One of the more practical sessions at the Sankalp Forum last week was on developing the brand of an enterprise, sponsored by the brand consulting firm Center of Gravity. Unlike many of the theoretical, overarching discussion panels of the state of the social entrepreneurship sector, this session provided concrete advice for start-ups on how to begin thinking about their branding strategy. Appropriate brand management is often undervalued by start-ups who have enough capital expenditures to worry about without also needing to hire a brand consultancy firm. Yet, it is an important consideration that can aid in gaining traction. The session provided a few simple guidelines for start-ups, which albeit obvious can still be useful points to begin with:

1. Understand the profile of your customers

Center of Gravity begins the branding process with a market segmentation analysis to understand the demographics and motivations of the customers. Enterprises often approach the market potential as one homogenous mass of consumers, whereas the customers are a diverse group with different motivations for making the purchase. For example, organic food consumers are not all driven to purchase for health reasons – some people go organic because it’s a perceived indicator of social status , and others buy organic because it’s more sustainable and eco-friendly.

2. Make your cause and message relevant

After understanding the consumption drivers of the primary customer segments, it’s important to create targeted brand messages relevant to each segment. People respond to messages with which they identify. The healthy eater would not respond in the same way to Whole Food’s upscale organic brand, whereas the status seeker would. It’s important to make sure that your brand message is aligned with your growth strategy if you need to target certain customer segments.

3. Provide a “So-What?” statement that connects your social impact to the customer’s choice

Consumers are lazy, so don’t leave it for them to make the connection between the product and the social impact. Demonstrate a clear link between the purchase decision and the environmental / social impact. For example, if your organic produce company directly helps small local farmers, have a story of that farmer on your package.

4. Do more with less by leveraging high profile endorsers

This piece of advice is a no-brainer. Every start-up would love to do more with less, and if there happens to be an influential person who is sympathetic to your cause, all the better. Center of Gravity gave an example of how they engaged famous Indian stars for a democratic campaign in Bangalore, but hardly every start-up has the good fortune of such endorsers. A better corollary to this particular advice would be to engage everyone and anyone who is willing to speak for your company. A particular CSR person may not have the power to make the purchasing decision, but they can influence and convince others in that position of power to make that decision.

5. Simplify the complexities of your enterprise

Every entrepreneur is very excited about their start-up and can talk about their company until the room runs out of oxygen. This isn’t an intelligent way to sell your company. It may seem that every detail is important, but the more you complicate the story, the less the audience and potential customer will retain. Condense those complications into a simple, memorable story that will stay with them after your conversation. Remember that the average attention span is <1 minute, which is why the pithier, the better.

For the most part, the advice given above is more easily applied to consumer facing products and services, whereas niche market companies have a harder time developing a strong brand equity that contributes significant value. I continue to struggle with creating a brand identity for my company, Coir Atlas, which operates in a niche market within the greater steel industry, but I think the lessons learned from this session are general enough to be applied. The key as with all marketing advice is in understanding how to adapt it to fit to your enterprise’s needs. Don’t just blindly apply all branding strategies and go chasing Bollywood stars to be the face of your product. Adapt these strategies and then apply them.

This article was originally published by the Wall Street Journal on February 24, 2010, “Budget 2010: Will Rural India Get a Fair Deal”. Within the article, Ms. K. Seeta Prabhu of the UNDP in New Delhi raises a number of extremely relevant concerns about the rural poor of India:

• 42% of rural farmers live under the poverty line
• Small acreage farmers compose 84% of total farmers
• Low agricultural productivity
• Lack of permanent shelter
• Lack of electricity and highly inefficient energy usage
• Lack of employment opportunities outside of agriculture

The situation described demands attention. In response, Ms. Prabhu recommends that the government should take action by injecting massive amounts of stimulus money into large public work projects to build crop warehouses and public toilets, to usher in another “Green Revolution”, to incentivize the installation of bio-plant stoves, etc. The litany of public projects that Ms. Prabhu wants the local governments to undertake is daunting. I find no fault with the problems identified and the end objectives cited, but I do doubt the realistic feasibility of the list of public projects. These proposed solutions are in fact not new; they have been discussed by the development community for some time. The problem doesn’t lie in the solution ideas themselves, but in the implementation – what has been coined as the “last mile challenge”. It’s agreed that these solutions need to happen, but how?

In my opinion, the government is not the agent of choice for solving this implementation problem and promoting large public works projects is certainly not going to address the rural poor’s needs. Ms. Prabhu herself points out that past governmental initiatives to create employment have failed:

“The implementation of the National Rural Employment Guarantee Program has offered some succor but due to various constraints, the promised 100 days of employment have been provided only in the state of Rajasthan. In fact, the performance of the program is quite low in the states of Bihar, Orissa and Jharkhand, which have large numbers of the rural poor.”

The NREG program is a perfect example of how the government failed to reach the last mile. A Villgro associate recently visited with farmers in the impoverished state of Assam and asked them why they were not in the NREG program, which could have more than doubled their current annual income (~Rs8,400 or $170USD). The Assamese farmers said that they weren’t aware that such a program existed. The local governments in charge of the NREG hadn’t publicized the program and so, those funds disappear off into a vacuum and failed to reach the rural poor. How then, will more public programs and government projects help the rural poor climb out of poverty?

Instead of encouraging more public works programs, Ms. Prabhu would do better to promote additional funding for the existing social entreprises who have made immense progress in helping the rural poor increase their income. In Out of Poverty, Paul Polak specifically discusses how rural innovations such as the treadle pump have helped increase the crop yield and income of small acreage farmers far more more than the first “Green Revolution”. Millions of rural farmers have used drip irrigation systems, treadle pumps, and other agricultural innovations developed by social enterprises to grow off-season crops which generate more income or to grow crops during the dry seasons.

There are also other entreprises that are addressing the other problems faced by the rural poor. In fact, Villgro has incubated a number of enterprises that address each of the problems cited by Ms. Prabhu. Innovations such as the Venus Burner help to make energy more efficient; the Pin Pulverizer is a small grinder that allows farmers to mill their grains before they spoil; Desicrew and other rural BPOs are creating lasting employment for women and youth. The list of rural innovations that are practical solutions addressing the needs of the poor continues to grow and their impact has been dramatic.  Although the implementation is still difficult, social enterprises have devised ingenious methods for distributing and marketing to that last mile. But most importantly, because the profitability and survival of these social enterprises is dependent on the adoption of the product or service, there is a guarantee that these solutions will actually reach the rural poor.

As the rural poor begin to increase their income through growing multiple crops per year (aided by drip irrigation), cost savings on more efficient energy and other activities, they can begin to invest their additional income to build the infrastructures that they value. Education, health, and permanent shelters are the next logical investments that the poor make, but they have to increase their income first in order to get there. If addressing the needs of the rural poor is the aim, Ms. Prabhu would be better served to support budget allocation of funds to existing social enterprises and the development of rural innovations rather than additional government stimulus and public works programs that fail to actually reach that last mile. The rural poor need practical solutions that place chapattis on their plates and rupees in their pockets, not grand social infrastructure schemes and empty government programs. After all, it’s only a fair deal if the rural poor actually benefits from it.

Paul Basil, the founder and CEO of Villgro, started off my induction meeting like this:

Villgro was started in 2001 during a time when the concept of supporting rural innovations and providing products and services to the rural poor was unheard of. It was a good time to start. C.K. Prahalad wrote about the Bottom of the Pyramid in 2004 and brought a lot of attention to the sector. Acumen Fund and others also started proving themselves around that time. We started and grew at a good time.

My interpretation of the above set of facts is less positive than that of Paul’s. To me, the fact that Villgro predates much of the BoP movement means that it was in a prime position to take advantage of the recent focus on social enterprises to be installed as a top-of-mind organization. Yet, this is not the case. Even though Villgro has developed strong relationships with key grantmakers and foundations (e.g., Rockefeller, Lemelson, Ashoka), its presence within the greater social entrepreneurship community is still understated. Prior to accepting my fellowship, I asked friends in microfinance and social investing space in India for their opinion on Villgro. Aside from the one who worked with one of Villgro’s partner organizations, the others at well connected organizations were all unfamiliar with Villgro’s work. And so it was a surprise to me after becoming familiar with all the entrepreneur incubation programs and supporting services that Villgro has, to realize that it’s a still so unknown. Why is such an established organization so understated?

The converse example is Acumen, started the same year as Villgro, and functioning in a similar role in investing and supporting social entreprises in India. Until 2006 when the BoP concept finally started becoming mainstream, Acumen was also little known outside a small group of social entrepreneurs. It’s only suddenly within the last two years that Acumen has exploded onto the scene and has become a trending topic of its own. Everyone within the social entrepreneurship community has certainly heard of Acumen, but even more impressive is its brand awareness amongst the general young professional public. While Acumen certainly deserves recognition for all the great work that they’re doing, why is there such a great disparity between Acumen’s brand and that of Villgro’s?

There is no magic sauce. It’s all in the marketing efforts and dollars spent on brand building. Acumen has a 1:5 marketing/communications/business development personnel to total staff ratio whereas Villgro has 1:15 ratio. Acumen has spent a great deal of effort on building young professional communities around the U.S. to further increase their ripple effect. It’s fairly clear that the more you market your organization, the bigger your brand. And the side effects are that the bigger your brand, the higher the quality of talent you attract, the more funds you can raise, etc. There are a lot of positive externalities to building a brand, particularly at this juncture when social entreprises are spontaneously generating everyday.

So why doesn’t Villgro pump more into its marketing and outreach communications? The answer I’ve received to this question is that it hasn’t been a priority and the belief is that the good work with speak for itself which raises another question:  Should social entreprises focus so much of their resources on marketing when it could be spent on directly increasing their impact work? I don’t have an answer for this question. But I do know that if the bar on marketing has been raised and not meeting those requirements will directly impact future success as a social enterprise, it’s time to put aside those idealistic beliefs and focus a little more effort on marketing.

Returning to India, I’m struck once again by the dramatic differences between the sights, sounds, and smells (emphasis on the smells) of Chennai and those of New York or San Francisco. The perpetual honking of auto-rickshaws and smell of spices mixed with human bodies serves as a daily reminder that this is not San Francisco and I should not treat Chennai as if it is. This is an obvious statement when observing culture, so why isn’t the same logic applied to social impact?

Why do we still operate and fund social enterprises, which are trying to achieve impact in developing countries, from the comforts of a developed world city 20,000km away?

The question is not new, but the problem persists. Many social enterprises that are aimed at improving conditions in developing countries are still operated out of cities such as New York and San Francisco, which are far removed from the center of action. Ever since social entrepreneurship became the “it” industry for generation Y, more and more young professionals have expressed an interest and have engaged in social start-ups situated in the developing world.  While I am encouraged that more people are getting involved, I doubt the effectiveness  of the enthusiasts who have not spent a significant amount of time in the place they’re trying to help. I do not think a week-long field visit qualifies as significant.  This leads to an issue: what is often perceived as valuable by the social entrepreneur is not similarly perceived by the rural consumers. The simple fact is that it is not possible to understand the nuances of the context and in particular what the target consumer needs without investing a lot of time to experience it.

A quick story to illustrate my point: a couple of years ago, while traveling through remote areas of Xinjiang, I was invited to the house of a camel herder for tea. He lived in a one room mud house with his sister, brother-in-law and nephew. There was no running water and no furniture other than a carved dresser, which was a wedding gift. The communal outhouse of their village was a small bus shelter like structure with holes in the ground, that was 0.5km from the village. What would a someone who never interacted with them propose to install to “better” their quality of life? I would bet that a public toilet would be at the top of the list. What did the village choose to value instead? Television. The village had one windmill generating electricity, enough to power the one television set so that they could all watch CCTV dramas. Instead of spending their resources on running water or using the electricity for light or heating, they choose entertainment. And the choice becomes easy to understand when you spend time in their lonely remote part of the world. TV is their link to the world and to a little diversion and that marginal value is incredibly underestimated by those of us who don’t live there.

Coming back to India, I am looking forward to spending my time learning the context and understanding a different set of values. The social entrepreneur sector should not be about what we think the people need, but about how to better provide access to those things that the people tell us they need. The first step to figuring the latter out is by going to the source — by being here. I would encourage everyone who professes passion and interest in this sector to commit themselves to learning and reshaping their thoughts around what the Bottom of the Pyramid needs are by dedicating the time to truly immerse themselves locally and experiencing it firsthand. Until that happens, I remain skeptical of the effectiveness of arm-chair social enterprise supporters.