Funding Entrepreneurs for the Same Price as a Meal at McDonald’s
Among this week’s most significant news at SAPPHIRE NOW + SAP TechEd Madrid, was the announcement of the winners of “The Power of Small: Entrepreneurs Strengthening Local Economies” global competition. Jointly sponsored by SAP and NGO, Ashoka, the competition attracted 370 entries from 69 countries. Here’s my take on lessons learned from these incredibly creative, committed people:
- Small business needs IT just as much as big business. For the price of a meal at McDonald’s, micro entrepreneurs in Brazil, (think street market salesmen, curtain fitters, car washers, confectioners, and day laborers) can subscribe to MySoft, and get apps to run their business better. In just three years, this development collaborative has trained approximately 10,000 youths to create cloud-based smartphone and laptop apps. There’s market potential to reach 27 million small service providers.
- Giving back makes economic sense. Adel is the brainchild of youth from Brazilian rural communities who received a university education. They launched Adel to help communities from Brazilian semiarid, the poorest region of Northeast Brazil, develop sustainable business models. Eighty-eight young entrepreneurs have launched 35 small rural businesses with Adel’s support. Over 200 youths have been trained to develop and manage businesses. There hasn’t been a single default on the $52,000 USD invested in loans to these young innovators. Fully 100% of participants have remained in their rural communities and plan to stay.
- Collaboration can help break the poverty cycle. Wennovation Hub in Lagos, West Africa can get entrepreneurs from ideas to funding in just six months. In Nigeria alone, between 35% to 50% of youths are unemployed. To help break the cycle of unemployment, poverty, and crime, Wennovation trains youths to become innovators. In exchange for a flat 10% equity fee, they form teams that quickly identify, prototype and launch solutions. Partnerships with universities such as the Massachusetts Institute of Technology (MIT), Google Africa, and the Tony Elumelu Foundation have helped Wennovation incubate half a dozen tech start-ups, and raise over half-a-million dollars for them from local and international investors.
- Access to technology makes a big difference to the smallest businesses. In South Africa self-employed, low-income individuals struggle to earn a living minus education, skills, and access to technology. The Microfranchise Accelerator (MFA) connects screened franchisors with potential franchisees to help these “necessity entrepreneurs” build commercially viable micro franchise business solutions. MFA’s two-year training and mentoring program aims to support 600 franchisees over the next few years.
There’s a lot of talk about small and mid-size businesses as the growth engine of world economies—I’ve written about this before. But the actions of these organizations prove that just about anything is possible.