health

This post first appeared on Acumen investee VisionSpring’s blog, Business in a Bag. We’ll be cross-posting with Business in a Bag from time to time.

The post’s author is Tim Johnson-Aramaki, a student at the University of Michigan’s Ross School of Business, who spent the summer with VisionSpring India working on a data-collection methodology to measure the long-term impact of VisionSpring’s work on the lives of Vision Entrepreneurs and customers. His project is part of a multi-year impact study conducted by Professor Ted London at Michigan’s William Davidson Institute.

Over the last few months, I’ve been working to develop a survey instrument with the VisionSpring team here in Hyderabad and the William Davidson Institute team in Ann Arbor. The first step was survey pre-testing, which involved conducting countless interviews in rural village throughout the state of Andhra Pradesh. These interviews are meant to help us discover whether the questions we’ve come up with are understood by respondents with varying semantic and cultural backgrounds, and if they prompt valid and appropriate responses. Some of the results we’ve gathered have been really interesting.

For example, one of the most critical pieces of data in measuring VisionSpring’s impact is the income of its Vision Entrepreneurs and customers. It also happens to be one of the most difficult things to measure as there are challenges when it comes to discussing money. Through our interviews, we’ve found that while people are relatively open in assigning a number to their income, that number may not be accurate. There are a variety of reasons for this, but one is that they fear the income figures may be passed on to state or national agencies, potentially jeopardizing the public assistance they receive. To avoid this, they often provide income figures lower than that which they actually earn.

The Skoll Foundation funds a fantastic ongoing interview series called the X Interview. Posted online to Social Edge, the X Interview is conducted by a mysterious blogger named Global X. Recently, Global X sat down with Acumen Fund ally (and Advisory Council member), IDEO CEO Tim Brown.

The interview - only 2 minutes, 30 seconds long - covers a few different topics, but Brown focuses mainly on insights he gleaned from a trip to India in the company of Acumen Fund CEO Jacqueline Novogratz:

…he [Brown] was impressed by the systemic thinking and level of innovation that Dr.Govindappa Venkataswamy (Dr. V) had brought to the Aravind Eye Care Hospital in Madurai.

It is now believed to be the best eye care and teaching facility in the world. The lesson?

“By trying to serve those who have the most needs, you can end up being truly innovative, to a point where those innovations have relevance not only in the developing world but in the developed world also.”

Via the new Skoll Foundation blog.

Last week, I had the opportunity to sit down with Jordan Kassalow, Graham Macmillan and Miriam Stone – three staff members at VisionSpring – to conduct a long-form interview. Formerly known as Scojo Foundation, VisionSpring is the pioneering base of the pyramid-focused enterprise working to provide access to eyeglasses in low-income communities around the world.

Acumen Fund is an investor in VisionSpring, having made a $500K debt investment back in 2006. We’ve followed their progress for a long time, up to and including their recent name change and announcement of a 5-year fundraising prospectus.

Rob Katz, Acumen Fund: How, when and why did you get involved with VisionSpring?

Jordan Kassalow, Chairman and Co-Founder, VisionSpring: It was very practical. I spotted a market failure in my blindness prevention work (I’m an optometrist and public health expert by trade.) For many years, my specialty was river blindness control, and when I worked in low-income communities, I saw more people coming to clinics because they couldn’t see up close, while there were relatively few who were coming to us for river blindness. I saw this pattern regardless of whether I was working in Africa, Asia or Latin America. When you’re working on blindness, the overall market relative to general eye care is small. The normal need for eyeglasses is strong, but underserved in the developing world. After many months, I finally realized that, if no one else is doing something about it, why can’t I?

Editor’s Note: This post is authored by Acumen Fund Summer Associate Amy H. Lin. Amy is pursuing an MBA and International Relations MA from the Wharton School, University of Pennsylvania and the School of Advanced International Studies (SAIS), Johns Hopkins University, respectively. Her professional interests are in international development in sub-Saharan Africa. She has worked at the World Bank, with TechnoServe and with the Boston Consulting Group. Amy graduated from Yale with a BA in Political Science.

By Amy Lin

Proving that BoP services and profit can go hand in hand, Nairobi-based Meridian Medical Centre has been profitably operating three outpatient clinics with one-third of its clients earning only $4 a day. In April 2008, Meridian opened a fourth clinic in Donholm, a low-income Nairobi neighborhood, to cater to a low-income clientele interested in high quality outpatient health care at a reasonable price.

Through a new partnership with Acumen Fund and The Blue Link Mirror Fund, Meridian will open 5 more clinics over the next 3 years in higher density, lower income areas. This expansion will begin in Nairobi, but with an eye to expanding to towns on the periphery of Nairobi. As the Kenyan newspaper The Standard reported on June 17, Meridian’s partnerships will leverage both capital and management expertise—strengthening Meridian’s bottom line while meeting BoP needs.

Meridian’s push into lower-income markets is part of a larger trend of companies recognizing the market potential of the BoP. In Kenya, prominent businesses like Equity Bank and Safaricom (a mobile phone company) have enjoyed explosive growth in recent years, largely due to their success at attracting large volumes of low income clients. Investors are also recognizing the opportunity to profitably serve the BoP, as illustrated in the oversubscription of the Safaricom IPO, which drew 236 billion Kenyan shillings ($3.68 billion).

As Meridian and others launch operations targeted at lower income populations to achieve higher growth rates, in Nairobi as well as in peri-urban or rural areas, the BoP will benefit from the greater choice of products and services. Just as he predicted, Adam Smith’s “invisible hand” is using corporate self-interest to achieve a greater public good.

I recently received Dial 1298 for Ambulance’s first newsletter. 1298 is an ambulance service in Mumbai. In 2007, Acumen Fund took a $1.5 million equity stake in 1298 to fund expansion of their service. Since then, 1298 (the number you call when you need an ambulance) has grown faster than expected in Mumbai and is already expanding their service to two new districts in Kerala. The company has captured a lot of press attention, with coverage from the Economic Times, DNA, the Hindustan Times, and others. 1298 currently has 51 ambulances which have taken more than 50,000 trips since inception.

Before 1298 launched its service, Mumbai had only about 12 working ambulances that fitted with intensive care equipment (which were primarily linked to specific hospitals); 9 out of 10 trips were to transport dead bodies. These weren’t ambulances; they were hearses.

1298 is one of a number of Acumen Fund investments that defies easy classification. The operating “special purpose vehicle” organization is structured as a for-profit business company that integrates smart cross-subsidies to achieve a social mission, while the supervising umbrella organization “Ambulance Access for All Foundation” is a not for profit. (If you ever needed proof that our terminology isn’t keeping up with what entrepreneurs are doing on the ground, then there you have it).

The cross subsidy model is deceptively simple. Patients who want to go to a private hospital in a full-service ambulance - staffed with a doctor - pay 1,500 rupees (about US$35). Those who go to public hospitals pay either half price or nothing. 1298’s leadership is committed to having 15-20% of the company’s calls be serviced free or at reduced cost. This simple logic takes away the cumbersome process of identifying who can afford to pay and who cannot.

Acumen Fund Fellow John Tucker was interviewed by VisionSpring’s Miriam Stone. Read the full interview here, in which John reflects on what he’s learned over the past year working in India as a Fellow. Good stuff.