David Stoker's Blog

Event: Ashoka Induction Ceremony

David Stoker — Tue, 18 Nov 2008 15:20:58 GMT

Ashoka's North American induction ceremony in Los Angeles, December 9th. (The pdf invite includes the full list of the new Fellows.)

One new Ashoka Fellow that caught my eye was Matt Flannery, c0-founder of Kiva, which I have argued recently should spread into microfranchising. I find it interesting that Ashoka, which has a long track record of finding social entrepreneurs early in their development, picked up Flannery about two years after he and Kiva were discovered by the blogging community but at the same time the remaining 24 fellows are likely completely unknown in the blogosphere. How can these two networks cross-pollinate?

2008 Ashoka Fellows in Franchising seeking support

David Stoker — Sun, 02 Nov 2008 05:23:51 GMT

Want to adopt a high impact social entrepreneur? Ashoka recently published a list of Fellows from their latest crop which include a few that are involved in franchising or have innovations that could be applicable to the training and financing of microfranchises. Ashoka typically provides a living stipend to the entrepreneur to allow them the flexibility to pursue their innovation full-time. You can support a whole stipend or give to a common fund. The average stipend amounts are calculated by regional cost of living estimates. For inquiries or to get started, contact supportfellows@ashoka.org. To see Ashoka Fellows in action watch this video diary from a recent trip to Argentina.

Alice Freitas | Brazil, Connecting Informal Artisans with Conscious Consumers

Alice has created a direct sales catalog to help informal artisans overcome the challenges of large-scale distribution. An estimated 50% of all Brazilian workers-many of them women-are currently involved in the informal economy, and consequently lack access both to valuable market information regarding prices and consumer interests, and to the financial resources and bank credit required to start a business. Alice matches artisans’ groups with men and women trained as direct sales agents, providing them with thorough training and an intimate understanding of the producers’ personal histories and social impact. Capitalizing on the growth of conscious consumerism, she thus enables consumers to exercise informed decision-making, and provides them with a direct communication channel to the women behind the products. Having launched the first catalog in 2007, Alice is now developing a franchise model in order to scale her approach throughout Brazil and beyond.

Lilian Masebenza | South Africa. Fostering Income Generation for Women

Lillian incorporates income-generation and entrepreneurial development into traditional village collective models, called stokvels, capitalizing on their inherent popularity among disadvantaged women and youth in South Africa. First formed by black South Africans -mostly women- in response to financial restrictions upheld during apartheid, the stokvels have historically been used merely as a way to motivate each other to save for specific short-term needs, such as weddings, funerals, and holidays. Lillian has transformed these widely accepted savings collectives into an effective business model, using the existing networks to conduct business trainings and skills development courses. By using indigenous models as a basis for business development, Lillian provides business training, skills-development, and mentorship to groups that previously focused on saving for special occasions, fostering a new sense of entrepreneurship among the country’s most disadvantaged communities.

Vivienne Schultz | South Africa, Empowering Entrepreneurs

Vivienne’s company, Biz Africa 1399, uses a three-part approach to economically empower marginalized entrepreneurs. First Biz Africa 1399 identifies potential entrepreneurs and encourages them to develop their ideas. Then, these individuals participate in E-Hub, a nurturing, resource-rich environment that provides work space and administrative services. E-Hubs are supported by business partners who become incubators for aspiring entrepreneurs. Additionally, these relationships help create new markets and tackle the challenges faced by entrepreneurs. Vivienne realizes that she is working with a continent-wide problem and in order to tackle it she must create business networks for struggling entrepreneurs throughout Africa. In order to support her expansion plan, Vivienne has partnered with academic institutions and a continent-wide company. She is currently writing a book about how to use experiential, or hands-on learning, to foster economic
development.

Ouattara Souleymane | Burkina Faso, Creating a Culture of Apprenticeship and Craftmanship

Souleymane Ouattara is transforming the way artisans and skilled laborers are trained and, in doing so, is opening employment options to many young people in Burkina Faso. Through his Association of Tailors, Weavers, and Associates, Souleymane has enlisted trainers in a variety of fields who together create workshops and hold training sessions for young people interested in
their professions. Everyone involved in the trainings also receives management training to ensure they understand production costs and processes, develop their marketing and creative capacities, and have the proper tools to see their businesses grow. Today the system Souleymane has set up is not only effective, but also is expanding as even the government looks at ways of using elements of his engaging training model.

Tamzin Ratcliffe | South Africa, Building Africa’s First Social Stock Exchange

Tamzin has developed the Global Social Investment Exchange (GSIX), a web-based tool that links citizen sector organizations (CSOs) with donors by mimicking traditional stock exchanges. After successfully launching the Southern African Social Investment Exchange (SASIX) in 2006, which raised $800,000 for CSOs in Southern Africa, Tamzin is now preparing to create a global marketplace using GSIX. GSIX will publish a Quarterly Prospectus for investors to choose CSOs, and then investors can buy shares in GSIX through participating brokers. Funds will be transferred to beneficiary organizations through a transparent and accountable process, and investors will have the ability to track their investments and view their impact online. Similar to financial stock exchanges, GSIX will use specific, time-bound investment and by pushing CSOs to be accountable for investments, GSIX will push the social sector to develop ways to measure social impact and, thus the return on social investments.

MicroFranchising recent Buzz

David Stoker — Thu, 23 Oct 2008 16:51:43 GMT

Primarily due to SoCap08, which was apparently bursting at the seams, and Blog Action Day on Poverty, there have been a series of posts around the web referring to franchising or microfranchising at the bottom of the pyramid. Here are some of the highlights:

A working paper shared by David Lehr of the Acumen Fund. This is the first major publication I have seen from someone outside of Brigham Young University, an exciting step if it means that research is moving out of academia into the private sector.

Jocelyn Wyatt shared her overall impressions which I think represents a good summary of the current pulse on the donor market and shows how well positioned microfranchises are to raise capital.

Gonzalo Pena gave a hat tip to the concept of microfranchising in his Top 10 list of ways to fight poverty and we were later able to have a good conversation together.

The MicroFinance Journal blog had a recent post about a microfranchise in the Philippines, Hapinoy, which represents another example of converting businesses in the informal sector into branded franchisees.

Al Hammond the creator behind WRI's bottom of the pyramid initiatives, including the well-known voice in the blogosphere - NextBillion.net, is using the term franchising openly in regards to the pharmacy network he is now building as a senior entrepreneur-in-residence at Ashoka.

MicroFranchising Conference Nov 6-7

David Stoker — Mon, 20 Oct 2008 06:09:49 GMT

I received an update from the 2008 ESR Conference folks with details about the MicroFranchising Sessions. The early registration/discount deadline is tomorrow, October 20th. Here are the descriptions for the MicroFranchising sessions:

Business Solutions for Development
Come listen to Jason Fairbourne and Steve Gibson discuss how microfranchising can serve as a bottom of the pyramid solution for development.

Branding a Microfranchise—VisionSpring, HealthStores, & Living Goods
Miriam Stone from VisionSpring, Scott Hillstrom from HealthStores, and Chuck Slaughter from Living Goods will join Jason Fairbourne and Steve Gibson in discussing specific challenges and remedies for creating a microfranchise brand.

Systemization of Microfranchises—Grameen Foundation & Mercy Corp
David Lehr of Mercy Corp, along with representatives from the Grameen Foundation, will discuss systemization, replication, and scale as it relates to global microfranchise initiatives.

Research from the Field—Brigham Young University
BYU has spent two years studying microfranchise institutions around the world and collecting data that compares them with microcredit institutions and stand-alone businesses. Findings from Bangladesh, Guatemala, and Ghana will be presented here.

Popular countries for operations

David Stoker — Sat, 11 Oct 2008 12:07:26 GMT

Ryan Gunderson over at Riches for Good had an interesting post the other day analyzing the country site of operation of the organizations on Fast Company's Social Capitalist Award list compared to World Bank numbers of # of individuals living on less than $1 a day. Although the data is not academic by any means it is illustrative:

A couple things I noticed:

1. Obviously India is a popular country for social capitalists. Demographically it makes sense: population density allows for certain efficiencies/cost per client etc., the large numbers are appealing to the donors backing the social capitalists, operation is relatively cheap in India, and there is also great need according to sheer numbers. Additionally, there is also a very vibrant citizen sector in India allowing for partnerships and synergy. Finally, I think English language is a big factor.

2. China is lagging. Is this due to language and culture? Is the government not conducive to allowing social capitalists to operate? Are the funders of social capitalists not as aware of the image of the poor Chinese farmer as they are of the poor Indian farmer?

3. It would be interesting to see this data according to % of the country living under $1 a day as opposed to overall population numbers. I think some of the more needy countries are not being served in proportion to their desperate circumstances.

My conclusion: there is enough need out there that you can make a difference anywhere. We should not punish small countries with high poverty rates simply because the numbers to show our donors are not as impressive. Some of our efforts should go towards the areas of greatest need not only the areas of greatest ease of operation.

IDE-Cambodia's MicroFranchise Scheme: Winner at World Bank Expo

David Stoker — Tue, 07 Oct 2008 03:35:01 GMT

Congratulations to Michael Roberts and IDE for their Microfranchising work in Cambodia being selected as a winner at the World Bank's Development Marketplace. The IDE microfranchise scheme in Cambodia was one of 22 winning projects selected out of over 1,700 proposals. You can read full press releases and watch videos from the expo on the World Bank website. I'll include their entry below. My commentary:

1. Having the label of microfranchising showcased in such a high profile environment (the competition was sponsored by the likes of the World Bank, IFC, Gates Foundation, and Google.org) should be considered a major development in terms of the development and spread of this as an idea or concept.

2. I had a chance to sit down with Michael while he was in town to discuss IDE's microfranchising work as well as explore connections with Ashoka, which could be many. There are so many natural points of overlap between IDE and Ashoka, particularly when it comes to identifying innovation in agriculture and rural development.

3. The last comment I wanted to make in regards to this event was their use of the model of a competition to source the most innovative solutions. I think it is great to see the likes of the World Bank engaging in this very organic, grassroot type approach. Competitions have been a major recent trend in philanthropy and innovation in general, think X Prize, the recently announced $10 idea competition by Google, Ashoka's Changemaker's compeitions as well as the numerous popularity/fundraising compeitions hosted by the likes of Parade magazine and American Express.

IDE-Cambodia's Entry (my markings):

Micro-Franchising Scheme for Agricultural Services
COUNTRY: Cambodia
ORGANIZATION: International Development Enterprises (Cambodia)
FUNDING REQUEST: $200,000
CONTACT: Michael Roberts
855 23 223 541
mroberts@online.com.kh
www.ide-cambodia.org

OBJ ECTIVE: To increase small farmers’ productivity and increase the net annual income of 1,800 small farm households by $150 by developing a sustainable micro-franchise enterprise to provide affordable horticultural services through Private Extension Agents (PEAs).

RATIONALE: The majority of Cambodia’s poor live in rural areas and depend primarily on agriculture for their livelihood. Small farm productivity could benefit from the substitution of imported vegetables, which account for up to 60 percent of all vegetables consumed in Cambodia. Small holders in Prey Veng and Svay Rieng (Cambodia), the two targeted provinces located along the route for Vietnamese imports, cannot exploit this opportunity because they lack know-how in vegetable production and access to credit and market information. In response to these constraints, this project will develop profitable micro-franchises to provide agricultural inputs, technical advice, in-kind credit and marketing services through a network of Private Extension Agents (PEAs).

INNOVATION: This project will implement an innovative micro-franchising scheme for agricultural extension services through private-sector providers in provinces affected by imports. It will do so by bundling information and know-how with agricultural inputs and by supporting the private sector providers as franchisees and linking them in a micro-franchise network.

Sargon, my HeroRat, passed away

David Stoker — Sat, 04 Oct 2008 22:07:23 GMT

Pardon the slightly off-topic post-

Sad news to share. Sargon, my adopted mine detection sniffing rat, passed away of old age the other day. He had cleared mines since 2003 and served over 300 families in Mozambique. Honestly, I was surprised to receive the update as I just saw Sargon featured in the October National Geographic magazine (I can't find the picture online), but I guess that he went out with a bang, checking out at the peak of his career.

I had met the visionary behind these mine-detecting rats a few months ago, Bart Weetjens, when he came into the office (Bart was elected as an Ashoka Fellow in 2006). His organization, Apopo, just received a $1 award from the Skoll Foundation. It was then that I participated in their "Adopt a Rat" program and selected Sargon as my wonder-pet.

I received a touching and slightly humorous announcement in my email box informing me that this "detail-orientated" "quick learning" "reliable, professional, and effective alone or in a team" rat passed away of natural causes. It added that he was known to work "even harder for peanuts or bananas."

There is an element of replication here, I was meeting with Bart to discuss his finances and he has received numerous pledges from other African governments wanting to replicate his operations in their countries but the wheels of African governments turn so slowly that he has not seen any of the money. In fact he has an over-abundance of requests for replication, only limited by his own operational budget and capacity. I suppose there could be potential for Apopo branding and franchising across the world but I don't think the local communities could completely sustain the operations as consumers, the model would likely have to be a mixture of government, individual philanthropy from the West and local contributions in-kind or cash.

There are still many HeroRats working hard in Sargon's memory if you want to Adopt one of these HeroRats.

Kiva should co-brand with microfranchises

David Stoker — Sun, 28 Sep 2008 05:20:08 GMT

I have been a fan of Kiva from their early days. They had another recent surge of success when they introduced Group Lending and Partial Loan Repayments, both brilliant moves in my opinion on multiple fronts: driving consistent traffic to their site, engaging their citizen base in a frequent and meaningful way, and leveraging natural networks.

However, I am still anxiously awaiting the day when Kiva moves into the next realm of innovation, when they are using their platform to strategically inspire change in the market. Right now they are focused exclusively on microcredit and simply support the normal activities of their partners and the microcredit borrowers. It could be argued that that is their expertise and value-add, however, I do not see the innovation nor the value of Kiva as a funder of microcredit, which is partly why I agree with people who say that Kiva should not be focused on providing a financial ROI for lenders. Even if Kiva continues on their projected growth their financing of microcredit will be minuscule compared to the capital being raised for microcredit through integration in the financial markets and through microcredit accelerator's such as Unitus.

The innovation of Kiva is that they have created a platform that allows a broad base of average citizens to become miniature philanthropists. Kiva has never had to spend a dollar on marketing, people find Kiva and become inspired: bloggers picked it up early, when people find Kiva they blog about it, they showcase their loans, Kiva even had to create an entire site, KivaFriends, to handle all the interest of their constituents to discuss the issues.

Therefore, as a platform and in the position of inspiring and shaping grassroot philanthropy I think Kiva is extremely well-positioned to strategically shape the local marketplace of their borrowers. One way they could shape the marketplace would be to partner with microfranchise operations. Kiva could be the platform, the broker, that connects microcredit organizations with the best microfranchise solutions, and then together they offer a financing mechanism for the expansion of new business and innovatin in the marketplace.

This would provide value to the microcredit borrower, providing them a new business model, a great potential source of income as opposed to simply increasing their inventory in the same business as their neighbor. It would provide value to the community in which the microcredit borrower lives, bringing a service such as VisionSpring eyeglasses or HealthKeepers pharmaceutical products or a technological product such as Kickstart's waterpump. It could probably be structured so that the MFI gets a cut as a distributor of products. Kiva could provide value to these fantastic innovations by being a catalyst for the best models. It would provide value to the Kiva Lender because they would feel they are being innovative in their lending and philanthropy.

Kiva needs to think beyond scaling up microcredit and more about being a platform for change.

MicroFranchising book now available in paperback

David Stoker — Thu, 25 Sep 2008 03:34:19 GMT

I just received a notice that the book, MicroFranchising: Creating Wealth at the Bottom of the Pyramid, is available in paperback. It is included in my recommended readings link; the paperback version is the one without the picture.

I'm excited and I know the authors are excited because it will make the information accessible to a much wider audience. I thought it was unfortunate that the original publisher put such a high price tag on the book as part of their strategy to target university libraries. Now, at a more reasonable price for the general consumer, I think the conversation can really begin. The book really is a great collection of theory based articles coupled with profiled case studies. The material in that book has been the starting point for many of my own wandering thoughts on this blog. Happy reading.

SoCap08 Major Donors and Entreprenurs Mixer

David Stoker — Thu, 25 Sep 2008 03:34:19 GMT

There is a big-time event coming up in San Francisco for the social enterprise crowd, SoCap08- October 13-15. It appears that the entire list of who's who in the 'new philanthropy' in Silicon Valley will be there, both from the entrepreneur and investor sides.

The registration fee comes across as a bit high for me but if one were able to secure a major funding relationship at the conference it would be well worth the investment, let alone the education available with such a lineup of speakers.

As I look over the schedule of events, a couple panels that look particularly interesting in the context of franchising--

"Taking Social Enterprise to Scale" - Rick Aubry, Rubicon Ventures

Obvious connection. Rubicon has bakery and landscaping social entreprises in the U.S.

"Social Investing 101" - Regina Connell, Good Capital; R. Paul Herman, HIP Investor Inc.; Andrew Kassoy, B Lab; Steve Godeke, Godeke Consulting

I'd be curious to see if franchising is brought up in the fundamentals class.

"Market Creators" - Deb Dunn, Skoll Foundation; Tim Freundlich, Good Capital; Elise Lufkin, Calvert Giving Fund;Andrew Kassoy, B Corp; R. Todd Johnson, Jones Day

This topic has been on my mind recently. If I were there and the topic was not addressed I would bring up the statement by the CEO of Kickstart regarding his projected timetable and the need for donor investments to reach that tipping point in the market.

"Democratic Capital" - Melanie Swan, MS Futures; Premal Shah, Kiva.org; Mads Kjaer, MyC4; Rajesh Jayaraman, Zopa; Ben Rattray, Change.org

I have always felt there is enormous potential for microfranchising to partner with these democratic capital raising solutions. An investor making snap judgments on these sites may have greater confidence to support a new business in the third world if it is a proven franchise operation. These sites could help facilitate greater diversity in these markets by doing so.

"Design in the Developing World" - Regina Connell, Good Capital; Paul Polack, International Development Enterprises; Tim Brown, IDEO

I would be on the lookout for products conducive to product franchising.

Overall, it looks like a fantastic event. From the perspective of the entrepreneur I am struck by the collection of investors that will be present, all looking to be educated on how to spend their wealth, a great opportunity to showcase one's work. From the perspective of a new investor wanting to get involved in social enterprise I see this as a great forum to learn from some of the best and most experienced in the field.