“Scale” is a nebulous and elusive concept in the social enterprise ecosystem. However, if the community is to make any tangible progress toward the social impact objective it seeks to achieve, like energy access for all, or access to clean water and sanitation, scale is an essential topic for us to wrestle with. The recent merger of Pollinate Energy and Empower Generation, two of our Global Social Benefit Institute (GSBI®) alumni social enterprises, provides a look at a new and rarely seen avenue toward scale.
Since 2003 GSBI has accelerated over 893 social entrepreneurs by delivering a world-class accelerator programs that connect global social enterprise leaders with Silicon Valley business executives to develop more sustainable, scalable market-based solutions to the problems of those living in poverty around the world. Over the past 15 years, we have seen that there is no single “right way” to scale. However, we have seen some themes emerge.
In search of scale, GSBI alumni have perused a number of distinct paths. Some entcerprises are able to leverage their proof of concept and record of success into large investments that will afford them the possibility of dramatic expansion. This was the case with GSBI alumni Husk Power Systems, who recently raised over $20 million to add an additional 300 mini grids in India and Tanzania and bring energy access to over 100,000 customers.
Other alumni, like Sistema Biobolsa, see replication as the most promising avenue toward scale. Sistema Biobolsa, worked with the GSBI Replication Initiative to package its business model and technology and cultivate international partnership that can replicate its success in new geographies.
But what if there are already a number of social enterprises that utilize a similar model? Organic expansion becomes difficult because the competitive landscape reduces the potential addressable market, and replication becomes challenging, as replicating organizations may face significant challenges from their more established local counterparts.
Pollinate Energy and Empower Generation both aim to increase last mile distribution of socially beneficial products (solar lanterns, clean cookstoves, etc) by training and employing women (and men) who live in under-resourced and under-served communities. Pollinate works in India and Empower Generation in Nepal.
Empower Generation’s model and impact to date is impressive. Launched in 2011, its distribution network includes 20 women-led businesses that manage over 250 sales agents, working as village-level entrepreneurs and earning an income with every product sold. As of December 2017, the network has distributed 57,000+ clean energy products, saving Nepalese families over $2,737,000 AUD in household energy expenses and displacing 12,861 tons of CO2 by replacing kerosene and candles. Empower Generation has impacted the lives of 294,626 people by providing them with cleaner, safer access to power, light, and cook stoves.
Pollinate Energy has also had an impressive track record and has reached over 130,000 individuals in over 1000 communities throughout India. In sum, Pollinate has helped to save over 4 million liters of kerosene- offsetting almost 10 million kgs of CO2 emissions. They have also helped to save Indian families over 215 million rupees.
Alexie and Anya first met through a connection made through GSBI. “We Immediately saw that there were significant similarities between both of their models, as well as highly aligned leadership values and ambitions. There was the right set of raw ingredients for a strong collaboration,” said Cassandra Staff, Chief Operating Officer at Miller Center.
By merging, the two organizations will be able to leverage their increased size for greater purchasing power and economies of scale. They will also be able to amplify each other’s strengths and distinct advantages.
For example, one organization had more a sophisticated operational system; leveraging these systems across the newly-merged organization will streamline processes, supply chain, data collection and analysis, sales force recruitment, and leadership. On the other hand, the other party had much more advanced skills-development programs for their staff and sales agents. By integrating these trainings, the talent at Pollinate Energy will have the skills needed to scale with their organization
“One exciting development for India will be adopting Empower Generation’s rural-based sales approach. This will allow us to reach remote families who are currently missing out on accessing our life-changing products. Together, we will reach millions faster and more efficiently, and be better placed to empower women to play a central role in the development of their communities and their families. This is critical when our model still currently relies on the support of generous donors to support our growth,” says Alexie Seller, who will remain as CEO for the new merged organization.”
While there are obvious advantages of leveraging each other’s strengths, the process of identifying those strengths and determining the practicality of merging was not without its own challenges. In order to help facilitate the merger process, Miller Center Executive Fellow, Steven White accompanied both of these organizations throughout the process and provided strategic advice on how to navigate this process.
Source for banner image: Sustainable Energy for All. Click here to view the recorded announcement of the merger between Pollinate Energy and Empower Generation.