After an inspiring week in Munich, launching the third cycle of the MAN Impact Accelerator - we reflect on some of the week’s insights - where entrepreneurs, mentors and the program team all met together, for the first time.
The week kicked off with a unique introduction from Sergio López Ramos, a gifted improvisation facilitator, who recently joined YSB and the MAN Impact Accelerator team. Sergio led interactive group exercises, with the aim to facilitate a collective mindset of trust, openness and empathy. Improvisational theatre was a fantastic way to increase engagement and open our minds, to begin working together as a group for the next nine months.
The group split up into pairs, to create their own mini-performance sketches. No matter what your partner said (e.g., Do you think we should buy Grandma a parachute for Christmas?), you had to respond with either of these three sentence starters, i) “No BUT… ii) Yes BUT… iii) Yes AND...
It was particularly enlightening to really feel the difference in these responses - the level of energy in the room when ideas were being shut down, compared to the level of excitement and innovation that was set free, when people not only listened and accepted each other’s ideas, but added to them, to co-create a story that was bigger and bolder.
This simple exercise taught the group how a positive, open response can be a real catalyst to make people feel heard and valued, thus learning to suspend the urge to say BUT… and say ‘Yes AND..!’ instead.
In a fast-moving environment such as a startup, entrepreneurs must learn to adapt fast to make meaningful change.
The Agile philosophy of ‘Stop Starting - Start Finishing’, was shared in Thomas Homolka’s presentation - for the startup entrepreneurs, often caught in the battle of having a lot to do, whilst being tight on time and resources. As a result, they become masters at switching gears between the amalgamation of different jobs, with duties that range from closing a round of funding to paying the office electricity bill.
However, some tasks get left undone or put on hold.Feeling overwhelmed can become the number one struggle entrepreneurs grapple with - and it turns out that wearing ALL the hats to keep their company on track is not actually a good look for startups or their bottom line.
Suma is a fair and direct trading platform connecting smallholder farmers with regular food buyers in Brazil. Their vision was to become both a food and logistics business, and as a result they were hitting the edge of their limits. Over several mentoring sessions in Munich, the difficulty and risk of taking on the additional responsibility of logistics became clearer to them - so they instead decided to re-align and focus on what they do best. Further resonating with their purpose, of working with farmers and helping them to participate in the market.
With the facilitation of mentor Marlin Watling , they clarified a new purpose statement: “Brazil is drifting apart and food supply chain contributes to it. Sumá changes the food system to support local food and better access to nourished the dream of a united Brazil.”
Their reluctance to outsource logistics was explained by their difficulty of finding a reliable logistics supplier in Brazil, in particular a service that contains chilled trucks to carry their fruit and vegetables from the farmers to the consumer. Julian Lange from Marley Spoon offered a new perspective - outsource logistics to a reliable company with ambient trucks, but invest in packaging instead (a giant styrofoam box with cooler packs) which can also be reused, reducing the amount of packaging waste when delivering to their customers.
It’s great to see mentors understand the entrepreneur’s biggest problems and fears, and bring in completely new perspectives, enabling them to transform their challenges into opportunities!
Trade-offs between business and impact are a daily challenge for social entrepreneurs. Impact is often the focus, being the driving factor of why they do what they do - but as obvious as it may sound, they will not be able to achieve any social impact in the long term, without having a financially sustainable business. There are a few repeated assumptions we continue to see from entrepreneurs that don’t always make sense; i) good intentions translate into good products and services, ii) in order to maximise impact they need to reach more customers and grow into new markets very quickly.
The mentors were present to challenge and question entrepreneurs mindsets, and see beyond the impact - working on internalising the fact that they are a business and accepting that in difficult decisions, it is ok to not prioritise impact as long as they are not losing sight of it.
For Suma, their impact objective is crystal clear - to empower as many Brazilian smallholder farmers as possible, who are at the base of the pyramid. Following this line of thought, Suma never had a problem building a large customer base of regular food buyers throughout their region. Customers had every reason to love buying their fresh, competitively priced produce, whilst supporting smallholder farmers. Even more sales would mean an increase in farmers’ incomes, but further complicates logistics and costs, even with the option of outsourcing.
With the help of their mentors, Verena Liedgens from Agruppa and Julian Lange from Marley Spoon, Suma learnt that the best way to cut down costs is to turn some customers down to concentrate the demand geographically. Focusing on their most notable customers (who provide ample orders and reliability) - becoming important suppliers to them, and scaling other sales geographically around these hubs.
As Verena Liedgens put in a recent article in Medium:
Drop the commitment to reach a certain growth, If you do not have the people, systems and infrastructure in place to make the growth efficient and sustainable, it’s better to slow down.
Suma’s main focus is to now invest in training farmers in their commercial skills, so they can learn how to align with the demands of the market. However, this leads to a further challenge - not all farmers want to engage in the help provided for them, with a lot of farmers dropping out of training, and continuing to create waste in warehouses (rotten fruit and veg) - causing constraints on their costs and time.
Another important shift of mindset for Suma was: ‘We need to do this’, to ‘You may not need to do this’.
Rather than scaling and onboarding as many farmers as possible on the platform - with the help of their mentors, Suma realised that perhaps they were not onboarding the right kind of farmers. Suma has 2,000 farmers onboard out of 200,000 in the region so they can afford to be selective, especially as even the most engaged ones are still farmers at the bottom of the pyramid and receive on average 37% more income with Suma.
Suma was left to think - Which farmers are ready to create and strengthen a mutual trusting relationship? And what is the criteria for these kind of farmers?
Suma’s homework to take away from the week is to now create these ‘farmer segments’ and hierarchise the different types of farmers in order to set rules that treat them fairly. By focusing on the more engaged farmers, Suma will be able to spend more time training those that are willing to grow with them, in enhancing their commercial skills with further workshops, qualifications and farm visits, whilst understanding more of what drives the disengaged farmer’s decisions.
The startup debrief was the final activity of the program week and an important highlight for all - hearing the things that worked well and the things that could be improved. The aim of our program is to tailor our mentors, activities and ecosystem visits to the needs of our startups, in a way that delivers the most value to our entrepreneurs. -So we make sure it is not only heard, but makes a big difference in how we go forward and plan our next program week.
In only one week the entrepreneurs shared that they felt empowered and stronger compared to when they arrived. It was particularly inspiring to hear Simony Cesar, who founded NINA, a technology that tracks cases of harassment in urban mobility, share her gratitude for the opportunity and the amazing responsiveness from the mentors to address the needs of where NINA is right now. Simony shared her personal story, from a humble background in Brazil, her mother was a bus ticket inspector, inspiring her to tackle the problem of harassment on public transport. She hopes to return home and share this message of hope and act as a role model to other women in her community who also have big ambitions to contribute back to their society.
The mindset is a muscle and just like other muscles, it doesn’t mean that once you’re in shape you don’t get to stop working out, you have to stay on it. The entrepreneurs now return to their teams with a big pile of homework to implement these learnings. We look forward to the following program weeks of the next nine-month journey, to help our entrepreneurs challenge their mindsets and open their minds to new possibilities.
Along with The Center for Sustainable Finance and Private Wealth (CSP) at the University of Zurich went out and about around São Paulo at the start of February to explore the ecosystem of social businesses and investment. Take a look at our fantastic week in the video:
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