Entrepreneur

Social Enterprises Are Not Charities - Here's What Else The Founders Have To Say

At DBS’ ‘Digital Disruption for Impact’ event held at DBS Asia X on March 6, the founders of three social enterprises – Zaya Learning Labs, Homage, and WateROAM – along with Dr Alex Lin, Head of SGInnovate (formerly known as Infocomm Investments Pte Ltd) and DBS BusinessClass Advisor, came together as panellists to discuss how technology and innovation empower social enterprises to scale their businesses.

Zaya Learning Labs, Homage, and WateROAM are all recipients of the grant awarded by the DBS Foundation as part of its Social Enterprise Grant Programme last year. Zaya was also the grand prize winner of the inaugural DBS-NUS Social Venture Challenge Asia in 2014.

Throughout the event, there was definitely much to learn from the speakers – these are my key takeaways:

1. Social Enterprises Are Not Charities

Zaya Learning Labs is a social enterprise that makes use of technology to make education accessible to children in low-income communities.

The startup has pioneered an end-to-end affordable Blended Learning model for the low-income Indian market; and its technology can be used by schools with none or limited Internet connectivity and unstable power supply through the ClassCloud, that stores and deploys content online and offline within a localised hotspot.

“Delivering quality learning to every child – regardless of their income level and location – definitely sounds like a very noble mission. But as a social enterprise, our focus is on building a business centred around this mission,” said Neil D’Souza, founder of Zaya Learning Labs.

That said, the real challenge lies in running a business at a low cost so that even the low-income people can afford to pay for it.

Image Credit: Zaya Learning Labs

Classrooms in India have been equipped with Zaya Labkits, each containing Wi-Fi-enabled tablets, a projector and the ClassCloud, preloaded with lesson plans for teachers and digital learning content for students.

This allows any low-cost private school in India or across the world to implement a fully adaptive curriculum for under US$2 per child a month.

“Schools in these low-income communities usually charge school fees of $8 to $10 a month, so we are definitely disrupting the education market by driving down our costs. What’s important to me is that customers pay for our service, so it’s not charity. That’s validation for me – that we’re adding some value to our customers,” said Neil.

“We constantly have to overcome this barrier of people telling us that we have to give our products or services for free, otherwise they don’t want it. However, you have to remind yourself that there is a cost of doing this service — and there are people who are willing to pay for it. It’s just that you have to make it more accessible at a lower cost, without compromising the quality of the product.”

Going beyond providing education, Zaya and its technology is also empowering women in low-income communities.

By providing these tools, women who might have previously been unskilled teachers now have the confidence and equipment to educate their students.

2. Tapping On Technology To Disrupt Industries

Zaya Learning Labs is not the only startup that leverages technology for digital disruption.

Homage, for one, is a complete service for in-home senior care that combines trained and curated caregivers with smart technology.

Gillian Tee, co-founder of Homage, spent the last ten years developing her career in both New York and the Silicon Valley; and when she returned home to Singapore in 2016, she noticed first-hand how much her 70-year-old mother had aged.

Her mother’s actions had slowed and she was becoming more forgetful — and that was when she realised that there was room for innovation in the eldercare industry. She felt that technology was often used to reach young people instead of the older generation, and this inspired her to develop Homage.

The platform uses a proprietary matching engine to pair seniors with the best healthcare professionals, and this helps seniors age with dignity, unburdens family caregivers, and turns compassionate people with care-giving experience into micro-entrepreneurs, providing them with an opportunity to earn.

“Technology is the ultimate enabler. We are taking everything that is inefficient about caregiving and automating the processes to make it (the user experience) better,” said Gillian.

Besides Homage, WateROAM is another social enterprise that taps on technology to bring about a positive social impact.

WateROAM develops water filtration solutions to bring about quick access to clean drinking water in disaster-hit locations.

Image Credit: WateROAM

Founded in 2014, David Pong and his two friends came together with the aim of solving the global water issue after realising that almost three billion people around the world do not have immediate access to clean drinking water.

Unlike Singapore that is blessed with abundant clean water, people in these countries are often afflicted with waterborne diseases, such as diarrhoea, on a daily basis due to consumption of polluted water.

Combining their background in environmental engineering and business, the trio sparked an idea to build an affordable and portable water filtration system that could be quickly set up in rural communities to provide clean water supply, without requiring heavy infrastructure.

And similar to Homage, WateROAM also strongly encourages its users to be micro-entrepreneurs.

“Besides providing clean water, we also want the entire village to be equipped with a portable water filtration system that they can use to pump clean water out of their water bodies that they already have at the back of their houses, such as rivers, lakes, or ponds. With our solution, they can easily produce clean drinking water which they can sell to their community at a very low cost,” said David.

3. Sustainability And Scalability Are Key Focuses

Image Credit: DBS

When asked about the key difference between social entrepreneurs and other entrepreneurs, Dr Lin said social enterprises place a heavy focus on sustaining the business.

“The difficulty for social entrepreneurs is that they are trying to sell their products cheap so that people can afford it by driving the cost down. But when your margin is thin, you have to sell a lot more in order to sustain your business operations. It’s hard to strike the right balance between charging reasonably while maintaining profitability. As such, scaling the business becomes a must,” he explained.

In other words, social enterprises must have the ability to be sustainable and scalable in order to continue to do good.

To scale and grow the business, there are three key things that social entrepreneurs need to take note of: funding, mentorship, and access to the marketplace.

As highlighted in this year’s Budget speech, it is clear that the Singapore government is very supportive towards the startup ecosystem, and the availability of various schemes and grants is a testament to this fact.

According to Neil, securing a grant is relatively easier than building and sustaining the business.

“So if you are not committed to your business venture, don’t even start it. Do not dive head-in without understanding the problem at hand or without a keen interest,” he sternly advised.

“But once you have a grant, it’s like a validation that you have a very good idea. However, it takes a very long time to get any sort of funding, so you cannot afford to have continuous rounds of funding. In fact, your grant can easily be spent in a year.”

“So if you want to be a smart entrepreneur, you should pick access to market as a negotiating factor in your investment terms and conditions. This can or can not work, but this is a bigger leverage for you as an entrepreneur — you can get access to market and have a recurring stream of revenue at the same time.”

David also shares that as a hardware company, WateROAM faces high manufacturing costs.

The know-how in this industry is limited so it takes them a long while to find the right mentors who can provide useful advice, as well as the right multi-national corporations (MNCs) to leverage their expertise.

Building on the point on funding, David said entrepreneurs also need to have tenacity. “Funding is often not sufficient for hardware companies. If we’re doing software, I think it’s easier to have another iteration quickly; but for hardware, one more iteration usually means forking out tens of thousands of dollars more. This means that you cannot afford – literally – to make mistakes.”

Advice For Aspiring Social Entrepreneurs

As someone who has been on both sides, Dr Lin – a serial entrepreneur and an impact investor – said that it is important for aspiring social entrepreneurs to believe in themselves and their social cause.

“If you articulate your ideas clearly and confidently, investors will also believe in you. Before pitching to an investor, it’s crucial for you to know who your customer is (who is willing to pay) and what the customer’s problem is (the pain points). The problem must be so painful that he or she is willing to pay you to solve it,” he advised.

Image Credit: DBS

Wrapping up the panel discussion, Gillian emphasised that it is important to “just start” on the journey, even if there are a million other reasons that will convince you that you are not ready.

“You’ll probably be wrong ten times before you finally get it right, but don’t be afraid to experiment and fail. You have to be comfortable with a bit of chaos because a lot of amazing things can happen when you are not sure of what is in the mix,” she added.

Featured Image Credit: DBS 

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