 Hi everybody My name is Jeff Perlman. I'm one of the entrepreneurs introducing sessions And I'm really pleased to be able to introduce today's session my again My name is Jeff Perlman. I'm the president and founder of bright power bright power provides Energy-saving solutions for multifamily apartment buildings and a lot of affordable housing so a lot of our work is involved in providing both software and engineering services to Make apartment buildings and affordable apartment buildings more energy efficient and therefore more affordable I'll be presenting on a later panel later today About in the Cal room about some of the work that we do in affordable housing So I'm really really pleased to be able to introduce this panel on the bottom of the u.s. Pyramid frugal innovation for our communities and I'll now turn it over to Dan Christopher Lee from Petrero Impact Advisors who advises Investors on strategy and for a maximum impact. Thank you Jeffrey, thank you very much and thank you a hearty souls who pride yourselves out of the festival hall and all the delicious food and Networking to come over here and take a nice snooze In the in the comfy seats. It's always the the risk of coming after lunch In a big dark space So we're going to try to keep this session as interactive as as possible We're going to do some brief introductions of each of ours ask a few questions of the panel and then encourage all of you to participate my experience at socap is that Most of you could also be up here on the stage and so we really encourage you to think of questions stir the pot and we'll be looking forward to that as early in our panel as possible So the issue that really has been bugging me I've worked much of my career internationally Investing in companies serving the base of the pyramid in places like Africa and India and the past two years I've been working increasingly in the u.s. And I'm seeing that we have 50 million or so Americans that lack access to health care that lack access to the formal financial system and Don't have healthy foods at the same time we are seeing tremendous Retreat in government services the fabled safety net Is no longer frayed it is getting shredded private companies are not Developing the business models. They don't see the opportunities in serving this this market in the u.s. And Philanthropy has seen a generation of investments Frankly being Reversed or even liquidated in terms of the progress they've seen they were building in many communities To use Tom Friedman's term. We're waking up to a world that is flat Thanks a lot for that Tom and How do we address it? How do we learn from adapt? Approaches that are coming from emerging markets. How do we develop our own? Google innovations that are radically more cost effective that are addressing the true needs of these communities Rather than just having innovation trickle down from the top while at the same time Recognizing that part of that five trillion dollar market that World Resources Institute and IFC identified for the Emerging markets base of the pyramid five trillion dollars is a lot of money Well a big chunk of that money, and I don't know the number for the u.s. A very large market size exists Right here in the u.s. At with our own low-income populations. So we are fortunate to have a wonderful panel today each with a different slice in a key sector of the economy in financial services in healthy food food systems and in health care And we'll be looking at issues both in each of those Rather large industries and hopefully pulling out some cross-cutting issues That each of them is facing comparing and contrasting immediately to my left is Arjan Schutte Who is the founder of core VC an investor in financial innovations that lower the cost and expand access to financial services in u.s. Communities Arjan Could you make that a little more tangible to us? What is an example of a financial innovation that is increasing access to finance in low-income communities? It's after lunch make it make it exciting for us sure Well, first of all to to make it concrete There's there's a Long-standing community development financial inclusion movement in the u.s. That address let's try to address a real need Right people don't have access to basic financial services And I think one of our aha moments was to really understand this that is not just a need, but it is a tremendous opportunity and it is a Not just a consumer market of people who are underserved and a rebanked, but it is really an untapped opportunity And just to give a feel in terms of order of magnitude The underserved population in the United States Represents about a trillion dollars of income and aggregate and Spends just on financial products consumer finance products 77 billion dollars a year for fees and interest So it's a big market. It's a growing market. They spend a lot of financial services And a lot of those are very inefficient so to give a couple examples of what that means specifically We made an investment in a company called rent bureau And rent bureau's business model is basically to collect rental payment data one in three Americans Pay rent and so there's no way for their on-time rental behavior to accrued any positive Manifestation the way my on-time mortgage payment does right that shows up in my credit score Which has an impact on any form of credit I get insurance applications job applications Right without a credit score. You're basically without a face so rent bureau collects From property managers on time and not on time rental payments We sold that company to experience and now 10 million people in the United States who pay their rent either on time or not That data is reflected in their main file Experience score, so it's totally invisible, but we think it has a real systemic impact in someone's life And you know, it's it's one very specific narrow example in which now someone's Who's historically been off the grid responsible behavior can accrue to their? positive benefit Thank You, Arianna, and I look forward to delving into some of those issues in greater detail Next to Arianna is Kirsten Toby CEO and co-founder of Revolution Foods a local champion highly successful and growing company serving over 200,000 meals per day Now if you're interested in scale of impact, it's hard to beat revolution foods particularly in the food sector So a question to you Kirsten. What were some of the biggest surprises that you encountered in building a company a High-growth company like yours where others have feared to tread Well, so I think for for us a couple of the big surprises were we started the company for a very specific reason We saw this obesity epidemic that was you know starting to get a lot of Visibility finally and you know not just because of the health impact, but the financial impact on the health care system And so we we set out to try to change the way that America eats because we saw this as this growing problem that's going to affect our kids futures and One of the biggest surprises we found is that we're actually building a big Scalable company and a big part of that is the people in the company So we set out with this vision of impacting kids You know kind of out there in the world and and what we've realized as we now have 900 plus employees We have a whole community ourselves to take care of and then Attracting the right kinds of people into the right kinds of roles and setting them up for success It's a it's a big human challenge to to navigate and to build to that scale We've gone from you know zero to 900 employees and in six years So it's the sort of human capital challenges have were something that we just didn't anticipate as we were you know Thinking about this as this big, you know vision of creating this impact I think another another thing that we've been really you know sort of pleasantly surprised by it was you know we set out with this Vision of changing the way that that kids eat and and increasing access to healthy foods and we thought that was going to be really Challenging and you know convincing kids to choose the healthier thing and what we realized is that if you make good food Taste good if you make healthy food taste good Kids choose by what they taste and what they see and what the food looks like it's it's not you know We had with so many people tell us when we were first starting the company Well kids will never choose to eat healthy food well Of course they won't choose to eat it if it tastes horrible You know it's it's it's really a matter of making and so that was why we you know brought a chef into the mix and Design every menu with kids feedback in mind and you know It's that idea of kind of being in touch with who you're actually serving and respecting your The consumer of your product as you're designing the product and not just designing some kind of big visionary You know organization that's going to change the world. It's really thinking about who you're serving That has been that's been a kind of a game-changing perspective shift that we've put on to the building of the organization That's fantastic Kirsten. I had the pleasure of first meeting you when you won the Global Social Venture Competition at Berkeley a few years ago And I voted for you so that just just to go on record with them And it's just been amazing to watch their trajectory They're definitely going up the hockey stick Next is James McGowan managing director of security research associates They're an investment bank Meeting the needs of companies and funds in the areas of housing renewable energy energy efficiency and inclusive finance and health James, I know you've been involved in bringing base of the pyramid model from emerging markets that is succeeded there and Bring that into the US market. I'd love for you to talk about some of the challenges you've seen in that process Sure Thank you for for that introduction I Come to this from an investor's standpoint, so I'm looking at the opportunity from from an investment standpoint and when a social entrepreneur named David Green Came to me having succeeded in innovating in in eye care and and achieving global scale in The areas of blindness He came to me with a with a product and an idea to solve the issue of 600 million people in the world not having access to hearing 600 million people hard of hearing of which 200 million are severe and those people are in the US and they're they're all over the world and So David and his partner Stavros Pasea set about to make a company that could succeed around the world And they figured if they could design it for India With an Indian rural customer in mind and get the price point right for India They could succeed not just in India, but in Africa And also here at at home in the US and in developed markets Because the same problems that affect someone in India also affect us here price being a big one in in the US The average hearing aid cost between fifteen hundred and two thousand dollars per ear And it's not covered by design by the the medical establishment And therefore out of reach to just about everybody And so you had to get the price down radically if you were going to succeed in in India and also in in the US And so for David and Stavros that meant a 10x reduction in cost and a thousand x Speeding up of the time to delivering a working product. So pretty pretty big Changes in usability and affordability That's pretty amazing and we've heard these stories from our event and David Green is is a repeat entrepreneur in the base of the pyramid space And to see those innovations coming to the US I'd love to hear more about that as we go into our discussion I guess a first question would be Some of the tensions that you see when you're trying to both do well You're you're offering intentionally a product or service that you hope has a positive social or environmental impact, but you're also trying to Do well as a business make money for your investors satisfy venture investors and What are some of the tensions that you've seen around that issue? Sure, I mean I can I can speak to that because I mean in the case of conversion sound There had been Investors in the company there had been grantors to the company So foundations had come and helped to develop the product with an eye toward Serving very low-income customers. So they've been grant money that had been received by the the corporation So it was set up as a for-profit corporation But foundations had had written grants to the company to support the product development and once that product worked a Lot of the same foundations came back and invested equity And and when the product was really working We could look to more commercial oriented investors For the opportunity and in fact You would think that there would be a great amount of tension in terms of setting prices And and profits but in this market if you want to succeed you have to Have a radical reduction in price in order to succeed You're not going to serve well-income customers charging them $1,500 $2,000 so that tension kind of goes away because Without a low-cost product you can't serve a low-income market I mean sort of seems obvious, but so you have to design a Wide enough delivery system a wide enough distribution system that you can make money at scale and not on on the margin of each product sold That tension and we experienced that quite significantly both in raising money for the fund as well as deploying the money for the fund So we're a double bottom-line fund, right? We're looking to make market rate returns or above market rate returns and we are intending to make Tangible measurable scalable positive social impact on low-income people's lives And I can't tell you how many times when we went out and you know pitched our fund We'd have this kind of lean-in moment Where the investor would say okay, Ariane that's good and well But really is this about making money or is this about doing good and it's a It's a question. I reject kind of intellectually because I think you should be able to do both but I think for us a real aha moment was to say that that the question doesn't just come from a Narrow-mindedness the question comes from the reality that most people aren't good at either right mark most people aren't good at Making money when you really push it and most people aren't really good at doing good if you really were to you know Look at social change so Kind of getting our heads around that to realize that it is quite a reasonable Pushback I think was was a good aha for us And then you know, there's also I think I realized a Multi-hundred-year legacy in the United States of people doing well first making money first and doing philanthropic later Right kind of doing good and well in cereal as opposed to in parallel And so, you know, it's a it's a deeply counterintuitive idea And I think it it improved our fund offering in that we really I think tightened our thinking around You know, is this a is this a ludicrous proposition that we're trying to do here or are there ways that we can actually align do good erism with financial returns and You know, it didn't require a radical departure from the way we approach this fund, but it definitely Tightened our thinking in making sure that we look at entrepreneurs whose business models whose enterprise value is Heightened when they're doing things that are good for people So decreasing costs or increasing assets or increasing access to credit or mainstream financial services And I very much believe that that is operative in our space. I don't know if it's operative everywhere But it's certainly something to be aware of, you know, when you Approach a double bottom-line business so I'm hearing similar messages from both James and and Ariane in that the The social benefit needs to be baked into the business plan which is making money So it's not a separate that's another divergent stream, but it's part and parcel of the core model Baked in and enhancing, right? It needs to write the more good needs to needs to maximize the return needs to increase the Enterprise value and Kirsten. I suspect you disagree completely Well, I actually agree Wholeheartedly, I think what we've what we've you know been able to do in building our Company and and also raising the money to support the growth of the company is that you know I think what investors tend to look for is you look for an opportunity like an unmet need and you look for a large market and What we saw out in the you know when we started looking at what's happening and what's causing kids to make the choices that they're Making and what they're eating both in school and out of school Is that there's a big unmet need in the fact that I mean how many people love what their kids are eating at school for school meals So the huge unmet need it's a you know $25 billion market just looking at school meal program in itself And then when you look at the issue of healthy eating and how many you know how many parents struggle to get their kids To eat healthfully at home. There's there's a huge opportunity there And so it's so I mean it's a very similar kind of a notion of that you're you're taking Taking this notion and building a business around an idea that the more the business grows the more positive impact you're having Because what you're providing is inherently better than the alternative is I mean that's that's been I think what's been the compelling kind of piece of For our investors who've invested in our in our company is that you know We're as the more kids that we can impact the more schools that we work with the more kids We're seeing who are staying awake in class in the afternoons and able to perform on their tests and more kids who are you know we having fewer days of absences because they're actually staying healthier and So there's so there's an inherent social impact to you know The the scale of our company and and every you know every child every school that we work with has a both a positive Social benefit there's also this interesting phenomenon, and I think this is sort of typical of of bottom of the pyramid Entities in general that you're our economics are actually driven by Serving larger low-income urban schools So the so our economics actually the economics of our business actually kind of work the best in schools that have high Participation levels in their lunch programs which tend to be you know schools that have high percentage of their kids qualifying for free lunches Which is exactly equal to kids who are low-income to moderate income Families and so there's so there's a very direct kind of economic link between the success of our business Being driven by you know the more presence we have in low-income urban communities. That's great I'm going to ask one more question and I'll encourage you to ask the next question and I'd also be worn our Mr. Microphone will be moving to the open Q&A pretty quickly In emerging markets, we've seen the need for a significant Investment in market creation creating new markets where no one Previously tread Can be very expensive and I've seen grant funding Going alongside investment for many years to patiently begin to create those markets I'm wondering if you're seeing that same effect here. What role does education play in market creation? Is that something that you can bring within your bottom line, or do you need external? Resources to achieve that in our space, you know People's knee jerk reaction when thinking about financial inclusion is financial literacy And I'm not sure this addresses the market creation part as much as you were talking about it But certainly the kind of the education capability and in our area. I think is a total misnomer right because buying hundreds of millions of dollars have been spent by well-intended financial institutions to include the you know the the masses and help them understand the banks, you know prescient offerings better by Delivering financial literacy programs and sadly, you know the the correlation between information delivered and behavior changed is almost zero And so in my mind, it's an entirely futile effort That is a very logical go-to kind of conclusion that everyone reaches That is actually much better addressed by offering a better product To a customer who's actually quite sophisticated and making quite rational choices and who chooses not to work with a bank for very logical and good reasons And instead to use that product as a as a carrier of financial literacy kind of at the right time and in the right place Right so kind of to give a an example out of my life, which is very different Than most of the customers we serve right like I I'm a sophisticated party supposedly But I really had no idea what a mortgage was until I needed a mortgage right then suddenly I'd learned a lot about a mortgage because it was relevant to me and actionable today and so similarly right most financial education is not actionable and relevant to most people today because of Millions of factors, but if you can add a check cashing transaction for example When someone comes in after a couple times right say well, perhaps you could instead of cashing this check You could deposit the value of this check on a prepaid card which can then serve as a pseudo banking Relationship right that is that's very local. It's very relevant. It's a small piece of financial literacy That's kind of in the right time at the right place And I think that's a that's a very scalable and actionable and tangible Market-making form of educating and it's again baked into the business model Or the same thing with the the example from from conversion sound from hearing It's very much product and needs driven One of the reasons people don't access hearing we've mentioned the cost, but one of the other factors that That drives the fact that people don't hear is they don't know where to access an audiologist I mean how many of you know a good audiologist? I mean I mean unless you're already in In the medical channel you have money and your heart of hearing you're not gonna know So there was a problem in in in India, of course of not having an installed base of audiologists less of a problem in the United States But if you're going to then have a new model then how are you going to get to that market? And you have to look at new partners. Do you partner with? Walmart's do you partner with minute clinic? Do you partner with a cell phone company because the the hearing test actually can be administered on your cell phone? Without the need for an audiologist for a large percentage of the cases you can actually Deliver and because of the design of the system You don't need three trips to have your ear fitted You can have an injection mold made on the spot and you can hear in 30 minutes instead of 23 24 days So again, if you design it for the end user And with their needs in mind Available everywhere where they need it you don't have to educate them. They'll figure it out for themselves And I think it's the idea of education is only as good as it is relevant and as the solution is accessible Right, I think that's we've we've made nutrition education a sort of integral part of what we do with schools We've actually been asked sometimes, you know, oh, well, why don't you kind of you know make your nutrition education curriculum something that you kind of make available to To schools across the country and I mean while it's certainly a great idea if it's not actionable I mean, I think it's such a such a good point that if it's not actionable And if you're one of the reasons why we started what we're doing what we're doing is that we had you know Physical education teachers and health teachers and schools telling us I'm teaching all these great units in my school about eating Healthy and eating your fruits and vegetables and then I have kids come up to me in the lunchroom And we had we had a couple of teachers tell us that they stopped going into the lunchroom because the kids were coming to the lunchroom and saying If you're teaching me this one thing in class, why are you serving me because kids don't make the they don't know who makes the decisions in their school Why are you serving me this what you're telling me not to eat when you're you know when you're teaching me? So so that having the education be relevant in the moment We've actually done a lot of work around Looking at how can we how can we actually make our our food be an education piece? Whether it's through the packaging or through you know Just the idea that kids are tasting new things is an educational process if you make them aware of it And you're and we're in part of our education is actually about changing palates and getting kids You know the more kids taste New foods and and you know they get accustomed to different flavors and less salt and and all those kinds of things So it's a I think education is great as long as people can take action on what they're learning and the same thing is happening You know out in the if you educate consumers about healthy eating and healthy shopping if they don't have a grocery store that has Fresh fruit and vegetables in their neighborhood. They're not going to be able to Make the healthiest choices just because they don't have access to the the products that you're telling them that they should be eating And so that's that's one of the next needs that we're actually looking at is the fact that families in The schools that we're working in often don't have access to healthy You know food within their communities and a reasonable radius of where they can drive or walk And so we're starting to make you know plans to make our meals available to families outside of the school You know for dinner for weekends for you know as a as a home cooking kit and things like that because we have parents saying You know this is great, which we're serving my kid at lunch But how can I serve it to my husband or to my you know my other kids who are you know 19 or 20 years old and going to community college Well, we'll sign me up for that service We could definitely benefit are you yeah This is a this is a bit of a weird panel that we're all different disciplines But one of the what I like about it actually and I wish I had more to report on What I like about it is that I feel like there's there is at least from my sector there's so much to learn both in health and in Nutrition that can be used in financial services. So like when you're talking about changing people's palates You know like we have the same problem, right? We can design better financial products all day long But people go get payday loans. I'm not making them. No one's making them But they're doing it because they're their financial palette is adapted to right? So how do you change those things and similarly, you know, for example, I'm I'm entirely Excited about the Nike fuel bracelet you guys familiar with that right like so Nike has this little bracelet and it it connects into your into your iPhone and it basically serves the the purpose of making Immediate and tangible something that is slight is important but broad and ineffable, right? I want to lose a couple pounds Right, which is kind of a broad goal. I want to you know But you know, how do you make that how do you take such a amorphous goal and and actualize that on a day-to-day basis, right? Having something that you physically wear on you and you can physically see a little display and it goes from red to green as you Move and it's imperfect in its in its measurement entirely But still, you know, it does something that makes again concrete and measurable and localized You know something as ineffable on the goal And it's something it's the same set of issues We have in financial services and people set financial goals around how much they want to save or that they want to reduce And these are kind of large ineffable goals that when you just get in the run of the day You forget about and it's hard to change your behaviors And I'd love to see a Nike fuel bracelet for you know for that reduction You don't need to go to a debt consolidator So if you've got near a payday loan, it would turn bright red and start an alarm Would would would would flash at you. Is that what you think? Yeah Well, I'm getting flashing red lights that it's time to open up to the audience And I'm wondering if we have any first questions. I think you were first Is that is that David? It's very hard for us to see you. They're very bright lights. Sure. Sure. Hi, David Erickson. I'm the Federal Reserve and and This is a great panel. Thank you very much And I was reminded of something that some from the mid-year our network last night was talking about how they look for revolutionary business and then that would sort of build the sector and That kind of creates the impact through sort of sector development So I wonder if you could talk a little bit about what you think your sector is and who are your partners and competitors in there And what are the trends that are sort of driving changes in your business model? Well, you're clearly sector focused are you want to take a stab at that sure I'm not sure I'm gonna I'm getting the essence of your question But you know my sector goes by different names right historically goes by community development or you know some people call it financial inclusion I call you know, I've kind of gotten used to a more secularized language. I you know, we're in the consumer finance business Now we're targeting lower-income consumers, but You know So and who are competitors? You know, what's exciting actually and something that I think gives our investment thesis credibility is that You know not just but from a policy perspective are these consumers underserved But actually, you know if you look at all venture capital and where it's allocated only 2% of all of venture capital is Allocated in financial services period not not bottom of the pyramid just all financial services So there's a relative dearth of money going into financial innovation, which is good in many regards It's financial innovation is by and large an oxymoron in my mind But You know, so there is there is a very small subset of other investors who are fintech investors who look at Companies like we do I think we're the only one in the country that's focused on fintech for the underbank So if you define it very narrowly, we don't have any competitors as a fund But we co-invest with a lot of others Who may also have an interest in this and they include the sequoias and the venrox and the Bray locks of the world kind of just traditional funds. I think it was interesting this discussion We had last night about the community development field and how you became a bit frustrated with the approaches that have failed to scale and how you see New models but more entrepreneurial approaches offering the opportunity for larger impact. Yes, that's a good point So that that thank you that so another side of of our space is that and I is that area? And so I kind of cut my teeth in this sector at shore bank you know, which really kind of created the community development space in the US and You know by our back of the envelope analysis when you add up all the shore banks, even though that particular institution is no longer You know it represents they serve about 1% or not even 1% of the population And so, you know my my frustration with that whole sector even though they're doing incredible work in many ways Is that it just doesn't scale and the priority at the end of the day amongst? entrepreneurs and leaders in that sector is more on on place-based deep work with communities than it is on scaling nationally You know and so our funds Our funds belief is that to create real social change you really need to scale to serve millions because one in four Americans is Underserved by traditional financial services and pays through the nose for very basic stuff And it's getting behind as opposed to getting ahead just around the financial instruments So the sector question is a really good one I think we actually were we're creating kind of a new type of Organization that spans across three different sectors. I think we're we consider ourselves a part of that I mean we're obviously in the food business, so we're we produce and deliver food So I have to say that we're part of the food the food industry But we're a very different kind of a food company in the way that we're we're you know both educational and Production oriented so we're you know producing food from scratch delivering it And and creating a whole new model of how kids can access healthy food And how that we can expand that to families accessing healthy food We're also we consider ourselves a when you ask our schools They would say that we're their health and wellness partner so I think you know in a way we're kind of changing we're one of the kind of you know prevention Based health care companies that's out there that's saying you know if you if you eat a healthy diet and live a healthy lifestyle You will actually reduce both your own personal cost and the sort of countries cost of supporting your health care bills And then finally we you know I'm an educator as a my training was as an educator And I was a teacher before starting this company So we definitely consider ourselves an education reform organization and we're you know We sort of we operate and live in the in a world that's you know very You know we surround ourselves by education Leaders and and you know we're the impact that we're having is is an academic impact as well as a and that's you know Really at the end of the day That's why we started the company is we want to see kids succeed in school And we believe that food and nutrition play a really important part in that in that equation So so it's you know I think that we play in three different sectors But I think and in that sense we don't really have a lot of direct competition of anyone who's trying to do Who's trying to tackle the problem from a similar angle So it sounds like you could eventually crowd in competition And that often is to sign of the success when others are trying to crowd into the space. Yeah I mean as my role as an investment banker I look personally for Companies and funds that have ideas that are going to be transformational for their their industry And then we look to find the right investors who understand that model and want to participate in that And so in that sense we would go out to the community a lot of you are here in this room For the best ideas that we have that are relevant to what you're interested in whether that's Inclusive finance whether that's low-income housing whether that's renewable energy or whether that's health care In the in the health care space You know there is a huge need that the for money that is aligned with a different mission of Simply looking at the market from the old high margin Low Volume approach That you know that that there is not an enormous amount of capital yet deployed in that market And we're hoping that with examples of companies like conversion sound Like the companies that David Green has helped found that there will be other Successor competitors in those markets and we'll be able to help bring capital to those companies with aligned investors Going forward. I think we think it's it's one of the ways to attract big problems It's a way for foundations also if they want to invest To multiply their their grant giving and have it have massive impacts in terms of The quality of life not just here in the US but around the world Interesting on the health care note. I am involved in advising a start-up health care finance organization Which sees very much this gap in support for the next generation of business models that are Creating highly scalable approaches that both increase access to low-income communities while improving the quality of cost quality and cost effectiveness and Frankly, there are very few funders investors that are playing in that and we would love to see more folks crowding in Yes, I think there was the person over here was next First of all, I want to say thank you I'm really excited about this panel because it's not often that you find something where people are focused on alleviating poverty in the US and To that question in terms of getting foundations or impact investors to buy into Poverty alleviation programs in the US. How do you go about competing for the dollars? And the attention of these foundations who want to do good But they're very focused on whether it's Africa or Southeast Asia South America all great causes But there are but we seem to be in the minority in terms of focusing on poverty alleviation here Yeah, good question You know clearly financial inclusion globally is a very exciting topic And a very depressing topic because it's you know, there are pressing issues And you know if you just from a financial perspective that are much more pressing abroad than here but that's not to say that they aren't pressing here and You know, I think it that's a work in progress and it's been difficult for us to really Educate that our backyard is important and that the situation is dire and Is worth paying attention here But you know, I don't think we've been particularly successful at Getting folks who look internationally to let go of their money here. I think we've basically looked for other people who are interested here and who have who Yeah, who care about here But I think it's I think it's it's important to do right because I think it's We'll we'll I always like the story of Al Gore going out to India to you know, talk to them about their global You know about their emission Contributions and then basically sending him home saying, you know, you guys are the biggest polluter. Why don't you? Why don't you, you know? Clean you up your own act and then come back And to me that makes a lot of sense, right? I mean if we can we can be we can We can export a lot of really great talent and great ideas But I think we would do so with much greater integrity if we actually had our act a little bit more together and you know It's pretty it's pretty bad. What's going on here in terms of the income gap in terms of you know, the eroding middle class So we sometimes try and make those connections, but by and large You know, we're we've found a different set of stakeholders who care about the United States Well, we now see that emerging nations such as India Are have they have the same per capita income that the United Kingdom had and in the late 1940s So those countries even though that the wealth is highly The genie coefficient is quite high. Am I getting the directionality, right? There's a lot of income inequality the average level is is is is is where we were just a generation or two ago And it becomes harder to justify international aid in that in that in that context And I think more investors I'm seeing anecdotally are waking up to the needs of Communities around job creation around new paradigms in these areas that we're talking Any yeah, I think I mean one of the sort of things that Inspired me to be part of starting revolution foods was I spent time in Africa in West Africa working on school lunch programs in Ghana and I was you know they're looking at helping the the Ghanaian health service to figure out how they could scale the the These this one very successful school feeding program that had been established to other parts of the country and you know I came home really inspired and feeling like wow, there's a there's some great work going on there You know, I wonder what's going on with school meals here in the US And I was you know living here in the Bay Area at the time and and saw that there are some you know Some there were this was you know eight nine years ago. There were some amazing efforts going on that were incredibly localized and incredible Incredibly, you know impactful in a very very small At a very very small scale within you know in parts of the Bay Area And that was one of the things that you know We started talking about there is you know when you look at what was going on in Berkeley ten years ago versus what was going on in Oakland and right next door you have this amazing edible schoolyard program in Berkeley and you know kids in Oakland are Are you know suffering from type 2 diabetes at the age of nine or ten years old? And so we set out to create this model that was that was scalable and that was addressing that the needs of Of the you know kids who need it most in the US and I think it's it's true that there are certain foundations that are very focused on Supporting work internationally and other foundations that are very focused on supporting work domestically in the US and addressing poverty related issues here and and we've had great success partnering with some of those foundations who are Who are here? I mean Kellogg Foundation has has a huge focus on nutrition and And has been instrumental in helping us to to scale into places like New Orleans where we may not otherwise be able to You know afford to build a culinary center because it's just not as big of a market for us and then we also have seen you know pretty substantial Foundation and municipal support for the fact that we're creating jobs and you know that part of poverty alleviation In you know the focus here needs to be on job creation and and the fact that we've now created You know of our 900 jobs, you know probably 80 85 percent of those are people who are working You know who may have been working very unstable jobs or were unemployed before they came to join our team And so that's that's part of you know my very first comment part of what we learned is that we're not just you know We're not just creating this impact on kids out in schools We also are creating and then we have the opportunity to create these you know real Good sustainable jobs with opportunities for people to grow and learn and move up especially because we're a growing company So so we have found that a lot of the kind of foundation support is actually on the side of Supporting us to create great jobs and provide great programs for the employees that we have to you know move forward in life and reach their life goals I Would just I would just add to that that And I think we if you hang out at SoCAP you you come to the conclusion perhaps that all philanthropic dollars are going into into some Very cool development project in in Africa, but I think if you look overall at giving in the United States You know 90 plus percent is is going to domestic To domestic sources it is true that there is perhaps less innovation For some of the domestic funders in terms of funding Enterprises and I think we can all be advocates For those foundations that we do Run across to say look put some tiny amount of your Giving or some tiny amount of your corpus into some kind of investment that is being reinvested in Enterprises at home. They're solving the problems that you want to solve And you'd be shocked at the number of very large foundations that This is just beginning to occur to them that they could do this so I think there's a huge Opportunity ahead to have those positive conversations about how those foundations can help Bring innovation forward to solve some of those big problems in areas like health or education or or financial inclusion I think that's a great point actually and one that is relevant in our case we know you mentioned it, you know, some of our LPs actually Are active your investors our investors are active in In international markets and part of our argument was to say, you know, there are actually tremendous importable ideas So, you know, let us be your kind of domestic microfinance effort or read your your domestic And and even though the United States in kind of apparently obvious ways has a more sophisticated financial Infrastructure it is also light years behind the rest of the world and there are actually tremendous Importable ideas. So that that's very true. That's great In the back Hi, thanks One of the things I hear said and I'd like to know if you guys agree with this premises that to have a really successful business Focused on bottom of the pyramid in the US. You have to have a business that also captures like middle class, but Happens to also bring with it bottom of the pyramid. I think you need to hold it close here. Oh, is this better? Yes, okay. Yeah, thanks for the tip Did you hear the first part of the question I should okay, so Do you agree with that premise and then if so, how do you advise? Your entrepreneurs or as an entrepreneur stay focused on iterating the product for the bottom of the pyramid opposed to getting distracted By the higher up. So in our case I'd say my answer would be yes and no We see two categories of companies. We see companies that basically serve low-income people exclusively And then we see companies who are serving a broader consumer set including low-moderate income and we're interested in both and on the former the folks who were just serving the underserved if you will one of the things that we found as a as a happy After-effect is something my wife is kindly called the Sesame Street effect, which is you know kind of Sesame Street wasn't Was designed to basically be in like an after-school program for low-income or black kids and you know urban communities And it turns out we all grew up in Sesame Street. And so similarly, right? There's lots of innovations that are really designed for and relevant to low-income right like my Rental payment thing that was really designed to be you know over optimizing low-income people It's actually tremendously benefit for me right like I rent in New York And so I benefit from that as well And so I think you know what is the case in in kind of you know Creating something that for a specific community that has specific needs will rise the tide for everybody And that's super true in our space So if you're if you have something just focused on on LMI on low-moderate income I think there's a there's a much bigger impact and I think An entrepreneur who's doing that would be wise to pitch those kind of externalities And someone who's looking at a broader consumer segment Should pitch the kind of the broader appeal Fair enough, but I think about medical devices it could be a little threatening to an incumbent supplier of the Device that costs ten times what your device costs to have that innovation. How does that? How does that market? dynamic play out Hugely threatening in fact when when conversion sound went to go talk to all the hearing aid companies They said well if we invested in your company you would destroy us, so we're not going to invest with you I mean that that that is very clear that if if the product succeeds as well as it does There is certainly threat to the entrenched market We think there's there will always be room for for both But I think if you design with the low-income consumer in mind And the quality is extremely high and the service delivery is very good Then I think you will find that Not just low-income consumers, but middle and upper income consumers will avail themselves of the product as well You may be giving up some of the extra margin that you could be charging to those higher income consumers If you're pricing it for that low-income customer But that you can sometimes manage that by by channels and geographies and added features so that You can deliver The product that works for the low-income consumer you can add features or other externalities or other services for middle-income consumers So that you can develop the right product mix Interestingly the way that the David Green model works in India is they give away a third of the product to people who can't afford it A third of it is priced below cost and a third of it is charged well above margin and they can still make Very healthy returns on it effectively returns on equity With the markets that are left over simply because the market is so large if you price it that affordably And I think it's I like the term the Sesame Street effect I mean our what we've done is designed we designed for we designed our meal program so that it was Accessible to kids who are on the national school lunch program, which means kids who are living at 130 percent or below the poverty line But we designed it what $15,000. It depends on the size of the family, but it's yeah, I mean it's astonishingly. Yeah, it's Astonishingly low the you know and the number of people who are who are on that means close to half of kids qualify so So we designed it so that you know cost-wise It's accessible to kids who are dependent on that as their source of you know a meal at school But we designed it with a with an ingredient integrity that you know We're serving the we're serving some of the highest income schools in California and some of the highest income You know districts and in other parts of the country. So there's there's a I think there is that there's a sort of high quality low Cost balance that if you can get it right and you you know design other costs out of the system that are not as necessary Then there's no reason why you shouldn't be looking at you know middle-class upper-class Customers in addition to you know having something that's affordable for for the you know sort of bottom of the pyramid Population so in our mind It's actually a real validation that we have kids in Hillsborough, California eating our meals and we have kids in Harlem You know eating our meals and they're it's exactly the same food But it's you know it there's actually a real validation that that's that it's good enough for these guys And it's good enough and affordable enough for for these guys And I mean frankly that's part of our social mission is is you know equal access is really important For for us and for you know to feel good about what we're doing But also it's it's just critical because kids you know kids aren't don't yeah, they're not born into a socio-economic class They just kind of inherited right them in there. They didn't ask for it, and they they deserve the best I mean that's how we knew that's how we knew the conversion sound thing was gonna work because We did focus groups the client at focus groups And they took high-income consumers who were using the state-of-the-art technology and a number of them said I'm gonna drop my $3,000 $2,000 device for this you know $100 or $200 device, and I like it better you know and so Has to be has to be high quality. That's great. It's really inspiring stuff Jeff So I'm interested in the question from a business perspective Who's your customer? Because we heard each of you talk about saying the financial innovation space how you know your customer ultimately Well, while it might be benefiting the low-income community and that's where the impact is your customer was a credit bureau Or they were my school lunch perspective you're feeding kids But your customer is probably the school itself or from a hearing aid. Maybe it's more the End-user, but still the audiologist needs to sell your product and so you know which customer do you focus on to have the biggest impact? So our our model is I mean it's very similar to sort of a retail food or a you know consumer product model where You know you're in and I was sort of shocked when I first heard this and I got into the the world of consumer Packaged goods, but your customer is the buyer at the store that you're selling to right But your consumer is the person who's pulling it off the shelf and and in our world It's a guy. It's exactly the same way There's a decision-maker at the school who decides whether or not to bring our program in but they're basing their decision on how much the kids Are responding to the program so and then you know We obviously have other folks who are kind of influencers in the whole process Which are parents and community members and faculty and they may not be direct decision-makers, but they're but they're influencing So I mean I think in any in any kind of a business you probably have multiple people that are you know engaged and involved in Making the decision of you know what you're doing But but we're pretty clear about our customer being the decision-maker at a school But our consumer being equally important as the student So you guys are all working in fields where making a profit is very closely aligned with making a difference and In other fields, that's less closely aligned. Sometimes it's diametrically opposed. Sometimes it's fairly well aligned a Lot of what we've heard people say at this conference When talking about serving Poor people internationally is that you know, they've been the sort of forgotten market that people have not realized The kind of profits that you could make from this billion people on the planet in the United States. That's not really true I think there's a huge amount of Marketing and businesses targeted at poor people in this country. So my question is Do you guys think that? You've shown that there's still There's still business opportunities But do you think that this is a broad untapped market where there's lots of potential or has the potential Been somewhat fairly well explored by large companies like I mean, I even want to say Walmart That's my question. Thanks That's interesting the We had a discussion previously about cross-cutting issues that touched each of the sectors and companies and The Walmart effect was one of those so sure, I mean we actually In a way the conversion sound hearing made is designed with Walmart in mind that it's a low-cost product that could go into a Walmart department a drugstore And be sold not by an audiologist which answers the previous question would be sold not by an audiologist But somebody with maybe a week's worth of training and That would allow you to address that market Directly I Think that there is I Think you have to to think about it With those kinds of partners in mind It's a great question and it is and it does strike me as one that's different in the US than in other places You know, we often refer to our consumer market as the underbanked and you know Many of them ironically are actually overbanked and then we call them underserved and you know when you think about it They're actually very well served. They're just served by people. We don't like or who's pricing We don't like or his products we don't like So we really think of them as inefficiently served and the market opportunity is huge Because by and large, right? There's we see missionaries and mercenaries the missionaries are the do-gooders the shore banks of the world Who are doing great stuff locally, but don't scale by and large and there's the mercenaries Who basically don't care about the welfare of the customer. They say need they'll serve it. They're the payday lenders, right? stereotypes and By and large the mercenaries in our space are run incredibly inefficient businesses They're fixed overhead costs are very high their loss rates are incredibly high basically they don't use technology for their for their For their solutions and so you know the lowest income people pay the price So we see a huge opportunity to kind of you know find a new breed of not missionary mercenary But we think of them as visionaries who bring this value set and this kind of set of commercial capabilities and sensibilities and will will drive efficiencies and There's multi-billion dollar businesses to do that here in the u.s. In in consumer finance Kirsten I see a lot of nodding Well, I've yeah a lot of thoughts on the on the question. I I think that because I know we don't have much more time left I think Fundamentally, we have a we do have a very different kind of market structure in our country than than what's happening in the rest of the world and and I think the I think what I would Hope and what I would predict is gonna happen over the next, you know 10 20 30 years is that some of the companies who have I think I mean Dan raised the question of externalities I mean some of the what's some of the business and that's been built on the backs of the of the sort of poorest of the poor in the u.s. Is a very damaging business to in terms of health and and other impacts on the on the community so You know and I'm thinking about first it was the cigarette industry that it was now It's you know soda and candy and and all of the overly sweetened beverage beverages and things like that So I hope that there will be a shift For you know that sector I don't know what that shift is going to look like if it's going to be policy driven if it's going to be consumer driven if It's going to be demand driven But hopefully that shift will will start to kind of make room in the market for Responsible businesses to serve, you know the real needs of those communities rather than kind of exploiting the profit opportunity there That's great one of the issues which we did not have time to cover in the session was the poll the role of policy public policy at the local state federal level, which is very different in the u.s. Compared to emerging markets, it's one where you do have policies that many times inhibit The positive impacts that we would like to see and there's a real role for engagement with with government there We are now out of time I would say that my intention with this session was to Shine some light on some of these amazing examples that we're seeing unfolding here in the United States with That some that have achieved Significant scale have tremendous potential for further growth Maybe attracting more of those bright entrepreneurs and those savvy investors to tap into these Sometimes complex but ultimately high opportunity markets for both financial and social impact. Thank you very much