Musings on market-oriented approaches to International Development
Successful shots from the middle of the basketball court. Businesses that release the right product at the right time at the right price, with ensuing profits. Books that strike a chord with unexpected audiences, becoming – and remaining – best sellers for a long time. For each of these successful, yet hard to achieve outcomes, there is a desire by many to understand what set of factors led to the positive outcomes – and more importantly, how those factors can be repeated in order to ensure continued success.
The enterprises and participants in the ever-increasing social impact universe are no less interested in this “repeatability” than any one else. In fact, with its concerted focus on scale – being able to successfully employ an enterprise’s model in different geographies, it could be argued that repeatability is probably one of the most venerated objectives of social enterprises and social impact practitioners.
One enterprise that offers much promise of a potentially successful model is Eight19, a British company that may offer a viable solution for the 1.6 billion people from low-income households who are not attached to an electricity grid. In essence, the firm sells a device on a pay-per-use (and gradual ownership) model, which once fully charged, is sufficient to light two small rooms and charge a mobile phone for seven hours. The next day, it’s ready for use.
Besides a commercial model which offers a revenue stream that can allow the firm to be profitable, a particularly attractive feature of Eight19 is that it may be able to lower its costs due to an expectation of reduced costs due to cheaper solar energy mechanisms in the future.
If true, the firm’s estimate that its device is cheaper over a period of time (not exactly clear from the article) than the paraffin used by energy-short households (not to mention safer), then the firm’s work may already be a boon to the 4,000 recipients of these solar units in Kenya.
But digging further behind Eight 19, deeper questions remain about social impact in general, and social enterprises in particular.
One of the most pressing questions is if the funds, talent and political energy being placed behind social enterprises are being employed on the right scale, timeline and expectations? For a rather fervent community that has yet to prove it’s merit as an altogether different model from conventional charities and/or businesses, with a related ability to deliver novel results – is it too much money, too soon? For example, Big Society Capital – a UK social investment bank, is expected to be capitalized with 600M, in a market that was estimated by BCG to be worth just 165M in 2010-11.
No firm answer remains, but the best way for social enterprises and the social impact community to prove their merit is with more firms likes Eight19 being successful at what they seek to do and repeatedly so.