This portion of my interview with Ayllu founder Melissa Richer explores the creation of Ayllu specifically (read Part I about the details of Ayllu’s business model here).  We focus on how the organization was founded, as well as those “moments of truth” that determine whether a social enterprise will go on to become real or simply stay a dream.

In case you didn’t tune into Part I,  some background information:  Ayllu fights poverty by scaling the world’s best business solutions. These businesses use microfranchising to create jobs for the poor that tackle unmet needs like healthcare, education, deforestation, and malnutrition. Ayllu is launching in Brazil, where they work with local partners, especially microfinance banks, to match community needs with business solutions from around the world. The organization is a tax exempt US-based nonprofit. Learn more about them at AylluInitiative.org.

Read on:

How and when was Ayllu founded?

I was working for Ashoka in 2007 and I noticed low-income communities were failing to break the poverty cycle even with access to microfinance. Although microfinance can bring borrowers out of poverty, it doesn’t have this effect on entire communities. The reason is that borrowers rarely develop stable, scaleable business models, or hire additional employees. The money is invested in the family (health, education, home needs) as opposed to in the business. Although microfinance is a vital tool for poverty alleviation, it faces a number of constraints [for greater exploration on this topic, read Melissa’s take on microfinance and microfranchising in Beyond Profit Magazine].

After much investigation, I learned a solution exists in microfranchising, which is when a business systematizes and packages its model to be mass-produced and run by the poor. These microfranchises satisfy unmet social needs such as healthcare, education, and electricity. Microfranchising has the potential to create exponential job growth, BUT the poor almost never encounter it. This is because of a market failure: low-income economies lack franchising infrastructure and microfranchise density is too low to push markets in this direction.

I realized this failure could be corrected by connecting microfranchises from around the world with the right community-based partners. So, I founded Ayllu and put together a team and advisory board to design our model. We chose Brazil because Ashoka Fellows there sought our partnership, the social innovation community is dynamic, and the market is ripe for microfranchising. We are partnered with local organizations, and by June 2010 we aim to introduce 3 microfranchise models to Brazil.

What moments have been the turning points for you in starting Ayllu?

Each moment has come when I felt stuck and I had to take a big leap.

Moment #1: I turned down a fellowship.  When I graduated from Duke I received a fellowship to work with local organizations in Central America. I had to wait 6 months so I took an internship with Ashoka to fill the gap. On my third day at Ashoka, I had the initial idea for Ayllu. It was not yet an actionable idea; it was a question: about how to spread social enterprises to everyone on earth.  By October I had to decide – did I want to go to Central America or did I want to develop the idea?  Ultimately I turned down the fellowship, I got a job with Ashoka so that I could learn more about social entrepreneurship, and I began exploring the question on the side.

Moment #2: I quit my job. Working for Ashoka was an excellent way to learn about the sector. But Ayllu was nagging me, like an itch. I knew I had to make a choice: Ayllu or Ashoka. It was a really hard decision, but I had to put the nagging to rest and throw myself into Ayllu.

Moment #3: Originally we tried to start Ayllu in Africa, but we weren’t getting traction. The goal was to get to Africa as soon as possible. The idea for Ayllu was too immature to get real financing, so I decided to get a job in Africa and work on Ayllu on the side. But every time I got close to going, something fell through. At one point I was offered a job in Ghana and was preparing to move in 2 weeks. But it turned out the company wasn’t forthcoming and the job fell through. At the same time, the IRS approved Ayllu as a 501(c)(3) nonprofit. This was a wakeup call.  I thought to myself, ‘Why am I trying to get a job?  I should just give myself six months full-time with Ayllu and see what happens.’

Moment #4: Goodbye Africa, Hello Brazil. When you feel stuck, like you’re spinning wheels, you have to take the leap.  I had built up a network in Africa, but it wasn’t the right place.  While at Ashoka many Ashoka Fellows from Brazil invited me to launch there, but I never seriously considered it. When Africa didn’t work out, I called a Board meeting and we changed continents.  If you take the leap, things start moving.  A complete change in course (refocusing Ayllu’s efforts towards Brazil) ended up being the right choice, and once we made that decision, things fell into place.

It sounds like you started Ayllu because the idea wouldn’t leave you alone. Did you choose Ayllu or did Ayllu choose you?

Echoing Green calls it a moment of obligation. Technically, I’ve chosen to do it.  But it doesn’t feel like a choice because I could never live with myself if I didn’t do it.  At Ashoka, the feeling of not acting on Ayllu was overwhelming: I would dream about Ayllu and during the day I was constantly distracted by it –I would relate everything I heard at my job to Ayllu. When I finally dove into the idea full-time, everything changed. I woke up excited, I had all this energy, I felt fulfilled…and that feeling hasn’t gone away ever since.

If you are interested in supporting Ayllu’s efforts to combat poverty through microfranchising and local capacity building, you can contact Melissa Richer at melissa [at] aylluinitiative [dot] org.  For more information, please visit their website at AylluInitiative.org.  You can follow Ayllu on Twitter or their blog by following the links in this post, and you can follow Melissa on Twitter as well.