Ashoka and Gates looking for Innovation in Rural Communities

Ashoka's Changemakers recently launched a competition looking for "sustainable change in rural development and agriculture" sponsored by the Gates Foundation. They are asking for nominations and ongoing comments from the Changemakers community.

I nominated the folks at Open Air Cinema from my last post; there is such great potential for them to inspire, educate, and shape rural communities through the power of film and media, particularly if they are simply providing the technology and empowering local filmmakers to create the content.

I look forward to future nominations and the full spectrum of innovations, here are two of my favorites:

Ashoka and Gates announce partnership

Over the course of this blog I have highlighted multiple models focused on agriculture. I tend to become excited about agricultural innovations because I believe enhancing agricultural productivity is one of the most highly leveraged points of investment when tackling rural poverty and the myriad of negative outcomes that stem from that poverty. I am not alone in that evaluation: research continues to support those claims as do the entrepreneurial experiences of organizations such as IDE and Kickstart. I think the Gates Foundation also found that it could not fulfill its global health goals without investing substantially in agriculture and rural development.

Which brings us to this latest announcement of a partnership between Gates and Ashoka. Now that it is public I can likewise publicly share my enthusiasm for this opportunity and what it could mean for the sector. $15 million does not put this partnership in the top tier of grants made by the Gates Foundation by any means but I think the knowledge and models that can come out of this partnership could dramatically drive the spread of innovation across the entire Gates portfolio. Ashoka's expertise in grassroot, early-stage identification as well as pattern and trend identification across their network will be powerful tools for Gates who then has the resources to really bring those innovations to the rest of the world. It will be an interesting experience for both organizations.

When it comes to franchising I'm anxious to see if it surfaces in the early rounds of identification by Ashoka. Traditionally franchising has not been associated with agriculture and farming but that could mean innovation is right around the corner.

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

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

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.

Kickstart and donor money to build markets

Britt Bravo over at Have Fun Do Good recently posted a great interview with Martin Fisher, CEO and co-founder of Kickstart. For me, the most interesting part of the interview was the discussion regarding the challenges faced by Kickstart, interesting because 1) I believe Kickstart has molded and adjusted to those challenges extremely well and 2) the issue of having to create entire new markets when introducing new products or services will be a similar challenge faced by most of the microfranchises discussed on this site.

It can be easy to talk about social enterprises as if launching a business were easy and success were automatic. Here we are reminded of the reality by one of the most successful organizations at introducing a new technological product at the bottom of the pyramid saying they expect it to take ten years of heavy promotion and reliance on donor funds to tip the market. That strikes me as a much longer time frame than is commonly presented in the industry. We like to talk about sustainability and revenue streams from social enterprises but we must not forget that there is still an incredible market failure in the funding for this market-creation stage. Even the most hard-nosed revenue stream proponents will need to understand the world of philanthropy and fundraising.

Briquettes: a lot of bang for your buck

There was a great highlighted technology over on Afrigadget that could lend itself to a branded microfranchise. It would be a briquette making business. There are other technology designs out there but the idea of a briquette making business is very appealing because it can address multiple issues in one intervention, i.e. as a business it would obviously seek to create jobs and increase incomes but selling briquettes would also bring some great positive benefits to the health of the family and the local environment.

The D-Lab out of MIT reminds us that charcoal is a smokeless fuel, cutting back on the indoor air pollution that leads to so many respiratory infections in children where there is open fire cooking in the home. In terms of the environment, charcoal can be made from agricultural waste which would otherwise be burned off as waste. This is particularly critical in a country like Haiti where deforestation is at a dire level. For a quick introduction to the technology GOOD Magazine did a great little article on this and other basic technologies a while back.

Has anyone has success or failure in attempting to launch a briquette making franchise. What were your greatest challenges?

OneRoof swinging for the fence

OneRoof is a for-profit social enterprise that seeks to deliver 9 essential services in one franchised operation: Information Tech. and Communications, Financial Services, Education, Energy, Health, Clean Water, Sanitation, Agricultural Technologies, and Employment Generation.

I heard Jennifer Ellingson, a senior associate, give a presentation about OneRoof at BYU last November and was quite impressed. They currently operate 20 stores themselves in Mexico and India, having yet to sell franchises outright. I would consider them to still be in the testing phase of operations and launch although I believe they have raised a significant amount of money for their initial growth. I think the are finding very different challenges in Mexico and India which is modifying their model. Looking over their website it appears that they have been able to attract a very talented team which bodes well.

I like their model of being a broker of services as far as being a branded location that can be a point of distribution for a number of partners instead of providing all the services themselves. I have no sense of how well they are delivering on their mission, I have not seen them in the press much and their blog has not been updated since they secured their second round of funding. Their aim to function completely as a for-profit venture will make them an interesting case study in evaluating the feasibility of Gates' creative capitalism and Yunus' social business.

Regarding not knowing their current status: what do you think about transparency and reporting in the citizen sector? How much should social businesses report about their struggles?

Tool Libraries

This is a concept which is not new (the apparently famous Berkley Tool Library” has been around since 1979) but the idea seems to be catching on in the United States and could have potential as a microfranchise. There was a recent post on Treehugger, which has been posted by EcoRealty. Kevin Kelly over at Cool Tools also spotted it a few years ago. There is also a Wikipedia entry which seems to have collected a list of operating tool libraries.

The concept could work beautifully in poorer communities given the right structure. My first thought is to combine it with a microcredit service. (I perhaps appeal to the 'combine it with microcredit' thought too often but the structure and scale of microcredit just begs for piggyback ventures.) When we traditionally think of libraries in the West we think of library cards, getting notices in the mail, etc., which would be obvious barrieres at the bottom of the pyramid. The microcredit innovation of group collateral could serve as the check on accountability and the established record keeping of microcredit institutions would be a great resource. Some microcredit groups I visited in Ghana already had a system of collective purchasing with group savings. Elect one of the women to be the tool librarian that way the MFI staff aren't burdened. The group can grow their library of tools collectively and rent them out to the community and then use the proceeds to buy mosquito nets, bam, and it comes back to my field of public health. See dad, I'm using my degree.

I can picture a tool library in Ghana having the FullBelly Peanut Grinder or KickStart's Brick Press, just to provide two quick examples. The idea of a tool library might also be appealing to financial donors who like to see their contribution touch multiple lives on a recurring basis. It's got potential.

Squarefoot Gardening goes micro

I was at a presentation last Friday where the founder of the concept of Square Foot Gardening, Mel Bartholemew, presented his company's newest product: a prepackaged, no-tool-required, easy-assembled squarefoot garden designed to be distributed through humanitarian efforts. In the lecture he said they intended to “give” them away which made me immediately hesitant thinking about problems created by other free handouts bednets, clothing, etc. I would instead see squarefoot gardening as an excellent business opportunity that microentrepreneurs should be anxious to adopt. I would feel more comfortable selling them the package, one could subsidize it in some manner or offer a flexible payment schedule, but having them invest in it would give them a sense of ownership and stewardship that would lead to greater success and dignity than a free handout. That's where I weigh in on that debate.

I get most excited about the multiple aspects of squarefoot gardening that could be fantastic microfranchises, either as distributors/educators/seed distributors/compost makers.

If you haven't heard of it before, square-foot gardening (or outside of the U.S. 1 meter squared gardening) is a simple gardening technique that is more efficient than traditional row gardening. The organization claims the same crop yields can be obtained in 20% the space with 10% the water usage over tradtional methods.

The organization is extremely socially minded and focused on empowering the poor to get themselves out of poverty. They have had amazing success in multiple countries around the world, showing great adaptability across cultures and conditions. Their stories also show great confidence in the poor themselves, who have seen the value of the idea, sought education about it, and ran with it. Including one case of a loose book finding its way from Nepal into the hands of an entrepreneur in India who used the methods to subsequently launch a training school for square foot gardening.

For more info:
Their book over at Amazon
A website endorsement from a Purdue gardener of the concept
Post at Get Rich Slowly
Wikipedia entry

Product Franchising Irrigation Kits and Mobile Movies

This is an old article that shows two possible franchising opportunities. First the “ready-to-use, prepackaged irrigation kits” are a possible candidate for product franchising. Explore around on IDEI's website and particularly look at their product list.

The Bollywood-style instructional video is also a potential franchise business. A franchisee could acquire one of these modified vans and travel to villages to show movies. A primary source of income could be from companies who wanted to run ads before the movie. This could also be a wonderful mechanism to share public health messages.

A worm store

It's not everyday one can take inspiration from the movie Dumb and Dumber, but Llyod's “I've Got Worms” store could be a wonderfully simple and low-cost microfranchise in rural areas in the developing world. Vermicompost, an excellent organic fertilizer, uses earthworms to convert organic waste such as kitchen waste, animal waste, and agricultural residues into compost. A vermicomposting franchise would train franchisees to properly 'feed' the worms and how to construct proper holding containers. Franchisees could then sell worms and holding containers to their neighbors. It would not be an all-consuming business but it could be an additional revenue stream, much like Honey Care Africa beehives can be an additional revenue for farmers in Kenya. I also think it is a microfranchise that could be particularly suited for rural women.

Source: Where the are No Jobs Vol. 4

$25 Rat Catcher Saves Fields

“Rat catching is an occupation for many poor people in the agriculture fields of India. The 25 percent crop loss due to the rat menace is economically devastating to farmers through the country. The income of rat catchers ranges from US $15 to US $30 a month. They use a traditional earthen pot fumigation method to kill rats in their burrows. This method comes at great cost to the fumigators' health as they inhale smoke that leads to severe occupational health problems, including problems with the respiratory system, heart and eyes. A study shows 30-40 percent of the rat catchers have one or many of these health complications.

The Center for Development of Disadvantaged People has developed a technology that would eliminate these health hazards and more than double a rat catchers' income because its method is twice as efficient. The cost of the instrument in between US $20 to US $25. Eliminating rats is essential to Indian agriculture, and the distribution and use of this technology could prove not only beneficial to farmers, but also to entrepreneurs in the rat catching business. “

I like this example for the simplicity of the technology, the low start-up costs, and the ease of training. How many places in the world could benefit from this technology, how many crops could it save?

Source: Where There Are No Jobs Vol. 4

Fridge for the Poor

This technology has been featured on AIDG, the Rolex Awards, and Treehugger.

"The pot-in-pot consists of two earthenware pots of different diameters, one placed inside the other. The space between the two pots is filled with wet sand that is kept constantly moist, thereby keeping both pots damp. Fruit, vegetables and other items such as soft drinks are put in the smaller inner pot, which is covered with a damp cloth. The phenomenon that occurs is based on a simple principle of physics: the water contained in the sand between the two pots evaporates towards the outer surface of the larger pot where the drier outside air is circulating. By virtue of the laws of thermodynamics, the evaporation process automatically causes a drop in temperature of several degrees, cooling the inner container, destroying harmful micro-organisms and preserving the perishable foods inside."

Brillant design. Simple. Affordable for the poor. Impact of Health and Malnutrition. Job Creation. As of 2005 the inventor had delivered over 90,000 pots. How many more places around the world can benefit from this product? How can we get it to them?

Practical Action Technical Briefs

Formerly known as ITDG (Intermediate Technology Development Group), Practical Action has collected a wide range of technological solutions that are appropriate for people at the bottom of the pyramid. Some of the greatest resources on the site are the technical briefs that give details about projects ranging from an improved donkey plough to compost toilets to bicycle ambulances. The question becomes-how can we get these products and the technical information out to the people.

Groundnut (peanut) shelling

This is a simple design that can lead to huge increases in productivity. I could have sold this machine like hotcakes in Ghana as I went to microfinance borrower group meetings. Individual woman could have used their loans to buy it or the group could have used their group savings to buy it. But it would have been a huge hit. It could easily be designed into a retail franchise. Here is their website and youtube video.

Full Belly

youtube video

Honey Care

Honey Care is a rapidly expanding social franchise in Kenya that trains farmers in commercial beekeeping and buys their honey at guaranteed fair-market prices which it then packages and sells for profit.

Startup costs: US$65 per hive. Typical start with four hives.
Breakeven: investment pays for itself in 2-3 years
Impact: 4 hives, 20 minutes a day can result in $150-$300 additional income.

Keys to success: Low start-up costs. Simple. The company manufactures a special design/high yield beehive. Activity compliments and function in harmony with existing farming practices. Low amount of required input as far as land, labor or knowledge. Partners with MFI's to finance startup costs for individual. Encouraged farmers to put their hives next to each other, increasing the quality of the collective bee colony as well as creating a support system for their clients. Trained in basic math/record keeping. In some cases hives are leased rather than purchased so that in the case of default the asset can be recovered and put into use by another client.

Threats: most failures due to lack of training or access to ongoing support, often result of unsure responsibilities between Honey Care and the MFI. Must be placed near proper vegetation. Long wait from initial investment to first harvest. Threat of bee stings : )

I think the guaranteed purchasing of the product goes a long way in building trust and encouraging recruitment of potential clients. Some clients reported being able to sell the honey at a higher price locally than the price offered by Honey Care, in such a case I think Honey Care should allow the clients to sell a certain percentage of their honey locally. My main question is: who is the final buyer of the honey? Can it be competitive in Western markets? How do we get it in Walmart?