USAID and Partners: Building an Ecosystem for Incubation

India has an infant mortality rate of 39 per 1000 live births (2014, World Bank). Newborn babies, fragile and delicate, are prone to fevers and infections, which, in a resource-poor country like India, can become fatal. New parents, barely making ends meet on highly unreliable incomes, don’t have the resources to track their baby's’ health and often wait till it’s too late to take the child in for treatment.

Like most problems in India, this is a complex one, with multiple challenges and solutions. But then again, like most problems in India, there can be simple and effective solutions and people who care enough to find them: Such as a temperature monitoring device fashioned like a wristband that beeps and alerts caregivers when a baby’s temperature drops, now available for as little as $30 (Rs 2,000) in clinics and pharmacies. And the entrepreneur and Stanford mechanical engineer who cared enough to try and treat hypothermia in newborn children to save lives and make healthcare a few steps more accessible for the poor.

When Bempu, the social enterprise founded by Ratul Narain, was incubated by Villgro in 2014, it was still developing a prototype. The company’s biggest challenges were completing the steps necessary  – including risk assessment and sourcing options – to take their brand-new product to market and, subsequently, marketing the product and executing a sales strategy. A year-and-a-half later, Bempu has started selling the bracelet to private hospitals and has provided hundreds of doctors with samples of the final product. (Ratul was also selected for the Echoing Green Fellowship, while Bempu won funding from Gates Foundation, Grand Challenges Canada, and was one of 17 awardees from USAID’s Saving Lives at Birth program).

Villgro’s approach to incubating social enterprises or startups with social impact has been evolving since 2001 – when social entrepreneurship was a rarely mentioned term in India – and continues to stay agile and grow based on entrepreneurs’ needs.

Our biggest learning has been that there is no one-size-fits-all model of incubation: While a company like Bempu may need more support around marketing and sales another health startup might need a large infusion of funds infusion for R&D and prototyping and access to doctors and labs. Social enterprises working in the education space have a completely different set of needs, such as how to create awareness for their products, integrate them into the classroom, and shape policy, whereas startups working in energy and agriculture may need help with last-mile distribution.

Our pioneering success – over 120 innovators supported in 15 years – is also reliant on factors like deep-dive portfolio management and enabling access to experts and resources within niche sectors, and more importantly:

a) Innovative techniques for an evolving space
From an entrepreneur-in-residence program to an accelerator style year-long program with classroom sessions to ‘diagnostic panels’ that bring together business and sector experts and entrepreneurs to brainstorm and develop strategies, we have continuously experimented with and then scaled (and occasionally discarded) tools and techniques that seek to magnify our portfolio companies growth and impact.  

b) High-touch mentoring for customised solutions
Time and again, whether it’s through a formal survey or in casual conversations, we have heard that mentoring – especially the brand of high-touch sector expertise offered at Villgro – is the most valuable service they receive. We run a highly engaged mentoring program that recruits former senior executives or experienced entrepreneurs and pairs them to work closely with portfolio companies. This has shown impressive results for the long run.

c) Building an ecosystem
No company or entrepreneur can work in isolation. Where there is funding, they need talent; where there is expert guidance, they need labs. An ecosystem of support – from events that bring people together to mentors to early-stage funding and more, you need an ecosystem to raise a start-up.

In the next phase of Villgro’s incubation model, these techniques and knowledge are being taken to a global context, to be replicated in other markets where social enterprise is on the rise, such as Kenya and Vietnam. New regions but similar contexts, where innovative market-based solutions are needed for age-old problems.

This partnership between Villgro and USAID’s Partnering to Accelerate Entrepreneurship (PACE) Initiative will help catalyze the implementation of what has been a highly effective approach into Villgro Kenya, a health-focused incubator set up in partnership with The Lemelson Foundation, and an incubation and investment program in Vietnam along with the Lotus Impact and local angel investor networks, such as the Mekong Angel Investor Network.

This partnership combines the knowledge and implementation of Villgro with the expertise and networks of PACE, setting the stage for even greater successes in the coming years. There will be new lessons to learn which will help us refine our approach, as we continue to grow our work and our impact.

This blog post is part of USAID’s Global Entrepreneurship Week Blog Series, which focuses on the importance of entrepreneurs for development, the challenges they face, and innovative models being developed to address them.