Monday, 25 April 2011

Analyzing a Businass Plan - RUMA

On our lecture on business planning we had an assignment of analyzing a business plan, and for this post I'm going to analyze the Indonesian based Social Business RUMA.

Having won the first prize of the Harvard Social Enterprise “Pitch for Change” competition, the acronym that gives name to this social business literally to Your Micro Business Partner. Through their business model they pretend to empower poor women by supplying them with a kit that enables them to start their own micro franchises hence becoming micro-entrepreneurs.

Using the strucutre seen during the lecture I'll try to make the analysis:


Most of the time when poor people ask for a loan, they fall into a vicious cycle of debt. This is often caused by the way the money is spent after the loan is granted. No money is generated back so, in order to repay another loan has to be made. The RUMA business addresses this problem through the lending of Microfranchises, in their own words, they lend businesses to generate money.

Literally called a Business in a Box this micro-franchises provide all the tools and training required for selling electronic airtime minutes through mobile phones.


Knowing that the mobile phone industry has a high penentration on Indonesia, RUMA partnered with the Grameen Foundation as well as with Qualcomm to put this business into work. The Grameen Foundation provided the initial investment funds through its Pioneer Fund, as well as technical assistance that helped RUMA to build its initial operational framework (which includes technology systems and human capital). Qualcomm supplied the technological expertise on mobile phones through its Wireless Reach initiative.


In order for RUMA to be a successful business they stipulated that the revenues will come from selling franchise kits that will be leased to the borrower by the financial institution, as well as for a margin obtained for each airtime sale. In that sense, the borrower of the microfranchise will use the revenue obtained to repay their loans. The estimated profit for the borrower is approximately $1/day. This business defines the poor as people as those living with less $2,5 a day (World Bank poverty line), so a steady $1/day supposes a 50% overall increase.

For measuring their results, RUMA chose the Grameen Foundation's Progress out of Poverty Index (PPI) since t's country specific and it's based on a ten-question survey of readily identifiable indicators.

As for their fanantial sustainability, RUMA plans to break even within its first 2.5 years. In order to reach that goal they need to empower 5,000 of the poor and poorest by August 2011, having as a target to reach a 70% of people below the poverty line.

RUMA in numbers (current situation).

At this point, Ruma has:
  • Created more than 600 new micro-business.
  • 100% profitability for the micro-business owners.
  • 97% of owners are women.
  • 68% of business owners are below the poverty line ($2,5/day)
They also pretend to develop and deploy new business kits that deal with medical products and services, education and training, trade and distribution, and agriculture and fisheries.

For more information I leave a link were you can download a through presentation

Friday, 8 April 2011

hacking social business: reverse engineering Bienestar's businee plan.

"Reverse engineering is the process of discovering the technological principles of a human made device, object or system through analysis of its structure, function and operation."

During the last week, as a group, we worked together to prepare a structured analysis and critique to the document that had been sent to us by the Grameen Creative Lab inherent to the "Bienestar" project, which is taking place in the region of Caldas, Colombia.
The analytical model that we applied to the document is, actually, the "reverse engineering" one; in this sense we have isolated, deconstructed and analyzed every single point of it with the prospective to grasp all the possible pros and cons.
The tangible benefit that can be drawn from this type of investigation, as well as the exercise itself, is the possibility of improving an existing template or, from its fbases, to try creating an entirely new and more efficient one.

Tuesday, 5 April 2011

Social business in Europe: incorporation choices, finance, networks and local development

In Monday's lecture we zoomed from the big picture – the historical mission largely attributed to social business in Europe in this day and age – to across-country diversity. Enjoy!

Monday, 4 April 2011

Social Investment Bonds

A Social Impact Bond is a contract with the public sector in which a commitment is made to pay for improved social outcomes that result in public sector savings. The expected public sector savings are used as a basis for raising investment for prevention and early intervention services that improve social outcomes.
The US government is exploring the use of social impact bonds as a means of encouraging greater efficiency in the delivery of social services. It essentially involves foundations and non-profits putting up initial funding for a project with government reimbursement, and the possibility of a ‘return’ if the project meets certain goals.

The benefits of Social Impact Bonds could be:
- More funds are available for prevention and early intervention services;
- The public sector only has to pay for effective services; the third party investor bears all the risk of services being potentially ineffective.
- Investors and services have an incentive to be as effective as possible, because the larger impact they have on the outcome, the larger the repayment they will receive.

According to the New York Times, President Obama is to launch in 2011 seven pilot schemes, which would issue a total of $100 million in bonds to support programs in the areas of job training, education, juvenile justice and children’s disabilities.

The Rockefeller Foundation has announced a $400,000 grant to the Nonprofit Finance Fund for a number of projects that will help bring the social impact bond concept to the US. The Fund, a community-development financial institution, recently launched an online platform for funders, non-profits and educators to share ideas about the bonds. After gathering research and opinions, they will conduct a feasibility study of the bonds in the US and identify opportunities where the financing structure could work.

The Big Society - For Dummies

4 Minute Film from Big Society on Vimeo.

Here is The Big Society, flagship policy idea of the 2010 UK Conservative Party election manifesto.

The aim is "to create a climate that empowers local people and communities, building a big society that will 'take power away from politicians and give it to people'" by encouraging charities, volunteering, social enterprises. Prime Minister David Cameron, is trying to make UK citizens ask themselves this kind of questions, "how can I do more, other than paying taxes and obeying the law, in order to make my country stronger and better place?".

Well, I have to say from a theoretical point of view it sounds pretty solid but in the real world things seem to get significantly complicated.

In my opinion, it is not so much about involving people to do the jobs covering for inevitable cuts in public services made by the Government, the great difficulty will rely on changing the mindset of 62 million of Britons. Especially in European countries where we take welfare programs for granted, and many times claiming these to be more generous every year regardless of the socio-economic environment. Evidently, this affects the transition creating a desynchronization in which the State is already cutting expanses in public services and where The Big Society is still too young and innocent to take the steering wheel. Useless to say this is causing more inequalities amongst the poor and the rich.
However, I find important to keep in mind that the Big Society is also valid even if increasing public expenditure since the goal will always remain the same: more empowerment, freedom, responsibility and control for communities allowing the Government to focus on other non accessible aspects of our society.

The Big Society is a Governmental initiative and so unfortunately these are never well perceived by the populace. Trying to tackle this issue, the conservatives are structuring a whole platform called StartUp Britain, in order to get new businesses going as well as a better social entrepreneurial friendly environment.

Here's my way of seeing this, I don't think anyone could tell if this is the solution right now but what I do know is that in UK there is will for change and when there's a will...

Sunday, 3 April 2011

Zipcar: Wheels When You Want Them!

Zipcar is a car-sharing service that offers urban residents, whether on an individual, business or university level, an alternative to car ownership. Its on demand and self-service model provides solutions to issues such as parking, congestion and transportation. This new model for automobile transportation is more cost-effective and hassle-free than owning, renting or leasing a car.

The development of new technologies, such as RFID (radio frequency identification), in addition to the birth of new user profiles, led to the emergence of Zipcar’s concept by creating an agent-artifact space.
The need was generated through the specific user profiles; people who live in cities and use public transport but need cars from time to time, or people who want to save money and don’t want to go through the hassle of owning a car, or even people who refrain from buying cars for environmental reasons.
You might be thinking, “but what’s so special about Zipcar? It’s just like another car rental company.” Well, what Zipcar did, is that it eliminated the intermediary relationship a customer usually has with a car rental company and replaced it with self-service accessibility to the car through the RFID card. Small change, big difference.

The way Zipcar works is quite simple:

Each new member that joins Zipcar’s community on the webpage receives a Zipcard powered by RFID technology. The member browses the cars available through the website by time, location, price or model. Once the car is chosen and booked, the member heads towards the parking spot and uses the activated Zipcard to lock and unlock the doors of the car. After the trip is over, the user returns the car to the same location.

The Zipcar concept is environmentally friendly and is changing the way people think about owning a car. Fewer cars on the road means less congestion, less pollution, less fuel consumption, less stress and fresher air. To top that, “over 40% of Zipcar members either sell their car or stop a car-purchasing decision.”

Now that’s innovation!

Saturday, 2 April 2011

Working Wikily - Social Change with a Network Mindset

While browsing the web trying to find some business plans to analyze for the class, I stumbled upon this blog. Working Wikily.

The blog was created by the Monitor Insitute, which is an entity that aims (as they would say in their own words) "to help innovative leaders develop and achieve sustainable solutions to significant social and environmental problems". They do this by giving consultancy, serving as a think tank of new trends, and being an incubator of new approaches and ideas.

The Working Wikily blog has the purpose "of providing practitioners in the social sector with a filter for the events that are pushing the field towards a more networked form of work and a perspective on how and why those events are unfolding".

In our case, this becomes relevant since we are doing a Master in Design For Social Business. We work inside the social sector, and the first part of this module was about setting a collaborative environment in order to approach any project in general (in this case our own experience of learning what is social business).

Networking is working in collaboration with others, building channels in which relationships are established and new ideas and ways of working are bred. This blog contains a lot of relevant articles, resources, and links that we may find useful in this new adventure we are taking part of...

For starters I leave you with a link where you can download their paper Working Wikily 2.0 in which they create the whole frame set for this approach to social innovation.


Friday, 1 April 2011

The emergent world we live in

When the telephone was rolled out as a commercial product, AT&T spent a few decades trying to persuade its customers not to use it to call their friends and families. Edison thought the phonograph would be used to record last wills. Gutenberg thought he was gong to print Bibles and indulgences to add to the splendour of the Church, and could not have seen the printing-press enabled Protestant Reformation coming. Innovation is not just about new gizmos. It is about what people decide gizmos are.

In this lecture, I offer a complexity perspective on innovation. I argue innovation is emergent; it happens in cascades; it is inherently unpredictable; it is sparked in the context of relationships, not in the mind of lone inventor. Furthermore, I argue that social innovation has just the same characteristics as vanilla technical innovation. Enjoy.

Ærø & Our Emergent World

In today’s session about innovation and our emergent world, we mentioned one of the Danish Baltic Sea islands, Aero, because of its technologies in energy generation so I thought it might be interesting to share these photos with you. 
I visited Aero last summer, and it is a truly charming island with beautiful natural scenery and remarkable picturesque houses. Although its inhabitants sum up to a rough total of 7,000 people, I barely saw anyone there under the age of 60! Yet, Aero remains serious about being environmental friendly and has the world’s largest solar power plants aiming to make the island completely self-sufficient in energy. Today, all of Denmark is following Aero's lead.
If innovation adaptation is not simply technology dependent but also socially dependent, then way to go people of Aero

Join Social Business Talk

Hello to everyone,

we're a team of seven as creative as down-to-earth people attending to the Master program called Design for Social Business (D4SB) introduced by IED this year.
According with Alberto Cottica, we are of the idea of extending this blog, which was initially formed as a platform for us to share opinions and critical viewpoints concerning the concept of Social Business.

The reason is having the opportunity to share ideas we have with other students, they will contribute as outside, interested and active observers with their remarks and considerations to this project.
We are sure that exchanging opinions and intuitions will bring new and diverse reasoning to all of us as well as for all of you who decide to be involved!

So please, be ready and willing to join us because we are all interested of yours point of view and please, do not be afraid of posting ideas in English, let's do it in Italian if you'd like, or in Spanish, French, Romanian and Portuguese or even in Arabic if you want!
We're an international team, and we do think that a good idea is a good idea also without any translation.

the D4SB team!