VisionSpring India partner, Villgro Fellow 2010, Jeanne Chen argued in a recent blog post that a gender gap exists in the adoption of technologies at the base of they pyramid. She suggested that according to her observations, VisionSpring’s customers are skewed in favor of men because women lack disposable income and find glasses aesthetically unappealing.

VisionSpring is grateful to our important partner, Villgro for working on our behalf and ensuring women and men adopt our products equally. It is through such partnerships that we continue to improve our operating model and spread our impact. We welcome the questions like those raised by Jeanne Chen so that we can continue to innovate both our products and services to better serve consumers at the Base of the Pyramid.

In her post, Chen asserts that social enterprises need to be conscientious of the gender gap in innovation adoption and evaluate the impact of their interventions to overcome this gap – we agree. VisionSpring trains our Vision Entrepreneurs to conduct screenings and provide eye care solutions to all genders. According to our sales records in India last year, VisionSpring customers were roughly 52% male and 48% female – only slightly in favor of men. Despite this statistic, Chen raises two critical issues for VisionSpring to consider.

First, Chen argues that women are less likely to wear glasses because they consider eyeglasses aesthetically unappealing. To address this, she recommends including women in the sourcing of glasses. As a market-driven organization, VisionSpring recognizes the importance of understanding the needs and desires of all intended users of our products, including women. We have learned that by listening to the consumer we have a higher adoption and usage rate of the product. For this reason, VisionSpring utilizes our Visions Entrepreneurs to gather feedback regarding frame styles and selection and the sales of our products reinforce what works for our customers. VisionSpring local staff collect this information and use it to make sourcing decisions. For example, VisionSpring created protector glasses, which are sunglasses with clear, UV protected lens, specifically to address the cultural preferences of some women to avoid shading their eyes. Though we are not perfect, like other consumer businesses, VisionSpring does its best to accommodate the widely varied tastes of our customers.

Second, Chen notes that women are less likely to have disposable income and economic means to purchase glasses. As she recommends, our Vision Entrepreneurs emphasize to customers the importance of preserving vision for economic productivity. Part of the challenge of selling this product is demonstrating to customers that purchasing reading glasses is an important investment for economic wellbeing of the family unit. One of our primary goals is to increase awareness about vision loss in the developing world and a large part of our outreach is done through vision campaigns in which our Vision Entrepreneurs not only screen vision loss, but also educate the general population about how restoring their vision can restore their productivity.

One customer in rural India, Shadna had been supporting her family for years after her husband died. As her vision deteriorated, she was unable to continue her work as a seamstress and had to labor in the fields earning too little to support her family. She tells VisionSpring, “I heard that a Vision Entrepreneur would be in my town, and even though I did not have money to spare, I went because the vision screening was free. I saw that the glasses they had were good quality, and I decided that they were worth the cost. I am back to my sewing now and making the same money as before. I am happy that I once again have a way to support my children.”

Stories like Shadna’s reinforce the power of awareness of our services and of vision care to women and men in the community. We thank Jeanne Chen and Villgro for holding us accountable to ensuring women are able to adopt the important technologies they need. We look forward to strengthening our collaboration on behalf of all consumers at the Base of the Pyramid.

In this short video, a VisionSpring customer in Nicaragua tells the inspiring story of how his friend became a Vision Entrepreneur and helped save his livelihood.

Dionicio Torrez-Hernandez, father of seven, was forced to use a handheld magnifying glass to inspect his shrimp harvest due to his blurry up-close vision. Then Lisseth, a young woman he knew since childhood, sold him a pair of low cost reading glasses that immediately doubled his productivity. Thanks to VisionSpring’s innovative model for providing affordable eye care, Dionicio and Lisseth are both able to support their children and save for the future of their families.

We would like to extend a special thanks to Willy Foote, President and Founder of Root Capital, for the production and composition of original music for this video. Join us in watching the inspiring story of Dionicio and Lisseth!

VisionSpring: Dionicio & Lisseth’s Story from elizabeth kaplan on Vimeo.

Learn more about Dionicio and Lisseth and read other inspiring Stories from the Field.

VisionSpring Senior Director Graham Macmillan reports on new private equity funds from the Social Capital Markets conference in San Francisco.

Is private equity really making a play in this space? If so, what’s their impact going to be? Those were the questions I asked myself as I sat down at the session “New Private Equity Funds” at SoCap ’08. The session’s description piqued my interest enough to choose it over the many other concurrent sessions. I wanted to learn more about the “serious money” being invested in non-microfinance related social enterprises. Well, I am happy to report that I found some good examples though I left with some lingering questions.

The session’s Moderator, Scott Smith of Hanson Bridgett, did an effective job of facilitating the discussion among Álvaro Rodríguez Arregui of Ignia Partners, Wes Selke of Good Capital, Christian Schattenmann of Bamboo Finance, and Josh Becker of New Cycle Capital. For one that doesn’t spend the majority of his time talking with investors expecting a financial return, I was interested in seeing what the investments in the funds were and what, most importantly, were the expected returns—both financial as well as social. Here is a quick listing of the funds, some of the investments the funds have made, and the expected returns:

Good Capital
Good Capital recently launched a $30 million Social Enterprise Investment and Expansion Fund focused on poverty alleviation, health care, and education in the U.S. While the fund hasn’t closed yet, they have already made two investments: Better World Books and Adina for Life. Wes Selke noted that the targets of the fund’s investors were social mission-led companies that can demonstrate scalable change. One of the differentiating factors in Good Capital’s investment approach is its hands-on, VC-like approach to working closely with the management team and taking a seat on the Board.

Target: 8-10% IRR over the seven-year lifespan of the fund.

New Cycle Capital
New Cycle Capital was new to me, but I was quite impressed with Josh Becker’s presentation on their investment strategy. New Cycle makes early-stage, VC-like investments in energy efficiency/clean building projects and domestic emerging markets. Some of their investments are: Cool Earth Solar, Goalspring, MK: Michelle Kaufmann, Positive Energy, Terrapass, and Sneaker Villa.
Target: Comparable to top quartile of VC funds over nine-year lifespan of fund.

Bamboo Finance
For those of you who aren’t familiar with Bamboo Finance, they came out of Blue Orchard Finance which is well-regarded for its microfinance investment funds. Christian Schattenmann described Bamboo Finance’s strategy as trying to help social enterprises tap into the capital markets like microfinance has. They have set up Oasis Fund to make five investments in social enterprises that provide critical services or goods to the lowest income sectors. Bamboo provides both debt and equity financing in the range of $250,000 to $3 million.
Target: 10-15% on equity investments. 7-8% debt investments.
Ignia Partners
Ignia Partners hails from Mexico where they are making strategic investments in BoP opportunities in Latin America. Led by Álvaro Rodríguez Arregui and Michael Chu, Ignia has established Ignia Fund I which has raised more than $20 million to invest in businesses that are scalable, generate cash, part of the last mile of the value chain, and led by experienced entrepreneurs. Ignia has made two investments thus far in Primedic which is a Mexican healthcare provider and an affordable housing project in Chiapas.
Target: Ignia focuses on hurdle rates and has a target of 25-30% over the hurdle rate.

Overall, I found the presentations from the funds to be quite interesting. Clearly, “real money” is beginning to move into this space and trying to mimic the investment cycle that occurred with microfinance, though there haven’t been any IPOs just yet. While it is still early days, it was evident that this was a trend all four of the funds were trying to push. While all four of the presenters were essentially on their first funds, it was interesting to note that one of the presenters said that the purpose of the first fund is really to get to the second fund. I took that to mean that there is a credibility and proof of concept stage here. With success breeds success and this is where I became concerned not only for the fund managers but the space itself. What kind of expectations are we creating? What happens if we don’t realize a financial return on these investments? Does this mean that the money will go away? Or, is there a real pent-up demand for these products? Will history show during these tumultuous days that social capital investments actually provide a stronger, risk-adjusted return than we’re seeing in the traditional capital markets? Lots of questions, few answers.
While the game of expectations is my overall take-away from SoCap 08, my take-away from the “New Private Equity Funds” session was measurement, hence the title of my post—two bucket thinking, two bucket standards. In the session there was a lot of talk about expected financial returns, IRR’s, and hurdle rates. If I were at a VC conference I would have felt right at home. The trick is that this gathering is about Social Capital and the phenomenon of the merging of two bucket thinking. I think it is safe to say that all the attendees believe in the blending of financial returns and social returns. No longer do we want to live in world where you can’t have your cake (20% return) and eat it too (poverty eradication). While all of the presenters acknowledged that the purpose of their funds was to provide double and triple-bottom line returns, I didn’t see anything other than anecdotal evidence of this being achieved. For one who comes from a philanthropic capital-funded organization where rigorous social impact measurement is required and the norm, I did not get a sense that the same rigor was being applied to the Private Equity Funds. I don’t believe this is the fault of the fund managers or the companies they’ve invested in. I truly believe that they feel they’ve seen the evidence of the social impact in their due diligence. Yet, not one of the fund managers could provide quantitative results of impact beyond carbon credit offsets. So, I left the session in a quandary. If you’re receiving philanthropic capital, are you held to higher standards of social impact measurement than other types of capital? If so, why? Is this somehow an adjustment to risk? If quantitative social impact measurement is the gold standard of social capital investment, how much are investors expecting a financial return willing to spend?