Pencils of Promise is an NGO focused on building schools in developing countries.  Though the organization is only a little over three years old, they already have 50 schools up & operating, with 30 more on the way.

According to their annual report, in 2011 Pencils of Promise operated off of $1.2M in contributions, plus in 2010 they received $1.1M.   These are no small sums, especially when you consider that they only received more than $100K from two donors.  This was a grassroots effort.

I’m sure you’ve guessed what their secret is: social media connections.  Adam Braun, the founder of Pencils of Promise, is quite lucky: he has a strong personal connection with Justin Bieber’s manager, but that doesn’t mean other social enterprises can’t learn from the example.

Justin Bieber has teamed up with Pencils of Promise to support their School 4 All campaign, among others.  For the most part, Bieber’s influence on twitter (his Klout score is a perfect 100) meant that one tweet of his had the power to translate into lots of support for Pencils of Promise.  Even if all that people do is visit the Pencils of Promise website or  watch their youtube video, the traction and popularity makes Pencils of Promise that much more alluring to prospective donors.

Pencils of Promise knows very well that vanity metrics (such as total page views) can have an impressive impact on donors, as they highlight quite well in their annual report.  In 2011, they achieved: 700,000+ website visits, 640,000 youtube video views, and 400 average daily Twitter mentions.  They boast that #Schools4All became a trending topic in 10 minutes and celebrate their biggest supporter  with the ‘top pop tweeter’ award.

Personally, I’m quite bad at updating twitter, but the value is incredible.  Look for opportunities to take better advantage of social media to grow your brand.

-          Bryan

This timely piece of news comes shortly after the government moved one step closer to signing a bill centralizing the authority of microfinance regulation. The passage of the Micro Finance Institutions (Development and Regulation) Bill would have provided SKS the upper hand in situations like the state government crackdown in late 2010.

This leaves SKS in an opportunistic position going forward: Sure you’re down, but you’re not out. Things are looking up, and though they might be rough for a little while longer, you can expect SKS to continue growing again soon. Two key questions present themselves, in my mind:

What is the mindset leading up to expansion?
With SKS huddling close to (their new) home in Mumbai, how do they restructure themselves, turn around a profit, and get in position to grow their business? They’ve already slashed operational costs through layoffs and office closings, but what needs to change from a strategic level? Are they focused on improving the efficiency of current operations?

Lots of questions here, but the point remains: the current model hasn’t worked, and even though there will (hopefully) be some centralization around microfinance authority, the government is still not your friend in business.

What are the lessons learned from expansion?
SKS faced difficulty when dealing with the different states’ restrictions, and appeared to have expanded beyond their reach. While granted their struggles in the past year were by no means unrelated to the governmental actions in AP, but that notwithstanding, it is clear that there needs to be a rethinking of the growth strategy. Can technology help, moving forward? Is slower expansion the expectation?

With horrifying stories of agents tracking down borrowers, there is no doubt that SKS cannot afford another PR misstep if they hope to move past their current state. Their lending and collection practices must change and adapt to each unique locale.

Once the beacon of Microfinance as a budding industry, SKS has since been humbled by the people and the government of India. How will they respond? How will they improve to ensure this doesn’t happen again?

- Chris

In sports, people often talk about the importance of matchups.  Size matchups, skill matchups, grit matchups.

In fact, any given sports team has a variety of strengths and weaknesses that together form the quality of the team.  Even though wins and losses are tracked to rank order teams, the fact of the matter is that the ‘best’ team is really just the team who matches up well against other teams more often than most.

The ‘best’ team can still easily lose to the worst performing team if the matchup works against them, which speaks to the power of matchups.

Oddly enough, the concept is rarely used outside the context of sports, even though it applies quite well to all relationships.

For instance, how do you build a great team at your company? Exclusively recruiting only the best of the best is actually not a good strategy.  Any hiring manager worth their salary will be able to tell you that it is better to draw from a pool of highly qualified candidates, but to focus on assembling the right team.

But we are still talking about teams, let’s look deeper–to your personal relationships.

With your best friends you’ll find that your tastes, preferences, inclinations and propensities match up in such a way that you complement each other’s weaknesses and  bolster each other’s shared strengths.

Naturally, there’s no magic formula for finding the right friend–sadly, I can’t help you there.  Relationships develop on their own and in unexpected ways, but taking the time to reflect on how you matchup with others can unlock insights that will improve your friendship.

What is your best friend’s biggest character flaw? Is that an area of strength for you? Be conscious of when your friend’s flaw is coming to the forefront…can you support them in that moment rather than react viscerally?

What is their biggest strength?  How do you help others express and build on their natural skills?   Is there a chance for you to showcase a particular skill of someone else’s?

Don’t always try to be the best yourself–see how you matchup in all of your relationships, from friends to work to love & leverage that knowledge to create balance and support.

You and your friends form a team afterall.

~ Bryan

If you watch kids, most of them will get bored and lose interest if something is too challenging.  Pets do the same.   While it may be easy to tell a child ‘don’t give up!’ or ‘try again’, it’s not so simple when it comes to adults.

Are you the type of person who loses interest when the challenge grows, or does the uphill battle energize you?

The secret to developing everlasting motivation is the experience of joy that you feel when you overcome a challenge.   Unfortunately, we’ve learned with time that we are less likely to experience that joy in the areas where we are weak.

At first, developing your strengths is a good thing, but in the end life is about balance.

Social entrepreneurs should take note.  Organizations are even worse than individuals when it comes to overplaying their strengths and letting their weaknesses go on exposed.  It feels natural to take care of what you’re good at, but it is a dangerous road.

Social enterprise sits at the merger of the capitalist, for-profit world and the mission-driven, non-profit world.  Since the industry is so young, almost everyone involved has a background that is either weak in for-profit experience or weak in mission driven experience.  Organizations should evaluate whether the talent pool and strengths of their staff members are balanced, or skewed.

Every new hire should bring your enterprise closer to balance.

The only way you can do this is if you honestly reflect on and consider where you have gaps.  Once you’ve identified your gaps, either build the skills in-house, or bring them in through other means.

You’re always going to be weak at something.  Just keep getting better.

- Bryan

“Always Be Closing”
- Glengarry Glen Ross

In the iconic movie, Glengarry Glen Ross, Alec Baldwin famously preaches this line which has become the inspiration for many businessfolk. It speaks more about the mental state you must be in as a salesperson than anything. Of course you know you want to close the deal, but you must be leveraging that thinking in your actions and conversations. It’s more than knowing – its acting on it.

Entrepreneurs – social or otherwise – know this phrase cold. Yet, there’s another similar phrase that entrepreneurs live by:

“Always Be Learning”

As entrepreneurs, we enter the field with more questions than answers. We’re resourceful and will work our network to find nuggets of advice or suggestions, but at the end of the day, so much of your time is spent learning. Whether you’re deliberately researching a topic, or going about a conversation with someone – you should Always Be Learning.

Inspiration or innovation does not reach the typical person between the hours of 8 AM and 5 PM during the 1 hour you scheduled to research. It happens when you allow your mind to open up expose it to various trains of thought.

So what does that mean on a daily basis? Take notice of the smaller things in life that you might just mindlessly automate. Why did you just complete that action in the way you did? Was there something about your thought process that is particularly interesting? How can you apply that to the constant brainstorm you have going in inside of your head?

With the increasing scope of availability for online courses, and the proliferation of blogs, tutorials, and walkthroughs on the internet – the fact remains true: you can learn anything. Building your internal set of capabilities is not just a critical component of being a good employee – it provides you with an added dimension by which to solve your problem.

- Chris

With the RBI taking a hardline approach on their stance, methods of improving MFI profitability have begun to take an interesting turn.

While most efforts to date have been focused on increasing the revenue side of the profitability equation for MFIs in India, the lack of progress from a policy level is forcing the hands of MFIs to act in other ways. There have been recent calls for compensation levels to be checked, but more importantly, to reduce operational costs within MFIs.

In the absence of political and institutional support, MFIs must begin to look inward for areas to trim fat. While I do not believe this is the only action that must be taken to improve the financial outlook of these organizations, I do think it is one that has a major upside in terms of innovation and technology.

Operational costs need not only be addressed through compensation adjustments, however beneficial that may feel.

For example, some MFIs in Lagos, Nigeria are combating fraud with new Point of Sale terminals designed to prevent loan officers from (mistakenly) entering in incorrect information into the logs. This product is aimed at not only reducing operational costs spent on combatting fraud, but also providing the sense of security among potential borrowers that might do its part to attract more business.

The adoption of mobile money is another application of technology that has benefits on both sides of the table. By reducing transaction overhead costs, mobile money has the potential to save MFIs on a consistent basis. Yet, mobile money provides another benefit that could help generate revenue through the convenience factor – something that borrowers value.

Technological innovation can and should be applied at the Bottom of the Pyramid, and microfinance is not exempt. How can technology continue to enhance the solutions provided at the BoP? There seems to be an interesting market here.

Examine the various aspects of your life and our world: believe it or not you are constantly driven and motivated by  uncertainty.

If you enjoy sports, do you prefer to know the score before you watch or no?  If you like literature, do you prefer to know the plot before you read the book?  My guess is no.  Suspense is what makes things intriguing.

Life itself is made that much more precious because there is nothing certain about when it begins or when it will end.
Yet, we shy away from uncertainty; we are constantly looking to add more stability to our lives.

When you’re young, anything is possible and you can go anywhere.  As you go through life, possibilities end and doors close–it’s a natural process.  With time we make commitments and decisions–and life becomes more certain.

The tragedy is not that doors close, but that we often forget to look for new ones to open.  We grow comfortable with the status quo and stop pushing ourselves to try new things.

It is easy to be complacent, to avoid failure and to stick with what you know, but thats when you stop learning and growing.  Sure, with uncertainty comes pain and disappointment, but these must exist so that we might experience joy and triumph to the extent that we do.

Be comfortable with the unknown; it’s much more exciting.

- Bryan

The very nature of social entrepreneurship involves camouflage.  Social entrepreneurs really aren’t the same as regular entrepreneurs, nor are they the same as non-profit organizations.

Yet, it is important to blend in at times, and stand out like a colorful flying parrot at other times.

For-profit social entrepreneurs, here is a quick guide on when to blend in with the rest of the entrepreneurship world and when to stick out like a sore thumb:

1.       From an Investors Point of View:
As a social entrepreneur myself, I’ve faced investors who have said that I need to focus my core user value proposition away from the ultimate social mission.  In fact, even investors who are clearly focused on social enterprises have given me this advice.

The fact is that investors—whether they are in the impact sector or not—are looking for companies that will succeed.  It seems like an obvious statement but it has important implications.

Certain investors may be attracted your business because it has the potential for a positive impact on society, and that may even impact their appetite for risk, but it doesn’t change what they expect from you.

The fact that you have a social mission will make certain doors easier to open, but when it comes to brass tacks, you need a solid business plan with a proven value proposition to get funding.

The answer: Blend-in

2.       From a Moral Point of View:
Social businesses benefit from the public opinion that they are good for society.  For that reason, they are often the first to come under fire for any moral transgression.  In fact, many companies that are not trying to have a social or environmental impact will trumpet themselves as if they are in order to benefit from the positive association.  This creates a dangerous environment for social businesses.

In 2009, Kiva got into trouble because they had not fully clarified the actual cash flow process of their loan system.  It became known that sometimes loans were made on Kiva after the cash had been received by the entrepreneur.   At the time, Kiva’s President, Premal Shah, told me that his biggest concern was that they might lose the trust of users, which was something they prided themselves in and really strived for.  It was an honest mistake on Kiva’s part, but it underscored the importance of transparency and high morals for social entrepreneurs.

Mixing profit & social mission is tricky—make it clear what your values are.

The answer: Stick out

3.       From a Customer Point of View:
Customers only care about the value that you can offer them in comparison to your price.

In most cases, customers do not place value on the social mission.  For instance, D.Light customers are considering whether to buy a solar lamp to replace their costly kerosene lamp.  They aren’t worrying about the impact on the environment or even their health…for them it is an investment decision.

There may be situations where customers place value on your social mission,  but in most cases you’ll want to focus on the value that the customer cares about.

The answer: Blend in

4.       From a Recruiting Point of View:
Employees want to work on things they are passionate about.  That’s all I need to say here.

The answer: Stick out

5.       From a Media Point of View:
The media loves to tell positive stories or profile social businesses (See Jacqueline Novogratz on the cover of Forbes) and more importantly, the media controls the perspective of your morals.

In addition, the media is a great opportunity for your organization to broaden the scope of its impact:  even people who just hear about what you are doing may be inspired to follow a similar or related path.  I like to call it impact through influence.

Overall, you want to make sure that the media values the social mission of your company.

The answer: Stick out

- Bryan

Often times we may find ourselves at this juncture and more often than not we tend to side with the choices that don’t rock the boat or draw attention. It can mean something as small as not speaking your opinion in a meeting or can have much larger implications by deciding not to share an idea with the team.

Our decision (subconscious or not) signals a lack of confidence – either in the idea itself or in our ability to explain or defend it. We quietly shoot the idea down in our head and never give it the opportunity to see the light of day. This rationalization is selfish and detrimental not just to our development, but to the mission that we aim to support.

Our job as change makers (insert “social entrepreneurs” if it makes you feel better) is to challenge previous thinking and to solve issues that have not been addressed with currently available tools. Blending in or towing the line is not in the job description.

Bryan discussed the concept of persistence in yesterday’s Sunday Morning Coffee, and it rings true for deciding to speak up. Sure, every idea or piece of feedback you offer will not be a home run, but it doesn’t have to be. You don’t need to take credit for the biggest idea – you need to be a part of the process to identify the biggest idea. Your thought just might inspire someone else and lead the brainstorm in a direction you had never thought.

Try it out this week: stand out and be different…not just for the sake of being different, but because it is who you truly are.

- Chris

~Benjamin Franklin

 It’s hard to ignore this quote when it comes from someone who was not just a founding father of our nation, but also one of the most well known figures in history.

Benjamin Franklin was a true variety junkie: he was an author, an inventor, a printer, a politician and more.

Franklin is most well known for discovering the conservation of electrical charge. Ironically, this quote could be about hard work or it could be about the importance of his discovery.

One way or another, Franklin’s resume suggests that he loved to try new things, and that he excelled at most of them.  Though I’m sure Ben was an exceptional, one of a kind person; keep in mind that you are too.

Maybe you have a different skillset, maybe you’ve never done it before, maybe you will fail.  Who cares? Try anyway.

The fact of the matter is that no one is born knowing how to do anything but eat and poop.  If you want to do more than that, you’re going to have to learn just like the next guy.

The good news is that most people aren’t trying that hard. Most of us are looking to be entertained or to just earn a quick buck.  It takes hard work and creative energy to get the bill with Benjamin Franklin on it…keep that in mind.

Sure, there is a horizon out there, a barrier to your natural abilities, a place where your labor bears no fruit.  But if you don’t work hard, if you don’t persist, you won’t ever have to worry about running into it.

If you wish you could do something…then find a way and make it happen.  Conquer all things.

- Bryan