Jordan Kassalow: Making the market work charitably

In the Third World, people lose their livelihoods because they lack eyeglasses that cost $5 in the United States. Kassalow’s company, VisionSpring, uses market strategies to combat this problem.

While working in Latin America, optometrist Jordan Kassalow discovered a relationship between economic and medical need. For many people, the natural decline in vision that comes with age resulted in a catastrophic loss of income, both individually and communally. Kassalow founded VisionSpring to apply for-profit market techniques to building locally based solutions -- in this case, training local women to fit and sell eyeglasses.

Before founding VisionSpring, Kassalow was co-founder of Scojo New York. He started the Global Health Policy Program at the Council on Foreign Relations, where he served as an adjunct senior fellow from 1999 to 2004. He also has served as director of the onchocerciasis (river blindness) division at Helen Keller International. Kassalow received a master’s degree in public health from Johns Hopkins University and his doctorate of optometry from the New England College of Optometry. He recently received the Award for Enterprising Social Innovation from the Center for the Advancement of Social Entrepreneurship at Duke’s Fuqua School of Business.

Kassalow spoke to Faith & Leadership about why it’s important to empower people to solve their own problems through market-based strategies. The following is an edited transcript.

Q: People in the United States would be shocked to realize how much can depend upon a pair of reading glasses they can get for $5 at Costco. How did you become aware of this need in other countries?

By training I’m an eye doctor and I’ve been fortunate to work in over 40 countries. Through the early years I was working on blinding disorders like river blindness and cataract blindness.

For every person that came in with a blinding disorder, there were 30 to 50 people coming to us because they were losing their ability to work. Many people in their early to mid-40s lose the ability to focus up close. In the developing world, people earn a living with their eyes and hands as weavers, tailors, mechanics, goldsmiths and so forth. As vision fades, their ability to do quality work [diminishes]. That leads to loss of productivity and loss of livelihood. At one time they were the masters of their craft. They were the economic center of their community, supporting children on one side and elderly parents on the other.

Once I framed it as an economic problem, it rose up as more urgent than if you just think of it as presbyopia, the inability to focus up close. If you look at it only from a health perspective, there are hundreds of health problems that are going to be more important. Showing that people are losing economic productivity makes it an urgent issue.

Q: Your material says you can buy a Coke in rural Guatemala more easily than you can buy a pair of glasses.

Absolutely. And for a lot less money. Research we’ve done in the field indicates that there are about 400 million people who have presbyopia but don’t have access to eyeglasses. It is a classic market failure.

Q: How did you get from recognizing the need to doing something about it?

To do something about a problem you have to figure out a solution. The market was failing because there was no natural distribution system into these communities. My idea was to create our own distribution system by training local ladies, who often didn’t have access to any capital or any empowerment, and providing them with an opportunity to earn a living.

There was a lot of research showing that virtuous things happen in a society when women have access to capital. Mortality rates can go down. Investments go into health and education for the children. Better housing gets invested in. There’s a virtuous cycle when women have access to capital. Microfinance institutions were showing that.

I thought we could train local ladies to do simple eye screenings and sell the eyeglasses to their neighbors and keep the costs affordable, but at a place where they can make a small margin. That was when the idea came of creating a livelihood for the women and sustaining livelihoods for customers. That’s what we’ve been working on over the last six years.

Q: It’s about a lot more than eyeglasses. This is a business model, right?

This is not just charity, although the intention is charitable; it is a nonprofit organization. The mission is to improve people’s lives through better vision and economic empowerment. It’s not a health organization as much as it is an economic development organization. We use the health product to help economic development along.

Q: Your sales people, the women in the villages, have an entire eye kit in a backpack, right?

People have probably heard the term “microcredit”; what we do is microfranchising. Like Subway has a franchise store, our backpack is our unit of franchise. That backpack has all the contents people need to start their little business: eyeglasses, an inventory of the eyeglasses, eye charts, repair kits, a uniform so they look professional, marketing materials, all the forms they need, a mirror so their customers can see what their glasses look like. We call it our microfranchise.

Q: Most of the local entrepreneurs are women. Is that intentional?

It is intentional. We looked at the literature and became convinced that women were at the heart of the solution to developing economies and societies. For too long, because women didn’t have power in these communities, the resources the men had weren’t geared toward those things that would move society forward, such as investing in your children.

Rigorous research has shown that when women have control over capital, they invest in their children’s education and in their health. That has virtuous results in bringing people out of poverty. It became part of our organizational DNA to train women to sell the products and to start businesses. After six years, we have over 6,200 individuals selling our glasses; the vast majority are women.

Q: What is the Senior Women Leaders Advisory Board?

We’re blessed to have a group of 12 women who have risen to the highest ranks of corporate America, whether with Accenture or Coca-Cola, Goldman Sachs or Burberry’s or TD Bank. These women have achieved significant personal success; they are starting to look outward and say, “How can we empower each other to successfully give back to society?” Working as a collective to find purpose in life, they adopted VisionSpring as their first organization to help.

VisionSpring gives the women a platform and gets the women’s expertise with strategy, operational challenges, fundraising and development. They are helping VisionSpring move to being a much larger organization.

Q: You’ve been quoted as saying, “Strategies that are not market-based weren’t going to make a dent in the problem.” Could you elaborate on that?

As a student, I joined an organization that did wonderful work. We would go down to a country in Latin America and set up a temporary clinic. We’d see about 2,000 people in a week. We would bring about 5,000 pairs of eyeglasses, all categorized by strength. We’d bring hundreds of pounds of ophthalmic medication and we would help a lot of people; they would be grateful and we would feel good about the work we were doing.

After doing that four or five times, I questioned what happens to people who lose their glasses or who run out of the medicines that we give them. It wasn’t an organic fix. It wasn’t empowering the community to take care of their own problems.

I became convinced that we could make the markets work. If people demanded the products and services and had the capacity to pay for something priced to their economic reality, we could scale what we were trying to do [to reach more people in need].

The problem was that the optical industry in these countries was geared to the 10 percent of the people who had 90 percent of the wealth. There aren’t enough donated glasses or charity dollars in the world to make a significant dent in the overall problem for 400 million people. If you bring your margins way down to a place that makes these products affordable to the average person, you can actually make the market work.

Q: Why didn’t you use a purely business model for VisionSpring, rather than being nonprofit?

The problem with going to an investor and saying, “Invest a million dollars in getting glasses to lots of people” is that the time [needed] to get that money back is not aligned with market reality. There is very little market for eyeglasses, even though there’s a need. The demand is latent. Here’s a story that exemplifies this.

I was in a home of a 52-year-old woman in Guatemala. I was showing off to my group, saying, “I can look at somebody and tell you what their prescription is; this woman, just by her look, needs a +2 pair of reading glasses.” We started talking to her. First question: “Can you see up close?” She said, “Oh yeah. I can see up close.” I started looking a little bit stupid. I said to her, “Can you thread a needle?” She said, “Oh yeah.” I was losing face here.

We have a needle and a thread in our “business in a bag.” I said, “Give her the needle and the thread and have her thread the needle.” As soon as she had the needle and thread in her hand, she said, “Juanita, come over here.” She called her granddaughter over to thread the needle.

When we put the glasses on and showed her how she could thread the needle herself, she said, “I want a pair of those glasses. Now I don’t have to bother my granddaughter every time I want to thread the needle.”

Q: What is the specific meaning of the term “latent demand”?

It’s an organic, physiological need that doesn’t get perceived as a need because people don’t know there’s a solution for the problem. These people have been living with so little for so long and have taken knocks and bumps along the road. The hardship of not being able to see close is just another on their long list. The physiological demand is there, but it’s latent because it’s not perceived as a problem, nor do they know there’s a solution.

Once our vision entrepreneurs, as we call the women, come to their door, educate them and put on the glasses, people can see for the first time, sometimes in 20 years. It wakes up the demand.

When I was a first-year student, one of my patients was a 52-year-old woman. One of the things a doctor asks the patient is, “How can we help you?” She had a Bible clutched to her chest; she said, “I haven’t been able to read my Bible for 10 years.” I did the eye exam and determined that she needed a pair of +2.50 glasses. I put on the glasses and she looked down at her Bible and collapsed. She went to the floor and hugged my legs and started to cry.

The next day I got to the clinic and there were 1,000 people and she was the first person in line. As a first-year student I said, “Uh-oh, I screwed up her prescription.” Through translation she said, “Doctor, for you maybe they’re just a pair of glasses, but to me you gave me back my God.” She handed me 20 chickens as a gift.

Q: Does VisionSpring have lessons for nonprofits such as faith organizations that want to make this kind of impact?

Nonprofit organizations have been doing wonderful work for decades. The notion of charging their customers for goods or services is somewhat blasphemous [to them]. But people don’t necessarily like charity. If you provide products and services that people value and you charge an appropriate amount of money for that, it preserves the dignity of the consumer in many ways. Everyone wants to be self-reliant. The exchange of capital for these kinds of services, again, as long as they are appropriately priced to the economic reality of the people you’re serving, ensures that your customer values your product.

The market is a very powerful listening device -- if your products and services aren’t valued, people aren’t going to pay for them. If they do pay -- again, a fair price -- it’s probably the most powerful indication that what you’re providing is of value. Because their dollars are very tight, the poor are value-conscious consumers.

There are a lot of daunting problems out there. It’s almost paralyzing to take a whole problem and try to solve it. See a little problem or even a big problem, take a little portion of it and start to chip away. Don’t worry about having the perfect business proposal. Start small. Listen to the lessons you learn. For every 10 things you try, nine aren’t going to work. One will. Figure out what worked with that one and try 10 more; another thing will work. Over time you build something.