New Year's Lunch: Partnering with Big Businesses
On January 9th, Ashoka Netherlands started off the 2020 calendar with a new year’s lunch, involving the Ashoka team, ASN and Ashoka fellows. Two Ashoka fellows – Aart van Veller, co-founder of Vandebron, and Bas van Abel, founder of Fairphone – were invited to share their stories and to talk about some major changes happening in their companies. Namely, Vandebron was recently acquired by Essent, the largest energy company in the Netherlands, and Fairphone entered into a strategic partnership with Vodafone.
The discussion focused on the reasons for partnering with these big businesses and the various considerations this involved. Both Aart and Bas talked about some of the challenges facing social entrepreneurs, offering an honest account of their experiences as well as highlighting the importance of creating support networks.
The event began with Aart sharing some background information about the growth of Vandebron, leading up to their decision to partner with Essent. He spoke about the initial struggle to find funding, especially since he and his co-founders had limited experience when they started, and it was seen as a risk to invest in their not-yet-profitable company. After five years in the business, Vandebron began making a profit, but they realised that if they wanted to continue independently, they would have to focus all of their energy on cost control. Due to this reason and various others, they made the decision to partner with a strategic investor.
So why Essent? Aart explained that selling the company to Essent was the best move because this agreement will enable Vandebron to continue relatively independently while being financially supported. Through this partnership they will also be able to keep their own system and to continue working from the same place. On the question of how Essent will benefit from this deal, Aart explained that they have been working hard to become more sustainable and to rebrand their image.
On a more personal note, Aart discussed his choice to leave Vandebron, commenting that other people are now more prepared to take over. He says that he has become more realistic and lost some of the naivety he had when entering into the industry. At the same time, he is proud of what Vandebron has achieved, making a notable impact in the market and helping to change mindsets in the Netherlands.
Bas’s story shared several similarities as well as differences with Aart’s, diverging in the setup of the company and how it was formed. Describing his journey with Fairphone, Bas narrated how they had grown from a single aim – to talk about the impact of the mining industry in the Congo – into a phone company focused on creating and selling conflict-free phones. Like Aart, Bas spoke about the difficulty of finding funding, and how he realised early on that they were going to need ‘the big guys’ to make his vision a reality.
In the talk, Bas explained some of the changes Fairphone has undergone over the years and their impact on the wider industry. For example, they pushed for businesses to start talking about what is happening in the supply chain, and they gained access to the factories and mines, which was not done before this. However, this did not come without its challenges, and they needed a huge cash sum to continue building the phones. More specifically, they were required to make up to one million phones per year, with the cash cycle beginning three months before production. There was also the problem of exhaustion, and the challenge of keeping up their momentum.
Considering all the factors, Bas began looking into a strategic partnership to create new opportunities. He noted that big businesses started to take an interest in them since Fairphone is a likeable brand which differentiates itself from other companies. When negotiating the changes, Bas acknowledges that sometimes you have to accept working within the boundaries of a system that is not how you want it, but that can be changed from within.
One of the major talking points in the discussion with Aart and Bas was the need to speak more about mental health and the exhaustion experienced by social entrepreneurs. More specifically, they pointed out the immense pressures faced by the founders of small start-ups, especially when they have to confront many of these obstacles alone. On this topic, Bas emphasised the value of sharing your experiences with the wider community of social entrepreneurs, speaking to people who understand your journey and can provide useful feedback.
Another discussion point was how to create an ecosystem around scaling companies, and where to find scaling partners. On this, there was the suggestion to connect with Ashoka fellows who have knowledge about scaling, creating a space to share their experiences when it comes to growing social enterprises and making them financially sustainable.
The conversation raised much food for thought, introducing the question of how to create better support networks, helping social entrepreneurs to develop and thrive both personally and professionally.