My Experiences as a Social Entrepreneur in Developing Countries. ~ Tiez Kroezen

Via on Feb 3, 2012

Introduction:

elephantjournal.com is honored to support the Unreasonable Institute as media partner.

In the months leading up to this summer’s Unreasonable Institute 2012 (our founder Waylon Lewis is one of the mentors), once every two weeks, we’ll share the story of one of the savvy social-good entrepreneurs who—with the support of their community—came from around the world to attend last summer’s Unreasonable Institute.

If you enjoy these stories of inspiration and elbow grease, please share with your community, or leave a comment for the entrepreneur. Consider it a way of tying yourself in a little with some important, fun, good karma. ~ Waylon Lewis, ed.

~

It is September 27, 2004. I am sitting on a plane from Amsterdam to Accra. Ahead of me is a future as a social entrepreneur in Ghana.

Behind me is my wife and two young children, who I won’t see for three months, and a well-paid consulting job from which I resigned two weeks before. How did I get on that plane and how did my life as a social entrepreneur develop?

The Seeds for Social Entrepreneurship

My father was meant to become a priest. However, well into his seminary education, he stepped out and decided to study economics. He spent most of his career working as a banker (when that was still considered an honorable profession). In is work as a banker and also through board membership for several charities, he never lost side of what initially drove him to priesthood: his social involvement and his will to make the world a little better. This approach to live was handed over to me and my brother and sisters. We were brought up with the idea that every person in the world is worthy and should be treated respectfully and with an open mind. Where people needed help, we should try to give it.

I grew up in Haarlem, a mid-sized city in The Netherlands (Harlem in NYC was named after it) as the third of four children. I was a good student, albeit lazy at times. And I had strong principles, which would occasionally drive my parents and teachers mad. After my secondary school, I decided to go to university and study management and IT. I graduated in 1987 and, after traveling for three months through Brazil, found a job as a consultant at Andersen Consulting (now called Accenture). At Andersen Consulting, I was able to build a lot of knowledge and skills in how to run a business. During these years Nicole (my girlfriend at the time and now my wife) and I went backpacking to a developing country each year. We visited Malaysia, Indonesia, China, India, Nepal and Ecuador.

These journeys gave as an insight into how most of the world’s population is struggling to survive. We realized how lucky we were to grow up in a rich, developed country.

My brother studied development economics and went to Africa and later South-America to do development work. Visiting him gave me an idea of the challenges of bringing development to poor countries.

A Meaningful Life

I built a good career as a management consultant for 15 years. I had interesting work, a good salary, a nice company car and the future looked bright. However, all these years there was this idea deep down in my mind that I wanted to work in a developing country and do something more meaningful than consulting for big multinationals. In the meantime, Nicole and I got married and had two sons.

Then an opportunity emerged to set-up a company in Ghana.

Nicole and I had a long discussion about it: We had never been in Africa. What about healthcare? How about education for our children? What to do with our house?

These were just some of the questions coming up. Despite the risks and uncertainties, we decided to take the plunge. I quit my consulting job. Nicole, who had gone back to school to become a teacher, got approval to finish her education in Ghana. Our sons, four and six years old, could not believe that we were really going to live in ‘the continent of lions and elephants.’

On September 27, 2004 I found myself on the plane to Accra.

 The Ghana Experience

We spent three years in Ghana, living in Tamale, the biggest city in the northern part of the country a long day’s drive away from the capital Accra. I set-up Savanna Farmers Marketing Company (SFMC) together with a local team. This company is linking small-scale farmers to the market in order to generate a better income for them and their families.

Meanwhile, as a family, we had to re-invent how to live our daily lives in a totally new environment. Where to buy our food, what to do when there is no electricity or water from the tab (which happened all the time) and how to interact with the local people that were very friendly yet completely different from what we were used to?

The first year of building the company was tough. Farmers were violating the contract they signed with us on a massive scale because they got a better deal elsewhere. As a consequence, we could not meet our contractual obligations to our customers, some of whom we had to pay penalties. Learning these hard lessons and seeing our small start-up capital quickly drying up, we made some changes in our business model when moving into the second year. Fortunately there was improvement and we were able to report a small profit.

When I left in 2007, the company was linking 5,000 small-scale farmers to local and international processing companies, including Guinness. It strengthened my conviction that business, when done in a responsible manner, is probably the most efficient and certainly the most sustainable form of development.

Instead of donating money for education and healthcare, business allows people to earn an income allowing them to take care of these expenses themselves. Imagine what this does to their self-esteem and pride!

During my last year in Ghana, I got involved with starting up another social venture in The Netherlands called FairMatch Support. This organization develops supply chains for sustainable food products from developing countries to the European market. An interesting idea, because for most sustainable food products, there is more demand than supply. Suppliers in developing countries are not aware of this market opportunity or they lack the capabilities to serve this market. FairMatch Support builds the bridge between companies involved in the supply chain and NGOs that provide the support to the producers that is needed to make the supply chains work. Unfortunately, the chemistry in our team was lacking, which made me decide to step-out after a year.

A Choice to Make

At this point I took some time to reflect on my career. Should I go back to consulting, a profession I had successfully had for 15 years, or should I stick to social entrepreneurship and try to have an impact? The choice wasn’t easy. Consulting provides the excitement of working with the best and brightest on challenges that really matter to large companies. On top of that, it comes with a nice package. Social entrepreneurship is more uncertain, pays far less, but provides the opportunity to be an entrepreneur and make a positive impact on some of the most pressing problems in the world. I decided to go for social entrepreneurship, whilst trying to make a decent living.

NICE Business

In October 2008, I accepted the position of Managing Director of NICE International. NICE International had been established 2 years before by Energy4All Foundation together with sustainable energy multinational Econcern. NICE is a business concept for solar-powered IT-centers that provide the local people in developing countries with affordable access to energy, IT, Internet and related services such as education. When I joined, we had a small country organization and two pilot NICE-centers operating in The Gambia, West-Africa. The two years before I joined had been spent on getting the technology right. Computers could not stand the heat and dust, the solar systems did not produce the expected amount of electricity and the software was full of bugs. Even more concerning was the fact that the NICE-centers were making big losses every month.

I decided to put all emphasis on increasing revenues in order to test the financial viability of the concept. This strategy paid off. Within a year the pilot-centers started to report their first modest profits. This made us decide to start expansion in The Gambia. During 2009 and 2010 we were able to set-up five additional centers. We also introduced a franchise-model allowing local entrepreneurs to operate the NICE-centers. This was an instant success. The first franchisee, who had been running an Internet-café before, doubled his sales within 3 months and he took over one of our pilot-centers after 6 months.

Living on the Edge

But other challenges came up. Econcern, the mother company of NICE, went bankrupt in 2009 following the global financial crisis. NICE was destined to go down with its mother, until we found some large companies that were willing to fund the business for some time. For two years, NICE was living on the edge of bankruptcy. It was the commitment of our teams in Europe and Africa and the support from our sponsors and donors that made the company survive through these difficult times. Although the NICE-centers were running well, the scale of the company was insufficient to cover overhead cost. We therefore had to scale-up, but this required significant funding. The funding we were getting was barely enough to survive and did certainly not enable us to grow rapidly. I talked with many potential investors but none of them were willing or able to provide the kind of funds we were looking for. In 2010 we applied for a grant from the European Union for starting-up in Tanzania and Zambia and setting up a total of 50 NICE-centers. To our own surprise, the grant was awarded on the condition that we would contribute co-funding. I managed to find three investors willing to provide the co-funding in the form of equity and convertible loans. We are now starting up the expansion project that will scale-up our business to the point of financial sustainability.

A Stubborn Fool

People often ask me what made me decide to give up my consulting-career and live the uncertain life of a social entrepreneur. My answer is that it is because I am a stubborn fool. Foolish enough to try things that many people say are impossible: building a business with thousands of illiterate, unorganized farmers in Ghana, or trying to make money with Internet in Africa, which most experts say is impossible. And I am stubborn enough to continue trying, even when things are tough. Why I am doing this? Because nothing else gives the same satisfaction as knowing that you have a positive impact on the lives of thousands of underprivileged people.

In the summer of this year, I had the opportunity to attend the Unreasonable Institute in Boulder, Colorado.

For six weeks I lived in one house with 25 other social entrepreneurs from all over the world. And every day we received visitors, consulting partners who provided training, capital partner who came looking for projects to invest in and mentors who shared their amazing stories and provided counseling. It was most encouraging to be amongst other people that do the same crazy things as I do. I wasn’t the only stubborn fool! Despite our different nationalities and backgrounds, we quickly became a family that was sharing its wins and losses and helping each other to move forward. The Unreasonable Institute provided me with the energy and encouragement to continue my journey.

My motto in life: Follow your heart and use your head! And that is probably the most important lesson that my father taught me.

About Unreasonable Institute

The Unreasonable Institute is a mentorship-driven acceleration program for entrepreneurs tackling social and environmental problems. Each year, we unite 25 entrepreneurs from every corner of the globe to live under the same roof for six weeks in Boulder, Colorado. These entrepreneurs receive training from 50 world-class mentors, ranging from the co-founder of Google.org, to the CTO of HP, to an entrepreneur who's enabled over 19 million farmers to move out of poverty. In the process, they form relationships with 20 investment funds, receive legal advice & design consulting, and pitch to hundreds of investors and partners. Check out this 3-minute trailer to get an inside peak! Feeling a bit Unreasonable? Apply Today!

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2 Responses to “My Experiences as a Social Entrepreneur in Developing Countries. ~ Tiez Kroezen”

  1. nathan says:

    So, who are the people being served by this? What is the actual impact, as opposed to some feel good abstraction? This piece is almost all about the author, and "the good he's doing." The little bit we learn about folks in Ghana is simplistic stereotypes. I'm not impressed.

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