The Trick is to Fail Small!

By Saurabh Kumar
Mint, New Delhi

From being a serial entrepreneur who created several successful billion-dollar companies in the US to being a mentor for social innovators, Gururaj Deshpande has come a long way.

The engineer who spent years tinkering with technological innovation now creates social innovation centres.

There’s already one each in the US, Canada and India.

The Sandbox model in Hubli, Karnataka, where he was born, incubates social innovators to help them create effective and scalable models for development in India.

He also co-chairs a national council to support US President Barack Obama’s innovation and entrepreneurship strategy.

Deshpande was here in India to support Action for India, which closely follows the Sandbox approach — essentially a testing environment for innovation and experimentation — to help social innovators scale up and make a greater impact.

Edited excerpts from an interview —

What brings you to India this time?

A “I am here because we do a social innovation Sandbox in India, which is a very exciting programme, and attend the Action for India conference. Usually in January we spend time in India and it is interesting how things have changed. It was 1973 when I went to the US first. That time we used to come back every three years. But now we come back almost three-four times a year.”

Q: Why these frequent visits now?

A: Well, we are doing a lot of social innovation work here in India. In 2000, I stopped being the serial entrepreneur and started being the mentor and started focusing on the non-profit side. I joined the board of MIT (Massachusetts Institute of Technology) in Boston and opened Deshpande Center for Technological Innovation.

We started to look at how technology can be used to make an impact. The idea is very simple — innovation plus relevance is equal to impact. Around eight years ago, we wanted to do something in India.

Both my wife and me went to IIT (Indian Institute of Technology) Madras and we kept doing the same thing there, that is technological innovation. But then it was not exciting any more, so we decided to do social innovation.

Now in social innovation that equation is turned around. You start with a deep understanding of the problem and then you bring the new ideas that you need to solve the problem.

So we came up with this concept of social innovation Sandbox. Social innovation means a lot of experimentation and experimentation means some will work and some will not.

So the trick is to fail small. The challenge is how to design your experimentation and innovation so that you are creative and do a lot of things. We wanted to develop that culture of innovation, entrepreneurship and experimentation. That is also the theme for Action for India.

Q: What qualifies as social innovation?

A: You want an intervention. The world is a variance and you see a way to make this a better world. So you come up with a new product or service and anytime you do that, there is a cost attached to it. If the people who benefit from that cost can pay you a lot more than what the cost is and the margin is high, it becomes a for-profit venture.
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If people cannot completely pay the cost or pay marginally, then it becomes a social innovation because you are trying to build the scale a little bit differently in terms of who pays for the service. That is the difference I see between these two interventions.

However, there is big difference in terms of dynamics of how things happen in both these scenarios. When the margins are high, you are trying to find something for which somebody is willing to pay for. If you do not find that sweet spot, you are out of business. In social intervention, that feedback is not natural because typically beneficiaries do not pay.

Q: The model you are talking about for social innovation, is it sustainable?

A: The way we work with all the interventions is that there are three ways in which you can make this sustainable — free market economy, government programme and broad-based charity, or a combination of the three.

If it is a livelihood thing where if you teach something or someone buys something which benefits him in the long run, obviously they can pay for it. In this case it becomes a company, even though the margins won’t be high. Of course, the motivation here is to help a lot of people. These become sustainable by accruing these small profits.

But let us say for a programme like Akshaya Patra, which feeds children, you can’t charge money because there is no direct economic gain for the children. So this becomes a part of the government programme. The government in this case gives $15 per year per child, but we have still not figured out how to run the programme at $15 as we need $30.

So we raise the other $15. Even though the 1.3 million children mark that we feed is impressive, there are 120 million children who need to be fed. So we are still to figure out how to sustain and scale this programme and reach all 120 million children, whether it is Akshaya Patra or not.

A couple of ideas that suddenly jump is that this cost should not go too far away from $30, if anything then gradually bring it down. And if anything, then work with the government to increase this $15 and close the gap. Then teach everybody else the same technique.

I think for sustainability, mega-scaling and impacting millions of people, you need to think a little differently in deciding on the combination of the three ways as said earlier.

But in all the cases, somehow you have to make the beneficiary a big part of co-creating the solution.

Q: Usually most social innovations happen in pockets. Why is this so?

A: This is not true. For example, Akshaya Patra is now in nine states of India and 1.3 million children are fed every day. Now 1.3 million is just 1% of what needs to be done, but it is getting there. I think even the US has not been able to crack this code. In fact, India is doing it a lot better than the US.

In the US, most interventions are very expensive. For example, if there is a school dropout there is a scheme to bring that person into the mainstream, but it costs $70,000. It works very well, but then they do it for only 2,000 children a year, whereas the total number of children who need this aid is 10 million. So they still haven’t thought about how to reach the millions because maybe their cost point is not right.

In India, because of low affordability and for the fact that solutions have to scale to a high level, people here think more in terms of cost-effective solutions. So since they are cost-effective, scaling it up and mainstreaming is more likely to happen in India.

Q: Do you plan to replicate Sandbox in other parts of the country?

A: We are doing one each in India, the US and Canada. That is all the capacity we have as of now as a foundation. But the idea is getting duplicated in lots of places. There is one happening in Nizamabad (Andhra Pradesh).

A lot of people under Action for India are coming together for the same. The idea is to take the venture capital model and funding innovators because you find passionate people who want to do something as opposed to push your idea through. It’s all a work in progress.



  1. Mindy

    August 22, 2015 at 11:28 pm

    Just cause it’s simple doesn’t mean it’s not super heulpfl.

    • WWR Editor

      September 11, 2015 at 8:02 pm

      Agreed! Thank for your comment. Allison

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