Nicole Van Der Tuin Finding Impact Podcast

FIP 016: Credit Scoring for Under-Served Populations with Nicole Van Der Tuin

For nearly ten years, Nicole has been working to get capital to places where it is scarce. She believes the cost of capital is central barrier to economic growth and development and she’s been focusing on ways to bring that cost down. In 2010 she set up First Access, a business that offers a credit scoring platform for lending institutions in emerging markets. In this episode, Nicole talks us through credit scoring for under-served populations and how this applies to any social entrepreneur taking on some level of risk with a lending product, such as asset financing or loans to customers.

Some of the things you’ll learn on this podcast include:

  • Ways to build up the “record of proof” for customers living in the informal economy, such as what you have earned, owned, spent.
  • How the emergence of mobile phones and the requirement to link SIM cards to people through some form of ID, has created the first mass of data, recording formal transactions for the majority of the world’s population.
  • How micro-finance institutions have been using a very labor intensive process for so long to offer small loans for people, creating a high cost per loan.
  • Also, how micro-finance institutions for too long have been non-digital and so leveraging the data they have on their customers has been hard.
  • The First Access analytics platform enables staff to act on patterns they’re seeing in the data of their customers.
  • The platform eliminates bias and ensures their decisions are made on the context of their country or region.
  • How using data analytics can reduce average customer acquisition costs dramatically, just by, for example, instantly approving any customer whose credit score comes within the top 5% of loan applicants.
  • Hiring a credit analyst would be a good move for any enterprise taking on some form of risk with a lending product.
  • A good first step for any social enterprise could be to simply start building up their data set to enable credit scoring faster at a later time. First Access can help organizations do this through a simpler, entry-level subscription which excludes the data analytics but ensures robust data collection using best practices.
  • We discuss distinctions between the lending products out there. One is small business micro-enterprise loans done through a customer evaluation process where you collect info about the customer before you lend them the money. This category is where you’re giving a borrower an asset that requires a down payment to ensure buy-in from that customer which predicts how likely they will pay and use the product.
  • Collecting data at the point of sale is good for your business, not just for potential credit scoring applications and assessing risk, but to know more about your customers which will make your sales and marketing more effective.
  • Email info@firstaccessmarket.com to request more info about credit scoring algorithms and other basic information to help improve your learning about this area.

Resources:

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FIP 015: Pro-bono Data science with Jake Porway

In this episode, Jake Porway talks us through DataKind, the organization he founded that helps connect data scientists with non-profits. He was previously with the New York Times as a data scientist so is a great person to have on the show to unpack how data can help non-profits make better decisions on the allocation of resources.

Some of the things you’ll learn on this podcast include:

  • A quick overview of data science and how big data, statistical modelling, machine learning, and artificial intelligence all fit together.
  • How DataKind brings together data scientists with social organizations to work on projects together, and how they facilitate developing the scope of the project, the design and the process of working together.
  • How to start right, which means coming up with the question to answer, rather than the data to use.
  • How the Red Cross worked with data scientists to to predict where fires were more likely to happen across a city.
  • How the Gates Foundation worked with data scientists and satellite imagery to help prevent the spread of wheat crop disease affecting subsistence farmers.
  • How more and more Corporates are sharing their data of human interactions to help with social problems, like a financial transactions of refugees or social media activity.
  • The six components that DataKind brings together for a successful project: a smart problem statement, data sets, data scientists, funders, subject matter experts, and the social actor who will use it at the end of the day.
  • How a crisis textline organization connecting teens in crisis with councilors, used data science to predict which texts were the most urgent, so resources could be allocated more effectively and lives saved.
  • How 14,000 data scientists are standing by with DataKind to help tackle social problems around the world and how you can take advantage of this incredible resource.

Resources:

Connect with Jake

Avery-Bang-Finding-Impact-Podcast

FIP 014: The Importance of Story with Avery Bang

In this episode, Avery Bang talks us through the importance of story and staying clear of poverty porn. Avery is the CEO of Bridges to Prosperity, a non-profit working to connect rural communities to essential services, like education, healthcare and markets. She has earned her stipes in storytelling, having done a TED talk, appeared on local TV stations, has an IMAX film featuring Bridges to Prosperity by an academy award winning director and is expected to receive 30 million viewers. If there’s one thing she has an unfair advantage on, it’s about how she uses story to embed what she’s doing into the minds of people around the globe. I was keen to catch up with Avery to deconstruct the process she’s followed to get the global exposure she’s achieved.

Some of the things you’ll learn on this podcast include:

  • We talk about the importance of telling stories in a tasteful, ethical way, and how to stay away from “poverty porn”.
  • If your solution is not a physical product, or resides in your local neighborhood, then getting people to connect with your solution is hard to do, which is why connecting with them through a story is important.
  • Avery’s method is telling stories of humanity – of hope and inspiration – rather than tugging at heart strings about the poor people who can’t cross the river.
  • We talk about the psychology of telling people about a big problem in international development, which tends to shut people down, which causes them to shrug and say there’s nothing they can do about a problem so large.
  • The story as a way to invite people with you, encourage them to celebrate the big wins with you, encourage them to inspire others, so they tell the story and it spreads.
  • Avery talks about how she pulled in creatives, who work in stories everyday, to visit the field with her, and ask them to tell the story from their perspective.
  • We point to Scott Harrison of Charity: water who is a ninja storyteller (my words), who makes charity: water’s work hopeful and encouraging people to think of their support like a badge of honour.
  • We stress the “Why” is so more important than the “How”.
  • We talk about what Avery’s first iteration of her story was when she started out, but she quickly realized it’s not about the bridge. It’s about the kid going to school, or the farmer going to market. The bridge connects stories every day.
  • Thinking about the story before your intervention, and then the story after your intervention, is a good way to think about it.
  • We talk about episode 002 with Scott Roy, and how this topic chimes with what he said, about what problem can your intervention solve for someone. It’s not about how good your product is.
  • To build your storytelling skills, Avery’s suggestion is to do something that makes you uncomfortable, like being part of toast masters, or doing a locally-run TED talk, to force you to work on translating your vision to someone else.
  • We briefly talk about the Oxford MBA, and how taking time out for your organization is a way of accelerating it to the next level.

Resources:

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lauren fletcher finding impact podcast

FIP 013: Planting Trees with Drones, with Lauren Fletcher

Lauren Fletcher talks us through his startup journey at Biocarbon Engineering, which quite simply, plants trees with drones. He has been a NASA engineer where he designed artificial environments for space shuttles and space stations. He’s studied Mars exploration technologies. He spent 4 years in the desert of Peru studying microbial biology for missions to Mars. And he’s studied Civil and Environmental Engineering at Stanford University where a course in deforestation first sparked his interest in reforesting the planet using robotics. Lauren takes us through his entrepreneurial journey over the last few years, building their ecosystem restoration company using lean startup techniques and methods to help roll out your business. There’s tons of useful nuggets of advice in here for anyone starting out on their journey.

Some of the things you’ll learn on this podcast include:

  • How social entrepreneurs should always be stepping back to see how their product or solution fits within the bigger picture, which can, specifically, link you up with those who have available resources to help you go further.
  • How Laurent went about finding his founding team, and how he looked for people with exposure and basic understanding of the subject matter he needed.
  • Their strategy of finding early capital, where they went after equity, prizes and government grants
  • We learn the downside of going after prizes, including how they are a lot of work for not alot of money, but the upside was a viral video that got over a million views that gave them the notoriety to attract seed round investors
  • How their product development roadmap panned out, which included building a pre-prototype basic flying planting machine in 3 weeks for the Drones for Good competition in Dubai.
  • How they’re thinking about getting their first clients, and the short to long term vision for revenue generation and growth

Resources:

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Mirik Castro Finding Impact FIP12

FIP 012: Selling High Price Products to Rural Farmers with Mirik Castro

In this episode, we join Mirik in Northern Tanzania as he talks us through their strategy of selling relatively expensive biogas products to poor rural farmers in East Africa. Mirik has been working in business since 2005, working to turn businesses around that were not surviving the globalization of commerce. When his brother approached him with a new biogas product he had invented, the two brothers entered into business together. Simgas offers affordable, high-quality biogas systems for household use.

Some of the things you’ll learn on this podcast include:

  • Why they decided to launch in East Africa rather than South East Asia.
  • Why they moved from a very centralized approach to one that is hyper local, with hub managers installing biogas systems in a 10km radius, with a heavy reliance on IT to monitor quality.
  • How they’ve productized the construction installation into a product installation
  • How they’ve standardized 30 distinct steps of installation, and each step is documented and stored in a database for diagnosing problems in the system later down the line.
  • How this installation monitoring system is linked to employee incentives for high quality installations.
  • Some of the indicators that told them their highly centalized model wasn’t working, and the steps they took to confirm their intuition that a hyper local model was the better way.
  • Reasons why a hyper local model is actually relatively cheap compared to the centralized version.
  • How, on the downside, a higher volume of stock is required for a hyper local model, meaning a more capital intensive model.
  • How trust in the company and affordability of the product have surfaced as the two key requirements for success
  • Who their ideal salespeople are in the community, to reinforce the trust aspect.
  • Who their customer is, in terms of status in the community, what motivates them, what their average monthly income is, and other characteristics.
  • Why traditional MFIs, who are used to selling a higher volume of lower value products, are not the ideal organizations to sell higher value products to rural populations.
  • How they’re solving their working capital finance challenges and the partners they’re working with to raise $150k increments relatively quickly.
  • How they expand into a new community, who they strike partnerships with, who they target as their first customers, and how they quickly ramp up to many many more sales in each country until each hub becomes profitable.
  • What part of his job over the last few years Mirik would happily giveaway.
    We delve into the different leadership roles of Managing Director, COO and CEO and how they work together.

Resources:

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nicky khaki on finding impact

FIP 011: Raising Early Stage Finance with Nicky Khaki

In this episode, Nicky Khaki talks us through early stage finance. He runs the EWB Venture fund that specifically targets early stage businesses and provides them with high-quality professionals to provide expertise to drive them forward. Nicky Khaki started out as an investment banker on Wall Street before working in Kenya for a year setting up small scale water shops in urban areas. He went back to University to study international development and then connected with Engineers without Borders Canada who were looking to formalize their investment offering for early stage businesses whilst providing professionals (or “talent”) at the same time.

  • Some of the things you’ll learn on this podcast include:
  • What the landscape of finance probably looks like for social entrepreneurs in Africa.
  • What EWB Ventures looks for in a business to potentially invest up to $100k and specifically at what stage.
  • Why EWB Ventures provides talent for 1-2 years when they make an investment into a company.
  • We talk about their talent screening process and what the talent can expect when they get placed with a company.
  • Recommendations for early stage entrepreneurs to cultivate investor relationships, including sharing a monthly update on progress.
  • What an early stage enterprise should have ready when approaching an early stage investor, and why a financial model is not expected at this stage.
  • We discuss common pitfalls Nicky’s seen with pitches to his organization, including (a) know your audience and making sure your presentation responds to that audience; (b) include what problems you’re facing and what do you need help with; (c) not interviewing the investor, to ensure they’re aligned with your style and approach; (d) talking about a major expansion in the pitch – which is crazy to do, even before you’ve reached revenue.
  • If Nicky was setting up a social enterprise, which sector he would go into.

Resources:

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FIP 010: Why Human Connection is Good For Your Social Enterprise, with Devin Hibbard

In this episode, Devin Hibbard from Beads for Life talks to us about the skill of connecting with people and how it can be so good for you and your social enterprise. Devin started Beads for Life with the simple idea of improving the lives of a few bead makers in a slum in Uganda. Her story of how that has evolved is instrumental for any entrepreneur working hard to create social change. Beads for Life has morphed into a entrepreneurial skills training program called Street Business School, reaching over 40,000 women in Uganda, with sights on a far greater goal by supporting other organizations to adopt their methodologies.

Some of the things you’ll learn on this podcast include:

  • Benefits of not just listening to your customer but really engaging with them as a human being
  • How Bead for Life have effectively scaled a high touch model by working through other organizations, to create a network of Street Business School implementers
  • How they’ve thought about scaling their impact, which didn’t mean scaling their intervention, which was effectively a form of social franchising before the term was even coined
  • Why they call their implementing partners “Catalyst Partners” instead of “franchisees”, and how this thoughtful move underlined a deeper connection with them as a way of building trust and keeping them in the network
  • How they’ve been trying to embed personal connections within the replicable model, for example the catalyst partners are taught to introduce themselves in the community as “coach” instead of a teacher
  • How checklists are a key asset they’ve developed to help catalyst partners to implement the model as expected
  • How they’re exploring ways to measure confidence in women, which is a key indicator for impact
  • Some hiring tips, including observing how candidates relate with customers face to face, and they’ll look for initiative, creativity and intelligence more than a good resume
  • How they managed the change process internally, as they went from a social enterprise selling beads from Uganda to a global program sharing Street Business School as an approach to lift women out of poverty around the world
  • How sharing successes with the entire team is crucially important to getting the most out of all staff – such as collecting stories and distributing them to staff, putting maps on the walls, giving updates from the trainings as they happen, and initiating an internal communications campaign
  • Why it’s so important for managers to tell stories to help people feel connected to what they do

If there are organizations you know could use Street Business School as a tool, they are accepting applications in their next two Street Business School Immersion Workshops, August 20-26 and September 3-9, 2017 in Kampala, Uganda. Submit your application here.

Resources:

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Patrick Watson Finding Impact Raising Debt Equity

FIP 009: Raising Equity Investment with Patrick Watson

In this episode, Patrick Watson talks us through the process of raising equity investment for social enterprises. Based in South America, he is Director of I-DEV’s Global Investment Advisory Group. He’s worked for KPMG and Inter Pipeline Fund, a multi-billion dollar energy infrastructure company.

Some of the things you’ll learn on this podcast include:

  • We go back to basics and talk about liquidity in emerging markets, and how difficult it is compared to more developed economies;
  • We delve a little into why there is a scarcity of investment finance in emerging economies, such as less money;
  • We talk about debt “with equity like features” and vice versa, and we talk about why an investor might prefer that option;
  • How to best prepare for going out to investors and what to say;
  • Great tips in how to build your financial model and a few important things to know, including how to break down how you intend to achieve the growth you state in your financial model;
  • We discuss a little about when equity investment makes sense and when grant funding might be more appropriate;
  • We talk about developing a strategic plan for investors and why it’s important;
  • Then other materials you need to have ready, such as your investment deck (and what it should contain), 1-2 page investment teaser, a non-disclosure agreement, and your “data room” ready for due diligence;
  • We talk about the mindset you should have when talking to investors, who are essentially buying into your business and helping you realize your vision;
  • We talk about how the social enterprise could approach investors with a term sheet already worked out;
  • Some of the common pitfalls seen by social enterprises when seeking to raise equity finance, including going to too few investors in the initial stages and lack of detail around the growth projections in the financial model.

Resources:

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Rob Mills Debt Financing

FIP 008: Raising Debt Investment with Rob Mills

In this episode, I talk to Rob Mills from Social Finance about raising debt investment for your social enterprise. This is particularly useful for a later stage social enterprise, who is looking to raise debt finance, or for social entrepreneurs with an eye on future growth. Rob was previously with the World Bank in Mozambique and has a long track record of various forms of large scale finance.

Some of the things we discuss include:

  • We review the landscape of investment options for social enterprises, from double digit return impact funds, all the way through to grants.
  • We explore a big gap in the investment space and why that gap is likely to persist, and we play around with the idea of investment that uses an impact-adjusted rate of return.
  • How it’s totally feasible nowadays to look for equity to fund working capital needs, as seen in the off-grid solar market in E. Africa
  • A flavour of the things that a debt investor would likely want to see, including details around governance, financial model, collateral, intellectual property, regulatory license to operate, tax and jurisdiction issues, etc.
  • Common pitfalls in why an investor might initially be interested in a social enterprise, but for various reasons, the deal doesn’t go ahead.

Resources:

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Rebecca Harrison

FIP 007: Developing Middle Management in Africa with Rebecca Harrison

“Effective managers hold the key to Africa’s prosperity”. A bold statement, but fair. So much focus by companies in Africa has been on technical training of employees, and management skills are woefully lagging. In this episode, Rebecca Harrison gives us some practical advice on how to start now on strengthening that middle management layer in your company, and why it’s the best investment you can make in your company today.

You’ll learn about:

  • How talent management gets tougher as your social enterprise scales, so setting up systems early pays off down the line
  • Some of the early roadblocks that caused them to pivot their early offering, including the challenges taking payment in Africa
  • Critical training that any manager should be given, including goal setting, personal productivity, time management and accountability
  • Formal learning is useless unless you practice on the job and create a feedback loop – check out some tips on how to create this structure around trial and error and form the right habits
  • Instead of thinking about training as a checkbox for your staff, think intentionally about the culture you want to build, the competencies and habits that need to underpin the culture, and then train and practice specifically for that
  • Tools to underpin staff development, such as goal setting, accountability partners, daily reflection through journaling.

References:

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