The gathering drew over 200 people, including Ashoka-Lemelson Fellows, business executives, and thought leaders, to exchange ideas and shared strategies in areas such as clean water, rural electrification and agriculture. Innovations highlighted included: telemedicine, alternative energy innovations, and the integration of these technologies with mobile technologies. Other hot topics included recent progress in science learning, payment systems, building new partnerships, and inspiring others to enter this field of work. [1]

Hyderabad is a very interesting place.  About 400 years old, founded by a feudal dynasty. About 10 million people and growing at an amazing rate of 200,000 – 300,000 per year, primarily from rural to urban migration. We Ashoka-Lemelson Fellows were housed on the Infosys campus, a very high tech software development firm and the conference took place at the India School of Business (ISB) campus, recently ranked 12th in the world by the Financial Times.  We were not roughing it by any stretch of the imagination.  We could have been in Silicon Valley as far as the facilities went, except for our lack of access to wireless due to security concerns. 

On day 3 my friend Ali Ashgar from the GSBI ’08 picked me up for lunch.  Ali works with micro-finance cooperatives of poor Muslim women in the slums of Hyderabad.  He and his wife and son drove me around Hyderabad so I could see more than just the conference center.  His 2+ year old son was a very good tour guide pointing out everything along the way, only that I couldn’t understand his Hindi.  They took me to "old town" where it is nearly 75% Muslim.  Apparently it was mostly the "untouchables" from the Hindu religion that were drawn to Islam’s promise of equality. 

Some of the conference highlights included:

• Sharing a panel with Sergio Orceansky of Yansa and Harish Hande of SELCO India

• Extensive discussions with micro-consignment model pioneer Greg Van Kirk

• Interchange possibilities with Souleymane Sarr and his organization AJA-MALI that educated children in Mali to become entrepreneurs

After the conclusion of the conference, I flew to Bangalore to spend the day with Neelam Chhiber, a friend from the GSBI ’08 who founded Industree, a sustainable, organic retailer in India.  I got the added bonus of meeting her husband, Jacob, who co-founded IDIOM, one of the largest design firms in India.  Jacob was a great tour guide so I got to see parts of Bangalore and his firms’ office.

At the end of the day I flew to New Delhi to catch my international flight home.  Upon landing in the domestic terminal I followed the signs to the shuttle bus to the international terminal.  Silly me.  After almost an hour of looking around and talking to people, I was told with authority that “there is no shuttle bus”.  When I was promptly referred to a friendly cabbie who tried to fleece me out of $50 to take me there!  Needless to say I finally found the “official” cab stand where the fair came out to $5.

Short trip, but an amazing experience I will remember.  Thanks to all who shared the time with me.

Some more pictures are available here.

[1] Paragraph laregly taken from Rosa Wang’s article here

The audit is a requirement by our longest-standing funder, Hivos.  Gearing up for first audit for the period of 2008 was a massive undertaking by blueEnergy that I wrote about extensively last year.

Since the first audit, Alex Pederson, CFO of blueEnergy and his accounting and finance team have continued to execute a massive internal capacity program to continue strengthening blueEnergy’s internal controls and to migrate blueEnergy to a state-of-the-art, online accounting system called NetSuite.

blueEnergy receive a license donation from NetSuite in 2008.  NetSuite is a powerful, feature-rich system.  The flip side is that it requires a considerable amount of configuration which is very challenging from a technical standpoint, and especially if your internal processes are not very mature.  In addition, as with all accounting systems, it has some bugs that can hamper implementation, especially when the implementation is of the “non-standard” variety.

For a small organization, blueEnergy has a considerable amount of technical capacity.  This capacity allowed us to implement the basic functionality of the system, although it took over a year.  Several consultants working with the NetSuite platform commented that they were amazed we were able to implement even the basics.  This was an important lesson learned – if you are a small organization with limited technical capacity and limited IT/admin budget, be very careful about implementing high-tech accounting/finance systems.  They can be a huge drain.  Transparency and high-tech are all the rage... but people generally don’t like to pay for it and it is expensive in terms of money and effort.  If you do go high-tech, keep it simple!

blueEnergy was in a much stronger position for the audit this year.  The process has gone well thanks to Alex and his amazing team: Shona, Sandra, Eric, Ramin and Brett.  We hope to have it all wrapped up by the end of the month – all part of our strong start of 2010!

The meeting was held in Bluefields, which afforded the Board the opportunity to meet our local staff, visit our facilities and to visit some of our beneficiary communities.  Joining us from abroad were Board members Brad Mattson and Matt Flannery, and from Managua we were joined by Lâl Marandin and Maricela Kauffman.  We were also fortunate to be joined by senior advisors Vicky Mattson and Alexandra Quinn.

The gathering was very fruitful and gave members the opportunity to increase the depth of their understanding of the conditions faced by blueEnergy in Nicaragua.  Having this hands-on perspective of context is critical for framing constructive discussions on strategy and growth.

Thanks everyone for making the effort to realize this amazing gathering!

The induction program covered such topics as the history of blueEnergy, how to work within blueEnergy, blueEnergy’s partners, blueEnergy’s technology, the history of Nicaragua and the Caribbean, how blueEnergy works with remote communities, the ethics of field work and development, blueEnergy’s Theory of Change and more!

We finally reached the point where we had the capacity to channel incoming volunteers to a specific arrival date.  This allowed us to justify investing the resources needed to develop the 8 day training program, which will pay huge dividends.  Invariably, when you don’t give people extensive training, you end up answering the same questions over and over and dealing with bad situations that arise from the lack of perspective and background.  Getting everyone gathered together allowed us to do a concentrated transmission of information that will make everything smoother going forward.  On top of that, having the new volunteers go through the program together helps build camaraderie among the group.

Nationalities represented in the new class: US, France, UK, Portugal and Israel.  Other nationalities represented in our veteran volunteers: Australia, Argentina, and Canada.

Here is a fresh picture of blueEnergy’s nearly entire staff in Nicaragua:

But 2009 was also a year that saw the international climate grow more uncertain and perilous.   After more than 6 months of preparations, the first funder lined up for our UNDP project – Iceland - went bankrupt; The World Bank, executing a project on behalf of the UK DfiD (United Kingdom’s Department for International Development), a situation created by the UK’s withdrawal from Nicaragua in 2008, stalled over massive internal confusion over the special project procedures; and finally an IADB $40M loan to Nicaragua for grid extension consumed all of the IADB and Nicaraguan Ministry of Energy’s administrative capacity, leading to a stall of the SECCI program.

blueEnergy is in a stronger position now than it has ever been.  Our staff is more experienced, more capable, our organization more defined and robust.  We have invested heavily and ramped up to meet the challenge of a large project that has not arrived.  There are encouraging signs that the “Big 3” projects continue to move forward and that in fact all is well on the “natural” timeline of these types of major, multilateral projects.  It appears that the frustration comes from unrealistic expectations on our part, of not understanding the “natural timeline” for this type of work; as well as not having deep enough pockets to fund a protracted project development/preparation phase, in some cases stretching longer than 14 months.

Our strategy, as it has always been, is to adapt.  We are planning a more dynamic approach for 2010, one where we pursue smaller opportunities and leverage our increased capacity to administer multiple smaller projects.  All the while, we will continue to move the big projects forward.

It’s not ideal.  We would like to have the financing and capacity to develop a 5-year strategic plan, get the plan funded, and then focus on execution. All of my exposure to the social entrepreneurship world through Ashoka, the Global Social Benefit Incubator, the Skoll World Forum and more, has taught me that this is the ideal way forward.  The line goes that project funding is too fickle, too time consuming, and too disjointed to lead to great impact and that it is much preferable to develop a strategy and get it funded as a whole.

But blueEnergy finds itself at the edge of a canyon – knowing that the best way forward is to develop a strategic plan and get it funded, but facing funders that either don’t consider blueEnergy “proven” enough or only want to engage after the development of a 5-year strategic plan.

So blueEnergy will be adaptive.  We will pick up projects that are inline with our mission and execute them to deliver impact.  In each of them, we will make sure there is a component that continues to strengthen our organizational capacity, moving us closer to being able to develop a strategic plan and get it funded.

In addition to “system change”, “sustainability” is also all the rage these days.  Funders, among others, demand it and want to see evidence of it in short project time horizons, typically a year.  But sustainability is by definition a process over time – it cannot be demonstrated in a short-time window.  What can be observed in the short-term are trends of change pointing to a more desirable future.  In this context, sustainability can be interpreted as being on a path where new value is created each year, without undermining the capital stock, be it environmental, social, financial, or whatever.  It is a process, not a destination you stand at and proclaim to have achieved.

blueEnergy, as well as most social organizations, must walk this fine line between the desires of its funders and stakeholders and the natural limits to change it pushes up against.  We work hard to make sure we deliver the impact funders demand in their time horizon without losing sight of the long-term vision and what it takes to get there.  This is achieved by ensuring that each short-term deliverable includes a piece that carries on the long-term capacity building required for system change and for traveling along the path of sustainability.  This is necessary to bridge short-term impact and long-term impact and should not be viewed as an undesirable inefficiency.

Light in Kahkabila.

. Light in Monkey Point.

To close out the year, blueEnergy launched a "Two Million Hours of Light" campaign to raise $20,000 by December 31.  As of this writing, we are almost 75% of the way there with 2 days to go.  If you want to help blueEnergy bring light to the people of the Caribbean Coast of Nicaragua and can spare $10, please visit our campaign page here.

Light in Kahkabila.

1) Business eco-system: Profit-driven organizations thrive.  Many types of service providers available, allowing specialization.

2) Periphery of business eco-system: Population density and access to cities allow project expense payback.  Service providers are available.

3) No business eco-system (subsistence living): No jobs, no service providers and no functioning economy.  Projects intended to develop economic opportunity.

How you work in these different spaces is fundamentally different.  Classic for-profit business resides in the inner-space, while the burgeoning field of social business and social entrepreneurship primarily focuses on the second ring.  The second ring is poor and marginalized, but exists on the periphery of the business eco-system and is often characterized by road access, phone access, micro-finance access as well as access to other important services.

What you learn at Harvard and Stanford Business School, will prepare you well for the center space.  Specialization and business focus is the name of the game in this space. Increasingly, there is a proliferation of "social business" curriculum, teaching about the ways to make money while serving the bottom of the pyramid (BoP). This movement of using business principles to alleviate poverty has grabbed the public's attention and drawn bi-partisan support.

But it is a mistake to directly apply the lessons of the center space to the second ring and equally a mistake to directly apply the lessons of the second ring to the third ring. 

In the third ring, attempting to create any one part of the eco-system alone is frustrated by the lack of support services normally available in the ecosystem in more connected, developed communities.

For this reason, interventions addressing only one dimension of need are unable to have a significant impact.  Because impoverished governments, the majority of nongovernmental organizations, and the marginalized communities themselves are unable to develop holistic, multi-dimensional actions on their own and lack a high degree of coordination between them, the communities remain marginalized and isolated.

In these cases, a holistic approach is required that blends delivering fundamental direct services with capacity building and linking these fundamental services to productive uses.  Furthermore, the approach must include a component of linking communities to external markets and resources.  As much as possible, these pieces of development puzzle should be taken on by a partnership of organizations with one member acting as the catalyzer and coordinator.  In many cases though, suitable partners do not exist at the onset of the engagement, so the role of the catalyzing organization includes a component of drawing in suitable partners.

There is strong empirical evidence linking human development to access to modern energy services. At a macro level, when countries develop, they do so in tandem with improvements in energy services.  In fact, according to the United National Milleneum Development Program, no country in modern times has substantially reduced poverty without a massive increase in the use of energy and/or a shift to energy efficient economies.

Because energy is a fundamental input to education, health and business services, all themselves key components of human development, we can see the important role energy plays in improving overall quality of life.  In short, energy changes lives.

This graphic illustrates the relationship between per capita electricity consumption and the Human Development Index. The shape of the curve highlights the tremendous marginal impact the first kWhs have in improving quality of life, which can in many cases justify the higher marginal cost of delivering these kWhs in less developed countries.  In terms of HDI, Nicaragua ranks 124th out of 182 countries [UNDP, 2007].  In pure economic terms, Nicaragua is the second poorest country in the western hemisphere after Haiti. On the Caribbean Coast of Nicaragua, the poorest region of the country, nearly 80% of the population does not have access to modern energy services.  The implications of this should be clear.

References: "Energy for All" report by the ADB, available here, and the UNDP report entitled "Energy for Sustainable Development: Linkages, Impacts and Indicators", available here.

Are people really so naive as to think you can lend DIRECTLY to people in some of the poorest, least developed areas in the world?  And by directly, I mean with no intermediaries facilitating the money flow and providing the due diligence to ensure the money goes to where it should and that the people soliciting it are who they say they are.  It is unbeleivable to me that the people that demand the most transparency and integrity are also the ones shocked that you have to have institutions in place as intermediaries to ensure all of this.  Side note: they are often, ironically, also the ones who don't like these overhead costs and think of them as "inefficiences" when in fact they are absolutely critical.

In the spirit of fair disclosure, I know Matt Flannery personally.  Our organization, blueEnergy, has worked with Kiva to get our microfinance partner listed on their site (

Set Net project posted and fully funded in one day! | Monkey Point begun paying back!). That's how I know he and the entire team at Kiva work tirelessly to create an experience linking lenders to borrowers that is as clear and direct as humanly possible, given the very real constraints of the real world.

 "...But Mr. Roodman’s blog post said that lenders like Mr. Kristof were not making direct loans. Borrowers like Ms. Cruz already have loans from microfinance institutions by the time their pictures are posted on Kiva’s Web site."

So for efficiency's sake, the loan is made from the microfinance institution to the borrower before the money is raised on the Kiva site?  That is a plus, not a negative.  That is called streamlining your model to increase your impact.  The microfinance insitution fronts, and Kiva lenders fill in.  It is inaccurate and misleading to generally say "borrowers like so and so already have loans from microfinance institutions"... yes, they may have the physical loan, but in many cases the loan was generated because of the Kiva relationship.  I know in our case, it was Kiva's backing that convinced our microfinance partners to issue loans in the marginalized, indigenous communities we work in.  No Kiva, no loans.

The last straw was this silly comment:

Yes Kiva relies in part on its own data and uses volunteers extensively - I'm sorry, how exactly do you build a wildly successful, scaleable model, with a high degree of transparency, while meeting everyone's demand to keep overhead low, without using some of your own data and volunteers?  Again, the hypocracy and naivete of wanting no intermediaries, transparency and not wanting to invest in overhead.  You can't have it all.

I knew Kiva was an amazing concept when I first heard about it and continue to believe that today.  Those looking for silver bullets that will solve all of poverty's problems in one shot should open up their eyes to a dose of reality.  Get out there and see the real world.  Then you will know that an entire eco-system is needed, and that Kiva plays a vital role in that eco-system.

One example of an often unnoticed impact blueEnergy has had has been in the realm of micro-finance.  Micro-finance is an integral part of the development eco-system but is outside of blueEnergy’s expertise and areas of focus.  blueEnergy’s solution was to help the local micro-finance institution, ADEPHCA, get registered with Kiva as a field partner in 2007.  You can read more about ADEPHCA here and here.

The intention was to immediately use this channel as a funding mechanism for blueEnergy community energy projects, but getting all the ducks lined up took longer than expected.  However, in the meantime, ADEPHCA pushed forward with Kiva, and as a result of this partnership (as of 08/24/09):

$92,625 has been loaned (13.7% delinquency / 0% default) to 206 entrepreneurs in the Bluefields area, where blueEnergy has its base of operations.  This is a significant amount of impact in this impoverished area.  To put it into perspective, if you make a very conservative estimate that each entrepreneur is supporting a family of 5, you get 206 x 5 ~ 1,000 people impacted.   This represents ~2.5% of the Bluefields population.  I am not an economist or a micro-finance expert, but to me, this is a big impact and I’m proud of the role blueEnergy played in jumpstarting it.

In recent months, blueEnergy's first projects have started to appear on Kiva's website:

Set Net project posted and fully funded in one day!

Monkey Point begun paying back!

It took a lot of blueEnergy legwork to jumpstart the ADEPHCA-Kiva relationship and then to get ADEPHCA to come with us out into the communities we work in (where they had never gone).  Almost 2 years door-to-door, but now I think we will see a lot of movement with less effort.  To be sure, Kiva and ADEPHCA deserve the lion’s share of credit for managing the inner workings of their relationship, but this is a good example of the kind of "seeding" and facilitating blueEnergy is doing to jumpstart different parts of the development ecosystem, all of which should factor into our impact analysis as well.  This is especially true when it comes to getting Kiva-backed ADEPHCA to stretch their micro-finance services to new, even more marginalized communities than Bluefields.

A process is a series of steps you perform to produce a certain product, service, or result. Processes can be as simple as a list or as complicated as a binder full of flow charts. You need processes to ensure uniformity of results across your organization and to free your creative energies for creative tasks.  In other words, make the mundane mundane so you can free your energy for visioning, planning and growth.  This becomes critical as your organization grows – when you are small, you can “fake it” and get by making each activity up as you go along, but as you grow and delegate more responsibility outwards, you need processes to keep everyone on the same page.  It is the glue that, along with leadership, keeps the organization from flying apart.

If your goal is to scale your positive impact, you have to first create institutional sustainability.  Sustainability has a financial component to it, but also a human capacity and process component.  At some point the small core team can’t shoulder the burden any more and a management team is created.  Responsibility is delegated outwards.  This is a wonderful thing if there is an understanding of how all the parts inter-operate, in other words, if there are processes in place.  At the GSBI, the group came up with this, “Scaling indicator – how your organization will do without you”.  If you think you are ready to scale, take a 3-month vacation and see what happens.

Finally, you don’t want to replicate your mistakes.  Drafting processes allows you an opportunity to examine what you do that is working and what you do that is not.  It allows you to correct mistakes on paper before applying it on a large scale, and that is priceless.