Kenya: 40% unemployment for the last 3 years of graduates
- Uganda: 65% unemployment for recent graduates
- 400k people graduating in Uganda, 1% of the population per year. But only 80-100k jobs open up each year.
Eddy talks about the infrastructure in the US, Europe and Asia to get graduates into jobs, like mentors, peer groups, career counseling, and internships. Africans need further training before they can even go into an internship, and African companies are only accepting 3-5 years of experience.
How Fuzu Closes the Gap
Here are some of the initiatives happening to help Africans close this employment gap:
- Large companies like Microsoft running intensive trainings
- Government and organizations looking at this problem intensively
But even with many initiatives, the scale of the education-to-employment gap poses the biggest problem.
“750 million people will enter the job force in the next 25 years. These initiatives can’t provide the tools and solutions that can solve this problem across the millions. For us it’s about how we support millions of aspiring junior professionals with tools, career advice, and mentorship to address the problem for Africa.”
Fuzu is intended to be a deep, personalized, catered technology experience to enrich the job seeking journey and unleash the potential of millions of graduates.
A Digital Career Companion
Here’s what will make Fuzu stick:
- Hosting the best job openings
- Contributing the best career content: how to write an email, how to do an interview, how to drive a discussion or lead a meeting
- Supplementing the experiential knowledge that is lost in multiple-choice-test style education
Fuzu and the Global Goals
Eddy emphasizes equal opportunity as an important focus for Fuzu (Global Goal #5). In oder to address the multiple Global Goals they care about, Eddy says that the platform must be the most engaging and opportunity-rich platform experience available.
“We’re trying to leverage all of the analytics to drive a merit-based hiring approach. In order for us to drive our mission, to have graduates and junior professionals utilize their potential and become a leader in the continent by providing the best job opportunities. So what we do is we give employers access to their personality, their talents and core competencies, and their experience.”
The user experience and analytics on Fuzu addresses 2 problems:
- Eases the unknown element of recent graduate hiring
- Mitigates the referral network approach of hiring – which is exacerbated by the tribe network and gender biases in Africa
“This way we force our employers to hire on merit, so everyone has an equal opportunity to get a great job.”
How It Works
- The employer creates a job search with detailed skills and personality requests
- The platform scrapes all 500k users to find matches
- Fuzu reaches out to the top 1000 potentials for the job by email
- Users apply through the platform
- The platform ranks applicants from 1-100 based on the accuracy of matching
- Employers review applications and select a new employee
“You don’t have bus drivers applying to be your accounting manager, or 5-year marketing managers applying for entry level customer service positions.”
The Business Model
Fuzu makes the platform accessible to anyone to use the tools and take the courses. For the employers, the platform has a freemium model, and for applicants, there are certain paid features like creating a CV.
“We don’t want to limit anyone from dreaming, growing, or being found. Most of the monetization is on the employers side, where we have large companies on an annual contract to ingrain us into their hiring process, and manage the hundreds of hires they engage per year.”
Here are Fuzu’s main points of focus to scale:
- Market expansion, to disrupt and enter a market ready for a new solution. This means going into West Africa, South Africa, and other areas. “You can only enter a market once. So we’ve got to make a big splash,” Eddy says.
- Enriching the experience to become the #1 career companion and CRM.
“We see Fuzu as a tool for building the economies and create more people that are ready to make a contribution. It will become a self-fulfilling cycle of job creation… and we want to impact and touch as many people as possible.”
- Wow, the education system isn’t giving real-world skills! How do we decide how we’re educating youth?
- What is it going to take to change the education system?
- We can tackle poverty and economic development by equipping young people to stimulate the economy from the bottom up.
600 million Africans do not have access to electricity, and most of them burn fossil fuels inside their homes. Is there a way to power off-grid homes and businesses sustainably?
The Green Mini-Grid Facility Kenya (GMG Kenya) provides grants and technical assistance to mini grid developers, to expand energy access to rural communities in Africa. In this episode, we talk with Nakul Sharma, a senior associate at I-Dev international and one of the lead managers of the Green Mini Grid Facility (GMG Facility Kenya) project.
- 5:00 What is the Goal of the GMG Project? | Find out how this company plans to get power to the pockets of homes and businesses who are not connected to a grid.
- 11:30 Why is a Power Grid Important? | Find out what life is like off the power grid, and what it takes to get power to people who live on less than $4 per day.
- 17:00 African Resources | Africa is the world’s largest geothermal resource, so why is expensive diesel fuel so popular?
- 21:00 The Mini-Grid Solar Business Model | See how GMG Facility addresses the biggest problem in their market: demand for power.
- 27:00 Maslow’s Hierarchy | Kenyans priorities food first, then education. But when they can save 25% of their daily income, priorities shift.
- 36:45 A Business Model that Puts Itself Out of Business | With enough mini-grids, the governments and industry in Kenya will see rural areas as viable to connect to the grid. How will GMG Facilities stay in business?
- 42:00 Global Goal #7: Clean Energy for All | Nakul asserts that although access to sustainable power is clearly in the future, it will take time.
Most countries have a national electrification plan. This program was created to cover the communities that were not included in the program. Some are so rural that it isn’t economically feasible to add the communities to the grid.
The households they help are the lowest income households with no electricity access. They use kerosene and flashlights to operate at night and cook. The mini-grids use a standard solar or hydro technology, and 400-500 households and businesses can be powered.
Nakul says that if their company is successful, the mini-grids they create will create a larger grid and make the community viable to connect to the existing governmental grid. “Success for this sector means that we connect these communities to the larger grid.”
“So essentially, it is GMG Facility’s job to put ourselves out of business.”
GMG Facility also covers funding: they pay for 50 percent of the cost of the panels, batteries, and hardware. Then, they help the communities and businesses raise the remaining 50% to pay for the grid. The idea is to use the funding and the development to generate interest in the sector: developers, investors, and governmental interest in connecting these communities to the grid.
Why is a Grid Important?
“What we’re seeing in the lowest end of that spectrum are some really cool innovations. What is the key issue for someone making less than $2 or $3 per day? It’s affordability.”
Nakul talks about a recent innovation in buying power in whatever increments you can purchase it, as you need it. So for agricultural communities where income is seasonal, they can buy power when they need it.
Previously, the lowest increment you could buy power was $0.50 per day, which is half to a quarter of the daily income. So, integrating a “pay as you go” business model was critical for affordability.
The African continent doesn’t need more coal or dirty fossil fuel. “Kenya alone has the worlds largest geothermal resource currently because it sits on the rift valley. I don’t know the science of it but I know it creates a hell of a lot of steam.” Steam turbines create energy from these rifts as well as hydroelectric power from dams as electricity resources.
However, diesel is the most widely used resource in Africa. It’s both the dirtiest and the most expensive resource. Nakul is optimistic though that Africa has the most opportunity for using clean energy since so much is available at a lower price than diesel.
“A commercial and industrial stand-alone solar system for a business can produce power for $0.04-.07 per kilowatt hour, while diesel provides power at $0.40 per kilowatt hour. The general electric grid can provide power at about $0.15 pkh… So, the opportunity is enormous,” Nakul asserts.
The Minigrid Solar Business Model
Affordability is the main deciding factor in the success of the mini-grid business model. Developers go from house to house collecting payments, and GMG Facility had to come up with a way for developers to be compensated dependably.
“When your power bill comes in, you also get the option to pay-as-you-go with credits in advance of the month. You can also use mobile money and pay with your phone. This way, when the mini-grid developer goes around and physically collects payments, he isn’t put off week after week when families cannot pay. Instead, they can pay with their phone or pay as they go in advance.”
Nakul shares the main driving question to the business model: “How do we create demand?” He says there are 2 models the company is looking at to answer these questions.
- Traditional model: developer driven. In this model, the developer finances the equipment teaches a business or family how to use the equipment, and manages the grid and the implementation.
- Enterprise-driven model: In this model, you look at a larger company (like an aquaculture company and see what they need. Then, you set up a mini-grid right next to that commercial complex to provide power to all of its related facilities. This way, the company provides 70% of the demand for the mini-grid to break even, and the remaining 30% of the profit comes from the demand for rural businesses and families.
Those at the lowest income bracket in an emerging market have problems at the bottom of Maslow’s hierarchy – food, shelter, and
basic health. Nakul suggests that energy is a basic need for education, connection to the internet, and communication to generate income. As GMF has interviewed families though, they have found that they typical expenses priorities are food first, and then education expenses second. Since kerosene, diesel, or a flashlight are viable options when you’re living on less than $4-$5 per day, the demand for energy decreases as funds decrease.
But there are health repercussions of using kerosene. The oil burns and produces smoke that can cause asphyxiation in the lungs.
Nakul talks about the World Bank study to link the use of fossil fuels to deaths or health hazards. He says they couldn’t find strong evidence for the health risks, and therefore clean energy companies need to focus on the economic benefits.
“Kerosene costs 50 cents per day. A stand-alone solar home system costs 50 cents per day for only 420 days,” Nakul says. So after a bit more than a year, you own the system. Each system is good for about 20 years.
“We’re Putting Ourselves Out of Business”
Nakul creating a scaling strategy for a business model that will be irrelevant once it works: Once GMF successfully connects many smaller mini-grids to the larger grid, the mini-grid developers won’t be needed.
Nakul’s idea is that the developers will be the distribution channel for power from the main grid to get to the mini-grids across Africa.
“We already have the distribution structure, so let us supply it to the households.”
One of the problems, Nakul says, is that even when the grid arrives it isn’t as dependable as a larger city grid. Eventually using the mini-grids as power distributors from the main grid is a great way to mediate reliability and rural access problems.
Global Goal #7: Clean Energy for All
“Africa is probably where India was 20 years ago.”
He says it’s a matter of time before off-grid communities will be connected to the grid. As technology costs go down over time, power will be more and more available to emerging markets and those who have never been able to pay for energy.
He also mentions the critical step of Government endorsement and funding of power into the commercial and private sectors. Nakul leaves us with a recommendation to get involved at a personal level in the clean energy sector through crowdfunding, so check out these crowdfunding sites:
In areas where resources and infrastructure are scarce, a few key investments can elevate the entire economy. In this episode, find out how the IFC’s education and healthcare portfolios are impacting Global Goals 3 and 4 in Africa.
- 2:00 How the IFC works | Investing in profitable AND sustainable ventures
- 12:30 What kinds of investments does the IFC do in Africa? | How the IFC impacts a whole ecosystem with $5 million+ investments.
- 18:00 Healthcare & Education | How the IFC supports these two critical impact areas in Africa
- 21:00 Medtech & Edtech | Technology can bridge the gap for off-grid families to get fully accessible, standardized education
- 26:00 Challenges to Scale in an Emerging Market | Kenyans value education, so the challenges of resources and infrastructure create opportunity for innovation.
- 28:00 Measuring Impact | Standard and case-by-case metrics for impact investing
- 35:00 Business in Africa | An invitation to do business in Africa
Senior investment officer Ananya Sengupta works with the IFC Sub-Saharan Africa division. The International Finance Corporation is part of the World Bank group, and they are committed to partnering with the private sector to end extreme poverty and increase shared prosperity.The IFC has invested more than $25 billion in African companies to help their partners overcome the financial, operational and growth challenges of business development.
We’ll see how the IFC measures impact in this episode, and how the healthcare and education industries are developing in Ananya’s point of view.
Investing in Profitable AND Sustainable Ventures
“We must be able to offer something that the market cannot offer,” Ananya say, like expertise, advice, or specific kinds of loans. IFC is a for-profit group that is proving that investing in emerging markets can be profitable.
“For any economy to grow, it’s not only the government that needs to invest but the private sector that needs to invest too. They will only do that if they see that it’s sustainable. So that’s what we do.”
Ananya talks about working in the health and education team with the IFC, then moving into a portfolio team for investments. Her portfolio group has more than 150 businesses, and she specifically manages about 40 companies. “We monitor the portfolio, the quality, the trends, and also at an individual level. After we’ve dispersed money to a company and it comes into our portfolio, we give the company a credit rating.” She talks about her job in creating the reports on those companies to ensure the quality of her portfolio.
What kinds of investments does the IFC do in Africa?
Ananya talks about the different industries and countries that they are involved in. She says they work with investments above $5 million, “because we believe in having the biggest bang for the buck. Our philosophy is to work with bigger companies that have a bigger impact on their whole ecosystem. This way we can impact a whole ecosystem of companies around the one we invest in.”
“We’re seeing a lot of medical tourism because Kenya’s becoming a center of excellence in healthcare. …But even though Kenya is strong in the region in healthcare, the cost is expensive. So many Kenyans go to South Africa or India for healthcare.”
Large parts of the population still don’t have access to affordable, quality healthcare services. Ananya says that the competition will help address those issues, as more and more companies arise from the market.
The investments that the IFC does in education are some of the smallest in their portfolio, and “they meet a very real need… in areas where there are just not enough public schools.” She describes schools that are run by one or two people out of someone’s garage and the opportunity for corporate alternative schooling companies to come in and provide quality education.
She talks about higher education as well, which includes technical and vocational universities.
Medtech & Edtech
Technology can now address problems like:
- Lack of teachers
- Lack of infrastructure
- Access to a school
- People living off of the energy grid
- Education quality
- Standardized curriculums
Ananya says that kind of technology is critical for Africa, from providing content and services that have never been available but also to increase engagement in education in Africa.
Challenges to Scale in an Emerging Market
Here are the main challenges Ananya mentions:
- Lack of electricity (though there is internet)
- Lack of resources and curriculum
- Lack of teachers
- Allowing remote access to a class they need
The opportunity, Ananya says, is that in Kenya education is very prized. People are willing to pay for their children to go to school.
Ananya’s portfolio group agrees on impact metrics that they will use to choose a company. Some of the Metrics the IFC looks for are:
- How many female employees do you have?
- What are the learning outcomes (for education)?
- ROI over time – infrastructure metrics vary, and are specific to each company
- How much business has this company given to SME’s (Small to medium sized businesses)?
Leap Frog to Africa
In Africa, you don’t have to go through all the pains of developing infrastructure because the market is ready for up to date innovation. For people who are willing to take that risk “there is a huge opportunity to make money and to make a real difference to the people here.”
- The IFC has taken a long-term stand to prove impact investing is profitable, and have created thousands of jobs.
- If you have a business with traction, head to IFC.org to get connected and see what work they have done for good.
Lori Systems is a logistics coordination platform that connects Cargo Owners and Transportation in East Africa. Find out how the company addresses Global Goals 1, 8 and 9 in this episode.
In this episode, Chandler interviews Ron Okello, the head of product marketing and PR at Lori Systems. Ron shows us how Lori Systems solves a major economic problem in East Africa: the relative cost of moving goods across East Africa is one of the highest in the world.
- 4:30 How the Platform Works | Lori Systems is a logistics coordination platform that seamlessly connects Cargo Owners and Transportation.
- 13:30 Why Does the Data Matter? | With data on transporter reliability and costs, the company helps suppliers optimize their business.
- 19:00 Business Model Insider | Ron talks about three pillars of their business: tech, operational excellence, and customer service.
- 27:00 Tech in Africa – Who Will Survive? | Hear the two main industries ready for tech innovation in East Africa.
- 32:30 Timeline for Exponential Technology | Ron expects exponential tech to come sooner than we think.
- 40:45 Lowering Costs, Alleviating Poverty | Find out how problem-solving in the cost margins can shift a whole economy.
Lori Systems was founded in 2016 by Joshua Adam Sandler, a South African Native and Harvard Alumni. When they saw the inefficiencies in the transportation industry, they created a platform to revolutionize logistics in Africa.
- Manage invoicing and operations
- Visibility of where the trucks are
- Rates for product moves
- Which cargo is coming and going, and the cost
- Access to consistent cargo
- Centralized control system and reliability enforcement
- Consolidation of providers, products, trucks, and feedback on driver compliance
- Journey and performance monitoring
- Push notifications telling their driving habits and arrival times
Formerly, there was no certainty that trucks would show up when a company would call them to transport products. This way, the product companies and warehouses can dependably transport their products and optimize their business based on the data in the platform.
Getting from point A to B in East Africa is not as easy as ordering Uber Eats. Most cities in Africa have unmapped, unpaved areas between them. This makes driving and delivering product challenging.
“The driver is our number one priority. His compliance and reliability is important to us.”
What do you do with the data?
“Every month we have a sit-down with our clients, and have a conversation about performance. We give feedback and they give feedback, based on the data. We better ourselves and also scale with the data.”
Lori Systems decreases the cost of goods for their customers by 15% just in lowering transport costs. “When we do this we will be able to realize more of the global goals – bettering economies and reducing poverty.”
Lori Systems address the Economic Development Global Goal by providing transporters consistent wages, and also they address poverty by reducing the cost to move products.
“The biggest goal for me would be Industry Innovation and Infrastructure. We looked at the challenges within that goal, and we come in to bring the innovation to streamline the process and make it more efficient.”
Business Model Insider
“We are centered in 3 pillars. We have technology to drive decision making, Operational excellence to operate teams, and customer service – which is the biggest one if you ask me. The beauty with Lori systems is that 33% of a move cost goes into fuel. And how we solved that problem is through fuel financing. We provide them with fuel to execute the job, and when they come back they give us the invoice. Then, we handle the documents with the clients and ask for a contract.”
This means it’s an all-around win for the transporters. They have fuel, insurance and access to consistent cargo.
“We map out your future for you. On your journeys we are looking for your return journeys, or move you from town B to town C because we have a new customer there. We always make sure that your trucks are constantly moving. I can’t begin to stress how much time we save the transporters.”
Tech in Africa – Who Will Survive?
“Tech cannot solve all our problems. It needs to be supported by people.”
Ron talks about crowdsourcing solutions to the industry, since it’s an industry “build on relationships.” He sees opportunity in the growing workforce and the government’s support of indigenous companies.
Ron suggests that any tech company oriented toward the Global Goals will be more likely to make it. Agriculture and logistics will especially thrive in African markets.
Another area of tech opportunity is tech for finance. Any technology that can help create access to capital or make fund transfer simpler will go over well.
“In a nutshell, as long as its a problem that you can solve, the industry is ripe and open to solutions.”
Timeline for Exponential Technology
Ron explains that on the financial side, exponential tech could arrive “sooner than we think.” Blockchain is growing in Africa since transparency is an issue in developing markets. “Self-driving cars may take awhile,” he says, since the infrastructure to support exponential tech in transportation is still developing.
Trust is a key factor in adopting exponential tech, Ron says, even if the market is ready. Moving from carrying groceries on your head to riding a hoverboard is an unlikely leap.
As far as Lori’s expansion, Ron talks about moving into Uganda next. Expanding the company requires partnerships and tackling the infrastructure issues in the country. How will they bank? What roads will they use? Though Lori will have the advantage of access to landlocked ports, they will have to create partnerships to allow imports and navigate the existing infrastructure.
Lowering Costs, Alleviating Poverty
Though costs of goods increase as their source companies move more inland, Lori is able to maintain consistent pricing because of the services they offer. Ron says it costs 4x the amount to move product in Africa as compared to the United States.
- Moving things is expensive! Margins are a critical problem-solving opportunity in an emerging market.
- What margins have you planned for in creating a business in an emerging market? How will increasing volume impact those prices and margins?