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Tuesday, October 22, 2019
Juhern Kim is Manager, Greenpreneurs Program
Sep 20 2018 - It was the summer time in 2011, when I visited the rural town called Takéo for the first time, located in the southwest of Cambodia, about 90 km away from Phnom Penh, the capital city. Once an empire in the Southeast Asian region – which covered territories of what is now Cambodia, Thailand, Vietnam and Laos from roughly A.D. 802 to 1431 – Cambodia is one of the world’s least developed countries (LDCs). I spent much time there to initiate and manage the capacity building program testing out a solar home system (SHS) technology. That time I was curious about witnessing how the concept of green economy – learned from the office when contributing to the publication of UN’s first Green Economy Report – is applied in the field in developing countries.
Despite somewhat excessive logistical hassles on the ground (e.g. shifting solar panels to households being scattered, as opposed to a colony type of town where appropriate to Grameen Shakti model), the program left one meaningful result. It stimulated local entrepreneurship. A rural social venture called Eco Solar, composed of vigorous youth in the town, was established and partnership was established with the Korean clean energy start-up Energy Farm Co., Ltd who participated in the program as technical experts, as a somewhat unexpected result of the program. I received a Minister citation from both donor and partner governments for that result, but I understood that installing SHS in 30 households with aid money does not explain much, if we consider a long-term and scalable impact.
Changing investment landscape, rising need of local entrepreneurs
Albeit it was a memory from 7 years ago, I still cannot forget the uncomfortable feeling that I had when I exited the small town of Takéo after two years of trials and errors. What the nascent local venture required to purchase was a couple more trucks to deal with the local demand to deploy solar panels to the rural town of scattered settlements. It was seed capital to test out their business. But it was simply not possible for us to make a direct investment from the ‘budget line’ of public resources. I had arranged a couple of meetings locally with an aim to mobilize grant, CSR fund, or even equity financing for these locally-grown entrepreneurs to spin off from the program, but the market was not matured enough to take risk with rural entrepreneurs in Cambodia, and more importantly, these entrepreneurs were not matured enough to convince a few foreign-operated incubators and investors (e.g. angle investors) due to their lack of financial planning, customer analysis, and marketing capacity. In the meantime, my job as a program manager from the public sector – administratively speaking – was finished. However, I knew it was an unfinished business leaving so many questions.
I simply learned firsthand about the limitation of an aid-based development approach, and recognized the need of partnering with business as a solution provider of traditional development issues that we want to tackle through a green growth intervention. And, it questioned about my role from the public sector as a facilitator or platform creator to advance this transition, between entrepreneurs and all relevant stakeholders including investors. Now, the entire landscape is completely different from then. It is not surprising to hear that a market-based approach, crafted by various forms of finance, is being applied in the bottom of the pyramid market to solve traditional development issues. It has been fueled by a growing trend to invest in mission-driven enterprises, known as ‘impact investing’ – which are simply targeted to provide capital for businesses bringing social and environmental returns – and its global assets under management is arguably reported $114bn according to the survey conducted by the Global Impact Investing Network in 2017. (note: there is a blurred line between impact investing and ESG).
Greenpreneurs, a platform for young entrepreneurs in developing countries
Even with this rising trend, young entrepreneurs in developing countries just like I encountered in Takéo, still have a lack of access to right technical training, network, mentorship, (strategy to access to) investment capital. They require coaching to convert their ideas into solid business plans. That is a raison d’être of business incubators, start-up accelerators, and any type of coaching programs, which are recognized as useful vehicle to help entrepreneurs thrive. But incubating young entrepreneurs are not a simple task, since the demand is varied depending on diverse stages of business development, e.g. idea stage–prototyping–testing–commercialization. There is no one-size-fits-all strategy to help entrepreneurs, particularly for those who are committed to green growth. And we are not talking about Silicon Valley here, with abundant capital, intellectual and physical infrastructure, and advanced ecosystem. These types of platforms are not always installed in every country in the developing world. Yes, nature of entrepreneurship is not always aligned with something to be taught in an organized classroom setting, but more with nudging their own way through the idea crowd, making connections, and creating their own ways to innovate. However, young entrepreneurs at least need to be exposed and connected enough to validate their ideas. For young entrepreneurs in the developing world, it is required to level the playing field.
This is why I am now actively involved in the global program, called Greenpreneurs, designed to supercharge green growth startups particularly in/for developing countries, by providing web-based training modules (e.g. from customer segmentation to financial modelling) for applicants to reexamine their strategy, connecting them with mentors/subject matter experts, and giving them the resources and support needed to make them to take a next step – which is to demonstrate unique value proposition and be ready to pitch to raise capital.
Greenpreneurs, be lean and agile to become the engine of green growth
Creating and scaling up green growth impact is differentiated at a country and provincial level, but at the core of it is to simultaneously achieve poverty reduction, social inclusion, environmental sustainability, and economic growth. And to implement this task through business, innovation is key, which requires multiple approaches from diverse levels, not only from top-down policies and regulations, but also bottom-up innovation. Here is where entrepreneurship meets green growth, and the reason why we are committed to support entrepreneurs.
It is relatively easy to come up with innovative ideas, but the real issue is to select the best ideas, test quickly, and implement (or modify/drop) them. For those start-ups committed to green growth, we recommend them to take a “lean start-up” methodology which favors experimentation (testing out hypotheses simply, e.g. through business model canvas) over detailed planning, customer feedback (through direct interviews) over intuition and theory, and iterative design (practicing agile development through creating the minimum viable products) over traditional up-front development. The emphasis is how much start-ups are nimble, speedy, and flexible enough to deal with frequent feedback loop of testing and learning to evolve around. To apply a lean approach in green entrepreneurship, what is required is a well-connected platform designed for entrepreneurs to interact with project developers, practitioners, subject matter experts, intermediaries, investors, and other relevant players to discuss their ideas, validate the market, and test out their products or services for commercialization.
In this context, the Greenpreneurs program would like to play a role as an arranger, facilitator, connector, and intermediary to make that happened, working with entrepreneurs who can create green growth impact in the area of sustainable energy, sustainable landscapes, water and sanitation, and green cities.
In 2018, the program is providing youth (aged between 18-35) with mentoring and networking opportunities as well as an opportunity to compete for small-scale seed capital by sharing business plan. All this is conducted through a 10-week virtual module program.
This year, despite its pilot nature, we see a rising potential of operating this platform.
Student Energy and the Youth Climate Lab, rising networking start-ups in the field of climate change joined the platform as co-organizers. 16 mentors and subject matter experts have voluntarily confirmed their participation to interact with selected entrepreneurs. 349 entrepreneurs in developing countries applied for this platform. On the other hand, the topic of green entrepreneurship is being picked up by many countries that are committed to achieving a national-level green growth strategy, so Greepreneurs is now associated with nationally driven demands, such as Pacific Greenpreneurs and YouthConnekt Africa initiative. Partnering with over 30 countries, the Global Green Growth Institute can offer a wide range of network and locally cultivated knowledge on green growth through its country offices embedded in governments. Already, colleagues at GGGI’s country offices are interacting with green entrepreneurs.
There are many international and national organizations working on green growth, and they can also be an important asset to support this journey with green entrepreneurs, as a mentor, partner, seed capital provider, and investor. Ultimately, once this platform mobilizes a critical mass of stakeholders, there is much hope to contribute to creating green jobs. Also, through this platform, entrepreneurs will be able to address grass-root challenges and generate new ideas of originating small-scale bankable projects that are in much need to be financed.
Unfinished business, calling for partnership to finish
As a long-time practitioner implementing green growth, I am excited with the fact that my role with young entrepreneurs – started from Takéo in 2011 – has not yet ended.. If you want to know more about our 10 finalists of Greenpreneurs this year, click here and send an email to me for further information. If you are an investor, CSR manager, or foundation committed to increasing green growth impact, please feel free to talk to us to join forces. As a platform recommending a lean approach to our fellow entrepreneurs, the program itself is ready to be flexible to evolve around with your expertise and resources, in order to become the most effective global platform helping developing countries’ entrepreneurs achieve their own version of green growth.
“Don’t be too timid and squeamish about your actions. All life is an experiment. The more experiments you make the better.” –Ralph Waldo Emerson
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