by Professor Dennis R. Shaughnessy
For the past several semesters, I’ve opened my introduction to social enterprise class with a short video called “Embrace: Spread the Warmth” that features a low-cost infant warmer designed, produced and distributed by a non-profit social enterprise called “Embrace”. Embrace represents a wonderful case study in the related areas of social innovation (and human centered design), social enterprise and entrepreneurship, and impact investing.
Here’s the video that features the “Embrace Warmer”, and the website!
For students who are just beginning to learn about social enterprise, we pose several questions:
- Who is the customer and what is the market for this product?
- What motivated the founding team to build this product and start this enterprise?
- Is the innovation disruptive, and is the business model the right fit for it?
- Is there an opportunity for income generating activities (or profit) to support the mission?
- Are there corporate partners and impact investors who can help it scale?
It’s estimated that as many as 15 million pre-term and underweight babies are born each year in the developing world that can benefit from an infant warmer or incubator. Babies born in poor remote areas (think Nepal) are often born outside of hospitals equipped with traditional (and expensive) infant incubators. The simple lack of warmth can lead to complications and all to often to a tragic and preventable death. The market opportunity is clearly a compelling one for a social enterprise.
The founding team of Embrace designed this innovative infant warmer targeting this “social impact market” as part of a design class at Stanford’s business school. The team included students who were passionate about social impact and motivated to make deep and lasting social change as well as those who were equally passionate about the engineering and business side of the project. The new product thoroughly disrupts the space for infant and maternal care with a very low cost and functional alternative to expensive hospital-based incubators. Embrace steadily built its capacity and reach, and now the Embrace Warmer has already helped save the lives of some 150,000 babies who might have died from exposure to the cold.
One of its founders, Joan Chen, is a leading voice in the social entrepreneurship space. Chen’s path as a social entrepreneur was recently chronicled in The New York Times “Up Next” column by Elizabeth Weil. She was able to attract impact investing capital from none other than Beyonce, to distribute Embrace Warmers in Africa. More recently, Chen engaged with the founder of Salesforce.com, Marc Benioff, and received a $1 million investment into the for profit branch of Embrace known as Embrace Innovations. This branch of Embrace was created to find sustainable sources of income to support the compelling social mission of Embrace. Salesforce and Benioff are well known for their social responsibility commitments.
Ms. Chen has also started a new venture called Little Lotus, which sells baby products in the US and other wealthy markets. Like Warby Parker’s “buy one, give one” model, each purchase of a Little Lotus product funds one baby’s use of an Embrace Warmer in a poor or developing country.
And at Salesforce and a cosmetics company called Dermalogica, every employee who has a baby will be provided with Chen’s Little Lotus products, which in turns supports Embrace. Embrace has been built into the social responsibility programs of these leading corporates.
One last interesting note in the development of Embrace from a business model perspective. Embrace is merging with Thrive Networks, an organization that brings together several social enterprises focused on water, health and education. This is a new and interesting model in which “great ideas and people are connected in surprising ways to increase social impact”.
In a time when we see outbreaks of violence and unnecessary death in so many places, from Syria to Lebanon to Paris and more, the opportunity to save a life seems especially precious. If you have the capacity and the interest, you might consider giving an Embrace Warmer as a gift on behalf of a friend or family member this holiday season. A gift of $200 donates an Embrace Warmer to a mother and child in need, and a gift of $100 supports a newborn health care training program for 20 mothers. Smaller amounts can also make a huge difference! Learn more here.
Please note that I have not been asked to endorse Embrace. And my thanks to Ms. Weil of The New York Times for her column on Jane Chen.
