Updated: Sep 3, 2020
This week, we present our Executive Director, Marc Blumenthal, on the Social Venture Foundation's new model for sustainable market creation at the Bottom of the Pyramid.
The "Old Paradigm"
About 15 years ago, I began studying a very old paradigm known as the poverty reduction industry. I quickly realized that the business community had delegated responsibility for this industry to unsustainable governmental agencies and organizations. I visited a wide variety of these shops including the World Bank, Inter-American Development Bank, OAS and UNDP. My take away: a lot of dedicated people in paradigms that did not foster sustainability. I then met a few pioneers of a new paradigm involving businesses focusing on bringing the poor into the free enterprise system on a sustainable basis. These individuals included Stuart Hart co-author of the cutting edge study, “The Bottom of the Pyramid” and Mohammed Yunus, founder of the first big business play in poverty reduction, the Microcredit lender, Grameen Bank and I was inspired.
Microcredit has enabled thousands of the poor to start their own enterprises, but it leaves it up to the individual to come up with their own idea for a self-employment business, often producing an overabundance of similar types of low wage/low tech enterprises such as small retail stands and handcrafts. Today, microcredit has moved up the "risk-averse ladder" requiring revenue track records exceeding 6 months, making it even more challenging for the poor to "jump-start" a business.
So, I started working on a new business model focused on market creation at the Bottom of the Pyramid, MicroFranchising. It is the flip side of microcredit, given that it is focused on underwriting proven business models that are sustainable and can be scaled. I originally presented the micro-franchise model at the MIT Media Lab and I was invited to present it again at the Media Lab Asia in 2001. The model focused on creating sustainable self-employment opportunities for the poor that delivered meaningful social impact for the poor at a price the poor could afford. However, at the time, International Development Agencies were loath to engage in a business solution to poverty reduction. So, I shelved the micro-franchise model rollout. In 2018, I was invited to present the model in my role as Executive Director of the Social Ventures Foundation at the “Bottom of the Pyramid Summit” (BoP) in New Delhi, India in April of 2018.
At the Summit I was approached by a sponsor to field test the model and V'ice was born. This micro-franchise employs the poor to deliver vitally important vitamin and protein supplementation at a price the poor can afford. It is all about market creation at the BoP including manufacturing, jobs, and nutrition.
Check out https://www.vicehaiti.com/ to learn more.