Sunday, April 17, 2011

Villgro Blog: Simply Fly Chapter 7

Recently I’ve been having several debates about how clear an indicator of social impact purchase is. It is with these debates in mind that I read chapter 7 of Simply Fly. Although the debate is quite a nuanced one, I’m going to make it somewhat simplistic in order to bring the issues into focus.

At one end of the debate is the argument that regardless of our economic status, all of us frequently buy things that are not good for us. This makes purchase quite an unreliable indicator of social impact. At the other end is the position that almost everything we buy improves our lives in some way, and therefore purchase is quite a strong indicator of social impact. From those who hold the latter view, I have heard the argument made that even fairness creams increase the self-esteem of those who use them, and therefore improve their lives.

An extension to the argument that almost everything we buy improves our lives in some way is that all entrepreneurship is social entrepreneurship. Yet in this post I am going to highlight two ways in which I believe social entrepreneurship should differ from other forms of entrepreneurship, using examples from chapter 7 of Simply Fly.

The first way in which I believe social entrepreneurship should differ from other forms of entrepreneurship is that it should prioritize improvements to peoples’ lives that are long-term, over short-term improvements. For example, while smokers may feel in the short-term that their lives are improved by being able to smoke, cigarettes are certainly detrimental to their health in the long-term.

In chapter 7 Gopinath secures all the licenses and clearances he needs and launches his helicopter business. He describes one of his customers as a small-time trader who moves between weekly village bazaars buying and selling chilies, who decides to spend all his savings on his sister’s wedding. He wants to rent the helicopter so that his sister can get married in it, reviving or reinventing the family tradition of getting married on elephant-back. Gopinath offers to do it at a 50 percent discount for Rs.75,000, and the man agrees. Gopinath describes it as, “a great human impact story,” and loses no time in alerting the media. However, in the process of gifting his sister a helicopter wedding, the small-time trader spent all his savings. If Gopinath were a social entrepreneur, would he still find this a story to celebrate, or would he see it as an ethical dilemma?

The second way in which I believe social entrepreneurship should differ from other forms of entrepreneurship is in the length of the chain from the enterprise to benefiting the disadvantaged. Gopinath’s customers range from the trader described above to visitors to India. For visitors he offers one or two day sightseeing packages by helicopter, and quotes travel writers Hugh and Colleen Gantzer describing him as having had the biggest impact on tourism in India. However, I could not help thinking that if Gopinath was not in the helicopter business, and had promoted eco-tourism instead, he could have benefited the people living near the river resorts and wildlife safaris he praises much more directly. Instead, as an entrepreneur, while generating employment, stimulating consumption, paying taxes and donating a portion of his profits are all ways to contribute to society, the length of the chain from these actions to benefiting the disadvantaged can often be quite long.

Nevertheless, as in other chapters, in chapter 7 too there are lessons from Gopinath’s experiences for social entrepreneurs. Gopinath devotes a considerable portion of this chapter to the issue of how to advertise effectively. He advises against expensive press conferences and instead suggests getting the media to write about your enterprise by offering them a good story. While his examples of good stories, like that of the small-time trader who rents a helicopter for his sister’s wedding, may be questionable, the general advice holds. In his attitude towards the media Gopinath expresses what I have come to recognize as his characteristic optimism, when he says that, “to a considerable degree we have an honest press,” as we have honest businessmen and politicians (barring exceptions). Another advertising strategy he describes is to offer to advertise the resorts he flies tourists to, in exchange for them advertising his helicopter service.