Tom Keffer: The Global Urge to Succeed

BY TOM KEFFER
December 1, 2007

As an entrepreneur, what originally attracted me to Mercy Corps was its very decentralized and innovative culture. Most non-profits I had dealt with in the past had very top-heavy organizations that were not only expensive to manage, but too static and slow to respond to the changing world. In Mercy Corps, I found an organization that mirrored the high-tech world I was used to. It was less like General Motors and more like Google: fast to innovate and believes in pushing decision making out to those in the field.

They, like many of their most successful sister organizations, have also recognized that an important component of lifting people out of poverty is community development. This is not an easy thing to do: it's far simpler to just hand out blankets, it's a whole other thing to stitch back together all the pieces of a successful community: civil society, government and private businesses. It means a lot of listening, a lot of cajoling, a lot of shrewd thinking to get groups that otherwise might not trust each other to take the many small steps necessary to rebuild after a catastrophic event.

I had a 15-year career in oceanography, mostly working on climate-related issues, after which I started a software company in Corvallis, Oregon. It was pretty successful, allowing me to start a now third career, this time more focused on non-governmental organizations (NGOs) and non-profits.

About a year and a half ago, I called up a friend of mine from my oceanographic days, Paul Dudley Hart, who works at Mercy Corps, and said, "I'm bored. What can I do to help?" He encouraged me to take a look at a small entrepreneur-to-entrepreneur fund called the Phoenix Fund, which he had just started within Mercy Corps.

Astounding innovations and drive

The idea of the Phoenix Fund is to seek out contributions from those in the business community who had been successful as entrepreneurs, and encourage them to invest in promising small businesses in Mercy Corps project areas. We pool our money and then invite front-line managers in Mercy Corps to submit businesses proposals. We then fund the best of them, usually in amounts from $10,000 to $100,000.

In some ways it is similar to microfinance, except the projects we tend to fund are frequently much riskier. They may be in or near conflict zones, or the immediate business opportunities may not be immediately obvious. We like proposals that can act as demonstration projects, thus encouraging more traditional sources of capital if they are successful.

I can tell you, this has been an enormously fun and fulfilling project for me. I think what has really struck me is how similar the urge to be an entrepreneur is across the globe: the dream of running your own business, to be successful, to see an idea pan out. The big difference is that those of us in the developed world sit imbedded in an infrastructure that offers huge advantages that we take for granted. The urges may be the same, but the situations could hardly be more different. And yet, despite the barriers, many of these budding entrepreneurs continually astound us with their innovations and drive to be successful.

Pineapples and peaceful change

A good example is the pineapple plantation we funded in Guatemala. As part of a settlement stemming from land conflicts during the Guatemalan civil war, Mercy Corps helped broker an agreement between landowners and tenants in the Alta Verapaz region that allowed the tenant to buy the land with loans over five to seven years. Loan defaults could result in a resumption of civil war but, unfortunately, income from traditional crops (corn and beans) would not be sufficient to pay off the loans.

It wasn't obvious what to do. The Phoenix Fund grant paid for an agronomist, who looked at the situation and recommended pineapples and higher-value crops such as chili peppers. Two years ago, they planted the pineapples and last spring they had their first harvest. It was a resounding success and now the United States Agency for International Development (USAID) has agreed to replicate the model in other areas in Guatemala.

This story has all the elements of a Mercy Corps success: the land settlement was a shrewd approach that encouraged each side to have a stake in the success in the other side, thus calming tensions. It used the innate drive of entrepreneurs everywhere to provide the drive to be successful, if only given a chance. Finally, it was innovative in a risky and challenging environment, thus encouraging other, more conservative, agencies to take it the rest of the way.

Learning (sometimes hard) lessons

Of course, the flip side of entrepreneurialism and its risky dreams is failure. And we've had a few of those. If we didn't, we would not be searching out more innovative solutions.

I think our most painful is a group of women in Palestine that we supported to start an olive products factory. The idea was to use the "Palestine" branding to sell high-quality soaps, lotions, and other products at premium prices. Unfortunately, we didn't have the management consistency to see that the women got the kind of help they needed for what proved to be a difficult and sophisticated marketing challenge.

Also, we underestimated the difficulties of exporting from an occupied territory. It was heart wrenching to visit their hard-built facility, but unable to offer them many ideas for an outlet for the products they were producing.

We are now deep into year three of the Phoenix Fund and I'm proud to say that we have learned a lot. We are now starting to offer training in basic business skills to country nationals so they can spot the very best business ideas out there. Our hope is to offer a reliable source of funds and expertise to help make these budding entrepreneurs as successful as they can be - everywhere Mercy Corps operates.

Next in this series: William Early: Education for the Global Economy

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