The BS test for social entrepreneurs: 5 questions every impact investor should ask

The world loves the story of the lone crusader (who happens to be young, attractive, and usually from an elite university).  Social entrepreneurs, specifically those from the United States and occasionally Europe who are flocking to the Global South to save the poor while living large, are the latest answer to all the “failures” of the non-profit and public sectors.  And there are plenty of “impact” investors ready to fund them, and foundations ready to crown them with admiring awards.  It’s all good, except for the fact that many of these (expensive!) ventures fail to deliver any value.

Some investors have set up shop in the Global South so that they have a front-row view of the action and can get their hands dirty.  Many other investors are unwilling or unable to do this.  As a result, social entrepreneurs sometimes take advantage of the fact that potential investors are not always savvy about the targeted markets and contexts.  Over the last few years of meeting a lot of entrepreneurs, I have come up with a few basic rules of thumb that may help investors better separate the truly great ideas from the ones that are pretty unlikely to succeed.

#1 Where is the entrepreneur based?  Or spending most of their time?

If you were starting up a new company in Silicon Valley, would you spend most of your time in Tokyo?  Of course not!  You’d be living and breathing the challenges of getting everything up and running on the ground.  Trust me that there are many additional levels of complexity when you try to do this in a developing country—from electricity, to establish occupancy in an office, getting permits, to the informal powers that will inevitably expect a cut if you want to avoid their wrath.  None of this can be done remotely. 

If the CEO is spending less than 80% of their time onsite, I’d be deeply skeptical that a.) they actually know what’s going on, and b.) that they are qualified to talk about whatever problem they are solving.

Sunday morning round up

1. Finally! Academics check to see if practitioners actually read what research results, and more importantly, if the research informs their actions at all.  My favorite findings:

• Practitioners like to share articles with other practitioners—learning is a chance to engage with colleagues in a unique way
• Practitioners know that academics often talk down to them, and think that academics often underestimate what they don’t know (and can learn from practitioners).  As in:

“The problem isn’t that the practitioners don’t understand the researchers. That’s a pretty arrogant assumption on the researchers’ part. It’s more the other way around: The researchers don’t understand the dynamics that the practitioners must live with. Why not have training sessions run by practitioners for researchers?”

2. Bangladesh’s bKash is now the second largest mobile money in the world with 12 million individual accounts.  mPesa better watch out—Bangladesh has close to 150 million people (more than Tanzania, Kenya, AND Uganda combined), so there’s still a lot of room for growth.  Especially with others like BRAC in the ecosystem working on innovative ways to incorporate bkash into development work.  See the piece my colleague and I wrote for Impatient Optimist on how BRAC supported bkash in its early days, and what we’re doing now to promote adoption at the organization level.

3. Implementation is harder than public commitment, but some of the recent pieces on what’s happened in the wake of the Rana Plaza factory tragedy demonstrate just how much of the motions afterwards was about maintaining public relations versus solutions that actually create safer environments for workers.  The Dhaka Tribune reports on how the monitoring bodies set up by the US and European-based buyers can’t seem to be bothered to work together or even agree on a common set up standards—making life much more difficult for factory owners trying to understand and comply with them. 

FYI, a few weeks ago the same newspaper wrote another good piece about factories that are closing for safety reasons, and worker protests about the loss of jobs.

The sticky truths of development

It's a great feeling when I read an article and find myself nodding "yes" emphatically with the author.  This week I came across two gems that captured so many important sentiments beautifully, which saves me a lot of hard work!

William G. Moseley had a piece framed as "graduation advice for aspiring humanitarians," but has much broader relevance.  His parting comment is a wonderful mantra:

"Do it because you enjoy it, develop deep knowledge of certain places, linger at the grassroots and be humble about the limits of your knowledge."

Too many people prioritize breadth over depth.  Many CVs these days boast "development professional with experience in over 25 countries," which in my mind translates to "I stayed in a 5-star hotel for a few days, traveled around the capital city by car, and sat in air-conditioned offices drinking tea the whole time."  Measuring your knowledge and experience in passport stamps is a bad idea.  My travel acuity scale, on the other hand, is way better.

Win-win situations, peace of mind, and other first-world luxuries

It’s been the perfect weekend.  A beautiful drive through tea gardens, misty mountains, and remote canals.  After finishing up a light lunch at a luxurious resort, we piled back in our rented van to start the drive back to Dhaka.

We’re on a winding country road heading back to the highway. We came around a sharp bend quickly and found ourselves on a collision course with an oncoming lorry filled with bricks. Luckily for us, he swerved and dented just the back of our van.  But unfortunately for him, the other side of the car took the brunt of the impact when he hit a tree, shattering the windshield and badly damaging the front side.

Both cars stopped, and our driver got out. A worker in the other truck jumped off the back and began to howl in agony while gripping his hand, not unlike the professional soccer players do when trying to convince the referee of foul play. The other driver was angry and on his phone, making calls. The police happened to be heading our direction, and stopped when they saw what’s going on.  Locals started congregating as well.

A few minutes later our driver hopped back in the car, and we started to drive away. 

“Where are we going?” We asked. 

He said, “They said that we could go.” 

That was easy. For about five minutes, anyway.

Looking good and surviving in places too lonely for lonely planet

I just finished reading the newly released “Expat etiquette:how to look good in bad places.”  It’s a great read for anyone heading to a developing country for the first time—especially if you’ll be staying for more than a few weeks. 

Expat Etiquette is one of the most readable travel guides I’ve ever come across.  It’s got some truly amazing anecdotes and enough humor to stay interesting, even when it’s listing out the various diseases you may need to diagnose yourself with.  It’s totally pragmatic, with sections like “how to use a squat toilet,” and “how to choose a restaurant unlikely to make you sick, ““how to not annoy the hell out of other ex-pats,” and “how to not get killed on the road,” and other skills that you might not have known you needed until you got there and learned them the hard way.  More than anything, adjusting to like in a third world context requires accepting a different mindset and orientation to the world—where things more often go wrong than right, scarcity is a daily part of life for most, life is wildly unfair, nice guys finish last, and that really, you’re totally on your own and no one else really cares what happens to you.  This may all be true in your hometown, but here there’s no way to avoid looking these types of realities in the eye in places like Dhaka, Kabul, and Khartoum.  The sooner you adjust, the sooner you can start to enjoy a new place and get things done. But as the book reminds you constantly, you'll still want to make sure you keep a stash of emergency toilet paper nearby, no matter how acclimated you become.  

Nothing in Expat Etiquette is groundbreaking, but it’s the stuff that no one really tells you and is extremely helpful to know up front.   There’s a few missing chapters that I have identified, so maybe I’ll write up an accompanying guide with fun issues like:

• How to avoid getting roped into other people’s financial problems
• What to do when you get lost (and determine just how lost you are)
• How to manage a maid effectively and avoid getting robbed
• “Your country please?” How to shut down unwanted conversations on the street
• Boil your milk and rinse your rice: how to avoid getting sick from your own cooking

For those who are headed to Dhaka specifically, I've written up some travel tips already.  Comments welcome!

Shout out to Wronging Rights’ post on Expat Etiquette—glad to have found it. See what else I'm reading, if you're hungry for other recommendations.

Nothing is as simple as it looks

One of the great privileges of working at BRAC is the occasional opportunity to hear our founder, Fazle Hasan Abed, speak.  Last Wednesday, we congratulated our first cadre of international Young Professionals on the completion of their training period in Bangladesh, and he offered some comments.
I've heard him speak several times about BRAC's experience in the 1980s with the Oral Therapy Extension Program (OTEP) (succinctly summarized in the New Yorker and more richly described in A Simple Solution, a must-read for any public health practitioner).  But today he offered some details that were new to me.
In brief, brief detail: the OTEP program was an effort to ameliorate the massive death toll of children from diarrheal disease --it claimed almost 1 in 5 kids before their fifth birthday.  Once scientists realized that you could prevent death from diarrheal disease through an IV (that essentially replenished fluids and electrolytes), the logical next realization was that by drinking a mixture of water, salt, and sugar, you could do the same thing.  Given the dearth of health facilities in Bangladesh, and the challenges of transporting ready-made oral rehydration solution (ORS) all over the country, BRAC chose the strategy of teaching moms how to make it at home.
The story gets really interesting when the monitoring team goes out to evaluate the program after it reached its first 30,000 households--it found that while many mothers could make the solution, only a handful (~6%) actually USED it when their children had diarrhea.  Upon a bit more investigation, they found that the field workers, who were teaching mothers about the solution, didn't actually use it in their own homes! So BRAC brought the field workers in, gave them a tour of the Cholera Hospital where many were being treated with the solution, and also gave a scientific explanation of how the solution worked.  Satisfied that the workers now had "drank the koolaid" (or at least the ORS!!), they asked them to go door-to-door for another 30,000 households and teach them about it.

Making education attainable for all: why Bangladesh needs low-cost, private schools

(Originally published as part of an online "edudebate" by WISE, an initiative of the Qatar Foundation)

In 2012, over two hundred thousand students applied for admission to the prestigious Dhaka University.  Only 6,000 can matriculate, putting Dhaka University’s acceptance rate at under 3%.  One in 37 applicants was accepted (as a point of comparison—Harvard College admits about one in 17 applicants).  In recent years, dozens of private universities have sprung up in Bangladesh, sensing the desperate demand for graduate and post-graduate opportunities.  Unlike public institutions like Dhaka University, which are virtually free of cost, private universities routinely charge USD 1,200 per year, putting them out of reach of many families in a country where the average GDP per capita is USD 750. The competitiveness highlights both the educational aspirations of the rising youth, as well as the inadequacy of the current supply.

Yet most don’t even make it to the point of applying to university. In Bangladesh, the greatest attrition happens at the secondary school level—fewer than half of the nation’s youth enroll.  A full 80% of poor students (those in the bottom 40% of households, by assets) drop out by class nine.  Girls often drop out when they are married—two in three marry before the legal age of 18—and other youth may drop out to pursue income-generating activities.

While these “pull” factors are often emphasized, recently there’s an expanding focus on the “push” factors, namely cost and quality of education. Though school fees are usually reasonable, the expectation is that students will also bear a number of less obvious expenses—most notoriously private coaching or tuition.  A internal survey conducted by BRAC and Pearson surveying over 1,000 households found monthly educational expenses in Dhaka were around $50, and coaching accounted for over half of the cost.  The survey also found that households with a monthly income of $ 193 or less tended to spend $2 on monthly school fees and $33 on tuition ($35 a month), whereas households with an income over $257 spend $6 on school fees and a staggering $141 on private coaching ($147). Despite the high prices, a recent study on competence found that class 5 students tested only marginally better than their out-of-school counterparts.  Many other studies corroborate that while enrollment is high, learning outcomes remain a significant challenge across public and private schools.