Articles by Rob Katz

A tiny bead of sweat ran down the ridge of my nose.  It reached the end, teetered for a split second, then dropped quietly onto the doctor’s desk.  I sat behind the desk, inside the Vijay Nagar Women of India clinic, which is tucked into a government-built housing project in the Bandra East area of Mumbai.  As the sweat hit the desk, it made a soft splat, and little Natra’s eyes followed it down.  About 3 years old, he seemed pretty interested in the inability of this strange white man to deal with the Mumbai heat – not surprising, all things considered.

Natra and his mother, Surekha, had agreed to take a survey about healthcare administered by Acumen Fund Fellow Joanna Harries and her colleague, Rubina Dsouza.  Joanna and Rubina work for Dial 1298 for Ambulance, a professionally-run, high quality ambulance service run in Mumbai (51 ambulances) and Kerala (30 ambulances). You dial 1298 to get a fully-equipped ambulance with doctor and medical equipment on-board.  1298 is affiliated with the Ambulance Access for All Foundation, whose mission is to provide high-quality service for all Indians, regardless of income. 

But will poor Indians call an ambulance?  That’s what Joanna and Rubina are working to find out.  Service for all is not only a noble goal, it’s good business as well – after all, some 40 to 60 percent of Mumbaikers live below the poverty line, in slums.  If you fail to serve this customer segment, you miss a huge number of calls – and your ambulances can run below capacity.

Effectively serving this market begins with listening, and that’s what Joanna and Rubina are doing.  They have been spending time visiting various Women of India clinics, all of which are located in slum areas, and asking a simple, 5-question survey: what do you do when you get sick?; how do you get to the hospital?; which (if any) ambulances do you call?; why wouldn’t you call an ambulance?; who helps you when you get sick?

Joanna and Rubina and I did eight surveys today, just the tip of the iceberg.  What is interesting is that 1298 takes its commitment to the low-income segments seriously – both in terms of social impact and in terms of business sense.  The company is marketing in a number of innovative ways – tying up with schools, hospitals, train stations, and more.  Slum outreach is an element of their business plan.  Regardless of income level, growing 1298’s customer base is an awareness game – call it marketing, brand management, outreach, whatever – you have to have potential customers know about your service before you earn their business.

The social enterprise space is alive and well in India.  This is my overarching conclusion having spent all day Tuesday at the inaugural Sankalp Forum, hosted by Intellecap in Mumbai.

Sankalp - which means “pledge” or “determination” in English - focused on the role of business in driving social change.  When I arrived on Tuesday morning, the main plenary hall was packed with attendees from across the social sector - entrepreneurs, investors, business executives, media, think-tanks, non-profits and students.  It was heartening to see such a diverse crowd.

The first plenary panel was among the best of the day.  It featured three investors, a journalist and a consultant.  I’m sure there’s a joke somewhere that begins with such a cast of characters!  Vineet Rai, of Aavishkaar - a BoP investment fund - suggested that C.K. Prahalad’s 2004 arguments have evolved, and that selling shampoo isn’t social enterprise.  (You won’t find much disagreement here.)

Unlike other Prahalad critics, however, Rai offered his “Four S’s of Social Enterprise” in retort: Social, Small, Sustainable, Scale.  Whether he intended it to or not, this 4-S framework persisted throughout the day - especially in the investment panels.

Investment panels?  Sankalp was not a typical conference - it was also a social enterprise investment forum.  The event was home to the final round of judging, identifying 15 high-impact enterprises serving social ends through market-based means from a field of 300 nominees.  Some of the interesting enterprises I saw at Sankalp include - in no particular order:

Ziqitza Education: (Editor’s note: Updated the link; this is direct to the right site. Thanks Abhishek for pointing that out!) Also known as “Education Access for All”, Ziqitza Education is a young social enterprise operating private schools and e-learning tools in Rajasthan, Kerala and Tamil Nadu.  Can there be chain private schools?  In India, where the demand for good private education is universal, the answer is probably yes.  (Parents of all but the poorest kids are willing to pay school fees, research shows.  Education spending is the first priority after food and shelter…)  If you are looking for a new company to keep your eye on, Ziqitza Education might be a good place to start.

Vaatsalya Healthcare: Vaatsalya won the Sankalp High Growth Award in the Healthcare category.  It’s a corporate hospital operating in semi-urban and rural areas - a first for India.  With a strong presence in Karnataka and coming expansion to Andhra Pradesh and Maharashtra, Vaatsalya is another company worth tracking.

Gramin Suvidha Kendra: This is a partnership between the Multi Commodities Exchange and India Post to use postmen - ubiquitous across India - to bring price information to rural farmers.  It’s allowing farmers to access futures contracts for the first time, which allows for cash flow smoothing.  For all the talk of microfinance, the kind of work GSK is doing is really the bricks and mortar of a functioning agricultural supply chain - which could do more to alleviate poverty than many of these other, more complex, companies.

D.Light Design: A social enterprise that sells solar-powered LED lights in East Africa and India, D.Light works to eradicate kerosene lamps from the world.  These lamps are inefficient, costly and terrible for your health.  A D.Light lamp - they have a range of brands - gets at all three of these problems.  (Full disclosure: Acumen Fund is an investor in D.Light.)

There were dozens of entrepreneurs at the event, all of them with inspiring business plans in various stages of development and implementation.  I hope the investors present left with pockets full of business cards and plenty of new ideas about the viability of the social sector here in India. I was also thrilled to see my colleague Vikram Raman on stage to present the awards for healthcare. Vikram was the lead judge in that vertical at Sankalp, a real testimony to his deep knowledge of the social enterprise space and of healthcare in particular.

In many ways, Sankalp reminded me of the 2004 Eradicating Poverty Through Profit conference, which was arguably the first significant event ever to focus exclusively on the intersection between development and enterprise.  (I should know - I helped plan the 2004 event as a World Resources Institute employee.)  As in 2004, there was a palpable buzz among participants Tuesday - that finally, there was critical mass around the idea of using business to do good.  As in 2004, however, there were also too many panels and not enough networking time.  And there was a nagging feeling that it might be a little inappropriate to run a conference about alleviating poverty and environmental problems in a 5-star hotel with the air conditioning set at a chilly 68 degrees Farenheit.  You heard the same criticisms of the 2004 event, held at a high-rise San Francisco hotel.

I should restrain my criticism, however - Sankalp was a great event.  Personally, I was glad to see colleagues from India, Asia and as far away as the United States during the tea breaks.  Despite all the talk of recession - or perhaps because of it - the social enterprise space is alive and well. 

Yet there is much to do.  Antony Bugg-Levine, of the Rockefeller Foundation, suggested in the closing plenary that we must be afraid of the hype.  Social enterprise might be alive and well, but it has not arrived, at least not yet.  Let’s remember that it took 30 years - and substantial subsidy - to get the microfinance sector fully developed.  Impact investing - and BoP business strategy - can be done quicker and better by learning from microfinance, but it won’t be an overnight change.

Update: You can now download and listen to the call in its entirety:

Acumen Fund Summer Associate call - April 1, 2009

For the 10 summer internship positions Acumen Fund has open globally, we received 700 applications from an amazing group of candidates. We’re going to do our best to find the 10 people who are the best fit for our needs this summer, but the bigger, harder question is, “What about the other 690?”

Sasha posed this question a few weeks ago on his blog and on the Acumen Fund blog. There were some comments; there was also a discussion here at Acumen about how best to engage this “amazing group of candidates.” After a couple of e-mails and meetings, we decided to run an experiment: offer our 690 non-accepted candidates a private conference call briefing from senior Acumen staff. This was a way to say thanks, to welcome folks into our community, and to offer ways to stay engaged - not just with Acumen Fund, but with the social enterprise space as a whole.

The call was yesterday morning; about 10% of the invited candidates joined (67 total). I helped moderate; Brian Trelstad and Yasmina Zaidman talked about the latest Acumen happenings (describing some of the newer investments, our plans for 2009 and 2010, etc.) We actually recorded the whole call, and will release a .mp3 version of it as soon as we get a copy and have a chance to convert it. (For some reason, Global Crossing records conference calls in .wav format - not helpful.)

Acumen Fund Summer Associate call - April 1, 2009

After a short presentation, Brian and Yasmina took questions - and the floodgates opened up. I promised at the end of the call to post questions to our blog, so here they are. We - Brian, Yasmina, me and the rest of the team - will do our best to answer them over the next few weeks. In the meantime, take a look - and comment below if one question in particular is of interest!

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1. How do social metrics figure into an ROI calculation? What are the typical returns on investment and investment timeframes you look for in assessing viability of projects?

2. One of the biggest challenges is identifying entrepreneurs in low-income communities. What is the methodology that Acumen follows to identify these entrepreneurs? Furthermore, how does Acumen Fund provide the technical assistance to ensure that these enterprises are indeed successful?

3. Has Acumen Fund encountered challenges in the more political unstable regions it operates in? If so, how has or is it working through them?

4. What is the evaluation process for the ventures you look at for investing? Do you use some kind of a Social Return On Investment metric? Or what metrics do you use?

5. What percent of your annual investments (in 2007?) were considered failures? Were they considered failures because of inability to repay or lack of social impact? How has this number changed since Acumen was founded?

6. Could you talk a little bit about the work of a Summer Associate an Acumen? In other words, what would a typical day at work look like?

7. What are the next steps if we are interested in working with Acumen Fund, and we are not considered for this year’s summer internship program?

8. Many of my peers are excited about careers in the social venture sector but struggle to see what the long term career path might be given the maturity of the sector. Could you help chart out the possibilities for a post-MBA graduate?

9. What is Acumen doing to increase awareness of their services to people in the developing countries?

10. How did Acumen Fund start, and does the opportunity exist (in your opinion) for an individual to start an analogous Fund working in other geographical locations? If so, what skills would you suggest an entrepreneur develop to follow this path?

11. How important is it for clients to have the potential to receive additional loans from Acumen in the future? Have any clients already received repeat loans? Do you think the potential has a strong influence on an entrepreneur’s motivation to repay?

12. Could you comment on non-profit/philanthropic and profit-driven/sustainable funding models?

13. I’m curious with regards to the diversification of investment strategies adopted. For example: if investment is being done in the housing sector of Pakistan do you invest in multiple arenas or are your investments confined to a specific focus area?

14. How does Acumen Fund take investment decisions or evaluate ROI in an environment where there is no financial data?

15. Could you elaborate on your thoughts with regard to involvement in social investing earlier in one’s career versus later in one’s career? Would getting involved later in one’s career have a greater impact and perhaps be more worthwhile?

16. Could you talk about your own professional paths and how you made the shift from more traditional careers to management roles in the BoP/ social entrepreneurship space?

17. Is something specific that Acumen looks for in a candidate profile?

18. Could you talk a little about entry level positions at Acumen Fund for recent MBA and policy graduates?

19. Could you comment more on how to get involved with Acumen Fund’s work outside the fellows and interns program — perhaps more detail on the “young professional” network?

20. What do you suggest an individual who has little experience in international work can do to participate with Acumen?

21. Where does Acumen Fund see itself in the future in its investments in ecomarkets? Is Acumen Fund aware of any viable engagements in payment for environmental services in the water sector, not only in water delivery but resource conservation (e.g., in watersheds/parks/reserve systems)?

22. Given the culture of intellectual property protection in the market and the simultaneous high purchasing value of knowledge (such as journal subscriptions), which can be an access barrier for “the base of the pyramid,” how does Acumen Fund address such issues head on to promote and extend its knowledge sharing impact? Particularly, how does Acumen Fund convince its partners (if they are entrepreneurs in a highly competitive marketplace) to be more open in sharing their knowledge?

23. What is the Acumen Fund’s position on the role of public-private partnerships both in the areas of environmental markets and knowledge sharing?

This May, Acumen Fund will host its first Summer Student Leaders Workshop. Be sure to get your application in before the April 10 deadline!

More information can be found on Aden Van Noppen’s blog post or on the Acumen Fund web site.

Thanks for your interest, good luck with the mini projects and we look forward to reviewing your applications!

As a venture philanthropist, Acumen Fund’s Jacqueline Novogratz leads entrepreneurial projects across the globe—many of which put women at the helm of emerging local businesses. In this video interview, she discusses her experience developing other women leaders, the way they have shaped her own approach to leadership, and the different leadership cultures she sees at play in the public and private sectors.

This interview was conducted by Bill Javetski, an editor with the McKinsey Quarterly, in February 2009. It was recorded in the New York office of Acumen Fund.

Click below to watch the video:

Jordan Kassalow, Chairman and co-founder of VisionSpring, was announced today as one of the Skoll Foundation’s newest grantees. The award includes a 3-year, $765,000 unrestricted grant to VisionSpring, a non-profit social enterprise that empowers local individuals to become self-sustaining entrepreneurs by selling affordable eyeglasses to the millions of people in the developing world who need them. VisionSpring is also an Acumen Fund investee (and the Skoll Foundation is an Acumen Fund Leadership Partner - it’s all in the family!)

We’re thrilled to see Jordan - and the entire VisionSpring team - recognized in such a prestigious forum. Congratulations! And we’ll see you at the Skoll World Forum next week (rather, Brian Trelstad, Ann Macdougall and Varun Sahni will…)

Editor’s note: Guest blogger Aden Van Noppen is a senior at Brown University where she studies International Development. She is also an intern for Acumen Fund, where she works to develop programs that teach college students about private sector solutions to poverty. Aden was formerly an intern for Dalberg Global Development Advisors, where she worked on the development of the Aspen Network of Development Entrepreneurs.

By Aden Van Noppen

Young people today are not protesting or rioting—instead, we are proclaiming ourselves social entrepreneurs and actively searching for the best models to address poverty. This movement is brewing on campuses across the country and the world, including my own, and Acumen Fund wants to help us develop the skills and knowledge we need to pioneer new approaches to poverty alleviation.

In response to growing interest among college students in social enterprise, and the potential we have demonstrated to lead social change, Acumen Fund wants to find ways to work with us. To start, Acumen is hosting a Student Leaders Workshop in New York City from May 28-30th to share their knowledge and collaborate with those of us who feel passionate about finding and communicating entrepreneurial ways of addressing poverty.

This workshop is an opportunity for students to gain skills and knowledge about enterprise development and social venture capital, and just as importantly, to communicate with Acumen about how to build meaningful partnerships with young people. The students who participate will return to their campuses in the fall with the opportunity to spread this movement amongst their peers.

If you are a leader for social enterprise on your campus, we want you to apply! If you believe that business and investment are powerful tools for poverty alleviation, we want you to apply! If you want to learn from Acumen Fund and members of Acumen’s community in an intimate setting, and then share what you learn with others, we want you to apply!

If you think Acumen Fund will hold your hand and help you find a dream job in the social sector after graduation, or want to add a cool brand name to your resume, this is not for you. Changing how the world approaches poverty is a big job and the people I have been working with at Acumen Fund are looking for real leaders who want to roll up their sleeves to challenge the status quo. If that sounds like you, we are looking forward to hearing from you.

Click here to find out more about the workshop and how to apply. Hope to see you in New York City this May!

Acumen Fund investee WaterHealth International (WHI) announced earlier this week that it had closed a $15M round of financing from the International Finance Corporation. The financing - combined with WaterHealth’s Series D round of funding - will enable the company to bring purified, disinfected water to 3 million more people in more than 600 Indian villages (in addition to the 200 in which they currently operate).

Naturally, we at Acumen Fund are excited to see WaterHealth continue to grow up and out, serving more and more base of the pyramid customers with a critical service. But what’s even more interesting - and encouraging - is the range of co-investors that have stepped forward to support WHI. There’s Dow Venture Capital and SAIL Venture Partners; Johnson & Johnson Development and Plebys International; Dr. Anji Reddy and Acumen Fund. And now, with another huge commitment, the IFC.

We believe in building systems rather than one-off solutions or projects. Who doesn’t? Unfortunately, the process of international development aid grantmaking and monitoring seems to lend itself better to “new” and “pilot” projects - a grant to support something “innovative” or “paradigm-shifting” has a better chance of winning than one to support a “small, struggling - but growing - business”. Donors tire of the same old, boring projects - they want new ideas! - and funds shift around to the cause du jour.

Not so with investing, at least not in this case. WaterHealth International has been at this for 12+ years (it was founded in 1996). If WHI were a traditional development project, it would have had to re-apply for funding at least 4 times (the average development aid grant runs for 3 years). But as a company, WHI has been able to raise angel, Series A, Series B, Series C and now Series D rounds of funding, all based on financial and operational results. And after 12 years of learning, re-learning, adapting, adjusting and innovating - a process that continues - WHI is beginning to reach real scale.

Is WaterHealth International perfect? Some argue that its UV Waterworks technology is too expensive, and that reverse-osmosis filtering is a better BoP-oriented solution. But you can’t argue with results - millions of customers today, millions more in the next few years. And with the IFC dedicating $100M to “infraventures” (infrastructure projects in low-income communities), we’re beginning to see real progress in a space formerly dominated by top-down government and aid projects. I’ll raise a glass to that.

We really hope it’s not too late. You may have already secured a great summer internship for 2009…if so, we’re happy for you. But if you’re waiting to hear back, or haven’t had the chance to apply as yet, then maybe you’re in luck. We are a little late in posting these (we’re sorry!) but are very happy to announce that we’re hiring a slew of Summer Associates to work in our New York, India and Pakistan offices.

All the details - position descriptions, duration, supervisor info, compensation, application instructions - can be found on the Work with Acumen page of our (now-resuscitated) web site.

Applications will be accepted only until February 20, so please apply today and help us spread the word to friends, colleagues, and others who might be interested.

Last year’s Summer Associates were a great bunch. I’m sure 2009’s crop will be just as fantastic…

Acumen Fund’s friend Iqbal Quadir - director of MIT’s Legatum Center for Development and Entrepreneurship and founder of GrameenPhone - wrote an op-ed in today’s Wall Street Journal (subscription required) entitled Foreign Aid, Bad Governments: Why helping entrepreneurs is the right approach. In it, he pushes the Obama Administration to ditch the Cold War aid regime and instead focus on helping entrepreneurs:

Tragically, the Cold War aid approach actually preserves suffering in poor countries. Aid empowers bureaucracies, promotes statism, and weakens government incentives to boost tax revenues through growth. Economic assets are often kept in the hands of the state, leading to monopolies, stagnation and extortion. All of this hurts entrepreneurs, who have the potential to create wealth and promote governmental accountability.

He goes on to call for the removal of trade barriers, an enhanced role for the International Finance Corporation (if it’s reformed) and for a matching grant program geared towards building health clinics in underserved communities. Iqbal concludes,

In short, America should stop pouring billions into bureaucracies to buy short-term alliances and focus its efforts on bottom-up entrepreneurship. This would increase America’s popularity, alleviate poverty, and promote real democratic change in these developing countries.

We at Acumen Fund agree with Iqbal that we need to focus on entrepreneurs, not aid. There is a role for aid to play, of course. But we know - through our investments, and our conversations with hundreds, thousands of customers - that everyone in the world deserves the dignity that comes from a day’s work, that comes from the choice to buy clean water or healthcare. We hope the readers of the Wall Street Journal will agree with Iqbal and join us in our quest to build a world in which everyone has access to the resources to help them shape their own lives - one entrepreneur at a time.

UPDATE: The Acumen Fund web site is back up! Thanks again for all your e-mails and, most of all, for your patience. (January 30, 2009)

To: Acumen Fund friends, Partners, community members and website visitors

From: Acumen Fund staff

Re: Unscheduled, unplanned website maintenance

Memo: Thank you! Our website went down this morning (New York time) for some “unscheduled, unplanned maintenance,” as we’re calling it. Basically, our server had a big hiccup and we’re in the process of restoring our data, backing everything up, and re-starting the whole shebang. Almost as soon as it happened, we started getting e-mails from you - our friends, colleagues, partners, Partners, community members, fans - to let us know what was up. As much as we don’t like to get caught with our servers down, it is totally refreshing and reassuring to know that there are so many of you out there who care enough to write. So seriously, thanks.

We’re working as hard as we can to get this fixed. In the meantime, might we suggest a visit to our YouTube channel? How about our Fellows blog? Or NextBillion.net, which Acumen Fund co-owns? There’s also the Facebook cause, the LinkedIn group - you get the idea.

We hope you’ll bear with us as we make these fixes. Thanks again to everyone who wrote - we’ll post again here on the blog when life is back to normal.

Gratefully,

Acumen Fund

“The toilet is a godsend” says Maurice Kirimi, a 29-year old Kenyan interviewed in line outside an Ecotact Ikotoilet last week. Maurice’s comments - along with a handful of other customers’ - were featured in an article that appeared in Kenya’s Daily Nation newspaper about new, pay-per-use public toilets. Entitled “Public toilets no longer filthy dens but gleaming havens,” the article discusses pricing (5 KSh for the toilets - about $0.06 USD; 10 KSh for a shower - about $0.12 USD) and customer satisfaction.

We’re glad to see an Acumen Fund investee featured in the article, but what’s even better is to hear customers’ opinions of clean, professionally-managed sanitation facilities. And you can’t beat the photo, which is of an Ikotoilet facility on Aga Khan Walk.