Getting Away from it All

Wow, is it really the middle November already?  Even in the tranquil Ecuadorian Amazon, time seems to fly right by. It’s probably because there’s never a dull moment here at Yachana – any given week is a mix of meetings with social entrepreneurs, business workshops at the high school, the occasional Kichwa lesson, and tending to my ever-present bug bites.  But those aren’t the only things that make the time pass “rapidamente” here:  add extreme rural isolation and lack of modern infrastructure to any of the above activities and they immediately take twice as long, and thus make your day about twice as short.

Por ejemplo, want to do laundry before your important big-city meeting tomorrow?  No can do muchacho.   Laundry takes about 3 days in the Amazon; that’s ½ a day to hand wash and at least 2 ½ days to air dry thanks to the constant 98% humidity.  Want to dash off to Quito for a quick afternoon appointment?  Try again, hombre.  Even though Mondaña is only about 120 miles from Quito, it takes on average a trip across the river (5 minutes – 2 hours depending on bus schedules), followed by a 2-3 bus ride on what I refuse to consider a “road,” followed by another 5-6 hour bus ride through the winding Andes Mountains before you even reach the Quito city limits.  (Yes yes, there are planes.  But even the nearest airport is 3 hours down river.)

Communication is also a bit tricky in the jungle.  Thanks to the Yachana Lodge we have wifi, but not enough bandwidth to send large files or to make voice calls.  Sometimes you can find a bar of service on a cell phone, but chances are the signal will disappear within the first 5 minutes of your call and you’ll have to start doing what has been so aptly named “the signal dance” until you find another lonely little bar of signal somewhere else.  And while satellite phones work flawlessly, they’re very expensive and not at the disposal of the masses.

What I’m trying to say is – daily activities, and subsequently business activities, take a bit longer here in the Amazon; especially with respect to transportation and communication.  Sure, all these obstacles may sound nice to the average Western nine to five-er who’s dying “to get away from it all,” but such obstacles can seriously impede economic development and entrepreneurial activity for those who actually live “away from it all.”

Stanley wants to get away from it all

So does he.

Let’s pretend you have small crop of pineapple plants. Pineapples usually sell for a set price, regardless of how or where they are grown.  A jar of pineapple jam, however, can sell for more than triple the price than the same quantity of fresh pineapple.  The additional costs of canning the jam are minimal – corn syrup, a little sugar, maybe some spices, and glass jars. The finished canned product is a fantastic way to increase the value (and shelf-life) of many fruits and vegetables without incurring substantial costs.  And who doesn’t love fresh jam in the morning?

But now let’s pretend you have a small crop of pineapple plants and you live in Mondaña, Ecuador.  If you decide to start canning pineapple jam, the costs of glass jars and bringing the final product to market instantly increase because of difficulties in transportation.  Since you’re not connected to the electric grid, you have to continuously purchase tanks of propane gas for your stove in order pressurize and seal the jars.  And because you have no reliable way to connect with potential retail customers outside of Mondaña, selling your product requires personal trips to the big city to negotiate contracts.

It's a long, bumpy road for pineapple jam

Well, shoot.   As much as I love pineapple jam and want to share its sweet goodness with the rest of the world, there’s no way I would ever start a canning business in the jungle.  By the time you add up all the additional costs, not including time and effort, you’d make the same amount of profit as you would just selling the raw pineapple at the weekly market.  The lack of infrastructure in Mondaña and surrounding rural communities makes it difficult for any entrepreneur to ever achieve economies of scale with their venture.  And to think, the Amazon is literally busting at the seams with exotic fruits, medicinal plants, and rare spices and herbs that could easily be cultivated (sustainably, of course), processed, and sold throughout Ecuador and rest of the world.  Such small enterprises could substantially increase the household income of and livelihood of thousands of families.  But alas, without modern infrastructure it is simply not feasible to begin such projects.  A few cases such as Kallari Chocolate and Runa Guayusa have been successful and their positive social and environmental impact cannot be ignored.  But they are the exception, not the rule.

Many have argued that the creation of infrastructure, i.e. electricity, communication services, and the construction of roads in the Amazon are all negative things. “We’re encouraging deforestation,” “we’re replacing century-old traditions with Facebook,” “we’re ruining the sunset over the Napo River with electric poles,” and the list goes on.  While all of these are extremely valid and very serious concerns, at what point do we have the right to tell the citizens of the Amazon that they can’t have a decently paved road or a functional communication system if they want them?

As much as many Americans are itching to “get away from it all” and escape to pristine pockets of natural beauty such as the Amazon, many rural families and communities in the Amazon are literally desperate to “get away from it all” …All being the difficulties in transport, little access to basic goods and services, and isolation from international commercial markets.   I first noticed the extremity of these crisscrossing sentiments while traveling back to Yachana from Quito the other day.

Agua Santa, the community across the river from Yachana, has recently received road access and is now connected to a major national highway.   With this road it is actually possible to drive 99% of the way to Yachana, and bus service in and out of Agua Santa to other major cities has also recently commenced.  The conversation I witnessed went as follows:

Gringo: (In a melancholy, somber, and every other depressing adjective tone of voice) “I heard they built a road from Tena to Agua Santa.”

Amazon local: (In an “I just welcomed my first born to the family” tone of voice) “Yes! We have a road! Thank God!  …It’s about time.” 

So where is the line?  Of course we want everyone to have the same opportunities for economic freedom and improved standards of living.  But we also want what literally makes up the lungs of the earth to continue to provide us with clean air, bio diversity, and countless other environmental services.

I’m pretty sure someone could win the Nobel peace prize for figuring out this not-so-little problem.  Until then, Ecuador and countless other emerging markets could sure use any ideas and suggestions!

Photo credits:

Village Capital-ito, Part Dos

I left off in my last post describing the mini Village Capital program that we were in the process of piloting at Yachana High School. (Need a refresher?) After 3 weeks of intense business planning, slight confusion, intermittent frustration, and lots of learning on both ends, we selected a winning social enterprise! Of course everyone is a winner in Village Capital-ito, which is evident in the 8 sophomores who can now rattle off the importance of a value proposition and the difference between startup and overhead costs.. However Gina and Manual of “Nuevo Amanecer” (A New Day), an organic fertilizer company, came out as clear winners by receiving over 60% of first place votes by their peers and teachers.

Gina and Manuel of "Nuevo Amanecer," an organic fertilizer company

Now I want you to think of all 16 year olds you know… think any given pair of them could come up with feasible social enterprise in 3 weeks? As I’m sure you can imagine, I was left completely jaw-dropped and speechless after listening to each group’s final presentation. True, I led them through a few workshops beforehand on business modeling and how to calculate costs over time, etc… but I can’t possibly take credit for how well each group performed. These kids have business savvy in their genes.

The business model canvas, jungle-fied.

In general Ecuadorians are extremely entrepreneurial, occupying the 7th place for total entrepreneurship activity (TEA) in the world. However, the majority of Ecuadorian entrepreneurial activity is necessity-based (due lack of other employment options) rather than opportunity-based (starting a new venture despite available employment options). But after having witnessed such stellar business plans from students who had just learned the meaning of “profit model” and how to calculate a percentage, it’s evident that this ratio is nearing a tipping point.  Watch out, world… my confidence in Ecuador’s entrepreneurial talent is stronger than ever.

As always, I’m getting ahead of myself. How did Village Capital-ito actually go down? Before turning all the Yachana students into wildly successful social entrepreneurs, we had to start with the basics. The program kicked off with a brief lesson on business modeling, followed by a giant brainstorm

"Lluvia de ideas"

of the best and the worst of the Ecuadorian Amazon; everything from Kichwa culture, fried yucca and our favorite animals to deforestation, pollution, and extreme poverty. The students later broke into teams based on mutual interests from what turned into a brain-downpour of needs and opportunities within the region. Each team was then tasked with creating a profit-generating business around their chosen social opportunity / need using the resources that are immediately available in the Amazon.

Sounds like a tall order, but these chicos rose to the challenge and then some. The social enterprises that would begin to take shape from that point forward included:

  • Artesanias Regionales (Regional Handicrafts): an intermediary dedicated to providing employment and greater income to local artisans by buying their products and re-selling them in areas frequented by international visitors such as city centers, popular hotels, and tourist attractions.
  • Muchshuk Kawsay (Kichwa for ‘New Life’): a socially conscious manufacturer of Balsa figurines. Balsa wood is typical to the Amazon, and Muchshuk Kawsay plans to source their material responsibly and educate customers about the different aspects of the Amazon through various figurine designs such as plants, animals, and insects.
  • Nuevo Amanecer (A New Day): an organic fertilizer manufacturer that utilizes native plants and traditional knowledge to create 100% organic plant fertilizers. Their main objective is to prevent illness from chemical use and contamination of water sources.
  • RRR – Reducir, Reusar, y Reciclar (Reduce, Reuse, Recycle): an educational firm that sells workshops and certification programs to the governments of rural communities and towns on how to properly dispose of recyclable material and reduce waste.

Artesanias Regionales working on their business plan

Let the peer-evaluating begin!

After presenting the first drafts of their business plans the following week, we began to dive deeper into the entrepreneurial process by exploring subjects such as pricing strategies and competitive advantage. A mid-point poll was taken where students had the opportunity to openly rank, applaud, and critiqued each other’s business models. During the third and final week of instruction we incorporated some basic math to forecast operating costs and earnings after 3 years. Never before have I seen so many “light bulbs” turn on at once as when each student began to realize that they could run a lucrative business that also generated a positive social return!  Village Capital-ito was working…

Johanna busting chops during the question and answer session

When the day finally came to present their final business plans, an air of nervous and excitement circulated throughout the classroom. Each group had stayed up late the night before to place the finishing touches on their marketing materials, financial projections, and oral presentations (the only reason I know this is because my room is right next to the library and our inch-thick walls do little to muffle noise. Mental note for anyone who comes to work at Yachana: don’t pick the room closest to where all the late-night homework takes place). After each team had successfully presented, the students were asked to rank each enterprises from 1 – 4 based on feasibility, potential social impact, and projected financial return. In previous Village Capital programs around the world, usually 1 – 2 particpating enterprises receive the majority of peer votes. So as was expected, one enterprise from Village Capital-ito came out as the clear favorite: Nuevo Amanecer.

While I’m definitely going to consider this first go-around a success, there were lots of lessons learned along the way. For instance, Latin American culture places a high importance on hierarchies – students are below the teachers which are below the principal, etc. When I told the students that they themselves would be evaluating each other’s business plans, you would have thought I told them the sky is red. After we conquered that hurdle, even greater confusion ensued when I told them “there are no wrong answers in brainstorming.” I won’t go into too much detail, but the Ecuadorian public education system is (sadly) built around rote learning; the teacher dictates the facts and the students copy, repeat, and memorize regardless of whether or not they understand what they’re “learning.”

Needless to say, I think some of the students began to doubt my own intelligence since I refused to grade their work or feed them answers. But that’s okay. I’m happy to play the part of the crazy gringa so long as projects like RRR, Nuevo Amanecer, Muchshuk Kawsay and Artesanias Regionales keep coming up in our future Village Capital-ito programs 🙂

Successful Village Capital-ito grads! Joined by the crazy gingo teachers