In Conversation with Jordan Kassalow

In Conversation with Jordan Kassalow In an interaction with Jordan Kassalow, founder and co-chairman of VisionSpring, he talks about the simple but transformative work his organization has undertaken of providing low cost glasses to the visually impaired and how that has enormously improved their lives and ability to make a livelihood. “There are 4 billion people on the planet who earn less than $4 a day and the whole optical market is geared to the 3 billion people who earn more than that.” “The good news about having vision is you can see a different future and the bad thing about vision is your vision always moves faster than reality.” Could you tell me how the VisionSpring idea has made an impact? It came about from personal experience as a doctor of optometry and working in over 40 countries. There are all types of vision problems from cataract to lack of spectacles and I observed that for every person, who had a medical problem of the eyes, there were 10 people who just needed specs. People who are earning their living with eyes and hands like tailors, artisans were falling out, not because of some terrible disease but because they could not see up close. I thought that was a ridiculous state of affairs and I am trying to change it by providing a pair of glasses for less than a dollar. Could you give me examples of how social impact has actually been created? There is very powerful link between vision and economic development and economic development is a major problem in the world. We are trying to find ways to bring more and more people in the mainstream of the world economy. Also, income disparities are a major problem and vision feeds that income disparity in several ways. The number of kids throughout the world fall out of school not because of any incapacity to learn but just because of they can’t see the blackboard. So that’s one impact that we are having. We are enabling them to see to learn. The second is the link between vision and productivity. We have done some studies that show that once the person gets glasses his productivity increases by 35% and income by 20% and the third link between vision and economic development is safety. Road traffic fatalities are rampant in the developing world. 59% of road traffic fatalities have a visual component associated with them. So we are working to make sure that people who are driving have access to affordable glasses and hence personal security and safety. As of today how many lives have you touched in the world? Directly we are closing in on 2 million customers. But, we also affect not only the customers but also people in their families. Therefore, we affect 5 times the people we have sold glasses to because the average family size is 5 in the market we work. Have you calculated the impact you have created in terms of economic value? Yes, we did a study with University of Michigan and found that the productivity of a person increases by 35% once he gets our glasses. Take an average customer who makes $2 a day. That’s $108 of economic value per pair of glasses per year assuming our glasses last for an average of 2 years. So, each pair of glasses that we sell for $2 or $3, earns a $216 return on investment. It creates a huge impact economically. We sell 2 million pairs of glasses and multiplying that with $216; so as an organization we are increasing economic impact by at least half a billion dollars over the last 10 years. How did you come to this idea and realize that this is one of the problems that you would like to solve? As a student I became involved with eye care services. But the transformative moment was when my very first patient was a 7-year-old boy from the blind school. While examining his eyes I realized that he was not blind but nearsighted. We provided him with a pair of prescriptive glasses. When the lenses aligned with his eyes the blank stare of a blank child formed into an incredible smile of joy. For me I had given him his vision, but he gave me my purpose that day and that very moment I have been on this quest. He had no hope or purpose in his life. That one pair of glasses literary transformed the boy’s life. Can you tell me more about the hurdles that you faced and what biggest challenge that you faced while creating VisionSpring? The first challenge that we faced was building the business model to solve this problem. The problem that we recognize is that 700 million people in the world needed a pair of affordable glasses. What I also observed when I was working with communities all over the world was that huge amount of people who were under employed or not employed needed economic opportunity, so, I thought that why can’t we train local men and women, particularly women, to sell simple glasses to the neighbor creating livelihood for the women and sustaining the livelihood of the trained craftsperson. So that was our first model called the ‘1.0 model’ and created a manned force called the ‘Vision Entrepreneur’. We were creating jobs, sustaining jobs through such a simple health product and giving value to people. We worked on that model for 5 years. But the bad news was no matter how hard we tried we could not get that model to yield enough money for operating expenses. So, that was the first big hurdle. We got a lot of funding, recognition because of this innovative model, but at the end of the day it did not work as a business. So, we started to iterate. How did you really resolve this problem to find that sweet spot that you are now in? The journey of iterations was an interesting one but did not work multifold. Firstly, there wasn’t a market for our glasses so, a latent demand; yes – meaning physiologically people needed our glasses but they did not know they needed glasses. So, it was expensive to create the demand. Another thing was the people that we were serving had very little capacity to pay. It was expensive to create demand and we could not create too much margin as we had to make the glasses, very inexpensive. We are a one product company and could not distribute our earnings through multiple number of products, which is a limitation for us. Also the people whom we were targeting were the poor people in the rural areas so our distribution costs were also high. The sales force was expensive to train and we had direct sales force channel rather than a multi lined independent sales force channel. The components of our model were elegant but expensive from a business perspective. How did you bring the cost down for a pair of glasses? It is true for any social business that pricing is key component. Initially the price for our glasses was Rs. 180. Over time when we saw that we were able to get some market penetration, we still realised that the glasses were expensive for an average person. We were forced to go back to the manufacturing floor in China and evaluate how we can retain value and make the cost significantly less. We started a program called the ‘Radical Affordability Program’ where we looked at every component of the glass manufactured in China and stripped out every cost that we could and in time we were able to lower the cost of the good by 50%. That helped us to come back into the market with a product that cost Rs. 100 or even lower. Simply put from a business perspective it was economies of scale that you were able to achieve. But how did you overcome the challenge of distribution? The distribution was very much a challenge. We work on creating the market and the distribution at the same time in an under resourced environment, which is again why social enterprises are so challenged because they often do both independently. So in terms of distribution, one is hub and spoke model where we create low cost real environments, where people can come into the optical store and get glasses. From each retail hub we also have a retail channel and from each hub we have a van going out in each of the communities around the hub area to raise awareness and sell the simple reading glasses/sunglasses as well as take care of the simplest problems at the village level. We observed that the patients returned to the hub. And that’s what is called the hub and spoke strategy. The one way in which we have worked on distribution is by ‘Lens Crafts Meet Eye Care’ model. Our hubs are now based in eye hospitals and we are not only able to increase the patients who want to have cataract surgery but also provide glasses to people. 80% of our hubs are embedded in the eye hospitals. Second model is the partnership model which means we go to the other organizations which already have distribution platforms / structure, tell them the power of our product and teach them how to incorporate our eye glasses into their distribution channel. That’s a wholesale partnership channel. How do you see other large branded companies, as competitors or collaborators to solve the problem at the bottom of the pyramid? The other branded companies thought us to be a small NGO, not doing much work. We have started to get attention and lot of big companies are watching the innovative way we are tapping into a whole new market. There are 4 billion people on the planet who earn less than $4 a day and the whole optical market is geared to the 3 billion people who earn more than that. The whole industry is skewed towards fashion and low volume - high margin direction and nobody is paying attention to the 4 billion people who earn $4 a day. Consumers need to read newspapers, see cellphones, and to read spiritual text and they have a huge need for glasses particularly as the literacy rates go up. So, by the time the other companies get there we can become partners but at this point they really don’t see us partners. Why do you think they are taking a back step and not really approaching you to do something together? I think a lot has to do with the historical mindset of the companies as they think themselves to be luxury companies, the ones who own the market, brands like Gucci, Armani, D&G, etc. It’s the sort of question like if you can make $10 on one person why would you make $1 on 10 people. But the problem with that philosophy is, it is harder to get the $10 on one customer which is not a growing customer. A growing customer is where you are really getting a huge margin but right now the whole mindset with organizations is a low volume high margin approach. It is not slated to reach the BOP and it’s not radical affordability, it’s not about solving social problem. It’s more about branding, fashion and providing to different segments of the market. VisionSpring sees our role as demonstrating to those companies that there is a vibrant market and there are economic viable business models that can scale through market forces. This would attract them to the market. So, an organization like VisionSpring is really redefining the very idea of capitalistic system or do you think that is going to be the new way the capitalistic structure is going to look in the future? I think that’s the new way the capitalistic structure is going to work. A capitalistic structure that supports disparity is not a sustainable one. We need to find new ways to tap into this wonderful thing we call capitalism and to do it in ways that bring a larger portion of the human family to benefit from power of capitalism. I believe that this is a new brand of capitalism called ‘Social Entrepreneurship’ but you can also call it ‘Emphatic Capitalism’ or ‘Compassionate Capitalism’. Do you think lot of people would actually say that the person is naive when he is thinking like this? Over time it would become clear that a larger portion of the human family are going to want the business services that the smaller portion already has. In order for society to grow and income disparity to shrink, we need new forms of capitalism. And it’s not only a matter of business savvy, it’s also a matter of social equity or national security. Is there a model you are talking about which is replicable? I think it’s both blending of heart and mind. I think the old form of capitalism where Freeman said that it’s all about maximizing profits did not really take into consideration the whole human being. The complexity of who we are – we want to strive, we want the best for ourselves and our family we want security and to maximize profits, so there is a deep yearning within us to have a life of significance. Those yearnings are important. The social enterprise clubs are oversubscribed and people want this form of capitalism to flourish. What are the 3 things to be kept in mind before you actually take a deep dive into creating social enterprises? The first and the most important thing one needs is grit and perseverance. People who dive into this field and pursue the idea have to be sure that it’s meeting the heart with action because that’s where the grit and perseverance comes from. Second, you have to think of your Social Enterprise as a business. Unless you make a model and actually work and go economically it might be a small beautiful project but it would never come close to solving the problem that you are trying to solve. Unless you can tap into its market forces you won’t be able to scale the ideas. Third, is it’s all about the money and the people. So you have to figure out where the money has to come from and what kind of people you are going to attract. How can large enterprises learn from these powerful ideas? I do think large enterprises are going to have increasingly hard time resting on the laurels. They don’t think about innovation /new markets. Who is Jordan Kassalow today an entrepreneur or doctor or social entrepreneur or business thinker? I think of myself as all of those. First and foremost I saw an equity/problem that needed to be solved. A problem that was simple, actionable, big and I wanted to see the world in a different way. The world is one way and I envisioned the world the other way. The good news about having vision is you can see a different future and the bad thing about vision is your vision always moves faster than reality. Though I have spent last 10 years to catch up to my vision, I am going to spend 30 more. My belief is by the time we are finished with this and my life is through we have made a major dent in this issue. Kids won’t be falling out of school, adults won’t be falling out of workplace, we won’t be unsafe on the road, and that’s the kind of world I want to be part of.

In Conversation with Michael Porter

In Conversation with Mark Kramer

The Revolution is Underway

Note from Editor-In-Chief

Big Idea by Navi Radjou

Note From Editor-in-Chief

Vast Entrepreneurial Potential in India

Yoga 3.0

In Conversation with Jordan Kassalow

Error thrown