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Social Entrepreneurship at CEL, Pilani

by on October 1, 2009
 

An increased awareness about the opportunities at the bottom of the pyramid (BoP), void created by inefficient government services, the hype surrounding the social/ development sector; whatever be the reason, you just cannot anymore ignore entrepreneurs starting-up businesses apart from make solid business sense also have an intrinsic social impact associated with it.

Social entrepreneurship seems like the judicious trade-off between charitable not-for-profits trying to solve problems of the society and stereotyped business houses exploiting these very problems to make profits. In India, the government hasn’t been very successful in targeting some problems of the BoP such as education, health care, communication and financial services where low cost, reliable and accessible services are almost non-existent. A huge opportunity awaits anyone who is ready to take the plunge. In all probability, our billion dollars and fifteen seconds of fame will come from providing basic amenities to people who can afford it but only with a strong value proposition.

Somewhere in an underdeveloped economy there is a kid with bright eyed dreams but no education, an indomitable spirit but with no food. He’ll probably die before he is 5, killed by a disease easily curable and certainly not fatal. And this kid isn’t alone. About 3 billion people live on less than $5/day. The kid dying of starvation is an extreme end of the spectrum but these 3 billion people represent a tremendous market for nutrition, education, health care, financial services, communication. Whatever might be the motive, if we create an efficient business out of the problem(s), there is mind-boggling amount of social change to be brought about.

However, starting-up a social venture seems to be a lot tougher than building a Twitter App in four days and then pushing it through viral marketing. By the very choice of market and the consumer, the entrepreneur is choosing to take on bigger challenges in production, delivery and marketing. With most of such services having a very low margin, hitting the necessary scale to break even is a daunting task.

In a social setting, even lack of competition is a problem. Educating customers about the need of drinking pure waters by Piramal water (a social venture aiming to sell water at 25paise/liter by setting rural reverse osmosis plants through a franchisee model) is the toughest part of the customer acquisition process. Trust becomes a far more important factor in the whole business. The shift is towards more of management of relations than management of transactions. With the reductionist viewpoint of just managing transactions, operating in the social sector is tough. Consumers in a social venture pay you a larger percentage of their income than what a consumer would pay in a different setting. In absolute terms, the value of each transaction might be very small, but for the consumer in a social start-up it might be savings accumulated over years.

Starting up is already ‘cool’ at BITS Pilani. The crowd on campus (including us) likes to believe that all the universities in India are increasingly passionate about solving societal problems through efficient framework of a business. At the Center (CEL), we are trying out our own experiment. In a small village called Garinda, we are working with rural women and helping them set up their own co-operative business. Currently, they make paper bags and sell it to the Institute’s Co-operative store. Like a true lab, we have been testing growing mushrooms and making papads as well. With some sustained effort from CEL members and contagious enthusiasm from the village women, we should be able to come out with a model that is not only sustainable but hopefully replicable.

Though their is no substantial proof to definitively say that starting up a social venture will change the world and make you a billionaire but sure enough, an increasingly large pool of entrepreneurial people are choosing to start-up a business with a social value attached to it.

We wish all of them the very best!

– Rachit Chandra

President, Centre for Entrepreneurial Leadership at BITS Pilani.

rachit /at/ celbits /dot/ org

To know more about CEL’s Rural Entrepreneurship initiatives mail Shailesh at shailesh /at/ celbits /dot/ org

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