TelarIdeas

Inspired by Muhammad Yunus

I recently watched Muhammad Yunus full of joy, sharing his story and advocating for his ideas during his Nobel Lecture of December 10, 2006, at the Oslo City Hall, Norway. I was deeply inspired and connected to his values and believe. I would like to contribute my 2 cents in promoting his lecture in this post.

Muhammad Yunus talked about poverty as the absence of human rights and the need to promote social businesses either as non-dividend and not-for-losses businesses or those owned by their customers, the financially poor, as it is the case for Grameen Bank. Muhammad Yunus also talked about the need for a new kind of social business marketplace, the need to fight terrorism in the most sustainable way by diverting the developed nations spending from war into the poverty fight. He also shared all the diversifying efforts the Grameen organization is taking to address the multidimensional needs of the poor. Out of the many creative and incredible stories, he shared the initiative of lending to the beggars of Bangladesh. The Grameen bank today lends to 85,000 beggars. Out of those, 5,000 of them decided to transform themselves from beggars to door-to-door salesmen with the help of Grameen. It is wonderful to see that there is a deep belief in enterprising rather than charity as a mechanism to bring forth a sustainable future.

It was revealing for me to learn of his beginning as a professor, emotionally connected to people, troubled by the contrasts between theory and the reality out of the door of his classroom. He started finding ways to protect the dignity of the women borrowing from lenders who abused of their financial vulnerability. As he saw results in the little he thought he did initially, he looked at the traditional banking system to solve the borrower condition. But this banking system did not respond limited by its traditional practices, its lack of trust of customers and the demand for collateral. Thus, he decided to take it in his hand, from his own pocket literally.

This story was vivid to me, raised in a town surrounded and living with poverty. A reality we became used to. As I matured, this reality transformed from being natural to intolerable to me. My fellow Venezuelans, many of them, yet today, live vulnerable to the daily abuses of the imperfect market and a state that is unaccountable and ill-powered to respond and bring dignity and prosperity. After many years, the reality of exclusion and now segregation is there regardless of the good service that media and propaganda brings to my country government. I am just a new kid around the block. I am in Yunus late 70s. And I may not reach high and deep as he has. But watching Muhammad Yunus was supportive to this early, struggling path as social entrepreneur.

As Yunus, I believe in every human being regardless of his or her social and economical condition. Every one. The financial condition, the lack of access to basic human rights or any prejudice we may expectedly live with does not take away our humanity, our dignity, our creativity, our ability to prosper when given the chance and the right conditions. I firmly agree that it is not about charity. It is about giving opportunities and accompanying and supporting each other in the process.

For many years, I have been an advocate and practitioner of innovation. One of the convictions that I have always communicated to the youth is: “The world is what we want it to be. We have the power to change it and build the future we dream. What we have now is what we human beings created for ourselves given the conceptions of the times. But this does not have to be the future. In fact, it will not be. This is just a step in the long, continuously-emerging and erratic experiment called humanity.” I gladly heard Yunus bring that message loud and clear to inspire and support the many of us making our away through social enterprising.

Honor to Muhammad Yunus and the many who around him and in many other microfinance institutions are building this wonderful new world of hope, dignity and prosperity for every one.

Lecture movie: http://nobelprize.org/cgi-bin/asxgen.asx?id=88&type=lecture&year=2006

Lecture text:  http://nobelprize.org/nobel_prizes/peace/laureates/2006/yunus-lecture-en.html

About time, money and knowledge as entrepreneurs

Learning is a wonderful and a slowly, painful process when we entrepreneurs are in early stages with no sustainable means and desperate for results. We want to go faster than what our human nature can take with its limiting structures, habits, social responsabilities and preconceptions.  The speed of learning is of essence for us as entrepreneurs. 

In fact what I am coming to realize is that we entrepreneurs have no time for learning.  Yes, no time for learning with a solo approach when it comes to action.  We should look for people that already know what we need to learn and team up with them to make things happen, in no time: mentors, partners, team members, volunteers, etc.

It is also of essence to recognize what strategies for financing our time and learning are the best with our given circumstances.  A "mother" entrepreneur who wants to keep her family needs a financing strategy different from a single, student entrepreneur leaving college.  This may look a trivial understanding but it is not.  (If anybody knows of such studies, please share it with this post.)

As I always like to look at things, there is a paradox in every story.  This one is no exception.  Early financing in "inadequate" degree can hamper the future of an initiative as the need is the mother of invention and financing may end up reinforcing the nonworking approaches and rather being the mother of costly and inappropriate solutions.  In fact, I would rephrase this famous statement by saying that the need is the mother of learning acceleration and as a consequence we invent.  Could somebody know of the right times and the adequate levels of financing?  probably after having done that and being there.

As my former advisor at MIT once told me, you just hope that you will do it  in time not to face an irreversible consequence you did not balance appropriately.   At this period of early-stage struggles, I am just hoping I will be able to keep my attention fronts in "dynamic" balance. 

This just sounded like a hymn to my Aha moment, my frustrations and my stubborn perseverance.  Moving along.

For people For profit For many reasons...

The following is my comment to the post by Erik Sundelof 's "Is a for-profit social venture impossible?" at the Reuters Digital Vision program blog

I think there may be many reasons why we are better off being a for-profit as an alternative to a nonprofit in the pursuit of wide and deep social impact. In my building of TAVOS, I realized through the business planning of the social enterprise that there were two ways to cover the high costs of a Latin American-scale deployment: either dedicate my life and one of the others to fundraising and not work directly with the people I want to serve or look for income-generation strategies to make every community unit of the initiative sustainable. I decided for the latter. Some of my reasons were:

1. I rather devote myself to care of the people I want to serve and let the market dynamics push my organization to listen, than devoting my life to fundraising to end up detached from the end beneficiaries.

2. The communities I am trying to serve are highly entrepreneurial. 50-60% of the economy in Latin America is informal. That means that Francisco in Catia, a low-income suburban neighborhood in Caracas, wakes up every morning thinking how he will make it to bring food to the table the next day. Francisco and 100 million other Latin Americans are better served by bringing opportunities they could use to tap into their spirit than by bringing charity that will leave them highly vulnerable if the funding gets dry.

3. A for-profit will make the social impact sustainable and scalable if we are serving well the needs of the target population. If we are failing, the market will tell.

4. Embedded in my last comment, the for-profit approach forces better learnings of the market and customers than the nonprofit approach.

I do agree that there is a challenge in leading and executing with integrity a hybrid social/business-mission venture. But I think that it holds true for any enterprise today. There is also an interesting discussion about for-profits with organizational and governance structures that "lock" their social mission, for example: a parent nonprofit or member association. But that is a whole new discussion.

Cheers,
jose

Are you a phase-1 or a phase-2 social entrepreneur?

I believe we do not figure out what it takes to be an entrepreneur and whether we like it unless we try ourselves.   Let me share some beliefs from my experience.

I believe that in the entrepreneurial route we learn much about ourselves. This leads us to realize which of the many roles fits better our personal making. Ours is not necessarily the role of the CEO, for example. I believe that part of the skill set for a founder involves having this type of honest realizations and in this particular case, let the ones with the making to perform the job. Then not only self-honesty but team building becomes critical. Not an easy job.

I heard once to Jacqueline Novogratz from the Acumen Fund talk about the phase-1 entrepreneurs and phase-2 entrepreneurs at one of the Stanford Breakfast Briefings last Spring.  Phase-1 being those visionaries that materialize the idea from concept to prove, an initial roll-out of the enterprise. And then phase-2 entrepreneurs those that are able to scale it. This is consistent with my knowledge of the evolution of technical systems. Every phase in the S-curve of a system requires a different and particular cast. My experience in start-ups confirm that. I saw a brilliant and visionary CEO being taken out by the BOD because year after year he was not able to take the company from phase 1 to phase 2. I lived the agony of VP after VP of sales trying to find the sweet sales model with no success. The company found its phase-2 CEO and the right model eventually. The last time I knew of them, they were doing great and in black. This does not undervalue the founder. The founder fulfilled a critical and exciting role as well. As I also believe the guy that came in for phase 2 would not have make it to engage the passionate and fun team we built during phase 1. I also assume that a few could perform both roles. But in general, I believe a successful entrepreneur should understand him or herself and recognize which role he or she should play in every phase of the enterprise for this one to be successful.

I currently perceive myself stronger as a phase-1 entrepreneur. I love inventing and making connections between the opportunities of new technologies and the demands and possibilities of the communities I care about. I love to be engaged with users and customers one on one and transfer my excitement and vision. I do not see myself much as a phase-2 entrepreneur replicating and scaling an organization and detaching myself from that vision-building and exploratory phase and the very human interface between the organization and the end beneficiaries. I enjoy the dynamics of small, creative organizations bringing a new solution to market. But that joy should not hold the company from its potential to reach far and wide. Phase-2 is also important for the enterprise and its scope and impact. And It will be part of my challenge to recognize when is the time for me to delegate the job into a more capable phase-2 entrepreneur when the time comes. I will love seeing my enterprises going through that phase successfully, even if executed by another team member. Whatever role I decide to play, it shall be the one where I have fun and can see my team thriving to bring a better future to the organization and all its stakeholders.

Do you agree with this view of entrepreneurship?  What is your making?