Monday, September 17, 2007

How to Save the World x 2.

Today, Guy Kawasaki interviews David Bornstein about social entrepreneurship. I wonder if this is the result of a dispute over Guy using the title of David's book for his website? Good stuff, in any event, even if Guy can't count how many questions he asked. I guess I am a little disappointed that it doesn't seem like Guy has read David's book and vice versa. David could have knocked question #4 out of the park with Guy's advice to "make meaning" and hire infected people from the "Art of the Start." It would be cool to see these guys collaborate on a book.

McDonalds or In-n-Out?
The Aravind case is a stand-by for courses in social entrepreneurship. It starts with Dr. V speaking about using McDonalds as the model he brought to cataract surgery. This is a great case to explore innovation and business models for social sector. Intersectional ideas, Blue Oceans, catalytic innovations. Good stuff and fun to teach. But a troubling aspect... thirty years after the founding of Aravind... the backlog of cataracts remains at about the same level that drove Dr. V to start it. Despite Aravind's amazing work, the problem persists. Aravind now does 270,000+ cataract surgeries a year.

This is a far cry from "Billions Served" and is unfortunately putting only a minor dent in the backlog of millions of blind people. Aravind has, no doubt, an effective model and I have the utmost respect for them. But it is still regional and attempts to replicate across countries and cultures have not yet seen big results. Project Impact has worked to apply a similar approach to other countries and conditions. But it still seems more like In-N-Out (a successful California burger chain) than McDonalds. How can the next generation of entrepreneurs work on truly replicating and implementing innovative models worldwide? I don't have an answer, but think the question needs more work. To date, social entrepreneurs have figured out how to sell the first, the hundreth, the thousandth, etc. But scaling to an impact of millions has, so far, largely eluded the sector.

Larry Reed, at Opportunity International, once told me an interesting story. Basically, every meeting with their board, they were showing bar graphs of the growth in microloans. Good progress, more borrowers, higher volume. Nice graphs. They were feeling great. Then one director asked "what is the total need for microloans worldwide?" As Larry tells the story "we were using the wrong measurement... it was not about growth, it was about serving the market." The bar graph of their total loans compared to the total market was not so impressive. To paraphrase Dr. Evil, "why serve billions, when you can serve... millions?"

For many of the problems social entrepreneurs are trying to solve, the market is literally, "billions served." What do you think are the best examples of enterprises with this potential? Be sure to help them out! As a customer, investor or evangelist.


max said...
This comment has been removed by the author.
max said...

Here's an interesting paper on this problem of replication.
Although, this paper talks about the process of going to may not give an idea of where Aravind might be failing to create impact. Another link:
gives a brief idea of what they have been upto recently. Still no idea of why the backlog exists.

Joseph Darnell said...

I think Dr. V did a good job of replicating the efficient model of a single McDonalds, but is definitely stuck in In and Out mode in the area of replication and scale. One of the key differences I see is the motivation to franchise...people open McDonalds because they want to make's harder to find people that want to run a business like aravind, where a lot of what could be profit goes toward subsidising free surgeries. There's a shortage of Dr V's.