Acumen Blog

The age of transformation

If the decade of the ’90s was the age of information, then all signs point to the world moving into an age of transformation. TED is as much a reflection of where the world is today as it is a pioneer in moving the trends forward. People are searching for meaning. Companies understand that social responsibility must be a part of their marketing strategies. Young people the world over are bringing forth an idealism not seen since the 1960s. And this is a more sophisticated idealism, one grounded in pragmatism, in pushing the edges of technological solutions, in understanding global complexity. The question is how to harness not only the good will but the skills and resources to make things happen. As Acumen Fund builds its entrepreneurial bench, we should think about what it would take to create a system whereby we help connect even more individuals with resources, skills and imagination to potentially sustainable and scalable innovations solving problems of poverty. [Read More]

When was the last time you really looked at a flower?

At the TED conference, Peter Skillman of Palm spoke about the power of creativity and quick prototyping. He has given the following test to various groups, including groups of kindergarten students and also MBAs from top U.S. schools. The group is given spaghetti, string and tape and given the instruction to create a free-standing structure to hold a marshmallow on top. Over and over, the kindergarteners aced the game, and the MBAs scored on the lowest end of the spectrum. Why? The kindergarten kids didn’t worry about rules and hierarchy and procedures but just got down to the work. It was messy, and there were more mistakes but the children got it right. We need more experimentation, more just doing things on a small-scale level quickly, learning from mistakes and doing again to make it better. You don’t want too many interations and want to ensure that the team is working together and not in parallel, but it is a great metaphor for solving tough problems. [Read More]

Notes from the TED conference

I had the privilege of attending the TED conference, one of the more extraordinary gatherings of worldchangers. Acumen Fund is particularly honored to be associated with TED, given our support from the Sapling Foundation, which owns TED. The conference includes 1,000 individuals who come to Monterey, CA from around the world to listen to some of the most innovative and creative thinkers and doers in the fields of Technology, Entertainment and Design. The experience was thrilling, filled with insights and inspiration. You couldn’t leave without wanting to be smarter, do better, make more of a contribution on earth. [Read More]

Making gender inequity an issue at Davos

Our friend Roshaneh Zafar, who runs the microfinance organization Kashf in Pakistan (one of Acumen Fund’s investees), was a participant in the recent World Economic Forum at Davos. She attempted to raise issues of gender inequity in the Muslim world at that event, and she writes about those efforts in this week’s The Friday Times, a Pakistani independent weekly. Access to the article online is by subscription only, so we’ve included the text of the article here. [Read More]

First impressions of Africa

I’ve just returned from my first trip to Africa to visit Acumen Fund’s investments in South Africa, Kenya and Tanzania. One of the most striking things is that within 24 hours (5 airline meals, 4 movies and 3 hours of sleep) I went from sitting in the living room of a woman with AIDS in a poor semi-rural community in tropical Africa to picking up my daughter at elementary school, knee deep in snow, and somehow did not feel the culture shock I expected to feel. (Frankly, I felt much more culture shock readjusting to driving, and not having to lock my doors and worry about the carjackings of JoBurg). I suppose this is largely because the trip was extremely short or it may have to do with weak antennae on my part, but I actually think there might be two things: First, the kind of struggle and community support and perseverance I saw are not something so foreign to us in the U.S. I see the same kind of commitment, optimism and heartbreak in the U.S., particularly through involvement with urban community development corporations. Just add a few zeros to the per capita GDP and a decade or two to the life expectancy, and the circumstances, at their core, are not that dissimilar. [Read More]

The continuing political challenge of tsunami recovery

This article in The Guardian highlights the ongoing struggle to house Indonesian survivors of the tsunami. It’s a reminder that money is not enough. It is criminal that less than 250 of the 16,000 houses needed have been built in Aceh since the town was devastated by the tsunami. Political will is critical for things to get done. We need as much public outcry today as we saw public support when the crisis hit. We also need to find - and communicate - metrics on progress so that there is a chance for real and sustainable change. [Read More]

What excites Pakistani graduate students?

This past week I was in Lahore, Pakistan visiting LUMS, the country’s leading graduate business school. I had meetings with the superintendent and several professors before making a presentation to students on Acumen Fund’s work. Approximately 50 filled the auditorium, and no one left before the end of our 90-minute presentation and Q&A. I usually try to talk about why and how we do what we do, rather then talk about organizations. It was exciting to see how enthusiastic these 24- to 28-year-old Pakistanis were about the idea of investing in businesses whose customers are mostly poor. We fielded question after question about these resource-poor organizations and how Acumen Fund tries to help them: How do you keep the strategic plans simple? How capable are the managers, and how do you help them? How involved do you get in running companies? What do you do when there is a great idea but no leader? Are there good ideas in other countries that we should try in Pakistan? [Read More]

The challenge of housing for the BOP

The challenge of structuring appropriate Acumen Fund housing investments is that they do not – cannot – look like traditional real estate development projects. The population we target does not have the disposable income needed for 15-20% equity down payments, and often the full family’s monthly income flow is insufficient to carry a very large mortgage. This means that we are looking for innovative financial structures, or small-scale projects that have primarily demonstration value. These features translate to higher lending risk, which causes most property lenders to step back from commitments. Acumen Fund’s strength in bringing commercial lenders to the table is that we have a higher threshold for risk then other institutions, and thus are in a position to leverage their involvement by bearing the first loss. We are demonstrating this leverage in launching a commercial mortgage lending program, as well as in lending to squatter property purchases in Pakistan, where our Housing portfolio is varied and growing after four years of investing. [Read More]

Economic lives of the poor

Understanding how poor people make economic choices and how their spending decisions are shaped is fundamental to providing them with affordable good and services such as housing, clean drinking water and health services and products. If we can become better at identifying what people want and what they choose to spend their meager incomes on (rather than assuming we know what they need), we can move closer to giving them access to those resources. [Read More]

Essay competition on business and development

The world needs good, crisp writing on delivering goods and services to people making less than four dollars a day. Especially interesting are the business models that may work in terms of delivering critical goods and services like clean water, healthcare and housing to the poor. The IFC and Financial Times have launched an essay competition on “Business and Development: The private path to prosperity” to promote best thinking on the role of business, development and social entrepreneurship. We hope friends of Acumen Fund contribute. [Read More]