Sethu Sethunarayanan

1. explicate in detail what theories and imaginations you learned in class be facilitatory to understand the case. The case discusses an entrepreneur named Sethu Sethunarayanan, who invented and marketed an innovative trap to attend myopic Irula people (an Indian tribe) sire browses more efficiently. He is the founder of the centralize for Development of Disadvantaged People (CDDP) one of a few recognised non-profit organizations in India. The case is an example how technological mental institution and human keen house be purposed to improve the life for the lamentable.This rat-trap entrepreneurship was a affectionate entrepreneurship beca ingestion the inventor used the re root systems to cater to the trains of poor people. Prior to the construct of the fresh trap, Irula villagers needed to use their mouths and their hands to generate the rats directly their health was severely affected when touching the rats. After talking to a rat- assureers wife, Sethu realiz ed that there was a bother and with the instinct of an entrepreneur, he k raw(a) that there would be an opportunity for him to solve the worry and improve the personifys of Irula people.With the attend of a shop mechanical engineer, Sethu developed a new trap to help people catch rats without contacting directly to the rats and the hot area of the trap. The values created from this innovation were a f any apart health and a better income for rat-catchers. A construct test was implemented to fifteen rat catchers to see whether it worked. This was an important operate to determine whether the entrepreneur needed to revise his innovation. After six iterations in eight months, the trap met most of the needs of the rat catchers. Sethu then utilize for the grant from the World curse to commercialize the innovation.It was a good excerpt of raising fund since fond entrepreneurships usually do not slang out numerous investors (because the aim is not for profit barely for a bett er life of people). Sethu withal planned various processes for the implementation of the project. Firstly, he set the market which consisted of 1,500 neediest villagers and communicated the benefits of the new trap directly to this segment by visit their villages. Secondly, Sethu created more values for customers by creating the womens microcredit funds, which operated like loans and enabled women to put up with a trap.These funds helped bring the traps to more villagers. Thirdly, he chose the right people to take care of the yield. Since the tender and unmarried women were selected to be the workers, the men and the boys were kept for transmissible the rats. Finally, he already thought of the exit strategy when the demand for the traps decreased. In much(prenominal) a situation, the manufactory would produce other steel products that were recyclable for Irula people. 2. What were crucial factors that determined success or failure? The success of the rat trap entrepreneursh ip was contributed by numerous factors.Firstly, it was due to the human capital Irula people. Although Irula young women were illiterate, they were able to produce the traps by themselves after being instructed. Selecting these women to operate the factory was a wise strategy because it made Irula people feel towering of their tribe. These workers might as well as persuade and instruct their relatives and neighbors to use the traps. As a result, the customer base for the business sector would be enlarged. Secondly, the technology innovation was also an important factor. It was the simplicity of the trap that made it usable for Irula people, 99% of whom were illiterate.Sethu and the mechanic engineer spent eight months inventing and testing the trap before it met all the needs of the rat catchers. If the trap was more complex, Irula people could not use it and the entrepreneurship would become a failure. Thirdly, the $98,500 grant from the World Bank served as the source for Sethu to implement his business plan. The plan included many bely processes such(prenominal) as health checks and discourses for the beneficiaries, building factory, training employees, and production. Without the fund of the World Bank laying the foundation, Sethu might not be able to start the business.Lastly, Sethu seemed to be the first one who addressed the problem in how Irula people catch rats, so he had the first-mover advantage. In addition, it was not likely that other social entrepreneurs would come and compete with Sethu in the near future. Hence, the Irulas did not aim other choices but use Sethus new traps if they wanted to change the centering to catch rats. 3. What characteristics of the entrepreneur enabled their success? Sethu had many characteristics of an ideal social entrepreneur. Among those characteristics, the affair distinguishing him from others may be his concern for the community.Being inspired by Mahatma Gandhi the Father of the Nation, Sethu eternally thought of ways to bring a better life for the poor in India. This is probably the reason why he realized the problem of the rare way of familial rats of the Irulas and did not stop thinking of a solution. In addition, Sethu obtained an appropriate education and experience in doing social entrepreneurship. Sethu analyze in Gandhis school in India, where he was instructed to use Gandhis method to improve lives for the poor, solve human conflicts and introduce new ideas.After graduation, he worked for an NGO to accumulate experience before establishing his own NGO in 1998. His education and experience were the foundation for his innovativeness, which contributed to the invention of the rat trap. Finally, the most full of life factor leading to the success of the entrepreneurship was Sethus risk-taking attitude. What would happen if the trap failed when applying to a large extend raze though it was successful in the concept test or if the Irula refused to use the trap anyway?In suc h a situation, Sethu would lose all the costs in health checking and treatment for the rat catchers, building the factory, training the employees and so on. More importantly, his prestige would be adversely affected since he was awarded the grant from the World Bank but failed to use it effectively. Despite all these risks, he still continued with the business because he believed in his idea and in the Irulas. 4. What were problems encountered by the entrepreneur and how did the entrepreneur deal with the problems? How did the entrepreneur overcome the problems?When implementing the project, Sethu did face some problems. Firstly, it was the resistance from the Irula people. They refused to conform to Sethu and CDDP volunteers because they think Sethu and the volunteers were from some politic parties. Knowing that Irula people wanted to bespeak and did not like free things, Sethu triggered their interest by approaching them personally, explaining the serious health problems with t he old trap and asking them whether they wanted to change their lives. The heartbeat problem was the selection of the workers for the factories.Because the men and the boys needed to catch rats while the wives and the old women were taking cooking roles in families, Sethu chose young, unmarried women to be the workers. He even transferred the ownership of the factory to these women so that they felt more motivated to fancy the production. The third problem was that Irula people were not be able to afford the trap at $25. CDDP solved this problem by launching the womens microcredit collectives. In particular, a host of 12-15 women contributed money to form a fund.When a woman wanted to buy a trap but could whole afford 50% payment, she overheard the trap and paid the rest to the microcredit fund. much(prenominal) a fund made the traps become more affordable for the Irulas. perchance the most serious problem was that the business did not bring profit, at least in the recent fut ure. The production cost per unit was $27 ($22 for raw materials and $5 for labor) but the selling price was scarcely $25. To deal with this problem, Sethu used bootstrapping as the financing method for the entrepreneurship when he well-tried to save unnecessary costs. For example, he asked the Irulas to return the trap if they did not use it.In addition, Sethus son successfully negotiated with the supplier to lower the material cost (from $28 to $25) and the cost savings was then reinvested in the factory. 5. Given the experience and skills you acquired in class, would you have done anything differently and if yes, what? There may be some alternatives to deal with the mentioned problems. Firstly, we can use the power of the influential group to persuade the Irulas to use the trap. By identifying some influential people, for example the tribal chief, in a village and convincing them to use the new trap, we can spread the benefits of the new trap to other villagers faster.It is be cause the Irula people still live with tribe culture, they will likely to follow what the tribal chief does. Secondly, rather of selling the traps to the Irulas people, we can employ them as our employees and pay them salaries. The salaries will have one fixed portion and one variable portion establish on the number of rats a person can catch. We will receive money from the farm owners and distribute to the catchers. By employing the Irulas as our employees, we solve the problem that some Irula people wish to use but do not afford the new trap.What is more, when putting them in a company and considering them as our employees, we also help educate them and turn off their illiteracy. 6. What would be the next go you would take to successfully proceed? To continue the success of the entrepreneurship, firstly, we must attain ways to earn money because no business can keep abreast forever without profit. Initially, the selling price was at $25, which was $3 lower than the production cost. We can continue working with the supplier (the steel maker company, in this case it was Tata Steel) or even change to other suppliers to further reduce the cost.On the other hand, we could provide new complementary products/services to earn dough and help offset the losses in the rat-trap product line. Notice that the new trap helped catch rat 95% power and helped doubled or even tripled their incomes, the Irula people would earn more money to spend for their living expenses. For instance, we could provide maintaining services for the traps and charge a current level of money, depending on the current economic situation of the rat catchers. Or it might also sell hand sanitizers for the Irula people to wash their hands after development the trap.When the Irulas income increased, these complementary products were likely to be purchased widely because the Irula people cared more slightly their health. In addition, we can work with the owners of the farms to increase the pay offs for Irula people. The old method of catching rats is extremely inefficient, affects the plants on the fields and causes pollution. We will approach the farmers explain to them the efficiency and the benefits of the new trap, and convince them to employ rat catchers who use the new traps. Lastly, a more efficient trap can be produced.The current new trap can only catch one rat at one time, which is very inefficient. We can apply new technology to catch many rats at one time. For example, rats are affected by certain electromagnetic waves. By putting some wave generators at the fields, the rats are hurt and will come out of their burrows. Then the Irulas might catch the rats more easily. Because the costs for such systems might be high, we will need to obtain a certain level of profits before toilsome the new technology. Furthermore, we can also seek funds from external sources.