Around the world, young social entrepreneurs are leading the way, rewriting the rules, and changing the world. It pays to do good.
In the far-off climes of Madagascar, an African island-nation in the emerald waters of the Indian Ocean, a tidy row of houses gleams in the sunlight. Unlike the crumbling, crowded settlements that cram nearby cities, the new single-family properties boast lawns and flagstone driveways. The interiors are modern too: Instead of latrines, there are toilets and sinks. Instead of dirt floors, there is tile. Instead of candles, there are electric lights and windows. Instead of squalor, there is order and respite.
This is not the latest manifestation of a widening gulf between rich and poor—
southern Africa has some of the greatest income inequality in the world, according to the African Development Bank—but rather, it hints of progress for a nascent middle class. Priced for families earning $400 to $1,000 per month, the new homes sell to bus drivers and chicken farmers, not to the wealthy elite.
Among the first of these residents is thirty-six-year-old Solofoniaina Andriatsimiavona Tahiry, a driver for the senate. He and his wife, Niry, swapped a one-bedroom rental apartment with no water or power for a new two-bedroom, one-bathroom home. Gone are the days of sharing a pit toilet with five other families.
“I am very happy,” Tahiry says.
“In our new home we have a quality life,” Niry adds.
Who’s driving this progress? Not an aid agency or government program but twenty-six-year-old BYU student Michael O’Day, who spends half of his time in Madagascar. O’Day founded his company, Trano Mirary, two years ago with seed money from the Marriott School’s Ballard Center for Economic Self-Reliance. It’s just one of dozens of social enterprises that have emerged from BYU to tackle poverty, disease, and other development issues around the world.
New Guard
“One of the most interesting stories in social change today is how much creative problem solving is emerging from citizens scattered far and wide who are taking it upon themselves to fix things and who, in many cases, are outperforming traditional organizations or making systems work better,” writes David Bornstein, author of How to Change the World. His book cites examples of this phenomenon in education, health care, prison reform, and more.
Bornstein defines social entrepreneurs not as “businesspeople solving social ills but people spreading new approaches—through nonprofits and businesses or within government—to address problems more successfully than in the past.” That sentiment is echoed by the Ballard Center. Crossing disciplines and locations, the center’s student innovators “break patterns, solve problems, and change perspectives.”
Social change is increasingly becoming a young person’s game. Muhammad Yunus arguably inspired a generation of changemakers through his pioneering microfinance work, which provided small loans to the rural poor. Since he won the Nobel Peace Prize in 2006, at the age of sixty-six, many people half his age have grabbed headlines for challenging the status quo in similar ways. Now Forbes highlights thirty social entrepreneurs under thirty each year. Other top publications have followed suit.
Participants in the Ballard Center’s social entrepreneurship competitions have seen plenty of press themselves. Daniel Blake and Craig Martineau—who founded organic composting company EcoScraps in 2010—have been profiled by Inc., Forbes, CNNMoney, Bloomberg BusinessWeek, and other outlets.
And why not?
“We’ve grown up during a time when social media has allowed us to connect with the world in an unprecedented way,” says Blake, now twenty-seven. “We feel connected to social problems on a personal level. We also grew up with, to one degree or another, a sense that the world is ours for the taking. So if not me, then who? Why can’t I be the one to solve the problem?”
Benchmarked Progress
For would-be problem solvers, there has never been a better time than now to set up shop. Not only are there more resources available to help—including the Ballard Center’s Social Venture Academy competition, which currently offers prize money up to $18,000—but there are also more young people equipped to solve complex problems, thanks to years of volunteerism and travel. In the words of one well-traveled prizewinner, “The world is becoming a much smaller place.”
Now in its tenth year, the Social Venture Academy was born out of a start-up competition at the Marriott School’s Rollins Center for Entrepreneurship, says Rob Tonks, a 2014 MBA grad who worked with faculty adviser Aaron Miller and others to refine the current format—a three-tiered curriculum with monetary prizes for students who pass certain benchmarks. “They’re not competing against one another,” Tonks says of the participants, “but gaining support and access to funding and mentoring.”
Often teams have an interdisciplinary background. The cofounders of 20:20 International, which provides low-cost vision treatment and eyewear in Ethiopia, will earn bachelor’s degrees in business strategy, public health, and ancient Near Eastern studies. The cofounders of Kuishi, which supports medical supply chains in Uganda, will graduate in business management, economics, and sociology.
As for the young CEO in Madagascar, O’Day switched to biological science education after first trying out business and nursing. And like a flight to the Malagasy capital of Antananarivo—via Paris or Johannesburg—it has been a winding road.
“I knew that I wanted to help the people of Madagascar, but I didn’t know how,” he says. It wasn’t until a favorite professor, Ronald Lindorf, encouraged a class of student entrepreneurs to learn by “getting out there and doing things” that O’Day started to grow wings, he says. He is now in Africa and planning to stay up to a year.
Construction Zone
Despite challenges to working in a remote corner of the globe, O’Day has committed most of his adult life to improving conditions for the people of Madagascar, a nation of twenty-two million that is smaller than Texas but bigger than California. The Delaware native served a proselytizing mission on the island at age nineteen and later started a foundation to combat poverty—an issue he sees as both cause and effect of poor housing.
“Demand is huge, and supply is next to nothing. And the problem keeps getting worse and worse and worse,” he says.
Marriott School students are taught early to identify three Ps in a business plan—pain, product, and process. Pain refers to the problem that must be solved. In O’Day’s case, that pain was a shortage of two million housing units in Madagascar, where the average worker spends half of his or her income on rent, while prices increase 5 to 10 percent per year because of inflation. Tougher still, approximately 93 percent of the urban population lives in informal settlements with little or no access to basic services, according to government data.
And yet O’Day says he learned through his volunteer efforts that a modern home costs as little as $10,000 to build—an attainable sum, but one still out of reach for his foundation, at least on a grand scale. “We realized that in order to make a difference, we needed to start a for-profit company that could actually attract capital,” he says.
So O’Day—who speaks Malagasy and French, the country’s two official languages—assembled a team of local experts to help him devise a business plan that was scalable, replicable, and impactful. But they soon hit another snag—prohibitive home financing costs. “Madagascar’s prime lending rate is 44 percent, whereas in the United States, it’s
3.5 percent,” he says. “So you have people who can build the houses and people who want to buy the houses but lack financing.”
His team—an experienced real estate developer, an appraiser, a banker, and an architect—partnered directly with Bank of Africa to offer ten- to fifteen-year loans at 15 percent (they later negotiated a twenty-year mortgage at 12 percent). Then they innovated strategies for land acquisition, housing design, community development, and partnerships to offer a price point that made it possible for people renting a house to purchase one instead. The company aimed to capture 5 percent of what it calls an “unserved and uncontested market.”
With that plan in place, O’Day entered the 2012 Social Venture Academy competition, drawing on completed coursework in entrepreneurship, international development, and nonprofit management. He was stunned when he won first place. “I couldn’t be more excited,” he told the Deseret News.
Trano Mirary, which markets itself as a “socially minded, profit-driven company,” received $13,000 in funding and a promise of $12,000 more if it implemented its plan and didn’t fold in its first year. Its first house sold six months later, and eight more have sold since, each yielding a 30 percent profit. O’Day says he hopes to scale the business from twelve homes per year to one thousand per year for the next fifteen years.
“They tell you in business school that the sooner you ask for money, the more of your company you have to give away,” he says. “I didn’t want to have investors in it just to make money. So I waited until we’d proven our model before I decided to start seeking funding.”
“I’m socially motivated for this project,” he adds.
Model Choice
For-profit or not-for-profit—it doesn’t matter. Ballard Center prizewinners have used both forms of social ventures, and even hybrids, to achieve their objectives.
This year the Social Venture Academy worked with thirty-two student teams, most of which were for-profits. Megan Baer Murff, a former student director for the academy, heads one of them.
“When you get a job, the majority of your waking hours are spent working,” says Murff, a twenty-nine-year-old Utah native who earned her MBA in April. “I’d way rather work at a cause I feel passionate about than just make money. Ideally, I can do both.”
After earning a bachelor’s from BYU, she moved to Washington, DC, to settle into the nonprofit world but ultimately turned down a job offer from a large homeless shelter to pursue other opportunities, including graduate school.
“There are a lot of great nonprofits, but they are sometimes limited by their fundraising efforts,” she said of her East Coast experience. “That’s when I started thinking, ‘I want to feel like I’m improving lives in the work I’m doing, but I also want to do it more efficiently.’ That’s when I started learning about social enterprise.”
Today, with the help of her financial analyst husband and a tireless crew of exercise wellness interns, Murff offers mom-and-baby fitness classes that she hopes will strengthen mothers and, in turn, families—a cause she supports wholeheartedly. In its infancy, her for-profit venture, Cahoots, sold thirty family memberships, and Murff continues to grow the Utah-based business even as she tends to her own baby, born just three months after her start-up opened its doors. The company name implies togetherness in purpose—as in, We’re in cahoots—says Murff.
For other Ballard Center students, self-reliance may be best achieved through the not-for-profit model, backed by solid business principles. Social Venture Academy 2014 prizewinner Melissa Sevy says Musana, the Uganda-based jewelry company she cofounded in 2009, could gross as much as $90,000 this year, which would make it sustainable for the first time. “As we’ve started to be more business-minded, we’re getting bigger sales,” she says. “We’re actually able to have a better impact.”
The firm’s thirty-year-old Ugandan manager, Tina Kyambadde, adds that Musana also teaches its twenty-one artisans—mostly single mothers—skills in entrepreneurship, health, English, and literacy. “We want women to start their own businesses and become independent,” she says via Skype from her home east of Kampala. “Most are developing small businesses.”
For current and future social entrepreneurs, especially those who will pass through the Ballard Center while studying at BYU, the question isn’t one about for-profit models versus not-for-profit models.
“The question is, how do we find, elicit, nurture, and harness the talents of millions of potential changemakers for the greatest good?” Bornstein asks. “It’s not just a question for would-be social entrepreneurs. It’s relevant for policy makers, managers, educators, parents—and ourselves. Many of us have little idea of our own change-making potential. We may be in for a surprise.”
School of Thought
Paraguay is a land of haves and have-nots. Though its economy grew faster than any other Latin American country last year, a quarter of its people still live in poverty—down from almost half in 2006, according to the World Bank.
Jeremi Brewer, a Peery Fellow at the Ballard Center for Economic Self-Reliance, has seen this kind of income inequality not only in Paraguay, where he has lived with his wife and two daughters since June of this year, but also in Mexico and Brazil, where he studied what he calls “necessity entrepreneurs” as a doctoral student at Texas A&M University.
Across the continent, “the economic opportunity is the same,” he says. “There are tens of millions of people who have started a small business because they have no other viable option to provide for their families.” He adds that most of these countries enforce policies that make it very hard for individuals to grow small enterprises.
Brewer, age twenty-nine, has already founded the Ballard Center’s Microenterprise Education Initiative, as well as schools in Mexico City and Texas. Now he has relocated to the Paraguayan capital of Asunción in the heart of South America to launch a business education center that aims to impact 7,200 people in its first year and tens of thousands after that.
The for-profit company, Elevate Global, offers courses in entrepreneurship and English as a second language. But the courses aren’t free as a matter of principle. “It forces individuals to sacrifice so that it means more to them,” Brewer says of his students, who hail from low-income and lower-middle-income families.
The new, privately financed initiative owes its early success to many stakeholders, including Fundación Paraguaya, the Ballard Center’s marquee partner in Asunción. Brewer’s business partner, Jeff Brownlow, a 2009 management grad and a Stanford University MBA candidate, runs the company’s US operations from Palo Alto, California, while some thirty employees in Paraguay are already hard at work. And researchers from five schools—BYU, Harvard, and Stanford among them—are further feeding into the program’s strategies and directives. “We’ll have four to six schools open by Christmas,” Brewer says.
Paraguay’s staggering inequality might seem like a formidable foe for many, but not for Brewer. As a boy he watched his own family escape poverty when his middle-aged father returned to college, inspired by a church leader. Anyone can do the same with help, he says. “It takes one person to step in and give knowledge.”
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Article written by Bremen Leak
About the Author
Bremen Leak studied journalism at BYU. He now lives and works in New York City.
