Giving is the New Receiving for a Generation of Entrepreneurs Setting Up Businesses with Social Goals. Unlike a Charity, they Aim to Grow, Scale & be Profitable While Having a Positive Impact On the Community or the Environment

Hi Everyone Today We will Talk About How Startups are Doing their Bit by Giving Back To The Society.

A New Generation of Entrepreneurs is Setting Up Businesses with the Core Mission to Benefit Society and Fulfil Social Goals. While Many Social Startups in India are in the Waste Management Space, a Number are also Looking at Ways to Improve Blood Donation Networks and Build Crowd Sourcing Platforms. Unlike a Charity, they’re Looking to Grow Independently, Scale and be Profitable While Having a Positive Impact on the Community or the Environment.

When Mainak Chakraborty and Sreekrishna Sankar Graduated from IIM-Bangalore in 2010, they Wanted to Set Up their Own Company. Venture Capital Firms Were Pouring Money into Ideas in the E-commerce Space, but they Decided Not to Follow the Crowd. “We Made a Choice to Become Social Entrepreneurs and Do Something that had a Direct Impact on People’s Lives,” says Chakraborty, Co-founder of Green Power Systems Renewables, a Waste-to-Energy Technology Company based in Bengaluru.

Delhi Based SocialCops, Founded by Prukalpa Sankar and Varun Banka, for Instance, is a Data Analytics Firm that has Tied Up with the Government and NGOs to Analyze Data to Improve Infrastructure and Policy. Its App Collect, Which Works Without an Internet Connection, Proved Useful During the Chennai floods.

“People Were Donating But No One Knew Which Areas Needed What. That’s Where Data Came in,” says Sankar. It Helped NGOs Assess Damage and Find Out which Areas Were the Worst Affected.

article-image-1Real Social Enterprises Will Help The Poor Become Asset Creators And Should Open Doors For Them To Be Employers Rather Than Employees.

— Harish Hande

Founder, Solar Lighting Firm Selco

There are 2 types of Social Enterprises:

  • One Where You Have a Business Idea in a Sector that will have a Social Impact.
  • Second Where You are Trying to Convert a Social Idea into Business.

Chakraborty Started GPS Renewables Because He Wanted to Address the Big Gap, Not Just in Policy But Also in Technology, In Waste Management in India. Its Flagship Product BioUrja is a Compact Bio Waste-to-Energy Solution for Urban Establishments. 5 Years On, GPS Renewables is a Profitable Company with 25 Plants Across India and Bangladesh.

Most of the Startups Identify a Specific Problem and Look for Solutions. Socialblood Leverages Facebook to Create a Space for Blood Donors and Recipients to Interact. Started in 2012 by Karthik Naralasetty, the Company has More than 150,000 Users in India, Brazil, Bangladesh and US.

Benefits For All

Generating Revenue and Profits Remain Challenges. SocialCops Earns Revenue from Government Bodies and Large Philanthropic Corporations, but Doesn’t Charge Smaller NGOs. “We Only Charge Companies that Have Big Budgets,” says Sankar.

Success Has to be Measured in the No of People U are Impacting Rather than the Revenue U are Generating Year After Year.

Magsaysay Award Winner Harish Hande, Who Founded Solar Lighting Company Selco 2 Decades Ago, says Social Enterprises Should Focus On Equal Value Creation to Shareholders, Employees and Consumers. “A Social Enterprise Should be Inclusive in All Respects,” He Says. Selco Has Installed Solar Lighting Devices in 2 Lakh Households and has Been Operating at a 2-3% Profit Margin for 9 Years.

Socialblood, On the Other Hand, Does Not See Any Revenue Potential in India as Requests for Blood are From Individuals. In the West, in Contrast, Blood Banks have an Advertising Budget to Solicit Blood.

Investors Are Hard To Catch

article-image-2Many say Investors are Not as Interested in Social Startups as they Should be. “There are Several Impact Focused Funds, but Regular VCs Would Not Want to Invest, and Raising Money is Always Going to be Tough,” says Naralasetty, Whose Socialblood is Backed by Google India Managing Director Rajan Anandan.

Chakraborty Explains that GPS, Which Received an Initial Grant of INR 50 Lakh from the Government, Did Not Try to Raise VC Funds as he Knew it Would be a Struggle. “We Survived On the Research Grant Before Growing the Firm Organically,” he says.

Although Seed Funding Came Easy, Aakar Innovations, Which Provides Rural Women with Raw Materials to Make Compostable Sanitary Napkins, Ran Into Trouble Later. “I Raised Initial Money from IIM-A’s Incubation Centre but Afterwards, I Had to Look Outside India,” says Founder Jaideep Mandal, Who Raised $50,000 from Rianta Capital Zurich. “In India, Many Who Claim to be Social Investors are Not. They Talk like Commercial VCs. This is Not a Good Time to Raise Money in the Social Space,” he says.

There Should Be a Government Backed Innovation Fund Focused On Rural Areas.

“That will have More Social Impact than the English Speaking, Urban Entrepreneurs. Real Social Enterprises will Help the Poor Become Asset Creators and Should Open Doors for them to be Employers Rather than Employees,” he says.

Rohini Nilekani, a Philanthropist who has Funded Around 40 NGOs, says Social Enterprises Struggle to Raise a Second Round of Funding Because People Fail to Understand the Sector in India. “For a Country of Our Size, a Lot More Can Happen,” she says. “We Have to be Patient.”

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