Come join Rising Pyramid and Vittana on March 4th, 2010 at 8pm and learn about Social Entrepreneurship! Kushal Chakrabarti, Co-Founder and CEO of Vittana will be sharing his experiences starting up a company and about the successes and challenges he has faced in the microfinance industry.  Much like Kiva.org, Vittana allows anyone (including you) to help fund an education loan for a student in a developing country.  If you have an interest in education, entrepreneurship, international development or philanthropy, you wouldn’t want to miss this talk.  Kushal is the co-founder and CEO of Vittana. Vittana partners with microfinance institutions around the world to develop student micro- loan programs, oftentimes providing the first and only access to college loans in those countries, and makes it possible for those students to receive loans from people around the world through vittana.org. Vittana is currently working in 6 different countries, has a 97% repayment rate on its loans, and loan dollars to students are increasing at double-digit rates every month. Vittana was recently featured in the New York Times, voted by 1.7 million readers as the #1 “Ultimate Game-Changer in Philanthropy” on Huffington Post, and named by Fast Company as one of “5 Social Capitalists Who Will Change the World in 2010.”

In past lives, Kushal was a computational biologist (we couldn’t make that up if we tried) and an artificial intelligence scientist. Most recently, he ran the multi-hundred million dollar personalized recommendations team at Amazon.com (“You might be interested in X because you bought A, B, and C”) and is the author of 20+ patents, papers and talks. In his (copious) free time, he runs Ironman triathlons and trains guide dogs for the blind. He graduated from the University of California, Berkeley with a B.S. in computer science and B.A. in molecular biology.

Rising Pyramid was started to educate people about the fast-paced growing industry of Social Entreprneurship and to spark interest in the concept of market-based solutions at the Bottom of the Pyramid. We aim to discuss the fundamentals of the industry and facilitate a discussion with you about your interests and ideas!

“How You Can Change the World: Solving Global Poverty Through Social Entrepreneurship” will take place on March 4th, 2010 at 8pm at the University of California at Berkeley at Andersen Auditorium in the Haas School of Business.  Several on-campus groups and professors are involved in marketing and supporting this event, including: Asian Business Association, Berkeley Group, Berkeley Consulting, Center for Entrepreneurship & Technology, Lester Center For Entrepreneurship, Microfinance DeCal, Net Impact Berkeley, Social Entrepreneurship DeCal, and the Taiwanese American Professionals, among others.

About Vittana: Vittana is an early-stage non-profit startup bringing student loans to the developing world through the power of person-to-person microfinance. We are a different kind of non-profit: we are designed from the ground up to be scalable, cost-effective, and just get things done. We are an Internet startup, we just happen to be in the business of creating good instead of creating money. Vittana is headquartered in the historic Pioneer Square district of Seattle, WA.

About Rising Pyramid: Rising Pyramid is about the gradual improvement of life for the world’s poorest, living at the Bottom of the Pyramid (BoP). Despite setbacks, social entrepreneurs who set goals on hitting the triple bottom line have been challenging global poverty head on and have succeeded in many cases. We believe that both the successes and challenges faced by these entrepreneurs are leading to the rise of those at the bottom of the pyramid.

BOP markets break our traditional ways of thinking and acting. This might be their biggest allure and challenge alike. Unless we are willing to discard our biases, this opportunity will remain invisible and “unattractive”.

- C.K. Prahalad
The Fortune at the Bottom of the Pyramid

As we close off 2009 and begin a new decade, its a time to reflect back on what has been accomplished in the last ten years, but also to look at what trends and innovations have come to fruition. A new concept has emerged by engaging the Bottom of the Pyramid in a market-based system of innovative and socially-minded companies. The combination of a flatter world, improved technology, and hungry entrepreneurs has played a role in growth in this phenomenon, but they are not the focal point. Once just a belief or hypothesis, the concept of social entrepreneurship has blossomed at a greater rate recently and is increasingly highlighted in successful case studies of organizations that are providing socially-focused goods and services while not surviving solely on donations. Publications such as The Wall Street Journal (here, here, and here) and The Economist (here and here) have devoted space not to just to the good work people are doing, but to turning the discussion towards the largest untapped market currently available.

Prahalad points out that working with the BoP goes against the grain and the homegrown method of business we learn from the consulting firms, the investment banks, and business schools needs to be rethought. It’s a challenge again. No longer are innovators looking to fit their product into the proverbial ‘box’ of today’s society. By going into a third world country without adequate infrastructure or resources and providing access to a product, entrepreneurs must tackle other issues that have been solved in developed countries. Can a traditional distribution model work here? What if there are no roads to access the towns? How does our product/service fit into the culture and traditions of the local villagers? These are all new puzzling questions that social entrepreneurs work to address alongside providing a social or environmentally focused product or service. The steep challenge posed by social ventures combined with a change in the mindset of entrepreneurs has boosted the “allure” of working in the social enterprise space.

As we work our way out of one of the worst global economic situations that the world has seen in some time, the momentum behind this movement/business model/market must not just be sustained but fueled. Innovation is what drives people to change their paradigms and beliefs as to what is possible. The past year alone has brought amazing business concepts and fascinating products to the social enterprise market – and its appropriate to take a moment to acknowledge that. The work is far from complete and the journey has just begun, but it is picking up steam, and the exciting parts are yet to come.

- Chris

As socially conscious businesses and organizations begin to develop and increase in popularity, the number of people that are affected or helped grows as well. Its no doubt that companies like D.Light, Connect Africa or Driptech have a major impact on the quality of life for the people that they seek to help. Their work is innovative, and eases the daily tasks of local people who are able to increase their income, welfare, or standard of living. The question, however, is ‘are there times where a Western influence is not wanted, or potentially harmful to the people we think we aim to serve?”

The spectrum at the BoP tends to vary quite a lot in terms of the level of Western influence or available technology. There are plenty of people who live on less than $2 a day yet utilize cell phones to be able to find the most optimal price for their crops that they produce. Others live in mud huts, but use solar panels to fuel their lights and cook stoves. As Westerners, we tend to assume that technology is the answer to assisting in the rise out of poverty, or that our ‘innovative’ ideas are what is necessary to help. Taking a step back from all of the progress that has been made in numerous countries – could we be overtly influencing people that wish to simply maintain or sustain their culture that has been generationally passed down through tradition?

Collaboration between countries and cultures is a beautiful concept that must be embraced and has lead to technological and sociological developments benefiting millions of people. However, it must be acted upon in such a way that does not threaten the diversity that has defined cultures. Many environmental solutions these days focus on the concept of zero-waste or close to zero-waste. I believe there are methods to raise the standard of living, prevent diseases, improve fragile economies in ways that are to ‘close to zero-waste’ in the social sense as well. By implementing solutions that not only solve a problem within a culture but that are also agreeable to tribal or town elders by not encroaching on cultural traditions, a trusting relationship is built and serves as a foundation for future growth. The loss of a sense of ownership or traditions within a culture (with or without the success of the implemented product or solution) can leave a devastating effect and hamper any future efforts to provide assistance later down the road.

Much of the discussion surrounding business plans of Social Enterprises (and as outlined in a previous post, How to Structure the Social Business Space) involves using the constituents at the Bottom of the Pyramid as consumers. For example, a popular business model that has arisen is reliant on developed world people micro-loaning to others in developing nations. The borrower receives the loan, uses it appropriately and then repays, closing the loop. Other examples of business ideas use BoP individuals to purchase products. Yet, a truly underdeveloped idea that has yet to gain as much traction – one that may hold even more promise – is using the BoP as suppliers.

Why it hasn’t happened as much
Inadequate infrastructure is a major reason that basic businesses dominate the economies in the developing world. Some countries are struggling to even provide utilities and adequate housing, and thus haven’t been able to turn their attention to providing the infrastructure necessary for developing a service-based economy. Agriculture and mining currently dominate the output of developing nations, and history shows that as developing countries progress, they will move on to manufacturing and services. Samasource is showing why they don’t have to wait until the manufacturing revolution occcurs to allow the BoP population to provide services to the rest of the world.

To quote Samasource’s website:

Samasource enables marginalized people, from refugees in Kenya to women in rural Pakistan, to receive life-changing work opportunities via the Internet. The core of this concept is microwork – little bits of labor that can be performed anytime and anywhere that add up to a real livelihood for our partners. In parallel, we enable socially responsible companies, small businesses, nonprofits, and entrepreneurs in the US to contribute to economic development by buying services from our workforce at fair prices.

This model shows that there are other ways to involve those at the Bottom of the Pyramid in business. Samasource is paving the way by showing the viability of treating the BoP as suppliers. This sort of creative business model should serve as an indicator that there is great potential in this area.

What needs to happen
The innovation that is so prevalent in the the business models that use the BoP as consumers needs to be applied towards developing business models that use the BoP as suppliers. Not only should they be seen as potential consumers or individuals that need assistance, but they should also be viewed as a viable workforce that has much to offer.

Given that, what needs to happen for this to occur? The growth of education and training facilities that can train the BoP is essential to developing a workforce that will be able to compete with the developed world. Countries in Africa, Latin America, and Asia have many benefits (cheaper wages, cost of living, and facilities) that provide a competitive advantage over the developed nations. As Samasource has come to discover, these competitive advantages provide a foundation for a viable business model. Innovative solutions should not only apply to products and distribution models, but to the way we see folks at the Bottom of the Pyramid.

- Chris