EMDC: A Year in Review (2012)

EMDC has come a long way since it launched almost 2 years ago. As we close this year, we asked our out-going president (Jay Beekman) to share some thoughts on this past year. As this year's leadership team, we are extremely excited to partner with you to make 2013-2014 memorable.

If you would like to learn more about the club checkout our website.
If you would like to join us for the road ahead, register for the club online.

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Jay Beekman:
I am extremely proud of the progress that EMDC made in just its second year in existence. The high level of student engagement in 2012-2013 is evidence of the importance of EMDC as the home for international development at Darden.

Below are some highlights from the year, including many “firsts”: 

• For the first time, EMDC created and sent out a monthly newsletter with job opportunities, events, articles, and other interesting tidbits.
• For the first time, EMDC hosted a panel at Darden’s Business in Society Conference. The “Achieving Measurable Impact in International Development” panel was expertly moderated by all-star faculty member Professor Peter Rodriguez and featured the following panelists: 
• Heather Simpson, Senior Director of the Department of Education and Child Development at Save the Children
• Dan Baker, NGO Global Programs Director at Accenture Development Partnerships
• Lisa Simutami, Senior Regional Director for East Africa at Population Services International (PSI)
• Rosario Londoño, Senior Social Innovation and Development Effectiveness Specialist at the Inter-American Investment Corporation
• For the first time, EMDC set up a Global Field Elective (GFE). A team of four students advised an association of leather shoe manufacturers in Nicaragua on an export strategy for breaking into the U.S. market and traveled to Managua over spring break to present the deliverable.
• For the first time, EMDC received funding from a source other than student dues.
• For the first time, EMDC teamed with the CDC to set up a resume drop for the International Finance Corporation’s summer internship program. Over 30 first year students applied.
• EMDC had an impressive lineup of events throughout the year:
• Lunches: 
• Dan Bierenbaum, Senior Researcher in the Batten Institute
• Frank & Veronica Warnock, Professor & Senior Lecturer and Fellow in the Batten Institute, respectively (Joint Event with Net Impact)
• Moustapha Sarhank, Postgraduate Scholar and Honorary Chairman of the Sarhank Group for Investment
• Peter Eliassen, COO of Visionspring (Joint Event with the Healthcare Club)
• Presentations:
• “African Export Successes” by Ariell Reshef, Assistant Professor in UVA’s Department of Politics (Joint Event with DABO)
• “How MBAs with Hazelnuts Changed Bhutan” by Teresa Law & Daniel Spitzer, Founders of Mountain Hazelnut Ventures (Joint Event with ABC & Net Impact)
• “Consulting in International Development” by Sarah Glass, Senior Manager at Accenture Development Partnerships
• “India and the Global Financial Crisis” by John Echeverri-Gent, Associate Professor in UVA’s Department of Politics (Joint Event with DSAS)
• “In Business for Freedom – Combatting Human Trafficking in South Asia” by Kerry Hilton, Founder of Freeset (Joint Event with DSAS & Net Impact)
• “Investing in Social Entrepreneurs to Create a World Beyond Poverty” by Jacqueline Novogratz, Founder of Acumen Fund (Several Co-Sponsors) 

The progress that EMDC made in 2012-2013 would not have been possible without the efforts of a talented and motivated leadership team. I would like to thank:

• Amram Migdal, VP of Events – Amram sourced, arranged, and managed many of the events this year
• Eugenia Delgadillo, VP of Finance – Eugenia spearheaded the GFE in Nicaragua and successfully applied for funding from a university source
• Charlie Lin, VP of Careers – Charlie researched the opportunities in EMDC’s newsletters and liaised with the CDC about pertinent career opportunities
• Isaac Salem, VP of Communications – Isaac leveraged his unique position as a joint-degree student at JHU’s SAIS to inform and compile EMDC’s monthly newsletters 

We are very all very excited to see what CJ, Rohan, Sylvester, Kyle, and Andrew have in store for EMDC in 2013-2014!

Darden Student Profiles: Changing Healthcare in Burundi

I recently sat in on a speech by Ed Freeman, where he shared about how to discover Inspiration. A particularly important point he made is to look for inspiration among those around us. For Ed, inspiration came from within his family.
As we think about the Darden Family, it seemed appropriate to look for inspiration within our family. With that in mind, I'm excited to invite our first student speaker to share a bit about his story.

- CJ (EMDC President)

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Student: Jonathan O'Conner
Co-Founder & Vice-President
LifeNet International

Jonathan, in 2008 you co-founded LifeNet International in order to deliver health solutions to the poor in Burundi.

Can you share a bit about what motivated you to launch this organization?

We started LifeNet out of a desire to better serve the global poor and for me, personally, an entrepreneurial desire to be part of a start-up. Microfinance had done wonders in helping the poor gain sustenance in food, but little had been done in healthcare. We wanted to create something that would bring healing to the poor.

I was working in investments at the time, when a mentor approached me with his idea to apply business-thinking to healthcare for the poor. We wanted to serve the poor in a way that would be sustainable (financially) and scalable (would impact a large number of people).

Launching a business is Burundi is an unusual task. What challenges did you face in bringing LifeNet to fruition?

There were two key lessons I learned in Burundi: fail fast, and persevere. Within three months of our launch we had completely failed in our idea for nurse entrepreneurs. The government regulations significantly restricted innovation in the delivery platform and many of the local nurses had much lower levels of education than we ever imagined. But we failed fast and learned faster. Within a few weeks we had another pilot launched focused on franchising existing clinics and a few months later launched our final major pilot that further honed our idea to focus on faith-based clinics, which were strategically significant in the country.

Our final model was a conversion franchise for faith-based clinics. That means, we took existing clinics and incorporated them into our franchise network to deliver nursing and businesses education, quality control, and medicine supply.

Official NGO registration with the government is required to scale your organization, import goods and the like. This process took me 16 months to complete because we refused to pay bribes. I met with everyone from the Minister of Health to the Permanent Secretary of Foreign Affairs to every administrative assistant, I believe, in the entire government (so perhaps not everyone in the government, but I did meet with a LOT of people to gain our final approval). But all the work, all the setbacks, taught me a very important lesson in not giving up.

  

How has LifeNet impacted the health system in Burundi? What challenges remain in improving healthcare delivery?

It’s incredibly exciting to see our work continue to grow. We’re now in 40 clinics and hospitals in Burundi and our network sees nearly 50,000 patient visits every month! In our first 10 clinic partners (with one year of partnership) we’ve improved the quality of care by 63% on average. In a country of 9 million people, we feel like there’s a real chance to impact their well-being.

The challenges ahead are significant. We’re still trying to increase the financial sustainability of our operations through medicine importation, but that’s a very difficult business in a developing country. There are also significant infrastructure and educational constraints that are major problems and not quickly fixed.

What prompted you to come to Darden for your MBA?

After nearly three years in Burundi our project was beginning to shift from our pilot stage to scaled growth. I felt that this was the right time for me to make a personal transition back to the US and that’s when I applied to Darden.

My work with LifeNet taught me the power of business-thinking to create value in the nonprofit space but I was always wanted something more. I saw telecoms in Burundi that were making millions in profit and yet creating tremendous social value that nobody seemed to recognize. And that’s what I wanted to do. Create businesses that generated both economic and social forms of capital and I saw Darden as a place where I could explore these ideas.

 Any advice for those planning to enter the social entrepreneurship space?

I would take Ed Freeman’s class and begin to question the social entrepreneurship heuristic. I think we should start with recognizing the problem to be solved and then trying to understand what forms of capital are required to solve it – is it philanthropic capital, patient capital, economic capital, or something else? There are a number of great nonprofits that apply business-thinking and a (very large) number of great businesses that generate social value and each are solving meaningful problems.

If you are interested in solving complex problems using non-traditional capital – philanthropic or otherwise - core business skills are crucial. My time spent in investments prior to LifeNet was invaluable. I knew how to put together a pitch book, which helped us communicate to donors. I knew how to build a financial model, which enabled us to make mid-sized loans to local clinics. So, consulting and investment backgrounds can be a huge help. Marketing also plays a big role. A good friend is an exceptional marketer and I was constantly soliciting his help.

The last qualifier is that none of this is any good unless you’re on the ground. Be willing to go move for two or three or five years to a crazy place and see what happens. You can’t learn empathy from a case. Really invest yourself in what you are doing, go co-create with your customer, and deliver a product that changes the world. 

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Jonathan O’Connor is first-year MBA student at the Darden Graduate School of Business. Prior to Darden, he was a co-founder at LifeNet International, a nonprofit that improves performance of primary care clinics and hospitals in Burundi, East Africa. Prior to launching LifeNet, he worked as an investment analyst with CNL Real Estate Advisors. During his time with CNL, he helped to originate private placement real estate funds for syndication to the retail equity markets. Prior to joining CNL, Jonathan was awarded a fellowship of the Trinity Forum Academy, a leadership academy based outside of Washington, DC. Jonathan will spend his summer as an associate at New City Capital, a private-equity firm based in Charlottesville, Virginia. 

The Poor are Human too!

Why did I choose a picture of shoes?

If you're shopping in an Indian metro, a pair of shoes will cost you ~INR 2000. If you buy your shoes on the street-side stall they'll cost your ~INR 200. Given how ubiquitous these stalls are, you'll find access to a massive selection at almost any market, and you'll never find it hard to get personal service. In fact, if you happen to look like a tourist, you'll likely be mobbed by stall owners selling their wares, with deep discounts on offer if you know how to bargain. If you're 1 of India's poor billion, you likely shop here.

Inversely, if you walk into the middle-class malls in Indian's growing urban centers, you'll pay a fixed price and choose from a limited inventory. You might find 2-3 sales people, who depending on their salary structure may have little incentive to lavish service on you. If you're looking to distinguish yourself as the middle class, then you might shop at such a store.

What's the dichotomy here?

If I'm interpreting this correctly, the street side stalls offer more convenient service at a faction of the price of the name brands. The material might not be as soft, and perhaps the fit not as snug, but if you (like any poor person) are price sensitive, then who cares? The mall has nothing to offer you. There is no clear motive to move upmarket. So why do so many development-focused firms pretend that there is?

What does this mean for Walmart?

Walmart might the latest foreign investor to try its luck in making money at the bottom of the pyramid. Since C.K. Prahalad published his ground-breaking article in 2004, hundreds of companies have taken the bait. There have been some inspiring success stories; most notably the telecom revolution led by Reliance in India and others elsewhere.

But the critical reason that Reliance succeeded where others failed might be due to an absence of alternatives. Cellphones never competed with land-lines for the poor. Cellphones never competed with a postal system or telegraph geared to serve the poor. Cellphones were a disruptive marketing-making technology that changed lives.

This is not the Walmart story. Walmart will be competing with every local food and grain vendor in India for market share. If Walmart plans to make its fortune selling to India's huddled masses, then it must do so by undercutting the local street stall. Inflation and rising food prices might help Walmart out, but only so far. Eventually, Walmart must sell food that meets a certain standard and pay its employers a certain wage. It must pay accountants and HR and marketing and any number of overhead expenses. The street side competition faces no such constraints.

If the battle is for price, then Walmart's outlook might be grim.


What does this mean for the Poor?

The fundamental flaw is that we make products for the poor but forget to actually market to them. We forget that, just like us, they have a slew of options they are choosing from and preferences that shape their decisions. The challenge is that their decision set might be a far cry from ours. You can create sanitation systems for the poor that eliminate disease and increase life expectancy. But as long as the systems costs more than taking a shit on the road-side, what incentive do they have to change?

Our problem might be than in our rush to help the poor, we treat them at "the poor". They are not "the poor". They are humans who happen to be poor. Yet they are capable of the same complexity of decision making and choice as the rest of us. The goal is NOT to make a "Fortune at the Bottom of the Pyramid". The goal is to make a Market.

Figure out their wants and needs, their set of alternatives and preferences, and then you might stand a chance of making a sale.

For more on this topic read: The Problem with the Poverty Premium

Guest Post: Thoughts on Turkey and my trip to Istanbul

Authors: by Edem Seshie
Source: Guest Post

Darden's Global Business Experiences (GBE) are an incredible opportunity to experience a new country with a group of peers. This past spring students from Darden visited countries ranging from Istanbul to South Africa and gained value experiences and insights. We asked First Year student Edem Seshie to share a bit about his experiences and what he learned during his trip to Turkey.

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The sense of new hopes rising out of old gloom is as palpable and obvious as the new architecture and skyscrapers rising out of the ruins of ancient Constantinople. There is such enthusiastic optimism among Turks about the future of Turkey, and so much of it cast in the light of Turkey returning to its former glory in a modern world, that you might just be left feeling like most people recall the glory of the Ottoman empire from memory rather than envision it from history.

But it is not hard to see why! Circled by what is left of the Roman walls that used to protect Constantinople from invaders, Istanbul is an orchestra of old and new tones; Timeless monuments and their stumps blend rather comfortably with modern glass as dual carriage roads run under roman aqueducts and turn unexpectedly into narrow pavements that were probably made for horses and carriages but now serve as shortcuts around traffic for knowing locals.

Within walking distance of each lie the exaggerated magnificence of the Blue mosque and the underestimated mystique of the Hagia Sophia, while the engineering genius of the Justinian cisterns offers a practical contrast to the celestial aura of such iconic religious edifices… But Turkey is not all about old monuments and new physical structures. I went to Turkey as much to see what an emerging market looked and felt like while it was still emerging as to see the vestiges of an ancient civilization. 

Turkey is probably better known today for Turkish airlines than for its rich history.

Turkey is doing well for itself, recovering from successive financial crises of its own, it has not failed to learn the lessons that come out of a crises; in fact some thought leaders hold the opinion that those crises saved Turkey from itself. I agree.

Today Turkey holds itself to and meets the Maastricht criteria while most of the countries that developed it are yet to follow. It also has a very well regulated banking sector. The state is exiting most of the businesses it controls even though it still retains some interest in most. At a nominal growth rate of 7.4% in 2012, Turkish GDP continues to grow fast and incomes have nearly doubled in the last decade.

The banking sector remains a large component of Turkish GDP, with private sector credit at nearly 70% of GDP in 2011 according to the WorldBank. Agriculture remains the largest employer, accounting for roughly 30% of employment, and while economic institutions are credited with doing a good job of monetary policy, Turkey's reliance on oil imports means there are powerful exogenous pulls on inflation beyond monetary policy. 

Women are a very active part of Turkish economy; the largest bank in Turkey has more female employees than male employees, and not just in low to middle management positions.

Some of Turkey's bolder ambitions include replacing Dubai as the new financial hub of the Middle East. It also includes a new international airport at a cost of 7 billion Euros and a capacity of 90 million people initially, to eventually rise to 150 million passengers a year. Europe's busiest airport (Heathrow) currently handles roughly 70 million people and the busiest airport in the world handles less than 100 million people. On the other hand, traffic at Turkey's main airport, Ataturk international airport rose by 20% to 45 million people last year alone. As to whether these are achievable ambitions or illusions of grandeur, only time will tell.

Turkey's institutions of state are now more solidly civilian and there's every reason to believe that Turkish democracy will thrive, even if the long and unending trial of some top military officials is a black box that even the most educated in Turkey are unable to see through. Things are looking good for Turkey, with a very young demographic (about 60% of the population is younger than 35), it has the second largest army in NATO and is now a more important trading partner to the USA than Russia (even though that may be due mainly to airplane imports).

With Europe mired in debt and hardly growing, most people have wondered how it benefits Turkey to join the European Union, and Turks have started asking themselves the same question; but the answer probably has more to do with politics and prestige than economics.

It seems to me thought that modern Turkey is almost all in Istanbul; this is not lost on the decision makers either, and there appears to be real efforts to extend development and education to all parts of the country. 

Maybe when one day I return to Turkey, they will be a highway from Ephesus to Istanbul and a high speed train from Istanbul to Ankara…which is the capital of Turkey!

Oh!, but that high speed train is already underway and expected to be finished in 2014.

Bye now, time for a boat cruise on the Bosphorus and a dinner with the Usman's later!

Ottoman is the western European mispronunciation of Usman that stuck with the empire.

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Edem is an entrepreneur with experience in investment management. A native from Ghana , he is a poet and a quant, and plays a mean game of chess.

Are MBAs a bad fit for start-ups?

Authors: by Chirag Jain
Source: Emerging Markets Development Club

WSJ recently posted an article by Vivek Wadhwa, a professor at Duke University, title Why I don't advise startups to higher M.B.A's. The thrust of the article was that the skills and frameworks that these programs encourage are a bad fit for the current climate of rapid evolution in the start-up space. While the logic seems reasonable and the arguments occasionally ring true, this begs a far larger question.

Why do I see so many existing and aspiring entrepreneurs in my MBA classes?

Have these students been deceived? Are they sinking massive sums of money based on false promises? Our culture is replete with a pantheon of entrepreneurial rock stars who have ascended corporate america without a masters on their resume. One can argue that reality is the best teacher, and the best and cheapest education we can find is the failures and successes of trial and error. From Malcolm Gladwell to Socrates, we have seen the value of practice and real-world experimentation in driving true learning. So why enter the ivory towers of a 2-year degree churning institution? If you want to start an enterprise (socially driven or not) just do it! How many avid entrepreneurs have entered an MBA program, only to be lured by the fat compensation offered by larger corporations?

While hardly a comprehensive response I'll offer one thought that might content the above sentiment.

  "Learn from the mistakes of others. You can't live long enough to make them all yourself"

- Elenor Roosevelt

The best things you'll learn during your MBA will come from the hard won experience of your peers and faculty. More than a deep curriculum, it is the deeper insights of a collaborative institution that will make you a more complete leader, and in some ways a more complete person.

I'm not saying that an MBA is the best option, and perhaps here is where all you current entrepreneurs  BVIP and Incubator entrants and EVCC members can chime in. I'll ask you to read a post by our Dean Bruner that includes his own thoughts on this topic. 

If you had to do it all over again, would you do anything different?

What helped? What hurt?

What can we do better?