Tuesday, August 2, 2011

A Business Proposition

Reginald and Davni were very mature for seventeen-year-olds. They know what they want to do, which is create an internet cafe/library somewhere in Tovar or Grison Garde. This is a tricky enterprise, because it would require space, power (generator or solar panels), and an internet connection. Everything else is trivial; we can get used laptops (which use less power and can be charged and detached, allowing a generator to be shut down), and the orphanage has a carpentry shop for young adults to learn woodworking, so they could make furniture.

The chief unknowns are costs, both for startup and operations. Space is expensive, so the young men hope to build an addition to Reginald's parents' house. Cost: unknown. They hope to buy a used diesel generator. Cost: unknown. HaiTel has reliable highish-speed internet, using fixed broadcast (presumably via microwaves). Cost: unknown. The chief operational cost is fuel for the generator; since we don't know how much the generator will need, that cost is unknown.

We also asked about the customers. Reginald estimated that 70% of the people around Tovar and Grison Garde are literate, but that estimate may be high. I'm not sure anyone knows how many people live in the two towns, let alone the immediate area. Reginald hopes to keep costs reasonable; a few goud for an hour of internet, and one Haitian dollar per minute for phone calls to the US. They also plan to offer classes on using computers and the internet, and they could charge tuition for these.

I should say here that I would love to offer all of these things for free, but there are two problems with that. The first is that even if we got a grant to cover the startup costs, it's not self-sustaining, even if we used solar power and didn't have to pay for fuel. The internet connection will cost money, as will maintenance, and purchasing books for the library. That doesn't even consider paying staff.

The second issue is bigger; the goal is always a self-sustaining economy. If this business didn't make a profit and financially enrich (to some extent) the owners, it wouldn't create the economic churn that needs to happen in this area to become economically viable. Bernard's dream of jobs for Haitians requires a robust economy.

Right now, the existing economy is geared entirely toward the export of currency to Haitian cities and eventually out of the country. The market is consists largely of independent retailers who buy wholesale in the city markets and return to Grison Garde. The local business include:
- at least one pawn shop (bureau d'affaires)
- countless lotto shops (for all of the major lottos in the area, including Rapid Bank, Patience Bank, and Apotheose Bank)
- stores selling national and international brands of soft drinks (boissons gazeuses)
- Digicel, Digicel, Digicel (global cell phone company with the majority of the Haitian market)

Creating a new business that serves the local community, as this cafe would, has the long-term possibility of providing a new way to move money around. I'm really hoping we can find a green initiative to fund solar panels, as fuel costs will always siphon away from the villages and Haiti. The internet connection will also cost, but that's a relatively fixed cost. To be really successful, this business would need to generate sufficient revenue to pay for operations, salaries, and the ability to expand (possibly even beyond the immediate environs).

However, it would be foolish to dismiss these young men. I doubt many American teens have established ideas of the cost of business. Reginald assured me that he would estimate costs and send them to me. We left the discussion open, after exchanging email addresses. I know this is not a new observation, but being able to communicate reliably with people in a foreign country still somewhat amazes me. This would not have been possible even five years ago; Reginald stays connected to the world with a 3G wireless internet card from Digicel.

My plan is to solicit CCI/Business students to help write a business plan and solicit/secure financing; the Haitians would be responsible for incorporating (to whatever extent that is done) and building and operating the business. Assuming we could do this as a business, rather than a non-profit, the business would be co-owned by the Haitians and Americans. We would want to send the Americans down to Haiti at least once. I'm hoping they could stay at the orphanage, which has security and facilities, although they may need to pitch a tent. Talk about an experience learning about international business! I'm meeting with Dean Kerr in the Belk College of Business in a week or so, and I'll bring up the idea.

Will it happen? Depends on what you mean. Sooner or later, someone will open an internet cafe; if nothing else, the local kids who are learning about computers via Waveplace and OLPC are going to want to use it. Will this initiative take root, ensuring local ownership? I can work on it and hope.

Multinationals succeed in Haiti and elsewhere because they have capital and know how to work the system. They can put money up front, and through advertising they build brands recognized even in rural Haiti. They can pay experts on the ground. We can't easily replicate this, because we don't have the money. What we do have is spirit, local partners who are committed to bettering their community, and a mix of drive and top-shelf business acumen.

Quite simply, there are two ways of looking at this. First, as a risky business venture, and it is that. Second is a challenging opportunity that will leverage everything we have in Haiti and everything we know about Haiti and our Haitian friends.

Ah, so the business aside, it was time for a last round of goodbyes with Adam, Junior, Elizabeth, Mishna, and Bastien. This goodbye was sad, since it was au revoir (until next time) rather than a demain (see you tomorrow). We started back to Cap Haitien in an odd mood; we're exhausted but happy. The week has gone by far faster than I would have expected, and we have some great things to work on.

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