Deshpande on Entrepreneurship-Part 23: What is the best way to start thinking about social impact?

By Desh Deshpande

(Editor’s note: This is Part-23 of the weekly video column with philanthropist and serial entrepreneur Desh Deshpande, with excerpts from his book “On Entrepreneurship and Impact.” This column appears every Monday.)

Desh Deshpande

Our world has been blessed with fantastic thinkers and innovators. Luckily, many among them also are hungry to make a meaningful and long-lasting impact for the betterment of this world.

What I’ve found over the last fifteen years is that it’s not enough to come up with a fantastic idea and take that intervention to the people who need it.

The solution often fails after the entrepreneur or innovator has put his or her heart into developing it.

There are many reasons for these failures but ignoring two key principles might be the root of many of the problems

–              Designing solutions appropriate to the locale

–              Building a viable business model

Let me elaborate on each of these in detail

As I have mentioned previously, Relevance is a key issue when designing solutions for social impact. Too often the solutions are proposed by practitioners who have a superficial understanding of the local conditions and context. From a personal perspective, they might not even share a common lifestyle with the potential beneficiaries. In many cases they lead with a technical solution.

The other aspect is developing a robust implementation and business model. This does not automatically imply a for profit solution. Instead it is a need for a well thought out approach to both distributing the solution as well as ensuring sustainability. Too often there is an eagerness to target the end customer as the potential user of the solution when in actuality it might be appropriate to target an intermediate level of user who might derive more value. This colors both the product requirements by sometimes making them a lot more rigorous than required as well as the economic model by often targeting a much more unrealistically low price point.

Let me illustrate with an example that was the result of a relationship with MIT and our Hubli Sandbox.

Recently a team of researchers from MIT visited the Hubli Sandbox. The MIT researchers’ goal was to figure out how to help the majority of Indian farmers who generally have small land holdings of a few acres. Most of the technology developed in the West was for farmers with large land holdings.

With the help of the Hubli team, they spent two weeks with the farmers holding in-depth focus sessions where they figured out a critical need for these farmers.

It was Soil testing!

Soil testing right now is very cumbersome, as it’s only done in government labs, takes forever, and less than 0.1% of farmers in India actually do it. When farmers use fertilizer and pesticides they have no way of knowing if they are using the right amount. And this costs money.

The first step was to come up with a solution that could address this need. After researching alternatives, they came up with a prototype device like a dipstick that would allow a farmer to quickly gauge critical chemicals in their soil much like a blood sugar test for diabetes.

In addition to the technical details, their initial design targets looked to sell the gadget directly to the farmers. This constrained their solution in two ways. It required a product that had to be inexpensive as well as very easy to use as most of the farmers were not very literate.

Rethinking the business model with an alternative distribution and financial target can significantly change the requirements for the product making it more feasible. Since farmers do not have to test their soil frequently, the proposed device does not have to be really inexpensive. Instead looking at an alternative model that trains a local entrepreneur to provide soil testing services with this device, relaxes the constraints on their design significantly.

Since the entrepreneur will be able to recoup his costs and generate a healthy income by providing a service to hundreds of farmers, the cost target for the device could be raised several fold. In addition, these entrepreneurs, who are already trained by the Hubli Sandbox and ready to go, are more capable of handling sophisticated devices, further easing the requirements for design.

Working closely with local resources, like the Hubli Sandbox, to co-create appropriate and relevant solutions as well as the related business and implementation models ensures a much higher degree of success in social impact projects.

 (About Desh Deshpande: During his entrepreneurial career spanning over three decades, Gururaj “Desh” Deshpande has built several companies. He has injected his passion for innovation and entrepreneurship into a number of social impact initiatives in India, the USA and Canada. He has been recognized for his entrepreneurial accomplishments by many institutions including being named co-chair of President Obama’s National Advisory Council on Innovation and Entrepreneurship. He currently also serves as a Life Member of the MIT corporation. He resides in Boston together with his wife, Jaishree.)

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