http://www.world-entrepreneurship-forum.com/index.php//News/News/Entrepreneurs-for-the-World-Awards-2011

Four role-models whose entrepreneurial achievements and commitment to society make them for entrepreneurship creating wealth and social justice have been awarded the Entrepreneurs for the World Awards at this year’s World Entrepreneurship Forum held in Singapore.

The Young Entrepreneur Award, a new award category for entrepreneurs below 35, has recognised Ms Reese Fernandez, Co-Founder of Rags2Riches in the Philippines. Her venture has revolutionised women’s business practices and lives by transforming rugs from recycling scrap material into fashion handbags, eyeglasses or wine-bottle holders, sought by high-revenue customers, bringing revenues and self-confidence to employed women.

This year’s winner of the Social Entrepreneur Award is Mr William Drayton, Founder of Ashoka, USA. Mr Drayton was the first person to coin the term “social entrepreneurship” and started Ashoka in 1980. The not-for-profit organisation is established in 70 countries and supports the work of 3,000 Ashoka Fellows, selected for their impact on their social and business environments, in replicating and scaling their ventures so as to have a global impact.

The winner of this year’s Politician Award is Ms Anneli Hulthen, Mayor of Göteborg, Sweden. She is Mayor of an entrepreneurial city that has implemented several initiatives, such as “Expedition Forward”, “Business Emergency Programme” or “Brew House Incubator” widely praised among European cities for their positive impact on entrepreneurs’ ventures and the related creation of jobs.

Finally, this year’s Entrepreneur for the World Award has been given for the first time to a company, FOSUN International. The Shanghai-based conglomerate with a wide array of activities such as pharmaceuticals or healthcare, being present on the global front through its 7.1% stake in Club Med, generates an annual revenue of 4.5 billion euros and has perfectly aligned its strategy to answer Chinese population’s social needs (such as ageing population or new consumption habits).

The winners received their trophies, designed by the French jeweler Korloff, at a Gala Dinner graced by Singapore’s Deputy Prime Minister, Mr Teo Chee Hean. The World Entrepreneurship Forum, drawing 130 selected entrepreneurship experts and thought leaders from 60 countries is being held for the first time in Singapore this year, from 2-5 November on the theme “Entrepreneurship – A Driver for Innovation and Technology”. A public gathering in NTU on 4 November morning allowed 450 persons from Singapore Business Community to benefit from the most outstanding entrepreneurial stories of Forum Members.

That sounds way too sensationalistic, and it probably is. But the drama of that statement is certainly rooted in truth.

Allow me to explain.

Several years ago, I got enamored with the concept of ‘innovation’.

So much so, in fact, that it became a personal buzzword, advocacy, unifying battle-cry.

I read all the books and delved into all of the websites. Innovation and Entrepreneurship. The Innovator’s Dilemma. Innovation : The Five Disciplines. Closing the Innovation Gap. Innovation to the Core. Open Innovation. Innovation Nation. Innovation X. If the book had the word ‘innovation’ in its title (even the sub-title), it had a 90% chance of ending up on my bookshelf. I would get indoctrinated in the religion of IDEO (the Shopping Cart video and the innovation bibles, The Art of Innovation and The Ten Faces of Innovation).

For a time, some really cool friends and I put up Kolektib – an Innovation Hub in the creative hustle-and-bustle of Cubao X. We did Innovation Workshops internally and externally. It was an exquisitely fun time.

Even social entrepreneurship, for me, was a form of innovation – albeit social innovation. Hapinoy and Rags2Riches are expressions of melding social development with business models, a rather revolutionary approach which would certainly qualify as innovating.

I eventually synthesized my knowledge. I wound up conceptualizing, creating, and teaching a class in Ateneo on Innovation. It would tackle the why’s, the what’s, the how’s of the topic. I wanted to transmit the spirit to a next generation of innovators which would try to conquer and/or change the world.

The one line i always wanted my students to remember : Innovate or Die.

But beginning last year, my innovation lens would slowly shift. Not on a different tangent, but rather on a different depth.

I’m significantly more experienced and quite wiser. For all intents and purposes, I’ve changed. But more importantly, the world has changed at a mind-spinning rate – far outstripping my own evolution.

The first decade of the 21st Century was characterized by dizzying change, hyper-competition, unbridled growth – all of the factors that led to an innovation explosion. Globalization was at full-swing, the Internet began to fulfill its promise of changing everything.

And everything seemed possible. Growth was so palpable and reachable, and so businesses began pouncing on the massiveness of the opportunity. Driven by sheer momentum, they just plowed full steam ahead.

An innovation avalanche would ensue.

Innovation and Design consultancies would have a field day. So many new products, services, processes, and business models would emerge. I should know – it’s what I taught :

How Zara had reinvented the supply chain, allowing them to launch new fashion lines at lightning speed.

How the Wii would tackle the Blue Ocean of game consoles, beating the higher-performing Xbox 360 and Playstations by going on a different tangent and tackling non-gamers.

How Procter & Gamble used Open Innovation and launched connect + develop, unleashing a torrent of growth for their brands under AG Lafley’s watch.

More consumers were opening their wallets, and companies were feasting.

But towards the end of the decade, the world would undergo yet another step-change, perhaps an even larger one than the last.

Crises of global proportions would enter the lexicon.

A financial crisis would infect the world over, leading to national economies teetering on the brink. It was a full-blown meltdown and it washed over countries like a worldwide tsunami.

And speaking of tsunamis, the world became a real-life disaster movie. Environmentalists have been banging the alarm bells on the planet for so long, but it’s certainly only in the past few years that climate change has become real to the person on the street. When Typhoon Ondoy hit the Philippines, it was a shock to the system – it dumped one month’s worth of rain in half a day, causing floods in areas we never imagined were possible.

This climate change crisis is of course linked to to the energy crisis – our over-dependence on carbon-based fuels. Generations ago it wasn’t tangible, but now we see just how finite non-renewable energy is. It’s like we’ve got lung cancer and yet ironically still need two packs of smokes a day just to keep on moving.

And while all this was happening, the gap between the rich and the poor continued to widen. The proportion of the world’s population that survives under $2 a day still goes between a third to one-half of the total human race! (depending on which statistics you look at). Without a doubt, the population and poverty crisis continues to rear its ugly head.

And so in the span of a decade, we went from an age of seemingly unbridled growth … and plummeted into an age of uncertainty. An Age of Massively Complex Problems.

And that’s why a nagging feeling in my gut gradually snowballed, until my lens shifted.

I remember some of the projects that were conceptualized in my Innovation Class. A better kind of toothpaste. Refillable packaging for laundry detergents. Heck, even an innovative cigarette that would light without matches. Of course there were some that were more interesting – especially those who were in the social innovation track.

But with all due respect to my former students, it was the teacher who was at fault. We were thinking too small. We were throwing our energies at the wrong things. (just look at my slides)

Power is useless, if misdirected. Same goes for Innovation.

Innovation is good at tackling any problem, but it can be so much greater if it tackled the right ones.

And so I’m drawing a line on the sand, demarcating where my old thinking ends and my new perspective begins :

The only problems worth solving, worth investing your life in, are meaningful ones.

In an Age of Massively Complex Problems, do we really need to design a better toothbrush?

Do we still want to use innovation to drive unbridled growth and overconsumption, for things that people don’t really need but we’d just want them to buy?

Do we want to continue ransacking the planet with novel products that don’t really add anything extraordinary to people’s lives?

I say, that may have its place in the world, but certainly not in mine.

I will invest my time, my resources, my life, in innovation that, frankly, matters.

Meaningful innovation that adds real value to people’s lives, that tackles real problems plaguing individuals, society, and the world.

A lot of Big Problems. A lot of Big Opportunities. A lot of Big Innovations needed.

I call this new evolution of my definition, Innovation(+). Innovation plus, Innovation positive, Innovation with meaning.

The time has come for us to put collective energies into innovations that can create positive differences in people’s lives, for society, and the world at large.

We need platforms for participation; Heck let’s take it a step further as Platforms for Activation – where people are actively engaged in helping things move not just onwards, but upwards.

And so it’s in these specific challenges that I will be investing my energies on :

1. Social Innovations at the Base-of-the-Pyramid
- How can we co-create business models, products, and services that serve essential needs for those that live under $2/day?
- How can we make the poor active participants and co-creators in the common drive to get them out of poverty?

2. Development of Technologies, Products, and Services that Positively Advance the Human Condition
- How can we create new innovations in education, healthcare, energy, and communications that sustainably serve the needs of this generation and the next?
- How do we use innovation and design thinking to tackle everyday problems of society – traffic gridlock, transportation, crime as some examples? (in fact, IDEO has evolved Design Thinking into tackling Big Problems – just look at Open IDEO).
- How can the Big Brands, Big Products, and Big Services reinvent themselves into positively advancing the human condition?

3. Harnessing the Web for Massive Connection, Collaboration, and Change
- As I mentioned earlier – how do we create Platforms for Activation? I can think of no better example than how Iceland recently engaged its citizens to write the constitution.
- How can we use web to either rebuild or create new institutions? Financial institutions, Educational Institutions, Healthcare Institutions, even Governments?

4. A New Kind of Society
- How do we transition a paradigm shift from the traditional economics of GDP into one that measures happiness and prosperity?
- How do we go from unbridled production-consumption-growth into true, sustainable living?
- How do we balance the currents of globalization, localization, and community?

5. Innovating for The Planet
- There’s just no way getting around tackling the Climate Crisis head-on, it’s quite simply the biggest problem that we as a collective species have to contend with.
- In fact, I love what Al Gore writes in his new book/app ‘Our Choice’. In addressing the Climate Crisis, he wants ‘to make the rescue of civilization the central organizing principle of our politics, economics, and action.’

So there. A new personal roadmap, a clearer direction, a manifesto on where I wish Innovation+ will go. Where it will take us, or where we can drive it towards.

One of my all-time favorite quotes is by technologist Alan Kay – “The best way to predict the future is to invent it.” Such wise words in an Age of Massively Complex Problems, an age which needs more and more of us to do Innovation(+).

So I had my car’s compressor (an integral part of a vehicle’s air-conditioning system)  replaced the other month, and it cost me an ouch-worthy twenty thousand-plus pesos.

I for the life of me have absolutely no more use for it. And so I asked around on where I could sell this worn-out piece of machinery. It turns out that the only establishment that will accept it is a junk shop.

And so I canvassed across a few of these junk shops. I then realized that this one-time twenty thousand peso spare part was now going for the princely sum of – uhmmm, five hundred bucks. That’s a full 97.5% percent depreciation of it’s original value!

For all intents and purposes, the compressor can now only be remelted as scrap metal.

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In my innovation class, I share a personal observation on the proliferation of junk shops around the Philippines. It’s a phenomenon you’ll see whether you’re in the city or in rural roadsides.

There are apparently a lot of Filipinos who reap the residual value from trash by transforming it again into raw material. The peculiar thing though is that a junk shop is agnostic on the throwaway product – it can be a laptop, a chair, a compressor, a high-end watch – once melted, they all transform into un-engineered homogeneous steel. This is why the way scrap material is bought is in volume and in weight – the ubiquitous ‘per kilo’. Plastic will fetch X amount per kilo, steel will fetch Y amount per kilo, Rubber is at Z and per kilo, and so on and so forth. And as my personal experience with my compressor shows – the value plummets dramatically with this process.

Now, in the same vein of talking about junk shops, I also share a perspective on how innovation creates more worth as you go through the value chain – the process wherein one goes from

Raw Materials > Product Design and Development > Production > Distribution > Marketing & Sales

In other words, the process whereby inventors, engineers, designers, entrepreneurs – a.k.a. innovators -  take the raw material and layer more value by identifying critical market insights, and then develop and make products and services that people need and are willing to pay for.

Now that’s not as easy as it sounds – there’s a lot of thought and investment that goes into the innovation process. But it’s precisely this line of thinking that begs the question, the choice :

Do we extract, manufacture, or recycle raw materials – OR do we layer on insight, engineering, and design to create a much-more valuable product? It’s a fundamental choice between producing a P500-peso piece of scrap metal or a P20,000-peso compressor.

Put another way : Do we want more junk shops – or more design and production shops?

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For me, the proliferation of junk shops already shows which side of the fence the Philippines is on. It seems that we’re focusing on the low-value side of the spectrum. Even worse, we’re moving backwards through the value chain – we take something valuable and take the easy way out by simply reworking them into scraps. By doing this, we actually end up depreciating and devaluing products!

This now results in a downward spiral because we’re not creating the products and services that people want – and hence we end up having to rely on other people – other countries – to fulfill this gap.

As such, I think that as an individual company, or at a much more macro-national level, we’ve got to seriously consider the following options :

1. Move through the Value Chain

We’ve got an abundance of raw materials – let’s take it through its logical conclusion and move across the value chain – processing, production, packaging, design, and marketing. In the Philippines, a simple example could be  processing of agricultural products into packaged goods. But aside from this, there are more industrial areas that we can certainly enter.

2. Innovate!

Discover, engineer, invent! Countries with much less natural resources than us are sourcing raw materials elsewhere and yet are able to transform these very same materials into higher-value products. There are so many entrepreneurial opportunities out there – so many industries and products that the ever-evolving marketplace is demanding, running the gamut from food to daily needs to technology.

Now, this is actually the stand that InoventDesign is taking.

3. Upcycle!

if we must deal with scraps, then let’s make sure that whenever possible, we create more value and not just regress back to low-value raw materials. There are certainly environmental benefits on recycling; But the truth is that sometimes, the energy and costs used to transform scrap waste into raw materials is more expensive than just extracting new raw materials.

This approach is obviously the one that we are taking with Rags2Riches. Scrap pieces of cloth have become high-end designer bags – thus resulting in high-value impact.

Even in such a simple business as Hapinoy’s Sari-Sari Stores – a business as relatively low-value as junk shops (especially since it’s retail rather then production) – we are also grappling with value creation. Our roadmap is precisely on a long-term trajectory to create new wealth for the communities. (read : watch this space for the next few years)

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It’s certainly my hope that we as Filipinos create world-class products and services. Let’s not be content with mediocrity!

If we really want to build a better future, we’ve got to rethink the fundamental logic of our businesses – are we happy to take leftover scraps, or do we want to create more value?

I recently got an invitation from INSEAD to become an SEiR (Social Entrepreneur in Residence) – essentially interact with MBA students to share my experience as a social entrepreneur. It’s done in-campus, and is in the form of consultations and talks.

Coincidentally, Reese’s Rolex Young Laureates Awarding (woohoo!) was slated in Geneva, and so we were able to request a stopover in Paris so we could drop by the INSEAD Campus. So the good news is that Reese and I were both able to go as SEiRs.

Now, the INSEAD Campus is actually not in Paris but in a beautiful area called Fontainebleau, accessible rather speedily forty minutes away by train.

Now, the experience of taking a train is not something new for me; I’ve previously taken them when I was in the US, and also when my family took a vacation in Europe.

But for some reason or another, on this particular train ride some thoughts struck me.

What I realized – and pardon the simplicity of this insight – is that this efficient transport system facilitated easy, daily flow between Paris and neighboring areas outside the city. It’s fast, and it’s comfortable.

It actually made a daily commute possible – bridging the gap between one’s work and one’s home. In fact, Christine Driscoll of INSEAD is a reverse-commuter – she works in Fontainebleau, yet lives in Paris. What this does is it makes decongestion of urban areas possible – allowing people to live outside the city, yet work in the city (or in Christine’s case, the other way around) – a dichotomy solved by infrastructure.

While looking outside the window during the train ride, I reminisced on my personal experience of driving from Manila to visit our Hapinoy Communities outside the city. I only know of two ways to do that – 1. using one’s personal car, as in my case – or 2. riding buses, which tends to take more time (and if recent news reports of accidents are any indication, becoming slightly more dangerous).

But what if the Philippines had a very good consumer railway system? Trains that make the link between Manila to  the South or the North easy? It would certainly make access to jobs in Manila easier, and possibly stem the rural-urban migration flow  – which leads to high urban density, squatters, and eventually poverty. (To be quite honest, i’ve factored out the carbon footprint of this daily flow in my thought process).

I know that there have been plans to put up a train system, but to date they are still just that – plans. Most of the recent investments has gone into highway infrastructure – and indeed we’ve seen marked increase in travel speed (and a corresponding increase in toll rates). But what it has essentially done is decongest traffic on the expressways – an issue trains really wouldn’t have to deal with.

So why don’t we have trains?

Maybe it’s politics, or political will. Maybe nobody has just risen up to the opportunity. Or maybe there are engineering challenges.

As I was thinking about it, perhaps it’s also at heart an economic issue. And this is really what struck me.

Quite simply, taking the trains is expensive. Paris to Fontainebleau already cost almost 10 Euro – PHP600 – per head, one way! So assuming we could perfectly transplant the cost structure to Manila – that means commuters would have to spend PHP1,200 just on daily transportation!

I’m feeling a bit nerdy right now, so let’s factor in a cost-of-living and currency adjustment with an ummmm, a McDonald’s Cheeseburger Meal Index; A cheeseburger meal in France is roughly 300% more expensive than in the Philippines. So, doing the math, that means the daily train commute could be around P400 (1/3 of PHP1,200).

The brutal truth is that PHP400 is around the minimum wage in Manila. So for the trains to make economic, sustainable sense, people should be willing to spend their entire salary on getting back and forth, something that is obviously not going to happen.

It’s just not affordable.

In fact, a couple of months ago there were news reports that the in-city metro trains are being dramatically subsidized by the government. It is actually costing the government millions (if not billions) of pesos in losses just to be affordable by daily commuters.

I don’t think the solution is in subsidy.

The root insight that I’m really getting at here is that we need Filipinos to get higher salaries. And people will only get higher salaries if they do work that has higher value.

Again, very simple thoughts.

But that IS precisely what we need.

We need better jobs that simply pay better. We need to build up our skills. We need to work ourselves up the value chain.

Now, I’m obviously not wearing my perspective as a social entrepreneur working with the poor with my thoughts here – that is an entirely different model driven by extreme affordability and livelihood creation. And I’ve certainly shared a lot of my thoughts on that already.

What I am certainly talking about is a burgeoning Filipino middle-class, also a concrete driver of growth and development for the country.

What are the industries of the future? What are the valuable jobs that will be created by them? And how do we build our human capital to precisely take advantage of these opportunities?

Interesting questions driven by a simple train ride; Certainly one that I’ll be seeking answers to in the coming years.

i wish this was for Social Enterprise of the Year – to recognize the HaPeeps, CARD, and of course all the Hapinoy Storeowners

Paolo Benigno Aquino IV
Mark Joaquin Ruiz
President/Managing Director
MicroVentures, Inc.

“Two roads diverged in a wood, and I — I took the one less traveled by, And that has made all the difference.” These often-quoted lines by poet Robert Frost aptly describe the journey of school friends Paolo Benigno “Bam” Aquino IV and Mark Joaquin Ruiz. Years later, their minds would meet and together would embark courageously on the road not taken. They would co-create a revolutionary microenterprise business model to address the economic and social inequity for those marginalized by the status quo — the more than 50% of the total Filipino population who lives on less than $2 a day.

They had gone on different career tracks after graduating with Management Engineering degrees from the Ateneo de Manila. After college, Mr. Aquino established himself in the public service sector, while Mr. Ruiz ventured into the corporate world.

“I always considered myself a social entrepreneur,” Mr. Aquino says, “because I was driven by a strong public service perspective.” As a fresh graduate, he joined the ABS-CBN Foundation’s Special Projects Group and was involved in a rehabilitation center for abused and neglected children, disaster management projects, relief operations and volunteer recruitment. He then spearheaded the National Youth Commission as its commissioner-at-large in 2001 before becoming its chairman and CEO in 2003. “In government, I witnessed programs that had short-term gains but no long-term effects for the people it served. That influenced me to think of something that could make a lasting, transforming difference for Filipinos.”

Mr. Ruiz, on the other hand, joined global company Unilever as customer development executive and merchandising supervisor. There he honed his skills in customer marketing, promotions development and planning. In just six years, he rose to the position of senior customer marketing manager and CMD head. Mr. Ruiz says, “Unlike Bam, I only considered myself an entrepreneur when I resigned from Unilever to collaborate with him. But being in sales and marketing, I always pushed for social development through innovation and entrepreneurship — the intersection of my passions and skills.”

Mr. Ruiz’s experience in marketing fast-moving consumer goods led to the idea of leveraging on the Filipino sari-sari or convenience stores, usually found in lower-income communities, that make up around 40% of total retail sales in the country. Seeing both the problems and the potentials of the sector, they theorized that for the stores to grow and be truly viable, they needed to enter a new phase of microentrepreneurship development.

After exchanging ideas on innovative microfinance development with like-minded individuals — among them Dr. Jaime Aristotle Alip, founder of the Center for Agriculture and Rural Development-Mutually Reinforcing Institutions (CARD-MRI) and with whom they would eventually tie up — Mr. Aquino and Mr. Ruiz concretized their plans and developed a business plan for aggregating microretail outlets, which led to MicroVentures, Inc. (MVI)

MVI started its formal operations in 2007 as a social business enterprise working with CARD-MRI and its borrowers through its flagship project, the “Hapinoy Store Program.” A combination of the words “happy” and “Pinoy,” Hapinoy aims to “make every Filipino happy” by using an ecosystem management approach to improve local microenterprises. Through the program, a borrower who has top credit scores can borrow capital to convert an existing convenience store into a small Hapinoy Store or a larger Hapinoy Community Store, which serves over 50 small stores.

Recognizing that sari-sari stores are usually owned and run by the woman of the household (the mother or nanay), the Hapinoy Program focuses on increasing these Nanays’ profitability. Nanays are given access to business management and marketing knowledge through the “Path to Prosperity,” a four-tiered program designed to assist a fledgling Hapinoy store. Mr. Ruiz says, “We believe that empowering the woman microentrepreneur is a pivotal factor in reducing poverty. Increasing her profitability leads to an improved quality of life for her family and her community as well.”

The Hapinoy Program harnesses the potential of smaller enterprises through microfinancing, aggregation, value chain integration, business model innovation, branding and training. By linking Hapinoy Stores with established manufacturers and microproducers, MVI brings sari-sari stores into an organized supply chain. Moreover, MVI is able to get goods directly and at a lower cost and is able to pass these savings on to Hapinoy Stores. “Our partner companies do very well on their own, but they also see the intrinsic value in helping the community,” Mr. Aquino says.

As marketing and branding consultant, merchandise consolidator and training provider, MVI teaches each Nanay to make her own business more resilient, profitable and sustainable. Through a training program named Sariskwela, members are equipped with best practices on pricing, inventory and credit management, business expansion and goal setting. Veering away from the traditional patronage relationship between an organization and its beneficiary, Hapinoy empowers each Nanay to be a proactive manager accountable for her own business decisions. While the program teaches each Nanay ways to increase her monthly earnings from P3,000 to P18,000 within six to eight months, MVI’s ultimate goal is to improve her entrepreneurial ability and, consequently, her family’s livelihood, self-esteem and dignity.

In this respect, the Hapinoy Program is different from similar microfinancing or social enterprise models in Mexico or India, where the main focus is on raising funds for the organization’s goals. Village stores in Southeast Asia exist but are not consolidated systematically. Mr. Ruiz mentions that international microfinancing organization Grameen Foundation has singled out Hapinoy’s uniqueness — while social in nature, it is run like a real business.

“We envisioned Hapinoy as a flexible and wide-ranging platform, giving us more areas of application such as retail, production, mobile banking, technology and healthcare,” Mr. Aquino adds. In fact, a grant from the Science and Technology Innovations for the Base of the Pyramid in Southeast Asia has enabled MVI to pilot its Hapinoy Health Hub, which makes affordable medicine available in Hapinoy communities.

Currently, there are 150 Hapinoy Communities of around 10,000 stores concentrated in Southern Luzon. MVI hopes to expand operations in North Luzon by next year and, eventually, establish a Hapinoy presence in every town in the country. Groups in other countries have also expressed interest in replicating the program, and both Mr. Aquino and Mr. Ruiz foresee international expansion.

Mr. Ruiz acknowledges, however, that the present business environment is not quite ready for large-scale social enterprises; for example, there is not much “patient” (long-term) capital source available given the developmental aspect, and for-profit organizations cannot accept donations without being taxed. Mr. Aquino sees this as an opportunity for advocacy, saying that, “It’s time more people push for social entrepreneurship. As donations for non-government organizations get scarcer, social enterprises need to take the lead.” Both believe that in the long term, they can help microenterprises integrate into the formal economy and create a system of entrepreneurs helping other entrepreneurs. They dream of changing the world, one happy Pinoy at a time — it is the road they have taken.

The Entrepreneur Of The Year Philippines 2010 is sponsored by SAP Philippines. Official airline is KLM Royal Dutch Airlines, operating on behalf of the Air-France KLM Group in the Philippines. Media sponsors are BusinessWorld and the ABS-CBN News Channel. The winners of the Entrepreneur Of The Year Philippines 2010 will be announced on October 12, 2010 at an awards banquet at the Makati Shangri-La Hotel.

In case you’re interested in the topic “competing against the giants”, Entrepreneur is hosting a networking tonight at A.Venue. Will be sharing experiences as an entrepreneur along with three other distinguished entrepreneurs. See you!

I’ve previously asked the question, where will the next generation of Social Entrepreneurs come from?

I think there are three sources -

1. fresh graduates from other disciplines (as there isn’t a formal social enterprise degree yet),
2. NGO practitioners who’ll deepen their business skills, and
3. corporate executives/entrepreneurs who’ll be making the leap).

I personally came from Bucket #3 and know a few who are in #2. But it’s the pool from Bucket #1 which excites me.

Their lack of work experience can be viewed as a potential weakness, but it’s also most certainly a source of strength. They’re not burdened by years of experience and dominant logic residing in their heads. They’ve got a deep wellspring of “intelligent naivete’” to see problems with entirely fresh eyes. And this approach leads to exciting new ideas for new solutions.

Now, I’m not saying they’ve got the operating models exactly down pat – in fact, this is where the experience factor will certainly play a role. But the audacity to see things from an entirely new perspective, to come up with new solutions is a most excellent starting point.

If anything, social entrepreneurship is about change. And change comes hardest to people who are deeply-entrenched in the way things are done. It will come easiest from new entrants, from new people who can easily challenge the status quo. This is precisely the Bucket #1 people who are asking ‘Why Not?’

Enter British Council Philippines’ ‘I Am a Changemaker’ – essentially, a social entrepreneurship competition.

I was invited to be a judge for their finals last July 31 at the Ateneo, and I must say that I’m highly encouraged by these idealistic and youthful changemakers who are already actively thinking about social enterprises.

From the official literature :

British Council – I Am a Changemaker operates like a business plan competition, awarding seed capital directly to the best social enterprise idea that best meets our criteria. It provides a vehicle for taking innovations from idea to reality, and is a real-world exercise for improving young people’s skills in 1. Starting a social enterprise, 2. Pitching ideas to possible investors (in terms of viability and scalability), and 3. Building networks (getting people to work together) Participants are challenged to unleash their ideas, energy and idealism to affect positive social change in our society. The only limit to the range of projects eligible for the award is dependent on their ambition and imagination.

In fact, as a judge, I was asked to “score” the entries along the following dimensions : overall concept, community impact, sustainability, risk assessment and market analysis, and management team. It’s a criteria that looks at the juggling act of social development and business modeling.

I was pleasantly surprised with the entries. I think there’s still a huge upside to further fine-tune most of them, but all-in-all I appreciate the fact that social entrepreneurship is being considered by these changemakers as a viable option.

The models were coalescing around certain themes – aggregation, community development, direct linkages/market access, capacity-building through livelihood development, working with the marginalized.

There are certainly more models of social enterprises out there, and I would certainly appreciate more diversity and originality from the entries – we really need more radical thinking for the “wicked problems” that plague society. But as I said, this is already an extremely encouraging beginning. I really believe it will create a very powerful snowball effect.

And on this point, congratulations to the British Council for really investing their time, focus, and resources on this extremely worthwhile project! (special mention to Jen Domingo and Ana Tan :p). It’s really setting young changemakers along the right path.

And to all those aspirants – just keep on pushing. This line of work is certainly not easy, trust me. But if a social problem absolutely consumes you, then nothing will get in your way.

Aside from the business planning skills gained in this competition, I’d just like to emphasize again the ‘soft side’ of social entrepreneurship - integrity, sincerity, and execution as key currency.

Good luck!!

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here are some highlights, in pictures and videos :

There were several finalists coming from all regions. In fact, the entrants were clustered into NCR, Luzon, Visayas, and Mindanao.

Here are some of the entries :

OrganiKa – Organika is a social business accelerator and resource innovator committed to grow and dignify Agri-Business Communities (ABCs) by providing marketing and distribution services through collaboration with institutions and experts across industry sectors. The enterprise was borne as a response to the market gap between local producers who are not able to reach the market and consumers who have limited access to comfortably-priced quality food products. As an entry strategy, Organika will market agricultural products such as coco sugar to institutional buyers including company pantries and food service establishments.

Hinabi – the premise is to use and promote various Philippine weaves in new, innovative and everyday products that cater to a target market that would not normally consider these products as an option for daily use. By creating weaeable products that feature those weaves, we would not only be promoting them, but also continuing a “dying” tradition and ultimately restores dignity to the weavers themselves.

HapiKaw Organics serves to unite and empower small-scale farmers by providing strategic marketing services to selected Dairy Federations in Mindanao with a production ethos based on organic farming technology. The short-term objectives are modest but the long-term goal is to become a world-class organic dairy industry that will address food security in Mindanao and eventually fair-trade export.

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Before the winners were announced, Fr. Ben Nebres, President of the Ateneo University gave the welcoming remarks. He talked on how Ateneo has been actively pursuing and supporting the social entrepreneurship movement as they believe it’s really the new model of social development :

And now, on to the Winners …

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NCR WINNER : THE GOOD FOOD COMPANY

The Good Food Company - The project aims to reconnect people back to the land by making them stakeholders by making them stakeholders in the work of farmers in organic production. Stakeholders also commit to purchase a fixed amount for a set period of time. The endeavor will also be a platform to educate the general public on the values of eating organic, the farmers’ plight, and other relevant matters.

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LUZON WINNER : ISLA CULION SOUVENIRS

Isla Culion Souvenirs – The increasing tourism activity in Culion Island and its neighbouring areas inspired the need to set up a model souvenir shop aimed at earning money not for profit but also for service to all stakeholders. It will not just cater to the market demand, but will promote the welfare of the Tagbanuas (indigenous people living in the Calamianes Group of Islands) and promote the responsible use of our natural resources.

VISAYAS WINNER : TEAM 3G (GO FOR GUSO)

Gasa sa Guso (Gifts from Seaweed) – proposes to address problems in education, employment and livelihood in Pangan-an Island by establishing a youth cooperative engaged in guso (seaweed) farming. Trainins in guso farming and entrepreneurship for high school students in Pangan-an Island, Cebu pave the way to managing the cooperative and the guso farm. Expansion in building a multi-purpose store, extending credit, and diversifying livelihood means through guso processing are also foreseen as strategies to improve living standards among families in the island.

MINDANAO WINNER : ENTREPRENEURS RESPONDING THROUGH SOCIAL SERVICES

Entrepreneurs Responding through Social Services (ERSS) – Bag Tarpreneurs wanted to address two of the major problems of society today – Pollution and Poverty. Bags made out of recycled tarpaulins by the unemployed women of Balulang, Cagayan de Oro is the focus of this social enterprise. Recycling one of the major waste materials found in most cities into useful and beautiful bags will help minimize waste and at the same time, provide sustainable employment and income to the women of Balulang.

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Here’s a group picture with all the winners :

Congrats to these new Changemakers, as they each won P100,000!

Gasa sa Guso also got another P100,000 as a special prize from Starbucks’ Shared Planet Special Prize. Personally, I really think that group nailed the social business model – although I did have some strong feedback on the financial model and their profit distribution (even after the panel discussion, I chatted with them to emphasize my point – couldn’t help it, such a promising group especially with some further tweaking) :p

HM Ambassador Stephen Lillie gave the closing remarks, and shares the UK’s deep experience on Social Entrepreneurship, and his belief that it can also have a strong impact in the Philippines.

Picture of the Panel of Judges with Ambassador Lillie and Fr. Ben

Some time back, Pam Imperial got in touch through the Life’s Direction’s Community (thanks AJ!) about making a special episode of Channel [V]‘s V-Life on Social Entrepreneurs, featuring myself and Reese

Little did we know that it would really be a rather lengthy episode! (Well, the upside is I think we’ll just show this as our wedding AVP on December – just kidding, Reese! :p)

Wedding jokes aside, we gladly agreed to do it because we continuously want to advocate that social entrepreneurship can indeed be a career choice. It’s certainly not a short-term thing or project, it’s a whole life’s choice and path. And yes, it is indeed viable.

Anyway, here’s the episode which first aired on May 18 -

Part 1 :

Part 2 :

Part 3 :

Part 4 :

I had an interview the other day, and I received a blindingly simple question. It was so simple yet so incisive that I wondered why I wasn’t asked that question before.

The question was, “At what point in life did you realize that you were an entrepreneur?”

I really wish I had a great childhood story to tell. That I had odd jobs like a lemonade – or Filipino-style, Buko Juice – stand or selling at bazaars. But the truth is I didn’t.

In fact, I’ve often stated my caveat about my entrepreneurial pedigree. My Ma was a successful corporate executive who worked in one company her entire life; My Pa, on the other hand, is a brilliant civil engineer who is more immersed in computations i cannot fathom rather the inner workings of business.

And since I thought that ‘the apple never falls from the tree’, I never really considered the entrepreneurial path as a personal career – and my previous life choices accentuated this point.

I took up a business degree in Ateneo de Manila, and eventually became a corporate guy in a leading multinational. It was the only road on my horizon, and I walked on that road for seven years.

Until I realized – and decided – that it wasn’t for me.

And so I made a go for it, and resigned.

Having said all this so far, I guess I can’t be blamed if I had doubts – especially before taking the leap of faith into this wild and crazy world of entrepreneurship – if I had that entrepreneurial DNA in me. To be honest, the uncertainty of actually making it hung over my head like the Sword of Damocles. I half-expected my head to be cut off in those early months.

But this I guess points to answering the blindingly simple question.

The moment i realized that I was an entrepreneur was when – despite my (lack of) entrepreneurial pedigree, despite my corporate background, despite the comfort and stability of my cushy job – I decided to still make the leap. That I went All In.

I’ve heard it said – reworded loosely – that an entrepreneur is somebody who risks everything in order to capitalize on huge opportunities, without regard for resources currently at hand.

And if so – then at that precise moment that I decided to risk everything because I was consumed by chasing quixotic-ally big opportunities, that I decided that the biggest risk is not to risk at all – that is the moment when I became an entrepreneur.

Now, how about you? At what point in your life did you realize that you were an entrepreneur?

Beyond the usual Competency 101 Profiles – visionary, entrepreneurial, business-minded, collaborative, empathic, empowering – I’ve reflected on (3) less popular characteristics that I wanted to highlight. I picked these (3) values as I consider them ‘currency’ in making one more effective, especially in working with people.

For me, these (3) are : Integrity, Sincerity, and the Ability to Execute – values that I continue to aspire for, and hope to one day realize.

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1. Integrity

Integrity is the default absolute must-have. After all, it is the cornerstone of being a social entrepreneur.

For me, the seed of integrity starts with the fact that you’re doing this for the right reasons; You have to be fueled by the right intentions.

It shouldn’t be about the money (although self-sustainability is undeniably important), your ego, or the warm fuzzy feeling one gets from “doing good”. My personal opinion is that you should be passionate about solving social problems, and obsessed about living a life of service.

Furthermore, integrity is about uncompromisingly doing the right thing. This can take the form of having core principles that you will adhere to, even when the going gets tough. In Hapinoy, for example, whenever we are faced with difficult decisions, we simplify it to one simple question : “What’s Good For Nanay (the Hapinoy Store Owner)?”. This ultimately sways the decision that we take.

When people know that you have integrity, they will trust you, collaborate with you, support you, do business with you. So you really have to guard this with your life. And the secret is simple : just live a life of integrity (I absolutely know that this is easier said that done!).

There are no techniques to gain integrity and build reputation, one must simply try as hard as s/he can to stay true to it. The easiest way to not have any skeletons in your closet that will explode in your face – is to not have any skeletons in the first place.

2. Sincerity

As a social entrepreneur, you’ll most likely be working with marginalized sectors/communities, tackling a palpable social problem – whether this be on livelihood, healthcare, education, poverty, inequality, access to energy, etcetera.

Now, take note that the people you will be serving and/or partnering with could have already been “betrayed” by over-promising politicians, or “let down” by good-intentioned, yet unsustainable organizations who came and then went away. In any case, earning the community’s trust – that you are here for the long-haul – is an important first step, and the smell of sincerity is a key that opens up communication and dialogue. (And trust me when I say that without the community’s trust, you will not be able to accomplish anything.)

Trust is not something easily given, and as such it must and will be earned through time. In Rags2Riches, it took over a year for things to really mature such that the Cooperative formation became a welcome development and shared goal. And although the program became more robust, I’d like to believe that it is the Community’s belief in the sincerity and integrity of the R2R team that made this social enterprise truly work.

3. Ability to Execute

Most Social Enterprises – especially if they are veritable game-changers – will start as a vision of what could be, and not what is. Now, while this is certainly inspiring, it also lends itself to the term, “Drawing lang ‘yan” – which means to say that it is still only a concept drawing on paper. In other words, it’s a skeptic’s perspective – it hasn’t happened until it has happened. In fact, you can be the most kind-hearted person in the world, but until you fulfill the vision you’re painting  – even gradually – you will be less effective in the eyes of your partners.

A former boss of mine taught me a valuable lesson : the best argument against your critics will always be results. After all, results will always speak for themselves. This holds true as well for social entrepreneurship.

The Ability to Execute and make the vision gradually real is sacrosanct. It not only fuels credibility, but it also spurs a bandwagon effect that increases momentum and growth.

In my view, Hapinoy still has a long way to go in realizing the true potential of the program, especially as we see it in our heads. But we continue to execute, iterate, execute, iterate – and gradually build on the unfolding results. It’s admittedly a continuing uphill battle, but one that we’re absolutely committed to getting to eventually.

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The reason I call the above (3) as ‘currency’ is this – a large chunk of a social entrepreneur’s time is invested in working with people.

And one particular nuance in a social entrep’s lifestyle – is that we do not strictly transact as other people do. For example, a normal business would be focused on finding suppliers and workers, pay them to do a job – and on the other side, sell to a customer, and gain cash from the exchange. In this model, money is the main currency.

The social entrepreneur, on the other hand, will also transact with money, yes – but will go and build deeper relationships. And at this level, it’s really intangible currency that can spell the difference.

In Hapinoy, we don’t hire and pay microentrepreneurs as labor; We work with them in order to co-build their business; In Rags2Riches, we don’t just sell bags, we sell the broader advocacy of eco-ethical style.

Money definitely speaks – but in social entrepreneurship, so do Integrity, Sincerity, and Execution.