Doing well by doing good? It's not easy.
A business class in California helps a US entrepreneur bring peanut paste to Haiti's hungry kids.
Santa Clara, Calif.
Every entrepreneur here in Silicon Valley has an elevator pitch, a 90-second spiel to lure a potential investor or customer. But few have one like Thomas Stehl's.Skip to next paragraph
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He talks about 17-month-old Rosalor, a child in Haiti who arrived at a hospital weighing just 11.9 pounds. She was fed Medika Mamba, a nutrient-packed peanut butter paste made by Mr. Stehl's organization, and in just over a month she gained five pounds and new vitality.
"Rosalor now has a second chance," says Stehl. "There's 120,000 kids just like Rosalor in Haiti. Imagine what's going to happen to the country if they don't [get this] treatment."
A two-week program at Santa Clara University called the Global Social Benefit Incubator (GSBI) teams up social entrepreneurs like Stehl with Silicon Valley leaders experienced in taking a new idea to mass production.
The program's results reflect the challenges facing nonprofit organizations that adopt business models to serve their social mission. GSBI has graduated some tremendous success stories. But there's also a keen tension between social and business goals, and the difficulty of cracking some developing country markets makes traditional entrepreneurs wince.
"We believe that it's possible to create value in these underserved areas and markets," says James Koch, director of the GSBI. "Large multinational companies have a tremendous myopia to these unmet needs. And they have standard ways of operating ... that would preclude them from the kind of patient, diligent, discovery-based learning that needs to happen."
Social entrepreneurs may need to spend "many, many years," he says, figuring out how to design products and services that work in places like Haiti.
Some past participants of the GSBI program have found that sweet spot. The founders of Thamel.com noticed that 18 percent of Nepal's GDP was coming from remittances, but intermediaries were taking a large cut of that. Their website set up a new way for expatriates to send money back home. Within five years it will be a $100 million social business in revenues, says Mr. Koch.
Another venture named Drishtee, which offers e-health and e-government service across India, successfully scaled up from 1,000 to 10,000 kiosks.
Stehl is the coordinator of operations for Meds & Food For Kids (MFK), which also wants to scale up.
In Haiti, MFK buys peanuts from local farmers, manufactures it into "Medika Mamba," and sells it to healthcare providers there – mainly international NGOs and visiting medical missions. But it wants to make more to bring the cost per unit down.