Business in Haiti

In my last post I alluded to some of the business ideas that our students had.  Today I want to highlight a couple of the ideas.

Let me first preface this by saying that there is a lot of opportunity  to do things here in Haiti. Much of the basic infrastructure we expect in the States, such as roads and our “always on” power grid, are either missing or very broken in Haiti.  Of course people being people, many workarounds have been found (such as buying SUVs to drive in the city) and some newer technologies have come in to take the place of what’s existent (such as solar installations).

Many of these ideas require lots of capital which is something that our entrepreneurs are generally in short supply of.  This means that their businesses need to be VERY compelling, or have plans to start small and scale.  Even then funding can be difficult.  To get a competitive rate loan from a bank in Haiti you need to be officially registered (usually as a Sole Proprietorship) and you have to already be running the business so as to show at least 1 quarter’s of financial statements (or be an individual with a track record of successful business or come from a family with money or a track record).  Of course you could always take out a micro-finance loan but who wants to pay rates in excess of 40% per year on a $2000 loan?  Not me and not our businesses.  So we have your traditional network of family/friends to beg money from or this bank loan process.  Thankfully EGI (our NGO host) has plans in the works to setup an investment fund but for now these are the options.  As you can imagine, you can’t start many capital-intensive operations when you need 3 months of real statements to get it off the ground.  With that in mind, let’s look at two of our entrepreneurs.

First up for the examples is Paul.  Paul is already running a small-scale enterprise from his home and wants to expand (we’ve noticed that our “best” students are generally of this same vein).  He has an extra room and wants to do something that will not only be profitable for him but also help his countrymen by building some valuable computer skills to high school students.  A true “win-win” (sorry Professor Tenbrunsel).  To do so he’ll need 20 computers, a screen, some teaching materials, and various furniture pieces.  Adding it all up he’s looking at about $5,000 to get this off the ground.  As part of the training we’ve given instruction on doing market research and putting together pro-forma financial statements.  Paul is a professional accountant so he knew much of this but he’s done a great job with his market research, determining how many schools are around him, determining the tuition, and talking with the principles to build relationships for not only his existing business but this new venture as well.   He’s built 3 different versions of his pro-formas for different numbers of classes and is doing a sensitivity analysis for price. All in all he’s on his way and the investment amount is reasonable, especially since he has some money he can put into it.  He can choose to start small with smaller classes and scale or start in just one building and then grow to have multiple locations.

Our second example is Illioto who often misses or falls asleep in class because in addition to taking our class he’s doing his residency for pediatric surgery. His idea is to create a clinic and an affordable insurance to enable uninsured children/students (2-14) to have access to medical care.  His idea is grand: a hospital capable of servicing 200 children at a time with 50+ doctors, 75+ nurses, etc… for a target market of 300,000 children in the Port Au Prince area. This won’t come cheap either at $275,000.  However he has an idea to solicit funds from the doctors for the clinic such that they would draw a smaller salary but be equity owners of the clinic.  Since doctors make reasonable money here in Haiti it’s reasonable to think that he could get the $5,500 per person needed to launch this.  Again, this model is replicable and allows him to expand to other locations. While he still has a lot of work to do in order to determine the costs of such an operation, we like this innovative funding model a lot.

So we have two ideas of vastly different scale but with the potential to find the necessary capital and to also expand outside of the initial idea.  Each has the potential to benefit both the entrepreneur and the country at large.  In fact all of the students are pursuing ideas to that end.  It’s just part of the EGI ethos.

Planes, Tuk-Tuks, and Bikes

Arrival to Cambodia was less of a hassle than I had imagined. All, the finals, graduation, my parents visit, and an upcoming move, didn’t leave me any time to apply for a Cambodian visa. Knowing that one can get a visa right at the border made our visas a low priority. On the flight from Seoul to Siem Reap, we were given visa applications requiring a photo which I didn’t have. So I started devising a plan for negotiations with the border control. Reading and hearing about no-so positive state of Cambodia I lowered my expectations and was determined to enjoy my summer experience no matter what. The first scene at the airport made me hopeful and thankful of not having to deal and negotiate with the Cambodian passport control. A visa production line was extremely efficient (I’m sure Prof. Shri would approve it): 1 man was taking applications, another was taking money, a few others were masterfully stamping visas, and my name was called within a min. Paying an additional dollar for not having a picture seemed like an excellent deal.

My colleague, Anna, met us (my husband and I) at the airport and we found a local taxi, what I learned was a TUK-TUK. It is basically a modern coach with a motorbike instead of a horse, a cheap (($1.5-2) and very popular way to get around the town. Pleasant night breeze and unusual taxi felt very welcoming – “Cambodia will be great” I told my husband as we continued our ride to a hotel. Next day, not even 5 min passed since we started our walk I received around 20 solicitations from Tuk-Tuk drivers who lined up along the road promising to take me to any place in Siem Reap and if I didn’t wanted it today, they offered booking them for the next day. Their determination and confidence that they can get your business only if they keep asking and following you still amazes me. It is quite a competitive business especially during the low season.

Back in my home country, Kazakhstan, people drive horribly (many just buy a license) and multiple accidents per day in Almaty serve as prove to the statement. What I saw in Cambodia completely blew my mind. Cars, tuk-tuks, bases, motos, bikes all are moving into different directions and often times a direction opposite to the flow. The first day I couldn’t really understand what was going on, as our tuk-tuk driver was maneuvering around other vehicles. It just didn’t make sense. However, such chaotic motion still had some logic behind it and I am getting used to it, while still have hard time understanding why people prefer to drive in between two lanes. Getting around in tuk-tuks is fun but costly to do it everyday and everywhere. Walking on the other hand is feasible, but too hot and takes time. So, we headed to a market to pick up bikes. Refurbished Japanese bikes are plentiful and quite affordable. $70 dollars later we were riding along the streets of Siem Reap. OK, I know how to ride a bike even if my last time doing it was 17 years ago, though the traffic was freaking me out, especially those guys choosing to ride directly at me. Do i go around them to the right or to the left? Can they see me? My confusion was freaking out other people on the road (and rightly so); a few times I had to break fast stopping basically head to head with motos. It was really frustrating the first few times, now I pose less danger on the road and just go with the flow. If you want to take a left turn, it is better to get on the other side of the road before the turn (going against the traffic for a few moments, then gradually merge to your lane. Given the low speed and niceness of Cambodians, people slow down if they see I need to get get over, so it all works out. The lack of traffic lights in Siem Reap ( i counted 4) leave it to a driver to figure out who has a right of way, so being on the look out is extremely important.

Motorbikes are definitely the most popular transport. Seemingly small, they manage to transport whole families. I once counted 6 people on one moto including 3 kids between ages 1-5. Something tells me that safety is not among the highest priorities for most Cambodians, but again – safety is privilege.

For the past two weeks we already did a fair share of traveling outside of Siem Reap (went to a Thai border and Phnom Penh)and I got to experience the outside of town traffic. It is a completely different beast. Not that it is busy, but traveling speeds are considerably higher than in the city, though the logic of driving is same. All of that makes you really hold on for your life. From what I saw, country highways are two way roads with only one lane for each direction. I have been impressed by the quality of main roads in Cambodia, may be some of the international development money were put to a good use (all the corruption aside). Though outside of 3 main roads, it is pretty challenging to reach most locations.If a road is clear from the opposite direction, drivers choose to drive in the left lane until the incoming traffic gets REALLY close, or between the lanes. People who travel by motobikes or bikes get really pressed to the side of the road and often get almost ran off the road. The use of horns is quite a norm and a way of communicating between the drivers. Our van driver on the way to Phnom Penh didn’t let the horn go even for a second until it got dark and then he switched to headlights signaling. After dark driving gets even more fun, as not all vehicles have properly functioning lights oftentimes they are buses and trucks. In that case, it is easier to misjudge the size of a vehicle coming right at you. So far, our drivers delivered us to our destination in one piece, but every time I wonder if we make it with no accidents
More travel is awaiting us. This long weekend when all Cambodians are celebrating the Queen’s birthday, we are heading to a former french-colonial town, Battambang, about 3 hours away.

Post MBA Summer in Cambodia

Aloha, from sweet (and often sticky) South East Asia. This summer I am working with the communications team for an NGO headquartered  in Siem Reap, located in the Northwestern region of Cambodia near the famous Angkor Wat Temples (pictured above.) This small organization focuses on improving education in the nearby rural commune of Chanleas Dai.

The government’s Ministry of Education Youth and Sport mandates and regulates curriculum throughout Cambodia, so PEPY finds that it can be be most effective working outside, but in conjunction with, traditional government schools. This is primarily done through community based programs, as well as supplemental education programs. Through these programs PEPY provides Chanleas Dai children with creative learning, computer science, and leadership education.

My job this summer is to develop a digital fundraising strategy to gain new donors through social media, crowdfunding platforms, and PEPY’s website and blog. Through this process PEPY is developing a new logo, new website, changing many of it web platforms, and revamping all of its digital communications. Our goal is to drive a lot of new traffic to PEPY’s website, raise awareness, and overall donations. Ultimately, these donations will contribute to PEPY’s 2012-2013 annual budget and supplement donations raised through grant writing and existing donor relations.

So far I have developed a map of PEPY’s existing digital resources and have begun to isolate the areas where I can make the most improvement. For instance, did you know that the majority of web conversation around Non-Profits happens on Social Media platforms – but primarily Linked In and YouTube?

Next time I’ll write a little more about my personal experiences in Cambodia and Cambodian Education in general. For now, it is enough to say that South East Asia has always been one of my favorite parts of the world. It is one of the friendliest, most hospitable places I have ever been…

Howdy from Haiti

Hello Everyone!

It’s hard to believe Aldo and I have already been here in Haiti for 4 weeks. We arrived on May 22nd into Port Au Prince from Miami and were picked up at the airport by two of our main contacts with EGI, Stephen and Patrick. EGI is the “Economic Growth Initiative”, a non profit focused on helping to develop entrepreneurs here in Haiti. Stephen is one of the founders and now sits on the board of the organization. Patrick is a local businessman who has invested a lot of his time into helping to build Haiti through business. It reminds me a lot of the things we learned in Business on the Frontlines, a unique course Notre Dame offers that highlights the challenges and opportunities of doing business in under-developed countries.

Our “job” here in Haiti has two aspects. The first is teaching a business-plan bootcamp to a group of EGI participants, many of whom graduated from a charter school here in Haiti that Patrick helps run. The charter school accepts promising students from poor families who have shown academic promise in the country’s standardized tests taken between elementary school and secondary school. At the school they learn 4 languages: French, creole, Spanish, and English. It’s quite an amazing thing.

The bootcamp is run 3 nights a week for 2 hours. Aldo and I take turns teaching core business concepts. Week 1 was Accounting, week 2 Finance, week 3 we hit Marketing and week 4 we talked about Operations. The students are very eager to learn and we have had very good in-class participation. Accompanying the teaching we’ve also had them give briefs on local business news and perform SWOT analysis on local businesses to get them used to evaluating things through a business lens. Where are the opportunities, how might this be a threat to my business idea, etc…

Every student came in with a business idea, some of which have morphed over the course of the class. Our secondary job role is to act as consultants to help the students evaluate their specific business ideas in a 1-on-1 setting as well as working with other local business people on occasion. Student business ideas include internet cafes, a computer literacy lab, a reforestation project and a couple of farming operations. We’ve also had a chance to talk to a couple of guys who are farming Tilapia on a massive scale. There’s a lot of opportunity there because they want someone else to do the distribution so we’ve talked about a franchisee model involving some of the students. Nothing is concrete at this point, but it’s good to have some critical discussions about the businesses and help the students things flesh out.

We’re using some online software called Pitch Then Plan that is good for helping to flesh out business ideas. The basic premise is to work on the pitch part first, so you understand exactly what you want to do. Once you understand that and you can talk about it coherently and cohesively, you do all the grunt work to pull the numbers that show your idea is viable. Our students will most likely get only as far as the pitch and we’ll help them start with their numbers but they’ll be well prepared to go out and do the necessary research.

“So how’s Haiti”, you’re probably wondering, I wasn’t sure what to expect when we arrived. You hear lots of awful things about Haiti and I didn’t want to believe them. Most of the rubble from the earthquake has been removed though much remains to be done to rebuild. It’s tough to tell what was already in bad shape before the quake and what’s gotten worse after. The country needs a lot of infrastructure work. The roads are quite bad, most of them unpaved and there’s little accomodation for sewer management so when it rains things just flood. Our electrical access is fairly constant but only because of a plethora of generators and batteries in the areas we visit. Haiti’s public utility company has troubles keeping the power on all the time. Actually the government seems to be one of the biggest problems here but then again where isn’t it. Despite the troubles people here seem to be happy and for the most part industrious. I see people sitting around but they are sitting in front of goods for sale and there are always people milling about. Safety is still a concern so we’ve spent a lot of time at the guest house we’ve been staying at in a region of the city known as Delmas.

Well this is probably enough for a first post. I’ll be writing more to help catch you up on some of the details of our trip. See you soon!

Cambodia – the beginning

I anticipated this trip  for the past 6-7 months, since I heard about the opportunity at the Gigot Center at Notre Dame offering a social internship with one of the partner organizations in multiple countries (South Africa, Cambodia, Haiti, Kenya, and Jamaica). A few of my classmates had an amazing experience last summer, and I thought it could be a great way to finish my Notre Dame MBA adventure.

It is my second week in Cambodia, and so far my stay has been full of interesting experiences, extensive travel, and gradual adjustment. Hence, my well overdue fist post. My main purpose for the trip is to help a Cambodian-American social enterprise, PEPY Tours, discover and design a new business segment and revise and structure the company’s internal policies. It is not an impossible task for an MBA and I am excited and eager to help, though I suspect I also have a great deal to learn from PEPY, Cambodia, and its people during my short 10 week stay. PEPY has a very interesting, yet not an uncommon story. It started when back in 2006 an ND grad went on a bike tour across Cambodia to fund-raise money to build a school, solve a problem of poor/insufficient education in Cambodia, and continue saving the world. Since then, the organization went through a series of metamorphoses: from building schools and offering volunteer trips to building teachers’ capacity, empowering and supporting Cambodian youth, and offering educational adventures tours while strongly advocating for responsible tourism. During the past 6 years PEPY greatly matured and became two organizations: an NGO (supporting education), and a social enterprise (tour operator that inspires responsible travel). I am working with a for-profit arm of PEPY, a very inspiring and enthusiastic group of people.

I’m stationed in Siem Reap, the most visited town by tourists due to Angkor Wat, the biggest religious monument and so-called the 8th Wonder of the World. Fortunately for me, it is a low&wet season, and the town is not overflown with thousands of tourists who usually stay no more than 2 days in Siem Reap. I have to admit I was ready to a much more rural and less developed (in a western sense) environment. It still has only a few main streets and can be crossed over in less than 20 min, and a 2 min bike ride from my office reveals more common rural sites. Riddled with budgets guest houses and 4-5 star hotels, Siem Reap is not only a mecca for tourists but also for hundreds of international NGOs who collectively are trying to make Cambodia a better place to live. The question however is for who? The expat community in Cambodia lives quite comfortably, saving the world, opening new businesses, and enjoying low-cost luxuries (posh restaurants. trendy cafes, and spacious housing) that are not affordable to the Cambodian population. Everything in this town is geared for tourists and westerners, and while it is true that it creates more local jobs, the money doesn’t stay in the region making it one of the poorest provinces in the country. Cambodians understand this trend, a young waiter in our guest house who is a university student studying English shared with us his dream of opening a nice restaurant in Siem Reap serving foreigners. I can’t complain much, my student budget is sufficient to enjoy the summer and explore the country. However, I am trying to be more cognizant to support locally owned businesses – an already noticeable influence on me by PEPY Tours’ strong advocacy for responsible tourism. I greatly enjoy my Khmer food (it deserves a separate post) lunches in a local cafe around the corner from our office and we live in a Cambodian family owned guest house.

More posts to come soon!