We organised a workshop on entrepreneurship in the solar sector today. It was held at our Centurion campus on the outskirts of the city of Bhubaneswar, and led by SELCO Incubation Centre. The organisation SELCO itself of course is pretty amazing. It has been working in the field for nearly two decades, assessing the energy needs of rural grassroots households and providing them with customised solar solutions.
SELCO is not in the business of coming up with solar technology innovations, nor in the business of producing solar products. What they do is system integration.
Households at the base of the pyramid in India have unique needs. Besides individual households, clusters (villages, small settlements, slums) also have unique needs. SELCO figures out how to solve the energy accessibility problem (specifically via solar energy) for households that are remote, not connected to the grid, or otherwise find it problematic to use traditional sources of power. SELCO has worked with urban slums and urban street vendors for example. Many urban slums are in danger of demolition at any time. Since these two groups would ideally need mobile solutions, SELCO would figure out what products would be appropriate, how to get these products into one integrated system to meet all the diverse lighting / heating / cooking needs of this demographic, and the installation of this system.
After all the experience SELCO accumulated in addressing the energy needs of the BOP, and after all its experience in learning about complementary needs (such as how a household will finance the cost of this system, how to work out the rates of installments for repayment, where they can get a loan etc), they decided to put this experience to use in creating new entrepreneurs in this sector. Hence the SELCO Incubation Centre. They mentor you through the entire process of setting up your own version of SELCO in your own part of India, through the fieldwork required to truly understand the customer base's needs, through the financing system relevant to your customers, through the actual system design and installing, and through the process of sourcing vendors for various solar products.
Since one of Centurion's biggest social entrepreneurships - Gram Tarang Inclusive Development Services (GTIDS) - has built a tremendous customer network across thousands of really remote, rural communities, this workshop was also a great way to initiate a partnership between SELCO and GTIDS. Two of Centurion University's own graduates are interested in kicking off their social entrepreneurship careers by heading this partnership and working with communities, solar product vendors, the SELCO team, and with GTIDS to bring solar energy solutions and financial inclusion to some of India's poorest and most socioeconomically excluded populations. Appropriate to this whole scenario is the fact that GTIDS itself is led by a young entrepreneur who shall be mentoring the two Centurion solar entrepreneurs.
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All of these are exciting, happy things.
- But the happiest thing of all is the fact that the two entrepreneurs you see sitting in the front row closest to you (the photograph above left) are two urban micro-entrepreneurs themselves.
- One is an auto repair mechanic and I believe has his own store. I forget what exactly the other does, given that I kept rushing in and out of that workshop all day.
- They came because they are interested in entrepreneurship and because they are friends with Dr. Ramana, one of those exalted "do you know who that is?" type of faculty at the Xavier Institute of Management, Bhubaneswar.
It's a happy world if there are even ten such socially borderless friendships around you.
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And then there all these other social entrepreneurs you see in the photograph above. I don't know if it's technically accurate to call someone an entrepreneur if they're wage employed, but I personally distinguish between entrepreneurship & self employment. I tend to think that entrepreneurship is the larger set and that self-employment is a subset. It's the entrepreneurial worldview that defines someone as an entrepreneur - ability to identify your own opportunities, and the willingness to take the necessary risks to take advantage of those opportunities.
In any case, in the above left photograph, you see a true blue entrepreneur (left) and my program manager (right). The one on the left is Nayana Devi, who I wrote about here since she attended our first information & recruiting community workshop, and told the people there her incredible story.
The Leadership Entrepreneur
In the above right photograph you see Anand in our office, discussing microinsurance (life insurance not business insurance) with a financial mentor who'll be working with us as a consultant for our clients. Anand was a social leader and social entrepreneur much before our intervention came into the picture, and about whom I wrote here. Part of the core community leadership team, Anand has worked in specific ways to shape the community according to his specific values (in collaboration with other community figures) : punishment meted out to those who drink alcohol publicly or create nuisance when drunk, a strict grip on law & order, a system for creating a community fund and so on.
He has also leveraged his connections outside the community to bring electricity to a set of 150-200 households (those who contributed monetarily to raise the capital required to set up such connections) and have borewells dug in different parts of the settlement. The manual work required for installations has been done by him and a group of people from within the community itself.
- Of course in return he gets enormous respect, political clout and various social privileges (of which, some social privileges likely translate into economic benefits in different ways). These benefits accrue from within the community and from outside.
- He becomes the community access point when projects come to this part of the city. Example in point, my own intervention (although to be honest, we sought him out because he had been so helpful when we had first approached the community last year. It was only later, once we formally hired him a month ago, that we realized how important a figure he is).
- Local political leaders know his name. Given the untenable nature of the slum, the ability to wield political clout on the one side and social clout (from within the community) on the other can be very handy in preventing the slum from being demolished.
- Local police know his name. When cases involving community members are brought to the local police station, he is contacted by the police first, before any further action is taken against the person in question.
- Banks approach him to mobilise community members to open bank accounts with them. He gets some commission from them for organising workshops and also commission when accounts are opened.
- And of course, he and his household themselves benefit from his ability to bring water and electrical connections.
The Outside the Box / Hybrid Model Entrepreneur
Nayana Devi is an interesting example of entrepreneurs that don't quite fit into categories. For example, attached below is a great paper by Berner et al. (2012) on categorising survival versus growth focused entrepreneurs. In their categorisation the survivalists tend to be women, tend to operate along kinship networks, and don't tend to scale up.
She operates not one but multiple small enterprises, where each enterprise is essentially a self-help group. She dictates what the groups do (whether grinding spices, or making snack foods, or making bags out of discarded plastic and jute sacks, or making brass pots specifically for use in marriages and other religious rituals), she invests into the machines used for each enterprise, and she seems to scale up by adding groups and adding to the production scale of some of these groups. She also does marketing for a lot of such self-help groups whose production she is not directly controlling, and takes an earning for her marketing channel.
I think it's a marvelous model, and she's given me the perfect case study to explore something that's been a bee in my bonnet for a while - the apparent contradiction between the rationale of economic portfolio diversification as a strategy for the poor, and that of funding self-employment schemes via specialized micro-businesses as a poverty alleviation strategy. (Caveat: This worry of mine concerns individuals, not sure if it is worthwhile to ponder this contradiction in the case of group businesses. Especially if the group is consistently able to function well as a collective).
Coming to group businesses, I think the government's been honestly trying to address the diversification issue by setting up groups (SHGs or otherwise) that engage in a variety of cottage industry activities. The big problem here seems to be good management of these groups, a good business model for their enterprise, and maintaining all the support services required for sustaining the group enterprise over time or making it increasingly profitable.
What Nayana Devi seems to have done is take this above need and run with it. She as a business firm represents a strange mix of private enterprise and an NGO focused on the self-help group model. Possibly because the cultural context within which her entrepreneurial activities have been embedded have led her to constantly look at the SHG model as the business model. She's basically managing and scaling up her own cottage industry.
Nayana Devi appears to be operating in large part along personal networks, since a lot of the groups working with her are actually her neighbourhood women and her neighbourhood is in a small town on the outskirts of the city (so it seems like these should be relatively close social ties).
I'm yet to find out the exact way in which she shares profits with these groups, and what her exact business model is for each group. Yet much of her production is actually done in her home (she has machines in each bedroom), and many of these women she works with are therefore hanging out in her house much of the time. I doubt she can afford much personal relationship mismanagement in her business at present.
- So it may indeed be that she is constrained in her ability to pocket as high a share of the profit as she could have if she had purely business relations with her group members. I don't know of course, so I won't speculate.
On the other hand, this woman has consistently scaled up over the past few years, she does seem to be growth oriented, and she is interested in adding new groups to her marketing portfolio.
Now, as a researcher I wouldn't care about this exception and I actually do agree with Berner et al's categories as a generalisation because I see these survivalists everyday (the women sitting with their kids in their little stores in the Basti while the husbands manage the bigger stores in town or go off on wage employment duties).
But as someone actually helping create entrepreneurs as part of an intervention, I also find it very interesting to look at those that don't quite fit these categories and who can be used as some kind of a hybrid model to help develop the potential of women who might currently be in the survivalist category but might be growth-entrepreneurs in waiting.