We’re flying by the seat of our pants down here in Ecuador these days. Lots of last minute meetings, travel plans, school changes, misunderstandings, and project alterations.  Honestly, it’s been a roller coaster and I’m just now starting to “enjoy the ride.”  For those who know me well, you can imagine it took some time for me to forego my google calendar that schedules my day in 15 minute increments and the notion that I could expect a meeting to start on time.

It’s quickly becoming apparent, however, that Ecuador has operated this way for quite some time and more importantly, doesn’t really see anything wrong with it.  Granted, spontaneity, complete neglect of foresight, and living in the moment each have their perks.  Little setbacks here are commonly followed by a mere “meh” or “oops.”  And In the words of my favorite entrepreneur in Ecuador, Douglas McMeekin – founder and president of Yachana, “If I sat around and took the time to 100% think through it all (all being the entire Yahana Foundation) it would have never gotten done.”  That may be true…

But over the past few weeks I’ve seen how the “go with the flow” Ecuadorian mentality can also lead to major inefficiencies, organizational setbacks, and most importantly, loss of opportunity.  Perhaps it’s the cultural tendency to think mostly in the “short term,” or Ecuador’s age-old habit of making quick fire decisions without really, well… thinking or communicating (i.e. throwing out 7 presidents in 10 years without stopping to wonder how that may look to investors wanting to invest in a “politically stable” country).

Below you’ll find three “Oops” instances from my first month in Ecuador that may help to illustrate exactly what I’m talking about.  They each vary in the severity of their consequences, but all could have possibly been prevented with a little previsto (foresight), planificación a largo plazo (long-term planning), rendición de cuentas (accountability), and comunicación (I shouldn’t have to translate this one….).  I really don’t know if Ecuadorians will ever adopt such practices, nor do I think it’s anyone’s place to tell them they should.  But the consequences are difficult ignore, and if left ignored Ecuador will continue to struggle in its effort to transition from an emerging market to one that is developed, self-sustaining, and thriving; not to mention delay the interest of impact investors who so whole-heartedly want to see countries like Ecuador realize their hidden potential.

Example 1

I walk up to a friend from Mondana (community where Yachana is located) and notice that the strap of her cotton bag is becoming unraveled and hanging on by a thread.

Me: I notice your bag is becoming unraveled.  I know how to fix it if you have some thread and a needle. Want me to help?

Girl: Oh yes, it’s been unraveling for a few days now.  But no thanks, I’ll just wait and fix it when it breaks.

Me:  Well if you want I could fix the tear and reinforce the rest of the strap, that way it will last longer and you won’t have to worry about fixing it if it breaks while you’re away from home.

Girl: Really? You know how to do that?  How interesting.  Thanks, but it’s still not broken yet.  I’ll just wait. 

Me: ………

I haven’t seen her in a few days, but I can guarantee that strap has surely broken by now.  And I doubt she was carrying around a needle and thread, because that would be downright crazy…

Example 2

My friends and I are about to cook dinner at our hostel in Tena, and have invited a few amigos who were staying elsewhere to join us.  The kitchen is outdoors, in a common area, and open to hotel guests.  Out of respect we thought we would mention to the hostel owner that we would be having some friends over.

Us: Señora, we´ve invited some friends over for dinner and wanted to let you know.  We’ll be very quiet and clean up after everything.  Your outdoor kitchen is amazing and we’d love to show our friends.

Señora: What? No, only guests can use the kitchen.  Your friends cannot come. I built that kitchen for paying customers only.  (she finally allowed our friends to come over, but only because I think she felt bad that we had already bought all the food…)

Obviously I’m not about to tell a Señora how to run her business.  But the kitchen has been built and is therefore a sunk cost.  Allowing a few non-customers to enjoy the space alongside hotel guests would not have cost the owner a single extra penny.  In fact, by allowing friends of guests to enjoy the hostel’s new common spaces she is essentially employing more mouths to spread the word about her business for free!  You can’t buy that kind of word-of-mouth publicity in the tourism industry.  But the curse of the short-sighted Ecuadorian business owner continues….

Example 3

This example is perhaps the most heartbreaking of all, but it also represents a wonderful lesson in communication, accountability, and organizational sustainability.

At Yachana, which is a considerably well-run organization compared to others in Ecuador, I’m still a little confused as to who exactly is in charge of what, and what exactly each department is responsible for at the lodge.  This became even more apparent after a serious storm this past Sunday when the Napo River rose so high and grew so wide that low-lying houses, buildings and moored boats were in serious danger.



As soon as river started to rise early Sunday morning, boat owners from around the community began to bring their canoes to higher, more secure ground.  And rightfully so – since there are no roads and the community relies on its canoes to travel to/from the market, school, and elsewhere.  But what about Yachana’s boat – the 30-person, dual-motor, covered fiber-glass canoe that brings tourists (aka income) in and out of Yachana multiple times a week? Who is responsible for keeping that boat safe? The hotel manager?  The higher ups in Quito? Whichever boat operator is on duty?

By about mid-day, the river was raging.  Actual trees were being ripped out of the ground and carried down the river.  By the time Yachana’s boat operator decided he should probably move the boat to safer ground, it was too late.  Upon trying to nudge the boat into a small cove, the current caught the tail end of the canoe and whipped it around horizontally so that the whole boat was sideways.  Unable to regain control against the current, the boat was forced against a tree and endured hours of river-beating until it was actually flipped upside down from the force of the current.

Bye-Bye, boat.

While witnessing this tragedy I had an enlightening conversation with one of the lodge’s staff members…

Me: Who is in charge of keeping the boat safe?

Staff member: I’m not really sure.

Me:  Oh.  Well who will tell the hotel management in Quito the boat is destroyed?

Staff member: I’m not really sure.

Me: Oh. Is boat insurance available in Ecuador?

Staff member: (laughing) I’m not really sure, but probably not.

Me: Uh oh.  So who pays when something like this happens?

Staff member: I’m not really sure.

Me: And how often does the river flood like this?

Staff member: Oh, at least once a year. 

So essentially, it is certain that the river will show its fury at least once a year.  It’s 100% going to happen. But have measures been taken to put someone charge and establish a contingency plan in the event the river tears up more than just trees?  Nope.

Mental note – there is a business opportunity in the boat insurance industry in Ecuador.

Hay un Chevrolet Para Todos

“There’s a Chevrolet for everyone, ” read an advertisement at one of the many car dealships that are popping up in downtown Quito. My immediate thought after reading that was, “Good Lord I hope not….” Don’t get me wrong – I don’t have anything against Chevrolet, nor do I really know that much about the company. But what I do know is that never in my life have I seen more traffic (and I’m from Chicago… the land of endless construction) than what I’ve witnessed over the past few days in metro-Quito. On my way home that same day while sitting in more traffic, I saw an advertisment that said “Compra Petro-Ecuador” (Buy Ecuadorian petroleum), and later that night I watched a public service advertisement practically beg Ecuadorians to vote AGAINST drilling for oil in the Yasuni National Forest. Now Ecuador, I know you need to dream big… but how you ‘gonna put every one of your 14 million citizens in a Chevy, ask them to buy Ecuadorian gasoline (which is in limited supply as it is), and all the while cease drilling for more oil in your precious forests?? Looks like Ecuador is about to (if they haven’t already) find themselves in a sticky situation. Let’s dive in a bit deeper…

4 years ago when I was studying here, it took about 15-20 minutes to get from my town of Cumbaya to Quito – a distance of about 10 miles. Not bad, right? Today, on my way to Quito, it took 15 minutes to move less than… wait for it… a QUARTER MILE! Is this for real?? Needless to say I was incredibly late for my appointment, even according to Latin time. Traffic is pretty standard in most big cities, and I get that. But Ecuador’s population has only grown by less than 2% in the past 10 years, and mostly in rural areas. So how is it that all this traffic came about (not to mention, increased greenhouse gas emissions less than 50 miles from the edge of the world’s lungs…aka the Amazon rainforest)?

Well, as is happening in a lot of emerging markets that have experienced economic growth from oil exportation, consumerism is the new fashion drug. If you can afford a car, or at least the loan payments that Ecuadorian banks will gladly offer you at criminal interest rates, then you mostly have a car or two. Public transportation? Forget it… Why ride with those of a lower economic status when you can turn a blind eye to the have-nots and relax in an air conditioned car (when its sunny and 65 outside) listening to American one hit wonders from the 80’s? No, no, no… you would not be caught dead on a public bus. As my host brother relayed to me this morning, having a nice car for everyone who drives in your family is a status symbol. For instance, if you have two children both of driving age who go to the same university, they’ll probably each take their own cars to school. (I know this happens in the US as well, and I don’t agree with it there, either).

Now the busses in Ecuador aren’t exactly the nicest vehicles you’ve ever seen. They can be very crowded and loud. But they’re cheap ($0.25 a ride), get you pretty much everywhere you need to go, and yesterday got me to my appointment sooner than any car could have since most busses have their own lane.

In Ecuador’s defense, they did try to implement a program called “Pico y Placa.” This program basically dictates which days your car can ciruclate in Quito during rush hour (pico), based on the last number on your license plate (placa). In theory, it sounds good. But in practice, instead of taking the bus on certain days of the week, those who could afford it just bought another car or two making sure the license plates allowed them to drive all days.

Some of you might be asking why they just don’t widen the roads? While this is definitely an option in certain places, and its being done.  But Quito rests in the middle of the Andes mountains, with the surrounding metro area below in the valley. To get up to Quito is to take a series of switchbacks…. and when was the last time you saw a 6-lane switchback up a mountain?

The worse thing of all of this is that because of all the traffic, it takes the the city busses that go between the valley and Quito a longer time to complete each route. And because each bus now can’t pick up as many passengers in a day as it used to, there are talks of raising bus fares to compensate for the loss in profits. The majority of people who ride the bus are of the lowest economic class in Quito. A fare increase for them means a decrease in the little expendable income they have for themselves and their families. This alone is one of the many factors that assists in widening the gap between the rich and the poor in Ecuador.

While there is a solution to this traffic problem, it’s not a simple one. I’ll most certainly be thinking about it on my way to Coca (in the Amazon!) tomorrow morning. The next time you’ll hear from me I’ll probably be writing from my hammock overlooking the Napo river. As always, sending muchos besos y abrazos!

Wait, what again are you doing in Ecuador?

…. I seem to get this question a lot.  Don’t tell anyone, but even though I’ve already been here in Ecuador for a few days, I still don’t really know the complete answer.  I would imagine that if you placed all the people to whom I’ve given some sort of answer in a room together, you’d probably think I have multiple personalities.  Given the many stakeholders, deliverables, and project tasks that have been tossed up over the past few months, the possibilities for what I’ll actually accomplish are endless (and quite frankly, a little overwhelming).

Therefore – to clear it all up for you guys and myself, I’m going to use this space for some good old fashioned project organization.  I was inspired last week by little sister’s first week in high school Chemistry where they learned how to write up a proper lab experiment.  And since my project here is quite experimental in itself.. I think that’s precisely the format I’ll use to relay to you, my loving public, and to myself what the heck I’m doing down here.  So here ‘goes..

Background: One of the greatest things to come out of the development/NGO/social enterprise/foreign aid/do-gooder space in the past 10 years (in my opinion) is impact investment. What is impact investment you ask? As one of my classmates used to say, that’s a GREAT question. In my own words, impact investment is the flow of capital (cash) from a social investor to a social entrepreneur with the intention that this injection of capital allow the entrepreneur’s enterprise to scale and grow not only in revenue, but also in social impact. If this defintion doesn’t do it for you, check out this, and this .  Oh and this too!

Now some of you critical thinkers out there might be wondering what I mean by “social.” And my response is – what does it mean to you? For some investors, social impact may come in the form of clean energy, last-mile power distribution, or employment. For others, it could mean access to healthcare, affordable basic goods and services, or education. For instance, First Light Ventures aims to invest in companies that provide affordable basic goods and services to impoverished individuals.

So far, impact investment has made wonderful headway in the United States. And while we in the US definitely have our own social problems, there are BILLIONS of people in the world living below the poverty line, many of whom live in emerging markets. Foreign aid efforts have been proven inefficient, and microfinance for the most part is geared toward individuals. Impact investment allows social entrepreneurs who would otherwise be overlooked by traditional investors the chance to play in the venture capital space and prove that not only can they sustain a profitable business, but also one that benefits society as a whole. This leads us to the main reason for me being here….

Problem: Well, there are a lot of those out there. I’ve settled on one that is pretty all-encompassing, and we’ll go ahead and call it a challenge. Problem is such a weird word…

1) How can impact investors most effectively and efficiently channel much needed capital to social entrepreneurs in emerging markets? And more specifically, in the rural Amazon of Ecuador?

Hypothesis: The Village Capital (VilCap)  business accelerator model (more on this in a later post!) will help to harness social innovation and entrepreneurs in the Amazon region of Ecuador, and thus further promote social and ecnomic development in the region.

Methodology: Well, here I am in Ecuador so the first hurdle has been conquered. One of the biggest challenges for impact investors is actually getting to countries such as Brazil, Lebanon , Egypt or Ecuador. Not to mention, language and cultural barriers are abound in these locals, making it difficult to work effectively in a limited time contraint. Lucky for me, hablo español, I am familiar with latin culture from previous travel and educational experiences, and the kind folks at the Yachana Foundation  have agreed to host me for next 5 months in exchange for some entrepreneurship training at their high school.

So, in order to tackle this challenge I’ve been tasked to perform feasibility study, or estudio de factibilidad, on whether or not a business accelerator or some other type of medium for impact investors and social entrepreneurs to gather is possible in the Amazon region of Ecuador. And since this blog post is quickly turning into a novel… I’ll wrap it up by saying that over the next 5 months I’ll be visiting various micro enterprises and social businesses in the Amazon, venturing to existing business incubators in Ecuador to see how they run their ships, working closely with the entrepreneurship program at Yachana, and talking to anyone and everyone who will listen to my ideas 🙂

Until next time, sending you all lots of latin love 🙂