2008 Ashoka Fellows in Franchising seeking support

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.

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.

Kiva should co-brand with microfranchises

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 in a Community Setting in the U.S.?

Recently I was invited to speak to a group of community leaders in a neighboring county in Virginia. I should mention I was providing backup for Jason Fairbourne, whom I had the privilege of working alongside as I finished my masters degree, who inspired the invite with his article in the Marriott School of Management magazine.

All of my experiences with microfranchising have been in the context of international settings. This audience, however, was concerned with the health of their local community which although being a rather affluent area overall, has large pockets of recent immigrants or otherwise low-income families. The question in essence was: Does microfranchising have any relevancy to community development in the United States?

My answer: As I put myself in the shoes of these community leaders of business, government and nonprofits who are dealing with issues of employment, housing, education and at-risk youth and ask the "so what?" question, I think there are a few lessons they can learn from microfranchising:

Replication of models. There is a changing tide in the nonprofit/community development sector and it is the rise of social entrepreneurs: innovative ideas combined with business-like practices and the passion of an entrepreneur. However, the ultimate goal is a social return on investment as opposed to profit-maximization. Prior to designing a new community project leaders could search best practices of Ashoka Fellows, Fast Company’s Social Capitalist Awards, and other star models. Why reinvent the wheel? The social entrepreneur could be recruited to bring the model to their area or train them to implement the model.

Application of Principles. Some principles of microfranchising that can be applied in a domestic community development setting:

• Think about incentives at each level of participation. In microfranchising it involves a financial incentive for customer, franchisee, franchisor, distributor, investor. In community projects it would be end-users, government bodies, local businesses, funders.

• Empower the community to be participants. Microfranchising looks to bring essential goods and services to the poor, provide employment, and stimulate the economy but they do so by involving the poor as a key actor, the franchisees. The group of people who the project was designed to help did so by making them actors in the operations and implementation of the project.

• Have an eye towards replication when starting projects. In the business setting this is the principle taught in the E-Myth. In microfranchising you build your first operations with an eye towards replication, you are thinking about streamlining operations, standardizing actions, creating systems and manuals of operation. In microfranchising this must be modified at times to match the education levels of the poor, for example manuals may need to be picture based and not text based.

• Business for Good. The business sector has raced ahead of the citizen sector in productivity and impact over the last century. Now the citizen sector can use the tools developed by business to achieve their social missions.

Microfranchising--Is it just a buzz word?

At the end of the year the word "Microfranchising" made Lucy Bernholz's Top Ten Buzz words of 2007 and her entry then had some circulation at the GlobalGiving, Chronicle, Huffington,
and even made it over to Germany. Perhaps inspired by Rob Katz's recent post about the word "Bottom of the Pyramid" I have had contemplative thoughts about this word I find myself typing so frequently.

Is it a good sign or a bad sign that microfranchising made a buzzword TopTen list? Does this mean that it really only has value as a word and the sun will set after its little bit of glory? The great buzzwords of the past (paradigm shift) and the ones of today (Web 2.0) actually did have substantial impact on their relative industries; corporate training was completely overhauled starting with Covey and now every company and organization has a 2.0 strategy or strategy 2.0.

Lately I haven't received many google alerts for the term microfranchising but perhaps the conversation is taking place offline or perhaps it is still too early to tell if the word is catching on.

My take is that the term can be applied fairly broadly and there are many practitioners out there that are using 'franchise'-like models but just not the word. The words I still hear are "replication" and "scale" but the conversation has not turned that corner to talk specifically about franchising, as we traditionally think of it, as a way to replicate and reach scale.

What do you think--is there value in encouraging the adoption of certain words in the sector? Are certain words destined to have greater impact? attract more participation?

How do people become involved in this space?

As I attended the ESR Conference and spoke with people informally or heard their personal stories I was intrigued to learn about the history of their introduction and first involvement in this space of microcredit/microenterprise/microfranchising/ and various efforts to help the poor. Three common histories:

1) Peace Corps. John Hatch (FINCA) and Greg Van Kirk (CESolutions) both were exposed or became dedicated to this kind of work when they volunteered with the peace corps.

2) LDS missionaries. Obviously, considering the conference was in Utah but this is a very common phenomenon. The LDS church has over 50,000 young people aged 19-21 spread out across the world at any given moment in time. These kids are on the streets, in the slums, in the homes of people around the world; they learn the language, fall in love with the culture and develop a soft spot in their heart for the people they served. They come home after two years of service and still feel a connection and want to make a difference.

3) The third common pattern was family vacations off the beaten track that exposed people to poverty for the first time in their life. The personal interaction and eye-witness experience changes them profoundly and they decide to take action.

I think the common thread is personal interaction. This has a couple implications:

First, there is great hope. The world is more interconnected than ever before. I can get on an airplane and be on the other side of the world even remote parts in a matter of hours. I can get on the internet and have an instant exchange with someone from India or Kenya. Prosperity is allowing more and more people to travel internationally. As personal contacts increase the number of people to get involved in efforts to eradicate poverty will increase.

Second, if you want to convert a donor to your cause find a way for them to personally interact with the beneficiaries of your program. I think of the example of Men on the Side of the Road in South Africa in which they consciously arranged, even if it was less efficient, for the beneficiaries to personally collect the donated resources from donors. They have extremely high commitment levels from their donors for their project at large. The same principal would apply if you are trying to secure a multimillion dollar grant. Take the drive to forge the personal connection.

Third, if the sector wants to recruit the best and brightest they must get into the universities and even high schools and facilitate the travel and personal interaction between the young people of the industrialized world and those struggling in poverty.

How should we spell MicroFranchising?

It might seem like a trivial topic but it has been something I've flucuated on as I have written this blog. I've seen it spelled as one word with a capital F (MicroFranchising), with a hyphen (Micro-Franchising), one word lower case (microfranchising), and even as two words (Micro Franchising).

I would think it would follow the other 'micro'terms, i.e. microcredit, microfinance, microenterprise, microinsurance, etc, which seem to have come to a consensus as single words without hyphens or special capitalization. But perhaps there are different opinions.