 Since we are talking about a subject that is international, I wanted to begin by saying that nous sommes ici avec mon ami Nicolas Sazard, de groupe SOS, and also with my mate from North London, correct? Dan Borellowitz. And we're going to be actually having a pretty important conversation about the question of replication. Each of these gentlemen represents a tremendous amount of passion and interest and also experience in thinking about a lot of the questions that some of our earlier speakers were talking about. And I'm not going to dive into what I think some of those questions are right yet, but after each of them gives you a little bit of an introduction, I think we will probe them rather deeply. And for me, it's actually sort of a pleasure to be with a small group for an hour. So selfishly, this is a total treat for me. For our gentlemen here who've come a long ways to be with us, if you can act really big and ask lots of questions and keep them really energized, that would be super, because I know it's kind of getting towards lunchtime. So I'm going to start with Dan. I know you've got a brief introduction, and we'll roll that. And then you can kind of finish your introduction, and then we'll turn it over to Nicolas. OK? Great. Whichever you wish, you might go on if you. OK. Do you want to roll the slides? OK, so I've decided to make my life slightly difficult, and hopefully this presentation is slightly more interesting, by presenting in the style of Petticoacher, Japanese presentation technique. 20 slides, each slide lasts for just 20 seconds, and they auto-advance. So if you see me running out of breath or panicking, that'll be why. So I've worked for an NGO called SEDEC for the last four or five years. It's a Jewish organization, but working regardless of race or religion in Ghana and India. This is a picture of me on my last day with my little boy, Sunny, wearing an I loved SEDEC t-shirt, just to prove that I did have a lot of commitment. Now, working for an NGO, I got quite frustrated, actually. I got frustrated because we were a grant-giving organization, giving to organizations like these. These are three different organizations making baskets in India. Each NGO is different, each doing their own thing, enormous reinvention of the wheel and waste of resources. And actually, what I started to realize is that it's sometimes the old ideas, the ones that are tried and tested, like the wheel and fire, for example, that work. And actually, maybe we should be doing a bit more of that. But beyond that, something else really frustrated me, which was that actually these projects tended to be able to help 50, maybe 100 people really successfully, but the problems were huge and growing. And actually, there's a real issue matching up solutions that work to growing social problems out there. So I started doing a bit of thinking about this and got onto a program called the Claw Social Leadership Program. This is Dame Mary Marsh, who runs the program. She was on the board of HSBC and runs a National Children's Charity. And it was just a great opportunity for me to think about this issue of scale. How do you match the scale of solution to the scale of problem? And pretty early on, I came across a brilliant organization called the Trussell Trust, who are a food bank based in the UK. Very simple model. They help people in emergency food situations. So people donate food. They hand them out. So 2004, they had a brilliant, brilliant model that was really working, helping a lot of people in their local community. And they decided they want to get this over the whole country. So what did they do? They boxed it up. They created a charity in a box, business in a box. In there went the brands, the systems, the processes, the monitoring and evaluation tools, everything you need to replicate. That was 2004. So a few years later now, they've spread this across the whole UK. There are 250 replications of food bank across the UK, helping over 200,000 people out of food poverty. They've really managed to very rapidly reach scale. And they started small, but now they're opening about two a week at the moment. So really, really impressive. So I got excited, started to think about where else I could find models like this. And you'll be pleased to hear I hung out in the McDonald's head office in the UK for quite a bit, finding out about how their systems work, the body shop too. And I've actually just written a piece of research which will be published next month, which McDonald's have green stamped, allowed me to use the golden arches. Started looking in India. Childline India, it's a phone number that street kids can call up when they're in trouble, 1098. And they're connected to local charities and statutory organizations. Same thing as the food bank. They wanted to replicate over India, but they didn't want to grow big. They boxed it up. In the box went the technology, the brand, the guide for how you set up a Childline. They are, year 2000, they did that. And now they're in 215 cities across India with 450 partners. It's a really, really impressive scale by using this replication approach. I, as you can tell, got quite excited by all of this and met this guy, Michael Norton, his serial social entrepreneur. He's founded, I think, 40 organizations. And he said, social franchising is it. We should set up an international center for social franchising. So I, this is in October. I quit my job the next day and founded the International Center for Social Franchising. We're a not-for-profit. I wanted to do that because we're mission focused. And our mission is to replicate 10 proven social projects in the next four years. So I'm here trying to find the best proven social projects to help replicate. Our business model is that we work with corporates. You see Galaxosmith, Klein, Experian there. And we use the surplus, the money that we generate to subsidize rates working with some great charities, NGOs, done some work with Oxfam, Street League in the UK, and a bit of work with Big Society Capital. So I want to just talk a little bit about the process that we go through when we're helping someone replicate. First thing is it's about proof. Proving the project actually does what it says and is replicable. We do a feasibility study, which uses a list of questions that we ask each organization. And you can find some of those questions on our website if you're interested for your own project. Once it's proved, it's about designing for scale. What is the best mechanism to use for scaling up? We don't go in saying we're going to franchise you. We go in saying, what is the best route to scale? And very often replication is it. We then look at what we've got and say, right, this is going to work, maybe it isn't. If it is going to work, we systematize. And that's about creating the box. What goes in that box? All the systems, the processes, everything you need to replicate your organization. And once you've done that, step four is repeating to scale. And that is around piloting. You'd normally do a pilot in maybe two or three different places, slightly different contexts to test it. And once it's tested, then you're ready for exponential growth, much like those two case studies we saw at Childline and Food Bank. So that's my 19 slides. This is my 20th slide coming up right now. Place. So I'm here really looking for proven ideas. Ideas that could be scaled up. We partner with organizations, hopefully some in the room are interested. I would love to hear if you've got any organizations. There's my phone number. Phone number? There's my email address. I'd love to hear if you've got projects you think could be scaled up and have that conversation. So I'm looking to the conversation now. Thank you. Well done. Let's do a quick check of all of you. How many of you are social entrepreneurs? How many of you have social enterprise ideas? Okay. So great. We're in the right conversation. Nikolas, how about an introduction from you? I think you have some slides for video? I have one slide. Okay, one slide. I think it's working. I don't know if it works. Let's see what happens. No. Nope. I think it's coming. I guess it's working. That's fine. We're waiting for a slide. The slides. Sorry, everyone. Pregnant pause. Appointed pause. Okay, great. There we go. Thank you. I'm going to tell you a story about a French organization that is called Group SOS. Group SOS has been created 28 years ago and its founder, there was a problem in France that was not solved, a social problem that was a problem with drug-addicted people. There were no structure in France in 1984 for drug-addicted people. So the founder of Group SOS decided to set up a social business oriented on drug-addicted people. After two years, he figured out that lots of the people that were in this structure, that were the users of this organization, lots of them were HIV positive. So what he did actually is to find and to organize and to set up an organization that could care about HIV positive people. And it was the first structure in France doing that before the public sector and all these kind of actors. But these drug-addicted people, lots of them and people who were HIV positive, they had no house. So he decided to set up a housing program and the people who hadn't houses were totally unemployed. So he decided to develop other activities and so on. It's just to say that the organization, how it has been structured, it's we're focusing on the people more rather than on the activity. We think that every single exclusion is a mix of several exclusion. So therefore we have a wide range of activities trying to solve the big social issues that we're facing in developing countries and not in developing countries. So that means that our five big issues that we have in France, but I think it's the same in the US and in Europe more globally, it's health. So we have structures and entities that care about health program for the people that are not able to have private insurance system. We have structure for elderly people because people are getting older and older and lots of them are not able to have medicalized structure for caring, yeah, for them. The third one is housing. Obviously housing is a big issue and especially for the poor people. The fourth issue is education because it starts there, finding, giving the same chances to every child, everywhere in the world is absolutely fundamental and the fifth problem is unemployment. So what we do is that we set up we programs and businesses that hire only long-term excluded people from the labor market. So with all this structure, we globally 10,000 employees, so 10,000 full-time jobs, mainly in France. We have an impact on over one million people in France. We usually say that we have seven million people that are considered as poor in France, so it's quite a big part and we have 750 million US dollar turnover every year. So we became slowly the biggest social enterprise in France, I think in Europe as well and one of the biggest in the world, but focusing on the issues of poor people, people that are facing inclusion in developed countries because the models are very different from developing countries and to developed countries, so we're really focusing on that, finding the right solution for these poor people. And what we figured out after 28 years, we set up an impact investing company because we thought that it was important as well to invest in other companies that find solutions, but mainly we tried to replicate what we did in France and I don't know lots of English expression, but there is one that I know that is why we invent the wheel. I hear that all the time I come here and so that's true. We developed models that you can replicate, I think in the main and lots of developed countries. Obviously you're not Coca-Cola, that means that you can't just take a model and say I'm gonna spread it to the world and do the same everywhere. You have always to adapt to the local context so it's why we're working with partners in Japan, in China, in South Korea, in Italy, in Spain, in the UK and so on and now we're gonna try to set up things also in the US so I'm very happy to be here and to share our experience with you. Thank you. So how many of you were listening to the plenary speeches this morning? How many were listening to the concepts? Okay, so a lot of what people were talking about on the main stage here this morning was about scale and one of the things that I've observed over years of practice and also thinking about some of these ideas that we're trying to use is that often social entrepreneurs and even social enterprise directors are confused about the difference between replicating and scale. So one of the things that I'm gonna ask both of you to keep telling us about is how you think about replication and when you think it turns into scale, okay? So we're gonna try to focus on that and I'm gonna get you all to help me by asking questions about that because you've got two really, really great models here that are ones that any of us can participate in. We can participate in Group SOS if we care to think about ourselves as a potential partner for expansion in the developed part of the world. Clearly Dan is looking for social entrepreneurs, social enterprises that could fit a franchising model because he's passionate about replication that turns into scale. So there's a lot of opportunity sitting with me on this stage and somehow in the next 45 minutes I wanna make sure that we are together capitalizing on that opportunity. So I think where it starts is actually with the theme of this particular one hour which is technically speaking the theme of public-private partnerships. So before we get into sort of these questions of replication and scale and Dan I'll start with you. When you sort of decided to quit your job and start the center, how important was it to you to think about the relationship with the public sector in terms of being successful? Can you tell us a little bit about that in the UK and sort of as you think about your model? How important is the public sector? So I don't know if this is gonna be the answer you want but I'm fairly agnostic to the sector actually. I mean I think in the UK particularly there's some really sort of interesting potential with public-private partnerships but actually franchising social replication is a business model that applies to a whole host of different sectors and we just did a bit of research for big society capital that a few people have probably heard of from a lot of Londoners around it's a new billion dollar impact investment fund in the UK and actually the research found that there's just no correlation between organizations that have successfully replicated and the structures. So there were a few charities, there were a few sort of public-private partnerships. There was everything, we have kicks which is sort of a hybrid model. So when it comes to replication I think the important thing is not necessarily what the model is but rather does the thing that you're replicating, is it worth replicating, is it proven? So you're really much more interested in the business model and the question of whether the sort of public sector participates that you're pretty agnostic about. I think so and then in terms of your scale thing, I mean I just think replication in the commercial sector an accepted route to growth is selling chunks of your company. We obviously can't do that, don't want to do that. So how else can you do it? In the commercial sector franchising or getting other people to run with your idea because they're bringing in capital but also because of the sort of energy that they're bringing in, sort of equity is a really accepted route to growth. So the industry in the UK is 13.5 billion pounds in the US, it's I think in excess of 80 billion. So if they can do it, the stuff applies to the social sector, we should be doing it as a route to scale, yeah. How about you, Nicolas? How important has the public sector been to particularly the tremendous growth that you've experienced over the last few years? For us, the public sector is absolutely fundamental but it's more cultural, it's a cultural thing. Obviously in France, for you in the US, I hear lots of your politicians say that we are socialist in France and that we, the models we developed, we're like more linked to communism rather than capitalism. So culturally obviously the relationship with the state is really important to us because we believe in France, most of the French people believe that the state has an important role to play and here there's a difference between our culture and the way that, yes, we think that the state has to organize everything and has to say how for the social issues, what to do and for helping the poor. So we work closely with the state, it doesn't mean that we get grants, subsidies and so on, we don't have this kind of thing, we really on a market-based and we find market-based solutions but obviously you need to understand how it works in a country and so on and it's why when we're in France, in Italy or in Spain, we work with the state a lot because they are the only one and the only actors that know the keys and the real social issues where there are the problems and all the needs that you have. But when we go for example in Asia, especially in South Korea and Japan and so on, the state has not the same role and so we work more with big corporation and these are the ones that care about the social good as well. So I think what I'm hearing from you is that you choose your partners depending upon the developed country that you're expanding into, sometimes the state's very important culturally as well as for support but often now you're finding it sounds like that the private sector is gonna turn out to be very important and certainly I was about to ask you about, for example, I know you've expanded recently and are working with South Korea, can you tell us just a little bit about what the relationships are there between private sector, public sector and sort of enterprise? South Korea is absolutely fascinating. I am fascinating, I love this country because 30 years ago it was a developing countries, they had no food, it was really terrible and in 30 years they really achieved to become one of the top 10 countries in the world and but now the problem is that they had big growth because of their very conservative system so now they have been able to develop the economy and so on but they just discovered three or four years ago that there are lots of poor people as well that they created lots of growth but lots of people were not on the good path and were facing difficulties. So they say they would like to do things and especially the state wanted to do things but what is quite interesting is that the states say it's not my role to play because culturally the state has not this part to play but the big corporations should do that so they asked the big corporation to find a market-based solution to fight this kind of problems and the big, the Samsung, the Hyundai, the LG and all these big Korean companies decided to develop inside their activity, inside this big organization, social businesses so you see Samsung had three or four social businesses Hyundai had three or four of them and so on. I had the privilege to be with Nikolas in Europe a few weeks ago talking on stage with a large European conference about this subject and our colleague from South Korea was there and it was really fascinating actually. If you think about again the comments this morning about when you're reaching scale that's when big business wants to participate and I think that's an apt comment in some parts of the world but in other parts of the world an example of South Korea you're finding that the private sector is actually very interested in the social enterprise space so part of what I really wanted to draw out in this conversation over this hour is that I think we're getting a long ways down the path of creating a real conversation here at Socap but one of the things I continue to observe is it's only in rooms like this that we get to take it apart a little bit and say well that's true in this part of the world but it's not really true in this part of the world and given how many of you raised your hands and said that you were social entrepreneurs I think that's a really important discussion to continue. How are you thinking about big business as part of your model? Having spent your time at McDonald's. Yeah, well so most recently and probably relevant to this we've just done a three month project for GlaxoSmithKline, the pharmaceutical company and it's been absolutely fascinating because I come from the social, I run charities and then suddenly I find myself in these big multinationals and the surprising thing is that there are they're good people there like these people have got good hearts I'm like really? Which has been wonderful so I've been working with the senior vice president for the developing world so he runs the 50 poorest countries in the world and they are pretty forward thinking what they've done is rather than measuring the success and giving bonuses based on profits of the sales people they're giving them based on market access so how many people are they actually reaching? Now obviously that absolutely transforms the way they think about who they should partner with because it makes NGOs it makes all of these local players really interesting good partners and it also means that they don't have to worry as much about profits I mean obviously they are thinking about profits but they're thinking medium to long term within these countries so the piece of work we did for them was we looked at 1,400 health innovations from around the world and we then narrowed them down on a five point scale for replicability and the possibility of scale and we then actually sent three researchers out to Kenya and India over a couple of months and visited 50 projects and have narrowed that down and recommended to GSK which ones they might support and those projects are a whole mix of different NGOs and others so I think going back to the point before big business has real potential to make change if they're the right partner great sometimes they aren't but actually I think there are people who are within big business who are really interested and it's kind of just getting to the right person the person at the top makes a big difference Do any of you out in the audience represent the corporate side of life? Where are you from? Japan? We have terrible bright lights so I'm sorry if I look like I'm squinting at you That'd be great, here comes Bjorni I'm going to ask you again where are you from? So I'm from Tokyo and I work for a Japanese think tank and we provide consultancy service to Japanese multinational corporation to do business with social enterprises in emerging markets at the bottom of the pyramid market Thank you very much so we may come back to you for more conversation in a minute and here in the US certainly in terms of my role here with Socap with our expansion of the hub concept around North America with some of the things we're doing to accelerate entrepreneurship I find that corporations are highly motivated to talk to us at the intersection of innovation so when there's an opportunity to talk about a solution I find the corporate environment is very, very interested Yeah, there's a microphone Bjorni's going to help us out so we turn this into more of a discussion Thank you I don't want to change the subject on you but I do have a question You can try it and we'll see if we'll let you go ahead I'm really interested in the commercial relationship between the original social enterprise and then the franchisees basically I'm interested in is... are these franchisees to use the... to come back to the case studies that you gave us the trustal trust, child line and group SOS I'm interested in does the original social enterprise have a financial stake in the franchisees are you licensing the brand or the business model or are you doing it for good of your heart because you just want to see your model replicated? It's a fantastic question and you're actually doing a great job of the segue that I think we should get to which is to me it's sort of about how you're capitalizing your you know, how you're capitalizing your strategies and also at what point does one form of capital strategy change to another which I think is part of your question and if we don't get your question answered we'll take it on again so Dan, I think again I'll start with you Sure, yeah so I'm terribly sorry there's just no set rules once again and I think that you know, the paper I wrote was comparing McDonald's to the trustal trust and I did that on purpose to sort of get you know, very tight control commercial model through to more dissemination so you've got a spectrum and the decision you make as to how tightly you want to control just totally depends on your aims and what you want to do as an organization so Food Bank for example is operating a a model whereby they charge about $3,000 to basically buy the box with all the information in and with that comes a whole lot of training and that sort of thing and it's subsidized so it will probably cost them double that much for each replication but they've set their price point so that you know, the idea can scale up big so it's a sort of mixed model and they think when they reach 350 that the center will be sustaining they then charge about $1,000 a year for each replication and you've got LeMatte which is a chain of hotels across Europe and they hire 50% of people with long-term disability that is a very traditional commercial model each social franchise is generating income but the franchise or the center is doing all the marketing generating marketing material and that sort of stuff and therefore each franchise pays a percentage you know usually around 10% something like that to the center for those services so operating in more of a McDonald's type way and then honestly you've got everything in the middle I suppose just another quick one worth mentioning is just the pure dissemination model AFLATUNE which does child financial literacy education they created six curricula to teach children financial literacy and I mean I've seen lots of people create curricula the challenge is not creating the curricula it's how to get people to use the thing so what they did is they've got a center in Amsterdam which is sort of the franchise or they didn't call it that but it's the center of expertise any NGO or organization running financial literacy training can apply for membership membership costs 50 euros a year so it's nominal since 2005 they've reached 82 countries they've taught 2 million children already and I mean that number is just growing exponentially so they're using a model of replication that you know it's not a full social franchise they're making it very inexpensive but they're reaching rapid dramatic levels of scale by just playing with the ownership model is that do you have a follow on question to your question I'm going to have Nicholas try to respond if you're still good okay so when you Nicholas when I know a little bit about your model and I think it's important for this audience to understand your revenue generation because you know your capital is really self generated at this point do you want to talk about that a little bit yeah sure just first if I just can answer the question it's the right question it's definitely like this what we do is we have actually and it's quite interesting because you did that a lot in the US we're not used to speak about the things that didn't work but we always speak about the things that work but I think it's you can understand that we had a really bad experience actually in trying to franchise and to replicate a model it was really difficult to work with these people even if they're really they seem to be really committed at the beginning but at the end we just discovered that it was not like this and we had big problems so at a certain point we say what we're going to do are we just there to replicate with everyone with everybody work with everybody and just nothing and at the end we say no it doesn't work like this a project works when you want to work with someone and when there's a real fit and I think that the most important thing is the human relationship you create at the really beginning that seemed to be maybe a little bit naive but I'm sure from a business point of view it really works like this because if you're working with people that you don't want to work with and you feel that it's not working it won't work I mean it's very difficult to do that so what we do we don't have because you have very few social enterprises that are achieved to scale and then achieved to really to replicate their model we still have this change and this opportunity to choose the people with whom we want to work and then after to adapt the model in every country as I say for example if I work with big corporations in countries like South Korea obviously I won't give it for free not because of me but because it's fair and it's like this but I can perfectly work and that is what I'm doing in other countries in Italy or in Spain with so young social entrepreneur that would like to replicate the thing and I know that they're young social entrepreneur I know their situation so I can do it for free I mean it's really open at this point of view it depends with whom you're working and how far you want to go in this relationship what we try to do at Group SOS is always have to keep having a little stake not to be, not to have the majority because it's not, I think that it's very difficult to do a big company and to own everything but still to be implicated and to give your insight and bring your experience and so on in the project so still be at 20 or 25% or maybe less or more but it's really open but still have a look but not controlling it because it's impossible I don't know in Japan or in South Korea I'm not able to say what you need to do for solving the social problem I mean you need humility as well and to be a little bit humble by doing this So now tell me about how capital works in all that because I think it has implications I know that part of what can drive success for you is you have Le Comptoir which can invest as part of your organization can you tell us a little bit about that? Sure, yeah The business model is very simple is that we're working with, we have lots of clients we have private clients, public clients, individuals institutions and so on it's really open, it depends on the activity but what we try to do is to focus on the social issue that we have activities where for example with the public sector we're working with them for homeless people in France in Paris, we find solutions for more than 2,000 homeless people in France every night and we care about them from a medical point of view Why that? Because we went to the public the national insurance company and we said what are you doing with the homeless people that are sick? Because homeless people usually when they just have a flu they go to the hospital and they take drugs and then they go back under the bridge but under the bridge if it's minus 10 degrees Celsius even if you have medication it won't get better so after three days under the bridge they get really really sick and they're brought into a public hospital and it's the public hospital that pays for that and it costs 300 euros per night per person and so that's a big problem for the state because it's the state that pays for that so what we told to the national insurance company we said you're paying for that what we could do if you give us a third of what you would give in this case we can care about this guy and maybe be even more efficient because we will have social workers that will work with this guy and maybe try a long term solution for him so that's typically how we work with the public sector is that we prove and it's the SROI the social return and investment that we prove that working with us they will save money and the quality of the social service will be better as well so it's proving the efficiency in terms of cost and in terms of quality that's with the public sector with the private sector we can work with big corporation we have a caterer for example we're doing catering with long term excluded people from the labor market so we're doing catering our clients are private companies why do they buy our food that we produce through the caterer not because the people are excluded because if you're doing marketing just saying that it's made by excluded people even when the food is not good the food is not good and they have clients, they have people so we hired the best chef of two years ago we hired the best chef of France and asked him if he wants to get involved in this project and so now we've become one of the top three caterers in France but the people that are our clients they don't know that the people that are working are long term excluded so we try to change the things like this and so that's working with the private sector and with individuals we have shops, we have lots of things but for every single entity that we have we're always trying to find the right business model we have rentability is important we reinvest all what we earn we reinvest everything in the activity because we're totally social oriented and we're focused on that when we have the chance not having very greedy shareholders so we're happy by doing that but the model is that we develop an economic model for every single activity trying to solve all the social issues it's not always possible but we try to do that so after when you replicate that in other countries the relationship is totally different even if you have the solution the clients will not be the same the people will be different the social needs can be also different so you always have to adapt and the best way to do that is to find local partners and these guys the local guys are the ones that are able to tell us what to do and so we work always in partnership we're not taking our French flag and bringing it and putting it everywhere we're going I think this is a great chance to actually turn this really truly into a conversation among us and it looks like you've got your hand up but here's what I think I think what we have in the audience are people who are interested in executing on social solutions and we have on stage we have a couple of opportunities as I mentioned so I'd like to just sort of turn this over with Bjorn's help to some of you to just ask your questions but let's do it in the spirit of, you know I don't want you to stand up and give a pitch for your enterprise I want you to, let's try to work together to figure out what these opportunities really consist of please go ahead you had your hand up first, yeah I don't really want to pitch my social enterprise I just have a question for Dan or I said we wouldn't let you pitch anyway no, okay, yeah that's what I meant but I'm not going to explain about my business it's not really interesting now I'm really interested in the franchising what you're doing I just, the previous session I walked up to the people from the panelists and asked them do you have some more best practices what correlates with my project so it's always a question that remains however, from my point of view at least I would recommend to not use the franchising definition that much because it's kind of, yeah people can interpret it in a wrong way I guess too simplistic, like you already mentioned it's about diversity the context, implementation that you have based in the implementation so you have to be aware of that always so I think about that a little bit that if you want to work with certain countries or something that they don't feel like oh, you're part of McDonald's like you already do not want to distinguish yourself from and furthermore I was wondering the business approach you had a comparison in the beginning and I was wondering businesses have an approach from a marketing perspective if you work to the supermarkets they know exactly where to put the chocolate so they can brainwash the consumer more or less about buying it and I was wondering how will you do this with for social entrepreneurs let's stop you right there yeah is that the first part of your question yeah, okay Dan okay, so well on the first question I absolutely, I mean I'm going around and talking about franchising all over the place so I'm very aware of people's mixed understanding of the words I had to choose a word and I thought quite long and hard about what it might be replication, repeatability, franchising they're all sort of these Latin words and you put social and franchising together and there's no ideal way to express this stuff so I picked one and basically as long as people come and open dialogue about how they can replicate and scale up that's fine with me in terms of your question so if I can take it as about sharing of best practice and what really works so I'll use an example first of all from Matt Donald's in the early days the Big Mac was actually invented by Franchisee and that might seem like a little sort of crass point but actually when you have a network for example within the food bank of 250 organizations running the same systems and processes being monitored on the same evaluation platforms one innovation in one area for example one food bank has just discovered that they can generate income because they're community based by getting second hand clothing donated and then selling it on one food bank discovered they could do that and then very quickly that was disseminated across the entire network of 250 food banks so I think what the network does with a scale is it just allows you to innovate across the network and really share best practice quite efficiently effectively over here I think thanks and then I think the woman behind in second row had a question too thank you very much for the presentations I was wondering in your experiences have you had problems with branding at the end of the day you were working with organizations that are natural allies how does the branding work in there if you're trying to replicate a model across countries and across sectors we'll take that first I have an interesting story we're developing in South Korea one of our structure and that is called Thé in France Thé is really smart, really nice it's a really nice French word but it means actually something dirty in Korean so when you want to replicate and you have the brand obviously the name means something different in another country is very difficult so what we really we still for that also we really open and we say that obviously you have to protect your brand because we had also difficulties in some countries where you had other people that tried to take the brand and do something with that so you still have you're still in the business world and you still have sharks and people that want to you know to take what you built and what you create but still it's really open I mean it's once again it's not about replicating we don't want for example replicate absolutely the group SOS and put a flag on it and say that's our brand and see the network and so on and have a big map on our website and so on and say and show how strong we are it's more about replicating a solution that is adapted to a local context so the brand is something obviously important in terms of image and communication but sometimes it's better to really to set up a new brand that is adapted to the local context and so on so you really have to be open and on that and not to be focused on your expansion and so on and more into what I want to replicate and what I want to do is to help the other people and to get faster in solving the social issues they're facing I know there over here and I know that this lady had a question we didn't get to so after you we'll go back to her my name's Max Piszczalik I run a commercial accelerator in sub-Saharan Africa out of South Africa looking at many different franchise models and replication models I wanted to ask a question on collaborative governance because the ones that I've seen are most successful it doesn't have this very strict hierarchy yet it has some sort of level of quality control and there's definitely a network and collaborative governance effect that helps scalability and replicability and engineering leaders within the network and I just want to leave any comments or insights into that That's a fantastic question and certainly speaks to this idea of openness and focus on people and solutions would you like to take it first? Yeah, sure There's one just brilliant example of this I think and this speaks to is it franchising, is it not? Well, if somebody's replicating to scale and they're using the replication as a tool to spread their model I think that's a great thing They're called Komossi based in Flanders in Belgium Essentially, five or six different people who own charity shops, secondhand shops you call them thrift shops here I think were employing mainly people with long-term disability and they were coming under increased pressure from the commercial sector so they said, hey, we're all doing this on our own let's get together and create a network so that was sort of about 10 years ago and the network grew there's now 100 of these charity shops in the network What happened over time? They decided they wanted to be under the same brand because if you're selling stuff and this comes back to the brand question whether or not you are under the brand or you're powered by the brand they can keep their brand name just depends on the product you're selling but in the case of a charity shop they needed to be under the same brand because they wanted the quality to be the same across everywhere So there's now 100 of these charity shops in the network and what was interesting is that over time they formed a federation and actually the center they started to put more and more of the tasks centrally so things like the marketing, the branding and then strategic thinking about how they could best get their products out there things like talking to government all of that stuff became central so actually they sort of ended up with a franchise model but each of the 100 shops comes together twice a year and actually sets the policy of the center so you've got this great symbiotic relationship and I think that there are a number of ways to make that relationship happen it sort of fits into the whole cooperative movement but when you get it right and the incentives are right it really is I think very powerful I'm Diana Pollard from Dallas, Texas I'm a business consultant and I have worked with several far profit companies that use franchise models one of the issues they have and I would like to hear how you deal with it is not just strategic thinking but strategic planning looking five years 20 years into the future I know that can be very very difficult for a franchised company and I was just wondering for companies that are social enterprises you know what do you see have you got experience with thinking about the sort of long horizon with some of your partners in the developed world can you talk a little bit about how you try to engender that kind of strategic thinking as opposed to just now we've got them as partners let's hope it all goes well yes for example we're doing also franchising it's one of the parts we have a fair trade network that is called Altarmundi that are fair trade shops and it's the first network in France and one of the biggest I think in Europe as well so we're doing franchising and it's really really complicated to do franchising that's from our point of view when you do it in a really classical business way I mean when it's a social enterprise because the people are committed obviously from a personal point of view to do a social business and then the other way you have these contracts or these franchising contracts that can be really terrible sometimes and really difficult and so it's something that we're really working on it's to become smoother in the way we set up this kind of relationship and not to be and not try to it's always the same but not try to replicate exactly the things obviously quality is important when you use a brand quality is fundamental so we can check that but you can do that in taking I'm more into joint ventures I really believe in this joint ventures things when you really take a stake and you really you're implicated in the project and you work hand in hand with the people franchising social businesses is to me I mean quite difficult and I prefer doing joint venture but I'm sure that you have other examples that shows the country have you thought through how to try to engender that sort of strategic long view can you give us a couple of tidbits? I mean absolutely the things you're saying about this being difficult it's very true but behind each of the stories here and the other ones I've talked about the reason why they've succeeded is because people are thinking strategically for the long term I mean in the commercial sector in the UK certainly it's five to eight years before a commercial franchise is ready to grow exponentially so if we're talking strategically over five to eight years you have to at the point where you choose you're gonna replicate do it properly you have to go through all the systemizations you have to make sure you're getting the right franchisees you have to test and test and test again before you're ready to grow exponentially so this is not an easy thing to do and sadly the devil is in the detail so you miss one or two little details and it really can have major knock-on effects so I think that there's some I don't know the people you're working with but I think certainly in the social enterprise space if you're not thinking strategic long term at least 10 years then this is probably not for you Do you think that part of the difference in the social enterprise world is that sort of deep personal kind of stake in it that perhaps transcends some of the kind of grittiness of the commercial franchise model? I don't know it's a tough one I mean when I asked Matt Donalds what the most important thing to remember in franchising is they said the people and I don't think that's necessarily different to non-franchises but I do think that if the people are wrong in a franchise system and it's exactly what you were talking about this is a marriage and if you get the wrong franchisee they feel like they're own their organization and the thing breaks down in spectacular style so you've really got to make sure that the person is right now in the commercial world you know the people running Matt Donalds they passionately believe in what they're doing they would not get a franchisee and as they believed in the project the product 100% and really wanted to sell that stuff so while yes the motivation is different in a food bank it's usually churches and these are people who believe from their faith they should be doing this you know if you're not interested if you're not in it for the right reasons it doesn't work across the spectrum I'd say I'm by the way a California native and old enough to be able to tell you about the sort of original McDonald's I mean in the sense that I don't know if anyone else in the room can share this with me but in the early days of McDonald's at least in California the spirit of McDonald's was just as you just described I mean they would not come out with anything that wasn't part of the vision of this guy you know who founded this amazing golden arch and hamburger thing you know I haven't eaten at McDonald's hamburger in 35 years but you know I certainly remember from my childhood this sort of story that you know in the 60s my parents would bring home and tell us about this guy that you know was really an entrepreneur you know the theme is obviously people here did you want to say something yeah the more true you look at I had something really quickly I think yes it's about the people and when you think about the strategy as I mentioned how we create our group it's first we didn't have this vision this global vision of saying we're gonna be this big social company at the we had the social problem we wanted to solve it it's a quite a short term kind of things and then we created and we developed everything and then we're doing this kind of activities but we're quite surprised ourselves to have all this kind of things and you it's really difficult when you ask the founder for example of my organization why did you do that he say yeah but I didn't have this vision I mean my vision is to be always very flexible and to adapt all the time because social needs they change very quickly as well and you always have to adapt and I think it's not necessary to have a long term vision it's like a business plan I mean you know that on a business plan what is written in five and 10 years you never have to believe it because you can't know what will happen and I think you need to be humble on that as well there's something that keeps going through my head and I don't know if we'll get to it on stage but it's a question I'd really like to converse about offstage if possible which is as someone who's an entrepreneur myself one of the things that we're talking about is this importance of the fit of the person and when that goes one of the ways in which that goes badly for entrepreneurs is when you're trying to access capital if you are trying to raise capital as opposed to having a capital having already solved your capital problems often that's when you get into trouble my observation as an entrepreneur in terms of finding yourself this is another American slang in bed with the wrong people and once you start down that path it can be extremely difficult particularly if you're a social enterprise to untangle those knots and so that's something that keeps going through my head as I listen to this extraordinary focus on the relationship, the people the way to adapt to the local model but yet use these methods that are really tried and true from the commercial side about replication to scale there's a question back there and then one here and then one here and we have three minutes so we probably have time for one, two, three oh go this way, okay there's one back here too and then one here hi, thank you guys I'm from Vision Spraying and we do a little bit of franchising and something we're doing now is scaling through partnerships and something that we're constantly I guess struggling with or challenged by is this vetting process and you mentioned passion and the people as being one of them but that does take you to a certain point but have you had experience with these local partners in country that have not been good fits for partners have you seen a strict vetting process as something that's important or is it more of a flexible case by case basis on how you judge potential partners to help you scale your models and I know Nikolas has already articulated this very, very focused effort to find the right people so if it's okay with you I'm gonna ask you Dan have you added anything to your vetting process that would be unusual or unique that might be responsive to this question is there something that you've thought about that we haven't already talked about that's sort of a twist on the vetting process? Yeah, I mean it depends on the different organization what commercial franchising research has shown is that when people are franchising for the first time they tend to select usually one in 10 they'll take on as a franchisee this is just in the UK so I don't know how it translates now what happens or even less than that you know one in three, one in four what tends to happen is that the first few franchisees then the relationship is really hard you know you've probably chosen slightly the wrong person and because you're learning as well they're probably slightly more entrepreneurial than your ideal franchisee profile and actually once you get past that initial bump of the first three, five franchisees and you know exactly what the profile of the person is you're looking for you know the next 100 are a lot easier so I think probably just a more general comment there rather than specific yes Kate's store architecture for humanity I would agree with that you know your profile I can smell an architecture for humanity person a mile away right but I wanted to ask yeah I wanted and they smell great I wanted to point out that you know NGOs have been doing this for god eons right we all have chapters and affiliates and I was wondering if you had done any work either you're looking at that model and the revenue model behind that the revenue sharing the control and so on thank you yeah we have a great experience in doing that because I think that the NGO model has been a catastrophe globally in the way they organize that and it's why it's important also it's interesting bringing this part of business I mean we're half an NGO we're half a bit classical business we're half the state we're half so we're quite a mix of all of that and obviously the model of the NGO has been the first one we looked at and we said how did they do that and you have lots of NGO that are not coordinated for example you have NGOs like the Red Cross you have Red Cross France Red Cross Germany Red Cross I mean everywhere and they not coordinated at all I mean there it's something just about the brand and without coordination and you see that in the word of the NGOs you see that a lot and it's not very useful actually just a name that you know and so on and they haven't been able to mutualize their experiences to mutualize their knowledges and so on and it's what I think when you're a social business you have to learn for the big corporation is this ability to make things more efficient well said and without efficiency of course you can't achieve scale since the definition of scale of course is is that as you grow bigger your efficiency becomes greater I think there's yeah thank you hi my name is Jessman Rodriguez and I'm the CEO of Hotbread Kitchen which is a social enterprise in New York and we've grown quickly and are now expanding and considering a franchise model and one of the things we're incorporated as a non-profit organization but have had real commercial success and are thinking about whether or not it makes sense for expansion to happen in a for-profit or a non-profit model so I'm wondering if you've seen any examples that have been successful or any sort of cautionary tales around that question of either having a sub-organization that has a different kind of corporate structure than the parent and probably all three of us have had experience with hybrid organization structures but this sounds kind of like it stands yeah so this comes back to the no-set rules thing so there's quite a bit of work that we need to really understand the model to know which one is best for you so once again I think probably most useful is a more general comment rather than specific which is and maybe this is just to social enterprises generally but the ones I see the for-profit models that I'm seeing that are successful whether they're actually incorporators and NGOs or whatever are ones who are really clear about what comes first is it generating income or is it the social value now I'm not saying that then social value isn't important you can have an organization that puts profit first and social but the risk of being a for-profit model but having social more important is that actually if you're not earning money and the person running the organization isn't receiving a salary the whole thing doesn't work so the critical for me is just setting values you know being really sure about where your value is what you're willing and not willing to compromise on on the social side and then but being absolutely fixed on saying number one is this has to generate income and we're gonna find a way to do that so it's a balancing act and it is it's a difficult space to negotiate and slightly different for each person's model one question I might ask myself if I were in your shoes too is if I were deciding today about my current enterprise and whether it was for-profit or non-profit based on our success so far and I hadn't already chosen to be an NGO what would I be today as a way to help think about that question that's certainly been helpful to me a little bit in the past I think we're just about out of time it's going the clock's going the other way which I think tells us that we've run out of time but I suspect some of you would like to pursue individual conversations and I believe both of you around the next couple of days well I'm actually a couple of us are going to go meet up in the hub so if we want to walk over if people have specific questions want to carry on the conversation I don't know if you're around but if there are people happy to do that and thank you very much for this conversation with us and have a great lunch which I think is being served just after this