Lessons Learned from the Levant/Beirut

The key to success in any endeavor is the ability to adapt and overcome the situation at hand.  Sometimes opportunities fall apart; however, we learn lessons from these failed opportunities. That way, we can assess future opportunities with more scrutiny.  Here are 2 recent lessons I have learned from Beirut.

Lesson #1

Do not look to partner with the biggest incubator in town, unless they are passionate and excited about the program. This should be obvious, however when actively exploring partnerships red flags are not always easy to recognize.

Out with the old, in with the new. Recently, a number of positive opportunities have opened up. We have been offered office space, as well as fundraising support for the program.  Additionally, Wamda is very interested in supporting us.

Lesson #2

Lesson Learned:  I actually know a lot about VilCap.  After pitching it for 4 months, it was not a problem to get up in front of professional investors and development folks and pitch the program.  That being said, it is important to know VilCap statistics and the curriculum like the back of your hand.  Also, have materials to help you get the points across, and don’t be afraid to draw lots of pictures…

 

Village Capital-ito, Part Dos

I left off in my last post describing the mini Village Capital program that we were in the process of piloting at Yachana High School. (Need a refresher?) After 3 weeks of intense business planning, slight confusion, intermittent frustration, and lots of learning on both ends, we selected a winning social enterprise! Of course everyone is a winner in Village Capital-ito, which is evident in the 8 sophomores who can now rattle off the importance of a value proposition and the difference between startup and overhead costs.. However Gina and Manual of “Nuevo Amanecer” (A New Day), an organic fertilizer company, came out as clear winners by receiving over 60% of first place votes by their peers and teachers.

Gina and Manuel of "Nuevo Amanecer," an organic fertilizer company

Now I want you to think of all 16 year olds you know… think any given pair of them could come up with feasible social enterprise in 3 weeks? As I’m sure you can imagine, I was left completely jaw-dropped and speechless after listening to each group’s final presentation. True, I led them through a few workshops beforehand on business modeling and how to calculate costs over time, etc… but I can’t possibly take credit for how well each group performed. These kids have business savvy in their genes.

The business model canvas, jungle-fied.

In general Ecuadorians are extremely entrepreneurial, occupying the 7th place for total entrepreneurship activity (TEA) in the world. However, the majority of Ecuadorian entrepreneurial activity is necessity-based (due lack of other employment options) rather than opportunity-based (starting a new venture despite available employment options). But after having witnessed such stellar business plans from students who had just learned the meaning of “profit model” and how to calculate a percentage, it’s evident that this ratio is nearing a tipping point.  Watch out, world… my confidence in Ecuador’s entrepreneurial talent is stronger than ever.

As always, I’m getting ahead of myself. How did Village Capital-ito actually go down? Before turning all the Yachana students into wildly successful social entrepreneurs, we had to start with the basics. The program kicked off with a brief lesson on business modeling, followed by a giant brainstorm

"Lluvia de ideas"

of the best and the worst of the Ecuadorian Amazon; everything from Kichwa culture, fried yucca and our favorite animals to deforestation, pollution, and extreme poverty. The students later broke into teams based on mutual interests from what turned into a brain-downpour of needs and opportunities within the region. Each team was then tasked with creating a profit-generating business around their chosen social opportunity / need using the resources that are immediately available in the Amazon.

Sounds like a tall order, but these chicos rose to the challenge and then some. The social enterprises that would begin to take shape from that point forward included:

  • Artesanias Regionales (Regional Handicrafts): an intermediary dedicated to providing employment and greater income to local artisans by buying their products and re-selling them in areas frequented by international visitors such as city centers, popular hotels, and tourist attractions.
  • Muchshuk Kawsay (Kichwa for ‘New Life’): a socially conscious manufacturer of Balsa figurines. Balsa wood is typical to the Amazon, and Muchshuk Kawsay plans to source their material responsibly and educate customers about the different aspects of the Amazon through various figurine designs such as plants, animals, and insects.
  • Nuevo Amanecer (A New Day): an organic fertilizer manufacturer that utilizes native plants and traditional knowledge to create 100% organic plant fertilizers. Their main objective is to prevent illness from chemical use and contamination of water sources.
  • RRR – Reducir, Reusar, y Reciclar (Reduce, Reuse, Recycle): an educational firm that sells workshops and certification programs to the governments of rural communities and towns on how to properly dispose of recyclable material and reduce waste.

Artesanias Regionales working on their business plan

Let the peer-evaluating begin!

After presenting the first drafts of their business plans the following week, we began to dive deeper into the entrepreneurial process by exploring subjects such as pricing strategies and competitive advantage. A mid-point poll was taken where students had the opportunity to openly rank, applaud, and critiqued each other’s business models. During the third and final week of instruction we incorporated some basic math to forecast operating costs and earnings after 3 years. Never before have I seen so many “light bulbs” turn on at once as when each student began to realize that they could run a lucrative business that also generated a positive social return!  Village Capital-ito was working…

Johanna busting chops during the question and answer session

When the day finally came to present their final business plans, an air of nervous and excitement circulated throughout the classroom. Each group had stayed up late the night before to place the finishing touches on their marketing materials, financial projections, and oral presentations (the only reason I know this is because my room is right next to the library and our inch-thick walls do little to muffle noise. Mental note for anyone who comes to work at Yachana: don’t pick the room closest to where all the late-night homework takes place). After each team had successfully presented, the students were asked to rank each enterprises from 1 – 4 based on feasibility, potential social impact, and projected financial return. In previous Village Capital programs around the world, usually 1 – 2 particpating enterprises receive the majority of peer votes. So as was expected, one enterprise from Village Capital-ito came out as the clear favorite: Nuevo Amanecer.

While I’m definitely going to consider this first go-around a success, there were lots of lessons learned along the way. For instance, Latin American culture places a high importance on hierarchies – students are below the teachers which are below the principal, etc. When I told the students that they themselves would be evaluating each other’s business plans, you would have thought I told them the sky is red. After we conquered that hurdle, even greater confusion ensued when I told them “there are no wrong answers in brainstorming.” I won’t go into too much detail, but the Ecuadorian public education system is (sadly) built around rote learning; the teacher dictates the facts and the students copy, repeat, and memorize regardless of whether or not they understand what they’re “learning.”

Needless to say, I think some of the students began to doubt my own intelligence since I refused to grade their work or feed them answers. But that’s okay. I’m happy to play the part of the crazy gringa so long as projects like RRR, Nuevo Amanecer, Muchshuk Kawsay and Artesanias Regionales keep coming up in our future Village Capital-ito programs :)

Successful Village Capital-ito grads! Joined by the crazy gingo teachers

Village Capital-ito! Part 1.

This title needs some explaining.  And bear with me… this post is un poco long, hence me dividing it into 2 parts.  I’ll try to keep you entertained along the way with pictures and my (often failed) attempts to be funny.  Get comfy, and happy reading =)

In previous posts, I’ve mentioned working with a social enterprise accelerator called Village Capital.  After such posts, a few of you have sent kind emails and notes saying that while the pictures are nice, most of what I write  zooms straight over your head.  And that’s just no bueno.  So here goes – my grand attempt to explain Village Capital, impact investment, business accelerators, and social entrepreneurship.  But promise me this – if I clear all this up for ya’ll, will someone please tell me (in one sentence) what the heck all this “Occupy Wall Street” stuff us?  Not a single news source has been able to give me a straight answer….

I digress…

So travel back in time with me circa 2006.  Muhammad Yunus and the founders of the Grameen Bank have just won the Nobel Peace Prize for making popular the financial tool that forever-changed development: Micro-credit.  Micro-credit was designed so that the “un-bankable,” or rather those who did not have sufficient income for a traditional bank loan, could be granted small loans at low interest rates.  With these affordable loans they could then start a small business, purchase a piece of machinery, invest in a few pairs of animals, or purchase some other type of working “capital” that could help to generate more sustainable income for their family.

What’s unique about micro-credit is that within the Bangladeshi communities that were initially served, the Grameen Bank formed small groups of individuals and asked them to vote amongst each other as to who was the most “loan-worthy” at the time.   This peer lending model not only created solidarity within each group, but also established accountability and a faint sense of peer pressure.  If an individual did not work to repay their loan, chances are their peer lending group would not vote to grant them another loan in the future.  Within peer lending groups, micro loans have an average repayment rate of 97%.  You don’t have to be a Swiss banker to see that the peer lending model works.

So now let’s travel forward in time to late 2010.  (But remember the concept of peer-lending, you’re going to need it later!) First Light Ventures, an impact investment fund, was brainstorming cost-effective ways to expand their portfolio of social enterprises and unlock the potential of social entrepreneurs in emerging markets.

Stop… I know what you’re thinking.  “There you go and lose me again, Megan.  What in the world is impact investing?  And how is a social enterprise different from a regular enterprise? 

Hold your ponies, I’m getting there.

A social enterprise, led by a social entrepreneur, is different from a traditional for-profit enterprise in that in addition to generating a profit, a social enterprise also measures its success by the amount of social impact it creates.  That is to say, a social entrepreneur will not consider his venture a success (despite any cash that is rolling in) unless his social mission is also being fulfilled.  Social and impact are a bit harder to nail down, and can mean different things to different entrepreneurs.  This in and of itself is a beautiful thing and creates room for innovation across a variety of social needs….employment, healthcare, education, affordable access to basic goods and services, climate change mitigation, waste management, security, financial services…. You get the point.

Typically, social enterprises are geared toward the “Bottom of the Pyramid” (BOP), which represents the 2.5 billion people in the world that makes less than $1,000 a year.  The population at the BOP makes up a large consumer market that, if given the chance to consume and take advantage of goods and services that are affordable, sustainable, educational, useful, nutritious, safe, etc., could begin to lift itself out of poverty and toward a higher standard of living.

For example, Yachana Technologies (YT) assembles and distributes 20-liter home water purification systems that eliminate 99% of all water impurities.  Their mission is to provide clean, affordable, safe drinking water and reduce dependency on plastic water bottles.  If a family in the Ecuadorian Amazon making $800 a year decides to invest in a  “Yachana Technologies water purification filter” for $40 (about 5% of their annual income), over time this family will save approximately $80-$100 a year on what they would have spent purchasing bottled water,  their children will be at a lower risk for contracting parasites, dysentery, and other digestive illnesses and thus be able to attend more days of school, and finally the family will not be throwing away toxic, petroleum-based plastic bottles that when burned pollute the air more than any other type of burned material.  YT then uses its profits to expand production and introduce its water filters in other areas where clean drinking water is scarce.

Saving money, happy healthy kids, less pollution, and profits to expand… genius!  If you don’t have warm fuzzies and goose bumps just thinking about a child drinking water free of bichos del ombligo (belly-button bugs) for the first time, I don’t think we can be amigos anymore.

Yachana Water Filters

= clean drinking water for all

 

= warm fuzzies

So what happens when Yachana Technnologies wants to expand their filters to the Peruvian Amazon or work on prototypes for different BOP solutions?  One option is to attract an impact investor or an impact investment fund.  What is an impact investor?  Darn glad you asked.  Impact investors “actively seek to place capital [cash money] in businesses and funds that can harness the positive power of enterprise.”  Some social businesses may have too large of a financial need to solicit a micro-loan or may be ineligible for grants that are intended for non-profit organizations.  “Impact investing has the potential to unlock significant sums of private investment capital to compliment public resources and philanthropy in addressing pressing global challenges” (www.thegiin.org).

However, one of the biggest hurdles for impact investors is actually getting people on the ground in emerging BOP markets to scope out social enterprises, meet the entrepreneurs (and converse in their native language), and report back to their board as to which enterprise is the most investment worthy.  First Light Ventures, the impact investment fund I mentioned earlier in this post (probably seems like forever ago), was struggling with this same problem.

And then it hit them… peer lending! In case you’ve already forgotten, in the peer lending model individuals voted amongst themselves as to who received the micro-loan.  Could this same model work with social entrepreneurs looking to receive seed capital?  It sounded like a solid idea, so First Light Ventures decided to test it out.  Small groups, or “cohorts,” of pre-selected social entrepreneurs were taken through a 12-lesson business accelerator program where they were mentored by seasoned social entrepreneurs, given workshops on how to improve their businesses, scale their models, attract capital, successfully pitch their idea, etc..  All throughout the process, however, the entrepreneurs voted amongst themselves as to which social enterprise was the most investment-worthy.  Sure enough, at the end of program 2 enterprises were left with a majority of the votes and therefore won a seed investment from First Light Ventures…. And the Village Capital model was born!  This peer-selection process has since been implemented (very successfully) by Village Capital in San Francisco, Boulder, New Orleans, Mumbai, Sao Paolo, and London.   The program has (in just 1 year!) graduated 137 participants and will have awarded nearly $1 million in seed capital to winning social enterprises.  That’s $1 million going toward product development, job creation, market expansion, and all-around “good stuff” for the Bottom of the Pyramid population.

Are you feeling warm fuzzies again, too?

I know you’re probably also feeling bad for the enterprises that don’t win (I was too), but don’t worry!  It’s a win-win!  During the acceleration process each enterprise gains access to invaluable mentoring and business coaching, will be exposed to a variety of additional impact investors, and most importantly leaves with a life-long network of peer social entrepreneurs.

So let’s bring it on home for now, because I’m just as tired of writing as you probably are of reading.  The whole point of me laying this all out is because while I’m down here researching possibilities for Village Capital in Ecuador,  I’ve actually decided to test a micro-version of Village Capital, Village Capital-ito, (add –ito to anything in Spanish and you make it mini) at the Yachana High School.

…And it’s going great!  The students have spent the last 2 weeks developing social enterprises for the Amazon and have already begun to critique and offer suggestions for each other’s ideas.  In part 2 of this post, I’ll tell you all about each group’s social enterprise, the triumphs and lessons learned along the way, and reveal the winning team of student entrepreneurs!

Photo credits:

Read up, folks!

I’m loving this weekend’s news coverage of “Bottom of the Pyramid” business solutions, so I thought I would share some of my favorite articles.

After a great week of social enterprise visits, entrepreneur meetings, and project proposals in Quito (more on these awesome adventures in a later post), I’m more than ready to head back to Yachana tomorrow… this time armed with an arsenal of insect repellents and light layers.

Coming up…

On Thursday I’m starting a “Village Capital Junior” program at the high school, whereby the students will create their own mini-social enterprises and peer review each other’s work along the way.  At the end of three weeks, they will have (hopefully!) learned how to create a business model, pitch their business idea to classmates, and identify key success factors for a successful enterprise.  The peer-selected winners of “Village Capital Junior” may even have the chance to present their business ideas to the Yachana Directors for a chance to take out a small loan and put their business plan into action!  I’ll be sure to relay the results.

Starting this week and continuing through the next month, I’ll also be conducting research and administering surveys on the adoption of social media sites in the Amazon.  The US has already seen the impact that sites like Facebook and Twitter can have on personal relationships, commerce, and mass communication.  Not to mention, the unprecedented voice they can give to a politically charged nation.  Living in an area that is on the cusp of adopting google, facebook, youtube, and all other off-spring of broadband internet is pretty exciting, and therefore worth researching!

Oh, and by popular demand, more baby otter footage :)

Probably the cutest thing in the entire Amazon



 

 

 

Oops.

 We’re flying by the seat of our pants down here in Ecuador these days. Lots of last minute meetings, travel plans, school changes, misunderstandings, and project alterations.  Honestly, it’s been a roller coaster and I’m just now starting to “enjoy the ride.”  For those who know me well, you can imagine it took some time for me to forego my google calendar that schedules my day in 15 minute increments and the notion that I could expect a meeting to start on time.

It’s quickly becoming apparent, however, that Ecuador has operated this way for quite some time and more importantly, doesn’t really see anything wrong with it.  Granted, spontaneity, complete neglect of foresight, and living in the moment each have their perks.  Little setbacks here are commonly followed by a mere “meh” or “oops.”  And In the words of my favorite entrepreneur in Ecuador, Douglas McMeekin – founder and president of Yachana, “If I sat around and took the time to 100% think through it all (all being the entire Yahana Foundation) it would have never gotten done.”  That may be true…

But over the past few weeks I’ve seen how the “go with the flow” Ecuadorian mentality can also lead to major inefficiencies, organizational setbacks, and most importantly, loss of opportunity.  Perhaps it’s the cultural tendency to think mostly in the “short term,” or Ecuador’s age-old habit of making quick fire decisions without really, well… thinking or communicating (i.e. throwing out 7 presidents in 10 years without stopping to wonder how that may look to investors wanting to invest in a “politically stable” country).

Below you’ll find three “Oops” instances from my first month in Ecuador that may help to illustrate exactly what I’m talking about.  They each vary in the severity of their consequences, but all could have possibly been prevented with a little previsto (foresight), planificación a largo plazo (long-term planning), rendición de cuentas (accountability), and comunicación (I shouldn’t have to translate this one….).  I really don’t know if Ecuadorians will ever adopt such practices, nor do I think it’s anyone’s place to tell them they should.  But the consequences are difficult ignore, and if left ignored Ecuador will continue to struggle in its effort to transition from an emerging market to one that is developed, self-sustaining, and thriving; not to mention delay the interest of impact investors who so whole-heartedly want to see countries like Ecuador realize their hidden potential.

Example 1

I walk up to a friend from Mondana (community where Yachana is located) and notice that the strap of her cotton bag is becoming unraveled and hanging on by a thread.

Me: I notice your bag is becoming unraveled.  I know how to fix it if you have some thread and a needle. Want me to help?

Girl: Oh yes, it’s been unraveling for a few days now.  But no thanks, I’ll just wait and fix it when it breaks.

Me:  Well if you want I could fix the tear and reinforce the rest of the strap, that way it will last longer and you won’t have to worry about fixing it if it breaks while you’re away from home.

Girl: Really? You know how to do that?  How interesting.  Thanks, but it’s still not broken yet.  I’ll just wait. 

Me: ………

I haven’t seen her in a few days, but I can guarantee that strap has surely broken by now.  And I doubt she was carrying around a needle and thread, because that would be downright crazy…

Example 2

My friends and I are about to cook dinner at our hostel in Tena, and have invited a few amigos who were staying elsewhere to join us.  The kitchen is outdoors, in a common area, and open to hotel guests.  Out of respect we thought we would mention to the hostel owner that we would be having some friends over.

Us: Señora, we´ve invited some friends over for dinner and wanted to let you know.  We’ll be very quiet and clean up after everything.  Your outdoor kitchen is amazing and we’d love to show our friends.

Señora: What? No, only guests can use the kitchen.  Your friends cannot come. I built that kitchen for paying customers only.  (she finally allowed our friends to come over, but only because I think she felt bad that we had already bought all the food…)

Obviously I’m not about to tell a Señora how to run her business.  But the kitchen has been built and is therefore a sunk cost.  Allowing a few non-customers to enjoy the space alongside hotel guests would not have cost the owner a single extra penny.  In fact, by allowing friends of guests to enjoy the hostel’s new common spaces she is essentially employing more mouths to spread the word about her business for free!  You can’t buy that kind of word-of-mouth publicity in the tourism industry.  But the curse of the short-sighted Ecuadorian business owner continues….

Example 3

This example is perhaps the most heartbreaking of all, but it also represents a wonderful lesson in communication, accountability, and organizational sustainability.

At Yachana, which is a considerably well-run organization compared to others in Ecuador, I’m still a little confused as to who exactly is in charge of what, and what exactly each department is responsible for at the lodge.  This became even more apparent after a serious storm this past Sunday when the Napo River rose so high and grew so wide that low-lying houses, buildings and moored boats were in serious danger.

Before.

After.

As soon as river started to rise early Sunday morning, boat owners from around the community began to bring their canoes to higher, more secure ground.  And rightfully so – since there are no roads and the community relies on its canoes to travel to/from the market, school, and elsewhere.  But what about Yachana’s boat – the 30-person, dual-motor, covered fiber-glass canoe that brings tourists (aka income) in and out of Yachana multiple times a week? Who is responsible for keeping that boat safe? The hotel manager?  The higher ups in Quito? Whichever boat operator is on duty?

By about mid-day, the river was raging.  Actual trees were being ripped out of the ground and carried down the river.  By the time Yachana’s boat operator decided he should probably move the boat to safer ground, it was too late.  Upon trying to nudge the boat into a small cove, the current caught the tail end of the canoe and whipped it around horizontally so that the whole boat was sideways.  Unable to regain control against the current, the boat was forced against a tree and endured hours of river-beating until it was actually flipped upside down from the force of the current.

Bye-Bye, boat.

While witnessing this tragedy I had an enlightening conversation with one of the lodge’s staff members…

Me: Who is in charge of keeping the boat safe?

Staff member: I’m not really sure.

Me:  Oh.  Well who will tell the hotel management in Quito the boat is destroyed?

Staff member: I’m not really sure.

Me: Oh. Is boat insurance available in Ecuador?

Staff member: (laughing) I’m not really sure, but probably not.

Me: Uh oh.  So who pays when something like this happens?

Staff member: I’m not really sure.

Me: And how often does the river flood like this?

Staff member: Oh, at least once a year. 

So essentially, it is certain that the river will show its fury at least once a year.  It’s 100% going to happen. But have measures been taken to put someone charge and establish a contingency plan in the event the river tears up more than just trees?  Nope.

Mental note – there is a business opportunity in the boat insurance industry in Ecuador.

When I’m not researching social enterprises…..

Over the past few weeks, I’ve gotten a lot of questions about what life is like the jungle.  To say that it is different would be a complete understatement.  Sometimes I feel like life out here isn’t even real… The sheer beauty and remoteness of my surroundings, the jaw-dropping size of the prehistoric bugs that dive bomb into my mosquito net at night, and the stories and legends that the locals and kids tell after dinner every night continue to amaze me more and more each day.  I am quickly learning that the Yachana Reserve and the Ecuadorian Amazon are very special places.   To help illuminate my day to day experiences a bit more for everyone, I’ve decided to show you what life is like in the jungle through a few of my favorite photo memories from the past week.  So without further ado…

When I’m not researching social enterprises in the Amazon…

…I’m considering trying new foods… like giant larva (AKA baby cockraoches)

Tasty.

Gracias, but maybe next time.

…I’m defending myself against the lodge’s crazy pet parrot, Yolanda… who takes the term “pecking order” to a whole new level.

It's a long road, but I see friendship in our future.

…I’m playing “connect the dots” with my bug bites and experimenting with various repellents and itch remedies. (The guides here swear a mashed up termite paste is the ticket…. we’ll see.)

Apparently this happened because "the bugs don't know me well enough" yet.

…I’m tending to my mosquito net and making sure ALL personal effects are kept up off the floor.  Open shoes and backpacks make for cozy spider condominiums!

Home sweet home – My room at Yachana Technical High School

…I’m learning how to spit slippery cacao seeds, a favorite jungle past time and true test of  one’s “jungle-ness”

US vs. the Jungle… I'm sure you can guess who won.

…And if it’s right around sunset, you can find me gazing out at this view that no Spanish or English word could ever describe.

You know you want to come visit…

 

 

 

What?! One month and no blog post!

That’s right, now stop crying and take the following quiz:

 

We will do this like a standardized test-

“An FM Scout drives….”

A) The closer vehicle B) The farther vehicle C) Both vehicles D) Neither vehicle
…  If you answered A you are correct!  That’s right I get around on those 60 pounds full of testosterone and speed.  Turns out one of the most important lessons Beirut had to teach me was on the streets.  I have only been hit twice, I haven’t hit anyone, and it hasn’t been stolen الحمد الله

The last week has been full of action.  I took a trip to a conference for young leaders in Zurich, Switzerland, One Young World and visited regional partners in Jordan.  Additionally, I have been meeting with a number of local Social Entrepreneurs (most of them don’t have websites, sorry), and we are about to put out a ‘call for applications’ for VilCap Beirut.

I am going to break from my past format, because there is really no way to give you a concise update whilst including EVERY meeting.

Here are a few highlights:

 

My fiance and I had one of our most delicious meals yet at Tawlet!  Tawlet means “table” in Arabic, and is an off shoot of Souk El Tayeb Lebanon’s first farmers market.  Souk El Tayeb translates to “the delicious market.”

Tawlet is one of the most interesting restaurants I have ever been to.  They serve lunch every day that is cooked by a different women from various parts of Lebanon.  In all they have over 15 women that come and cook on a rotating basis.  This is a fantastic model in so many ways.  Many of these women typically would not have any other source of personal income.  In addition to their daily wage (which is far above the going market wage rate, if they had been able to find employment elsewhere), there is a measure of prestige that goes along with traveling to the ‘big city’ to cook at a fine restaurant twice a month.  Souk El-Tayeb has a number of for profit initiatives, of which Tawlet is one.  They have a couple concepts up their sleave that could be highly scalable, and I am looking forward to future talks with them…

In Amman I was able to meet with the Aramex’s Entrepreneurial Support Unit, Ruuwad, and the King Abdullah II Fund for Development.

Aramex founder Fadi Ghandour has a strong belief in entrepreneurship.  He also happens to be the major backer of Ruuwad, and group that focus on community development in the lowest of income areas in Jordan.  Like many individuals around here where the start up and venture investing industry is so young, many individuals in the Aramex office wear the investment analyst, mentor, and even entrepreneur hat simultaneously.  For in stance, the MENA Venture Fund is run out of the Aramex office as well.

The KAFD is going to be a fantastic recruiting and marketing partner.  They have been recruiting and mentoring fellows for three years now, and have had two complete classes.  A lot of there fellow have received a lot of tips on how to start there business and are working in the ‘seed stage sweet spot,’ where what they really need to do is scale.  This is fantastic because as participants in VilCap they will get a chance to focus on how to take on investment and do just that, scale.  One of KAFD’s most successful entrepreneurs/enterprises has been Souk Tel.  And if you just caught that the word “souk” appeared half a page up, you may have a future in linguistics.  Souk Tel is an online marketplace for connecting potential employees to jobs, particularly in Palestine.  You can read more about them on their website- I hope to be able to meet the founders at some point.

Thank you for reading, and I will do my best to stick with bi-monthly updates from now on.

 

We’re not in Quito Anymore…

That’s for darn sure.  The good news is – we made it to the jungle!  It’s been about a week since we’ve arrived, and let me tell you…. This place is freakin’ amazing.  I can say with certainty that never again will I have the opportunity to spend 5 months at place like Yachana, no less in the middle of the Amazon rainforest.  Yachana Technical High School (where I live, research, work, and teach) is about 2 hours south along the Napo River from the city of Coca.  Everything is greener than green, there are flowers and birds with colors Crayola can’t even compete with, and the people here are super tranquilo.  The bad news is – I’ve already been bitten by a Parrot named Yolanda, I’ve counted over 100 bug bites,  a few of my electronics have fallen victim to the humidity (see ya’ in dryer times, I Pod), and did I mention the insects here are ENORMOUS?  For now at least, the good continues to outweigh the bad and I think that as I get more involved in my projects the bugs will eventually disappear into the background (right?).

So… on the subject of getting settled, it’s been interesting trying to figure out how I can best be of use here.  On the academic front, I’m compiling a list of social enterprises that I’d like to visit and hopefully write a few case studies about.  With respect to giving back to Yachana for so graciously putting me up in the finest of jungle high schools (pics to come soon), I am developing a series of workshops on business modeling, professional planning, and social media for the high schoolers here.  If you read my first post, you’re probably wondering how I’m going about my main reason for coming to Ecuador, which was to connect impact investors with social entrepreneurs in the Amazon.  Well, that’s still a little TBD.

And for good reason….that being, it’s hard to connect to anything out here.  To even leave Yachana, I would have to take a canoe to the nearest town (about $20 for 20 minutes… no, thank you) or wait until a group of tourists come in or out of the Yachana lodge from Coca.  Thank goodness for satellite internet, otherwise you’d only see a blog post once a month!  The reality is, the Amazon region of Ecuador is still extremely difficult to access (you have to go up and down and around the Andes just get to its opening), very few roads have been built here (most are stone roads if they are built), and electricity and modern plumbing are sparse.  For instance, we get electricity from a generator only from 6 – 9 pm, and our water is pumped up from a small estuary. (Let’s just say I hope the rainforest never runs out of rain.)  But again, this is the Amazon.  With so few inhabitants, why would it need the comforts of the quote un-quote “civilized” world?  With the technology that is currently available in Ecuador, not only would it be extremely costly but also extremely detrimental to the environment and habitat of so many precious plants and animals if we paved a ton of roads and ran electrical wires and PVC plumbing everywhere.  Building is also difficult since the rivers are constantly expanding and receding, and the ground is loose and uneven.

That doesn’t mean that we can ignore the communities that live in this area, which are more often than not impoverished and without basic goods and services.  Nor can we ignore the use of diesel in generators and boat motors.  And worst of all, thousands of acres of rainforest continue to be cut down as the demand for lumber and petroleum exploration increase.  That being said, despite the difficulties in physically getting to and connecting with the Amazon – I see hundreds of opportunities for social enterprises that can mitigate such issues.  I’ll go ahead and name the first three ideas that came to me.  (I can’t share all my secrets!) They may sound crazy and far-fetched, but isn’t that how all inventions start?  If you decide to use one of the ideas below, just please make sure I get 10% of the profits and a nice seat on your board

  1. Renewable energy.  Obvi.  A good majority of the time, it’s pretty sunny here.  And solar technology gets better by the second.  There are some companies that are already experimenting with roof panels, but the possibilities are endless! (on top of canoe covers, floating solar lilly pads in the river banks, I’m sure you can think of more).  Also, most of the tributaries that flow to Amazon have a strong current. Micro-hydro generators have been proven to generate consistent electric current and do not damage natural habitats like large hydro-electirc plants can.  Finally – biomass.  Everyone and everything in the jungle (and the world) poops.  Let’s start capturing that methane and cook with it!  The problem with renewable energy technology is that it’s still new in Ecuador, costly, and difficult to maintain.  But I have faith that the bright, young, engineers of the world will heed my calling and develop something that’s light, inexpensive, and durable.
  2. Durable, bug-proof, humidity-resistant electronics.  I say this mainly from personal experience, but also in seriousness.  If you were told that a laptop, camera, I pod, phone, or other electronic device would only last a year in the jungle because of the extreme humidity and the bugs that fly into its crevices, would you buy it?  I sure as hell wouldn’t.  (Don’t worry Mom and Dad, I’m taking precautionary measures with my computer and camera :) ).  So how can we expect those who live in the Amazon rainforest to adopt new technology if it’s not economically worth it?
  3. A micro franchise of (sustainable) river taxis / buses.  Outside of the Amazon, most of Ecuador is connected by large network of city, municipal, and national buses.  It’s not a stretch to say that you can pretty much get anywhere west of the Amazon by bus.  But inside the Amazon, roads are sparse.  Most communities are settled along the major rivers, and thus most transport is done by boat.  There are several private canoe operators, but none that offer organized public transit, much less in a sustainable fashion (all of the boat motors are diesel).  Also, gasoline is extremely pricey.  In case you missed it earlier, it can cost one person as much as $20 to go just 20 minutes.  That’s where the beauty of public transportation comes in!  Wouldn’t it be great to have a few, slightly larger, hybrid canoes taking community members to various markets so they can sell their goods, participate in commercial activities, and access services like healthcare, banking, and higher education?  I sure think so.
In the next posts, you can look forward to an inside view of my life here in the jungle, and hopefully some more updates on social enterprise in the Amazon. 

Wait, what again are you doing in Ecuador?

…. I seem to get this question a lot.  Don’t tell anyone, but even though I’ve already been here in Ecuador for a few days, I still don’t really know the complete answer.  I would imagine that if you placed all the people to whom I’ve given some sort of answer in a room together, you’d probably think I have multiple personalities.  Given the many stakeholders, deliverables, and project tasks that have been tossed up over the past few months, the possibilities for what I’ll actually accomplish are endless (and quite frankly, a little overwhelming).

Therefore – to clear it all up for you guys and myself, I’m going to use this space for some good old fashioned project organization.  I was inspired last week by little sister’s first week in high school Chemistry where they learned how to write up a proper lab experiment.  And since my project here is quite experimental in itself.. I think that’s precisely the format I’ll use to relay to you, my loving public, and to myself what the heck I’m doing down here.  So here ‘goes..

Background: One of the greatest things to come out of the development/NGO/social enterprise/foreign aid/do-gooder space in the past 10 years (in my opinion) is impact investment. What is impact investment you ask? As one of my classmates used to say, that’s a GREAT question. In my own words, impact investment is the flow of capital (cash) from a social investor to a social entrepreneur with the intention that this injection of capital allow the entrepreneur’s enterprise to scale and grow not only in revenue, but also in social impact. If this defintion doesn’t do it for you, check out this, and this .  Oh and this too!

Now some of you critical thinkers out there might be wondering what I mean by “social.” And my response is – what does it mean to you? For some investors, social impact may come in the form of clean energy, last-mile power distribution, or employment. For others, it could mean access to healthcare, affordable basic goods and services, or education. For instance, First Light Ventures aims to invest in companies that provide affordable basic goods and services to impoverished individuals.

So far, impact investment has made wonderful headway in the United States. And while we in the US definitely have our own social problems, there are BILLIONS of people in the world living below the poverty line, many of whom live in emerging markets. Foreign aid efforts have been proven inefficient, and microfinance for the most part is geared toward individuals. Impact investment allows social entrepreneurs who would otherwise be overlooked by traditional investors the chance to play in the venture capital space and prove that not only can they sustain a profitable business, but also one that benefits society as a whole. This leads us to the main reason for me being here….

Problem: Well, there are a lot of those out there. I’ve settled on one that is pretty all-encompassing, and we’ll go ahead and call it a challenge. Problem is such a weird word…

1) How can impact investors most effectively and efficiently channel much needed capital to social entrepreneurs in emerging markets? And more specifically, in the rural Amazon of Ecuador?

Hypothesis: The Village Capital (VilCap)  business accelerator model (more on this in a later post!) will help to harness social innovation and entrepreneurs in the Amazon region of Ecuador, and thus further promote social and ecnomic development in the region.

Methodology: Well, here I am in Ecuador so the first hurdle has been conquered. One of the biggest challenges for impact investors is actually getting to countries such as Brazil, Lebanon , Egypt or Ecuador. Not to mention, language and cultural barriers are abound in these locals, making it difficult to work effectively in a limited time contraint. Lucky for me, hablo español, I am familiar with latin culture from previous travel and educational experiences, and the kind folks at the Yachana Foundation  have agreed to host me for next 5 months in exchange for some entrepreneurship training at their high school.

So, in order to tackle this challenge I’ve been tasked to perform feasibility study, or estudio de factibilidad, on whether or not a business accelerator or some other type of medium for impact investors and social entrepreneurs to gather is possible in the Amazon region of Ecuador. And since this blog post is quickly turning into a novel… I’ll wrap it up by saying that over the next 5 months I’ll be visiting various micro enterprises and social businesses in the Amazon, venturing to existing business incubators in Ecuador to see how they run their ships, working closely with the entrepreneurship program at Yachana, and talking to anyone and everyone who will listen to my ideas :)

Until next time, sending you all lots of latin love :)

Unrest in Egypt: An investor’s view

Every investor should try and take into account as much information as possible before making a decision as to how to invest.  If you’re interested in investing in Egypt you should read this article.  It was written in January, but provides a great background and history into the country from an investors point of view.

http://money.msn.com/investing/unrest-in-egypt-an-investors-view-jubak.aspx

Our first enterprise, but we haven’t arrived yet!

I leave for Beirut tomorrow, and will arrive late Monday night (Beirut time). As I do some last minute preparations, I would like to showcase two entrepreneurs and their enterprise.

2bdesign, founded by Benedicte de Blavous Moubarak and Raja Moubarak, is a business whose mission is to “Restore the unseen beauty of the broken- broken people, broken
heritage, broken environment.”  2bdesign salvages and reclaims elements of architecture from destroyed traditional houses (wrought iron window frames and balconies, railings etc..) and transforms them into unique pieces such as lamps, candle holders etc.   They do this all the while, employing the unemployable, providing marginalized and disabled persons with training and employment opportunities.

2bdesign utilizes a hybrid business model, utilizing a for profit business for operations and marketing, and a non-profit for training of employees (which is often longer and more intense than with employees in better socioeconomic standing).  Earlier this month when I spoke with Raja Moubarak, he told me that 2bdesign intentionally pays about 40% above the market wage rate to their employees.  “The typical wage for these individuals, is simply unstainable,” I was told by Raja.  “The marginalized have little options without adequate pay.”

I look forward to meeting Raja and his partner, and figuring out ways to support there tremendous work.  Raja is an accomplished executive and entrepreneur in the region, with a wealth of experience in for profit and not for profit organizations.

Keep me in your thoughts as I travel, and please comment on what you would like to see from Lebanon and social impact investing in Beirut!!

Investing in a Revolution

Egypt is a dynamic country with a storied past and for a period of approximately 500 years was the world’s strongest power.  The Egyptians constructed one the Seven Wonders of the World when they completed the great pyramids of Giza.  For over 3,800 years these were the tallest man-made structures in the world.

Now Egypt is in a time of transition after a historic revolution that ousted an autocratic regime that ruled the country for over 30 years.  This revolution began when people took to the streets to protest poverty, rampant unemployment and government corruption.  While protests are still occurring in response to a slow pace of change by the government there are many opportunities that will present themselves in the coming weeks after the first free, democratic elections in decades take place.

These elections will provide stability in the political process and the rule of law.  If you are an investor or an entrepreneur this means you have more security in the future of your investments.  Egypt and the surrounding region will become more stable and will return to a haven for private equity and infrastructure investing.

Egyptians are looking at this as an investment and a time to liberate the forces of entrepreneurship, bringing in the informal sector, encouraging the dynamism of Egypt’s small and medium sized companies, and most importantly, launching skills training programs and a reform of the education system.  Egypt stands a very good chance of overcoming many of the issues and barriers that kept it from becoming one of the large, emerging markets along the lines of Brazil or India.

These reforms are ready and reformers are poised and prepared to embrace revitalizing the Egyptian economy. Frontier Market Scouts will be there on the ground and will be the first to deliver the most updated information about how the connection between Egyptian Businessmen and Investors can be facilitated.  Follow us and be a part of the solution.