In 2010, Manuel Wiechers Banuet founded Iluméxico. A social enterprise which uses solar energy to fight poverty in rural communities. Manuel’s gift for public speaking and connections within the impact investment and social entrepreneurship ecosystems, combined with his company’s inspiring story and impact, have earned him many invitations to major ecosystem events as keynote speaker.
Last year alone, I saw him speak on several occasions. In one of his speeches, he said, in effect, that he was grateful for being chosen to speak, but asked to stop being invited. Instead, he challenged the ecosystem players present in the room to look beyond the already renowned “stars” of the social impact sphere, and instead offer opportunities for other, less connected and under-represented entrepreneurs to share their stories. Manuel’s request resonated greatly with me, as Agora Partnerships strives to level the playing field for social entrepreneurs from all backgrounds.
In an effort to track our progress on this goal, we recently started gauging our level of “inclusiveness” through a variety of measures. Gender is, of course, the most obvious of these, and 52% of our alumni companies are either owned or co-owned by women. In Mexico specifically, we are also trying to target indigenous entrepreneurs, an underrepresented community in any accelerator pipeline.
Being inclusive also means getting out of the major cities and seeking entrepreneurs working in second-tier cities or niche sectors of social impact, such as forest entrepreneurs. Since last year we have also been measuring the percentage of our alumni entrepreneurs who had never received entrepreneurial support before partnering with Agora. Despite not intentionally focusing on this statistic in the past, we are currently at 33%, and would like to build on this foundation in years to come.
We cannot, however, improve these numbers alone. We need to partner with incubators and other nominating partners that are deeply integrated within their regional and local ecosystems. In some cases, local ecosystems are weak or even nonexistent, so we must work as a field to create or strengthen them if we want to be more inclusive. As the latest research reveals, “despite the widespread characterization of entrepreneurship as a means for economic development, there remain significant gaps in the engagement of, and support for women and minorities.” We also need to understand – and this is something we have learned directly by working with marginalized groups such as fishermen, cooperatives and indigenous entrepreneurs in the past – that serving minorities requires a specialized set of skills, which may result in adapting the traditional accelerator methodology and/or partnering with complementary community-based organizations to provide really tailored and comprehensive support.
As part of our efforts towards greater inclusiveness, we have analyzed the geographical distribution of the entrepreneurial support ecosystem in Mexico (based on a desktop analysis of 125 actors, ranging from government institutions to incubators, accelerators, business networks, university programs and any other entities which support social entrepreneurship), and contrasted it with the geographical spread of about 180 social enterprises from different sources. While neither of these samples are large enough to be fully representative of Mexico as a whole, they provide a good idea of the distribution of these entities. Unsurprisingly, Mexico City is predominant on both sides, constituting about 43% of social enterprises and ecosystem players.
The states of Jalisco, Nuevo León and Puebla also seem to have a strong base of both pipeline and support institutions. However, other States, such as Oaxaca, Guanajuato, Querétaro and Yucatán, appear to have many more social enterprises than ecosystem players based in their states, While Aguascalientes, Baja California, Guerrero and Tamaulipas show the opposite trend. In that sense, the upcoming multistakeholder Oaxaca-based program offered by the US Embassy in Mexico, in partnership with the Miller Center for Social Entrepreneurs, the Anahuac University, Impact Hub and a local government entity (IODEMC), is one important step in the path towards greater inclusiveness in the field. Finally, our analysis has found that some states lack both a large pool of social enterprises and support institutions (Coahuila, Sonora, Baja California Sur, Durango, Colima, Tlaxcala).
Over the past few months, we have developed a number of concrete proposals that will help us make strides toward greater inclusion from Mexico to Chile. However, it will take more than just a few months to level the playing field, and Agora can’t do it alone. Apart from finding the entrepreneurs, inclusion can also come at a cost, as many believe that more rural and marginalized entrepreneurs are less likely to raise as much capital.
Donors and investors, therefore, also have a key role to play in the transition toward a more diverse ecosystem. Currently, many donors judge accelerators’ performance based on the amount of capital raised, the percentage of revenue growth, and the number of jobs created by their portfolio companies. Additionally, impact investors tend to increase their ticket sizes, in part because of the perceived higher risks and transaction costs associated with smaller deals. Thus excluding many amazing but less attractive companies from an investment perspective. This naturally leads us to look for the “stars” that Manuel was referring to, and we are proud to have many of them among our alumni. However, they are sometimes hard for small, remote entrepreneurs to identify with.
Even though the growth trajectory of marginalized entrepreneurs may not be as dazzling (although there is some hard evidence that suggests that focusing on women or minorities leads to an improvement in accelerators’ ability to drive funding into participating ventures), other entrepreneurs’ stories and efforts are certainly worth sharing and supporting. Take Vidal Pat for example. He is an indigenous entrepreneur from the State of Campeche in Mexico and one of our alumni who came to us thanks to our local partner GreenSquids.
Vida founded Miel Pat, a company that produces high-quality organic honey in a remote Mayan area. He then sells to major honey producers, thus bringing economic sustainability to highly vulnerable families that live on $5-6 a day. Despite being a leader and role model in his community, very few ecosystem players have ever heard of him. Even though he may not necessarily be an “ideal” candidate for impact investors, it is our duty not only to share his story with the world but also to support his entrepreneurial efforts and accelerate the growth and impact of his company.
Do you also think the field is not as inclusive as it should be? If so, please join us in our efforts!
Agora Managing Director