Hello Jona, could you tell us about yourself and your work at MIT D-Lab?
I am the Social Entrepreneurship Manager at D-Lab MIT. Through the accelerator programme that I run - the Scale-ups Fellowship - I have the opportunity to work with incredibly talented local founders developing products and services that improve the lives of people living in poverty. I spend my time thinking about how to best connect them to the right individuals, right resources and opportunities that they need to thrive. Because the Scale-ups Fellowship is based at MIT, we also have a strong knowledge generation mission that runs through my work. Thus a key part of what I do is to harvest critical lessons learned from developing and scaling high impact local enterprises. We turn these lessons into knowledge products for a global audience of social business leaders, impact investors and practitioners.
Why is inclusive business particularly relevant when it comes to building resilience in the private sector, especially in this time of Covid-19?
Before Covid-19, True Moringa, a hair and skincare venture, earned almost 90 percent of its revenue from exports and sales in physical stores in Ghana. With the pandemic, its retail income quickly disappeared. In response to the crisis, Kwami Williams, the founder of True Moringa and his team pulled off their fastest sprint ever: they built an online store in 15 days, setting up warehousing and fulfillment for products for themselves and for 22 other Ghana-made brands who were also struggling to reach their customer base. The initiative is called “Thrive Together” and 71% of the businesses in the new platform are women-owned, employing over 7000 people in total. “Thrive Together” is donating 5% of its earnings to charities and healthcare workers.
These are challenging times for the private sector. Most entrepreneurs are starting to realise that things will not snap back to normal if they just wait out the lockdown phase. Many of their customers are adjusting their go-to-market behaviors and are radically shifting their long-term and short-term consumption patterns. In this context, many entrepreneurs are thinking about how to rekindle and strengthen their relationships with their customer base and many may not be aware of the range of opportunities, strategies, and specific techniques to deepen participation of stakeholders in their value chains.
True Moringat's trajectory highlights why, some inclusive business ideas that have generally played on the fringe may start to lead the pack. Successful inclusive leaders are quite different from their business-as-usual counterparts. MoringaConnect leveraged its e-commerce knowhow to help other businesses recover lost revenue. From their bottom-up and customer-centric models, to their commitment to grow alongside their team and key stakeholders along their value chain, to the very tools and approaches they use to adapt their products and technologies to drive social impact and profitability in their existing markets, businesses like True Moringa have a lot to offer. Inclusive business founders have deliberately designed their models to never stray too far from the needs and experiences of customers, partners and employees, and as True Moringa demonstrates, they hold great lessons about how to connect the sustainability of the company with the wellbeing of entire communities.
From your experience, what does resilience mean in this context?
Imagine trying to bake a cake but there is no flour available anywhere within reach. Chebet Lesan, a D-Lab Scale-ups fellow and the founder of Bright Green Renewable Energy in Kenya, found herself in a very similar situation when the sugarcane feedstock supply chain that she relied on to make her eco-friendly briquettes was unexpectedly severed. Her usually reliable supplier could not deliver shipments due to the countrywide lockdown, but her distribution network of microentrepreneurs needed the charcoal to stay in business. Rather than halting production, she started making calls. She was able to pull together a few consignments of banana leaves, maize cobs and groundnut husks and she and her team started immediately experimenting. In just a week, her new concoction was meeting the same parameters as her original briquettes. She was back in business.
All the hype around resilience - the ability of entrepreneurs to overcome roadblocks and setbacks in the face of adversity - feels timely, but also incomplete. In the best of circumstances, growing a business is like running an obstacle course. It is also a bit like flying a plane without a manual to land. Like Chebet, you are called upon to make difficult choices, with imperfect information, over and over again. Due to the disruption and the uncertainty that Covid-19 has unleashed on markets, being an entrepreneur is made harder still. Resilience, as Chebet's story suggests, is a worthy destination, but only if you know how to get there. An acronym we use to prime our founders, and that better encapsulated Bright Green's response is FAR - which stands for Focus, Agility and (then) Resilience. We lead with Focus because distraction during a crisis is ubiquitous, dangerous, and it comes in a million forms. At D-lab, we try to help entrepreneurs zoom in to see what their biggest risks are and push away the many other things demanding their attention. FAR is about identifying those few areas where focused efforts can make a real impact, then executing with speed to recapture the market.
How is your organization helping (inclusive) businesses to be and stay resilient in / post-Covid-19?
We have basically re-deployed the proven troika of entrepreneurship support: capital, knowledge and mentorship, with a Covid-19 twist.
The first thing we did when we realised how deeply our Scale-up Fellows were affected by the pandemic was to fundraise for a Bridge Fund to keep our ventures on track. All entrepreneurs we spoke to reported acute disruptions in their supply chains, manufacturing processes, distribution channels, and point-of-sale systems. As we launched Bridge Fund, most of our fellows were scrambling to figure out basics, such as how to make their products and how to sell to customers who were now just out of their reach. To best allocate funding among the different portfolio companies, we developed an innovative Urgency Index. The Urgency Index used impact, business vulnerability, and potential for growth as proxies to determine the size of need. In total we awarded 19 bridge grants, ranging between US $2,000 to $8,000, in early April.
At the same time, we started pulling together practical advice and case studies from our entrepreneurs on the ground. This project took shape as the Covid-19 “Manual to Land.” It includes a mix of strategies on how to protect your venture, as well as strategies on how to capture opportunities for future growth. Organized along five dimensions: finances, operations, customers, team and business model, it first breaks down complex challenges into more manageable parts, then gets into the nitty-gritty details of what entrepreneurs can do to address them.
Lastly, we quickly realised that our entrepreneurs needed someone to be vulnerable with during these difficult moments. Covid-19 became an opportunity to work with almost all the Founders that have ever gone through our programme, and strengthen our network and relationships to continue to meet their needs.
Kindly describe the survival playbook you developed. How does it benefit entrepreneurs?
Our Manual to Land should fill a few gaps in the existing literature. Its target audience is inclusive business leaders in emerging markets, which is important for two reasons: first, it takes into consideration the infrastructure, capital, and technology limitations that are emblematic to these contexts. Second, it embeds inclusiveness and impact throughout - helping entrepreneurs become aware of and navigate the tensions inherent in keeping their company afloat while protecting those that are most vulnerable in their value chain. Finally, while most of the advice out there draws on the experience of large, well-established companies, our tips, in contrast meet the needs of early stage nimble entrepreneurs who face an entirely different set of hurdles.
To compile the guide we crowdsourced inspiration on how to handle shocks from organizations that deal regularly with uncertainty and fluctuating customer demand. Agricultural start-ups who regularly experience currency and weather volatility in places like East Africa, for example, have a lot to teach us about adapting to shocks.
The effects of Covid-19 on businesses will have a long tail, so we hope that entrepreneurs can revisit the Manual time and time again as their response evolves with the pandemic. We invite entrepreneurs to use it as an encyclopedic reference; browse it to find inspiration, then mix and match actions that fit best in their particular context. It is a long, living document (we will update it as we go) and we welcome input and feedback.
Do you know of any additional resources that could help entrepreneurs stay resilient?
There is no shortage of resources for entrepreneurs that need support at this time. There is something for everyone, you just have to find the signal through the noise. To make sense of the crowded resource landscape, I invite entrepreneurs to think about the type of help available as belonging in one of four of these distinct buckets: the curators, the access providers, the advisors, and the connectors.
The “curators” are all the intermediaries who are pulling together and organizing vast quantities of information in easy to navigate platforms. A few of my favorite curators are Covidcap.com, which has put 1300+ Covid-19 specific fundraising opportunities into a searchable database spanning over 62 countries, and iBAN’s Covid-19 “Webinar’s insights for business” which puts hard-won start-up wisdom (aka webinar summaries) at the fingertips of time-constrained entrepreneurs.
The “access providers” are usually content developers who have taken down paywalls during Covid-19. This is a great opportunity to experiment with new tools or access knowledge that may usually be out of your reach. A few that come to mind in this category are EY’s Finance Navigator (three months of free access), and AMI’s Covid-19 Survive to Thrive, an interactive course designed exclusively for African businesses (currently offered at a discounted price). The “advisors” include people and organizations that offer tailored pro-bono expertise and deep mentoring based on specific needs. One of my favorites in this category is Appleseed, which holds office hours to discuss challenges related to marketing and behavior change. Another one is Pariti, a start-up advisory company that will review and give you free, expert feedback on your pitch deck in under three days.
Finally, there are the “connectors.” These are the people and organizations that are unique to you. Think of “connectors” as those high potential nodes in your network who you need to activate to get access to the partnerships, knowledge, talent and capital that you need. Too many entrepreneurs overlook their own connections (funders, friends, clients, etc.) as resources to tap into during Covid-19, but I challenge you to leverage them to improve your probability for success. Networks are everything!
What should entrepreneurs keep in mind for the post-Covid-19 period when thinking about staying resilient?
Rahm Emanuel, a former advisor to President Obama, once said: “Don’t let a good crisis go to waste.” Taking a page from his playbook, I tell founders that even though there are a lot of things demanding their attention at the moment, they should make the time to do some serious housekeeping. For most entrepreneurs, for example, Covid-19 has revealed multiple points of failure in their supply chains, in their operations, and even in their team. Taking stock of underperforming units and fixing glitches in their systems may be unpleasant, but it is necessary. It will help them build the disciplined venture that will perform better under duress and scale more effectively later. Also, it may sound obvious, but, on the flip side of the coin, the crisis has probably also unveiled their most essential assets - these are those people, relationships or channels that define their competitive advantage. It is really important to double down on them to supercharge their company into the future.