Ronnie Screwvala stepped up on stage. As a highly successful entrepreneur who built up UTV Group into an Indian media empire and then sold it to Disney in 2011, Ronnie knows a thing or two about building a great business from scratch. Assembled before him in a Mumbai hotel ballroom was a cosmopolitan throng: impact investors, social entrepreneurs, advisers and enthusiasts who had turned out for the Sankalp Summit, held 12-13 April in Mumbai, the event of the year in India’s impact investing sector.
After a day of fervent discussions on business models to serve the urban poor and the lack of debt financing for social enterprises, Ronnie put the focus squarely back on entrepreneurship. Ultimately, all the business model ideas and financing in the world will achieve nothing without a generation of bold and creative entrepreneurs willing to strike out and make them real. Just as in commercial entrepreneurship, Ronnie emphasized how social entrepreneurs have to be able to ‘absorb risk’ if they are to overcome the unpredictable shocks and challenges of starting a new business. He also talked about the importance – and the challenge – of building great teams, investing in strong performers and letting go of poor performers.
Most striking of all was his point on pioneering new offerings in the marketplace, a strong aspect of his own experience: Ronnie started the first cable TV service in Mumbai in the early 1980s and launched India’s first daily soap operas in the 1990s. But Ronnie drew the important distinction between successful pioneering and being too far ahead of one’s time. ‘When you tell people who are familiar with your market about your idea, if they are all sceptical and tell you that you’re crazy, you might just be too far ahead of your time.’
It makes sense: if you’re too far ahead of customer needs and preferences, it’s going to be a challenge persuading people to part with their money.
It strikes me that this is a critical – and fundamental – challenge we face in social enterprise and impact investing today, particularly if we look at solutions to global poverty. In a way, we are striving to be way ahead of our time, leapfrogging the natural pace of innovation and development. We are applying state-of-the-art technology and business acumen to try to solve the pressing problems of the poor in the least developed parts of the world.
Selling health insurance to the rural poor in northern Pakistan? Electrifying remote villages in India? Whole new business models are being pioneered, and in some cases entirely new markets created, under extremely challenging business conditions. It is clear that these pioneering entrepreneurs have chosen the world’s toughest opportunities, not the easiest or most lucrative. Some are succeeding but they are doing so against heavy odds.
It’s time to acknowledge how difficult this is, and will continue to be. The way in which we support these pioneers and help them to overcome these challenges will critically determine the success of this entire field.
Harvey Koh is an associate partner at Monitor Group and co-leader of its Inclusive Markets unit in India. He recently lead authored a new report, published on 17 April, that describes the phenomenon of the ‘pioneer gap’ in impact investing: From Blueprint to Scale: The case for philanthropy in impact investing