Impact

Impact Investing Is A Good Way To Go For Frugal Innovators As Well

~ Venkata Gandikota

Over the past 3 years, I have been developing ideas on all the different ways that Entrepreneurs and Startups who are creating frugal solutions can access capital.

Mind you if you are a big company that is publicly listed or even privately owned, then they can go for their own cash reserves or set aside budgets to deal with these as new R&D&I projects.

But for startups, they can either access traditional innovation funds in the public sector, or raise funds via crowdsourcing, or get funding via big foundations in your field. Now Impact investing is a growing phenomenon trying to take advantage of all these.

Came across this nice overview for Impact investing from The Global Impact Investing Network’s What You Need to Know About Impact Investing

Many types of investors are entering the growing impact investing market. Here are a few common investor motivations:

  • Banks, pension funds, financial advisors, and wealth managers can PROVIDE CLIENT INVESTMENT OPPORTUNITIES to both individuals and institutions with an interest in general or specific social and/or environmental causes.
  • Institutional and family foundations can LEVERAGE SIGNIFICANTLY GREATER ASSETS to advance their core social and/or environmental goals, while maintaining or growing their overall endowment.
  • Government investors and development finance institutions can PROVIDE PROOF OF FINANCIAL VIABILITY for private-sector investors while targeting specific social and environmental goals.

Just Came Across Conscious Capitalism – Initial Thoughts

~ Venkata Gandikota

“It’s not about minimizing costs and making profits. You have to build on growing, caring and making an impact.”- Babson College Professor, Raj Sisodia, co-founder of Conscious Capitalism Inc.

This above quote is from this article Conscious Capitalism: the Next Chapter in Business. 

This is part of the increasingly mainstreamed way of doing business. First came Corporate Social Responsibility (CSR), then Inclusive Business, Social Entrepreneurship, Impact Investing and Frugal Innovation have started to push business from “Laissez Faire Capitalism” to responsible capitalism.

This in combination with economists like Tomas Piketty’s “Capital in the Twenty-First Century” and Professor Angus Deaton (2015 Nobel prize winner in Economics) have started to highlight the necessity in creating a more responsible way of doing business.

I will have to read more, get more examples, digest them all and will get back to further thoughts on this in future blog posts.

Impact Solutions Are Not Necessarily Frugal Solutions But The Opposite Is True

~ Venkata Gandikota

I am seeing lot of ‪#‎Impact‬ examples where ‪#‎affordability‬ to end user is missing. I made this note for myself:

“What is ‪#‎Frugal‬ can be ‪#‎Impactful‬ but an #Impact solution isn’t necessarily a #Frugal Solution.”

My definition of Frugal = Quality, Accessible, Sustainable & Affordable.

The comment I have heard from a Finnish colleague is “This might not be a top priority for a typical Finnish engineer or technological solution, i.e. being tech-centric as opposed to user-centric. I suppose the point-of-view depends what target market a product or service is being designed for. Personally I understand an impactful product or service to be either affordable for the end user or otherwise accessible (paid for my someone else), because what impact is there if the product or service does not reach its intended users?”

But isn’t it so that because even if we think of a developed country market..eg: Finland:

  • Average pension is less than 2000 Euros, Pensioners (1.525 million) make up almost 28% of the population;
  • Currently 341000 people are unemployed (The Ministry of Employment and the Economy has forecasted that by 2017 the long-term unemployed will rise to nearly 40 % of all unemployed …A bigger issue is if increasing number of unemployed have stopped looking for work);
  • The recent Employer-employee contracts show that wage growth will be more or less stagnant;
  • Government funding cuts to organisations already shows in lesser resources for education, research, healthcare, social security, pensions etc.. Also means government can’t or wont subsidise much;

    • Also I read that a growing number of Finns financial difficulty is now at record levels. 372,000 people had problems paying the bills in April 2016 (Turun Sanomat May 30, 2016).

    So with these in mind how can we push the conversation in this country that actually “Frugal” solutions are needed here as well, not just in some distant faraway Africa or Asia.