Sunday, February 27, 2011

It's not a pyramid!

As posted on

CK Prahalad’s book ‘The Fortune at the Bottom of the Pyramid’ firmly established our visual impression of the world’s economic landscape as a pyramid. So much so that ‘Bottom of the Pyramid’ or ‘BoP’ has become part of daily lingo. Except it’s not a pyramid. A 3D visualization of how income or wealth is distributed in most countries, including India, looks nothing like a pyramid. It looks like this:

So what’s in an image? A lot actually. There’s a reason for the saying ‘an image is worth a thousand words’. The pyramid suggests to us that the problem of poverty is a lot less dramatic than it actually is. The real picture presents a problem of far greater magnitude than we might ever have imagined. If you are seeking the fortune at the bottom, you might think that this suggests a far larger fortune – a bigger market. However, when you consider that the total amount of money in the system is controlled, it means that that as you get down towards the bottom, wealth becomes increasingly stretched thin across much larger segments of humanity. Maybe not as glinting and magnificent a fortune after all.

Monday, February 14, 2011

When there are no words...

A couple weeks ago at an internal strategy meeting at Madura we were talking about the connotations of the word ‘transformation’. Transformation meant change that was dramatic and rapid, not slow and gradual. To transform, we agreed, required taking bold risks, a leap of faith. How do we say this in Tamil? I asked. We work largely in the South Indian State of Tamil Nadu and the room had at least 25 native Tamil speakers. There was a moment of silence and then arguments erupted, online dictionaries were consulted. There was no equivalent word in Tamil for transformation. No equivalent word for risk. No comparable idiom to a leap of faith. It took several sentences to explain each word.

Sunday, February 6, 2011

Evaluating Social Impact

(As posted on

For people engaged in the social entrepreneurship space, one of the most difficult questions is how to measure the positive social impact you make. How do you know you’re doing net social good?

What we typically do is assume that our product has intrinsic positive social value and so simply measure how many people have used our product or service. Then we make grand statements like ‘We have positively touched a million lives’. For some products this might be all it takes. Take d.light, for instance, a solar alternative to kerosene lamps that is cheaper, brighter and healthier. A simple count of product sales would be a pretty good indicator. For many other products and services though it is far more ambiguous. Microfinance, pharmaceuticals, health services, education. All of these have great potential for good but also for abuse, misuse or mistakes. Each instance of use is not always a net positive; a borrower who drinks away a loan, a person who commits suicide with an overdose of painkiler, a person who gets wrong medical advice resulting in a worsening of their condition. In some cases, the net positive impact is highly debated. Are people really better off if they took a loan? If they underwent a particular treatment? Took a particular course?

Tuesday, February 1, 2011

Social Entrepreneurship? Really?

(As on

Social Entrepreneurship is the new buzz word in India and marks a shift in thinking away from non-profit models to market based solutions that can operate at large scale and therefore create social value more systemically.

But what puts the ‘social’ in social entrepreneurship? We all have a notion that it means starting a business that does good for less fortunate folk. So we commonly think of a social entrepreneur as someone who is addressing a low income market with a product that can raise standard of living, either by providing greater opportunity or convenience. However, as I have discovered over the past five years, simply product and market are not sufficient.