The discussion below is more specific to my own blog, and since I happen to be an Adify customer, I asked Russ some details about what are some of my options – current and future.
I choose to publish it because I am sure there are other bloggers out there who would find this information useful, and can adjust their plans around which networks to work with.
SM: My big question from a non-interview standpoint is, what is going on with the business network side? My next natural step, and I told this to Jeff, is to move to Federated. I am almost there in terms of traffic, and I have been in conversations with John, and I told him that. >>>
In 1815, Napoleon began building up his army in preparation for an invasion of Belgium.
His goal was to capture Brussels. He wanted to divide the British, Prussian, Belgian and Dutch armies before defeating them separately, forcing Wellington’s army to retreat back to the Belgian coast in the west and the Prussians, headed by Blücher, to retreat to the east. He was ready to attack on June 15, 1815.
Three days later, against all odds, Napoleon lost the battle of Waterloo. >>>
The recent solar energy boom in Germany has placed a significant strain on Selco. Selco will need to face the possibility of continued high demand in developed countries which are already highly industrialized, can pay big dollars, and suck up the supply of solar panels.
SM: One of the points I would like to discuss is the impact of Germany on the solar power market. Can you tell us how that impacts India and impacts you? HH: Plain and simple, the German market killed us. I always bought solar panels and solar products from India. When Germany suddenly implemented a subsidized program, it sucked up the world’s production.
Manufacturers in India had a shortage of modules needed to build the products I used.
Second, manufacturers changed and stopped building the smaller modules so they could make larger ones for Germany. My lead times increased, and for a small company like me it went from 15 days to 90 days. The cost of the panels increased by 47% over 18 months. Both of those issues hurt us very badly. >>>
The main issue with MicroFranchising is always scale and growth. Up to this point most successful models have been a side operation of a successful parent company that lends technical and financing expertise in the same field:
* Norway’s Telenor with Grameen’s Village Phone,
* Danone with Grameen on small yogurt factories, or
* Scojo with Scojo Vision Entrepreneurs.
However, with the wave of social entrepreneurship, more companies are starting from their very beginnings with a social mission. And just as microfinance is moving into the mainstream capital markets for financing, social enterprises are tapping into the world of venture capital to help them launch. Some of the leading organizations specializing in social venture capital are the Acumen Fund, Good Capital and Aavishkaar, all of which have received recent praising press.
We continue our discussion on the challenges of human resources, and then move on to discuss business strategy. Selco has developed quite well to date by offering unique services and customized solutions. However, they now face the difficulty of hiring strategic thinkers who can continue this model for such low pay. The need to productize their offering is a key enabler for future growth and scalability.
SM: Your biggest challenge then is the human resource piece to scale all of this. If you are looking to do an additional 200,000 systems, it seems the real issue will be the management scaling. HH: Very true. I also see that the people who come into interviews are very good at one aspect, but they are one-dimensional and that is a problem. I have a very hard time getting people who can think in terms of technology and financing.
SM: You are really looking for strategic thinkers. You are going to have to find more productized solutions so people at that level don’t have to do that type of thinking.
HH: I am sure we are going to have to make that sacrifice.
SM: A lot of companies have scaled, and nobody has scaled by requiring strategic thinkers at the lower levels who can design solutions on the fly. To scale you have to productize. Even in custom software, there is plenty of reusable code. >>>
A friend and advisor of our company, Sean Wise just published a new book… “Wise Words – Lessons in Entrepreneurship & Venture Capital.”
You can download or buy the printed book [here]
I have known Sean for many years and used his counsel on many occasions. He has been successful on both sides of the entrepreneur (5 startups) and VC equation, has practiced corporate law, advises most of Canada’s VC firms, and most importantly to this audience – has run 75 bootcamps in Canada to train enterpreneurs in how to develop business plans, pitch and work with investors. Over 2500 founders have been through Sean’s program and collectively raised over $890 million in venture capital – quite a track record. He is an entertaining speaker, writes a regular column for the national Globe & Mail and publishes a popular blog [here]. Most recently, Sean has been working on the second season of the hit realty TV show in Canada, called “The Dragons Den”… where entrepreneurs pitch 5 multi-millionairs on live TV, for the startup capital they need.
Sean has dedicated his professional career to helping entrepreneurs achieve their dreams. To quote one of his Canadian fans, John Pinsent, former Director with Ernst & Young LLP – “Sean is the guru of entrepreneurship in Canada. What Al Gore is to the environment, Sean is to entrepreneurism”. Can it get any better than that? Read the book.
When we stop and think of the number of businesses that fall under the umbrella of Franchising in the developed world and the dearth of those business models at the bottom of the pyramid, it is exciting to think of the possibilities. A list of Franchise businesses: Automobile dealerships, Professional Sports Teams, Bottling Plants, Cell Phone Shops, Restaurants, Gas Stations, Pharmacies, Truck Drivers, Ice Cream Carts, Hot Dog Stands, Mechanics, Plumbers, Hair Stylists, Insurance Agents, Avon Ladies, etc. Each have characteristics of branding, training, streamlining of services, regional jurisdictions, and systems of operations.
In the informal market in developing countries it is difficult to form such a list. Each family is forced to be their own enterprise. They understand the power of branding and will sometimes paint recognizable images of Coke or cell phone companies on their stall to give themselves credibility.
There are a couple resources on the web that are gathering microfranchising ideas and examples: Kirk Magelby of the Ascend Alliance posted a listing of opportunities on the omidyar network. There is also a blog, that is gathering news, examples, and potential ideas that fall under the umbrella of microfranchising from around the web.
Up Next: Financing Growth
A company like Selco must have a unique culture. Harish has explained that his company does not offer charity and he does not want his workers to have pity for people. Instead, they are intermediaries who assist individuals as they make their own changes and shoulder their own responsibilities. Doing so requires a unique organizational culture.
SM: Let me switch gears a bit and explore how you build an organizational culture to sustain this model? How do you hire employees in this culture, especially facing the stiff IT competition? >>>