Social enterprise done right: Spotlight on Marcus Lim
An interview with the co-founder and Managing Director of ECOSOFTT
For the third of our spotlights on Singapore’s cleantech sector, we met with Marcus Lim to talk about what got him into the world of social business and how the hybrid business model of his water company ECOSOFTT is taking a new approach to serving the underprivileged while generating profits. Here is a part of our conversation.
A strong duo on a mission
“ECOSOFTT was born at INSEAD during an EMBA program that my co-founder, Stanley, and I attended. We both came from the corporate world and were looking for a change. He served for over 25 years in various multinational organizations and I spent 16 years working as a management consultant.
Growing up in India, Stanley showed interest in water from a very young age. He was concerned how the water situation had become worse, with rivers and lakes running dry, high levels of pollution and people not having access to water. He had a fire burning inside him and was determined to do something about it.
I had been thinking of doing a career change in order to address what I saw as a misallocation of capital in the world today.
On the other side, I had been thinking of a career change in order to address what I saw as a misallocation of capital in the world today. A lot of capital and investments are going into sectors that seemingly make money but ultimately lead to environmental destruction. I knew there had to be a better way to deploy capital, utilize technology and channel human capital to communities that are facing environmental and livelihood challenges.
When Stanley brought the idea of starting a social enterprise to me, I thought he was crazy. He was about to give up his expat package at Nestlé to do something for poor people. ‘You’re going to starve,’ is what I told him.
But, we both quit our jobs and started ECOSOFTT. This happened 5 years ago.”
Learning from the best
“As we contemplated on the idea of starting a social business, we looked around. Most of the social enterprises that we came across were not sustainable. While founders acted on very good intentions, they couldn’t generate recurring revenue, execute and scale up the impact.
So we asked ourselves what makes a truly sustainable social enterprise?
We researched all around the world and looked at different models of social enterprise. After all, there were some people doing remarkable things. One of them was Dr. Joe Madiath, founder of Gram Vikas, based in the town of Berhampur in Orissa, India.
As a consultant, I would have never imagined myself in a place like Berhampur. But, we ended up volunteering with Joe Madiath and working alongside him and his team. During our time there, we learned about their methodologies, successes, and challenges. And we also learned things that you would never be able to find out by reading or studying a business case. A good part of it was understanding the end objective of an organization like Gram Vikas. Joe Madiath provides water and sanitation services but what really drives him is social justice. Providing basic services to those who are the most marginalized is his way of uplifting them and integrating them into the society.”
Social enterprise done right
“Joe Madiath’s motivation resonated with us.
We wanted to embark on the movement of serving underprivileged people. At the same time, it was clear to us that we have to be as competitive as any commercial organization.
We wanted to embark on the movement of serving underprivileged people. At the same time, it was clear to us that we have to be as competitive as any commercial organization. This is how we created a hybrid business model with four operating blocks that is built on the foundations of creating shared values, making a social impact whilst achieving sustainable growth.
ECOSOFTT — Eco Solutions for Tomorrow Today — is an innovator and pioneer in the area of decentralized management of water, wastewater, and environmental services. We provide technology-based solutions that address challenges related to water scarcity and quality, in developed and developing worlds.
- The first block of our business offers water and wastewater solutions to hotels, schools, commercial buildings and government agencies. These customers clearly have the budget and are looking for efficient and competitive solutions. As on date, we have over 40 projects completed or in the process of completion in Asia. One of them involved laying 11 kilometers of sewer lines and designing and constructing two treatment plants of 1 MLD capacity for a Smart City in India.
- The second block encompasses engineering and technical, professional services to help policy makers or building owners conserve and manage their water resources. Water audits, for instance, fall into this category.
- The third block is designed as a not-for-profit activity and serves underprivileged rural communities — villages with no toilets, women walking for hours to fetch a bucket of water. We call this block S.O.U.L. — Solutions for Underprivileged Lives.
- And the fourth block — aqua — is a program designed to provide education on water and environmental issues. We target students from primary school all the way through college with the goal to create global ambassadors. Just like the third block, we run this as a non-profit activity and so far, we have engaged about 15,000 students in the UK, India, Hong Kong, and Singapore.
We often get asked what is the one product that we do. There is no one product. Water is complicated and requires a portfolio of solutions.
We knew this from day one, so the business model we created back then still stands today. And we have turned profitable as of last year.”
The SOUL of the business
“Many times, government money allocated to build toilets and to provide clean water supply has failed to reach those it was intended for. Quoting media reports and what we have seen on the ground, a lot of toilets exist only on paper. In reality, those toilets have either not been built or only half-built in a way that they are not usable.
We go to the village and say we want every single household to participate in the program.
This is where we come in. We go to the village and say we want every single household to participate in the program. And to participate, every family needs to put a one-time payment into a village fund — the equivalent of about $20, which is a lot of money to these people.
I reckon the first time we went and asked these people to put $20, they thought that we wanted to cheat them. But in order to start the program, our condition was a 100% participation. If there is one household that cannot afford to pay, then the whole village must pay for them or else they do not get it.
It is important to do this because water is a shared resource. Now, if you have one family that does not participate, that family will either be a free-rider or a polluter. Which will lead to an underclass within the society. We’re trying to lift everybody up.
Once this condition is met, all villagers commit to putting in the labor. On our side, we design the infrastructure, which includes not only the toilets but also a wastewater treatment plant and a water recovery system and, we also channel additional funds into the project because $20 per family is not enough.
Tangibly, at the end of the project, each family gets one toilet and one bathing room of good quality, which lasts for 20 years, 24/7 supply of water and 70 liters of drinkable water per person per day.
We also help them set up a village committee with complete gender equality — two men and two women. That is extremely important, because women are the most affected by water challenges, while usually getting the least say in village affairs. One of the biggest things that you can do for women empowerment, rather than just fighting for the right is to let them have access to basic facilities, and then show them what they can do to manage household and village affairs.
After the first project, other villages wanted us to execute similar projects in their villages. The demand became overwhelming, too large for us to supply. Luckily, there are corporates like Barclays Bank, which design their CSR activities around projects like these.”
Shared value for a harmonious future
“I guess we would have turned profitable earlier, had we solely been focusing on selling and not doing R&D or social projects. But doing both has helped us along the way. We won commercial projects because we have that nonprofit angle and because we are close to communities. When we build new infrastructure, we help share the fruits of development between people regardless of their socio-economic status.
We’re very small compared to the big water companies internationally. The need is out there, the demand is great, and we have proven that our solutions are relevant in many of these places. The limitations for us are the resources to get there. Quite honestly, we’ve been disappointed with the availability of impact financing in the world.
If I had a magic wand, I would ask for access to financing. We’re talking about the ability to mobilize 500 million Singapore dollars. This would allow us to grow and get to a scale where we can access the capital markets for the next round of funding. By 2050, we aim, among others, to treat 1 trillion liters of water and complete 10,000 community-led transformation programmes for water, sanitation, and livelihoods.”
A special thanks goes to Marcus for sharing his story with us. You can learn more about ECOSOFTT and their projects on their website, on Facebook and on Youtube.
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