As a regional organization working in multiple countries, we have found that youth entrepreneurs and accelerators throughout the region face similar challenges, respectively. We determined that accelerators benefit from sharing their experiences, learning from their peers and exploring effective practices. Furthermore, insights and experiences from outside of the region can be valuable to local organizations. We can accelerate the speed by which accelerators in the region improve their quality of support for youth entrepreneurs through sharing lessons learned from local and foreign peer organizations.

This resource guide is the first step to actively share experiences, knowledge and best practices to increase the amount, and improve the quality of, support available for youth entrepreneurs. The goal is to see more ventures from the region successfully growing, attracting funding and creating more positive impact in their communities.

This guide was made possible by the support of the Capacity Development Fund of the Aspen Network of Development Entrepreneurs.

In the latest installment of our Ventures in Action, we’re excited to bring you the story behind SolarLEAP, a venture started by a high school graduate during his gap year before university. One gap year turned into several, and in this time Charles Watson has made some incredible impact on the educational opportunities for students such as himself. We wrote about the effectiveness of his model in an earlier blog post.

We’re excited to share a photo story of our experience with SolarLEAP and to provide some insight into this incredible venture.

Click here to watch

With the awesome founder of SolarLEAP – Charles Watson

In his blog post, Beyond Sexy, Daniel Ben-Horin explores the dangers of the focus on scale, speed, and everything needing to be new, fast and financially profitable in the social enterprise sector. As he and seasoned social entrepreneurs point out, this focus is sending the wrong message to entrepreneurs and funders and as a result attention, funding and other resources may not be focusing on the most effective and lasting solutions.

Through our work at Synergy we see that ideas for the lowest cost products, using the newest technology, or those that can be rolled out at the biggest scale get the most attention. We’re not afraid to say, even at the risk of not being perceived as one of the sexy organizations in the sector, that this is not our focus. We have seen over and over again that these factors don’t necessarily lead to the most effective or long-term impact that we are looking for.

A social enterprise that we’ve worked with whose experience really drives home this point is SolarLEAP, whose founder Charles Watson has brought computer labs and digital libraries to schools in areas without reliable electricity in over 5 different countries. His journey addressing the problem of lack of access to computers and the educational opportunities they provide is a lesson in what makes a solution truly effective and why some seemingly exciting approaches may fail.

The lowest cost solution is not always the best solution

An ultra low cost product usually means high volume is required. The One Laptop Per Child (OLPC) is a laptop computer for schools in developing countries and famous for its $100 price tag. However, this price can only be achieved at a very high volume and the computers can only be sold at a minimum of one million units per order at this price level.

Furthermore, an ultra low cost product can be very expensive to develop, and accounting that cost into the cost of individual units actually makes them much more costly. A $35 tablet computer developed in India was hailed as a huge milestone in affordable technology for the masses. However, the computer maker encountered endless delays and obstacles in the manufacturing process. In addition, the much talked about $35 price point was actually a government subsidized price for students with the retail price being almost double.

The sexiest or most advanced technology can also be the most impractical

Tablet technology may be the latest and greatest, but is not necessarily appropriate for rural schools or classrooms in general. By virtue of their portability, tablets are subject to greater wear and tear and can be stolen more easily. Durability is especially critical in rural settings where electronics can be damaged faster by heat, humidity or dust.

Educational tablets or computers often have proprietary technology. This means that local computer repair shops may not have the spare parts or the ability to repair malfunctioning machines.?Another challenge is that while proprietary educational technology can help students learn, it may not prepare them for the real world where many jobs require experience with PCs, Microsoft Windows and Office.

The dangers of scaling too soon

The worst you can do is roll out a bad solution on a large scale. Putting the necessary time and resources into developing a really effective solution, testing it and refining it, will more likely result in a solution worth scaling. Funders shouldn’t focus on the quick win, but on the real win, and a solution that will be effective on a large scale and in the long term, even if it takes time to develop it.

Looking beyond sexy to effective

A high school graduate on a gap year untainted with the sector’s hype for the fastest, most scalable and most innovative solutions, Charles approached the problem of students not having access to computers from the practical aspect. What would be the most practical way to bring computers and educational resources to low income and off grid schools?

He took a netbook processor (which uses the least amount of electricity), put it inside a modern flat screen desktop computer (which is most user friendly for a rural classroom setting), and pre-loaded a digital library containing an offline version of Wikipedia in the local language, content from the Khan Academy and other educational resources onto the computer. Then he connected the computer to a solar panel via a regular tractor battery and the result was a school computer lab with modern desktop computers and a vast digital library of educational resources in a school that didn’t even have access to electricity. All this was possible for an approximate cost of $450 per computer (including the solar panels).

SolarLEAP computers are designed to use components that are commonly available and if they malfunction someone with a basic understanding of computers can fix many of the problems with a Phillips screwdriver. For more serious problems, local computer repair shops familiar with the computer’s components should be able to fix them or replace faulty parts.

Watching Charles develop SolarLEAP computers over the past few years we’ve seen a process of constant feedback from the users and iteration and improvements to the product. Because Charles personally assisted with almost each installation, which includes providing instruction to students and teachers on the use and maintenance of the equipment, he has been able to make continuous improvements to the product and design based on his understanding of the users’ needs and challenges. He’s shown wisdom in not rushing to scale too quickly but assessing his own product and recognizing that the first iteration will not be the best or final one.

How do we know that SolarLEAP’s solution is effective? Because several years later, the school we visited during our first installation with Charles is still using the computers, and other schools in the country are asking for more. This is a nice change from the computer labs we have seen too often in other schools around the region, where fully equipped computer labs sit untouched or locked up because they are broken and can’t be fixed, the school can’t afford the electricity needed to power them, or the teachers don’t know how to use them.

A social enterprise that isn’t developing the newest, most scalable and most financially attractive approach may not be considered sexy or support-worthy by some standards, but if their solutions actually work and create real lasting impact, we think they’re pretty awesome and exactly the type of models we want to support!

Solar panels being installed on the roof of the school

Students at the new computer lab

In this study, Jana explores why most of the Asia and the Pacific region lags behind the rest of the world in tapping into social enterprise and impact investing models to contribute to the development agenda. She identifies the main barriers that are currently preventing the region from benefiting from impact investment and discusses the ways that various actors, from philanthropists and investors to policymakers, can contribute to enabling the growth of this sector. Jana summarizes her study with several conclusions and recommendations:

Philanthropy will always be a crucial component of impact investment and commercial investment alone cannot support the development agenda.

The potential of private enterprises funded by private investment to create social impact and contribute to inclusive and sustainable development has been demonstrated. However, such investment will not predominantly consist of commercial investment that also generates a market rate financial return. Philanthropy will always play an important role in the development of social enterprises and investments that generate a market rate of return will only be a part of the spectrum of impact investment.

Impact investment is an important tool for development but will complement, not replace, existing forms of development funding.

Impact investment will not replace existing forms of development funding; rather it will be an important addition to the range of available funding tools and will alleviate some of the pressure on grant funding. Impact investment is suitable and can be effective only in addressing social and development challenges that lend themselves to market based solutions.

Policymakers need to support a strong SME sector and entrepreneurial ecosystem.

Any country wishing to benefit from impact investment activity and attract foreign impact investment must first ensure that it is supportive of small enterprise development and has in place a domestic entrepreneurial ecosystem that produces a quality deal flow for investors. This should be the primary focus of initiatives and policy, before the focus can shift to the social aspect of small and medium enterprise.

Policymakers need to decrease barriers to foreign investment and take a multi-stakeholder approach to policy development around impact investing.

In order to attract foreign impact investment, policymakers should ensure that barriers to foreign investment in industries and sectors of interest to impact investors are eliminated. Examples of measures include reductions in foreign investment and ownership restrictions in impact sectors, reductions in paid-up capital required for foreign ownership to enable undercapitalized foreign social entrepreneurs to be active in a country, lower levels of bureaucracy and red tape for setting up and investing in SMEs and ensuring adequate investor protection through a quality legal system which includes proper shareholder protection laws.

Domestic funding and capacity-building of social entrepreneurs is crucial.

Domestic support for seed and early stage social venture activity is essential before foreign investors are able to engage with social enterprises. Governments, the domestic business sector and domestic philanthropists can contribute to initiatives providing capacity-building and funding to young social ventures. Domestically funded and operated incubator and accelerator programmes can make a significant contribution to social venture development in this regard.

Policy must allow for necessary flexibility and innovation in this emerging sector.

The diversity in legal structures and organizational forms, motivations, and activities is an important part of the social enterprise sector as it continues to innovate and evolve. Supportive government policies can play an important role in advancing the development of social enterprises and impact investment. However, Governments should take care that policies actually contribute to the development of the sector and do not become a burden. As a new sector, impact investment needs time and space to innovate. Narrow definitions of what constitutes a social enterprise will limit the development and growth of the sector.

The full publication and chapter are available from the UNESCAP website.

Although I had worked in Myanmar in 2004 and found much of the physical infrastructure challenges still existed, there was a palpable difference in the air. Yes, everyone still used generators many hours a day since the government preferred to sell the electricity to Thailand rather than provide for its own people. And yes, there were still potholes the size of cars and taxis in such decrepit conditions that you could see the ground moving beneath you. But the biggest change couldn’t be seen, only heard and felt in conversations with local people, in terms of both content and delivery.

The airport was so improved it was unrecognizable, had to take a picture!

In 2004, government oversight and censorship were still very much the norm.? All the international NGOs, including the one where I worked, had government spies. (Everyone knew who the spies were. When I suggested firing our resident government mole, everyone was horrified. At least we know who it is! If we fire him, they’ll send a new one or turn someone else into one and we’ll have to start over to figure out who it is.) Taxi drivers knew where all of us foreigners lived, which was both convenient yet disconcerting. Many websites, including seemingly innocuous ones like the Population Council (a reproductive health nonprofit) were deemed inappropriate for [our] viewing. There was little talk, and even less hope, of any changes to the government and the economic situation in the country given the sanctions. My local friends and colleagues tried to make the best of their situations and seldom spoke about politics. Self-censorship reigned supreme. There was so little hope in the air that although I have worked in poorer environments (like some parts of India), Myanmar felt the most desperate and hopeless.

Newspaper cover page the day after President Obama’s visit

But things have changed. People cannot stop talking about the new President and their high hopes progressive reforms by the government and economic development given the lifting of most sanctions. Those in the social sector talked about the government’s sustainable development advisory committee. Apparently there are countless conferences featuring buzz words like green, clean and sustainable. All are signs hinting at positive developments to come.? While most people, both inside and outside the country, are still waiting to see if the rhetoric turns into real action, at least there is hope.

The streets of Yangon

This November we conducted an initial exploratory visit to Myanmar to better understand the current context given the recent major changes in the country, to explore the social entrepreneurship sector and to assess how Synergy could contribute to its development. As with all our exploratory trips, we make a point to meet with a full range of stakeholders including government, multi or bilateral donor agencies, private sector companies, civil society groups, nonprofits, social businesses, philanthropists, investors and intermediaries.

Our visit to Myanmar began the day after President Obama visited the country. The atmosphere was one of excitement and hope, there was not one newspaper that did not have President Obama or Aung San Suu Kyi on the cover. Despite the very recent political and economic changes, Myanmar appears to be determined to catch up to its neighbors. We had hardly left the airport when we saw a billboard advertising a social enterprise business plan competition at a local business school. This was not just a coincidence; the topic of social entrepreneurship is very much at the forefront among people in the social and business sectors. It?s potential to contribute to sustainable development of Myanmar is recognized.

While we are excited that the topic of social enterprise is receiving so much attention in Myanmar already, our job is to look at the barriers to the sector and help overcome them. Although there is strong interest in social enterprise, strong barriers exit for would-be entrepreneurs. Some significant ones include an underdeveloped legal system in while enterprises can be registered and legally protected and virtually no access to start-up venture financing for new social entrepreneurs.

Synergy will begin our work in Myanmar by working with some existing social enterprises we identified and helping them to connect to partners outside of Myanmar, by making available our resources to local organizations that seek to support local entrepreneurs, and by working to raise funds that we can provide to high-potential early stage social ventures in Myanmar to help them overcome the critical financing barrier.

So how does Thriive work? It gives equipment capital loans to small business owners. When it’s time to repay the loan, the loan borrowers repay it forward in the form of goods and services they provide to their community. When applying for the loan, the borrowers must already have a clear repayment plan that details the social needs in the community that its repayment will help address.

What’s brilliant about the model is that the borrowers usually create jobs in their sector, and often train young people to set up their own businesses in the same sector. It may seem like potential competition but in fact they are merely expanding their supply chain. ?One savvy mushroom farmer borrowed money to expand her mushroom farm and train other women to grow mushrooms that she commits to buying because she is unable to meet the current demand for mushrooms on her own.

So far, all Thriive borrowers have continued giving to their communities even after their loans have been repaid. In Vietnam, Thriive borrowers join the Thriive Business Association where the borrowers connect with one another and develop ways to support each others businesses and the community through a service or product barter system. For example, a carpenter helped a small incense shop install a wooden door that it had not been able to afford.

Thriive repayment ceremony in Hue, Vietnam

The Thriive model makes a great deal of economic sense. These businesses need capital to grow their businesses and once they do, they can create economic value by creating more jobs in the community. Thriive offers a non-interest bearing loan that is more attractive than regular commercial loans. But Thriive is also creating an equally important kind of value, social value in the form of creating or strengthening closer and tighter caring community bonds. This is what ultimately leads to supportive and resilient social infrastructure in times of crisis. The Thriive Hue team has already shown its savvy understanding of this concept by linking all the Thriive businesses to the local disaster response organization in Central Vietnam, a part of the country that is prone to destructive flooding. All Thriive borrowers commit to providing certain supplies in case of flooding emergencies.

A man sporting his new pajamas received from a Thriive borrower

It was great to see the links between the entrepreneur-philanthropists and the community. Prior to my visit, I had thought Thriive helped to ‘seed’ philanthropy in low-income communities. But after meeting the Thriive borrowers and learning about their many philanthropic activities prior to Thriive, I realized that in most cases, Thriive helped to formalize, nurture and grow existing small-scale community-building initiatives. Some of the Thriive borrowers may have already been low-key community do-gooders but the Thriive model shines light on their good deeds and provides additional resources to ramp up their community building activities

During my visit, I was fortunate to be able to participate in a Thriive repayment ceremony. Two Thriive borrowers, both tailors, gave custom-made pajamas and school clothes for abandoned elderly and children with special needs respectively. There were smiles, tears and hugs all around.

If the Thriive model is able to help one rural community reach out to its most disadvantaged members in such a positive and caring way, one can only imagine what Thriive can achieve on a global scale.

Recently, however, I’ve had some conversations that don’t follow this pattern. Instead of the usual excitement, I sense hesitation and reluctance. I ask these aspiring entrepreneurs why they want to start a business. “My funders suggested I start a business and use the profits to help my nonprofit organization be more financially sustainable”? is the answer. Somehow, it seems, social entrepreneurship has gained the reputation of an easy solution to a nonprofit organization’s shortage of donor funds. Instead of funding the nonprofit’s work, some funders now see it a better use of their funds to help the organization start a side business and use the profits to fund the nonprofit organization’s work. In theory it sounds simple, if the donations aren’t coming in start a business and supplement your revenue with the profits. Unfortunately, it’s not simple at all.

Entrepreneurship is not for everyone. It takes a certain personality, someone who is knowledgeable and passionate about a particular industry, is stubbornly persistent, and has an appetite for risk and an ability to deal with many ups and downs and constant uncertainty. Early-stage investors say that it’s all about the people and the idea is secondary. You can have a great business idea, but the wrong people will not be able to implement it. Or you can have an average business idea, and the right people can make it a great business. As with everything else, some people are suited for entrepreneurship, some are not. Because the right entrepreneur is such a key factor, we can not assume that every nonprofit organization will have the right person on the team to launch an enterprise. Most in fact will not.

Starting a business, social or not, is very risky, and the failure rate of start-ups is incredibly high. Many successful entrepreneurs succeed not on their first try, but on their second, third, sometimes fifty-sixth. Even if a nonprofit organization has someone on the team who has an entrepreneurial drive and the right skills and experience, launching an enterprise will take time and resources. For most businesses that do become profitable, it is a matter of years and a lot of resources invested. Funders encouraging a nonprofit to become enterprising need to consider how much of their time staff will need to devote to the effort (or how much it will cost to hire a good management team) as well as the financial resources needed. In addition to the risk of failure, another potential negative consequence is the effect on the nonprofit’s core activities if staff are devoting time to starting a business.

There have certainly been examples of nonprofit organizations that have established business ventures that have become profitable and contributed back to the revenues of the parent nonprofit. Important factors for success, however, are the right people to lead the venture, and a business opportunity that can leverage a core competency of the parent nonprofit organization. A social enterprise is a powerful tool when used in the right circumstances. But expecting it to be a sure way for a nonprofit to add to its revenue streams is almost sure to result in a stressed out entrepreneur and funder, lost funds, and a loss of focus on the primary work of the nonprofit.

Rithy at Small World

I met Rithy, a young but serious-looking guy the day after he had completed a run across Cambodia to raise money and awareness for Small World, a co-working space he founded where Cambodian youth can explore entrepreneurship and creativity. Despite the fact that he must have been exhausted after 10 days of running, Rithy was energetic as he spent over two hours answering our countless questions.

I was so impressed by his thought processes of why he wants to foster entrepreneurship in Cambodian youth and about the different activities through which he inspires other young people to explore creativity and innovation. From the poster paper on the wall listing questions Small World’s members wanted to explore, to interesting product samples and prototypes, to a mini ping pong table (to encourage thinking differently), evidence of budding ideas were everywhere.

Kim visiting a customer

Later that week I met Kim, a Cambodian woman who is the local project manager for Brooklyn Bridge to Cambodia. BB2C imports tredle pumps that enable small-scale farmers to water their fields efficiently and grow high cash crops during the dry season. On the way to visit farmers using these pumps, Kim chatted to us in great English and gave us insights into life in Cambodia. She also told us about her work with BB2C, laughing as she explained that often when she first comes to a village they call her “the cheating NGO”. This is because she goes to villages to explain the value of buying a product that will enable farmers to increase their income, not to bring free snacks and give things away.

Kim explained how her family’s farming background helped her to understand the value of the pumps, and why she felt selling them rather then giving them away would ensure the pumps got to the farmers that would value and use them most. When we arrived at the farm, I watched her chatting easily with the farmers, checking on the pumps, jumping in to remove a mouse stuck in a pump and wading knee deep into a swamp to clean a hose. The naturally charismatic salesperson that she is, she already had other farmers waiting for her to find out how they could get a pump.

On the two hour drive back to Phnom Penh, which is bumpy and uncomfortable enough in a car, I though about Kim doing this drive on a motorcycle with coils of hose in front and behind her pulling the pump behind the motorcycle. Undeterred by lack of resources such as a truck, she just gets things done.

It is this kind of enthusiasm, resourcefulness, critical thinking, passion and ability to overcome countless obstacles that we look for in entrepreneurs. More than good ideas, good entrepreneurs are hard to find. When investing resources into early stage ventures, we are really betting on the entrepreneur. I’d say these two young people are pretty good bets.

Dr. Ed Rubesch & GSVC participants during a mentoring session

This March I was excited to be invited back as a judge to the South East Asian round of the Global Social Venture Competition. The competition is held annually in Bangkok and organized by Thammasat University, whose MBA program is a leader in the region in incorporating sustainability and social entrepreneurship into its curriculum. Two incredibly energetic people, Dr. Ed Rubesch and Pattraporn (Dao) Yamla-or from Thammasat’s Center for Sustainable Enterprise, are instrumental in this program as well as organizing the GSVC-SEA. This year’s winners, Micro Oasis from Indonesia and Marine Gifts from Vietnam will participate in the global finals at UC Berkeley this month.

Micro Oasis provides a clay pot irrigation system for dry land farming, enabling farmers in Indonesia to grow crops during the dry season. What impressed me about this team is that they had spent a significant amount of time on the farms with farmers and understood well the context they were dealing with. Their marketing involves a lot of community engagement, including through puppet shows, to demonstrate the benefits of the irrigation system to farmers. Marine Gifts is an ecotourism company that brings tourism with minimum impact on the environment to communities in Marine Protected Areas along the coast of Vietnam. These communities have almost no industry and while men do some fishing, women have no sources of income. Through ecotourism, Marine Gifts brings income generating opportunities to women who provide services for tourists and make souvenir products from locally available materials. The ladies behind Marine Gifts were the only non-MBA team in this competition and the first Vietnamese team to advance to the global finals. Although they do not have formal business education, these entrepreneurs understand their industry and the communities they work with extremely well, a key to running a successful venture.

Ryan Dick of GIGA speaking at the Social Enterprise Symposium

A highlight of this year’s event was the Social Entrepreneurship Symposium, which brought together veteran entrepreneurs from through the region to share their stories and lessons learned. One of the speakers was Ryan Dick, director of GIGA, an online platform for sourcing green building and design materials in China. I’ve had the honor of working with Ryan since the early days of GIGA and watching him develop as an entrepreneur. He is true role model for social entrepreneurs, someone who embodies the integrity, intelligence and perseverance that we always look for in entrepreneurs. In his presentation, Ryan spoke about sustainability. It’s a word that we throw around a lot, but don’t always stop to think about what it means. Ryan makes an important point about sustainability, what is it that we are actually trying to sustain? We encourage and fight for sustainability, but is the current status quo actually something worth sustaining? From the environmental perspective, is our environment in the best state that it can be, and such that we should work to sustain? Ryan and his team at GIGA aren’t satisfied, and through their design projects they innovate ways to clean the water, the air and our environment in general. Only once it is improved will it be worth sustaining. I think this way of thinking is relevant to the business world as well. Today’s business as usual can be better and it is encouraging that young people entering the business world today are not satisfied and trying to change the business environment they will be a part of – an environment where people and planet are just as important as profit and where business is a tool of positive impact, not only economic, but social and environmental as well. The students competing at the GSVC are all examples of this shift.