Six student finalist teams flew in to New York to compete in a final pitch-off for the Hult Prize at the Clinton Global Initiative annual meeting last night. In each of the last four years, business students were invited to create solutions to a specific societal problem selected by former US president Bill Clinton.
This year, their challenge was to create a social enterprise that will drastically increase food security for urban slums by 2018. The best idea will take home $1 million in seed capital, donated by Swedish entrepreneur Bertil Hult and the Hult family. But there are some changes this year.
“This year we made a fundamental change to the competition. This year we’re giving a million dollars directly to the winning student team, not to an NGO. And that is because the students have the energy, passion, commitment, and ability to take their ideas forward like no other third-party could match,” said Stephen Hodges, head of the Hult International Business School.
The Hult Prize previously partnered with NGOs and charities – including One Laptop Per Child, Water.org, Habitat for Humanity, and SolarAid – through which prize money to develop an idea would be awarded, instead of directly to the students.
There is also a desire to move theoretical ideas into practice. Previous years did not require teams to have a working business plan, but this year teams have already built startup ventures and pilot programs. They were required to attend a summer accelerator at the IXL Center where they were provided with the tools, resources, and mentors to hone their businesses.
The challenge attracted 11,000 students from 350 universities across 150 countries this year, up from 300 students in 2010 when it was still called the Hult Global Case Challenge.
“Literally four years ago to the day, I didn’t even know what social entrepreneurship meant. I had no idea that there is an intersection that existed between doing good and doing well,” said then-MBA student and creator of the Hult Prize, Ahmad Ashkar.
Ashkar went back to school after the fallout of the 2008 financial crisis. A speech by Charles Kane of One Laptop Per Child triggered his interest in how to sell a product to the poor to eliminate poverty, which he didn’t think possible at the time – charity is charity, business is business. Kane explained that there was something called social enterprise.
With the Hult Prize, Ashkar wants to target MBA students who never would have considered a career in the social sector, saying that “when they answer the President’s Challenge, they get hooked, they see the opportunities to have a lifelong career – something that can give them responsibility in the impact that they have, and also a career where they can live sustainable lives.”
Aspire Food Group
Out of 11,000 students, 26 competing in six teams remain. Kicking things off last night was Aspire Food Group, created by a team from McGill University in Canada, who aspire to use insects to address the challenge.
Already eaten by over 2 billion people worldwide of which 140 million live in urban slums and lack food security, insects such as grasshoppers are a “micro-livestock” loaded with protein comparable to traditional livestock and six times the amount of iron and calcium. But the problem is that they are hand-harvested, making them more expensive, and they are seasonal. In Mexico, home to the largest slum in the world, grasshoppers are only available for three months per year.
Aspire’s idea is to harvest insects year-round by breeding insects and supplying farmers with eggs, getting farmers to grow insects, and distributing them in the slums.
A team from the University of Cape Town in South Africa pitched Reel Gardening, a biodegradable paper tape with built-in seed and fertilizer to make planting food easier. The idea was developed by team member Claire Reid, who realized from a personal experience in her own backyard in Johannesburg during her teens that growing a vegetable garden is not as easy as it looks – there are Mother Nature’s other animals to hold back and sometimes families have to trek far distances just to get water.
As an optimally-designed product, Reel Gardening spreads seeds at the correct distances apart, is protected from birds, and is able to save up to 80 percent of water than traditional gardening methods because a user only has to water the demarcated part. Beyond food security, Reel Gardening has fostered a collaborative spirit by working with schools and communities to implement gardens.
Another team hailing from the Hult International Business School created Pulse to address food security from a different angle. Rather than producing food, Pulse is a mobile-based solution which encourages customers to save away money for food.
In slums, vendors sell food, but people are still malnourished. An average slum dweller, lacking access to bank accounts, may try to save their hard-earned money at home, but because it’s not stored away it becomes easy for the family to use it on items other than food. When they purchase something at the local vender, they often get change in the form of chocolate bars or candy, because vendors are short on small change.
Pulse, leveraging a high mobile use rate in developing countries, allows users to “top-up” their accounts so that they can save for rainy days.
Students from the Asian Institute of Management in the Philippines aim to create a new supply chain with Poshnam. They hope to sell off-specification produce, typically discarded for their appearance, to make food more affordable for slum dwellers while cutting food waste simultaneously.
In India, 30 percent of all food produced is off-spec. They get discarded along the supply chain and never make it to the consumer, but could have potentially been used to feed the millions who are malnourished in the country. Poshnam purchases off-spec produce from farmer co-operatives, and through women entrepreneurs they hope to reach the end consumer at a significantly lower markup and selling price.
Next a group from the London School of Economics introduced SokoText, which uses mobile text messaging to aggregate demand and realize bulk pricing for slum dwellers. By aggregating purchases, SokoText estimates that the price of fresh produce is reduced by 20 percent.
Farmers would inform SokoText of their available produce, and customers on the SokoText network would be informed of what’s available and place orders. Each SokoText outlet manages the orders for 150 local kiosks serving over 11,000 customers altogether. The company employs “SokoText Ladies” or micro-franchisees to set up kiosks, which are pickup points for the food. This summer, the team went to Mathare Valley in Nairobi and has successfully implemented a fully operational outlet there.
Finally, students from the ESADE Business School took to the stage, but they were one person short. Having just returned from one of their pilot locations, one member contracted malaria and was in hospital. The remaining members presented Origin, a social enterprise that helps small retailers sell cheaper and healthier foods in slums.
They do this by leveraging the supply chain of their partner TechnoServe, who has been aggregating the supply of smallholder farmers. Origin would expand the supply chain to slums. As a network, Origin handles all the logistics and builds local collection centres.
In the end, a panel of eight judges including Muhammad Yunus, the 2006 Nobel Peace Prize winner and founder of the Grameen Bank, Ertharin Cousin, the executive director of the United Nations, and Premal Shah, the co-founder and president of Kiva, chose Aspire as the Hult Prize winner.
“If I said to somebody 60 days ago ‘I love this prize and I’m going to give the prize this year to someone who wants to grow, process, and sell edible insects to actually empower rather than devour urban communities’, some people would laugh, but the truth is two-and-a-half billion people worldwide eat insects seasonally already,” said Clinton, who was there announce and congratulate the winner.
But before they take home the $1 million prize, Aspire would have to deal with one ongoing issue, otherwise they risk losing the prize money. The McGill team is currently in a dispute with Jakub Dzamba, a PhD student at McGill, surrounding the cricket farming kit. Dzamba claims he first came up with the idea in 2009.
Dzamba filed a report of invention with the university in August 2012. He was approached by the McGill team this year, who knew of his cricket farming research, and asked for help in designing a farming kit for the competition. Businessweek reports that he “produced some of the graphics used for the team’s presentation, including several showing the collapsible ‘cricket reactor’ he designed for the team.”
Dzamba says he believed there was a verbal agreement where he would be made a team member or partner in any company formed should the team win the regional competition, which took place in spring. But that never happened.
The university has stepped in and after review, says that Dzamba was the sole inventor. The Hult team did not meet the criteria of co-inventor as they did not have the idea or the ability to execute it.
The university tried to facilitate a resolution, but talks broke down leading up to the competition last night. Although it didn’t affect their ability to win the competition, Hult representatives say that McGill team would be ineligible for the prize money if they violate any laws, including intellectual property, and that they would need to sign an agreement saying they won’t.
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