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Published: February 28, 2012
 / Spring 2012 / Issue 66

 
 

Linda Rottenberg’s High-Impact Endeavor

This social entrepreneur pioneered a new model for mentoring startups in emerging markets. Now she’s replicating it around the world.

Growing up in one of Rio de Janeiro’s impoverished favelas, Heloísa Helena Assis realized that there was enormous demand for an affordable product that would tame Brazilian women’s unruly curls. In 1993, Assis and her partners — a former nanny, a cabdriver, and a McDonald’s employee — started a business called Beleza Natural (“Natural Beauty”) in the basement of a modest house in the suburbs of Rio de Janeiro. The company was an immediate success. Beleza Natural was soon scrambling to keep up with demand, unsure of how to pursue strategic growth with limited funding.

In 2005, Assis turned to Endeavor Global Inc., a nonprofit organization headquartered in New York that promotes “high-impact entrepreneurship” in emerging markets. Endeavor accepted Assis into its entrepreneurs program, providing her with what Endeavor founder and CEO Linda Rottenberg describes as “venture capital without the capital” — training, mentoring, and support from a network of business leaders, finance and organizational experts, and successful entrepreneurs.

With Endeavor’s help, Beleza Natural’s revenues have grown by 914 percent and its employment has increased by 214 percent since it joined the entrepreneur program in 2005. (Today, the company boasts 26 salons across Brazil, a full line of hair-care products, and a cosmetics research lab.) With US$30 million in yearly revenue and 1,300 employees, the company is a rags-to-riches Brazilian success story.

And it is the sort of story that Endeavor has been helping to replicate in emerging markets across the globe over the past 15 years. In 2009 alone, the organization’s entrepreneurs — who have created 130,000 jobs in 11 countries — generated $3.5 billion in revenue and $92 million in equity capital. And whereas less than half of new firms in the U.S. survive their first four years of operations, 95 percent of Endeavor’s emerging-market companies still operate after eight years. Indeed, Pulitzer Prize–winning author Thomas Friedman has called Endeavor “the best antipoverty program of all.”

An olive-skinned brunette with a wide smile, a Pilates-toned physique, and an intense gaze, Rottenberg, 41, has a personality as vibrant as the colorful Indian pillows in her office at Endeavor’s global headquarters in downtown New York City. On a busy day in March 2011, she leans back in her chair and stretches her legs out on her desk, the scuffed heels of her black boots visible to anyone walking by. Rottenberg is one of the world’s leading figures in social entrepreneurship — a field that she helped create. Her unswerving belief in the power of this field to effect profound change is the driving force behind Endeavor, whose unique social entrepreneurship model falls somewhere between capitalism and philanthropy. The organization’s mission, she says, is to “meritocracize wealth” in emerging markets, where entrepreneurs face daunting obstacles that include a lack of capital, a dearth of role models, and cultures that discourage risk. By providing entrepreneurs in these countries with access to the networks and support necessary to scale their businesses, she argues, Endeavor enables them to produce a high-impact ripple effect that can generate sustainable wealth and innovation.

“Endeavor doesn’t create entrepreneurship,” she says. “It already exists, in every country. We just catalyze the conditions under which it can thrive.”

In the years since Endeavor’s founding, Rottenberg has seen the idea of social entrepreneurship enter the mainstream. She believes that by bridging the gaps between the private, public, and nonprofit sectors, social entrepreneurship models like Endeavor’s are uniquely poised to tackle society’s most pressing challenges. The success of these models in aligning stakeholders’ values, she says, even in the face of difficult barriers, offers valuable lessons for both government and the private sector.

 
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Resources

  1. Thomas Friedman, The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, 2005): Bestseller that describes the context of globalization in which Endeavor emerged, including an account of Rottenberg’s work.
  2. C.K. Prahalad and Stuart L. Hart, “The Fortune at the Bottom of the Pyramid,” s+b, First Quarter 2002: Seminal article by the late globalization expert and management thinker on business opportunities in the developing world.
  3. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000): A classic analysis of the cultural and institutional impediments to entrepreneurship in the developing world.
  4. Endeavor’s website: Features case studies, statistics, a blog, and more.
  5. For more thought leadership on this topic, see the s+b website at: strategy-business.com/global_perspective.
 
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