In Search of the Fortune at the BOP

In Search of the Fortune at theBottom of the Pyramid

Abeer Desai

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Agenda

1. The Journey

2. Today

3. The Future

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The Journey

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IndividualAn entrepreneurialapproach to changingsocial beliefs.

Social Entrepreneurship anevolving concept

CorporationHarness the profit motiveto effect change withinthe context of a business.

StartupDevelopment is abloated industry to bedisrupted like any other.

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Collapsing cost of:Information processing

CommunicationTransportation

Trends

Boostsindividual reachand productivityto allay lowmarket density.

Allows more decisionmakers to getacquainted withglobal issues.

1. 2.

Flatworld

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Microfinance

“The shot that rang out across the world”$358M IPO13 times over subscribed$1.6B valuation for 600M customers

Proof of financial viability of the market

But emphasizes the risk of straddling two worlds.

May 8th, 2011HYDERABAD: For years they were hailed as messiahs reaching much-neededfinance to the poor in the remotest of India's corners. But today, they have beenreduced to the status of villains, no better than moneylenders profiteering at theexpense of the poor. abeerdesai.com

Today

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Example: Product: d.light

Cost-effective, hardy solarproducts built specificallyfor BOP conditions

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Example: Service: Rang De

Peer-to-peer microlendingwith on-ground lendingexpertise.

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Example: Funding: Rubicon Property

% of every deal goes towell construction. Firmsuccess judged by howmany wells get constructed.

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Example: Dual Core: Toms

Non-profit donation modelsustained by for-profitoperations.

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Example: VC: Acumen Fund

Invest patient capital incutting edge, scalable, highimpact social ventures.

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The Future

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Production as the path?

BOP as producer first, consumer second.> Directintersection ofprofit and purpose

> Overcomeliteracy chasm

> More wealth forconsumption

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Impact Investing

Impact Investments: An Emerging Asset ClassNovember 2010 Report

Investment opportunity between$400B and $1T over nextdecade for profit opportunity of$183B and $667B.

Impact investments are investmentsintended to create positive impactbeyond financial return.

Critical bottleneck is intermediation.

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1. Social mission comes first (just like anyother great company)It is the basis of brand equity and stakeholder relationships.

2. Scale is essentialCreate “information intensive commodities.”

3. Rational consumers (in extreme situations)A different approach for a different culture. Marx had it halfright.

4. Profit is the means, not the end

Principles

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The Future: BangaloreBangalore:“The Silicon Valley of Social Innovation”1. High domestic consumption2. Entrepreneurial population3. Easy access to customers4. Culture of innovation5. Capital density

Think of (low-tech) platforms:An innovation that permits3rd parties to build anecosystem of applications.

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