THE LAB

By Georgina Allen
Re-Vision Labs Intern

It is impossible to make it through a day without hearing something about the depressing state of the economy.  Hundreds of thousands have lost their jobs and struggle to find work.  Many more have become disillusioned with the profit as a primary goal in life.  Out of this, however, has come an inspiring story of growth in “necessity entrepreneurs”, many of which have turned to more socially conscious methods of generating income.  This exciting new trend made me think it would be interesting to hear from a seasoned social entrepreneur and get advice based on his experience.

James Dailey is the co-founder and Chief Technology Officer of MicroEnergy Credits, aiming to source carbon offsets from the developing world.  He worked at the Grameen Technology Center since its founding in 2001, and led the development of the Microfinance Open Source (Mifos) project, a micro-banking software application. He has consulted on technology and extending financial services in dozens of countries.   He is also the CTO of VillageReach and is responsible for the Last Mile logistics systems that support global public health.  The following list is a summary of the lessons he’s learned through these ventures.

Buck the status quo.

James graduated with a degree in information systems from University of Notre Dame at a time when his skills were in  high demand.  Most of his university colleagues took high paying jobs with big consulting firms.  Instead, James decided to delve into an entirely different discipline by joining the Peace Corp.  This unique combination of skills and knowledge has been crucial in giving James an edge in his industry of choice.

Be a sponge.

James had the privilege of working with Grameen Technology Center, part of Grameen Foundation early on.  During his time there James observed the market dynamics around software and learned from experienced people in the field, taking in everything he could on the market conditions, the needs of buyers and the products of vendors.  This led to the development of the Grameen MIFOS project, which gave microfinance banks access to open source banking software.

Seize the moment.

Shortly after James left Grameen Foundation, he discovered that his good friend April, who had years of experience in business consulting and knowledge of microfinance, was also looking to establish a scalable social venture.  The two recognized that their combined skill sets and sudden lack of time obligations presented a once in a lifetime kind opportunity.

Test the waters.

“The first step is coming up with an idea that really compels you and then circulating that idea.  We tried on a bunch of different ideas.  We tried them out on people, discarded a bunch of ideas, and then focused in on one particular aspect.”

Take it with a grain of salt.

Before MicroEnergy Credits (MEC) came into being, James and April wrote a number of different business plans.  “You have to have the humility to say ‘that one didn’t work’” says James.

Follow your heart.

For James, the daunting task of conducting business internationally, let alone in the developing world was part of the fun.  “So there are more obstacles talking to so someone in Mozambique than there are in Peoria Illinois, but it is much more interesting.  It’s just part of the landscape. It’s not particularly challenging.”

Hustle and bustle.

While James and April were getting MEC off the ground, their connections were enormously helpful.  Not only did these provide an outlet for contract work and income, but they both continued to take on paid work for the industry in which they were aspiring entrepreneurs, keeping them up to speed on important information.

Proceed with caution.

“We tend to be  strong on the strategic stuff.”  James and April spent over a year writing up a business plan for MEC and they continue to take a very deliberate approach to their decision making process.  It seems to have paid off because not once has failure been on their radar!

There’s no turning back.

James expressed that you have to have a “sense of we are in this to make a massive change in the lives of people, and if I don’t do it who will? Somebody has to try to figure this out. We have the skill to do it so are going to stick with it till it happens.”  Additionally, “If you just have a good idea, or even a great idea, people on the other side of the table are wondering if you are going to be here a year from now.”

Think big.

James and April’s most recent venture, YurtCozy incorporates an element of community by encouraging their fans to purchase carbon offsets by supporting green micro-entrepreneurs featured on their website.  When asked about this, James indicated that it was all part of the broader scheme of things to scale up their operations.  As with the organic and local foods movement, it is simply a matter of fulfilling a demand that already exists.

And for some final words of inspiration, “To paraphrase a famous entrepreneurial saying – If at least some of the people don’t think you are crazy, then you don’t have an original idea”.

By Georgina Allen
Global Development Intern

The more deeply I become involved in the global development community, the more I can’t help but think of The Four Stages of Learning.  In psychology, this theory describes the stages through which one passes when learning a new skill.  It goes something like this:

Unconscious incompetence > conscious incompetence > conscious competence > unconscious competence

I have been feeling overwhelmed at the prospect of progressing past the stage of “conscious incompetence” when it comes to learning everything there is to know about global development.  What do I mean by this?  Technology has made information on this topic readily available, inspiring a whole wave of new activists in this community who inevitably become eager to share their own perspective.  Reviewing all of this material online is an impossible task, so finding a strategy to sift through it all is a crucial element of effectively combating global development issues.

In a June 2009 speech in Cairo, Obama stated “There must be a sustained effort to listen to each other; to learn from each other; to respect one another; and to seek common ground.”  While this statement was made in the context of a discussion on U.S.-Arab relations, it seems to have resonated with the global development community.  Last week, USAID launched Global Pulse 2010, a 3-day online discussion marathon for people working in the field of development in an effort to aggregate great ideas from around the world.

Upon its conclusion, the staff of Global Pulse selected “hot ideas.”  Many of these emphasized the importance of building community and communication.  My favorite suggestion was in the “Inspiring a New Generation” forum, where one person advocated for the use of video conference capabilities in classrooms around the world.  Some responded with information on organizations who are already working to make this a reality, such as One Laptop per Child and Global Nomads Group.

In this discussion, other websites working to break down communication barriers and build community were also mentioned.  Panwapa.org offers a space where young children can connect with other children from around the globe based on their interests, for example, soccer.  Children can select from a list of pre-translated messages to send to other members.  On news.meedan.net, links to news articles in English and Arabic can be posted and instantly translated, making alternative perspectives on current events available to those without the necessary language skills.

The World Bank is another organization who has recently taken on the task of strengthening the global development community with their new Urgent Evoke website, which is promoted as “A crash course in saving the world.”  Each week, a “mission” is released to all members.  For example, this week’s mission, which is related to “empowering women,” gives members points for a blog entries summarizing related news stories, personal efforts to empower women and their vision for the future of women’s’ empowerment.  All of this user-generated content is shared on the site, and active members are given priority in contests for mentorships, scholarships and even investment money.

While some of these innovative organizations and websites use community and communication to inspire a sense of responsibility, by aggregating and streamlining information they are also facilitating my quest to learn about effective solutions to global development issues and overcome my “conscious incompetence”.

Photo by Avant Game on Flickr.

By Martina Welke
Communications Fellow

What Motivates You?

At a professional development seminar in a previous life, I was introduced to David McClelland’s Theory of Motivation, which locates the impetus of human action in three basic needs: the need to influence, the need to achieve, and the need to affiliate.  I’m always skeptical of theories that seem to be overly simplistic—particularly when they attempt to taxonomize something as unpredictable and complex as human behavior—but  something about McClelland’s trifecta resonated with me, and I’ve since found it to be useful for reflecting upon my own choices and the actions of those around me.

I recently found myself ruminating on two themes that routinely occupy my mind—microfinance and communities—and realized that the needs trio provides a great framework for discussing some of the exciting community building strategies that two of my favorite microfinance organizations are beginning to employ.  OikocreditUSA and Vittana are both engaging their lenders in a variety of ways that feed our “basic needs” and incorporate us into an interactive, international microfinance community.

Influence:  Both Vittana and Oikocredit share client stories with investors and offer updates on the impact loans have made.

Vittana, which partners with microfinance institutions in Latin America and Asia to offer student loans, provides a biography for each student listed that includes their goals and the projected earning potential the investment in education could facilitate.

Oikocredit’s new Community Hub features a Meet the Entrepreneurs section where investors can read detailed stories about individual clients and browse through profiles of Oikocredit’s partner organizations in order to better understand the influence their loan could have.

Achievement: Both sites have plenty of information to help illustrate collective and individual achievements.  Vittana’s Community Page includes an update summarizing the total amount loaned through the website and the total number of community members.  A summary of individual’s loan history is listed on the each lender profile page.  In the spirit of friendly competition, Vittana organized a March Madness lending contest, during which lenders were encouraged to organize groups and compete with other Vittana groups for the most members and dollars loaned.  The leading groups were highlighted on Twitter and in comunity e-mails to recognize their achievement.

Oikocredit also updates lenders on the total amount loaned and allows lenders to track individual loans.  The site clearly outlines 5 Levels of Engagement for community members, so that those motivated to become increasingly involved in the organization might map their progress.

Affiliation: The opportunities to affiliate with other community members through both on and offline activities are abundant after joining OikocreditUSA or Vittana.  As I alluded to earlier, both websites offer users the chance to create and populate lending groups. The OikocreditUSA hub allows members to create blog posts, share photos, and even video chat with other community members.  Additionally, members can download a toolkit with materials to host a Community Organizer Toolkit that inculdes materials for developing local groups and hosting informational houseparties.

Never underestimate the power of a party.  Over the weekend, I attended a Seattle party that Vittana hosted in partnership with SeaMo to celebrate passing the $100K loan benchmark (which happened in early March) and the great success of their March Madness campaign (they exceed their goal of $50K in loans and fully funded every student listed on the website).  As I mingled among a few familiar and many new faces, I happened to bump into OikocreditUSA’s new Northwest regional comunity organizer.  I chatted about all the great developments on the OikocreditUSA website and the exciting potential for growth.  I toasted to Vittana’s wonderful achievements.  I met other people with an avid interest in microfinance (and even someone who shares my enthusiasm for cupcakes!).  At the end of the night, I left feeling well-fed–in McClelland’s terms–and very motivated to do more.

Georgina and roommate Amy.

Most of what you can read about Haiti right now is in post-earthquake news.  But how about a little bit of pre-earthquake description to put the whole disaster in perspective?

I spent a lot of time writing about my experience in Port-au-Prince (pre-earthquake) in 2008 while I was an intern at Fonkoze, Haiti’s most well established microfinance institution.  Twice a day, I walked through the streets on my way to work, absorbing everything I could.  As a current member of the global development team at Re-Vision Labs, my hope is that by sharing excerpts of my journal it will inspire people to join or stay active in the relief community.

Below are three passages taken from different entries in the journal I kept in Haiti, each of which discuss my walk to work.

Haiti is a difficult country to live in, but a good sense of humor makes it a lot easier.  My roommate Amy and I laugh a lot about how even the smallest tasks here can be emotionally draining.  Our daily walk to work is a perfect example.  Within a span of ten minutes, Amy and I face countless hazards and nuisances.  Every day we have to fight other pedestrians, vendors, parked cars and flea bitten strays for precious sidewalk space.  The alternative is walking along the side of the road (the gutter), where you run the risk of getting sideswiped by a car, accidently stepping in a sewage cesspool, or worst of all, falling into an uncovered manhole.  Although many of these things are avoided with luck, the bad smells cannot be bypassed.  Most days it’s a delightful mix of garbage, body odor, and fried food.  It is impossible to arrive at work smelling nice.  Amy and I have an ongoing joke that our walking around Potoprens is kind of like a level of a videogame that can be defeated only by making it to your final destination without using up all of your “health”.    Accidently step in a cesspool….50% health!

Our guide through Boukan Kare said repeatedly that Haiti would cast a voodoo spell on us.  After two months in Port-au-Prince, I would agree that there is indeed something magical about this place.  When I dare to take my eyes off of my immediate surroundings on my walk to work and look at the horizon, I can see lush emerald mountains.  Its thick vegetation is broken up by clusters of homes and “Flamboyant” trees with spectacular fire-engine red blossoms.  The rich color palate bleeds into the urban landscape in the form of brightly colored advertisements hand painted on every wall space.  Taptaps (public transport) with wild, almost psychedelic, paint jobs putt through the streets, carrying Haitians, produce and sometimes even chickens.  The constant buzz of Kanpa (Haitian music) and Haitians bantering in the streets lasts from sunrise until long after sunset.

My experience here has for the most part been limited to my walk to and from work every day, which can make grasping the true scope of poverty here somewhat difficult.  Even so, I have come to understand the misery that exists in Port-au-Prince through this repetitive act.  On the surface, the city appears to be at least halfway functioning.  People sit in the shade, chitchatting with their neighbors, selling food, clothing or other miscellaneous junk.  Only after observing this the neighborhood for three months do I see those things which were not immediately apparent.  Every day I pass by the same elderly gentleman, motionless, legs crossed, trying to sell one of the same five magazines he has had since I arrived.  The avocado lady seems increasingly desperate to swindle me out 25 cents for a freshly picked avocado.  School is in now session, but most of the neighborhood kids continue to sit patiently alongside their parents on the sidewalk throughout the day.  I now understand that the bronzed hair, yellow eyes and stunted bodies of the people walking towards me in the streets are the result of lifelong malnutrition.  I could go on for pages describing small things that I have come to notice, but no words can really communicate the suffering that exists in this country.

There is certainly a lot to feel pessimistic about when it comes to Haiti.   I would however, like to add that I was in Haiti during a series of four hurricanes that devastated the country in 2008.  Never in my life have I been so amazed by the resilience and selflessness of a population, having witnessed first-hand while Haitians sacrificed their own scarce time and resources to assist those in desperate need.  Haitian pride and determination are the reason that I am confident Haiti will recover from this unprecedented disaster and one day flourish.

Last night I had the privilege of joining some Re-Vision Labs colleagues and two accomplished Seattle social entrepreneurs in a conversation about global development and sustainable business models.  Samantha Rayner and Cole Hoover are part of the International Management Team of Lumana, a microfinance startup serving clients in Ghana.  In less than two years, the Lumana team has implemented a comprehensive entrepreneurship program in two communities in Ghana with ambitious plans to increase their client base and enhance client services in the coming months.

As an undergraduate business student at the University of Washington, Rayner was inspired by the teachings of Muhammad Yunus, who was awarded the Nobel Peace Prize in 2006 for his pioneering work in microfinance.  She began researching global microfinance markets and learned that only 1% of funds invested in microfinance worldwide were going to Africa.  In 2008 Rayner’s research took her to the village of Atorkor in Ghana, where she partnered with Chief Samuel Adjorlolo to provide the business training and small loans to several village entrepreneurs
(read news article about Chief Adjorlolo and Atorkor here).

During her first trip to Ghana, Rayner worked with six cooperatives, each with five to eight members, to develop a pragmatic business training curriculum and lending process.  Rayner dedicated much of her time to job-shadowing cooperative members in order to gain insight into Atorkor’s economy.   In the seashore village with a population of about 2,000, many people already operated three or four small businesses, such as selling porridge, weaving printed cloth, or fish-mongering.

Upon her return to Seattle, Rayner started talking to fellow Foster Business School students about creating a sustainable business model that could be replicated in other villages.  Rayner currently works with a team of 15 volunteer in Seattle, many of whom were recruited from her network of classmates and community collaborators.  Hoover joined Lumana’s International Management Team as the Outreach Coordinator, and Re-Vision Labs founding partner Brett Horvath currently serves on the Board of Directors.  Hoover pointed out that helping to build Lumana has allowed him the opportunity “to take all these things that you’ve learned from the amazing Seattle business mentorship community and start trying them out, which is really, really cool.”

Since Lumana serves a relatively isolated rural population, the client service model differs from other microfinance institutions located in urban areas.  Hoover explained that the Lumana team realized early on that a focus on agriculture was essential for providing clients with food security.  Rayner is proud that Lumana has “made [microfinance] work in a community that has traditionally been very difficult to reach.”

Lumana currently has two loan officers and eight entrepeneurship educators working in Ghana.  Clients are required to take business training before

qualifying for a loan, which has proven to be an important part of Lumana’s success.  Hoover emphasized that “education always helps, especially if you’re doing in a targeted way that benefits [the clients].”

Other global development organizations and several media outlets have taken note of Lumana’s rapid success.  Rayner and Hoover traveled to New York in January for the 2nd Microfinance and Sustainable Development Summit, where Rayner was honored to speak on a “Models that Work” panel alongside other social entrepreneurs.  Last month, Lumana was the featured organization at Microfinance and Microbrews, a recurring event sponsored by SeaMo, the preeminent Seattle microfinance network.  Lumana has also been highlighted in The Seattle Times, The Daily at the University of Washington, and the Foster Business School Journal, in addition to many other news sources.

Plans for growth at Lumana include launching a fellowship program, expanding service to six or seven nearby villages, and building partnerships in order to offer more comprehensive client services.  Eventually, the leadership team would like Lumana to become an information hub for the villages it serves in order to help clients access healthcare, further agricultural training, and entrepreneurial mentorship opportunities.

I look forward to watching Lumana’s progress and providing future updates.

One of my favorites, passed out by our business school professor Dr. Jones Christensen to the entire class on the last day of “Introduction to Sustainable Enterprise.”

The Development Set
by Ross Coggins (1976)

‘Excuse me, friends, I must catch my jet
I’m off to join the Development Set;
My bags are packed, and I’ve had all my shots
I have traveller’s checks and pills for the trots!

The Development Set is bright and noble
Our thoughts are deep and our vision global;
Although we move with the better classes
Our thoughts are always with the masses.

In Sheraton Hotels in scattered nations
We damn multi-national corporations;
injustice seems easy to protest
In such seething hotbeds of social rest.

We discuss malnutrition over steaks
And plan hunger talks during coffee breaks.
Whether Asian floods or African drought,
We face each issue with open mouth.

We bring in consultants whose circumlocution
Raises difficulties for every solution –
Thus guaranteeing continued good eating
By showing the need for another meeting.

The language of the Development Set
Stretches the English alphabet;
We use swell words like “epigenetic”
“Micro”, “macro”, and “logarithmetic”

It pleasures us to be esoteric –
It’s so intellectually atmospheric!
And although establishments may be unmoved,
Our vocabularies are much improved.

When the talk gets deep and you’re feeling numb,
You can keep your shame to a minimum:
To show that you, too, are intelligent
Smugly ask, “Is it really development?”

Or say, “That’s fine in practice, but don’t you see:
It doesn’t work out in theory!”
A few may find this incomprehensible,
But most will admire you as deep and sensible.

Development set homes are extremely chic,
Full of carvings, curios, and draped with batik.
Eye-level photographs subtly assure
That your host is at home with the great and the poor.

Enough of these verses – on with the mission!
Our task is as broad as the human condition!
Just pray god the biblical promise is true:
The poor ye shall always have with you.’

Similarly, who is “poor?”  A person living in a remote Ethiopian village where everyone makes $2 a day (using purchasing power parity exchange rates), or someone living in a Chicago housing development with an annual income of $5,000?

“Well…” says Mr. A, the inexperienced economics student, “both their incomes are above their respective poverty thresholds, so they should have enough for life-sustaining goods. But the person making $2 a day is closer to that threshold, so he must be poorer.”

Dr. Goldberg, the economist counters, “Actually, the Ethiopian is surrounded by people making the same income and the person living in Chicago has an income far below the average national per capita income, so the latter, from a relative perspective, is poorer.”

The capriciousness of absolute and relative poverty in the developing world has captured much attention within the last century.  Through empirical work and countless trial and error, economists have developed strong summary measurements of poverty, such as those below:

Poverty gap index: Economists use this model to measure how much income is needed to bring the population under the poverty line above it.

Gini coefficient: A widely used ratio statistic that measures the relative degree of income equality between countries or areas.

Foster-Greer-Thorbecke index: A popular model used to measure the degree of income inequality among the poor. It was considered such a strong measurement of poverty that it is included in the Mexican constitution.

In contrast to these dry quantitative theories put forward by economists, Nobel Laureate Amartya Sen has developed a far more qualitative, human-based approach to measuring poverty.  In his book “Development as Freedom,” Sen outlines his idea of how economics could be broadened to better measure people’s well-being.  As Sen explains, “focusing on human freedoms contrasts with narrower views of development, such as identifying development with the growth of gross national product.”  In particular, Sen examines the ways in which expanding people’s freedoms can be both a viable means to economic growth and a desirable end.  His unique approach suggests that poverty is far more complicated than a simple lack of income and should in fact be measured by the “capabilities” people have to live the type of life they desire.  This broadens the term “poverty” to take into account the education, political freedoms, and health services available to people.

Sen’s principles were a major influence in the formulation of the Human Development Index, a powerful method of comparing social well-being across countries. The Index takes into account life expectancy at birth, level of education and standard of living to give an overall measure of a country’s well-being.

So, if asked which person was poorer (the Ethiopian or the person living in a housing development in Chicago), Sen would consider any answer incomplete that doesn’t account for social, political, and institutional circumstances.

The mutatis mutandis assumption strikes back!