Social businesses are no-profits whose goal is to solve a social problem, while running as a business. They do not rely just on donors’ money but are financially self-sustainable. Investors can get back the money they invested, but cannot take any dividend. Profits are invested in the business to fulfill its social mission. Success is measured in terms of the positive impact on the people and the society. The social business model is becoming more and more popular and is inspiring a growing number of social business entrepreneurs around the world. Eugenio La Mesa is a social business entrepreneur who has recently founded a new social business to cure Thalassemia in India. I believe his story will inspire and motivate many.
Eugenio, can you tell us about yourself and your activities??
I am a serial and social business entrepreneur (LinkedIn profile), and my working interests are software and Internet marketing. 15 years ago I have helped to launch Publisoft VI.SPOT, the first online data bank of TV commercials, and in 1997 I won the Microsoft Italy award for the most innovative Internet solution.
10 years ago I confounded Salesware, a company delivering email marketing services through the Internet (SaaS) , and in the last 3 years I've been working with Code Architects, a company cofounded by 2 Italian Microsoft Regional directors and renewed experts in the field (Francesco Balena and Giuseppe Dimauro); we produce and sell VB Migration Partner, an automatic migrator from Visual Basic to .NET, and we cooperate with Microsoft and some of main system integrators all over the world. Among the other things, I am in charge of worldwide sales and Internet marketing.
In the last 20 years I have mainly worked in the business world, but I also wanted to do something that was not related to business and money; I was basically every year just donating some money to charities, but without being personally involved (it is easier to give money then to give time..). But then, all of a sudden, last year something happened, mainly by accident: I discovered my passion for social business.
What is a social business?
A Social Business, as defined by the Nobel Prize Prof. Yunus, is a non-dividend non-loss company, whose business goal is to solve a social problem and not to look for profit maximization. It is financially self-sustainable and it doesn't rely on donors' money. The workforce gets market wage with better working conditions; Investors get back their investment amount only. No dividend is given beyond investment money.
What do you have to do it with Prof. Yunus?
Last year I read his book "Creating a World without poverty", and I was very touched and fascinated with this new idea. I was volunteering for an Italian NGO called Cure2Children, and I was seeing first-hand the problems of being financially self-sustainable mainly relying on donor's money, like Prof. Yunus says in his book. So one night (June 14th 2009) I sent an email to Prof. Yunus without knowing him and without knowing his email address (I just contacted him thorough the standard contact form of his site); I was shocked and surprised then we replied to me the following morning from his blackberry! We had an email conversation for a few weeks, and on August 7th 2009 I went with Lawrence Faulkner (Cure2Children founder) and my best friend Pietro Sodani to Dhaka in Bangladesh to meet him and his staff. We signed an MoU to establish a Bone Marrow Transplantation (BMT) Unit in Dhaka as a Social Business, to cure thalassemia (the most spread genetic mortal disease of the world).
In his new book "Building Social Business: The New Kind of Capitalism that Serves Humanity’s Most Pressing Needs" there is an entire chapter on Grameen-CureChildren, and there is the text of the email I sent him as well as his reply.
What is your involvement in Grameen events?
Prof. Yunus organizes some social business events through some of his companies, like the Grameen Creative Lab and the Yunus Center. I've been invited and I've attended some of them in Italy, Germany, Scotland and Bangladesh. 3 times I've been speaker, and at the Global Social Business Summit 2010 I've co-moderated, together with the CEO of Grameen Health Care, the workshop "Health care and Social Business".
For me it is a great pleasure (and an honour) to be invited, I learn a lot and I do a great networking with very smart and motivated people from all over the world who are interested in social business
Why have you started "Cure Thalassemia"?
For about 1 year I've been CEO (as a volunteer) of Cure2Children, but in August 2010 I have resigned. Now I'm starting a new organization called "Cure Thalassemia" with my friend Pietro Sodani, an expert in hematology and BMT, and with Chandrakant Agrawal, and Indian friend whose grand-child suffers from Thalassemia and is being cured in Rome by Pietro Sodani and Prof. Lucarelli. Cure Thalassemia will only focus in Thalassemia, just doing social business, so without the traditional NGO charity model that relies on donors. We plan to be financially self-sustainable and we will start in Hyderabad (India), where Chandrakant lives.
The scientific coordinator will be Prof. Guido Lucarelli, the scientist inventor of BMT for Thalassemia, and a worldwide authority in this field since 30 years.
What is the business model?
In India only there are 500,000 children with Thalassemia, and 10,000 new born every year. But since the disease is genetic (you inherit it form your parents), patients belong to both wealthy and poor families. In India a BMT costs about 20-25,000 USD, which is a lot of money for most people. We plan to be able to give 1 BMT every 2 paying patients; in other words, we will use the gross profit margin of the paying patients to cross-subside the cost for patients who can't afford it.
I got the idea when I first read of Aravind Eye Care, the pioneer in cross-subsiding for cataract surgery, whose business model has also been implemented by Prof. Yunus in Bangaldesh with Grameen Eye Care Hospital.
Why do you have a blog on Social Business?
I have a big passion for Social Business; most of my friends are aware on what I'm doing in India and in general with Prof. Yunus. They asked me many questions during the last months; so I decided to start a blog (in English and Italian) to tell the behind scenes of what I'm doing for Cure Thalassemia and with Prof. Yunus and Grameen. In the first 2 months, just by word of mouth, I have had visitors from 44 countries!
I also have a Facebook Fan Page, a group on LinkedIn, a Twitter account, pictures on Flickr and I plan to have video channel on YouTube I put a lot of effort to regularly update them.
What will be the impact of Social Business in 10-15 years?
I think it will be huge. Many people are not happy that they have to work just to make money and to look for profit maximization. This is one of the reasons why many people all over the world volunteer in charities, NGOs, etc. The problem for a long term effectiveness is to be financially self-sustainable, which is very though to achieve. In Social Business you work like in a company, using the same tools, infrastructures and best practices, but the goal is to solve a social problem, not to make the shareholders rich. Since all the people working in Social Business are payed at market prices, some brilliant people could decide to work in a Social Business, and not in the for-profit world like they do know. People always make the difference.
What is the role of CSR and Venture Capital?
I think that they both can have a huge role. There are many philanthropists all over the world, but most of their donations are for one shot projects, and constant funding in needed every year because they are not financially self-sustainable. But thanks to Social Business, a philanthropist could invest in something that becomes self-sustainable, so for every dollar invested there is a high long term social return. They are also defined Philanthrocapitalist, in the book "Philanthrocapitalism". Most of them are young and they became rich with IPOs with IT or Internet companies. They do not just want to be good, they want to have a lasting impact. Pierre Omidyar, eBay founder, is one of them.
The same reasoning is true for the Corporate Social Responsibility (CSR) budget that most companies (especially big ones) have, and today it is often used just to have good press coverage for una-tantum activities. That same money could be better spent (having an even higher press coverage) to finance Social Businesses, like SAP is doing for Haiti.
I would like to thank Eugenio La Mesa for taking time for this interview. If you have a question for Eugenio or for BAIA please feel free to contact us or leave a comment below.