
Yup, that’s right, another review of two books at once. This time it’s The Blue Sweater
by Jacqueline Novogratz, CEO of The Acumen Fund, and The Fortune at the Bottom of the Pyramid
by C.K. Prahalad (who just passed so RIP CK). Like before, this is because I had to read the books in tandem. In fact, I had to write a short paper comparing the two books’ strategies for building value within the poorest areas of the world; so if you’re interested in that check out the pdf linked at the bottom.
Let’s start with The Blue Sweater. I first heard about this book when Fred Wilson reviewed it in February. He called it “a terrific book” and I second that. I loved Jacqueline Novogratz’s stories about investing in businesses in Rwanda (before the genocide), Pakistan, and India among other places. It is inspirational to see the difference that one person can have on the life of so many by giving them a way to provide for themselves.
Since very few of you are actually interested enough to go read my paper, let me summarize something here instead: I strongly dislike charity. I think that it serves a very important role in giving immediate aid to those who are in need, and it does it very well. No amount of investment or teaching is going to get medical supplies to Haiti right now or feed the starving people in sub-Saharan Africa. However, at the same time, none of those people’s children are going to live a better life than their parents if nothing is done to fundamentally change the way that they live. Charitable donations are not a sustainable option for the economic growth that can make these problems obsolete.
Anyway, enough of that. I really enjoyed reading The Blue Sweater and greatly admire the work that Novogratz did and still does. Her model of mixing philanthropy and capitalism will get your brain churning about different ways to help people.
The Fortune at the Bottom of the Pyramid is a little different. This book is about how multi-national corporations can sell to the poorest 20% of the world and still make money doing it. Now, before you go getting all appalled that a company would dare to profit off the poor, let’s think about this a little more. If the option is to wash your clothes in filthy river water and spread bacteria and disease, or buy a 10-cent laundry detergent specialized for your conditions that will clean your clothes are you really being exploited? When a company like Hindustan Unilever (the Indian branch of Unilever) creates a program that employs over 1-million local women to act as sales people to their communities, are the poor worse off because they are buying goods they wouldn’t usually? I would argue no, but you are free to disagree.
This book has a very good formula for how a company should go about redesigning its business practices to market to the people in these poor areas and is supplemented by interviews and case studies in the back (including one with Novogratz and The Acumen Fund).
I think that everyone should read The Blue Sweater
to get a good idea of what is going on out there and some of the mechanisms smart people are coming up with to help the poor. If you read that book and get really interested in exploring ways to help the poor more, check out The Fortune at the Bottom of the Pyramid
.
And yes, here’s my paper: http://www.f2f2s.com/SocialEntrepreneurship.pdf