I have a strong desire to start my own social business at some point in the future. As I plan for this, I’ve tried to bucket the types of social businesses that I might start to help guide my thinking. Below are four types of social businesses that I would consider starting; this is not necessarily meant to be a comprehensive list of all potential businesses but I think these groups cover the bases.
The business types are generally split into two types; treating the bottom of the pyramid as consumers & as suppliers:
BoP as Consumers:
Financial Services
- Description:
- Providing financial services that typical banks will not offer on fair terms
- Small business loans
- Student loans
- Housing loans
- Savings accounts
- Credit cards
- Stock trading
- Etc.
- Providing financial services that typical banks will not offer on fair terms
- Motivation:
- Create a net influx of capital into the local economy by sourcing loans from the developed world
- Integrate with internet and social media to create personal links with the developed world
- Examples:
- Grameen Bank
- Kiva
- Vittana
Consumer Goods
- Description:
- Selling products directly to the BoP for a profit
- Lanterns
- Cook-stoves
- Soaps & shampoos
- Toilets
- Food snacks
- Electronics
- Etc.
- Motivation:
- Demonstrate that products tailored to the needs of BoP can be successful
- Explore innovative low-cost manufacturing and distribution business models
- Examples:
- D. Light
- Danone (Yogurt in Bangladesh)
- Unilever (Daily size soaps & shampoos)
Education & Healthcare
- Description:
- Provide necessary tools & services to the BoP to improve their own condition
- Higher education with focus on entrepreneurship
- Affordable healthcare aimed to cure inhibitive medical conditions
- Provide necessary tools & services to the BoP to improve their own condition
- Motivation:
- Enable educated individuals to start medium/large size businesses that fuel the economy
- Unleash productive capacity of those burdened by easily curable medical conditions (e.g. cataracts)
- Examples:
- Aravind Eye Care System
- Jaipur Foot
BoP as Suppliers:
Consumer Goods & Services
- Description:
- Create dignified jobs for those in deep poverty by leveraging lower cost environment
- Data entry jobs
- Manufacturing jobs
- Utility/Telecom/General Infrastructure created by BoP laborers
- Create dignified jobs for those in deep poverty by leveraging lower cost environment
- Motivation:
- Establish fair employee treatment standards in the developing world
- Integrate with internet and social media to create personal links with the developed world
- Examples:
- Samasource
- Voxiva
- Fair trade certified coffee
I believe that bucketing the businesses I might start into these four groups has helped me to frame my thinking communicate my interests to others. If you were to start a social business, which type would you start?
- Bryan
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Interesting post! I really like this framework as a way to think about how social businesses are structured. My personal interests lie in the healthcare bucket, and a company that has caught my eye recently is LifeSpring (http://www.lifespringhospitals.com/). They are a network of hospitals that provide affordable, yet quality, maternal and child care for low income populations in India. Check it out!
[...] social businesses that treat the BoP as consumers (see How to structure the social business space) are seeking to provide products that will help alleviate poverty either directly or indirectly. [...]
[...] they have left over to spend on more essential items. Karnani advocates creating businesses that treat the BoP as suppliers and producers rather than as customers, which I would agree is a very valid way to reduce [...]