Posted by: Tayo Akinyemi | May 20, 2010

Chicago for Acumen: If You Build It….

On Tuesday night I attended Chicago for Acumen’s inaugural event at Bull & Bear.  For those of you who don’t already know, the Acumen Fund is a nonprofit global venture that uses entrepreneurial approaches to solve the problems of global poverty.  Essentially, it uses philanthropic dollars, a form of patient capital, to invest in institutions that use innovative business models to reach people who lack access to clean water, health care, and housing.  Some people call this venture philanthropy; others file it under the broader ‘impact investing’ umbrella.

But no matter what you name it, the notion that investment dollars can be leveraged to solve critical social problems has captivated the imaginations of many people around the world.  In response, 40 groups, comprised of folks who support Acumen’s work,  have been founded.  Chicago is one of the newest additions!

Now,  having followed Acumen for a couple of years, I’m fairly familiar with how it does what it does.  Consequently, I viewed the event as an opportunity to meet like-minded individuals and have fun.  But to my surprise, I actually learned something new as well.  Sasha Dichter, Director of Business Development, gave an overview of the organization’s whos, whats, whens and whys while John Tucker, a recent Acumen Fund Fellow, recounted his fellowship experience.

My ‘aha’ moment came during Sasha’s spiel.  He described how Ansaar Management Company (AMC),  a Pakistan-based investee spent many years perfecting its affordable housing model.  Eventually, after a lot of work and even more learning, AMC worked out a business model that attracted the interest of private investors who wanted to scale it.  In those moments, Acumen’s real value proposition, at least from my point of view, became quite clear.  If  Acumen can use its small portfolio of investments to test, codify and share problem-solving problem business models, the knowledge that its investees generate can be scaled.

What Sasha pointed out (and what inspired a revelatory moment in me), is that while  ‘blueprinting’ and replicating these models is challenging, proving them in the market enables the participation of investors who might not have been involved otherwise.  Acumen assumes the risk of investing in these businesses, because its mission and the nature of the capital it deploys incentivizes it to do so.  By the time successful investees emerge, their risk-return profiles have probably shifted enough to successfully attract private capital.

Voila!  Now you have the potential for scalable, sector-changing business models—not a shabby revelation for an otherwise ordinary Tuesday evening.  Thank you Chicago for Acumen for teaching me something new!  May the ‘aha’ generating moments continue!

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Responses

  1. Thanks for your insightful blog post! I’m glad we were able to coordinate a successful kickoff event for Chicago for Acumen Fund and even help long-time followers something new! 🙂

    • Thank you, Ganesh! The event was informative, well organized and lots of fun.
      Looking forward to seeing what’s next…

  2. Also, definitely join the Chicago for Acumen Fund group here! We will be planning exciting events such as a Blue Sweater reading session and entrepreneur events (details forthcoming), and your suggestions and insights will surely help: http://community.acumenfund.org/group/recruitingmembersfromchicago

    • I’ll be sure to do that, Ganesh. I appreciate the invitation.

      • Awesome Tako. I just realized…we introduced ourselves briefly but we were interrupted by Sasha’s speech. I was the Indian guy next to you with the coke drink. 🙂

  3. Hi,

    I am a member of the Chicago chapter of acumen fund. While I did not attend the kick off I am still interested in the work acumen fund does and any projects that the people who join the chapter initiate.

    I was reading your article and I became confused by your use of the word “scaled”. For example in the fourth paragraph and in the last sentence you say that “the knowledge that its investees generate can be scaled”. Could you please explain what you meant? I didn’t go to Booth!

    • Houston, we have a problem! You definitely shouldn’t need an MBA from Booth to decipher my writing. My apologies for that; obviously, I wasn’t clear.

      When used in a business context, ‘scaling’ involves two primary components:
      1) replicating the business/business model so that the company grows in any number of ways, e.g. you produce more goods, make more money, expand geographically, etc.; and 2) the business benefits from economies of scale, whereby the incremental cost of producing another product/serving another customer drops because you’re using the same set of resources to produce more “stuff”. As you noted, I didn’t use the word that way in this post.

      What I meant to communicate in the fourth paragraph is that the investees generate knowledge that can be applied beyond their own businesses. For example, if my company creates a good model for selling bed nets, then presumably other bed net sellers can apply what I learned in my business (assuming I share this knowledge) and adapt it to their unique situations.

      I hope that helps!

  4. Thanks for clearing that up that actually helped alot!

  5. Great post Tayo! You summed up what, for me, is so head-turning about Acumen – the ‘potential for scalable, sector-changing business models’ that can transform millions of people’s lives.

    So nice to meet you at the event last week. Look forward to seeing you soon as we keep the conversations and action going here in Chicago!

    • Thanks, Ryan! It was great to meet you too and I’m looking forward to continuing the conversation.


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