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Preface
5
Acknowledgements
9
About This Book
11
Contents
12
About the Authors
13
List of Figures and Photos
15
List of Tables
18
1 Introduction: Scaling a Social Enterprise by Exchanging Impact for Resources
20
Phase I: Negotiating Impact for Resources
30
Phase II: Designing Operations
31
Phase III: Integrating Financing and Impact Logics
32
References
33
2 A Market Approach to Scaling Impact
35
How a Market Approach Supports Efforts to Scale Impact
35
A Contextual Approach to the Impact Logic Model
36
Extending the Ecosystem of Social Enterprises by Establishing a Market-Based View
37
The Roles of Actors Who Interact with Social Enterprises Throughout the Scaling Process
38
The Relationship Between Impact Investors and Social Enterprises
39
Negotiating Impact for Resources
40
Defining the Standards that Structure Relations
42
Avoiding Mission Drift
43
The Three Phases of a Market Approach to Scaling
45
Phase I: Negotiating Impact for Resources
48
Phase II: Designing Operations
49
Phase III: Integrating Financing and Impact Logics
50
References
53
3 Phase I: Negotiating Impact for Resources
56
Exploring Actors That Can Support a Market Approach to Scaling
56
Impact
57
Resources
58
Standards
58
Negotiation
60
The Diseclar Case
60
The Case: Securing Venture Capital for a Social Enterprise in Latin America
62
Recycling in Colombia
64
Development Stages of Diseclar
65
Stage 1: The Idea
65
Stage 2: Incubation at Campus Nova
66
Stage 3: SENA and the Emprender Fund
67
Stage 4: Financial Awards as a Source of Funding
68
Stage 5: Formalization and Development of a Minimum Viable Product
68
Diseclar as of 2015
70
Mission and Vision
70
Target Market
70
Products
71
Costs and Competitiveness
71
Assurance of Raw Material
72
Infrastructure and Assets
72
Finances
72
Organization and Work Team
74
Sustainability as a Competitive Advantage for Negotiating Impact for Resources
74
Defining the Company’s Future
77
Option 1: Negotiating with a For-Profit Investor
78
Option 2: Negotiating with an Impact Investor
79
The Decision
79
Additional Information of the Case
81
The Entrepreneur and the Start of His Venture
81
Diseclar’s Value Proposition
82
Initial Target Market Segment
83
Teaching Note on the Diseclar Case
84
Learning Objectives
84
Reflection on the Market Approach to Scaling Diseclar’s Impact
85
Tying the Diseclar Case to Phase I of the Market Approach to Scaling
86
Discussion Questions
87
References
88
4 Phase II: Designing Operations
90
Operations for Scaling
90
Supply and Assets
91
Products and Services
92
Distribution and Revenue
93
The Kingo Case
94
The Case: Scaling a Solar Energy Business at the Base of the Pyramid
95
Guatemala’s Solar Energy Industry at the Base of the Pyramid
97
Alta Verapaz
97
Petén
98
Development Stages of Kingo
100
Stage 1: The Advent of an Idea and the Selling of Solar Energy Kits via the Quetsol Model
100
Stage 2: Selling Solar Energy Services via the Kingo Model
101
Stage 3: Raising Economic Funds for Initial Growth
102
Kingo’s Distribution Channel
103
The Kingo Unit and Its Related Services
103
Hiring, Development, Culture, and Results-Focused Hierarchy
105
The Importance of Community Training and Customer-Relations in Accessing New Areas of Service
106
Distribution Through Neighborhood Shops
107
Assistance to End Users
108
Flexibility on Revenue Process Based on Payment and Energy Use Options
108
The Challenge of Scaling
110
Option 1: Manage the Shopkeeper Sales Channel In-House
110
Option 2: Outsource the Distribution Channel to Estrella Digital
111
Additional Information on the Case
111
Kingo Case Photographs
111
Teaching Note on the Kingo Case
113
Learning Objectives
114
Reflection on Kingo in the Context of the Market Approach to Scaling
116
Tying the Kingo Case to Phase II of the Market Approach to Scaling
119
Discussion Questions
119
References
121
5 Phase III: Integrating Financing and Impact Logics
123
Exploring How to Integrate Financing and Impact Logics
123
Mission
124
Leadership
125
Communication
125
The FUNDES Case
127
The Case: Managing Change at FUNDES
128
MSMEs in Latin America
129
The Role of MSMEs in the Socioeconomic Development of Latin America
129
Differences Between the Countries in Which FUNDES Operated
130
MSMEs’ Need for Business Development Services
130
Business Development Service Providers
130
Inclusion of MSMEs in Large Firms’ Value Chain
133
Development Stages of FUNDES
134
Stage 1: Using Donations to Provide Access to Micro Loans (1984–1996)
134
Stage 2: Acquiring Financial Resources for a Training and Business Environment Development Program (1996–2002)
134
Stage 3: Acquiring Financial Resources for Coaching and Consulting (2002–2009)
136
FUNDES’s Mission and Vision
136
FUNDES’s Organizational Structure
137
FUNDES’s Income and Cooperation
137
FUNDES Cooperation Partners
138
The Challenge of Balancing FUNDES’s Historically Nonprofit Model with Its Newly Emerging Market Orientation
139
Project I: COPROCA
140
Project II: CSH
140
The Decision
143
Teaching Note on the FUNDES Case
144
Learning Objectives
144
Reflection on FUNDES’s Market Approach to Scaling
145
Tying the FUNDES Case to Phase III of the Market Approach to Scaling
146
Discussion Questions
149
References
150
6 Examples of Scaling Strategies
152
Scaling Through Co-creation in Low-Income Contexts: The uSound Case
152
The uSound Case
154
The Case: Using Co-creation to Bring Technology from Northern Argentina to the World
155
The Context of Jujuy
156
uSounds’ CEO
156
The Birth of uSound: A Problem Identified, an Opportunity Discovered
157
uSound: From Smartphone Application to Social Enterprise
158
New Challenges and Opportunities
159
Additional Information of the Case: uSound Case Photographs
160
Teaching Note on the uSound Case
161
Learning Objectives
161
Reflection on uSound’s Market Approach to Scaling
162
Reflection on Using the Co-creation Strategy
163
Discussion Questions
165
Scaling Through Collective Impact: The Warmi Case
166
The Warmi Case
168
The Case: Hilandería Warmi (the Warmi Spinning Mill): Collective Impact Produced by Business Collaborators and Indigenous Communities
168
The Textile Industry in the Jujuy Region
170
Contextual Reality
170
The Textile Industry
171
A Vision for Developing the Puna
171
Stage 1: The Warmi Suyajsunqo Association
171
Stage 2: The Creation of Different Projects to Develop the Puna
173
Stage 3: Hilandería Warmi (the Warmi Spinning Mill)
173
Warmi’s Organizational Structure
174
Operations and Structure
174
Changing the Practices of the Textile Industry
177
Target Market and Sales
180
The Challenge: Moving the Mill Operations to the Puna
180
Financial Situation
180
Scaling Impact in the Puna
184
The Decision
187
Additional Information of the Case: Warmi Case Photographs
188
Teaching Note on the Warmi Case
188
Learning Objectives
188
Reflection on the Warmi Spinning Mill’s Market Approach to Scaling
189
Reflection on the Warmi Spinning Mill’s Collective Impact Strategy
190
Common Agenda
191
Shared Measurement Systems
191
Mutually Reinforcing Activities
191
Continuous Communication
191
Discussion Questions
196
Scaling Through Replicating Business Models: The Ciudad Saludable Case
196
The Ciudad Saludable Case
197
The Case: Replicate a Nonprofit Branch or a Hybrid Organization?
198
Peru and the Problem of Solid Waste
200
The Emergence of Ciudad Saludable
202
Stage 1: Founding the Nonprofit
202
Stage 2: Standardization of Services
202
Stage 3: The Naissance of PWI
203
Stage 4: The Social Enterprise “Ciudad Saludable”
204
Initial Conversations with EUVestment
205
Proposing a Scaling Strategy
206
The Decision
207
Additional Information of the Case
208
Teaching Note on the Ciudad Saludable Case
208
Learning Objectives
209
Reflection on Ciudad Saludable’s Market Approach to Scaling
210
Reflection on Designing a Replication Strategy
211
Discussion Questions
214
References
215
7 Guidelines for Teaching the Market Approach to Scaling Impact
217
Courses and Workshops on Scaling the Impact of Social Enterprises
218
Experiential Learning as a Pedagogical Guideline
220
Experiential Learning to Tackle Major Challenges
224
The Four Roles Instructors Play When Using Experimental Learning Techniques
225
Instructors as Lecturers
226
Instructors as Analysts
227
Instructors as Moderators
228
Instructors as Mentors
229
References
231
Index
233
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