2. Manoj Kumar of Social Alpha

Manoj Kumar (LinkedIn) is co-founder and CEO of Social Alpha, a "multistage innovation curation and venture development platform for science and technology start-ups that aim to address the most critical social, economic and environmental challenges".

The innovation system that works for industrial, and existing sectors, it works for those sectors, but it doesn't work for the unaddressed problems.

Therefore, Social Alpha is doing is itself an innovation at the level of a system by which innovation can happen. It's a system-level innovation, which then people with technical or other novelties can go from lab to marketplace, including creating a marketplace as they go along. 

Social Alpha is focused on India. Since its inception in 2016, Social Alpha has nurtured more than 200 start-ups including 60+ seed investments.

This is part of a series of interviews about innovation for sustainability conducted for the UCL Institute for Sustainable Resources, as a contribution to a module in this Masters.  You can find out more about these interviews, and the module, here.


Here are the times of each of the questions. 

PERSONAL AND ORGANISATIONAL INTRO

0:53 - Q1. What is your role and organisation? 

ORGANISATIONAL SETTING

4:12 - Q3. How is ‘sustainability’ framed in your organisation? (For instance: are there specific key words or phrases? Is it only environmental?)

 6: 46 - Q2. What role does your department / function have in the organisation? What is expected from you? How does that connect to the organisation’s strategy?

INNOVATION STORY

12:00 - Q4. Can you tell us the story of a good example of your work on innovation for sustainability?

INNOVATION MANAGEMENT

20:50 - Q5. What are the key methods and practices you use for innovation for sustainability?

25:57 - Q6. What are the biggest challenges you face, and how do you overcome them?

27:34 - Q7. If there was one thing policymakers could do which would make your work significantly easier, what would that be?

THE FUTURE

28:45 - Q8. What are your organisation’s priorities on innovation going forward and why?

This is part of a series of interviews about innovation for sustainability conducted for the UCL Institute for Sustainable Resources, as a contribution to a module in this Masters. You can find out more about these interviews, and the module, here.

Transcript

ISR Innovation Interview Manoj Kuma Social Alpha audio

Wed, 1/26 4:19PM • 30:04

SUMMARY KEYWORDS

create, innovation, problems, sustainability, mainstream, market, sector, people, impact, organisation, india, support, invest, company, livelihoods, startup, sustainable, world, social, climate change

SPEAKERS

Manoj Kumar, David Bent-Hazelwood

INTRODUCTION

David Bent-Hazelwood  00:14

Hello everyone. This is one of several interviews on innovation, business and sustainability for the students studying for the MSc in sustainable resources at UCL. My name is David Bent. I'm an honorary lecturer at the UCL Institute for Sustainable resources, and CO lead for the module on eco innovation, and sustainable entrepreneurship. Most of the course gives people the latest academic theory, research and insights, these 30 minute interviews are about getting about being with practitioners, and getting under the fingernails of innovation for sustainability today, and I'm absolutely delighted to say we're joined from Bengaluru by Manoj Kumar, 

QUESTION 1: what is your role in your organisation?

Manoj Kumar  00:58

And, David, it's, it's nice to be here and nice to talk to you. Thanks for inviting me, it's always a pleasure talking to people in academia, from a practitioners perspective. So I'm the founder of social alpha, social alpha is, let me try to explain what it is. It's a multi space, innovation, curious and adventure development platform focused on science and technology innovations, and startups, which are trying to solve complex social, economic and environmental problems. We work with innovators and entrepreneurs who are on a mission to solve some of the problems, their market failure is visible, and help them with our ecosystem building approach.

David Bent-Hazelwood  01:48

Great, there's quite a lot to unpack in there. And we'll do that through the rest of the call. But I suppose the key thing there is that you are a, you're not a for profit organisation, you're mission driven. And I suppose you'd like to make profit along the way, but the primary purpose is about creating change and addressing those messages.

Manoj Kumar  02:09

That's right. So we are a non profit. But the objective is to create new markets, especially in areas where most of the mainstream investment impact investment corporations are reluctant to get into because of unknown risk, unpredictable return trade offs. 

So what we do as a not for profit is to de risk these innovations, so that they become attractive for corporations or governments or philanthropy or investors to come in and take them to their scale. So that's, that's what we do. So if we end up making any profit, in this process, that profit doesn't go for redistribution, it gets redeployed for the same car, right. So we try to create circularity of capital.

David Bent-Hazelwood  03:06

And do you focus on problems in India market failures in India? Or are you global in your reach?

Manoj Kumar  03:12

So we started about five, five and a half years back and we started with focus in India, because India is a large, diverse country, right, culturally, geographically, we have, you know, large population and large number of problems as well. So the idea is to work in India create playbooks and then see if we can replicate those playbooks in other countries. So it's an open source model, we want to do more and more experiments, and then open source it and, you know, some of our districts or states are larger than some of the countries in developing world. So I think we can try to, you know, share our experiences and experiments. 

So right now the focus is in India, and we work in three areas, climate change, and sustainability, health and wellness and livelihoods and poverty elimination.

David Bent-Hazelwood  04:05

And so, that takes me to what is technically Question three, but let's go there now, about those issues. 

QUESTION 3 (Q2 comes after) how sustainability is framed overall, how did you drive those three as your priority areas?

Manoj Kumar  04:21

And, and to be honest, they are all interrelated as well, right? So let me take example of climate change. The biggest victims of climate change are actually the poor smallholder marginalised farmers, people living in tribal and coastal areas, because their exposure to the climate risk is highest. Right. And it impacts their livelihoods. And it impacts their health as well. Right. So pollution and emissions impact human health, but again, the poor are more exposed to that, right. 

So climate, health and livelihoods are interrelated, but they have their own specific problems which can be solved through innovation, right? So we, we, we were working in many areas, but we finally consolidated and said, if we address these three huge, and during pandemic, we realised how important it is to focus on healthcare as well. 

So, you know, these three issues will take care of a reasonably large number of problems that we face. And we also realise that innovation in each one of these areas, plays a really large role. Right. So left take example of sustainability, right? If we need to focus on climate change and sustainability, we have to focus on sustainable production and sustainable consumption, right, which means we have to decarbonize everything, right, from grid, to manufacturing, to, you know, industry to agriculture, to lifestyle choices, right? 

So innovation plays a big role, everywhere. So we said, okay, let's focus on, because our core expertise is taking innovation from lab to market to communities, let's focus on climate health and

David Bent-Hazelwood  06:03

great, and then let's just pick up that that function there you're talking about, which is our question to about taking innovations from lab through to market. And you in your introduction, and when you were describing the organisation, you gave various different stages and use this phrase, ecosystem builder. Now, that might be unfamiliar to a lot of our listeners and audience. 

QUESTION 2: What is the role of your organisation? 

Manoj Kumar  06:31

That's a great question, actually, if you look at our mainstream business, right. mainstream business I mean, you know, automobile airlines, pharma, this has developed over centuries, right. So if you look at Industrial Revolution in, in Europe, right, with, with the steam engine, and till today, we have, you know, we have grown every industry, right. 

And the mainstream world, Ajit goo also created institutions, right. So you had universities where people were doing research, you had corporations who actually translated research into products and services, and then you went to their consumers, but the entire ecosystem of capital providers like banks and venture capital in the in the last century, right, and, and incubators and accelerators and public policy, everything worked together, because industrial world created each and everything that it needed to perpetuate capitalism. Right. 

And it was this is the beauty of capitalism, right? Because capitalism not only valued capital, it also created every possible institution that promoted for the, you know, growth of capitalism. Right, it became a perpetual machine, that that drove development around the world. 

Unfortunately, some sectors were left out. Right, and that we today call social sector or development sector or, or climate issues, right. And they're the institutions don't exist, right. So if I were to address the problem of climate of health or livelihoods, using the same tools, which were developed for mainstream backyard industry, I will not be able to do it. 

And that is why venture capital models which are being replicated in the name of impact investing in social work, are not working beyond micro finance and agri value chains, precisely because they have not been created for innovation. Curious, right. 

So what we are trying to say that if we have to solve some of the most complex problems of society, we need to create an integrated system. And that is where the ecosystem becomes very important, where we integrate r&d Labs, translational research organisations, incubators and accelerators, investors, public policy, market players, corporations, governments, philanthropy, NGOs, everybody together, right, and use a platform approach. 

And the approach that allows these innovators to access various resources, it could be access to capital, it could be access to laboratories, it could be access to mentoring, it could be access to expert advice. Get that expertise to create an ecosystem that allows these entrepreneurs and innovators to take their innovations from black to market in the process. We will create markets and what we call today's social sector or development sector will one day become mainstream.

Micro finance, 25 years back, was only done by nonprofits. When Professor Muhammad Yunus won the Nobel Prize, right? That time it was all nonprofit, right? Today, micro Finance is more mainstream than mainstream banking right now. And you can see mainstream capital there. 

So I believe that various areas whether climate change will become a large market, because every sector has to decarbonize. If every sector has to decarbonize, we're going to spend trillions of dollars on decarbonize, it means there is a business opportunity the same in the healthcare, if we have to avoid what happened during the pandemic around the world, we have to invest in primary health care.

 And if we want to invest in public health system and primary health care, we need to reduce the cost of health. If we have to reduce the cost of health care, we have to design new diagnostics and devices and therapeutics. And if we have to design new diagnostic devices and therapeutics, we have to focus on innovation, and to take that innovation from lab to market.

Meaning that we need an entirely new architecture, the old architecture will work for Pfizer, that old architecture will work for Boeing, the old architecture will work for BMW, but old architecture will not work for affordable diagnostics. Right. And that is what the point is.

David Bent-Hazelwood  11:04

And so to pull out the like the message of all of that is that that the innovation system that works for industrial, and existing sectors, it works for those sectors, but it doesn't work for the unaddressed problems. 

What social alpha is doing is creating it is itself an innovation at the level of a system by which innovation can happen. It's a system level innovation, which then people with technical other novelties can go from lab to Marketplace, including creating a marketplace as they go along. Yeah,

Manoj Kumar  11:56

absolutely. Very well articulated it better than I!

David Bent-Hazelwood  12:00

I had the advantage of hearing you say it, so there we are. So I think all of that is wonderful. And it also can feel rather abstract. So it'd be great to have a story about one of your organisations that has gone from lab to marketplace, and really land to people and illustrate for people the sort of work that you're doing. 

QUESTION 4. . Can you tell us the story of a good example of your work on innovation for sustainability?

Manoj Kumar  12:20

So, we have we have incubated more than 200 enterprises invested in 60. Since we are talking about sustainability, let me give you an example. And it's a very, very stable and very popular example, because this company has become mainstream brand now. 

So, there's a small I would say a small city in India called Campo which is on the bank of river Ganga which is you know, holier in India, right, and all our places of worship, huge flowers. So, all the flowers which are offered in places of worship, and ended up going into the river polluting water body as well as soil contamination, right. Because the flowers are grown industrially using chemicals and pesticides. Right. 

So now you have tonnes of flour waste, going from farming, to temples, to soil and water. Right. And here is an entrepreneur who thought about converting this flower waste into several valuable lifestyle products ranging from you know, essential essence steaks to biodegradable Styrofoam replacement, to vegan leather to compost, right organic compost, and in the process created employment for several women from marginalised communities by creating employment for them. 

However, the beauty was in creating lifestyle aspirational brands, which sell at a significantly higher gross margin than the compare competitive products in the marketplace because it created a completely new category, which was perishable, or New Age consumers, right? It has become an extremely successful story. And we wrote the first check and incubated this company. 

It's called fool. Phool is Hindi word for flower. You can have a look at the website https://phool.co. 

And today, mainstream investors are hobnobbing with the founder for investing significantly large amount of money so that this business can escape, right. So this is an example where a company that started a waste management Circular Economy company In five years has become a b2c brand. Right? And generating interest of consumers and investors both, but in the process has solved three problems. 

One, the problem of quality, you know, waste management, right, and water and land contamination. Second the problem of unemployment and social exclusion of certain communities by providing them jobs and economic value for them, so that they can lead a better quality of life as well as a more dignified life. And it's a successful, scalable, profitable business for the founder, and therefore, the value of this business has grown. Right. So this is triple bottom line. Right? And it all starts with sustainability and social angle. And eventually it became ministry.

David Bent-Hazelwood  15:58

And what was your role as Social Alpha? Did he come to you with? "I have, I have a technique which will turn flowers into all these other things, it was a chemical thing, then?" How did it work?

Manoj Kumar  16:11

So actually, it will, it was, I think, an accidental meeting I had because I was part of the jury in a in a startup pitch competition, and he was presenting there. And at that point of time, the company didn't exist, they were experimenting and selling as a small scale business. 

And I was very impressed with the whole circularity. Right, and, and the social and environmental impact. So I told my team, let's keep in touch with this guy. And, you know, it appears that he's creating new market. And that that was then we were also starting, we were one on one and a half year old. 

And then we mentored him, provided him I still serve on his board, though I'm not adding much value anymore, but I still serve on the board. But what we did, we wrote the first chapter, right. And though we ended up taking around 12% stake in the company, but that first check allowed him to prove that one, he can continue to invest in r&d. 

So in one of the premier institutes in the country, Indian Institute of Technology, he set up his lab so that he can continue to do r&d on new products, at the same time, started investing in marketing and branding, right, and, and created a decent supply chain and market access model. 

And then a few other foundations came in with some grants and equity. And then angel investors came in, and then mainstream investors came, right. 

So what we did our role was not much our role was to one help company, tell the world that the business I'm doing actually is a result of market failure and pollution, and unsustainable consumption. And it this business is actually viable, sustainable and scalable. What it needs is little capital and some support. And we created that support system by taking them to IIT, by giving them money, and by giving them right advice at the right time. And now we can get out because our religion, right, yeah, so we don't have to continue to engage with the company, because then we can engage with other companies as well. But unfortunately, in this case, the founder doesn't want us to go away right now.

David Bent-Hazelwood  18:32

So I guess just to illustrate or to pull out some of the things an entrepreneur and enterprise will go through various stages in the lifecycle from just the notion, the idea through to having a product through to having revenue and then growing. And social Alpha was playing a key role in those very, very early stages. So that the having a product that you get some of that was management advice and tech advice, some of that was bringing in money, but some of it was also introducing to the existing companies, the existing universities. Yes.

Manoj Kumar  19:10

Yeah. Yeah. Yeah. And now introducing to investors,

David Bent-Hazelwood  19:13

investors, yes. And now they've reached a certain size, it's no longer your speciality, it's no longer what you focus on the rest of their success.

Manoj Kumar  19:24

However, you know, it also depends upon complexity of the sector, right in this sector. We provided early stage support and now this company is on its own, but in some companies, we actually provide support for example, in medical diagnostics and devices, we remain engaged till clinical trials and regulatory approvals, till medical devices and diagnostics are injected in the public health system, right. 

We have to do much more for market creation there because we are not dealing now with consumer markets, right. So in consumer markets, we may have early stage involvement In medical diagnostics devices, we may actually remain involved for a much longer duration, till the solution is actually tested and validated. And, and the system is starting to procure from the startups, right? 

In climate change again, you know, our role is still, mainstream investors or mainstream corporations come and acquire these companies or partner with these companies, or these companies generate enough cash to grow on their own internal cache, and become large corporates, right. 

So the time it takes in clean energy, for example, could be two to three years, medical devices could be four to five years, right? Then you are would be one to two years digital could be six months to one year. So each sector has its own complexity in terms of so

David Bent-Hazelwood  20:49

let's talk a little bit about the methods and practices that you have. Because there is that difference between sectors between products? 

QUESTION 5: Are there any methods or practices that you use to choose which ones to invest or to bring into your network? How do you support them? What are the key things that you help you to decide?

Manoj Kumar  21:11

Well, we have created again, a multistage model, right. 

So for very early stage prototypes, proof of concept prototypes, lab level prototypes, which still need investment in product development, testing and validation. We run a programme called entrepreneur in residence, where we bring in these people as our own employees, give them a budget, and then have them off at a separate company, once they have a certain milestone achieved. 

Then we run multiple incubators and accelerators, where people can come with a working prototype and then get ready for market deployment, , right, pilots, validations iterations GTM readiness, and then we run a market access accelerator where we work with the startups when they have a product that is ready to go to market. 

But they need they need some kind of a catalytic push to get into the market. So we provide market access support, and user financing. procurement system changes policy interventions, so that so they see, these are multiple tools that we use. 

So we use innovation, r&d as a tool, we use incubation as a tool we use accelerator as a tool will use investment as a tool grant making as a tool, public policy. Right? So it all depends upon which stage you are in, and what problem you are solving and how complex is the problem?

David Bent-Hazelwood  22:38

Yeah. And often an innovation you have someone will start with an intention and with a hope about what its impact will be on one of those big issues, climate change health income, but then as it develops, then what its impact is and what its potential is will change. Is there anything you do to make sure that the innovations are going to have that alignment to the impact your hoping for?

Manoj Kumar  23:06

You're asking amazing questions. So no, thanks. You know, David, we are, we are not for profit, right? And we consume a lot of philanthropic capital, which are very high opportunity cost, right. 

So we work on problem statements, okay. And we validate those problem statements from communities, from NGOs, with stakeholders, researchers, various experts, and these curated problem statement then form a thesis for each sector. 

So we have a thesis in climate change. We have a thesis in healthcare, and we have a thesis in livelihood. 

Now, this is not a static document. It keeps evolving as we learn more and more about a sector through primary research, secondary research, stakeholder consultations, and ground level connect, and also learn from our failures. Every time we fail in doing something that goes back to refine our thesis further, right. Based on this, we search for innovators. 

And then when these innovators, presenters business plans for their startup, we make sure that they have an impact plan and they have a business plan. And we evaluate them first on the impact plan. And if the impact plan gets approved, then only we look at their financials and business numbers, right. So what we actually sign up with these startups is a combination of what impact they will create how that impact will be measured, monitored and reported. And what business numbers will they achieve? Right? What would be their revenue gross margin and escape? Right? So it's not either or. Right. But it is fascinating.

David Bent-Hazelwood  24:46

It is impact first. 

Manoj Kumar  24:48

Impact first. You know, if a startup is successful in creating impact, but social Alpha loses money, it's acceptable. Right? We are impact first and we will always be impact for us, because we need to make sure that the market failure is address because if market failure is addressed, all the money that we are losing will be made by someone else in the market. Right. So that at the source at a system level, we are not losing money, and we are creating impact. Yeah.

David Bent-Hazelwood  25:17

So, just in the last few minutes moving into the last few questions, 

QUESTION 6: What are the biggest challenges you face? And how do you overcome them?

Manoj Kumar  25:26

Actually, the big challenges, I would say, I'll keep them in three categories. 

First, a lot of innovators and entrepreneurs really want to work in climate, health and livelihoods. That's good news. They are reluctant because they're not sure whether they will get support and they will get long term continued support, right, they will get burned out or they will start runway. So we have to educate and convince them that we will work with you and we will support you as long as it is required. Right. So that is part of our outreach and education. 

Second is for the philanthropists, right? The donor community, right, which is, which is used to giving money for direct charitable projects, asking them to register or allocate part of their philanthropic capital for innovation and entrepreneurship. Because a lot of people think that that is the job of venture capital and impact investing. Why do you want to consume philanthropic capital that can go for disaster relief and direct, you know, charity, and we say that unfortunately, venture capital and impact investing playbook doesn't work in some of the areas. So we really need access to philanthropic capital. So again, continued education with corporations, CSR, corporate CSR people who are responsible for corporate social responsibility, the ESG guys, and the philanthropist and donors that look what we are doing is also philanthropic. 

Third, convincing governments various bodies in government to also support us financially, because we are doing actually what they are supposed to do, right? To facilitate market creation. So this is, these are the three challenges, but I think it takes time, but you know, as you sow success, and as, as you continuously engage with these three communities, right, the state, the philanthropy and the innovation, you can bring them on board. And that's slow. But certainly

David Bent-Hazelwood  27:25

QUESTION 7: If there was one thing policymakers could do, which would make your work significantly easier, what would it be?

Manoj Kumar  27:34

I think what policymakers around the world, all over the world need to do is to continuously reduce subsidies on for example, fossil fuels, and provide the savings they make by reducing these subsidies for new clean energy transition analysis. Right? This is one example. 

So they need to do things like this, that make the planet safer, and provide fiscal incentives to sectors which are going to create futures. Sustainability, in, in the planet, right. And, and it's in the it's up to state how a state budget, right? So instead of heads of state, pulling out of Paris Agreement and saying this is not going to work, I think more and more people need to commit to global agreements on climate change. And I'm very happy that our government in India, in cop 26, and now is in debt commitment to Nigeria, right? So these are positive examples that these are signals, right? These are signals from public policy, that climate is serious. Sustainability is serious, and we need to take it serious.

David Bent-Hazelwood  28:45

QUESTION 8:  what are your priorities going forward?

Manoj Kumar  28:52

Right is the three sectors I mentioned to you. And the top priority is to raise more capital from philanthropy, and deploy it for innovation and entrepreneurship, and make even social Alpha sustainable so that we can circulate all the value we capture in this process back into the social coach.

David Bent-Hazelwood  29:12

So that's growth for yourself. And you mentioned right up top about you can India focus, but if you can create methods and make them open source to others who can use them as a growth in the world?

Manoj Kumar  29:23

Yeah. If you can create playbooks and those playbooks can then be applied. And also we are a startup. If they're successful in India, they can access global markets. Right. So

David Bent-Hazelwood  29:35

yeah, wonderful, manage. It's been an absolute pleasure talking to you. It's so fantastic to hear about the work of social alpha and innovation in itself of the system by which other innovators and entrepreneurs are supported. And thank you very much for your time.

Manoj Kumar  29:51

Thank you very much. It was great talking to you. And thanks again for inviting me. My pleasure.