Fernando mistura between worlds
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ONLINE GLOBAL SOCIAL ENTREPRENEURSHIP CONFERENCE www.SENS24.com March 24th, 2013 FERNANDO MISTURA, CO-FOUNDER, 2.5 SECTOR PROJECT, DOCUMENTARY ”BETWEEN WORLDS”
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Transcript of Fernando mistura between worlds
ONLINE GLOBAL SOCIAL ENTREPRENEURSHIP CONFERENCE
www.SENS24.com
March 24th, 2013
FERNANDO MISTURA, CO-FOUNDER, 2.5 SECTOR PROJECT, DOCUMENTARY ”BETWEEN WORLDS”
AGENDA
The 2.5 Sector Project
Social Business: a new business paradigm
How big is the market?
The advantages of social business
Challenges of social business
Grameen Danone Foods
Aravind Eye Hospital
Conclusions
THE 2.5 SECTOR PROJECT
Inspire young business leaders
and entrepreneurs to create sustainable BUSINESS SOLUTIONS
that strive to achieve HIGH SOCIAL IMPACT and ECONOMIC
RETURN
Promote and Consolidate the 2.5 SECTOR in Brazil
THE 2.5 SECTOR! SOCIAL BUSINESS ARE REVOLUTIONIZING TRADITIONAL BUSINESS PARARDIGM
2º Sector 3º Sector
2.5 Sector
SOCIAL BUSINESSES
Have a clear social purpose and theory of change
Adopt profitable business strategies
1
2
Essential Characteristics
Social Businesses
Commercialize affordable products/services that are
critical to the exercise of citizenship by poor and
fragile populations
Social Insertion companies
Re-insert marginalized populations into the labour
market by providing direct employment, training and
coaching, allowing employees to find a position in
traditional companies in a later stage
Fair-Trade Companies
Business partnerships, based on dialog,
transparency and respect, with the objective of
commercializing products from “out-of-the-market”
suppliers, offering them better exchange conditions
(better prices) and rights guaranties
The 2.5 Sector is composed by:
WHAT IS THE POTENTIAL FOR GROWTH?
MARKET SIZING ESTIMATES SPECTRUM OF INVESTMENT
Source: WRI, 2005
US$ 1 trillion Potential for invested
capital over the next
10 years Source: JP Morgan, 2010, Impact investing: an emerging asset class
WHY ARE SOCIAL BUSINESSES TRANSFORMING THE SOCIAL SECTOR
Access to expansion capital due to the adoption of commercial strategies and innovative structures
Higher financial autonomy and resources diversification Long-term and structured solutions: products and services
Business models based on social innovation
Attractiveness to traditional companies in building partnerships Creation of new actors in the Value Chain (Supply and Distribution)
Business model capable of attracting talents
Capacity of generating high-scale impact
Greater complexity and impact ambition Competitive remuneration
Perennial business strategies Replicable Influence public policy / political commitment
PERFORMANCE
INNOVATION
BUSINESS SOLUTION
HIGH-SCALE SOCIAL IMPACT
GRAMEEN DANONE FOODS
Purpose Process Product
o Highly nutritive iogurt o Containing 30% of daily vitamines and nutrients Bangladeshi children lack
o Affordable price= US$ 0.07 / container
o Local suppliers and distributors – rede Grameen Group.
o Proximity Business approach (factory suplies the market within 60km)
o Sustainable value chain
o The company’s mission is to eradicate children malnutrition
o Profit:a mean to expand and reach such goals
o 100% of profits are reinvested after initial capital recovering
48% of children up to 5 years in Bangladesh live on
extreme sub-nutrition
ARAVIND EYE HOSPITAL
Price Process Product
o Low cost interocular lenses: US$ 2 a $4, while market price is around US150
o High quality: lenses are exported to over 110 countries
o Standardized activities: - High volume - High quality
o Low cost surgery: US$ 0 a US$ 200, while market price is around $1500 o Service reaches the patient in rural zones – Eye camps & tele centres
o Innovative pricing method: pays who wants and who can!
o Every paid surgery covers other 2 gratuity surgeries
60% of blind people have cataract, 70% of these
live in rural areas, 80% of ophthalmologists live in
urban centres
Doctors make up to 100 surgeries per day
More than 250.000 surgeries per year
OTHER CHALLENGES
Social business ENTREPRENEURS’ mindset is socially-oriented: replicate instead of protect their business
Hybrid models are often necessary > unbundling activities to develop market based solutions
Patience: most social business models take much longer to mature
Scale is important and commercial capital can help, but the process of bringing in investors is often complicate for entrepreneurs and poses governance issues: dealing with mission delivery and sustainability
Legal structures are often not tailored for social business, pose challenges and demand some innovative-thinking
ONLINE GLOBAL SOCIAL ENTREPRENEURSHIP CONFERENCE
www.SENS24.com
March 24th, 2013
Thank you for your participation!
Contact us at: [email protected]
AFFORDABILITY AND AVAILABILITY IS CRUCIAL FOR THE SUCCESS OF SOCIAL BUSINESS VENTURES
SOCIAL BUSINESS MODELS
Paraskilling Aravind Eye Hospital
No frills Aravind Eye Hospital, Lifespring Hospitals
Pay per use IDEAAS, Grameen Phone, and DMT Mobile Toilets
Pay per use of a community-level facility
Rental of individual product or service
Quality services but without “fancy acessories”
High asset utilisation and service specialisation
High volume
Shared distribution networks to reach into remote markets (use of SHG or NGOs to reach the market)
No frill services
+ disaggregation of tasks to be undertaken by non specialists (without qualification)
Shared Channels Servals burners, Nutriset
Source: Monitor Institute, 2009
BASIC PRINCIPLES OF MARKET-BASED SOLUTIONS
Fonte: Valeria Budinich, Kimberly Manno-Reott , Stephanie Schmidt. Harvard Business School
Conference on Global Poverty and Business Approaches. December 2, 2005
