Discussion Forum – one pg

 Social venture makes light work of expansion”,  from Financial Times. The article gives examples of three ventures. Discuss the merits of these three ventures – provide your own opinion on their uniqueness, efforts, and the reasons for their potential success or failure. In addition, provide your own opinion on Social Entrepreneurship. You should also review their web sites if any.

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It was not so long ago that Anna Stork and Andrea Sreshta – founders of LuminAID Lab, a social
enterprise that makes solar-powered lanterns – sold their flashlights in batches of one or two
through a website they cobbled together themselves. They responded to every single customer
inquiry personally and single-handedly ran a successful crowdfunding campaign, “Give Light, Get
Light”, where customers bought and also donated thousands of lights for people in the developing
world.

Now, a little over two years after Ms Stork and Ms Sreshta took first prize in the University of
Chicago Booth’s Social New Venture Challenge, a business plan competition for social enterprises, things are different.

Sales have doubled over the past six months, buoyed by 35 new wholesale accounts and a new sales channel on Amazon. The partners
received an infusion of $100,000 in the form of a grant from the Clean Energy Trust in Chicago. And in July and August, the company
hired – and paid – a team of undergraduate interns to run its social media efforts.

“They are getting there,” says Craig Wortman, professor of entrepreneurship at Booth and an informal adviser to Ms Stork and Ms Sreshta.

The past few months have been a time of clarity for LuminAID Lab. It has two distinct ambitions: to provide lights – at a deep discount – to
humanitarian agencies that work in disaster-hit regions so that relief workers and victims can function after dark; and to sell lights to
outdoor enthusiasts and campers at a sufficient profit to support the business. These goals require markedly different sales strategies,
marketing plans and pricing models – things that would be tricky for an established company to pull off and are incredibly challenging for
a start-up.

“For a while there were so many sales avenues to pursue we weren’t sure which ones to devote our time and energy to,” says Ms Stork, 27.
“But recently we’ve had really good sales through both traditional retail and disaster relief channels. It’s an affirmation that this model can
work.”

In July the partners inked a deal to sell the LuminAID on Amazon, the world’s largest online retailer, and formed partnerships with
international distributors to sell the light in camping stores across the UK, Japan, Korea and Germany. They also won accounts with
several state emergency management systems in the US and international aid agencies, including Shelterbox, a UK-based group that
distributes kits filled with supplies in post-disaster and conflict areas.

Ms Sreshta, 29, is a second-year MBA student at Chicago Booth. This semester she is taking one course. “If we have customers that need to
be talked to, I don’t want to put that off because I have to go to class. I want to make sure we’re doing everything we can to move the
business forward.”

The biggest priority for the company this year is to crack into a large, name-brand sport and camping store. Indeed, “getting early traction
with selling” is critical to LuminAID’s future growth, according to Prof Wortman. “They need to get aggressive and network their way into
[a big retail outlet] by doing what aggressive sales people do,” he says.

“We are working on building relationships with retailers, refining our packaging and taking a close look at potential displays,” says Ms
Stork.

In late May, the business partners introduced an updated version of their light. The model is similar to the old one – a white rectangle,
sealed in a sturdy, inflatable plastic bag – but provides light for a day and a half after only five to seven hours of sun exposure. The previous
model provided eight hours of light after about six hours of sun exposure. “This [shorter charge time] is critical because in many places you
don’t have continuous sunlight,” says Ms Sreshta.

They are also working on a second product: a brighter solar-powered light that requires even less charge time and also powers mobile
phones.

While the business partners are eager to diversify their product offerings, Prof Wortman is more cautious. ”That’s a tough one,” he says.

By Rebecca Knight

JOURNEY OF A START-UP September 22, 2013 11:51 pm

Social venture makes light work of expansion

Page 1 of 4Social venture makes light work of expansion – FT.com

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“The problem with expanding the product line is that you’re doing product development and you’re not selling.”

For now the company is self-financed. The partners have received close to $200,000 in “free money” from business plan competitions and
grants and each chipped in several thousand dollars of their personal savings. Neither Ms Stork nor Ms Sreshta take a pay cheque and
beyond a handful of part-time workers who help with web development, and PR, they are the only two employees.

“We are still trying to run things as leanly as possible and scale up in a smart way,” says Ms Sreshta, adding that they occasionally consider
the possibility of taking venture funding. “We are always asking ourselves: what does this business need?”

Lost in a crowded, competitive market

A little more than a year after winning a business plan competition, tech start-up

Spotted has called it a day on its venture. Their plan to launch an app to help

people network more effectively did not make it on to the market.

But although the four co-founders of the team, MBA graduates from Mannheim

Business School in Germany, have now secured full-time jobs, they have no

regrets about starting a business together.

The Spotted mobile app was designed to help people attending large-scale

events to network easily with each other. The team considered deploying the

software in conferences and trade shows before focusing on careers fairs. Using

the app, jobseekers and employers would be able to create online profiles and

set up meetings during the event. The aim was to reduce the element of chance

when it came to professional networking and to put the face-to-face interaction

back into social networking.

Yet despite winning the European Business Plan of the Year competition 2012

the team – Alistair Bruce, Moritz Hertler, Stefan Reuter and Christian Uhrich –

knew that this was no guarantee of success.

One of the main problems for Spotted was in securing sufficient funding. Earlier

this year, their application for grants from the German government was turned

down. If the economic climate had been better Mr Reuter says that perhaps their

chances of getting funding would have increased.

Spotted even featured on a crowd funding website – Startkapital Online – to try to

raise money from investors. The aim was to raise a minimum of €25,000 by mid-

March this year. The crowdfunding terms state that if the minimum specified

amount is not reached by a certain date, then any initial money pledged is made

void. The Spotted team only managed to raise €11,000 and therefore the

application was cancelled.

Although Spotted did succeed in attracting the interest of entrepreneur Candace

Johnson, who wanted to invest as part of a group, the team was unable to find a

suitable interested second party.

The team also needed additional help onIT development to turn their idea into a

working product that could be sold to customers and presented to potential

investors. For instance, the app required a database to help connect users. But

the team did not have the money to hire the experts needed to develop this.

Mr Bruce says that the apps market is a competitive one and with a multitude of

products available, it is very difficult to stand out from crowd.

Even though their entrepreneurship journey has come to an end, the idea for

their app is not dead. Mr Bruce is convinced that it is only a matter of time before

there is a better way of interacting at trade fairs. The team hopes that event and

trade fair organisers will take up their idea.

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Start-ups can founder because of personality clashes, but Mr Reuter says that

this was not the case with Spotted. The team was “fantastic”, he says, which

makes it even more of a shame that the venture did not succeed.

Reflecting on their entrepreneurship journey, the four have amassed a network of

contacts and gained experience that will be invaluable in their future careers.

Mr Hertler and Mr Bruce now work for Adtelligence, a digital marketing

optimisation company, and would not have met its co-founder, Michael Altendorf,

were it not for Spotted. They met through the entrepreneurship club at Mannheim

Business School, where Mr Altendorf was a guest speaker. He even provided

ideas for the team in their preparation for the business plan competition and kept

in contact with them.

The Spotted team has learnt several valuable lessons from the venture, says Mr

Bruce. Would-be entrepreneurs should never underestimate the time and effort it

takes to secure investment, he says, be realistic in what they are trying to

achieve and always have a plan B.

Fundraising in the Philippines takes off

Interested in funding handmade “bambike” bamboo bicycles, or supporting

scholarships for children from economically disadvantaged families? These were

two of the five projects Justin Garrido chose to feature in the beta version of his

crowdfunding platform targeting social schemes in the Philippines.

Mr Garrido co-founded the crowdfunding website Social Project PH in 2012 with

his Melbourne Business School MBA classmate, Julia Sevilla. He wanted to raise

funds and offer marketing and brand management services to social enterprises

in the region.

The co-founders had a slow start with website difficulties and a typhoon causing

disruption. A year on, however, they are implementing the business plan that

won the Melbourne University Entrepreneurs’ Challenge in 2012.

Of the five projects on the beta launch in May 2013, two secured funding for

some of the milestones stipulated on the start-up’s website.

The Ayala Foundation, which provides scholarships for underprivileged youth,

raised more than $2,400 which allowed it to send four children to school. And the

Solar Energy Foundation raised more than $1,200 so that it was able to sell

discounted solar lanterns to a rural community an hour from Manila where

residents have no mains electricity supply.

Social Project Ph, received 5 per cent of the profits raised by these two projects.

As for the other three projects, which failed to secure funding – including the

bambikes – Mr Garrido is pragmatic, taking lessons from the experience.

“Their milestones may have been too high and/or they weren’t as strong in social

media marketing,” he says. “I also think although we had interesting projects for

the pilot, five may have been a lot to start with.”

Social Project PH is now developing partnerships with an ecommerce website

that features social enterprises in the Philippines and online media groups to gain

more exposure. Mr Garrido is also planning to tie in with offline fundraising

events.

“One insight we learnt is that many [fundraisers] for causes in the Philippines

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typically occur in offline events such as concerts, runs and black-tie dinners,” he

explains.

Developing an online presence and online tools is another primary objective for

Mr Garrido. “One key to a successful crowdfunding campaign is strong social

media marketing as well as a strong story, something non-profits are typically

weaker at, so we are exploring a student social good ambassador programme

[that will connect] college students to our project partners [to help with social

media marketing],” he says. In return, the students will receive mentorship

opportunities.

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