Ankie van Wersch – Lenders walks us through Enviu’s growth in the impact entrepreneurship space over the past 19 years.
“It was a tough journey. We, too, have had our share of failures and successes; but we learned more from our mistakes,” Ankie van Wersch – Lenders, the Managing Director of Enviu, thinks aloud as she reflects on the organization’s growth in impact entrepreneurship over the past 19 years.
Enviu has built 24 ventures over the past two decades. “Through our methodology of lean learning and lean validation, we quickly learn, and quickly adapt. That is what our 19 years of success and failure have given us,” she says.
Impact Entrepreneurship (IE) is the process of building a business that has a positive effect on both people and the planet. Ankie, who has more than 10 years of experience as a serial entrepreneur, admits that building an impact enterprise is three times as hard as a regular enterprise.
Since such enterprises are about making an impact across a spectrum of groups and issues, it encompasses working with vulnerable people (customers, employees, suppliers) and in countries with more vulnerability compared to developed countries with better economic and social stability. Enviu’s People Pension venture, for instance, focuses on low-income customers in the informal sector. Uptex empowers a fully circular textile chain while employing people from economically weak communities.
It may seem a herculean and impossible feat. However, it is possible to make an impact and at the same time, build an enterprise.
The 24 Enviu ventures target a particular environmental problem; for example, food waste, textile waste, plastic waste, and carbon emission from the maritime sector. However, at the heart of the business models and methodologies for each of these ventures is a crucial concomitant factor — the people who stand to benefit from the venture through livelihood opportunities, sustainable economic empowerment, and social welfare.
SokoFresh tackles post-harvest loss in East Africa by enabling small- and medium-scale farmers to store their produce in strategically placed cold storage facilities. Here, Enviu has developed a ‘pay as you store’ business model. The venture also links the farmers to buyers via a digital market platform in an otherwise fragmented agri-value chain. “We increased the income of smallholder farmers while reducing the amount of food waste. This business model includes the farmers in our sustainability journey, where they make money in a sustainable way,” explains Ankie.
Uptex employs women workers at their sorting centers for textile scraps in India, Kenya, and Bangladesh. “We created sustainable income for women while reducing the amount of textile waste ending up in the landfill. This business model has not only garnered interest from local recyclers, but also from large textile and apparel brands,” says Ankie.
Creating an IE ecosystem
“Never underestimate how much time it takes to develop an ecosystem,” says Ankie. In addition to customers and suppliers, an ecosystem for impact entrepreneurship comprises other disparate components — governments, corporates, and investors — that will create an enabling environment for the new business to thrive. However, all speak different languages and work on different timeframes.
For instance, at the government level, it takes five years (or the equivalent of a government’s tenure) to pass legislation. Corporates function on five-year planning, with six months for decision-making. For an entrepreneur, the timeframe lasts until the investment ends.
“Because Enviu takes a systemic approach towards venture building, we already take such variegated and studied timelines into account when building a new venture,” says Ankie. “We build an ecosystem that is ready for the venture to flourish. That makes an enormous difference.”
To ensure success, it is critical to onboard all of them, especially if the innovation is something positive for people and the climate.
Mindful of revenue growth, too
One of the biggest failures of IEs is that they have an impact first and profit second approach, notes Ankie. Both must go hand in hand. From the beginning, it must be clear that there is a business model that is financially sustainable; if not, there might not be a business. “This is something we learned the hard way,” says Ankie.
Two Enviu ventures in India and Kenya provided hygienic and nutritious meals to people from poor communities. “However, there was a very low-profit margin, which means that when something happens, the financial stability of the company is impacted. And it did. We went bankrupt within a week after COVID-19 hit the world.”
Hence, financial sustainability is crucial. Without that aspect, it becomes a foundation or public-private organization that can still have an impact, but it will not be a business.
As an impact entrepreneur, it is also integral that companies be accountable to themselves for the impact claim. “Companies hold themselves accountable when it comes to profit figures, right? Similarly, monthly reporting should reflect both impact and profit figures since these factors are the core of the enterprise. At Enviu, we make an annual report and an impact report,” says Ankie.
💡Pro-tip: Learn and pivot quickly; do not stick to one idea because you believe it is best. Quick learning and lean testing have been crucial for Enviu.