Monthly Archives: November 2011

A Tale of a Customer Service Revolution

Posted on by
Reply

Last weekend I went to Tena with the other Yachana volunteers. Even though it’s still in the jungle, Tena is a fairly large city and serves as the gateway between the Andes and Amazon. While it was nice to get some R&R, escape the bugs (though they found me in Tena, too) and take advantage of fast(er) internet, the main purposes of my quick weekend getaway was to bask in the awesomeness that is electric laundry services. In case you missed it earlier, it literally takes DAYS to do laundry in the jungle. And since everything is always damp and border-line musty, I’ve developed an obsession with washing as many clothes as possible whenever I have access to functioning washing machines and dryers.

So literally the second my friend Amanda and I set foot in the “metropolis” of Tena we went off in search of a lavanderia, or “laundry service.”  I honestly can put into words how stoked I was to have REALLY clean clothes.  We first tried the lavanderia we had used during our previous visit which, according to the larger-than-life sign outside, was just started with the help of a micro-credit cooperative. I must admit I enjoyed the thought of supporting a new venture, especially one that I personally had a need for. As we ascended the steps, I began to notice the absence of whirring spin cycles and dryer buzzers. Worry quickly turned into slight panic. They were closed. Not even a “back in 5” sign was to be found.

But how!? Why!? Their monstrous sign clearly states they should be open at this perfectly normal business hour of 3:00 pm. Confused and devastated, we lugged our jungle-y clothes back to our hostel pondering the fact that it was really no surprise to find a business NOT observing its stated hours of operation in Ecuador. Our next attempt was recommended by our hostel owner, who quickly pointed us in the direction of her employee’s aunt’s brand new lavanderia on the other side of the street. “They’re open all day, even on Sunday!” she said. Another new business to support and they’re open? Perfect. Let’s go.

The drop-off was abnormally smooth. A young boy assured us he could take the “jungle-ness” out of clothes and sent us on our way with “That will be $4.00, you can pick it up tomorrow morning” all in less than 5 minutes. In case you didn’t know, that’s equal to the speed of light in Ecuador.

Then disaster struck. Amanda and I arrived as told the following morning each with $4 in hand. There’s really nothing like clean clothes on a Saturday morning in the jungle, so we were in higher than usual spirits. But once we got back to the hostel and began to unpack, that same feeling of worry and panic consumed us immediately. We both noticed bleach spots on a few items, and then further investigation led to Amanda discovering that nearly all of her clothes had been stained… no… tortured with bleach – and not in the cool tie-dye way.

Mind you, clothes are scarce, precious resource in the jungle. As professionals we struggle to look half way decent while protecting ourselves from bugs, the sun, the heat, razor-sharp plants, and basically everything else the jungle throws our way.  And now Amanda’s wardrobe / arsenal of jungle protection had been destroyed by the bleach monster AKA our hostel owner’s employee’s aunt’s son.

“It’s okay,” we told her. “Go back with the hostel owner, explain the situation, get your $4 back and surely they’ll throw in extra to help you buy new clothes.” That’s good customer service, right? Any well-run establishment would surely own up to what was most likely an honest mistake and find a way to make it all better.The response Amanda got was a mix of the following….

“Oh mi hija, people make mistakes. Sometimes that happens. It’s not that bad. The thing is, I was away and well my son was here and he really doesn’t know any better. We can try to dye your clothes back to their original color (I’m going to have to see this to believe it…). I can’t possibly refund your money. There’s nothing I can do for you.” For those familiar with the phrase, she basically told Amanda ‘Sorry I’m not sorry.’

Amanda wasn’t taking no for an answer. “Yes, Señora. People do make mistakes and these things do happen. But it is that bad, and whoever did it should be held accountable.” The encounter ended with the lavanderia owners giving Amanda the silent treatment until she left in frustration.  Our hostel owner was just as upset as Amanda with their apathy and encouraged her to reclamar or “file a complaint” at the Tena equivalent of the Better Business Bureau first thing on Monday morning.

But even before Monday came, the customer service revolution was already catching on. News of the bleach disaster started to spread around the hostel, and even the hostel owner had begun to tell her entire circle of friends of her guest’s unfortunate tale. You can bet she won’t be sending any future guests that that lavanderia nor will her other hostel-owning friends. For the lavanderia owner, I imagine that returning Amanda’s $4 compared to losing hundreds of potential customers isn’t looking so bad anymore…

On a semi-unrelated note, I later advised a friend to use the original lavanderia Amanda and I had first tried to go to. Their enormous sign says Monday is good to go, surely it would be open. Right? Nope! Closed again. Am I surprised? Not really.

From my current and previous travels in Ecuador, I’ve learned that good customer service, by international standards, is hard to come by. As an American, I didn’t quite realize its economic value until I experienced its absence. But then I thought – The reason I always shop at certain stores, eat at select restaurants, go out of my way for my favorite coffee shops, and so on, is due in small part to cost and quality, but in larger part to their level of customer service. Good customer service costs practically nothing in the long run, and what you get in return is invaluable: loyal patrons and a positive reputation that will bring your more business than all the obnoxiously large signs in Ecuador ever could.

I’m not saying that there are zero businesses in Ecuador that practice good customer service – there are probably many and I’m sure they’re very successful. But in general, and at least in Tena, someone could make killing on a lavanderia or any other business that followed its listed hours of operation and offered a money-back guarantee to its customers.

I’ve mentioned this before, but I truly believe that Ecuador is at a tipping point with respect to economic development… I see and feel it all around me as I travel throughout the country and meet with budding entrepreneurs. Incorporating customer service best practices could not only potentially speed this process along, but also ensure its sustainability. While I can’t change the whole country over the next 2 months, I do have 10 high school juniors who are eager and willing to learn about entrepreneurship and business design. So while planning my next Village Capital-ito program, I’ve decided to add in a lesson on the other half of what makes a successful business – its customers.

This just in: As I was writing this Amanda sent an email update from Tena. While it took some perseverance, the lavanderia owners might be giving her the money back tomorrow. The Customer Service Revolution is working!

Getting Away from it All

Posted on by
Reply

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

Posted on by
1

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