Deal Review: SPAVA Coffee Company

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Jason Rissman’s analysis of one of these enterprises.)

SPAVA COFFEE COMPANY

By Jason Rissman

Healthy coffee. Why didn’t I think of that?
Serving caffeine addicts and aficionados that have demonstrated a clear willingness to pay premiums for upgraded cups of joe, Spava’s poised to be the next big thing since non-bleached, stone ground 100% whole wheat sliced bread. I’ve long suspected that half of Starbucks customers are either on the way to or from the gym. Seriously, high end coffee seems to be a last standing vice amongst health conscious people, and Spava’s goal of introducing “organically grown, naturally fortified coffee for healthy living” looks dead on. While demand might not exist yet for healthy coffee, neither did it for bottled or vitamin-enhanced water.

Spava has distribution nationwide at HEB, Publix, Kings Market, and selected Whole Foods and Kroger stores. The team looks very solid. So what could stop it?

My main concerns for Spava surround is intellectual property and its competition. Building wider national distribution overnight will be difficult if a better known brand comes to town with a similar product. IP protection might be its only defense against entering rivals until its own brand becomes well known. Still, within the upscale healthy living space there always seems to be room for new names (and higher prices).

As for a social impact assessment, I suppose that depends on your view of caffeine. Is Spava aiding and abetting a guilt-free but unhealthy indulgence? Or are they just making an inevitable coffee habit a bit healthier? Either way, I can already hear the chatter by the elliptical machine: “Sure I have four cups a day… but the last one is SPAVA!”

Deal Review: ScholarCentric

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Jason Rissman’s analysis of one of these enterprises.)

SCHOLARCENTRIC

By Jason Rissman

Sad, surprising fact: Every nine seconds a student drops out of an American school. Another: Over 30% of all public school students drop out before graduating high school. For some minority groups the dropout rate is even worse: close to 50% for Hispanic, Native American, and African American students. The overall impact of this dropout rate is simply unfathomable.
Enter Scholar Centric, a for-profit educational business that provides drop-out prevention curriculum, assessment and professional development services to middle and high school students. The company reports early successes, including 64% rise in retention, 137% improvement in school attendance, 52% improvement in grades and 33% increase in classes passed.

While its results with students are impressive, Scholar Centric might face an even more challenging task in selling to schools with very limited resources. The company offers an online fundraising guide with grant writing tips and lists of grants. Hopefully this strategy will be combined with strong PR and sales efforts. If the company can continue to document such impressive results it seemingly will have a compelling story to tell. With increased brand recognition, Scholar Centric could see shortened sale cycles and more inbound leads. While partnering with other organizations serving at risk students might be difficult as they could be competing for the same scare school dollars, such an effort could further demonstrate the impact of Scholar Centric’s program and help raise awareness for the company. For instance, partnering with College Summit could help develop noteworthy case studies and raise the profile of both organizations as parts of a comprehensive strategy to maintain and motivate students. Does anyone know of other possible partners?

Whatever its marketing tactics are, the acquisition cost of new clients seems to be an important metric to track.

The Scholar Centric team is a definite strength. They bring extensive experience within the educational space, especially in developing products for students.

Meanwhile, local support could only help. Is anyone involved in a local school that might want to learn more? Get in touch at 800-995-8779 or info@ScholarCentric.com.

Deal Review: Oso Eco

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Jason Rissman’s analysis of one of these enterprises.)

OSO ECO

By Jason Rissman

Wouldn't it be nice if there was a fun, easy way to find sustainable products and shop more responsibly? OsoEco is a new company, still in private Beta testing, that thinks it can help. While I won't give away some of their unique features, OsoEco's formula is simple: Layer a green filter onto the proven social shopping mold (ala Kaboodle) and there we have it, smart shopping made easy.

While I do think there is opportunity in the green e-commerce space, I also think there are sizable challenges that OsoEco will face. Here's a couple that stand out for me:

1) First, its no easy feat deciding which products are green, greenest, or even green enough. Until we have a more standardized audit of production processes and of the carbon footprint of individual products, comparing mainstream companies and products is a tricky game. This isn’t to minimize the recent eco-boom of small companies with products specifically designed to have minimal impact, and I think the company has an opportunity to connect these smaller companies with buyers. Even a short time on their beta site introduced me to several interesting products. If the company can successfully recruit an eager community of sustainable shoppers to post product recommendations, OsoEco could become a great resource for finding products that at least seem green to others. Peer validation, however, is a far cry from impact assessment. I hope OsoEco can provide enough information so this is more than a way to feel good about buying questionable products.

2) As demand for green products grows, so will competition for OsoEco. This will include other social shopping sites or green product sites, but also…

- Green content sites that often include product reviews (Treehugger, e-commerce enabled Lime, or RiverWire - which recently raised $1.5m)
- Large e-commerce sites (Amazon, Buy.com) which could include more green products and information
- Direct retailers that could easily start including more green products. For instance, stores ranging from Wal-Mart to Crate & Barrel already highlight organic products
Will OsoEco’s content and community set it apart and provide a barrier to entry against other shopping choices? Perhaps close partnerships with existing organizations could help.
A question I’m left with is how far are we from a more comprehensive green ratings system? Here’s one idea for a eco-nutrition label for products. Greener One has launched their own independent rating system. Am I wrong, or are we in need of some standards?

Deal Review: Zanadu Technologies

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Andrea McGrath’s analysis of one of these enterprises.)

ZANADU TECHNOLOGIES

By Andrea McGrath

Zanadu Technologies first began in 2003 with a focus on the deployment of wireless broadband network services in emerging economies. During the past 5 years, as it developed its technology business to service clients ranging from governments, corporate and retail - it began to see the need - and the opportunity - to utilize increasingly available technology - such as broadband, mobile, and hand held devices - to provide increased and improved financial services to poor and largely "unbanked" communities.

Zanadu now aspires to deliver financial services through a secure, mobile, low cost, and scalable model. Solid numbers on the markets, infrastructure growth, and company strengths make this opportunity an interesting one. For example, in terms of access to 'traditional' financial products, recent World Bank data on three larger economies - Mexico, Columbia and Brazil - showed that 65-85% of urban households do not hold any kind of deposit account. While the flow of funds within many developing countries is low - there are a few case studies now of some 'pioneering' m-banking projects in the Philippines, Kenya and South Africa. Another demand signal is that the flow of funds to developing countries in the form of remittances continues to increase (the World Bank estimated recorded remittances at $240 Billion for 2007). In terms of infrastructure to support financial services, the numbers of mobile users and internet users globally continues to grow at a healthy rate. In addition to the mobile banking potential - Zanadu's web based platform has potential to tap the growing social networks getting involved in financial transactions - be it donations, loans, etc.. in both the for-profit and nonprofit sectors. Could social networking increase the use and volume of fund flows in developing economies (increasing transparency, building understanding of new services). As an organization with 5+ years experience in emerging economies, Zanadu has an opportunity to build on its developed relationships and core skills in technology services and expand into the potential of mobile and internet banking services to the still large, unbanked communities globally.

Dialogue Questions
As public information on the organization remains somewhat limited - the dialogue questions for this idea are somewhat more specific/related to details about the market and services - such as:
Services - what services will Zanadu provide (i.e. payments to merchants and others? loans/micro loans?)
Revenue model from transactions - what are rates and volumes needed?
Regulatory/political issues in terms of licensed mobile/internet service providers
IT: Any security issues with Zanadu moving from current business into financial transactions?

Social Impact
Strengthening financial sector can have substantial impact on economic development/poverty alleviation (from the Ecomomist (Nov 15, 2007): Leonard Waverman of the London Business School has estimated that an extra ten mobile phones per 100 people in a typical developing country leads to an extra half a percentage point of growth in GDP per person)
Increased access to funds also has potential to spur or encourage increased entrepreneurship
Potential to provide LOW cost access and transparent access (remittances and credit)
Networks via web has potential to develop partnerships for funding and development opportunities

Deal Review: Jewish Community Investment Initiative

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Andrea McGrath’s analysis of one of these enterprises.)

JEWISH COMMUNITY INVESTMENT INITIATIVE

By Andrea McGrath

The Jewish Funds for Justice are offering a new investment opportunity - specifically looking to increase the participation of the American Jewish community in community investment notes. The JFSJ Community Investment Initiative is being launched in partnership with the Calvert Foundation and allows individuals to purchase notes of $1,000 or more. Investors have choices ranging from the structure (rates of return ranging from 0% to 3% and a loan period from 1 and 10 years) to the target investments (the can direct investments in 1 of 8 regions in the US themselves or let the Calvert Foundation allocate their funds).

This appears to be a good investment on multiple levels: a low minimum investment threshold to attract diverse funding base and a solid investment partnership - with the Calvert Foundation bringing its expertise and experience in community investment notes and the Jewish Funds for Justice bringing its education and advocacy skills. It also brings a potentially strong new market to community investment with its own membership and with the larger American Jewish community.

Dialogue Questions
The JCF raises interesting questions (possibilities) on:
potential alternative channels to grow community investments
opportunity to learn from partnering with an advocacy/membership organization - and particularly a faith based and/or culturally rooted organizations as a way to build awareness of alternative investments and CDFIs (and increase capital)

Social Impact
Increased community development capital
Increased awareness of alternative investments (such as structured notes)
New insight on effective partnerships to educate and advocate socially responsible investments

Deal Review: Pro Bono Manager

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Andrea McGrath’s analysis of one of these enterprises.)

PRO BONO MANAGER

By Andrea McGrath

Pro Bono Net is a nonprofit organization focused on improving access to justice for millions of poor people facing legal problems without legal assistance. Their core activities involve innovative/improved use of technology in the nonprofit legal sector, facilitating collaboration among advocates working on similar sector issues, and increasing the number and impact of pro bono lawyers. Their main programs include:

Probono.net - online resource for attorneys, law professors, students, and social services advocates; also connects pro bono attorneys with opportunities, training events, mentors, and searchable libraries (45,000 members)
LawHelp.org - online resource helping low and moderate-income people find free legal aid programs in their communities, answers to questions about their legal rights, court information, links to social service agencies, and more ((the site won the 2007 Webby Award for Best Law site)
Online Document Assembly - centralized effort to provide online legal document assembly for poverty law and court access to justice programs nationally; also increases access to resources for self-represented litigants and improves efficiency for legal aid, pro bono and courts-based access to justice programs

Pro Bono Net seeks funding for one of its new programs - Pro Bono Manager - which was started with $900,000 in grant capital from the Gates Foundation and Booth Harris law firm. Pro Bono Manager is a hosted web application that helps increase the capacity, effectiveness and efficiency of law firms’ pro bono programs. The site integrates content for pro bono lawyers on training events, volunteer opportunities and news with key tools for law firms such as reporting, knowledge management and lawyer matching tools that draw on data from firm’s internal systems (personnel, billing, time keeping, etc..) It will include firm-branded portals connecting firm lawyers to a national network of pro bono and legal aid organizations, and case tracking and engagement reporting tools.

This service looks like a good bet! Organizational, market, and team strengths include:(1) Value Statement: pro bono net has developed a solid 'value' proposition for law firms in terms of time/money saved, increased efficiencies and case/impact reporting, and their potential to impact clients' critical goal of lawyer retention; (2) Hire and Retention Tool: according to industry surveys, a law firm's pro bono services are ranked #2 in importance (after revenue) in how lawyers rate law firms; (3) Market Spend: law firms are spending $5 BB annually on technology; (4) Market penetration: pro bono net has initial competitive advantages through its law firm penetration (clients include 3 of the top 10 firms) and public interest law penetration (including strong (and somewhat proprietary) public interest legal content); (5) Channel Partners: pro bono net has developed partnerships in sales/marketing channel with ALM and LexisNexis.

Dialogue Questions
What is the potential of an earned income strategy (law firms as clients)?
Would earned income stream affect its philanthropic supporters?
Any possible thoughts on exit strategies for business when it develops

Social Impact
Revenue from this business model could dramatically increase the financial support for Pro Bono Net's CORE nonprofit programs - focused on increasing the number of low income people accessing legal assistance, supporting a community of public interest lawyers and organizations providing this assistance
Value of the product to law firms - and pro bon lawyers (supply) could increase both the time given and the value/impact of pro bono legal services

Deal Review: Calabash Music

(Inspired by the Social Capital Index located here on xigi.net, two analysts are posting their take on the enterprises listed in Deals in Play. Deals in Play is a new feature of the Social Capital Index that lists social ventures actively seeking capital. Following is Andrea McGrath’s analysis of one of these enterprises.)

CALABASH:
Tune Your World

By Andrea McGrath

Think KIVA for the global music community! Calabash is creating an online microfinance/social networking platform to help independent recording artists worldwide (approx 30,000) attract funding for their recordings directly from fans. It also helps increase their ability to engage with their natural fan bases! Different from Kiva, however, these are not loans but 'donations' of support - coupled with 'high touch' donor services and benefits such as receiving news from he musicians and downloading advance copies. Fans can also download free tunes and purchase downloads from artists for .75 - .99 cents (iTunes is generally .99). Musicians receive approximately 50% of net revenues (revenues - fees) and retain ownership of the copyrights and all other rights in any content and material submitted.

The appeals are numerous for fans and musicians - social networking for music fans, support for small, independent artists, and a platform for global musicians similar to fair trade markets for indigenous products. The social networking site includes spotlights on current projects/artists to fund. Calabash has launched its own "One True Fan" fundraising campaign - looking to find 1,000 "true fans" to donate $100 each to help pay for its development costs to launch their musician micro-funding platform for artists globally. The team is currently working with 2500 artists with goals to reach 10,000 artists - and 100,000 fans - this year (2008). Helping it reach these goals, Calabash is expanding its media company partnerships - including Link TV, Afropop Worldwide Global Rhythm, Brazilmax and Mondomix - and an exclusive music service provider contract with National Geographic.

I love this idea!! The social networking possibilities seem ripe and the team is actively looking to natural partners such as MySpace (fan-artist connection) and iTunes (for distribution). While Calabash uses similar language to microfinance - and actually use Kiva as a comparable - the funds raised are donations to the artists rather than loans. That said - they seem to be doing a great job in terms of creating/marketing a true 'exchange' of value (rather than a donor-recipient mentality) - in that fans who donate get a variety if value-adds from both the artist and Calabash - as well as the opportunity to direct their funds in a meaningful, specific way (growing popularity of this "citizen philanthropy" is being developed well with Kiva and DonorsChoose)

Dialogue Questions
Questions about the markets: independent artist music industry, music download business, etc..
Competition: iTunes and other sites for free music
Revenue model: Calabash current funding appears to come from fees from music sales, some advertising (Google ads on certain pages) and from media partnerships? Curious to see

Social Impact
Could increased marketing and exposure for smaller, global musicians actually produce an 'exit' for previously unfunded artists to more institutional funding from the industry?
Could Calabash have a 'systemic' impact on how people access music, how music is supported, how global audiences can have dramatically improved access to global music (and societal benefits from that)?