Diana Jue-Rajasingh

When Stuff You Do Makes a Difference …

Posted in Essmart, India by Diana on June 16, 2016

… even when you didn’t really expect it to. I’ve been learning that empowerment — “the process of enhancing the capacity of individuals or groups to make choices and to transform those choices into desired actions and outcomes” (according to the World Bank definition) — is a powerful thing.

Lunch with these businesswomen in Pollachi.

Lunch with these businesswomen in Pollachi.

I’m writing this from Pollachi, a town of about 100,000 people that is located about 1.5 hours south of Coimbatore in Tamil Nadu, India. The surroundings are beautiful; they’re green and lush, with coconut trees sprouting out of every barren piece of land. Pollachi is the home of Essmart’s first Distribution Center.

I’m here this week because I had to follow up with some women whom we trained three months ago. The training was based on the United Nation Foundation’s Global Alliance for Clean Cookstove’s Women’s Empowerment Fund’s Empowered Entrepreneur Training Handbook (that’s quite the mouthful), and it was funded by the same organization. Our goal was to encourage higher levels of women’s participation in business — namely, the women who worked in Essmart’s stores. We encouraged women’s participation in retail stores by first training the men on business skills while emphasizing the contributions that women can make. Then, we trained the women on business skills while emphasizing their own capabilities.

At least, that’s what we had planned to do. We managed to run two training sessions, one for men and one for women, but our attendance numbers were low. The multiple-day workshop setup wasn’t conducive to the busy lives of shopkeepers, so participants floated in and out of the sessions. All but one of the women worked on businesses outside of Essmart’s stores; technically, they weren’t our target audience. But we worked with what we had.

I didn’t expect that a three-day training session would make much of an impact on either the men or the women. I was more or less correct about the lack of concrete impact on the men — I think that their biggest takeaway was that it is critical to, well, speak to customers nicely (which I thought was obvious?). But the women — they surprised me. There was the young Muslim woman who broke out of her shell through this single training workshop. The sales of her door-to-door nightgown selling business increased by 50 percent, after she became more comfortable talking to potential new customers. Her utilization of technology — namely, WhatsApp groups — made a huge difference in reducing her gasoline prices, since she no longer had to show her designs door-to-door via scooter. The WhatsApp group also helped her gauge customer demand so that she wouldn’t waste money on inventory that no one buys. She now takes pre-orders based on responses from her WhatsApp group. Additionally, her WhatsApp group has eased tensions with her family, who were previously discouraging her business because it required her to drive around town alone. Her family members are now quite supportive of her. Way to go, sister!

Another woman works at her family’s motorbike financing business. After the training session that Essmart held, she went back to analyze her costs. She realized that the business was spending far too much money outsourcing repairs to a third-party workshop. They were paying Rs 700 per day for just the labor to fix broken motorbikes. This woman realized that she could spend Rs 7,000 per month on a mechanic who could fix many motorbikes. She ended up starting up a new motorbike servicing center that falls under the umbrella of the family’s motorbike financing business. She has three male employees who service 10 to 20 motorbikes per day. This new servicing business is earning more profits than the company’s core financing business.

A businesswoman with great ideas strikes a pose with her employees.

A businesswoman with great ideas strikes a pose with her employees.

Empowerment is powerful. Being told that you have something to offer — and then truly believing it — unleashes so much potential. Limiting beliefs are destructive, and our training workshops helped participants unearth the limiting beliefs they have of each other (mostly in the sense that men believe that women are limited in, for example, their ability to learn new technology) and limiting beliefs they have of themselves, which both women and men suffer from. Of course, there are much larger, societal issues at play here, and training workshops that emphasize gender equality are small steps. However, something good is happening through them, even if it’s in the lives of two people and their families.

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What Keeps the Poor from Adopting New Technology? A Response.

Posted in Essmart by Diana on May 26, 2016

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Actually, I really don’t like the use of the term “the poor,” since it’s quite demeaning. But that’s the title of the article that I’m responding to today — an article published on Yale School of Management’s Insights in March this year.

By discussing with three different practitioners, Professor Mushfiq Mobarak came up with three different obstacles that prevent low-income customers from adopting (or, really, purchasing) new technologies. These are information failure, cost, and risk aversion.

Of course, these are true, but I find the categorization to be a bit, well, heavy-handed.

Information-failure is definitely an obstacle; customers don’t know about offerings because they’re all innovative and new to their geographies, and sellers don’t know what customers need. That bi-directional flow is required to figure out what products people demand and at what cost.

Cost is a loaded term, and I think that, more than the cost of the product being the obstacle, it’s more about both affordability. Financing is mostly required for most durable purchases, which are investments. C.K. Prahalad noted that products like shampoo can be put into small packets and sold on the cheap to customers whose cash flows are limited. However, this process doesn’t work for a solar lantern, since no one wants to buy a piece of a solar lantern. Financing or purchasing on credit in some markets is difficult to manage, with the lack of cashless payments in rural areas.

Then, there’s the notion of value. Through my experiences with Essmart, I’ve found that customers who purchase Essmart’s offerings don’t just value the product but also the after-sales service that Essmart provides, the reputation of Essmart and the company that makes the product, and the societal signals that the product give off after its purchase. Customers in low-income markets are of course not homogenous; some will self-identify as willing to pay more for products of higher quality and a seller they can trust. Honestly, sometimes I wonder if we’re catering to a niche market of emerging market customers who value these ideas.

Finally, there’s risk-aversion. From my experiences, I wouldn’t call low-income customers “risk-averse.” They’re just being rational, especially when the offering is new to them and they have to choose where to invest their limited incomes. Additionally, you have to keep the customer’s past experiences in mind — there are many fly-by-night sellers who take advantage of low-income customers, dumping cheap, low-quality products into an area and leaving within a month, before those products break and cause customer complaints. There’s no customer protection in rural areas, and the mentality is more “buyer-beware”. No one looks out for the little man, and a seller’s foreignness can be more of a turn-off than an appeal.

I sometimes think about the market for solar lanterns like the market for “lemons” — you know, the used care market. There are good solar lanterns and there are bad solar lanterns. Customers can’t tell which one is which just by looking at the product, and sellers are all going to say that the lanterns are good. Customers won’t risk paying more for a “peach” solar lantern if he thinks there’s a possibility of it being a lemon solar lantern, and sellers won’t go down on price for peach solar lanterns, so the market for peach solar lanterns is actually really small. (At least, this is how I explain Essmart’s bad months.)

Getting a customer to believe that you have a peach solar lantern involves what I wrote about earlier: signaling to customers that, beyond the product itself, you as a seller are trustworthy and reliable. You’re a used car salesperson who has repeat customers because they didn’t get screwed over on their first purchase. You’re here for the long-run! You have a local presence, you won’t run when angry customers run after you, and you’re kind of guaranteeing your sale with your reputation. You’re increasing the value of your offering so that customers can make that rational decision to buy the product (and your promise to them).

So, information-failure is a real obstacle, but practitioners need to consider affordability and value over cost. Cheaper/lower-cost obviously isn’t always better. Also, customers aren’t risk-averse as much as they’re being smart, so sellers need to demonstrate that they understand customers’ needs and provide that guarantee.

Risk-Taking and the Entrepreneur

Posted in Essmart, India, Reading, Social Entrepreneurship, Start Up by Diana on May 25, 2016

At the end of my and Jackie’s Echoing Green New Fellows Retreat, all of us newly minted Fellows received gray shirts with large white boxes across the chest. Below the white box were the words “matters most.” We were then given permanent markers and were asked to pick a word (or words) to write into the box. _________ matters most.

What to write in the blank was difficult for me to decide upon, but ultimately, I wrote “relationships.” I even wrote it with the “s” at the end, despite the fact that I was knowingly being grammatically incorrect. Now, Jackie first wrote “people,” but after our group photo, she felt uncomfortable with her chosen word and fetched a new shirt. Then she wrote, in big, bold letters, “RISK.”

2013egfellowsEchoing Green Fellows, Class of 2013. Jackie and I are standing on the right.

Risk. You know, despite the fact that it looks like I’ve taken risky decisions throughout my life (taking time off school, pursuing a start-up, moving to India), I never felt like I was a risk-taker. I’m pretty run-of-the-mill, to be honest. And every decision I’ve made has been … calculated. To me, the potential payoffs of starting up in South India were always greater than the potential payoffs of not (not necessarily financially, but definitely otherwise). I’ve never felt like I’ve actually “sacrificed” to do anything I’ve done. My faith plays a role in this, too; I go where I believe I’m called, which is the least risky thing to do in the grand scheme of things.

It’s popular thinking to stereotype entrepreneurs and pioneers as avid fans of risk — you know, the guy or girl who likes to live on the edge, never knowing exactly what tomorrow will bring. But from my own experiences, I don’t really think that most entrepreneur are like this. In my recent read of Adam Grant’s Originals, he doesn’t seem to think so either. Here, he’s writing about an investment opportunity into Warby Parker (the online glasses retailer) that he actually turned down because the company’s founders decided to keep their day jobs while starting up:

When I compared the choices of the Warby Parker team to my mental model of the choices of successful entrepreneurs, they didn’t match. Neil and his colleagues lacked the guts to go in with their guns blazing, which led me to question their conviction and commitment. They weren’t serious about becoming successful entrepreneurs: They didn’t have enough skin in the game. In my mind, they were destined to fail because they played it safe instead of betting the farm. But in fact this is exactly why they succeed.

I want to debunk the myth that originality requires extreme risk taking and persuade you that originals are actually far more ordinary than we realize. In every domain, from business and politics to science and art, the people who move the world forward with original ideas are rarely paragons of conviction and commitment. As they question traditions and challenge the status quo, they may appear bold and self-assured on the surface. But when you peel back the layers, the truth is that they, too, grapple with fear, ambivalence, and self-doubt. We view them as self-starters, but their efforts are often fueled and sometimes forced by others. And as much as they seem to crave risk, they really prefer to avoid it.

– Adam Grant, Originals: How Non-Conformists Move the World

Grant continues to write that creative people and successful entrepreneurs essentially manage a balanced risk portfolio. That ability to create something new can only come from a place of security. As Grant points out, Pierre Omidyar started eBay on the side while he was a computer programmer, and he didn’t leave his job until the online business was netting him more money than his then-current job. Bill Gates waited a year to drop out of Harvard, even though he had sold his software by that point. He just took a year off to test out the waters. And those Warby Parker founders were well aware that they didn’t want to put all of their eggs into one basket before knowing if the startup was actually going to work. Entrepreneurs aren’t risk maximizers are much as they are risk mitigators. By the time they decide to go full-time into their businesses, it feels much less like a leap of faith and much more like a calculated decision.

Likewise, if I had racked up large amounts of student loan debt, then by no means would I want to be an entrepreneur. But since I was debt-free, I was free to try something different without fear of digging myself into a hole. Additionally, I had a Fulbright at the time to help support my time in India (and to give me another practical reason to be there), and an Echoing Green fellowship the following year buoyed my income so that I could stay.

I’m thankful that someone has recognized that risk aversion and risk mitigation aren’t dirty words for entrepreneurs and leaders. The heroism that exists in entrepreneurship (and especially social entrepreneurship, since sometimes outsiders see social entrepreneurs as sacrificing a lot for little returns) is truly unfounded.

The Countdown

Posted in Essmart, Faith, India, Personal by Diana on May 23, 2016

After nearly four years of living and working in India, I’ll be heading back to the US (along with my husband) to start a new chapter as a PhD student at the University of Michigan Ross School of Business. Although I’ve been living the social enterprise start-up life, it has honestly been taking a toll. I have a lot to unpack from my experiences on the ground, but I require the space to do this in an analytical and unbiased way. Being an entrepreneur provides very little space to question the work that we do (because I’m perpetually projecting “We are awesome, give us money!”), but my research-oriented mind tends to be more critical. Of course, I still believe in Essmart’s mission and its operations, and I’ll still be involved to some degree and through research, but I need the renewed perspective and refreshment of taking a step back.

My husband and I have about two more months left in Bangalore. I’m already starting the countdown to our departure. One of my Echoing Green chaplains said that instead of sprinting to the finish line, I should consider taking a “cool down” instead. Honestly, that term just justifies what I’ve been feeling already. By the time I leave, all of my responsibilities have to be handed off to other people, and I should effectively be doing nothing.

Additionally, the chaplain mentioned that I should be intentional about honoring the years that I’ve spent here, which have been life-changing for me. The Lord has been incredibly faithful, providing an excellent home-away-from-home through a new family (through my husband and his), a church family, and my Essmart family. I’ve learned a ridiculous amount — how to lead in a style that suits me in professional and faith/church-related settings, how to open my life and home to more people in a way that’s sustainable, how to think more about business, how to cook a number of foods from scratch, and so much more. There is so much to honor, and there are so many people to honor. I cannot easily leave this place, and for this I am thankful.

How to Change the World with Technology

Posted in Essmart by Diana on November 29, 2013

A note from Diana: Although this is my Fulbright blog, it receives many hits from people who are interested in my work with Essmart. As is such, this is a blog post about my motivations for Essmart: the huge social injustice it addresses, my research and lessons from the field, and how far the social enterprise has come. Enjoy.


 

When I was an undergraduate student at MIT, I thought that technology would change the world. My friends talked incessantly about their latest research and design projects. One upperclassmen friend designed assistive learning devices for people with disabilities. Another friend was a material scientist who was printing solar cells on paper, thus addressing the worldwide energy crisis.

I found my home in the social sciences, and my primary interest was international community economic development. Given that I was at an engineering school, my particular niche grew around technologies that were designed to improve the lives of people living in low income, rural areas around the world.

To nurture my interest, I participated in MIT’s D-Lab, which is a group of classes geared toward engineering students who wanted to apply their skills to global problems. D-Lab produced a number of inventions with societal impact, including a bicycle-powered mobile phone charger and a solar cooker. What was unique about these inventions was that they were designed with the end user. Thus, the technology was easy to understand, use, and repair, affordable, and appropriate for local conditions.

At the time, I guess you could say that I optimistically “drank the Kool-Aid.” I believed so much in the potential of these inventions to change the world.

But then I spent time in rural China and India to learn about how these technologies were being used. I discovered that, on the whole, they weren’t. I never once stumbled upon anyone using one of these inventions. Few people knew that these technologies existed. Even if they did, they didn’t know where to get them. And if someone received a product from a nongovernmental organization, she didn’t know what to do when the product broke.

For example, when I was in a Tibetan village, I learned that most people didn’t know about the solar cookers that were being offered by a small community-based organization. One household that owned a solar cooker was scared to use it, since the solar cooker accidentally set fire to someone’s clothes. In southern India, I saw a pile of smoke-reducing biomass cooking stoves locked in a storeroom, gathering dust. The organizing distributing the stoves hadn’t hit on the correct strategies to commercialize them.

combined photos

Left: A solar cooker in western China. Few families knew about their existence, and many families were afraid of them. Right: Smoke-reducing biomass cooking stoves sitting in a warehouse in southern India. Photo Credit: Diana Jue, 2009 and 2010

From these experiences, I saw that despite the efforts put forth by well-meaning engineers, life-improving technologies weren’t having the impact that they were intended to have. This is because there was no local ecosystem for the education/marketing, distribution, and after-sales service.

In these areas of the world, there isn’t just a technology divide. There’s a huge global supply chain problem. People in low income or rural areas of emerging economies don’t have access to technology for a number of reasons: governments promise but don’t have the capacity deliver, large multinational companies find it too costly to enter these regions and stick with selling to richer urban areas, and nonprofit organizations are too financially constrained to bring technology to people at scale in a sustainable fashion. This is an injustice that few people are talking about.

Then what is needed to address this huge, unjust gap in the global supply chain?

First, more of the right technologies are needed. There are a number of organizations in developed and emerging economies that are working on this. Engineers are working with communities to create with products that improve lives.

Second, and more importantly, a local ecosystem that focuses on education/marketing, distribution, and after-sales service for these technologies needs to be built in low-income and rural areas. This ecosystem must consist of local entrepreneurs – small businesses that are financially incentivized to sell these products. There is no need for the government or nongovernmental organizations to be involved, since there is buying power at the Bottom of the Pyramid. Entrepreneurs with the right products and selling strategies can tap it.

With these ideas in mind, I co-founded Essmart, a for-profit social enterprise that is dedicated to solving the global supply chain problem for life-improving technologies. For about a year, we’ve been working in southern India. We’re currently selling 25 different types of technologies through a growing network of 100 mom-and-pop rural retail stores. To date, Essmart has brought technology to over 1,200 end user households and small businesses.

If you’re interested, watch the videos below to learn more about our mission, work, and progress. Follow our blog and our Facebook page as well. With your support, we can together ensure that technology will actually change the world.