Our first foray into mapping the impact investor at SoCap space features Elnor Rozenrot, a Venture Director of Innosight Ventures. Innosight Ventures is a unique venture capital firm focused on creating or reshaping its own opportunities for investment in two ways: by spotting opportunities that others can’t see and shaping these opportunities, and by doing well by doing good.

Video Interview Table of Contents:

1. What does Innosight Ventures do? (0:01-3:44)
2. Why does Innosight Ventures invest in social ventures instead of traditional for-profits? (3:45-5:15)
3. What key questions do you ask an entrepreneur before investing in his/her venture? (5:16-7:24)
4. How does Innosight create sizable returns with very small initial investments? (7:25-11:08)
5. What’s the best investment Innosight Ventures has ever made? (11:09-14:10)
6. What is Innosight Ventures doing to pave the way for mainstream investors and entrepreneurs to serve overshot/BoP customers? (14:11 to 16:30)

Disruptive Innovation in Action

Innosight Ventures Profile. Launched in 2001, Innosight Ventures is currently headquartered in Singapore, with a presence in Mumbai and Baltimore. Innosight Ventures invests based on the principles of Disruptive Innovation.Theory as outlined by its founder Professor Clayton Chrstenson in The Innovator’s Dilemma. This theory holds that companies innovate more quickly than their customers’ needs change and that many of these customers either don’t need or can’t afford to keep up with new products and services. What many of these customers need insteadis access to products and services that are simpler, cheaper, and more convenient. Innosight Ventures targets these overshot markets, investing in affordable technologies that enable its customers to get a job done (called a “jobs-to-be-done approach”).

In Action. What does this look like on the ground? One of the shining stars of Innosight Ventures’ Portolio is its Village Laundry Service (VLS). VLS provides a vetted, low-income Indian washerman, called a dhobi, access to a laundry machine (disruptive innovation). The laundry machine enables him to vastly increase the number of clothes he can wash each day and dramatically improve the quality of his services, effectively doubling to quadrupling his income (job to be done). Thanks to the machine, he can lower his price from Rs. 36 per kilo of clothing to Rs. 30 per kilo, making his services more affordable to his customers. To top it all off, the venture takes 2 days to produce profits and Innosight Ventures walks home with 40% of them. Not too shabby. You can hear Elnor describe the Village Laundry Service in more detail in his response to Question 1.

Investment Range. Conventional wisdom holds that generating substantial returns requires initial investments of millions to hundreds of millions of dollars to produce prototypes. Innosight Ventures structures its ventures to achieve success with initial investments of $250,000 to create initial revenues to $1 million to create initial profits. Listen to Elnor explain how in his response to Question 4.

Portfolio. Innosight Ventures’ portfolio includes investments in ventures like Guaranteach (a web-based math tutor that adapts to students’ preferences), Peepal Finance (a finance company filling the funding gap between microfinance institutions and traditional banks), Razor Rave (kiosks that provide grooming services for men) and Innoway (a company offering high quality products to low-income consumers), The Innosight Ventures website includes a video library of some of the firm’s best portfolio companies. Elnor discusses two of Innosight Ventures’ best investments in his response to Question 5.

Elnor Rozenrot’s Bio. Elnor Rozenrot is a Venture Director of Innosight Ventures and is based in Baltimore. He focuses on the incubation and early-stage businesses development of Innosight Ventures’ portfolio companies and is one of these early-stage portfolio companies in the US. He has lived and worked in the US and in Israel, serving as an Owner’s Agent at a telecommunications company, and leading two IT companies in Israel. He received a Bachelors Degree in Law from the Academic College of Law in Tel Aviv and an MBA from the Tuck School of Business at Dartmouth, where he was awarded the Arnold F. Adams Jr. Entrepreneurship Award For Excellence In Entrepreneurship.

Many thanks to Elnor Rozenrot for taking the time to talk to us about the Innosight Ventures! Learn more about what they do at www.innosightventures.com.

My dad used to tell me that leadership is about asking the right questions.

As I grew passionate about making the world a better place, I started to ask “how can I change the world?” I never really got a good answer. What it takes to change the world is shrouded in mystery. Many argue that it’s the domain of the anomalous Mahatma Gandhis of the world, who operate at the fringes of human capability, or simply a matter of a miracle occurring. I was so frustrated. How can we afford to leave changing the world up to anomalies and miracles?!

I realize now that I was just asking the wrong question.

The phrase “change the world” is entirely too vague to be actionable. What I really should have been asking all these years was “how can I create effective solutions to the world’s biggest problems that can be financially self-sustaining and scalable to multiple countries and millions of people?” Or as we like to say here at The Unreasonable Institute, “how can I create an Unreasonable Impact on the world?”

So that’s the question I’m asking now. And in fact, that’s the question driving this blog.

This blog, therefore, is dedicated to demystifying how to achieve Unreasonable Impact.

Here’s our game plan:

1. Learn from those that have achieved Unreasonable Impact.

Every other Thursday, we’ll feature a video interview and short profile of an “unreasonable” social entrepreneur who has achieved at least one of the elements of the drawing (describing Unreasonable Impact) below:

On the alternate Thursdays, we’ll interview and profile the most innovative social investment funds that both support the work of unreasonable social entrepreneurs and redefine the ways we use finance to create Unreasonable Impact. This Thursday, Elnor Rozenrot will be speaking to us about his work at Innosight Ventures.

We’ll ask them how they developed their ideas, what drove them to create the impacts they achieved, and what challenges they faced. We’ll also ask them how they created solutions that effectively addressed social and environmental problems, how they developed financially self-sustaining models, how they scaled their solutions to multiple countries, and how they reached unreasonably high volumes of people. We’ve partnered with SoCap, whose global network of near 900 of the world’s leading changemakers, social entrepreneurs and social investors, will comprise the bulk of our interviewees.

2. Learn the concrete skills required to achieve Unreasonable Impact.

How exactly are we going to mobilize people, develop a self-sustaining revenue model, and conduct the marketing necessary to reach millions of people in order to achieve Unreasonable Impact? Good question. Every Monday, through a series of guest writers and the chronicles of our own experiences, we’ll provide guides to developing the skills crucial to achieving Unreasonable Impact, including:

• How to pitch your idea to a social venture capitalist for $1 million,
• How to design an earth-shattering website for (almost) free,
• How to put together an excellent team,
• How to create the perfect powerpoint presentation,
• How to have a one-on-one conversation with anyone about your idea,
• And much more!

3. Encourage Unreasonability

Achieving the elements of Unreasonable Impact takes outrageous audaciousness. This blog is written for people who want to create solutions to the world’s biggest problems. We challenge you not to be satisfied with humble contributions or with temporary solutions. We need solutions that last, that enable those that you help to provide for themselves, and can create the viscerally measurable progress our world desperately needs. When you have access to the crucial guidance and practical skills you need to create systemic social change, the more unreasonably determined you are, the more likely you are to drastically improve the lives of millions of people on the planet (as evidenced by the highly scientific graph below).

Join as we demystify the creation of Unreasonable Impact.