Entrepreneurship isn’t always about getting rich. Sure, some entrepreneurs are mainly driven by financial gain, but a growing number want their companies to have greater meaning. They can innovate in important ways, beyond the technical aspects. This is the sort of company that Tandem Fund, located in Kuala Lumpur, Malaysia, wants to help.
“We invest in social businesses with a cause – reducing poverty, for example – but also have a way to generate revenue,” says Tandem Fund director, Kal Joffres. “Their mission needs to be social in nature, with a business model tied to the private sector,” he says. “Whether they help people depends on the market.”
It’s a bit revolutionary for Malaysia, where philanthropy is often limited to giving money to orphans – and having yourself photographed doing it – once a year. Financed by a bank’s charitable foundation, TandemFund is more ambitious. It invests in health, food, lodging and distribution for disadvantaged populations.
“We’re happy with a return on investment that’s smaller than a commercial return, what’s called ‘patient capital,'” Joffres says. The fund uses lesser known models like ‘risk debt,’ loans for startups’ capital expenses. It also practices the (very Islamic) concept of profit sharing.
Some of the companies it has funded are SOLS 24/7, which teaches English to disadvantaged Asian children – only children from rich countries like Japan need to pay, and WeDesignChange, a site where designers volunteer to help rural artisans “raise the value of their products without raising their production costs.” The fund also helps a company that recycles computers, giving them to social organizations.
Tandem Fund has also created Tandemic, a consulting group that helps social enterprises. One of its primary activities is organizing Hack Weekends, intense sessions where applications are built to solve problems, like creating a carpooling app for people hesitant to ride with strangers.
MakeWeekends are focused on being an entrepreneur’s first attempt at building out an idea, no matter how elaborate or crazy. “The weekend keeps people from abandoning their work,” Joffres says. “Young people come to rapidly prototype whatever idea they have. We don’t worry about business models. People are more likely to go all-out in the prototyping phase.”
With the government’s help, Tandemic collaborates on Innobridge, a project to familiarize Malaysian students with problems encountered in business. Business cases are put online and students have two weeks to answer them. Innobridge holds competitions and awards monetary prizes for useful replies. The ministry of higher education gives points to the universities where the best answers come from – the winner is awarded by the Prime Minister.
The project is a way to build links with the private sector and encourage entrepreneurship. “It’s good for companies’ image and helps find future employees,” Joffres says. “It’s great for the students who realize they can earn money by fixing a real-world problem. It gives them a lot of confidence.”