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FIP 107: Last mile distribution 2/3 – How to manage a merger of like-minded social enterprises, with Sita Adhikari and Alexie Seller of Pollinate Group

This is part two of a 3-part mini-series on last mile distribution. This series is a collaboration between the Finding Impact Podcast and the Global Distributors Collective (or the GDC). The GDC is a collective of last mile distributors around the world, with over 140 members in over 40 countries, who cumulatively have sold more than 8 million life-changing products to last mile households.

The GDC is dedicated to supporting and representing last mile distribution companies to help them reach underserved customers with life-changing products like solar lights, clean cookstoves, water filters and nutrition products. The purpose of the GDC is to make last mile distribution the first priority so that life-changing products can be made affordable and available to all.

This episode with Pollinate Energy in India and Empower Generation in Nepal is on how partnerships between distributors can leverage economies of scale and maximise impact.

On this episode you’ll learn:

  • Before the merger, Pollinate Energy was working primarily in urban areas serving families in slums with no access to electricity or other services. Empower Generation would work with women entrepreneurs in rural areas and train them to sell solar lanterns.
  • Empower could see huge potential for their model to reach all rural areas in Nepal, but needed funding and technology to help them scale, and partnership was a possible option for this. Likewise, Pollinate were looking for funding, but also recognised there were many new entrants to the last mile distribution sector who were competing for the same funding, which felt counter-productive.
  • An added challenge faced by Pollinate was the difficulty in growing their ‘pollinators’- the people who sold the products – due to the stigma of working in slums and engaging effectively with women as potential pollinators.
  • A group of four women-led organisations at the Miller Centre engaged and found out more about each other’s organisations, recognising there was an opportunity for greater collaboration. They all declared an interest in greater impact over preservation of their brand or unique knowledge.
  • They held regular phone calls, and shared a spreadsheet around to collect details on each others’ organisations, such as type of technology systems, extent of fundraising capacity, etc. They also sought board approval to continue with the exploration. An external facilitator was involved at this stage.
  • The process comprised of two parts, each with a decision point to move ahead: one to develop a joint business deck to figure out how the company would look in the future, and second to go deeper into due diligence and take site visits to each organisation. There was also the significance of have a strong gut feeling when visiting each others teams and offices, since many mergers fail because of an incompatible culture.
  • There were man fears faced by both parties, including whether the company cultures would fit, whether internal teams would get behind the merger. This included whether both boards would come together.
  • A sticking point was when the lawyers got involved, who wanted an MoU but which management didn’t, and how the board would merge with a clear path forward to good governance and compliance.
  • The whole merger process was split into 90 day phases. First there were legal and compliance issues to overcome, which were relatively simple and straightforward once a commitment to merge was made.
    Merging systems and finance between India and Nepal was the next issue to overcome, which they set themselves 90 days to do.
  • Then the next 90 days was focused on people and culture, where they took the opportunity to amplify Nepal’s training of women entrepreneurs, which Pollinate saw as valuable to India operations.
  • The final 90 day phase was spent in tying up loose ends.
  • They made the conscious decision to move the question of ‘which brand’ to the end, rather than let it hold things up – since it’s the most emotional aspect of a merger.
  • Pollinate Energy and Empower Generation is now Pollinate Group, and they re-named their Indian local brand. The Nepal arm retained their local brand.
  • Both feel the merger has breathed life into the organisations. For Sita, the merger has meant she can focus more on scaling the model across Nepal, with a stronger proposition for funding. For Alexi, the merger has forced them to open up to changes in their model, rather than focusing solely on the model they grew up with.
  • Alexi’s advice to others is for trust and authenticity to be key for the leaders going through the merger. Also, to run as fast as you can rather than getting paralysed over every decision.
  • Sita’s advice is to say your concerns up front, as it helps you come up with a solution. Also to engage with all of the team, to help you understand the company culture and how to proceed in the future.

Links to further resources:

Connect with guests:

FIP 65: Profit vs Impact Series 1/3 – with Arjun Bolangdy

For the first episode in our three-part series on “Profit Versus Impact”, today we hear from Arjun Bolangdy, Associate Vice President – Strategic Projects of Pollinate Energy, with a mission to improve the lives of India’s urban poor. Through providing energy products to BOP markets, Pollinate Energy works to improve their customers everyday lives, while at the same time empowering local entrepreneurs in India and raising awareness of social business across the country.

On this episode you’ll learn:

  • Arjun explains how Pollinate Energy’s unique fundraising model – with a non-profit enterprise in Australia which wholly-owns a for-profit in India – allows for the organization to scale to different cities and finance other value-addition activities.
  • How to low income customers pay for these products? Arjun details how Pollinate Energy extends credit to make their products affordable to their customers and how that relates back to making the company financially sustainable in each city.
  • Arjun details the overall model of the company, including the different and important roles of Pollinate Energy Australia and Pollinate Energy India and how the integration of these roles supports a growth model that covers Pollinate Energy India’s costs during the 18-24 month period it requires to breakeven in new cities.
  • What are other interesting aspects of Pollinate Energy’s model? Arjun shares about the company’s multiple fellowship programs that include “scout” fellows to map urban slums in new cities, as well as city “co-founders” to lead Pollinate Energy’s expansion into the city.
  • Arjun talks about the importance of balancing impact versus growth, for which the company uses city financial sustainability as a key metric. He explained the enterprise’s strategic decision to pause expansion for 2018 to focus on deepening its impact in the communities it already serves versus continual growth.
  • Finally, Arjun also spoke to some of their impact measurement tools, which center on customer surveys on direct impacts (shifts from kerosene-based to solar energy use) and indirect impacts (such as improved health, education outcomes, etc.), and how that data relates back to their fundraising model.

Links to Resources:

Connect with Arjun:

 

FIP 55: Tools and Tactics to Maintain Strong Founder Relationships with Edith Elliott

Edith Elliott is the co-founder and CEO of Noora Health, a nonprofit that unleashes the potential of patients and their family members by training them with skills to tremendously improve clinical outcomes, provide care and save lives. Today she tells us about her experience as one of four co-founders. Four co-founders. That’s double, if not quadruple, the industry standard and co-founding a company isn’t seen as a “more-the merrier” situation. Edith tells us about the tools and tactics that her leadership team has used to build a healthy and trusting founder relationship.

On this episode, you’ll learn:

  • Why co-founder conflict is one of biggest reasons for start-up failure and how to build trust early
  • Get personal and build trust. Healthy co-founder relationships begin with empathy, and sharing things about meaningful areas of your life to forge a path for trust and respect. Invest time in your relationships!
  • Know when to budge. Flexibility is a necessary trait, especially for colleagues like co-founders who have equal weigh-ins. Remember to be user-centric. And trust that your co-founders are putting the user first as well.
  • Do you have a united vision for the company? How do you uncover underlying expectations and have open conversations?
  • See the resources below for some of the exercises that Edith talks about. Want to invest in the relationships in your team? Try “I like, I wish”
  • Having a diverse co-founder team is a good thing, but it could also be a potential source of friction unless you learn to trust each other’s skill sets
  • We learn the key to how Edith and her team maintain a positive and productive relationship with one another
  • It is important to have good relationships while prioritizing what is best for the organization. At the end of the day, it is a business.
  • Acknowledge communication breakdowns early – don’t let them fester. Nip it in the bud! Helps to create a culture of transparency.
  • Make time for each other outside of the office. A co-founder relationship is a relationship like any other, and dedicating focused time paves the way for great collaboration.

Links to resources:

Connect with Edith

What was your favourite lesson from this episode? Share it with the social enterprise community on Twitter by clicking here!

Shloka Nath Finding Impact

FIP 54: Gender-lens Investing with Shloka Nath

This episode triggered a few ‘a-ha’ moments for me and it’s a topic I’m proud to cover on the show. Gender-lens investing is a growing trend in the impact sector and Shloka Nath has some valuable lessons to share from her experience setting up such a fund in India with her business partner Reena. Shloka works with one of the largest philanthropic organisations in India, she’s an active angel investor and has over a decade experience in print and and broadcast journalism.
On this episode you’ll learn:
  • Why Shloka and her business partner decided to setup a women’s impact fund that addressed the needs of women, what research she did and with who.
  • We find out what’s behind the name Sankhya Women’s Fund and the ancient Indian philosophy it refers to.
  • Why women make wonderful investors, especially for impact focused companies that require patient capital.
  • We elaborate on the meaning of gender lens investing more broadly, because it’s a growing trend in the investment space.
  • We discuss what sort of evidence is available that indicates improved performance of companies and investment portfolios that take a gender-positive approach.
  • We discuss what businesses can do to stand out more to gender lens investors, and how to ensure their company is a good fit for these kinds of funds.
  • We hear what barriers they faced with setting up their fund.
  • We hear what advice Shloka gives to women-impact businesses seeking capital for their business or investors wanting to deploy their capital in this way.
Quote:
  • “Out of one lens see the participation, needs and realities of women and the other you see the  participation, needs and realities of men and your vision is optimum only when you have the combination of the two.”
Links to resources:
Connect with Shloka:
What was your favourite lesson from this episode? Let me know on Twitter by clicking here!
GAURAV MEHTA dharma life finding impact

FIP 53: Distributing Social Products to Rural Markets with Gaurav Mehta

Dharma Life supports women and subsistence farmers to sell products such as solar lamps, stoves and sanitary napkins to villagers to improve their quality of life. They recruit people with a basic education, who are in need of money and don’t have a full-time job. Guarav Mehta founded Dharma Life in 2009 during his MBA in London.

On this episode you’ll learn:

  • How they’ve achieved a 65% women entrepreneur rate, despite men stepping forward in villages to take on the role. So they took steps to counter this self-selection bias by working with women’s families to help them understand the benefits.
  • How the minimum retail price in India is creating better incomes for village entrepreneurs, so they’re passing on 60-70% of the margin.
  • The complexity of selling products that improves people lives requires behaviour change and marketing efforts, which helps entrepreneurs make the sale.
  • Products are selected through a consumer study which involves analysing deaths in a community, their causes, and matching products to solve the problem. These make up the core basket of goods.
  • Other products are added based on a selection process, which must be socially neutral, it mustn’t have a negative impact, and which enhance the income of the entrepreneur.
  • How Dharma is structured, to ensure the company drives for impact rather than profits.
  • How Dharma provide research and marketing services for companies “across the adoption process” to diversify their revenue streams.

Links to further resources:

Connect with Gaurav:

What was your favourite lesson from this episode? Let me know on Twitter by clicking here!

FIP 52: Bridging Education Gaps in Rural India with Umesh Malhotra

Umesh Malhotra is the co-founder of Hippocampus which is a network of libraries and schools that is attempting to change the face of rural education in India. A graduate of one of India’s leading engineering institutes, IIT Madras, he began his career in Infosys and went on to create and sell an IT company. A serial entrepreneur, his entrepreneurship experiences range from IT services to restaurants to social enterprises. His latest passion project, Hippocampus, serves to provide quality education to rural children from low income families. By 2020, the aim is to bring preschool education to as many students in India as the population of Finland, but at one percent of its cost. That is why it is being called Mission Finland!

On this episode, you’ll learn:

  • About Umesh and his years spent in the corporate world – he takes us through the journey of his company and what made rapidly scaling possible.
  • Are you being challenged enough in your current role? When is it time to switch gears?
  • The importance of a good story behind your brand. Wait until you hear his!
  • How to give your social enterprise a chance to survive – Umesh never set out to create a profitable business.
  • How do you keep momentum and not scale too early or too quickly?
  • Is your business easy to replicate? This will help when it is time to scale.
  • The power of hiring people who are intrinsically motivated and passionate about what they are doing.
  • Sticky ideas are good for business! What do people remember about your story?
  • The importance of being goal oriented: Mission Finland – 2020.

Links to resources:

Connect with Umesh!

What was your favourite lesson from this episode? Share it with the social enterprise community on Twitter by clicking here!