Failing Your Way To Success

[Image Courtesy: IMPCT Taiwan]

For any entrepreneur, the idea of failing is an unwelcome thought.

Hear from Taylor Scobbie, co-founder of IMPCT, on their journey from spectacular failures (like forgetting to install doors for their schools) to building global social enterprise dedicated to helping urban slum communities construct and run high quality and affordable early education franchises.

“I think business is a lot of talking about success all the time and we never talk about failure. They craft this narrative that ‘I’m always winning’, because you want a message to your stakeholders that you’re successful,” said Taylor Scobbie, co-founder and CEO of Taiwan-based IMPCT. “It’s important to seem successful, but there’s a real difference between what people see and what we experience as entrepreneurs.”

Scobbie’s venture into social enterprise started as a “lucky occurrence” when his team beat 26,000 other teams to win the USD1 million Hult Prize, the world’s largest student business competition, with their plan to empower women in urban slums to own and operate their own preschools.

“We had this idea of what we believed quality education should be, and for us, it was kids in a classroom. It was about having teachers, materials, interaction, nutrition and safety, the things we had as kids,” he said. “Quality early education is expensive and urban slums notoriously don’t have any money to spend on anything, let alone quality education.”

Turning this vision into reality is far more complex than in theory. Practical challenges such as lack of basic amenities, local politics and tight finances stand in the way of of effective implementation. IMPCT’s first school that it built in El Salvador’s La Cuchilla district, an informal community where most people live in shacks, did not have a door.

“The truth is that we fail a lot more than we succeed. It’s probably a 100 to 1 ratio, and we fail in all sorts of different ways. We come up with ideas that are bad. We tried different building models, different kinds of curriculum and different ways to raise capital.”

IMPCT is preparing to implement an aggressive scaling plan to achieve its vision of building 5,000 schools over the next five years. That vision has not changed, although the journey there will, for instance having to finance schools in a different way, said Scobbie.

Using the Playcare franchise and a Montessori curriculum, IMPCT trains teachers and caregivers to run the school for their community. After building two schools in El Salvador, the company went on to establish a presence in South Africa and Guatemala.

“There are so many markets that I think can use the solution. But for us, it’s about building a foundation of sustainable schools. So the first and second markets have to be ones we think we can succeed,” said Scobbie. “Subsequently we’d like to enter riskier markets, because the riskier markets have the children who need it the most. But going into the riskier markets first is tough from a business perspective as we have to answer to investors.”

To increase the quality and capacity of IMPCT’s work, capital is needed at terms that make sense, so the company came up with its own set of solutions to that.

It is at the stage of developing a new financing model it calls the demand dividend investment platform that lets people invest in these businesses that they care about as a return bearing investment, said Scobbie. “It’s never been done, so we’re trying to do it. It is legally complicated but we’re really excited about this as a new way to finance businesses in urban slums,” he said.

To finance the construction of another school in a rural village in Guatemala, the company is developing a range of IMPCT products, starting with coffee which is sourced from the local communities they work with.  All of the profits are ploughed back into building a school or providing scholarships for the kids in schools which are already built.

His advice is to share the burden and find local partners for your social mission.

“Especially in the start-up stages of a social enterprise, if you in-house everything, your overheads will be massive and that will lead to true failure,” he said. “You will also need local knowledge. In every community and every country you work in, the solution needs to be changed, either a little or a lot. The only way to know how you need your solution to be different is to hire people from the local place and do your learning.”

“If you can get past how hard it is, it will be the most rewarding thing,” said Scobbie. “The feeling of walking into the classroom on the first day and seeing kids learn when they’ve never had an opportunity before - that’s the reward and that’s why we keep persevering through all failures.”

“You can only fail your way to success. But you only really fail if you quit, so it’s just an attitude.”

This presentation took place at the DBS Foundation Social Enterprise Summit 2016. We'll be sharing more practical insights from the conference in the coming weeks so do keep a lookout! 

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