Listen to leaders from Lumana, Village Reach and Nsansa as they discuss how they developed their good ideas into ventures that are changing the world!
In this first session of the Global Ventures Workshop, Samantha “Sammie” Rayner, Founder, Lumana (and GSEC 2009 participant) shares her life long journey towards social entrepreneurship and discusses the top challenges of institutional funding, nation perception and a lack of business distribution infrastructure for Ghana.
John Beale, Strategic Development Director, Head of Social Business at Village Reach has spent the last three years applying his extensive business background to solve social enterprise challenges such as access to capital, access to quality management and really understanding what the market needs and how you would get it there. He sees a big opportunity to enhance the Sub Saharan Africa transportation systems to support public sector activity and better commerce.
Debra Glassman, Senior Lecturer in Business Economics and Global Business Center Faculty Director, University of Washington Foster School of Business described the Social Ideas to Global Ventures Workshop as a “a day about applying business models to social ideas.” The seven session topics feature learning from the Global Social Entrepreneurship Competition (GSEC) and the Business Plan Competition at the University of Washington. Panelists and moderators from the business community in the greater Seattle area provided valuable real world global experience in the social venture community.
Rashmir Balasubramaniam, Founder and CEO, Nsansa , moderated the first session. Rashmir is an Adjunct Faculty member of the Foster School of Business at the University of Washington and at the Bainbridge Graduate Institute, where she teaches classes on Harnessing Business and Markets to Address Poverty and Social Justice & Business. She also spent five years at the Bill & Melinda Gates Foundation.
Rashmir: What inspired you and where did you get the idea?
Sammie is a UW alumna and GSEC participant from 2009. Although she didn’t win, she received valuable mentorship and networking opportunities during the competition. She grew up in an entrepreneurial family and always had that drive to start her own company at some point. She also always had an interest in service and finding a way to give back. Sammie said that “Social entrepreneurship was the first real opportunity I found to combine my passion for business discipline and efficiencies and seeing systems really work and become sustainable with the idea of giving back and doing something that would truly have social impact.” But that isn’t enough to stay engaged. “My peers [were] an incredible inspiration source,” she said.
When she came back from launching her pilot program in Ghana, where she collaborated primarily with the Chief in the rural village, Sammie was amazed at the incredible welcome she received from other students, friends, and a lot of people her age who said “Wow, this is really powerful. I want an opportunity to get engaged in something meaningful and have a real impact for it, not just go file papers for someone.” Sammie feels there is a real trend with Millennials “wanting to actually be engaged and feel like we are able to go for our passion first and find some way to make is sustainable second.”
Sammie’s drive continues to be how to “open up the global development space for other young people who have ideas, have creativity, [and] have a fresh look on old problems.”
Rashmir: Why microcredits?
Once in Ghana, Sammie realized it wasn’t just about the credit, but also about the mentorship of getting existing dealers to work with those just getting started. It was also about business education, financial literacy training and the savings plan above all that was really having an impact. To make the entire program successful, they had to come up with a whole suite of services. By working with hundreds of small businesses, they began to understand the pain points and to understand what the actual needs of the people were. The next step is to attract resources to fill those needs.
According to Sammie, “in a lot of ways, it’s not about what the actual service itself is, but it’s the process for delivering that service that gives you an incredible sense of how poor people live day to day and how you can really provide them with what they need in order to move forward”
Rashmir: how do you take that idea and learning and turn it into a company with 8 employees – half in US and half in Ghana in 3 years?
First, Sammie traveled to Ghana and met with some of the local community leaders, “I had to throw my business plan out the window,” she said. Second, she got out and shadowed businesses. Sammie carried water for a porridge seller going down the beach, learning what it means to try and get a business to work. She is amazed that with tiny margins, the women manage such complex financial lives and still come out profitable. “You have to think about seasonality, the ebb and flow, a dollar here, 10 dollars there.” Sammie sees this crucial step as “putting yourself in the shoes of the market leaders so you can serve.”
Second, you need to have a clear needs assessment survey if you are in an early needs idea phase. “You have to get some things you are trying to measure and complete a survey in the community even if it is not going to be statistically significant,” she said.
Third, you have to know who the local leadership is. “There is a chief, a headmistress, there’s a preacher, there’s someone who is really the leader in the community and they will understand what the needs are,” she said.
Rashmir: What kind of numbers are you seeing now and what is your goal for scale?
Right now, Lumana serves just over 400 businesses across 10 rural villages. Their 5 year goal is to be serving over 12,000. The typical Ghana household is 4 so you have that immediate multiplier effect. Lumana is looking at the rural supply chains, how something comes from a raw material to an actual product or service. A loan won’t necessarily fix that. According to Sammie, they “are starting to look at making investments in small and medium sized enterprises that directly address a lot of those supply chain issues – wholesalers, ways to preserve your farming input.” Her frustration is that even with additional capital, there is only a certain level of growth that can be achieved until the systematic issues are resolved. When Sammie adds in the distribution business, the job target is closer to 20,000.
John Beale kicked off his remarks, with the following provocative statements about social venture: “I don’t think it is sustainable. It is very expensive. Its sustainability is in question. It is jeopardized by a weaker
global economy, and we are seeing it right now.”
All is not lost however. John really wanted to do something with his “business guy” skills. “My lofty goal, my vision is to improve course efficiency of global development,” he said. John sees that activity in two parts. The first is to help fix a problem and need in a community. The second is to serve as an example of something that is different from the norm and see if that can be considered as one of many alternative ways to development.
Rashmir: It is not just about sustainability, but also scale. Was there an Idea you wanted to put forward in Village Reach and if yes, how did you do that?
John joined Village Reach three years ago after it had already been running for seven years. Village Reach focuses on last mile health system gaps. The target is rural health centers in Sub Sahara Africa where there is a real need to improve health system performance and stress at the service delivery layer. That is where the vaccines are late or never arrive. Watch the video “Life at the Last Mile” to learn more about the last mile challenges.
Like Lumana, Village Reach found gaps and pain points in the delivery system that needed to be solved. Today, Village Reach is not only a social enterprise, but also a software developer for tracking the commodities that they are supporting and a provider of public health training.
The challenge of the organization in the last three years is how to scale. John translates “significant impact with significant scale.” He emphasized that is very difficult to achieve sustainability even though “the idea is to leave a legacy of improved capacity, expertise, etc. in those health systems after we’ve gone.”
Rashmir: What is big?
According to John, it is “both doing the work, and then advocating for greater change.” Village Reach works with existing health systems providers. The population they are reaching is an extension of what the health systems themselves are reaching. In Mozambique, they are reaching 5-6 million and are extending to about 12 million over the next couple of years. In Malawi, they are reaching about 1.5 million.
That experience has allowed them to consult with other health organizations in 7-8 other countries and provide technology assistance. John emphasized that Village Reach is “trying to…draw attention to the huge gaps in health system performance that are concentrated at that last mile area. And so you lead by example…” John further explained that this requires you to “look from the bottom up through the health system as opposed to traditionally looking from the top down.” John has found that there isn’t enough emphasis on the poor training, poor expertise, and limited capacity of the health systems lower down.
Through that process, Village Reach looks for additional social venture opportunities in support of the health system work that they are doing. They also spend a lot of time documenting the challenges they have in trying to run a business overseas, trying to improve the health system overseas, and trying to find software developers overseas. It seems to be working. Revenue has grown from under a million three years ago to about four million this year. John attributes the success to a “growing recognition in gaps in which we are working.”
Rashmir described the similarities between the two ventures. “Although they both came at this wanting to tangibly impact people in terms of improved health or improved incomes, you realized as you studied the programs and looked at what is actually going on on the ground, that there is actually a lot of complexity and that your highest point of leverage for change may not be at the interface with the actual person whose life you want to be changed.”
John jumped in with the question “What is social enterprise?” He answered it by stating, “A service that provides some social benefit.” As with Sammie’s peers, John states that “there is a great desire to want to serve directly to the people. It is not the only way to provide a compelling social impact or service.” For Village Reach, that service is fuel distribution in Mozambique. John argued that creating a cold chain for the vaccines because they have to be refrigerated and getting fuel to the rural health centers where there is no electrical grid is every bit as impactful as administering the vaccine in the center. It may even have more impact because the infrastructure can be leveraged for additional services.
Coming full circle, Sammie stressed understanding the individuals to understand the problems. “If you don’t have a relationship with that end person, it is really easy to get disconnected.”
Guest post by Sam Rosenbalm who fuels his passion for startups and social enterprise as a director in Microsoft’s BizSpark program, a GSEC advisory committee member and a GSEC judge. @rosenbalm