Important Lessons for Social Entrepreneurs

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Social entrepreneurs often struggle to reconcile the typical business survival issues faced by a startup with wanting to truly benefit those they are trying to help; more often than not the two are at cross-purposes. The lessons that Siva Devireddy learned in his entrepreneurial journey developing GoCoop, India’s first online and mobile-based two-sided platform that connects rural handloom weavers and artisans with urban markets in India and abroad, are summarized in a new paper by CEIBS Professor of Entrepreneurship S. Ramakrishna Velamuri that has been published by The European Business Review.

GoCoop is the most successful among a number of ventures in India aiming to enable sustainable livelihoods for rural artisans while also ensuring a consistent supply of high-quality, authentic handlooms and handicrafts to customers. It caters to both domestic and foreign individual customers (B2C) as well as wholesale customers (B2B). Its business model has evolved through two rounds of funding: angel funding of US$ 270,000 in 2013, and a Series A round of about US$ 1.5 million in 2015. With an engineering degree and more than a decade’s worth of experience working in Silicon Valley start-ups and multinational consulting firms, Siva set out to leverage technology to connect weavers and artisans in rural areas to urban markets in India and abroad. He quickly found that using tested technologies and business principles with far flung rural artisans was more difficult than he anticipated.

He encountered challenges at multiple points along the value chain, including quality control, providing financing for the artisans to buy materials, and a long working capital cycle. Today, GoCoop works with more than 4,500 co-operatives, has an offering of more than 23,000 products, and has more than 11,000 registered buyers. As Professor Velamuri and his co-authors explain, there are several takeaways from Siva’s experience that social entrepreneurs everywhere can learn from. These include the importance of working as part of a team instead of being a lone founder; being prepared for a the significant long-term investment in time and effort needed to develop a supply chain and the capabilities of rural producers, as well as building trust and acceptance with rural producers; and tempering idealism with a heavy dose of reality.

The paper is titled “Improving Rural Livelihoods through E-Commerce: The GoCoop Experience” and Prof. Velamuri’s co-authors are Siva Devireddy, G. Sabarinathan, and Janine Coughlin. Read the paper here to learn more about how Siva overcame his various challenges.

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