By Jyothi Vynatheya Oberoi
Most interpreters of the triple bottom line – measuring business performance with the “three P’s” of profit, people, and planet – ask how businesses can improve living standards and support the environment. Fewer also ask how social businesses can maximize their potential for profit.
All organizations, however, can consider how they can maximize both social impact and profit, regardless of whether they are labeled as a “traditional” or “social” business. We at Dalberg Mumbai believe that young startups have a particularly apt opportunity to build the three P’s into their practices from the early stages of their business’s growth.
With this concept in mind, our team recently launched Igloo, an entrepreneurs-in-residence program based in Dalberg’s Mumbai office. Igloo provides catalytic organizations and entrepreneurs an enabling environment in which to grow. Our team will advise these young organizations through short-term formal consulting relationships and informal collaborative brainstorming and networking sessions to support their growth and refine their business strategies.
One of Igloo’s first members is Sonali Mehta Rao of Mela Artisans, a business that successfully straddles the line between profit-maximizing and impact-maximizing. The driving force behind Mela’s creation was an effort to keep local Indian artisan groups, who might otherwise live at the brink of poverty, in business. The founders initially envisioned Mela Artisans as a smaller-scale non-profit entity. However, as Mela’s founders gained a better understanding of the market forces that led to artisans’ poverty, they determined that the most effective way to support artisan livelihoods was to develop a socially conscious luxury brand that would sell crafts created using traditional local techniques to customers around the globe.
Mela’s model empowers artisan groups by showcasing their contemporary design capabilities, establishing linkages to buyers, and providing local craftsmen with interest-free working capital loans to fulfil their orders. In other words, Mela replaces the traditional middle-men and creates opportunities for artisans to sell their products to high-end global stores at a much larger scale than before.
Measuring the social impact of a company such as Mela can be challenging, as it is often too complex to quantify or standardize. As a result, for-profit companies whose work yields social benefits (e.g. job creation, pollution reduction, or infrastructure improvements) may not venture to assess these benefits, simply because they are difficult to quantify or claim as a direct result of their business.
For Mela, measuring success beyond the balance sheet is core to the business. For this reason, Mela tracks periodic metrics to ensure its positive impact on the livelihoods of the artisan groups within its network. For example, the business conducts household surveys of its artisan group members to understand individual and family income, assets, saving and spending behavior, and access to basic services such as healthcare and electricity.
Mela’s strong business model and deeply rooted linkages to local artisans recently led Aavishkaar, a Mumbai-based social venture capital firm, to invest $3 million USD in Mela. This investment marks a strategic inflection point for Mela, which will continue to grow while housed at Igloo. Our team in Mumbai aims to support Mela’s staff and other entrepreneurs-in-residence at Igloo as they develop businesses with an eye to maximize their profit and social impact.
Not every business lends itself to complementary benchmarks of both financial and social success. However, there is real value in assessing whether an organization can move beyond a single bottom line. Through Igloo, we hope to bring this impact-oriented thinking to the forefront of the startup scene in Mumbai.
To learn more about Igloo or to join this unique community of entrepreneurs, please visit Igloo’s website.