Taking the Next Step: Business Plan Contest Participants Talk about the Challenges and Rewards of Starting Their Businesses

Social Enterprise Newsletter, Fall 2003

Even the most well-formed business plan is still just that: a plan. The plan needs to be successfully executed, and through that process there are inevitable bumps in the road-and lessons learned. Social Enterprise recently spoke with HBS alumni who competed in the social enterprise track of the HBS Business Plan Contest to see how their plans have evolved.

BEST Education Partners
Winner, 2002 Social Enterprise Track
Members: Matthew Mugo Fields (MBA '02); Lucas Klein (MBA '02); and Jason Green (Wharton '02)

Social Enterprise: What was the original concept for your business?

Matthew Mugo Fields: BEST Education Partners was designed as a for-profit enterprise to run charter schools and to revamp existing public schools. We also intended to set up tutoring centers and extend the use of the buildings and of the staff to run a profitable operation.

SE: What challenges did you face as you began?

Fields: Our fundraising efforts were not as successful as we'd hoped. Part of this was due to the difficult economy, part of it was due to the difficulties many social entrepreneurs face in proving to investors that you can strike a balance between running a for-profit business and wanting to help people. That's something we found ourselves having to justify time and again; it's frustrating having to prove your sincerity.

SE: Where does the business stand now?

Fields: We recently saw an opportunity to merge with Platform Learning, a venture-backed, comprehensive supplemental education company that provides afterschool, weekend, and summer educational programs to students in underperforming schools. This merger allows us to continue our mission of helping children.

SE: How did your experience at HBS, and the Business Plan Contest, help you through this process?

Fields: First of all, an HBS MBA gives you instant credibility. Some of my mentors at the School, professors like Allen Grossman and Bob Kaplan, helped prepare me for the kinds of situations I would face. The negotiation techniques from entrepreneurship classes were enormously helpful in taking us through the merger process.

Gyaana Ventures
Winner, 2003 Social Enterprise Track
Members: Meghna Modi (MBA '03); Raj De Datta (MBA '03); and Arvind
Krishnamurthy (MBA '03)

SE: Can you give us an overview of your organization?

Meghna Modi: Gyaana seeks to eliminate functional illiteracy in India. At a time when children are taken out of school to work and help support the family financially, Gyaana will work with microfinance and vocational training institutions to provide funds for families to invest in their children's education and to make the children's education relevant to future opportunities.

SE: As the 2003 Business Plan Contest winners, you're just getting started. What has happened thus far?

Modi: We've conducted detailed secondary research on the education problem, and field research across six states in India. We now have a managing director in place, and we have raised $10,000 in external capital. Also, we are exploring partnerships with four other organizations.

SE: What are some of the challenges you've faced at this early stage?

Modi: Given the passion that is required in this sector, it can be difficult to build the executive team necessary. We've also learned that when it comes to fundraising-start early!

SE: How did your experience at HBS, and the Business Plan Contest, help you get started?

Modi: Participating in the contest-and responding to the queries of the judges-helped us focus on the important details of our plan. Also, the seed money from the prize funded our initial set of activities, which helped us to acquire the next round of funding.

SE: How do you hope your venture will evolve?

Modi: During the next year we plan to do pilot tests in villages-disbursing around 100 loans. From there, we hope the product will scale in the next two to five years.

Modulo
Runner-Up, 2001 Social Enterprise Track
Members: Gerardo Ruiz Maza (MBA '01); Juan Pablo delValle (MBA '01); Arturo Lopez (MBA '02); and Salomon Chertorivski (John F. Kennedy School of Government, Harvard MPP '01)

"We wanted to address the housing deficit in Mexico, which is more than 6 million, with 750,000 additional houses needed each year."

SE: What was the original premise of your business?

Gerardo Ruiz Maza: We wanted to address the housing deficit in Mexico, which is more than 6 million, with 750,000 additional houses needed each year. Many poor people in Mexico own or have inherited land, but cannot afford to build. Our idea was to provide prefabricated do-it-yourself homes and a financing plan for the purchase of the system.

SE: And how did that plan evolve?

Maza: We decided to make it a for-profit business in order to grow it over time. Because many of the people don't have papers proving they own the land, they were unable to get financing. Also, people didn't accept the prefabricated home, because they are traditional and unfamiliar with new technology. So we decided that we would buy land, build the houses, and sell them to the consumer with government financing.

SE: What are some lessons you learned through this?

Maza: The importance of being flexibleŠimprovisingŠdevising an alternative plan that would still address the problem you set out to solve. Perseverance is the key. We've completed 24 houses, and plan to finish over 200 houses by the end of the year.

SE: Did your experience at HBS, and the Business Plan Contest, help you prepare for some of the challenges you encountered?

Maza: Absolutely. We faced intense questioning as we devised our plan, from the distinguished judges of the contest and from our advisor, Professor Myra Hart. This helped us to be well prepared and confident in ourselves, two important attributes to have as we brought this plan to reality.